Notes to Accounts of JIK Industries Ltd.

Mar 31, 2015

1. Rights, preferences and restrictions attached to the shares

* Equity Shares have at par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per- share.

* 'A' Ordinary Equity Shares have at par value of Rs 10/- per share. These shares have differential voting rights viz. 1 vote forevery 10 shares held excluding fractions, if any.

2. Intrest free Sales Tax deferral / loan is availed from the Government of Maharashtra in accordance with the 1988 Package Scheme of Incentives. The said deferral / loan is repayable in 8 annual installment starting from 30th June 2010 without any interest and penalty in term of sanctioned Scheme of "BIFR".

3. Contingent Liabilities not provided for:

Current Period Previous Year

a) Disputed Income Tax Demand 310,205,682 1,290,375,240

b) Sales Tax Demand 16,942,118 -

c) Other Matters 782,500 782,500

4. The closing stock is as per the inventory taken, valued and certified by the management.

5. In the opinion of the management, the current assets, loans and advances have the values on realization in the ordinary course of business at least equal to the amounts at which they are stated in the balance sheet except the trade receivables and loans and advances which falls under management's policy for bad and doubtful debts as taken in the previous years.

6. Debit and Credit balances are subject to confirmation and reconciliation.

7. There are no dues to Micro, Small & Medium Enterprises as at Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors.

8. The Company has made provision for gratuity for the year under review as certified by M/s. VHV Finance & Consultancy Services.

9. Related Parties Disclosures i) Relationships:

(a) Subsidiary Companies:

* I. A. & I. C. Pvt. Limited (IAIC)

* Shah Pratap Industries Pvt. Limited (SPIL)

* Glassworks Trading Pvt. Limited (GTPL)

(b) Key Management Personnel: (KMP)

Shri. Rajendra G. Parikh (RGP)

10. The Company operates in one segment i.e. crystal, glass and allied products hence no separate disclosure of segment-wise information has been made as per Accounting Standards (AS-17) Segment Reporting issued by the Institute of Chartered Accountants of India

11. Board for Industrial and Financial Reconstruction (BIFR) has sanctioned the Rehabilitation Scheme of the company in terms of Section 19 (3) read with Section 18 (4) of SICA having scheme period 2008-2017.

12. The Company had filed a Miscellaneous Application (MA) with Hon'ble BIFR for implementation of clauses under Hon'ble BIFR sanctioned scheme by Directorate of Income Tax DIT(R). Hon'ble BIFR vide its order dated 21.10.2013 directed DIT(R) interalia not to take any coercive measures of recovery of any demands during scheme period, which is valid upto 2017 against the company / guarantors / promoters.

13. The Company has made an application with The Government of Maharashtra on 07.10.2014 under B.R.U Act for renewal of "Relief Undertaking" status.

14. Respective e-forms with ROC are pending due to pending litigation of non-implementation of Hon'ble BIFR orders by Ministry of Corporate Affairs & Others.

15. Provision for Unrealizable Debts and Sundry balances has made to present true and fair view of the Management and as per the policy adopted by the Management of the company in the previous years.

16. At present Long-term Investments in shares of M/s Jagati Publications Ltd stand in the name of subsidiaries viz. M/s I.A & I.C Pvt Ltd & M/s Shah Pratap Industries Pvt Ltd and the same are in the custody of government authorities. Both the parties have agreed for completing the necessary procedure on release of shares lying with the authorities.

17. Provision for diminution in value of Long-term Investments is made as there is a decline, other than temporary, in the value of investments and the carrying amount is reduced to recognize the decline. The resultant investments are carried at Book Value or Face Value whichever is applicable.

18. Hon'ble BIFR has given order to The New India Assurance Co Ltd to settle the insurance claim filed by the Company due to fire at Chemical Waste Recycling Plant at Vijaygad, Tal. Wada. Further, the Company had filed a petition in Hon'ble Bombay High Court against the insurance company. Hon'ble High Court vide its order dated 3rd February, 2014 granted Decree in favour of the Company. The Insurance Company has deposited the entire decreed amount of Rs. 7.38 Crs in court and preferred an appeal against the said order.

19. During the year, the management based on the opinion of experts, reviewed the position of contingent liability relating to income tax demands and as a matter of prudence has recognized tax demands amounting to Rs 89.30 Crs., pending the ongoing appellate proceedings reaching the finality. The management will periodically review the position based on subsequent appellate proceedings and are hopeful of substantial reliefs there from. With the review as on 31st March, 2015 the position of contingent liability stands as stated above in Pt No. 1 above.

20. Extra-ordinary items of Rs. 478.62 Lacs (Net) represents sundry receivables from various parties, which in the opinion of the management are uncertain of recovery amounting to Rs 510.17 Lacs, which have been written-off during the year. Management will pursue its efforts to realize those dues and recognize realization if any during the relevant financial year. Further, it also includes sundry dues payable to certain companies amounting to Rs 31.55 Lacs have been written-back.

21. For the Financial Year 2014-15, the Company has changed its Year ending to 31st March, 2015 to align its Financial Year as per the provisions of the Companies Act, 2013. Accordingly figures for the Current Period are for 9 months as against 12 months during the previous year.

22. The previous year figures have been regrouped/classified wherever considered necessary.

The accompanying notes are an integral part of the financial statements

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Jun 30, 2014

1) Contingent Liabilities not provided for:

Current Year PreviousYear

a) Disputed Income Tax 1,290,375,240 1,254,060,935 Demand

b) Other Matters 782 500 782,500

2) The closing stock is as per the inventory taken, valued and certified by the management.

3) In the opinion of the management, the current assets, loans and advances have the values on realization in the ordinary course of business at least equal to the amounts at which they are stated in the balance sheet except the trade receivables and loans and advances which falls under management''s policy for bad and doubtful debts as taken in the previous years.

4) Debit and Credit balances are subject to confirmation and reconciliation.

5) There are no dues to Micro, Small & Medium Enterprises as at Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors.

6) The Company has made provision for gratuity for the year under review as certified by M/s. VHV Finance & Consultancy Services.

7) Related Parties Disclosures

i) Relationships:

(a) Subsidiary Companies:

- I. A. & I. C. Pvt. Limited (IAIC) - Shah Pratap Industries Pvt. Limited (SPIL) - Glassworks Trading Pvt. Limited (GTPL)

(b) Key Management Personnel: (KMP)

Shri. Rajendra G. Parikh (RGP)

Note: Related party relationship is identified by the Company and relied upon by the auditors.

ii) Details of Transactions with Related Parties:

(figures in bracket pertains to previous Year).

iii) The amount outstanding and maximum balance outstanding at any time during the Year (figures in bracket pertains to previous Year).

8) The Company operates in one segment i.e. crystal, glass and allied products hence no separate disclosure of segment-wise information has been made as per Accounting Standards (AS-17) Segment Reporting issued by the Institute of Chartered Accountants of India.

9) Board for Industrial and Financial Reconstruction (BIFR) has sanctioned the Rehabilitation Scheme of the company in terms of Section 19 (3) read with Section 18 (4) of SlCA having scheme period 2008-2017.

10) The Company had filed a Miscellaneous Application (MA) with Hon''ble BIFR for implementation of clauses under Hon''ble BIFR sanctioned scheme by Directorate of Income Tax DIT(R). Hon''ble BIFR vide its order dated 21.10.2013 directed DIT(R) interalia not to take any coercive measures of recovery of any demands during scheme period, which is valid upto 2017 against the company / guarantors / promoters.

11) The Company has received shares of M/s Jagati Publications Ltd against and in lieu of the outstanding amount from its subsidiaries viz. M/s I.A & I.C Pvt Ltd & M/s Shah Pratap Industries Pvt Ltd. At present the shares stand in the name of subsidiaries and the same are in the custody of government authorities. Both the parties have agreed for completing the necessary procedure on release of shares lying with the authorities. As per the order of Hon''ble BIFR provisions of Section 372(A) are not applicable to the Company.

12) The Company has made an application and part paid as required under VCES Scheme of Service Tax as per the terms of the scheme.

13) Respective e-forms with ROC are pending due to pending litigation of non-implementation of Hon''ble BIFR orders by Ministry of Corporate Affairs & Others.

14) The networth of the subsidiaries M/s I.A & I.C Pvt Ltd & M/s Shah Pratap Industries Pvt Ltd. as at the Balance Sheet date has been completely eroded. However, the management is of the view that since the Investments is long term in nature no provision is required to be made.

15) Exceptional items of Rs. 291.48 Lakhs represents loss on impairment of assets which is based on assessment by external valuer. The recoverable amount was estimated with reference to the net selling price on 31st March,2014. The carrying amount of the impaired assets was determined to be higher than its recoverable amount and therefore an impairment loss to this extent has been recognized.

16) In view of the revision to the Schedule VI as per notification issued by the Central Government, the financial statement for the year ended 30th June, 2014 have been prepared as per the requirement of the Revised Schedule VI to the Companies Act, 1956. The previous years figures have been accordingly regrouped/classified to confirm to the year''s classification.

17) Pursuant to General Circular No. 08/2014 dated 04.04.2014, issued by the Ministry of Corporate Affairs, the Company has prepared its financial statements for the year ended 30th June,2014 as per the provisions/ schedules/rules governed by Companies Act,1956.

The accompanying notes are an integral part of the financial statements

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Jun 30, 2013

1) The closing stock is as per the inventory taken, valued and certified by the management.

2) In the opinion of the management, the current assets, loans and advances have the values on realization in the ordinary course of business at least equal to the amounts at which they are stated in the balance sheet except the trade receivables and loans and advances which falls under management''s policy for bad and doubtful debts as taken in the previous years.

3) Debit and Credit balances are subject to confirmation and reconciliation.

4) There are no dues to Micro, Small & Medium Enterprises as at Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors.

5) The Company has made provision for gratuity for the period under review as certified by M/s. VHV Finance & Consultancy Services.

6) Related Parties Disclosures i) Relationships:

(a) Subsidiary Companies:

- I. A. & I. C. Pvt. Limited (IAIC)

- Shah Pratap Industries Pvt. Limited (SPIL)

- Glassworks Trading Pvt. Limited (GTPL)

- IRIS Trading FZE (ITF) (Subsidiary of GTPL)

(b) Key Management Personnel: (KMP)

Shri. Rajendra G. Parikh (RGP)

(c) Relatives of Key Management Personnel and entities in which key Management Personnel are interested, where transactions have taken place: M/s. Share Bazar House. (SBH)

Shri. Aditya R. Parikh (ARP)

Note: Related party relationship is identified by the Company

and relied upon by the auditors.

7) The Company operates in one segment i.e. crystal, glass and allied products hence no separate disclosure of segment-wise information has been made as per Accounting Standards (AS-17) Segment Reporting issued by the Institute of Chartered Accountants of India.

8) Hon''ble BIFR has given order to The New India Assurance Co Ltd to settle the insurance claim filed by the Company due to fire at Chemical Waste Recycling Plant at Vijaygad, Tal. Wada. Further, the Company has filed a petition in Hon''ble Bombay High Court against the insurance company.

9) Board for Industrial and Financial Reconstruction (BIFR) has sanctioned the Rehabilitation Scheme of the company in terms of Section 19 (3) read with Section 18 (4) of SICA having scheme period 2008-2017.

10) The Company has filed a Miscellaneous Application with Hon''ble BIFR for non-implementation of clauses under Hon''ble BIFR sanctioned scheme by Directorate of Income Tax, the case is pending before Hon''ble BIFR.

11) The Company will be making an application under VCES Scheme of Service Tax to pay off the outstanding service tax by 31st March, 2014.

12) The Company has received shares of M/s Jagati Publications Ltd against and in lieu of the outstanding amount from its subsidiaries viz. M/s I.A & I.C Pvt Ltd & M/s Shah Pratap Industries Pvt Ltd. At present the shares stand in the name of subsidiaries and the same are in the custody of government authorities. Both the parties have agreed for completing the necessary procedure on release of shares lying with the authorities. Meanwhile due to the order of Hon''ble BIFR provisions of Section 372(A) are not applicable to the Company.

13) Extraordinary Items Rs 462.01 Lakhs represents Loss on account of Capital Project Shelved due to unavoidable / unforeseen circumstances and the same is as per the policy adopted by the management in past

14) The net worth of the subsidiaries M/s I.A & I.C Pvt Ltd and M/s Shah Pratap Industries Pvt Ltd. as at the Balance Sheet date has been completely eroded. However, the management is of the view that since the Investments is long term in nature no provision is required to be made.

15) Respective e-forms with ROC are pending due to pending litigation of non-implementation of Hon''ble BIFR orders by Ministry of Corporate Affairs & Others.

16) In view of the revision to the Schedule VI as per notification issued by the Central Government, the financial statement for the year ended 30th June, 2013 have been prepared as per the requirement of the Revised Schedule VI to the Companies Act, 1956. The previous years figures have been accordingly regrouped/classified to confirm to the year''s classification.

The accompanying notes are an integral part of the financial statements.

(*) Includes figures of IRIS Trading FZE, a wholly owned Subsidiary of Glassworks Trading Pvt.Ltd

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Jun 30, 2012

1) Contingent Liabilities not provided for: Current Previous Year Period

a) Disputed Income Tax Demand 107,860,080 107,860,080

b) Other Matters 782,500 272,300

2) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.243.55 lakhs (Previous Period Rs.243.55 lakhs).

3) The closing stock is as per the inventory taken, valued and certified by the management.

4) In the opinion of the management, the current assets, loans and advances have the values on realization in the ordinary course of business at least equal to the amounts at which they are stated in the balance sheet except the trade receivables and loans and advances which falls under management's policy for bad and doubtful debts as taken in the previous years.

5) Debit and Credit balances are subject to confirmation and reconciliation.

6) There are no dues to Micro, Small & Medium Enterprises as at Balance Sheet date and no interest has been paid to any such parties. This is based on the information on such parties having been identified on the basis of information available with the Company and relied upon by the auditors.

7) The Company has made provision for gratuity for the period under review as certified by M/s. VHV Finance & Consultancy Services.

8) Related Parties Disclosures i) Relationships:

(a) Subsidiary Companies:

- I. A. & I. C. Pvt. Limited (IAIC)

- Shah Pratap Industries Pvt. Limited (SPIL) Glassworks Trading Pvt. Limited (GTPL)

- IRIS Trading FZE (ITF) (Subsidiary of GTPL)

(b) Key Management Personnel: (KMP) Shri. Rajendra G. Parikh (RGP)

(c) Relatives of Key Management Personnel and entities in which key Management Personnel are interested, where transactions have taken place:

M/s. Share Bazar House. (SBH) M/s. Korpus Financial Services Pvt. Limited (KFSPL) Note: Related party relationship is identified by the Company and relied upon by the auditors.

9) Hon'ble BIFR has given order to The New India Assurance Co Ltd to settle the insurance claim filed by the Company due to fire at Chemical Waste Recycling Plant at Vijaygad, Tal. Wada. Further, the Company has filed a petition in Hon'ble Bombay High Court against the insurance company.

10) Board for Industrial and Financial Reconstruction (BIFR) has sanctioned the Rehabilitation Scheme of the company in terms of Section 19 (3) read with Section 18 (4) of SICA having scheme period 2008-2017.

11) The Hon'ble BIFR in its sanctioned Rehabilitation Scheme has directed the Income Tax Authorities to grant relief u/s. 115JB and other reliefs under the Income Tax Act, 1961 to the Company. In view of this the Company has not made provision for taxation u/s. 115JB of the said Act.

12) The Company has received order from Government of Maharashtra dated February 7, 2012 by which the Company has been declared "Relief Undertaking" for one year from that date.

13) Respective e-forms with ROC are pending due to pending litigation of non implementation of Hon'ble BIFR orders by Ministry of Corporate Affairs & Others.

14) Pursuant to the Notification No.447 (E) dated February 28,2011 and Notification No.653 (E) dated March 30,2011, issued by the Ministry of Corporate Affairs, the Company has prepared its financial statements for the year ended March 31, 2012 as per revised schedules VI to the Companies Act, 1956. Accordingly, the previous year's figures have been regrouped / reclassified, wherever required to align the financial statements to the revised format.

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Mar 31, 2010

1) Contingent Liabilities not provided for:

In respect of demands under Income Tax proceedings disputed in appeals Rs. 106,901,501/- (Previous Period Rs. 106,901,501/-).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs.243.80 lakhs (Previous Period Rs. 163.50 lakhs).

3) The company has completed One-Time Settlement (OTS) with ARCIL during the period & "No Dues Certificate" has been received by the Company. The company has paid off its last secured creditor and is totally debt free with respect to secured creditors.

4) (a) The Authorised Share Capitalof the company has been re-classified into 14,70,00,000 Equity Shares of Rs.10/- each and 1,00,00,000 A Ordinary Equity Shares of Rs.10/- each with Differential Voting Rights (DVR).

(b) The issued, subscribed and paid up capital includes 31,928 Equity shares of Rs.10/- each fully paid up, allotted for consideration other than cash as per the scheme of amalgamation of erstwhile JIK INDUSTRIES LTD., sanctioned by the Hon. Mumbai High Court on March 14,1996.

(c) The issued, subscribed and paid up capital includes 3,16,232 Equity shares of Rs.10/- each fully paid up, allotted for consideration other than cash as per the scheme of arrangement under Section 391 of the Companies Act, 1956 sanctioned by the Honble High Court, Mumbai on September 16, 2005.

5) (a) In compliance with the Accounting Standard AS 22 relating to

"Accounting for taxes on income" issued by The Institute of Chartered Accountants of India, the Deferred Tax Assets/(Liability) (Net) accruing during the current period Rs.542,132/-, (Previous Period Rs. 21,063,901/-) has been shown in the Profit and Loss Account.

6) Interest and finance charges of Rs.592,642/- (Previous Period Rs. 3,895,733/-) shown in Profit & Loss Account is after adjustment of interest income of Rs.16,908/- (Previous Period Rs. 50,909/-). The Tax deducted at source from interest income is Rs. 1,171/- (Previous Period Rs. 11,349/-).

7) The closing stock is as per the inventory taken, valued and certified by the management.

8) In the opinion of the management, the current assets, loans and advances have the values on realization in the ordinary course of business at least equal to the amounts at which they are stated in the balance sheet except the receivables and loans and advances which falls under managements policy for bad and doubtful debts as taken in the previous years.

9) Balances of loans and advances, debtors and creditors are subject to confirmation and reconciliation.

10) In absence of information with the Company, the details of amounts payable to Small Scale Industrial Undertaking in excess of Rs.1 lakh and outstanding for a period of more than 30 days have not been given.

11) Related Parties Disclosures

i) Relationships:

(a) Subsidiary Companies:

- I. A. & I. C. Pvt. Limited (IAIC)

- Shah Pratap Industries Pvt. Limited (SPIL)

- Glassworks Trading Pvt. Limited (GTPL)

(b) Kev Management Personnel: (KMP) Shri. Rajendra G. Parikh (RGP)

(c) Relatives of Kev Management Personnel and entities in which kev Management Personnel are interested, where transactions have taken place:

M/s. Share Bazar House (SBH)

M/s. Korpus Financial Services Pvt. Limited (KFSPL)

Note: Related party relationship is identified by the Company and relied upon by the auditors.

12) The Company operates in one segment i.e. crystal, glass and allied products hence no separate disclosure of segment-wise information has been made as per Accounting Standards (AS-17) Segment Reporting issued by the Institute of Chartered Accountants of India.

13) Information as required pursuant to paragraphs 3 & 4 of Schedule VI of the Companies Act, 1956:

a. Licensed and Installed Capacity (As certified by the management) (Relied upon by the Auditors - being a technical matter) Licensed capacity: Not Applicable

14) During the period the Company has floated M/s. Glassworks Trading Private Limited as wholly owned subsidiary of the Company

15) The Companys petition u/s 264 of the Income Tax Act, 1961 for the Assessment Year 2001-02 and 2002-03 are pending adjudication.

16) Honble BIFR has given order to The New India Assurance Co Ltd to settle the insurance claim filed by the Company due to fire at Chemical Waste Recycling Plant at Vijaygad, Tal. Wada. Further, the Company has filed a petition in Honble High Court, Mumbai against the insurance company.

17) The claim money receivable from certain parties have been charged to the statement of profit and loss account and the same shall be reversed as and when the said claims are settled or money received by the Company and will be taxed accordingly.

18) The Company has made provision for gratuity for the period under review as certified by M/s. VHV Finance & Consultancy Services. Meanwhile the amount stands payable to unwilling employees under dispute.

19) The promoters and associates had pledged their shares to the various lenders / creditors as collateral security for the companys borrowings. Due to the financial difficulties, certain lenders / creditors have invoked the collateral security. Effect for the same is given in the books only for the details received by the company and remaining effect will be given as and when details are received.

20) The Company has received order from Board for Industrial and Financial Reconstruction (BIFR) during the period under review by which the company ceases to be a sick industrial company, within the meaning of Section 3(1 )(o) of the SICA. Further, the Rehabilitation Scheme having scheme period 2008-2017 has been sanctioned in terms of Section 19(3) read with Section 18(4) of SICA.

21) The Company has during the period wiped out the accumulated losses after adjusting Reserves & Surplus to the tune of Rs 647,778,626/- as per the order of Honble BIFR.

22) The Company has during the period allotted 5,106 A Ordinary Equity Shares of Rs 10/- each with differential voting rights (DVR) (viz. 1 vote for every 10 shares held excluding fractions, if any) on preferential basis to willing creditors/investors as per Honble BIFR Orders.

23) The Company has during the period issued Shares/Fully Convertible Bonds on preferential basis to Promoters/ Associates/ Other than Promoters as per Honble BIFR orders and as decided by the board.

24) The Rehabilitation Scheme sanctioned by Honble BIFR also provides for certain other reliefs and concessions by the Central Government/ State Government of Maharashtra / and other Authorities etc. The same shall be accounted for in the books of accounts of the Company as and when the said reliefs/concessions are actually availed by the Company.

25) The Company has completed sale of unutilised spare assets of Chemical Waste Recycling plant destroyed in the major fire owned by the Company during the current period for which advance was received from party of Rs 4,15,000/- during the earlier period.

26) The Company has received order from Government of Maharashtra dated July 24, 2009 by which the Company has been declared "Relief Undertaking" for a period of one year from that date.

27) The Company continues its operation on the property of subsidiaries with lease term having expired and the same has not been renewed till date and after agreeing to shift from the premises.

28) The Company has extended its accounting year ending by a period of three months upto March 31, 2010 accordingly figures for the current period are for fifteen months as against eighteen months during the previous period.

29) The figures for the previous period are regrouped or rearranged wherever considered necessary.