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Notes to Accounts of International Combustion (India) Ltd.

Mar 31, 2015

Rs in lacs) For the year ended For the year ended 31st March, 2015 31st March, 2014

1.01 CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities

Outstanding Bank Guarantees 68.59 96.12

Commitments

Estimated amount of contracts remaining to be executed on capital account 900.80 -

1.02 EMPLOYEE BENEFITS

a) The Company has Defined Contribution Schemes for its employees'' retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees.In case of Provident Fund Scheme, the contributions are also made by the employees.

Note:

1) Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of return on assets have been considered based on relevant economic factors such as inflatio, market growth and other factors applicable to the period over which the obligation is expected to be settled.

2) The contributions expected to be made by the Company for the year 2015-16 is yet to be determined.

3) The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees'' Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be met by the employers need to be treated as ''''Defined Benefit Plan". Accordingly the actuary in consultation with the management, has carried out the acturial valuation of such provident fund liability on account of shortfall of interest on the basis of the guidelines issued by Acturial Society of India. Such liability as determined by the actuary amounts to Rs. 4.06 lacs (Previous Year - Rs. 4.20 lacs) which has been provided in the Accounts for the year ended 31st March, 2015.

1.03 In the opinion of the Board of Directors, Current Assets and Loans and Advances have a value at which these are stated in the Balance Sheet, unless otherwise stated and adequate provision for all known liabilities have been made and are not in excess of the amount reasonably required.

1.04 Related Party disclosures as identified by the management in accordance with the Accounting Standard 18

a) Key Management Personnel:

Mr. I. Sen - Managing Director Mr. S. Saha - Executive Director

b) Joint Venture Company having substantial interest in the Company

Mozer Process Technology Pvt. Ltd

c) Chairman and non-executive Director - Mr. Sanjay Bagaria

1.05 LEASES

a) The Company had certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Note 28

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2013-14 - Rs. Nil)

1.06 Previous year''s figures have been re-grouped wherever necessary.


Mar 31, 2014

1.01 CONTINGENT LIABILITIES AND COMMITMENTS Contingent Liabilities

Outstanding Bank Guarantees 96.12 102.18

Sales Tax demand under appeal — 540.94

Commitments

Estimated amount of contracts remaining to be executed on capital account — 13.62

1.02 EMPLOYEE BENEFITS

a) The Company has Defined Contribution Schemes for its employees'' retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees. In case of Provident Fund Scheme, the contributions are also made by the employees.

Defined Benefit Scheme

The Employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligations is determined based on acturial valuation using the projected Unit Credit Method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

1.03 In the opinion of the Board of Directors, Current Assets and Loans and Advances have a value at which these are stated in the Balance Sheet and unless otherwise stated adequate provision for all known liabilities have been made and are not in excess of the amount reasonably required.

1.04 Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by the Companies Accounting Standard Rules 2006.

a) Key Management Personnel:

Mr. I. Sen - Managing Director Mr. S. Saha - Executive Director

b) Joint Venture Company having substantial interest in the Company with effect from 23rd July, 2012 Mozer Process Technology Pvt. Ltd

c) Chairman and non-executive Director - Mr. Sanjay Bagaria

1.05 LEASES

a) The Company had certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Note 28

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2012-13 - Rs. Nil)

1.06 Previous year''s figures have been re-grouped wherever necessary.


Mar 31, 2013

1.01 CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities

Outstanding Bank Guarantees 102.18 117.42

Sales Tax demand under appeal 540.94 540.94

Commitments

Estimated amount of contracts remaining to be executed on capital account 13.62 58.74

1.02 EMPLOYEE BENEFITS

a) The Company has Defined Contribution Schemes for its employees’ retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees.In case of Provident Fund Scheme, the contributions are also made by the employees.

The expected return on Plan Assets is based on market expectations at the beginning of the year. The rate of return on long term government bonds is taken as reference for this purpose.

The contributions expected to be made by the Company for the year 2012-13 is yet to be determined.

c) The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees’ Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be met by the employers need to be treated as "Defined Benefit Plan". Accordingly the actuary in consultation with the management, has carried out the acturial valuation of such provident fund liability on account of shortfall of interest on the basis of the guidelines issued by Acturial Society of India. Such liability as determined by the actuary amounts to Rs. 5.02 lacs (Previous Year - Rs. 1.59 lacs) which has been provided in the Accounts for the year ended 31st March, 2013.

1.03 In the opinion of the Management / Board of Directors, the Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and adequate provision for all known liabilities have been made.

1.04 Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by the Companies Accounting Standard Rules 2006.

a) Key Management Personnel:

Mr. I. Sen - Managing Director Mr.S. Saha - Executive Director

b) Companies/Individuals/HUF/Body Corporate having substantial interest in the Company:

Shiva Prasad Bagaria Sanjay Bagaria Purnima Bagaria Sanjay Bagaria - HUF Shiva Prasad Bagaria - HUF Satyam Bagaria Benefit Trust Devanshi Bagaria

1.05 LEASES

a) The Company had certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Note 27.

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2011- 12 - Rs. Nil).

c) The future obligation for vehicle taken on finance lease is given below: (Refer Note-4).

1.06 Previous year''s figures have been re-arranged and re-grouped wherever necessary.


Mar 31, 2012

(a) The Company has only one class of equity shares having a par value of Rs. 10/- each. Each holder of equity shares is entitled to one vote per share.

(b) In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of all preferential amounts in proportion of their shareholding.

(c) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(d) Cash Credit from UCO Bank and Axis Bank are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, stores and spares, book debts and other current assets of the Company and all moveable assets and by equitable mortgage by deposit of title deeds of immoveable properties comprising of land and buildings at the Company's factories situated at Baidyabati, Nagpur and Aurangabad.

1.1 During the year, Minimum Alternate Tax (MAT) has been provided. The Company is entitled for MAT credit and the same has been recognised accordingly.

2.01 CONTINGENT LIABILITIES AND COMMITMENTS

Contingent Liabilities

Outstanding Bank Guarantees 117.42 104.22

Bills discounted under Letter of Credit (since realised) - 213.16

Sales Tax demand under appeal 540.94 134.00 Commitments

Estimated amount of contracts remaining to be executed on capital account 58.74 83.30

2.02 EMPLOYEE BENEFITS

a) The Company has Defined Contribution Schemes for its employees' retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees.In case of Provident Fund Scheme, the contributions are also made by the employees.

*Included in "Salaries and Wages" and "Contribution to Provident and Other Funds" under "EMPLOYEE

BENEFIT EXPENSES" on Note 25.

The expected return on Plan Assets is based on market expectations at the beginning of the year.

The rate of return on long term government bonds is taken as reference for this purpose.

The contributions expected to be made by the Company for the year 2011-12 is yet to be determined.

c) The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees' Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be met by the employers need to be treated as "Defined Benefit Plan". Accordingly the actuary in consultation with the management, has carried out the acturial valuation of such provident fund liability on account of shortfall of interest on the basis of the guidelines issued by Acturial Society of India. Such liability as determined by the actuary amounts to Rs. 1.59 lacs which has been provided in the Accounts for the year ended 31st March, 2012.

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

2.04 Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by the Companies Accounting Standard Rules 2006.

a) Key Management Personnel:

Mr. I. Sen - Managing Director

Mr.S. Saha - Executive Director

b) Companies/Individuals/HUF/Body Corporate having substantial interest in the Company:

Shiva Prasad Bagaria

Sanjay Bagaria

Purnima Bagaria

Sanjay Bagaria - HUF

Shiva Prasad Bagaria - HUF

Satyam Bagaria Benefit Trust

2.05 LEASES

a) The Company had certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Note 28.

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2010-11 - Rs. Nil)

c) The future obligation for vehicle taken on finance lease is given below: (Refer Note-4)

2.06 Previous year's figures have been re-arranged and re-grouped wherever necessary.

2.07 Till the year ended 31st March, 2011, the Company was using pre-revised Schedule VI to the Company's Act,1956 for the preparation and presentation of its financial statements. During the year ended 31st March, 2012 the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company. The Company has reclassified previous year's figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.


Mar 31, 2011

(Rs. in lac)

31st March, 2011 31st March, 2010

(1) Contingent liabilities not provided for :

Outstanding Bank Guarantees 104.22 92.82

Bills discounted under Letter of Credit (since realised) 213.16 —

(2) Gross depreciation for the current year is Rs. 294.30 lacs (2010 - Rs. 364.21 lacs) of which Rs. 13.20 lacs (2010 - Rs. 13.18 lacs) has been transferred from revaluation reserve.

(3) Cash Credit from UCO Bank and Axis Bank are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, stores and spares, book debts and other current assets of the Company and all moveable assets and by equitable mortgage of immoveable properties comprising of land and buildings at the Company's factories situated at Baidyabati, Nagpur and Aurangabad.

(4) Fixed Deposit receipts of Rs.136.17 lacs (2010-Rs.114.48 lacs) have been deposited with Banks against guarantees issued by them.

(5) Employee Benefits

a) The Company has Defined Contribution Schemes for its employees' retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees. In case of Provident Fund Scheme, the contributions are also made by the employees.

(6) Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by The Institute of Chartered Accountants of India:

a) Key Management Personnel:

Mr. I. Sen - Managing Director

Mr. S. Saha - Executive Director

b) Companies/Individuals/HUF/Body Corporate having substantial interest in the Company: Shiva Prasad Bagaria, Sanjay Bagaria, Purnima Bagaria, Sanjay Bagaria - HUF, Shiva Prasad Bagaria - HUF, Satyam Bagaria Benefit Trust.

(7) Leases

a) The Company has certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Schedule 15.

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2009-10 – Rs. Nil)

(8) Previous year's figures have been re-arranged and re-grouped wherever necessary.


Mar 31, 2010

1

(Rs. in 000) 31st March, 2010 31st March, 2009 (1) Contingent liabilities not provided for: Outstanding Bank Guarantees 9282 7443 (2) Estimated amount of contracts remaining to be executed on capital — 8295 (3) Auditors Remuneration: Audit Fees 175 175 Certification etc. 98 108 (4) Research and Development expenses debited to respective heads of accounts 4641 5269 (5) Selling and Distribution Expenses comprise of Travelling Expenses 23371 19686 Commission on Sales 7347 4520 Other Expenses 5491 5078

(6) Miscellaneous Expenses include prior period expenditure of Rs. Nil (2008-09 - Rs. 2000 thousands).

(7) Gross depreciation for the current year is Rs.36421 thousands (2009 - Rs. 32770 thousands) of which Rs.1318 thousands (2009 - Rs.1274 thousands) has been transferred from revaluation reserve.

(8) Cash Credit / Working Capital Loan from UCO Bank and Axis Bank are secured by hypothecation of stock of raw materials, work-in-progress, finished goods, stores and spares, book debts and other current assets of the Company and all moveable assets and by equitable mortgage of immoveable properties comprising of land and buildings at the Companys factories situated at Baidyabati, Nagpur and Aurangabad.

(9) Fixed Deposit receipts of Rs.11448 thousands (2009-Rs. 12204 thousands) have been deposited with Banks against guarantees issued by them.

(10) Employee Benefits

a) The Company has Defined Contribution Schemes for its employees retirement benefits such as Provident Fund, Superannuation and defined Contribution Pension Schemes. For these Schemes, contributions are made by the Company for certain group of employees based on their.current salary to recognised funds maintained by the Company and contributions are also made to the State funds for certain other employees. In case of Provident Fund Scheme, the contributions are also made by the employees.

Contributions to Defined Contribution Plan recognized for the year are as under:

The expected return on Plan Assets is based on market expectations at the beginning of the year. The rate of return on long term government bonds is taken as reference for this purpose.

The contributions expected to be made by the Company for the year 2010-11 is yet to be determined.

c) The guidance on implementing Accounting Standard (AS-15) (Revised 2005) on Employees Benefits issued by Accounting Standard Board (ASB) states that provident fund trustees set up by the employers which require the interest shortfall to be met by the employers need to be treated as "Defined Benefit Plan". According to the management, in consultation with the actuary , it is not practical or feasible to actuarially value the Provident Fund liability in the absence of any guidance from Actuarial Society of India and also due to the fact that the rate of interest as notified by the Government can vary annually. Accordingly, the Company is currently not in a position to provide other related disclosures as required by the aforesaid AS-15 read with ASB guidance.

(2) Exchange difference of Rs. 526 thousands being net loss (2008-09 - Gain - Rs. 1158 thousands) included in Miscellaneous expenditure.

(i) The above remuneration does not include provision for gratuity and leave encashment as these are not separately ascertainable

(ii) The remuneration of Rs. 9192 thousands paid/ payable to the Managing Director for the period from 1st May, 2009 to 31st March, 2010 is pending shareholders approval at the ensuing Annual General Meeting

(3) Related Party disclosures as identified by the management in accordance with the Accounting Standard 18 issued by the Institute of Chartered Accountants of India:

a) Key Management Personnel:

Mr. I. Sen - Managing Director

Mr. S. Saha - Wholetime Director

b) Companies/lndividuals/HUF/Body Corporate having substantial interest in the Company: Shiva Prasad Bagaria,

Sanjay Bagaria, Purnima Bagaria, Sanjay Bagaria - HUF, Shiva Prasad Bagaria - HUF, Satyam Bagaria Benefit Trust.

(11) Leases

a) The Company has certain not non-cancellable operating lease arrangements for residential and office premises which are renewable by mutual consent and mutually agreed terms.

b) The aggregate lease rentals payable are charged as "Rent" in Schedule 15.

The future minimum lease payments under non-cancellable operating leases is Rs. Nil (2008-09 - Rs. Nil)

(12) Previous years figures have been re-arranged and re-grouped wherever necessary.