Notes to Accounts of Indus Finance Ltd.

Mar 31, 2015

1 Corporate Information

'The company was incorporated as a private limited company on 11th March 1992 and was converted into public limited company U/s 44 of the Companies Act, 1956 on 29th March, 1994 with an object of carrying business as "Non - Banking Finance Company" having registered office at Kothari building, 4th Floor, No.114, Mahatama Gandhi Salai, Nungambakkam, Chennai -600 034.

The Company has been registered with Reserve Bank of India as "Non - Banking Finance Company" on 5th May 1998 vide Registration No. B-07-00068.

Formerly, the company was known as "Indus Finance Corporation Limited" and the name has been changed to "Indus Finance Limited" on 22nd January, 2015 for which RBI Approval is awaited.

2. Contingentliabilitiesandcommitments As at As at (to the extent not provided for) 31.3.2015 31.3.2014 Rs. In lacs Rs. In lacs

Contingent liabilities

(a) Claims against the Company not acknowledged as debt

Total Demand as per Order raised by

Income Tax Department 493.00

Less : Income Tax Refund Due or Tax paid duringRegular/ Scrutiny Assessment 227.02 265.98 40.10

The Company is disputing various demands raised by the Income Tax Department, which are pending before Supreme Court & High Court. The Company has got Opinion from Legal Counsel which is in favourofthe Company and hence the liability has not been recognised in the Books of Account.

Income Tax department has attached the company's Investment in Equity Shares of one of its associates against the above stated litigated demands.

3. Disclosures required under Section 22 ofthe Micro, Small and Medium Enterprises Development Act, 2006

There are no amounts due to small scale industries in terms of The Micro, Small and Medium Enterprises Development Act, 2006

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. This has been relied by upon by the auditors.

4. Related party transactions

Details of related parties:

Description of relationship

Associates / Companies where Key Managerial Personnel have a significant influence.

Indowind Energy Limited

Indowind Power Private Limited

Everon Power Limited Indus Capital Private Limited

Kavit Green Energy Private Limited

Key Management Personnel (KMP)

Bala V. Kutti - Director

Alice Chhikara - Director

N Bhaskara Chakkera - Executive Director

K K Dinakar - Company Secretary

Note: Related parties have been identified by the Management.

5. Segmentinformation

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily Non-banking Finance, Power Generation and Others which include Investment. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

6. Previous Year's Figures

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

---

Mar 31, 2014

1 Corporate Information

"The Company was incorporated as a private limited company on 11th March 1992 and was converted into public limited company U/s 44 of the Companies Act, 1956 on 29th March, 1994 with an object of carrying business as "Non - Banking Finance Company" having registered office at Kothari building, 4th Floor, No.114, Mahatama Gandhi Salai, Nungambakkam, Chennai-600 034.The Company has been registered with Reserve Bank of India as "Non - Banking Finance Company" on 5th May 1998 vide Registration No. B-07-00068."

Formerly, the Company was known as "Subuthi Finance Limited" and the name has been changed to "Indus Finance Corporation Limited" on 19th March 2011

2.1 Contingent liabilities and commitments As at As at (to the extent not provided for) 31.3.2014 31.3.2013 Rs. Rs.

Contingent liabilities

(a) Claims against the Company not acknowledged as debt

Total Demand as per Order raised by Income Tax Department 26,549,769

Less : Income Tax Refund Due or Tax paid during Regular/Scrutiny Assessment 22,539,672 4,010,097 9,459,180

The Company is disputing various demands raised by the Income Tax Department, which are pending before Supreme Court & High Court. The Company has got Opinion from Legal Counsel which is in favour of the Company and hence the liability has not been recognised in the Books of Account.

Income Tax department has attached the Company''s Investment in Equity Shares of one of its associates against the above stated litigated demands."

---

Mar 31, 2013

1 Corporate Information

FonrmSly,7te rompany was known as "Subuthi Finance Limited" and the name has been changed to

2.1 Contingent liabilities and commitments

As at 31.3.2013 As at 31.3.2012

(to the extent not provided for) Rs. Rs.

Contingent liabilities

(a) Claims against the Company not acknowledged as debt

Total Demand raised by Income Tax Department 9,459,180 28,189,967

(After adjusting payments and refunds)

The Company has disputed Rs.94,59,180/-which are pending before Supreme Court & High Court. The Company has got Opinion from Legal Counsel which is in the favour of company and hence the liability has not been recognised in the Books of Account.

Income Taxdepartment has attached the company''s Investment in Equity Shares of one of its associates against the above stated litigated demands.

Bank Guarantee for Cash Credit Facility availed by the

Associate Company "Indowind Energy limited" - 100,000,000

2.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no amounts due to small scale industries in terms of The Micro, Small and Medium Enterprises Development Act, 2006

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

2.3 Segment information

2.4 Previous Year''s Figures

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

---

Mar 31, 2012

1.1 Contingent liabilities and commitments

As at 31.3.2012 As at 31.3.2011

(to the extent not provided for) Rs. Rs.

Contingent liabilities

(a) Claims against the Company not acknowledged as debt 28,189,967.00 28,189,967.00

Income Tax department has attached part of investments of the company against the above stated litigated demands.

The company has given a Bank Guarantee in case of cash credit availed by Indowind Energy Limited for an amount of Rs. 10 Crores

1.2 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

There are no amounts due to small scale industries in terms ofThe Micro, Small and Medium Enterprises Development Act, 2006

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

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

1.3 Previous Year's Figures

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

---

Mar 31, 2010

A. Balance Sheet

Secured Loans

The Company availed loan from the Life Insurance Corporation of India on the security of the Key Man Insurance Policies.

Current Assets, Loans and Advances

In the opinion of the Board, the current Assets, Loans and Advances have a value on the realisation in the ordinary course of business at least equal to the amount at which they are stated.

B. Contingent Liabilities:

Income Tax Demand Rs. 41,725,049/-

For the Block Assessment period 1993-94 to 1996-97, the Assessing Officer has passed orders disallowing the Depreciation claimed by the Company and has demanded tax of Rs.10,243,906/-The Company has appealed before the Honble high Court of Chennai.

For the assessment year 1996-97, 1997-98 and 1998-99, the Income tax authorities have raised demands totaling to Rs. 9,932,914/- disallowing certain lease expenses and levy of penalty for the years. However, for the A Y 1995-96, the company has a preferred a writ before the Honble High Court of Madras against the dismissal of Petition U/s. 264 of the income Tax Act by the Income Tax Department. When the company succeeds, there would be a substantial relief in the above demand.

For the A Y 2004-05, there is a demand of Rs. 21,548,229/- by making certain additions. The companys appeal is pending before the Appellate Tribunal.

During the year the companys appeals against the penalty orders passed for the assessment years 1996-97,1997-98 and 1998-99 have been allowed in companys favour resulting in reduction in demand of Rs 6,517,464/- by the second appellate authority. The said second appellate authority had also remanded back the appeal

preferred by the company against the order of the first appellate authority for the assessment year 2004-05, directing rehearing based on decided cases of Honorable Supreme Court of India were decisions have been rendered in favour of the company in similar issuses.

Corporate Guarantee:

The Company has extended corporate guarantee in respect of the credit facilities of Rs.50,000,000/- provided to M/s.lndowind Energy Limited by Bank of India, Andheri Corporate Banking Branch, Mumbai.

C Related Party Disclosure under Accounting Standard -18:

The details of related parties as identified by the management are as under:

i) Key Management Personnel:

Shri Bala K V - Director

Shri Jayaraman T R - Director

Shri Raghavan T S - Director

ii) Associates:

Indowind Energy Limited

Loyal Credit & Investments Limited

Ind Eco Ventures Limited

SGM Wind Farms Private Limited

Bekae Properties Private Limited

Bewind Power Private Limited

D RELATED PARTY TRANSACTIONS;

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is required to be made and no amounts have been written off or written back during the year in respect of debts due from or to related parties. There are no other related parties where control exists that need to be disclosed.

E Information with regard to other matters specified in Part II of schedule VI of the companies Act, 1956, are either NIL, or not applicable to the company for the period under audit.

F There are no amounts due to Small Scale Industries in terms of " The Micro, Small and Medium Enterprises Development Act, 2006 ".

G Expenditure in Foreign currency - Nil

H Earnings in Foreign Currency - Nil

I Previous years figures have been regrouped wherever found necessary.

As per our report of even date