Notes to Accounts of Invigorated Business Consulting Ltd.

Mar 31, 2016

1. Estimated amounts of contracts remaining to be executed on capital account- (Net of advances)-Rs. Nil (Previous Year Rs. Nil)

2. Contingent Liabilities: Contingent liabilities not provided for in accounts in respect of:

3. Sales tax demands against the Company not acknowledged as debt and not provided for in respect of which the Company is in appeal is Rs. 2.93 lacs (Previous Year Rs.2.93 lacs).

4. Claims/demands under litigation against the Company not acknowledged as debt and not provided for in the books. Amount is presently not ascertainable.

5. Preference Share dividend amounting to Rs. 1615 lacs (Previous Year Rs. 1520 lacs) pertaining to 10% Redeemable Cumulative Preference Shares of Rs. 10/- each.

6.. Due to continued financial constraints the Company was not able to maintain investment in Government Securities as liquid assets in terms of Section 45-IB of Reserve Bank of India Act, 1934.

7. Due to paucity of funds and no fresh business having been conducted by Company, the Minimum Capital Adequacy Ratio could not be maintained as required for Non-Banking Financial Companies.

8. The Company had filed an application with the Reserve Bank of India (RBI) for deregistration of its NBFC status and accordingly Certificate of Registration (COR) has been surrendered. Subsequently to Balance Sheet date of 31st March, 2016, the approval for deregistration of the NBFC status of the Company has been received vide letter dated 06th May, 2016.

9. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. No rating has been sought thereafter.

10. In accordance with the Hon''ble Delhi High Court''s Order / direction dated 04th March 2011, Escorts Benefit Trust (EBT) created by Escorts Limited, repaid matured fixed deposit liability against the claims received till 03rd March 2013. Claims received after the said date have also been entertained and settled after due verification. As at 31st March 2016, the unpaid/unclaimed matured fixed deposits liability is Rs. 1278.78 lacs (Previous Year Rs. 1357.40 lacs) which are pending to be deposited in the Investor Education & Protection Fund.

11. Due to the continued financial constraints faced by the Company, there is considerable delay/ difficulty in collection/recovery of loans and advances vide Note No. 09. Full provision is held against such loans and advances.

12. The Company had accumulated losses at the close of the financial year with its net worth continuing to stand fully eroded. The Company has not carried out any fresh business as a Non- Banking Financial Institution (NBFI) during the year and had filed an application with the Reserve Bank of India for de-registration of its NBFC status. However, the Company continues to focus on recovery of delinquent assets through settlement/compromise/ legal action etc. Besides the efforts on recovery of loan assets, the possibilities of venturing into newer business areas shall be examined subsequently. The accounts of the Company have been prepared on Going Concern Basis.

13. Trade receivables amounting to Rs. 793.52 lacs (Previous Year Rs. 846.99 lacs) vide Note No. 11 represent certain cases against which legal actions/ settlements/compromises are in process. However, full provision is held against such receivables.

14. Due to accumulated losses and loss for the year, the Company has not made any provision for preference dividend on cumulative preference shares amounting to Rs. 95.00 lacs as at March 31, 2016.

15. The Company has not obtained Actuarial Valuation with regards to Employee''s terminal benefits i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of lesser number of employees on rolls, the Company has made provision for these benefits on actual basis as on the Balance Sheet date.

16. The Company is engaged primarily in the business of financing (limited to recovery of loan assets) and accordingly there are no separate reportable segments as per the Accounting Standard - 17 ''Segmental Reporting''.

17. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

18. Joint Ventures and Associates:

- Escorts Assets Management Limited.

- Surendra Ambalal Dave, Trustee of Escorts Benefit & Welfare Trust.

19. Key Management Personnel:

- Mr. P. K. Marwah - Manager

- Mr. Donald Fernandez -Chief Financial Officer

- Mr. Vicky Chauhan- Company Secretary

20. Related Party Transactions:

- Investment in shares of Escorts Assets Management Limited as on 31st March, 2016 is Rs. 489.93 lacs (as on 31st March, 2015 Rs. 489.93 lacs)

21. In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

22. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax asset (net of deferred tax liabilities) at the year end.

23. Balances appearing under loans & advances, trade receivables and current liabilities are subject to confirmation in certain cases.

24. The figures in the Balance Sheet and Profit & Loss Statement have been presented in Rupees Lacs and to the nearest thousand in terms of decimals under section 129(1) of the Companies Act, 2013.

25. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil).

26. Previous year figures have been regrouped / reclassified wherever necessary.

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Mar 31, 2015

1. Estimated amounts of contracts remaining to be executed on capital account- (Net of advances)-Rs. Nil (Previous Year Rs.Nil)

2. Contingent Liabilities:

(a) Sales tax demands against the Company not acknowledged as debt and not provided for in respect of which the Company is in appeal is Rs. 2.93 lacs (Previous Year Rs.2.93 lacs).

(b) Claims/demands under litigation against the Company not acknowledged as debt and not provided for in the books. Amount is presently not ascertainable.

3. Due to continued financial constraints the Company was not able to maintain investment in Government Securities as liquid assets in terms of Section 45-IB of Reserve Bank of India Act, 1934.

4. Due to paucity of funds and no fresh business having been conducted by Company, the minimum Capital Adequacy Ratio could not be maintained as required for Non-Banking Financial Companies.

5. The Company had filed an application with the Reserve Bank Of India (RBI) for deregistration of its NBFC status and accordingly Certificate of Registration (COR) has been surrendered.

6. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. No rating has been sought thereafter.

7. In accordance with the Hon'ble Delhi High Court's Order / direction dated 04th March 2011, Escorts Benefit Trust (EBT) created by Escorts Limited, repaid matured fixed deposit liability against the claims received till 03rd March 2013. Claims received after the said date have also been entertained and settled after due verification. As at 31st March 2015, the unpaid/unclaimed matured fixed deposits liability is Rs. 1357.40 lacs (Previous Year Rs. 1606.08 lacs) which are pending to be deposited in the Investor Education & Protection Fund.

8. Due to the continued financial constraints faced by the Company, there is considerable delay/ difficulty in collection/recovery of loans and advances vide Note No. 09. Adequate provision is held against such loans and advances.

9. The Company has not carried out any fresh business as a Non- Banking Financial Institution (NBFI) during the year in view of the restrictions placed by and application filed for deregistration with Reserve Bank of India. However the Company continues to focus on recovery of delinquent assets through settlement/compromise/legal action etc. Pending completion of deregistration formalities and recovery of loan assets, the possibilities of venturing into newer business areas shall be examined subsequently. The accounts of the Company have been prepared on Going Concern Basis.

10. Trade receivables amounting to Rs. 846.99 lacs (Previous Year Rs. 865.51 lacs) vide Note No. 11 represent certain cases against which legal actions/ settlements/compromises are in process. However, full provision is held against such receivables.

11. Due to accumulated losses and loss for the year, the Company has not made any provision for preference dividend on cumulative preference shares.

12. The Company has not obtained Actuarial Valuation with regards to Employee's terminal benefits i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of lesser number of employees on rolls, the Company has made provision for these benefits on actual basis as on the Balance Sheet date.

13. Pursuant to the notification of Schedule II of the Companies Act 2013 ("The Act") by the Ministry of Corporate Affairs effective April 01, 2014, the management has internally reassessed the useful lives and residual value of the assets. Accordingly the carrying amount as at April 01, 2014 is being depreciated over the revised remaining useful life of the assets after retaining the residual value.

14. The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the Accounting Standard - 17 'Segmental Reporting'.

15. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

(a) Joint Ventures and Associates:

* Escorts Assets Management Limited.

* Surendra Ambalal Dave, Trustee of Escorts Benefit & Welfare Trust.

(b) Key Management Personnel:

* Mr. P. K. Marwah - Manager

* Mr. Donald Fernandez -Chief Financial Officer

* Mr. Vicky Chauhan- Company Secretary

(c) Related Party Transactions:

* Investment in shares of Escorts Assets Management Limited as on 31st March, 2015 is Rs. 489.93 lacs (as on 31st March, 2014 Rs. 489.93 lacs)

16. In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

17. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax asset (net of deferred tax liabilities) at the year end.

18. Balances appearing under loans & advances, trade receivables and current liabilities are subject to confirmation in certain cases.

19. The figures in the Balance Sheet and Profit & Loss Statement have been presented in Rupees Lacs and to the nearest thousand in terms of decimals under section 129(1) of the Companies Act, 2013.

20. Earning Per Share

I) Basic

S. Particulars 31st March 2015 31st March 2014 No.

1 Opening No. of shares 40172500 40172500

2 Total Shares outstanding 40172500 40172500

3 Profit/ (Loss) after tax (8.68) 12.56 (Rs. Lacs)

4 Earning per Share (Rupees) (0.02) 0.03

II) Diluted: None of the potential equity shares are dilutive.

21. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil).

22. Previous year figures have been regrouped / reclassified wherever necessary.

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Mar 31, 2014

1. SHARE CAPITAL

Out of the above:

(a) 10% Redeemable Cumulative Preference Share redeemable on 27th June, 2017.

(b) The details of Shareholder holding more than 5% shares:

2. Estimated amounts of contracts remaining to be executed on capital account- (Net of advances)-Rs. Nil (Previous Year Rs. Nil)

3. Contingent Liabilities:

a. Sales tax demands against the Company not acknowledged as debt and not provided for in respect of which the Company is in appeal is Rs. 2.93 lacs (Previous Year Rs.2.93 lacs).

b. Claims/demands under litigation against the Company not acknowledged as debt and not provided for in the books. Amount is presently not ascertainable.

4. Due to continued financial constraints the Company was not able to maintain investment in Government Securities as liquid assets in terms of Section 45-IB of Reserve Bank of India Act, 1934.

5. Due to paucity of funds and no fresh business having been conducted by Company, the minimum Capital Adequacy Ratio could not be maintained as required for Non-Banking Financial Companies.

6. The Company has filed an application with the Reserve Bank Of India (RBI) for deregistration of its NBFC status and accordingly Certificate of Registration (COR) has been surrendered.

7. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. No rating has been sought thereafter.

8. In accordance with the Hon''ble Delhi High Court''s Order / direction dated 4th March 2011, Escorts Benefit Trust (EBT) created by Escorts Limited, repaid matured fixed deposit liability against the claims received till 3rd March 2013. Claims received after said date are also being entertained and settled after due verification. As at 31st March 2014, the unpaid/unclaimed matured fixed deposits liability is Rs. 1606.08 lacs (Previous Year Rs. 1747.43 lacs).

9. Due to the continued financial constraints faced by the Company, there is considerable delay/difficulty in collection/recovery of loans and advances vide Note No. 9. Adequate provision is held against such loans and advances.

10. The Company has not carried out any fresh business as a Non- Banking Financial Institution (NBFI) during the year in view of the restrictions placed by and application filed for deregistration with Reserve Bank of India. However the Company continues to focus on recovery of delinquent assets through settlement/compromise/legal action etc. The management is also exploring possibilities of establishing the Company in the businesses other than NBFI and accordingly the accounts of the Company have been prepared on going concern basis.

11. Trade receivables amounting to Rs. 865.51 lacs (Previous Year Rs. 904.64 lacs) vide Note No. 11 represents certain cases against which legal actions/ settlements/compromises are in process. However, full provision is held against such receivables.

12. Although the Company has made profit during the year, it has accumulated losses as at end of financial year and also has incurred losses in the immediately preceding financial year, the Company has not made any provision for preference dividend on cumulative preference shares.

13. The Company has not obtained Actuarial Valuation with regards to Employee''s terminal benefits i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of lesser number of employees on rolls, the Company has made provision for these benefits on actual basis as on the Balance Sheet date.

14. The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the Accounting Standard - 17 ''Segmental Reporting''.

15. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

(a) Joint Ventures and Associates:

* Escorts Assets Management Limited.

* Surendra Ambalal Dave, Trustee of Escorts Benefit & Welfare Trust.

(b) Key Management Personnel:

* Mr. P. K. Marwah - Manager

(c) Related Party Transactions:

* Investment in shares of Escorts Assets Management Limited as on 31st March, 2014 is Rs. 489.93 lacs (as on 31st March, 2013 Rs. 489.93 lacs)

16. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax asset (net of deferred tax liabilities) at the year end.

17. In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

18. Balances appearing under loans & advances, trade receivables and current liabilities are subject to confirmation in certain cases.

19. Earning Per Share

Diluted: None of the potential equity shares are dilutive.

20. The figures in the Balance Sheet and Profit & Loss Statement have been presented in Rupees Lacs and to the nearest thousand in terms of decimals. The approval of the Government of India for the same has been obtained under section 211(1) of the Companies Act, 1956.

21. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil).

22. Previous year figures have been regrouped/reclassified wherever necessary.

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Mar 31, 2013

1. Estimated amounts of contracts remaining to be executed on capital account- (Net of advances)-Rs. Nil (Previous Year Rs.Nil)

2. Contingent Liabilities: (Rs. in Lacs)

Particulars 31st March 2013 31st March 2012

Sales tax demands against the Company not acknowledged as 2.93 2.93 debt and not provided for in respect of which the Company is in appeal.

3. Due to continued fnancial constraints the Company was not able to maintain investment in Government Securities as liquid assets in terms of Section 45-IB of Reserve Bank of India Act, 1934.

4. Due to paucity of funds and no fresh business having been conducted by Company, the minimum Capital Adequacy Ratio could not be maintained as required for Non-Banking Financial Companies.

5. The company has fled an application with the Reserve Bank Of India (RBI) for deregistration of its NBFC status and accordingly Certifcate of Registration (COR) has been surrendered.

6. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. No rating has been sought thereafter.

7. In accordance with the Hon''ble Delhi High Court''s Order / direction dated 4th March 2011, Escorts Beneft Trust (EBT) created by Escorts Limited, repaid matured fxed deposit liability against the claims received till 3rd March 2013. As at 31st March 2013, the unpaid/unclaimed matured fxed deposits liability is Rs.1747.43 lacs (Previous Year Rs.2101.88 lacs).

8. Investments in securities amounting to Rs.1.25 lacs at cost (Previous Year Rs. 1.25 lacs) are currently not traceable in the records. Adequate provision for the same has been made in the books of account as at the year end.

9. Due to the continued fnancial constraints faced by the Company, there is considerable delay/ diffculty in collection of installments due and recovery of advances. Adequate provision has been made in all such cases.

10. The company has not carried out any fresh business as a Non- Banking Financial Institution (NBFI) during the year in view of the restrictions placed by Reserve Bank of India. However the company continues to focus on recovery of delinquent assets through settlement/compromise/legal action etc. The management is also exploring possibilities of establishing the company in the businesses other than NBFI and accordingly the accounts of the company have been prepared on going concern basis.

11. Trade receivables amounting to Rs. 904.64 lacs (Previous Year Rs. 919.09 lacs) vide Note No.-11 represent certain receivables against which legal actions/ settlements/compromises are in process. However, full provision is held against such receivables.

12. Due to accumulated losses and loss for the year, the company has not made any provision for preference dividend on cumulative preference shares.

13. The Company has not obtained Actuarial Valuation with regards to Employee''s terminal benefts i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of limited number of employee''s left on rolls, the Company has made full provision for these benefts as on the Balance Sheet Date.

14. The Company is engaged primarily in the business of fnancing and accordingly there are no separate reportable segments as per the Accounting Standard – 17 ''Segmental Reporting''.

15. Related Party Disclosure as identifed and certifed by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

(a) Joint Ventures and Associates:

Escorts Assets Management Limited.

Surendra Ambalal Dave, Trustee of Escorts Beneft & Welfare Trust.

(b) Key Management Personnel:

Mr. P. K. Marwah - Manager

(c) Related Party Transactions:

Investment in shares of Escorts Assets Management Limited as on 31st March, 2013 is Rs. 489.93 lacs (as on 31st March, 2012 Rs. 489.93 lacs)

16. In view of uncertainty of future taxable profts, the company has not recognized deferred tax asset (net of deferred tax liabilities) at the year end.

17. In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

18. Balances appearing under loans & advances, trade receivables and current liabilities are subject to confrmation in certain cases.

II) Diluted: None of the potential equity shares are dilutive.

19. The fgures in the Balance Sheet and Proft & Loss Statement have been presented in Rupees Lacs and to the nearest thousand in terms of decimals. The approval of the Government of India for the same has been obtained under section 211(1) of the Companies Act, 1956.

20. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifed on the basis of information available with the Company. (Previous Year: Rs. Nil).

21. Previous year fgures have been regrouped / reclassifed wherever necessary.

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Mar 31, 2012

1. Estimated amounts of contracts remaining to be executed on capital account - (Net of advances) - Rs. Nil (Previous period Rs. Nil)

2. Contingent Liabilities:

Particulars 31st March 31st March 2012 2011

Sales tax demands against the Company not acknowledged as debt and not provided for 2.93 2.93 in respect of which the Company is in appeal.

3. Due to continued financial constraints the Company was not able to maintain investment in Government Securities as liquid assets in terms of Section 45-IB of Reserve Bank Of India Act,1934.

4. The unpaid matured/unclaimed fixed deposit liability (including interest there on) amounting to Rs. 2,091.64 lacs as on 31st March 2012 (Rs. 3,244.69 lacs as on 31st March 2011) shall be met out of funds/assets of requisite value kept with Escorts Benefit Trust created by Escorts Limited in terms of direction of the Hon'ble Delhi High Court, issued while disposing off the Scheme of Compromise and Arrangement filed by the company along with Escorts Limited before the Hon'ble court vide which Escorts Limited had undertaken to bail out the fixed deposit holders and creditors of the Company.

5. Investments in securities amounting to Rs. 1.25 lacs (P.Y. Rs. 20.85 lacs) are currently in the process of being transferred in the name of the Company as the same has not been traceable in the records.

6. The Company had sold 48,99,300 Equity Shares of Rs. 10/- each of Escorts Assets Management Limited during the financial year 2002-03. These shares were not transferred in the name of buyer due to non-receipt of regulatory approvals. During the year, the transaction of sale has been annulled with mutual consent and consequently the investment in these shares has been restored in the books of accounts.

7. Due to paucity of funds and no fresh business having been conducted by Company, the minimum Capital Adequacy Ratio could not be maintained as required for Non-Banking Financial Companies.

8. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. After submission of the Scheme of Compromise and Arrangement filed before the Hon'ble Delhi High Court, no rating has been sought thereafter.

9. Due to the continued financial constraints faced by the Company, there is considerable delay/difficulty in collection of installments due and recovery of advances. Adequate provision has been made in all such cases.

10. The company has not carried out any fresh business as a Non- Banking Financial Institution (NBFI) during the year in view of the restrictions placed by Reserve Bank of India due to defaults in repayment of matured fixed deposits which happened due to large scale delinquencies in the hire purchase financing business. However the company continues to focus on recovery of such delinquent assets through settlement/compromise/legal action etc. The management is also exploring possibilities of establishing the company in the businesses other than NBFI and accordingly the accounts of the company have been prepared on going concern basis.

11. Consequent to large scale delinquencies in Hire Purchase financing business of the Company in the past, the company had, in earlier years, made full provision for doubtful debts in respect of trade receivables amounting to Rs. 20457.13 lacs. These receivables are outstanding since considerable period of time. During the year, the Company has, on a prudent basis, written-off amounts aggregating to Rs. 19531.39 lacs out of the above trade receivables as not recoverable. Further, certain related receivables amounting to Rs. 479.20 lacs shown as advance recoverable have also been written-off during the year against which full provisions were held. Consequently provision held against such receivables and advances have been written back in the books of account during the year.

Trade receivables amounting to Rs. 919.09 lacs vide Note No.-11 represent certain receivables against which legal actions/settlements/compromises are in process. However, full provision is still held against such receivables.

12. Due to accumulated losses and loss for the year, the company has not made any provision for preference dividend on cumulative preference shares.

13. The Company has not obtained Actuarial Valuation with regards to Employee's terminal benefits i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of limited number of employee's left on rolls, the Company has made adequate provision for these benefits as on the Balance Sheet Date.

14. The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the Accounting Standard - 17 'Segmental Reporting'.

15. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

(a) Joint Ventures and Associates:

- Escorts Finance Investments & Leasing Private Limited.

- Escotrac Finance and Investment Private Limited.

- Escorts Assets Management Limited.

(b) Key Management Personnel:

- Mr. P. K. Marwah - Manager

(c) Related Party Transactions:

- Nil, However Investment of Rs. 489.93 Lacs (Previous Year: Rs. Nil) in shares of Escorts Assets Management Limited reinstated during the year at cost. (Refer Note-25)

16. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax Asset (net of deferred tax liabilities) at the year-end.

17. The reconciliation of advance tax/TDS recoverable with the related tax liability for the earlier years has been carried out during the year. The consequent impact of the same at Rs. 533.62 lacs has been taken to profit and loss account under the head Tax Expense.

18. In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

19. Balances appearing under loans & advances, trade receivables and current liabilities are subject to confirmation in certain cases.

20. Earning Per Share

II) Diluted: None of the potential equity shares are dilutive.

21. The figures in the Balance Sheet and Profit & Loss Account have been presented in Rupees Lacs and to the nearest thousand in terms of decimals. The approval of the Government of India for the same has been obtained under-section 211(1) of the Companies Act, 1956,

22. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil).

23. The financial statements for the year ended March 31,2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for the previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

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Mar 31, 2011

1. Estimated amounts of contracts remaining to be executed on capital account – (Net of advances) - Rs. Nil (Previous period Rs. Nil)

2. Contingent Liabilities:

As at As at Particulars 31.03.11 31.03.10 (Rs. lacs) (Rs. lacs)

a) Income tax/ surtax demands against the Company not 295.83 295.83 acknowledged as debts and not provided for in respect of which the Company is in appeal before the Tribunal/ Commissioner (Appeals), excluding for those matters where a favorable order is available for earlier years.

b) Sales tax demands against the Company not 2.93 2.93 acknowledged as debt and not provided for in respect of which the Company is in appeal.

3. Due to continued financial constraints the Company was not able to maintain requisite investments in

Government Securities as liquid assets in terms of Section 45-B(I) of Reserve Bank of India Act,1934. However ,during the year the Fixed Deposit liability to the extent of Rs 13,031.92 Lacs out of total liability of Rs. 16,276.61 lacs has been liquidated in the course of implementation of the Scheme of Arrangement and Compromise (Refer Note No. 7 below) under the direction of Honble Delhi High Court. For the remaining sum, the funds/assets of requisite value have been kept in Benefit Trust created by Escorts Limited in terms of the direction of Honble Delhi High Court. Therefore, as per the Management, the Company is not required to maintain any investment in liquid assets in terms of requirements of Reserve Bank Of India.

4. Investment in Securities amounting to Rs.1.25 Lacs (P.Y. Rs.20.85 Lacs) are currently in the process of being transferred in the name of the Company as the same has not been traceable in the records.

5. Due to paucity of funds and the fresh business not having been conducted by Company, the minimum Capital Adequacy Ratio could not be maintained in terms of the Non-Banking Financial Companies Requirement.

6. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. In view of the Scheme of Arrangement filed before the Honble Delhi High Court, no rating has been sought thereafter.

7. The Scheme of Arrangement and Compromise filed by the Company alongwith Escorts Ltd. before Honble Delhi High Court, vide which Escorts Ltd. had undertaken to bail out the fixed deposit holders and creditors of the company, stands disposed off. During the pendency of the scheme, on the interim directions of the Honble Court from time to time, a total payment of Rs.13,031.92 lacs have been made to those fixed deposit holders who came forward to claim the maturity value of fixed deposit in full and final settlement. The payments have been made under the overall control and supervision of the Hardship Committee constituted by the Honble Court , to whom equity shares of Escorts Ltd. of required value were allotted to enable it to dispose off the same in open market and disburse the proceeds to the claimants. On the principal objectives of the scheme having been achieved, the Company and Escorts Ltd. filed applications before the Honble Court to permit withdrawal of the Scheme/Petitions, which have been allowed by the Honble Court on compliance of certain conditions. Accordingly, the unsold 24,01,050 Equity Shares of Escorts Limited lying with the Hardship Committee have been transferred to Escorts Benefit Trust for the purpose of discharge of unclaimed Fixed Deposits in terms of the direction of the Honble Court. The unclaimed amount as on 31st March 2011 is Rs.3,244.69 lacs. The necessary adjustments have been made in the books of account by substituting Escorts Ltd. as creditor of the company in place of the fixed deposit holders to the extent of the payments made upto 31st March, 2011.

8. The accounts of the Company have been prepared on going concern basis inspite of the continued full erosion of net worth. The management is exploring possibilities to expand the business activities in to non- funded and other financial services business now since the objective of Scheme of Arrangement and Compromise have been fulfilled.

9. During the year, the Company had conducted Physical Verification of its Fixed Assets in order to ensure their locations and existence and assess their working conditions. Accordingly, WDV of Fixed Assets amounting to Rs. 41.67 Lacs have been written off during the year based on such verification.

10. Due to the continued financial constraints faced by the Company, there is considerable delay/ difficulty in collection of installments due and recovery of advances. Adequate provision has been made in all such cases.

11. The Company has not obtained Actuarial Valuation with regard to Employees terminal benefits i.e., Gratuity and Leave Encashment as mandated by Accounting Standard 15 issued by the Institute of Chartered Accountants of India. In view of limited number of employees left on rolls, the Company has made adequate provision for these benefits as on the Balance Sheet Date.

12. Computation of Net Profits as per Section 349 read with Section 309(5) and Section 198 of the Companies Act, 1956 is not furnished for the current period, as no commission is payable to the Directors.

13. The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the Accounting Standard – 17 Segmental Reporting.

14. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on “Related Party Disclosure” issued by the Institute of Chartered Accountants of India are given below:

a. Joint Ventures and Associates: - Escorts Finance Investments and Leasing Pvt. Ltd.

- Escotrac Finance and Investment Pvt. Ltd.

b. Key Management Personnel - Mr. P.K. Marwah - Manager

c. Related Party Transactions - NIL.

15. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax Asset (net of deferred tax liabilities) at the year-end.

16. The reconciliation of advance tax/ TDS recoverable with the related provision for taxation pertaining to earlier years is in progress. The impact, if any, arising out of such reconciliation is presently not ascertainable.

17. Liability No Longer Required Written Back:

a. During the year, the Company wrote back excess liabilities amounting to Rs. 136.70 lacs which were made in earlier years and in the opinion of the management, are no longer required to be carried in the books of account as at March 31, 2011.

b. Provision No Longer Required Written Back amounting to Rs. 43.57 lacs represents certain Provision for Doubtful Advances and Doubtful Debts written back during the year.

19. The figures in the Balance Sheet and Profit & Loss Account have been presented in Rupees Lacs and to the nearest thousand in terms of decimals. The approval of the Government of India for the same has been obtained under section 211(1) of the Companies Act, 1956.

20. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil)

21. In opinion of the Board, the current assets, loans and advances have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

22. Balances appearing under loans, sundry debtors and sundry creditors are subject to confirmation in certain cases.

23. Previous periods figures have been regrouped/ reclassified wherever necessary.

---

Mar 31, 2010

1. Estimated amounts of contracts remaining to be executed on capital account - (Net of advances) - Rs. Nil (Previous period Rs. Nil)

2. Contingent Liabilities:

As at As at

Particulars 31.03.10 31.03.09

(Rs. lacs) (Rs. lacs)

a) Income tax/ surtax demands against the Company not 295.83 295.83 acknowledged as debts and not provided for in respect of which the Company is in appeal before the Tribunal/ Commissioner (Appeals), excluding for those matters where a favorable order is available for earlier years.

b) Sales tax demands against the Company not 2.93 15.41 acknowledged as debt and not provided for in respect of which the Company is in appeal.

c) Guarantees given by the Company (Margin Money - 7.67

Deposit Rs7.67 lacs)



3. (a) Investments in Government Securities amounting to Rs. 311.25 lacs (Previous Year Rs. 311.25 lacs) and Fixed Deposits with Bank amounting to Rs. 60.93 lacs (Previous year Rs. 57.48) are held in pursuance of Rule 12 of Non-Banking Financial Companies (Reserve Bank) Directions, 1998.

(b) Due to continued financial constraints, the Company has not been able to maintain investments in Government Securities as liquid assets in terms of Section 45-B(I) of Reserve Bank of India Act, 1934.

4. Investment in securities amounting to Rs. 20.85 lacs are currently in the process of being transferred in the name of the company as the same has not been traceable in the records. The formalities for obtaining relevant share certificates are being complied with.

5. As at the year ended 31st March 2010, the Company has not maintained the minimum Capital Adequacy Ratio that is required to be maintained in terms of the Non-Banking Financial Companies Requirements.

6. As per the provisions of the Reserve Bank of India, (Amendment) Ordinance, 1997 No.2, the Company is required to create a Special Reserve equivalent to a minimum of 20% of the net profit after tax. In the absence of profit for the year, the company has not created any Special Reserve.

7. The credit rating for the Fixed Deposits programme of the Company was revised in November, 2005 by CARE Limited to CARE (B) i.e. Susceptible to default. In view of the Scheme of Arrangement filed before the Honble Delhi High Court, no rating has been sought thereafter.

8. To bail out the Company from its financial constraints and to protect the interest of fixed deposit holders and secured creditors of the Company, a Scheme of Arrangement was filed before the Honble Delhi High Court. As per directions of the Delhi High Court, the approval of fixed deposit holders and the secured creditors to the proposed scheme was obtained. As per the interim order of the Court, partial repayments have been made to certain depositors in hardship cases determined by independent committee set-up by the Court, to whom 34,04,256 shares of Escorts Limited were made available for sale and disbursement among such cases. As at the year end an amount of Rs. 1,660.05 lacs was paid by Hardship Committee out of proceeds realized by sale/transfer of some share to the identified deposits holders. The principal amount of fixed deposits and interest accrued thereon relating to identified hardship cases has been shown under Current Liabilities. Any further liabilities towards the matured fixed deposits including overdue interest, if any, shall be accounted for in accordance with the terms of approval of Scheme by the Honble Delhi High Court.

9. The company is conducting physical verification of its fixed assets in order to ensure their location/existence/working condition. The necessary adjustments arising therefrom including provisioning/impairment/write off, shall be carried out as and when completed.

10. The 10% Redeemable Cumulative Preference Shares issued by the company and which were due for redemption on 28.06.2009 are pending redemption as at the end of the financial year.

11. The accounts of the Company have been prepared on going concern basis inspite of the continued full erosion of net worth. The management plans to expand the business activities in to non-funded and other financial services business once the Scheme of Arrangement and Compromise is approved by the Honble Delhi High Court and implemented.

12. Due to the continued financial constraints faced by the Company, there is considerable delay/ difficulty in collection of installments due and recovery of advances. Adequate provision has been made in all such cases.

13. Computation of Net Profits as per Section 349 read with Section 309(5) and Section 198 of the Companies Act, 1956 is not furnished for the current period, as no commission is payable to the Directors.

14. The Company is engaged primarily in the business of financing and accordingly there are no separate reportable segments as per the Accounting Standard - 17 Segmental Reporting.

15. Related Party Disclosure as identified and certified by the management:

Related party disclosures as required under Accounting Standard 18 on "Related Party Disclosure" issued by the Institute of Chartered Accountants of India are given below:

a. Joint Ventures and Associates: - Escorts Finance Investments and Leasing- Pvt. Ltd.

- Escotrac Finance and Investment Pvt. Ltd.

b. Key Management Personnel

Mr. P.K. Marwah - Manager

c. Related Party Transactions: NIL.

16. In view of uncertainty of future taxable profits, the Company has not recognized deferred tax Asset (net of deferred tax liabilities) at the year end.

17. The reconciliation of advance tax / TDS recoverable with the related provision for taxation pertaining to earlier years is in progress. The impact, if any, arising out of such reconciliation is presently not ascertainable.

18. The figures in the Balance Sheet and Profit & Loss Account have been presented in Rupees Lacs and to the nearest thousand in terms of decimals. The approval of the Government of India for the same has been obtained under section 211(1) of the Companies Act, 1956.

19. As per the information available, there are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. (Previous Year: Rs. Nil)

20. In opinion of the Board, the current assets, loans and advances have a value, which if realized in the ordinary course of business, will not be less than the value stated in the Balance Sheet.

21. Balances appearing under loans, sundry debtors and sundry creditors are subject to confirmation in certain cases.

22. Previous periods figures have been regrouped/ reclassified wherever necessary.