Notes to Accounts of Innoventive Industries Ltd.

Mar 31, 2015

1. Nature of business

Innoventive Industries Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestic and international markets.

2. 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 share holder of the equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31,2015, the amount of per share dividend recognised as distributed to equity shareholders was Rs. Nil. (March 31, 2014 Nil). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distributing all preferential amounts.

3. Shares held by holding/ ultimate holding company and / or their subsidiaries/ associates:

The company does not have any holding or ultimate holding company.

During the year the company has Deferred Tax Assets arising on account of unabosrbed depreciation and business Jossess. However, the same is not recognised in the books of accounts as there is no virtual certainity that sufficient future taxable income will be available against which such deferred tax assests can be realised *

* Cash Credit and demand loans are secured by first pari pasu charge by way of hypothecation of all current assets both present and future and second pari pasu charge by wav of hyphotication on all fixed assets, both present and future and having interest rate at 11%

4. Related Party Transactions

(i) Parties where Control Exists Relationship

Sankalp Engineering & Services Private Limtied Subsidiaries

(Erstwhile Sankalp Forgings Private Limited)

Saicon Steels Private Limited Subsidiaries

Innovative Technomics Private Limited Subsidiaries

Arihant Steel and Metal Wires Private Limtied Subsidiaries

Arihant Auto Components Private Limited Subsidiaries

Sevenstar Electrodes Private Limited Subsidiaries

innoventive Americas INC Subsidiaries

lnnoventive Industries UK Ltd Subsidiaries

Salem Steels NA LLC Step Down Subsidiaries

Sankalp Americas INC Step Down Subsidiaries

Sankalp Middle East FZE Step Down Subsidiaries

II Directors and their Relatives Relationshipship

Mr. Chandu taxman Chavan Chairman and Managing Directors

Mr. Ravindra W Katre Whole Time Director

Mr. Pradeep Tupe Independent Directors

Miss. Pournima Gadiya Independent Directors

Mr. Rajendra lagdale (Upto 14th August 2014) Independent Directors

Mr. Kamprasad joshi (Upto 31st August 2014) independent Directors

Mr. Sanjay Asher (Upto 30th September 2014) Independent Directors

Key Management Personnel Relationship

Mr. Chandu l.axman Chavan Chairman and Managing Directors

Mr. Ravindra W Katre Whole Time Director

Relatives of Key Managerial Personnel (Relative ol KMP) Relationship

Dr. Shnbhangi Jadhav Relative of Director

Mrs. Mrunal Katre Relative of Director

Promoter Group Relationship

Mr. Sanjay Bhatle Promoter Group

Mr. Parag Muley Promoter Group

Mr. Shivaji Katke Promoter Group

Mr. Sanjay Waghulade Promoter Group

III] Enterprise over which Key Managerial Personnel and the Relative of Key Managerial Personnel exercise control/signiticant influence (Other Related Concerns]

Name of Enterprise Legal statusof such entity

Yashoday Engineers Private Limtied (Upto September 2013) Private Limited Company

Keytool Engineering Solutions Private Limtied (Upto September 2013) Private Limited Company

Opal Luxury Time Products Limited Limited Company

Gargi Bio Tek Private Limited Private Limited Company

Membrane Filters (India) Private Limited (Upto September 2013) Private Limited Company

Aim Filtcrtcch. Private Limited (Upto September 2013) Private Limited Company

M/s. Saptashrungi Engineering Works Sourcegenie Insurance Broking Private Limited Private Limited Company

Sourccgcnie Consulting Private Limited Private Limited Company

Swayamsiddha Mahila Utkarsha Foundation Section 2S Company

Swayamsiddha Socio-economic Projects Private Limited Private Limited Company

Innoventive Ventures Limited Limited Company

Highhrnw Investments Private Limited Private Limited Company

Orgreen Private Limited Private Limited Company

CLC Holding Private Limited Private Limited Company

Phoenix Enterprises Proprietorship

Tulip Greenhouses Private Limited Private Limited Company

Phoenix Erectors Private Limited Private Limited Company

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Mar 31, 2014

1. Nature of business

Innoventive Industries Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestic and international markets.

2. 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 share holder of the equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31, 2014, the amount of per share dividend recognised as distributed to equity shareholders was Rs. Nil. (March 31, 2013 Rs. 0.1).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distributing all preferential amounts.

3. Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates:

The company does not have any holding or ultimate holding Company.

4 Related party transactions

I Parties where control exists :

Subsidiaries

* Arihant Steel and Metal Wires Private Limited

* Arihant Auto Components Private Limited

* Sankalp Engineering & Services Private Limited (erstwhile Sankalp Forgings Private Limited.)

* Saicon Steels Private Limited

* Seven Star Electrodes Private Limited

* Innoventive Americas, INC.

* Innoventive Industries UK Limited

* Innovative Technomics Private Limited Step-Down Subsidiaries

* Salem Steel NA, LLC

* Sankalp Americas Inc.

* Sankalp Middle East FZE

II Key management personnel and their relatives (KMP)

Mr. Chandu L. Chavan Chairman & Managing Director

Mr. Ravindra W. Katre Whole Time Director

Mr. Sanjay H. Waghulade Whole Time Director (Upto September 2013)

Mr. K V Ramarathnam Whole Time Director (Upto August 2013)

Mr. Sanjay T. Bhade Promoter Group

Mr. Parag M. Mulye Promoter Group

Mr. Shivaji R Katke Promoter Group

Relatives of Key management personnel (Relative of KMP)

Dr. Shubhangi Jadhav

Mrs. Mrunal Katre

Mrs. Vishakha Bhade

Mrs. Kavita Dhupkar

Mrs. Smita Katke

Enterprise over which the key management personnel or their relatives exercise control/significant influence (Other related concerns)

Name of the Enterprise

Yashoday Engineers Private Limited (Upto September 2013)

Keytool Engineering Solutions Private Limited (Upto September 2013)

Opal Luxury Time Products Limited Gargi Bio Tek Private Limited

Membrane Filters (India) Private Limited (Upto October 2013)

Aim Filtertech Private Limited (Upto February 2014)

M/s. Saptashrungi Engineering Works

Sourcegenie Insurance Broking Private Limited

Source Genie Consulting Private Limited

Swayamsiddha Mahila Utkarsh Foundation

Innoventive Venture Limited

Highbrow Investments Private Limited

5. Micro, Small & Medium Enterprise Development Act, 2006

Suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this, information under Section 22 of the said Act is not given.

6. Foreign Exchange difference on long term foreign currency borrowings

Pursuant to notification dated 29th December, 2011 issued by Ministry of Corporate Affairs, Government of India in respect of changes to Accounting Standard 11, the company has exercised the option of capitalising exchange differences arising on reporting of long term foreign currency loans in so far as they relate to the acquisition of depreciable capital assets. Accordingly, in the current financial year, an amount of Rs. 1,099.57/- lacs (March 31, 2013 Rs. 406.17/- lacs) has been capitalized

7. The company has recognised deferred tax asset since the management believes that the reversal of timing difference on account of depreciation would result in sufficient future taxable income against which the said deffered tax asset can be realised.

8. Corporate Debt Restructuring

The Company has filed an application with the Corporate Debt Restructuring (CDR) Cell in September, 2013 for restructuring of its debts. The application was admitted by the CDR Cell on September 26, 2013 and is in the process of approval. Pending the approval of the application, borrowings and other balances with banks reflected in the Notes and interest thereon is recognised in the books as per the original terms of sanction and/or as per bank statements received and is subject to adjustments which may arise on approval of CDR scheme and reconciliations of the said balances with the banks.

9. Cost of Material and Components Consumed & (Increase)/Decrease in Inventories of Finished Goods and Work-in-progress

During the year, the operations of the Company were adversely impacted by the downturn in Autocomponents and slowdown in demand from Power Sector due to various problems such as coal linkages, etc. Accordingly the company has made reassessment of inventory held and made provision/write down of Rs. 13,039.55/- lacs in value of inventories on account of slow and non moving inventory, reassessment of net realisable value and consumption norms.

10. Based on the reassessment of realisation of Debtors and Loans and Advances, the Company has made a Provision of Doubtful Debts/ Advances and Other Current Assets of Rs. 17,808.76 /- Lacs (Previous year Rs 56.77/- Lacs) and written off Bad Debts amounting to Rs. 3,428.52/- Lacs. Further, the credit balances which are considered as not payable by the management amounting to Rs. 9,699.68/- Lacs and provisions no longer payable amounting to Rs. 453.79/- Lacs have been written back and shown in Note No. 21 - Other Income.

11. Prior year comparatives

Previous year figures have been regrouped/ reclassified wherever necessary.

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Mar 31, 2013

1. Nature of Business:

Innoventve Industries Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestc and internatonal markets.

2. Related Party Transactons: a) Partes where control exists

Subsidiaries

Arihant Steel and Metal Wires Private Limited

Arihant Auto Components Private Limited

Sankalp Engineering & Services Private Limited (erstwhile Sankalp Forgings Private Limited.)

Saicon Steels Private Limited

Seven Star Electrodes Private Limited

Innoventve Americas, INC.

Innoventve Industries UK Limited

Salem Steel NA, LLC ( fellow Subsidiary)

Sankalp Americas Inc. (fellow Subsidiary)

Sankalp Middle East FZE (fellow Subsidiary)

Innovatve Technomics Private Limited (w.e.f. October 1st, 2012)

b) Key management personnel and their relatves (KMP)

Mr. Chandu L. Chavan Chairman & Managing Director

Mr. Ravindra W. Katre Whole Time Director

Mr. Sanjay H. Waghulade Whole Time Director

Mr. K V Ramarathnam Whole Time Director

Mr. Sanjay T. Bhade Promoter Group

Mr. Parag M. Mulye Promoter Group

Mr. Shivaji R Katke Promoter Group

Relatves of Key management personnel (Relatve of KMP)

Dr. Shubhangi Jadhav Mrs. Mrunal Katre Mrs. Vishakha Bhade Mrs. Kavita Dhupkar Mrs. Smita Katke

c) Enterprise over which the relatve of key management personnel exercise control/signifcant infuence (Other related concerns)

Name of the Enterprise

Yashoday Engineers Private Limited

Keytool Engineering Solutons Private Limited

Opal Luxury Time Products Limited

GeneOmbio Technologies Private Limited

Phoenix Erectors Private Limited(tll March,2012)

Gargi Bio Tek Private Limited

Membrane Filters (India) Private Limited

Aim Filtertech Private Limited

M/s. Saptashrungi Engineering Works

Sourcegenie Insurance Broking Private Limited

Swayamsiddha Mahila Utkarsh Foundaton

Innoventve Venture Limited

3. Unhedged Foreign Currency Balances

The company has Outstanding forward contract as of March 31, 2013 USD 10, 00,000 (March 31, 2012 – NIL) The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

4. Micro, Small & Medium Enterprise Development Act, 2006

Suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006, have not furnished required informaton regarding fling of necessary memorandum with appointed authority. In view of this, informaton under Secton 22 of the said Act is not given.

5. Foreign Exchange diference on long term foreign currency borrowings

Pursuant to notfcaton dated 29th December, 2011 issued by Ministry of Corporate Afairs, Government of India in respect of changes to Accountng Standard 11, the company has exercised the opton of capitalising exchange diferences arising on reportng of long term foreign currency loans in so far as they relate to the acquisiton of depreciable capital assets. Accordingly, in the current fnancial year, an amount of Rs. 406.17 Lacs (March 31, 2012 Rs. 776.18 Lacs) has been capitalised.

6. As per circular no. 25/2012 dated 09.08.2012 issued by the Ministry of Corporate Afairs, exchange loss of Rs. 111.94 Lacs has been capitalised to relevant fxed assets which was charged as interest expense in the previous year.

7. The Company had opted for prepayment of sales tax deferral liability amountng to Rs. 3,181.29 Lacs outstanding as on April 1, 2011. As per the provisional valuaton of Net Present Value (NPV) an amount of Rs. 1,397.26 Lacs is payable against the full and fnal setlement of aforesaid liability of Rs. 3,181.29 Lacs. The Company has paid aforesaid NPV of Rs. 1,397.26 Lacs to sales tax authorites in fnancial year 2011-2012. The sales tax deferral liability upto 2006 -2007 afer completon of assessment amounted to Rs. 1,343.43 Lacs, against which an amount of Rs. 681.08 Lacs was determined as NPV. The sales tax authorites have completed the Assessment upto 2006-2007 and determined an amount of Rs. 681.08 Lacs as payable against the total liability of Rs. 1,343.10 Lacs. Accordingly, the company has accounted Rs. 662.02 Lacs as income on prepayment of sales tax deferral liability under other income in fnancial year 2011-2012.

Balance liability of Rs. 1,838.19 Lacs was pending for assessment in fnancial year 2011-2012. This liability has been shown as a part of other current liability and payments already made of Rs. 716.18 Lacs towards the said liability are shown as part of deposits in fnancial statement of 2011-2012. During the current year said pending assessments are completed and accordingly the company has accounted Rs. 1,109.07 Lacs as income on prepayment of sales tax deferral liability.

8. Amount sanctoned under Industrial Promotonal Subsidy by State Government of Maharashtra for setng up Mega project unit is considered as non-taxable based on legal opinion obtained by the Company.

9. During the year, commercial banks have sanctoned insurance-backed factoring in respect of debtors of the Company. Accordingly, as on date of Balance Sheet, total debtors assigned to the bankers are:

10. The company has in-house research and development (R & D) facility at Gat No. 56/3,4,5 Village Pimple Jagtap, Tal. Shirur, Dist. Pune 412 208. The company has applied for recogniton of this R & D Unit with Department of Scientfc and Industrial Research (DSIR).

Details of assets capitalized during the year and Capital Work In Progress in respect of In-house R&D facility is as under:

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

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Mar 31, 2012

Innoventive Industries Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company manufactures precision steel tubes, membrane panel strips, auto components and other steel products catering to industries in automobiles, boilers and heat exchangers, energy, oil & gas, farm equipment & general engineering etc. The Company caters to both domestic and international markets.

a) Terms/ Rights attached to equity shares:

The Company has only one class of equity shares having a face value of f 10 per share. Each share holder of the equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognised as distributed to equity shareholders was f 3 (March 31,2011 Rs.2). In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distributing all preferential amounts.

b) Shares held by holding/ultimate holding company and/or their subsidiaries/associates:

The company does not have any holding or ultimate holding company.

Notes:

1 Bonus Issue of 3,04,49,360 equity shares in the ratio of five shares for every share held in the company as on the record date, i.e. September 18,2010.

2 Bonus Issue of 379,280 equity shares only to Kavos Capital Limited in the ratio of 1.51712 shares for every single share on their existing holding of 250,000 equity shares as on the record date, i.e. July 30,2010 in compliance with Section 205 (3) of the Companies Act, 1956.

3 Preferential allotment of 710,492 equity shares to Kavos Capital Limited dated August 16,2010.

4 Preferential allotment of 19,23,117 equity shares to Innoventive Group Employees Welfare Trust dated September 28,2010.

5 Pursuant to the Pre-IPO Placement, the Company has made a preferential allotment of 26,00,000 Equity Shares at a price of f 117 per equity share to Standard Chartered Private Equity (Mauritius) II Limited.

1 CAPITAL COMMITMENTS, CONTINGENT LIABILITIES & SECURED LOANS.

Rs. in lacs

PARTICULARS YEAR ENDED YEAR ENDED MARCH 31,2012 MARCH 31,2011

i) Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for( net of advances) 885.33 60.43

ii) Contingent liabilities

a) Claims against company not acknowledged as debts 451.53 448.07

b) Guarantee issued in respect of obligations of a subsidiary 170.00 3,015.00

- Loans outstanding in respect of above 29.24 425.61

c) Unfulfilled export obligations under EPCG scheme to be fulfilled over 8 years 6,250.13 389.00

Duty liability on non-fulfilment of above obligation is Rs. 1,037.64 lacs

d) Unfulfilled export obligations under advance authorization 711.36 -

Duty liability on non-fulfilment of above obligation is Rs. 66.46 lacs

2 SEGMENT REPORTING

I) Primary Segment

Based on the guiding principles given in the Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Company''s primary segments are Motor Vehicle Parts (MV Parts), Tubes and Products & Others. The above business segments have been identified considering -

i. The nature of the products,

ii. The related risks and returns, and

iii.The internal financial reporting systems.

Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated Expenses." Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocated Assets/Liabilities."

* The company has incorporated 100% subsidiary on January 1,2012 in United States of America. ** The company has incorporated 100% subsidiary on December 6,2011 in United Kingdom *** The company has been incorporated on January 1,2012 in United States of America.

Notes:

1 Expected rate of return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

2 The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors on long term basis.

3 MICRO, SMALL & MEDIUM ENTERPRISE DEVELOPMENT ACT, 2006

Suppliers covered under Micro, Small & Medium Enterprise Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this, information under Section 22 of the said Act is notgiven.

4 FOREIGN EXCHANGE DIFFERENCE ON LONG TERM FOREIGN CURRENCY BORROWINGS

Pursuant to notification dated December29, 2011 issued by Ministry of Corporate Affairs, Government of India in respect of changes to Accounting Standard 11, the Company has exercised the option of capitalising exchange differences arising on reporting of long term foreign currency loans in so far as they relate to the acquisition of depreciable capital assets. Accordingly, in the current financial year, an amount of Rs. 776.18 lacs (March 31,2011 Rs. Nil) has been capitalised. Out of this amount Rs. 59.37 lacs (net) (Rs. 70.87 lacs exchange loss and depreciation of Rs. 11.50 lacs thereon) has been capitalised on account of foreign exchange losses arising during financial years 2007-08 to 2010-11 and has been adjusted against the general reserve. This amount will be depreciated from the date of capitalisation over the remaining life of the assets. Had this change not been effected profit for the year would be lower by Rs. 681.44 lacs (net of depreciation) and the gross block of assets would have been lower by Rs. 776.18 lacs. The balance of foreign exchange difference capitalised pursuant to above, remaining to be depreciated over the balance life is Rs. 736.13 lacs.

5 CURRENT MATURITIES OF SALES TAX DEFERRAL LOAN (UNSECURED)

During the year, the Company has opted for prepayment of sales tax deferral liability amounting to Rs. 3,181.29 lacs outstanding as on April 1,2011. As perthe provisional valuation of Net Present Value (NPV) an amount of Rs. 1,397.26 lacs is payable against the full and final settlement of aforesaid liability of Rs. 3,181.29 lacs. The Company has paid aforesaid NPV of Rs. 1,397.26 lacs to sales tax authorities. The sales tax deferral liability upto 2006 -07 after completion of assessment amounted to Rs. 1,343.43 lacs, against which an amount of Rs. 681.08 lacs was determined as NPV The sales tax authorities have completed the Assessment upto 2006-07 and determined an amount of Rs. 681.08 lacs as payable against the total liability of Rs.1,343.10 lacs. Accordingly, the Company has accounted Rs. 662.02 lacs as income on prepayment of sales tax deferral liability under other income.

Balance liability of Rs.1, 837.86 lacs is pending for assessment. This liability has been shown as a part of other current liability and payments already made of Rs. 716.18 lacs towards the said liability are shown as part of deposits. The difference between sales tax deferred liability and NPV will accounted as income in the year. The assessment for the same is completed by the sales tax authorities.

6 Amount sanctioned under Industrial Promotional Subsidy by State Government of Maharashtra for setting up Mega Project Unit is considered as non-taxable based on legal opinion obtained by the Company.

7 PRIOR YEAR COMPARATIVES

Till the year end March 31,2011, the Company had adopted pre-revised Schedule VI as required by the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year''s classification. The adoption of revised schedule VI does not impact recognition and measurement principle followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.

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Mar 31, 2011

1. SHARE CAPITAL:

i. Out of total 4,10,62,349 equity shares, 3,08,28,640 shares are allotted as fully paid by way of bonus shares by capitalization of opening balance of Profit and Loss Account and Capital Redemption Reserve A/c in July 2010 and September 2010.

ii. During the period, 52,33,609 equity shares were allotted.

a. Out of the above 7,10,492 equity shares have been allotted at a premium of Rs. 482.62 Per share on August 16, 2010

b. and 19,23,117 shares have been allotted to ''The Innoventive Group employees'' Welfare Trust'' at face value on September 28, 2010

c. Balance 26,00,000 equity shares were allotted to Standard Chartered Private equity (Mauritius) II Ltd at a premium of Rs. 107 per share on February 08, 2011.

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

Rs. in lacs

PARTICULARS March 31, March 31,

2011 2010

(a) In respect of guarantees given to banks/ financial institutions on behalf of:

(i) Subsidiary Companies 3,015.00 3,098.00

-Loans Outstanding in respect of above 425.61 934.97

(ii) Other guarantees

-Loan Outstanding in respect of above - -

(b) In respect of:

export obligation against EPCG Licenses 389.00 -

Claims against the Company not acknowledged as debts 448.07 3.01

3. CAPITAL COMMITMENTS:

estimated value of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 60.43 lacs. (Previous year Rs. 139.44 lacs)

4. suppliers covered under Micro, Small & Medium Enterprises Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this, information required under Section 22 of the said Act is not given.

5. Provision For Taxation:

Amount sanctioned under Industrial Promotional subsidy by state Government of maharashtra for setting up mega Project unit is considered as non-taxable based on the legal opinion obtained by the Company. Accordingly tax expenses related to IPs scheme for march 31, 2010 of Rs. 644.30 lacs is written back during the year.

6. segment re Porting:

a) Primary segment

based on the guiding principles given in the Accounting standard - 17 "segment reporting" issued by the Institute of Chartered Accountants of India, the Company''s primary segments are motor vehicle Parts, tubes & Products and others.

The above business segments have been identified considering -

i. the nature of the products,

ii. the related risks and returns, and

iii. The internal financial reporting systems.

revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "unallocable Expenses." Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/Liabilities."

b) secondary segment

the Company caters mainly to the needs of Indian markets. export turnover during the year being less than 10% of the total turnover, there are no reportable geographical segments.

7. RELATED PARTIES DURING THE YEAR ENDING ON MARCH 31, 2011 ARE AS FOLLOWS:

a. Parties where control exists

Subsidiaries

Arihant Steel and Metal Wires Pvt. Ltd.

Arihant Auto Components Pvt. Ltd.

Sankalp Forgings Pvt. Ltd.

Saicon Steels Pvt. Ltd.

Sevenstar electrodes Pvt. Ltd.

b. Key management personnel

executive Chairman Mr. Chandu L Chavan

Managing Director Mr. Ravindra W Katre

Whole-time Director Mr. Sanjay Waghulade

Promoter Group Mr. Sanjay Bhade

Promoter Group Mr. Parag Mulye

Promoter Group Mr. Shivaji Katke

c. Enterprise over which the relative of key management personnel exercise control/significant infuence

Name of the enterprise Legal Status of such entity

yashoday engineers Private Limited Private Limited

Keytool engineering Solutions Private Limited Private Limited

Opal Luxury Time Products Private Limited Private Limited

GeneOmbio Technologies Private Limited Private Limited

Sourcegenie Consulting Private Limited Private Limited

Phoenix erectors Private Limited Private Limited

hotel Gourish Private Limited Private Limited

Gargi Bio Tek Private Limited Private Limited

Membrane Filters (India) Private Limited Private Limited

Aim Filtertech Private Limited Private Limited

M/s. Saptashrungi engineering Works Partnership Firm

M/s. hollyhock Tours & Travels Partnership Firm

Sourcegenie Insurance Broking Private Limited Private Limited

b. The Company has entered into derivative transactions with an objective to hedge the financial risks associated with its business viz. foreign exchange, interest rate.

8. PRIOR YEAR COMPARATIVES

Previous year''s figures have been regrouped/reclassified, wherever necessary, to conform to current year''s presentation.

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Mar 31, 2010

1. Borrowings and Securities:

Sr. Name of the Type of Nature of Securities No. lender Loan

1 Oriental Bank of Long Term First charge on pari-passu on entire fixed assets Commerce Loan (present & future) and industrial promotion subsidy from Government of Maharashtra, Directorate of Industries.

2 Central Bank of Long Term First charge on pari-passu on entire fixed assets India Loan (present & future) and industrial promotion subsidy from Government of Maharashtra, Directorate of Industries.

3 Axis Bank Long Term First pari-passu charge on fixed assets of the Loan Company along with other term lenders and second charge on current assets on pari-passu basis.

4 GE Capital Services Long Term Exclusive charge on specific assets being funded India Loan out of loan amount.

5 State Bank of Long Term First pari-passu charge on the Companys present Mysore Loan and future movable and immovable fixed assets.

6 UCO Bank Long Term First pari-passu charge on the Companys present Loan and future movable and immovable fixed assets. 7 United Bank of Long Term First charge on fixed assets, present and future of India Loan the Company, ranking pari-passu with existing lenders.

8 IDBI Bank Working Primary: First charge on all the current assets of Capital Loan the Company.

Collateral: Second charge on pari-passu basis on all fixed assets of the Company.

9 IDBI Bank Long Term First charge on fixed assets, present and future of Loan the Company, ranking pari-passu with existing lenders.

10 Corporation Bank Long Term EMG / first charge on factory land and building and Loan hypothecation or first charge on plant & machinery and other movable assets on pari-passu basis with other financing banks.

2. Contingent Liabilities not provided for:

Particulars 31st March 31st March 2010 2009 (Rs. in lacs) (Rs. in lacs)

(a) In respect of guarantees behalf of:

(i) Subsidiary Companies 3,098.00 6,498.00 - Loans Outstanding in 934,97 2,756.93 respect of above

(ii) Other guarantees - 20.00 - Loan Outstanding in - 12.72 respect of above

(b) In respect of: Claims against the Company not 3.01 0.92 acknowledged as debts

3. Capital Commitments:

Estimated value of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 139.44 lacs. (Previous Year Rs. 1,419.55 lacs)

4. Suppliers covered under Micro, Small & Medium Enterprises Development Act, 2006, have not furnished required information regarding filing of necessary memorandum with appointed authority. In view of this, information required under Section 22 of the said Act is not given.

5. Segment Reporting:

a) Primary Segment Based on the guiding principles given in the Accounting Standard - 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Companys primary segments are Motor,Vehicle Parts, Tubes & Others.

The above business segments have been identified considering -

i. The nature of the products,

ii. The related risks and returns, and

iii. The internal financial reporting systems.

Revenue and expenses have been accounted for based on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Expenses." Assets and liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/Liabilities."

b) Secondary Segment The Company caters mainly to the needs of Indian markets. Export turnover during the year being less than 10% of the total turnover, there are no reportable geographical segments.

6. Related parties during the year ending on 31st March,2010 are as follows:

a. Parties where control exists

Subsidiaries Arihant Steel & Metal Wires Pvt. Ltd.

Arihant Steel Products & Services Pvt. Ltd.

Arihant Auto Components Pvt. Ltd.

Sankalp Forgings Pvt Ltd. Saicon Steels Pvt. Ltd.

Sevenstar Electrodes Pvt. Ltd.

b. Key management personnel

Executive Chairman Mr. Chandu L. Chavan

Managing Director Mr. Ravindra W. Katre

Whole-time Director Mr. Sanjay Waghulade

Promoter Mr. Sanjay Bhade

Promoter Mr. ParagMulye

Promoter Mr. Shivaji Katke

c. Enterprise over which the relative of key management personnel exercise control / significant influence

Name of the Enterprise Legal status of such entity

Yashoday Engineers Private Limited Private Limited

Keytoot Engineering Solutions Private Limited Private Limited

Opal Luxury Time Products Private Limited Private Limited

GeneOmbio Technologies Private Limited Private Limited

Sourcegenie Consulting Private Limited Private Limited

Phoenix Erectors Private Limited Private Limited

Hotel Gourish Private Limited Private Limited

Gargi Bio Tek Private Limited Private Limited

Membrane Filters (India) Private Limited Private Limited

Aim Filtertech Private Limited Private Limited

M/s. Saptashrungi Engineering Works Partnership Firm

M/s. Hollyhock Tours & Travels Partnership Firm

7. Amount of borrowing costs capitalized during the period is Rs. 710.13 lacs (Previous Year Rs. 970.00 lacs)

8.a. The Company has entered into derivative transactions with an objective to hedge the financial risks associated with its business viz. foreign exchange, interest rate.

9. Prior year comparatives

Previous years figures have been regrouped / reclassified, wherever necessary, to conform to current years presentation.