Notes to Accounts of Kanel Industries Ltd.

Mar 31, 2015

1. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so as to make them comparable with the current year.

2. The information's / details are as per the books maintained and determined and information compiled and furnished on the computer.

3. Management have broadly reviewed the data on the basis of compiling details and information and have test checked wherever considered necessary the books and / or the details / information compiled in the company and also on the computer.

4. The Company has initiated the process of identifying the suppliers who qualify under the definition of Micro and Small Enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March, 2015, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material and NIL.

5. Wherever external evidence in the form of bills, invoice, and debit notes, credit notes, Journal entry etc are not available, Management has relied upon the internal vouchers prepared and authenticated by the directors/Authorized officers of the company and also entry passed in the accounts maintained by the company.

6. Bank Account statement / balance certificate of Denabank [No lien A/c], SBI [previously SBBJ (No lien A/c) 2.5%, previously SBBJ (No lien A/c) 10%, previously SBS (No lien A/c) 10% are not available. Management trying hard to get all such required statements / certificates from the banks. Management have written letters to the above banks requesting them for submission of latest bank statements directly to the Auditor but the same are not received. Balance with No lien deposit account with banks does not reconcile with total transactions of Company.

7. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advances and some of the banks and financial institution have not been received and they are subject to confirmations and reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliation would not be material effecting current Year financial statements.

8. The company has not provided for listing fees of Jaipur, Calcutta and Ahmadabad Stock Exchange.

9. Certain documents, registers, etc. including fixed assets register were seized during the search operations as on 5th October, 2001. Such registers were not made available except fixed assets register prepared by management separately to us for inspections, usual verifications and periodical updating.

10. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporate governance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

11. The management is in the process to start manufacturing activities and will implement the stringent remedial actions for the recovery of outstanding dues, optimum utilization of cash management, maintenance and updating of proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlement of debtors/creditors through journal entry and improving overall profitability and adequate capacity utilization of the factories.

12. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimed dividend has to be transferred to special fund called Investor Protection and Education Fund from the date on which the unclaimed dividend has been transferred to a special bank account. Company has no information about the balance of unclaimed dividend with Bank. In absence of the above information, management is unable to comment about status of unclaimed dividend amount or its transfer to Investor Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 125 of Companies Act, 2013. The company has received several complaints for revalidation of dividend cheques but in absence of banker's cheque and details of unclaimed dividend, management is unable to solve their complaints.

13. Company is preparing for filing Income tax Return for the FY 2014-15 and all pending previous years and all pending Sales Tax Returns up to FY 2012-13 shortly and till that the company have not made provision for income tax and sales tax in the books of accounts.

14. Contingent liabilities not provided for in the books of accounts are as under:

(i) The company has a various matter for different assessment year and pending with different forum of sales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forum of sales tax department as details given below.

(i) Company has filed "Vandha Arjee" against Municipal Tax and interest bills for several previous years. The matters are under litigation with authorities.

(ii) Details of Claims lodged against the company, not acknowledged as debts : Such amount is not ascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange cannot be quantified.

15. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Deferred Tax Asset has not been recognized due to virtual uncertainties about realization of profits in the forthcoming years in accordance with Accounting Standard-22.

16. Company's Naroda division is closed since long time. Company has provided depreciation of Rs.2.28 lacs due to normal wear and tear for assets.

17. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of the value stated, if realized in normal courses of business.

18. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

Figures have been regrouped and rearranged wherever found necessary so as to make them comparable with in the current year and Figures in the Balance Sheet are rounded off to the nearest of the rupee.

19. Management have broadly reviewed the basis of compiling details and information and made test checked wherever considered necessary. The books and / or the details / information compiled in the company on the computer.

20. Writing off debtors, Bad and Doubtful debts, investments, loans and advances are as per management's decision and opinion. Debtors/Creditors are accounted at the time of settlement of claims.

21. Contract remaining to executed on Capital Account not provided for Rs. Nil/- (Previous year Rs. Nil)

22. 40. The company is operating only in one segment of trading of goods. Hence no separate Segment wise Accounting is required and given herewith.

23. Due to settlement dispute with debtor/creditor, advance given and advance taken we could not quantify closing balance at the end of year as such balances have been arrived by unilateral actions. Amount of dispute cannot be quantified. No fraud by company or on company has been initiated during the year.

24. NSC matured could not be encased as they are lying with sales tax department. Recoveries of such NSC are negligible. As per auditor these investment must be written off in absence of details.

25. We could not employ full time company secretary u/s.383A of Companies Act, 1956, due to non-availability of professional.

26. Additional information pursuant to paragraph 3, 4(C ) & 4 (D) of PART II to Schedule III of the Companies Act,2013 have been given to the extent applicable to the company.

27. The information/details given in the Audit report are as per the books maintained and determined and information are compiled and furnished on the computer.

28. Prior Period Expenditure :-

Prior period expenditure / Income have been debited / Credited to the profit and loss account under the following account heads :

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Mar 31, 2014

1.1 Inter Corporate Loan from Adani Enterprise Ltd of Rs. 5 Crore [ Previous Year Rs. 5 Crore ] is secured by Equitable mortgage of Plot No. 213, 214/2 &3 in the Naroda Industrial Estate consisting Revenue S No. 174 p & 175 / part withing the village limit of Muthia , Dist Ahmedabad. AND Unit No 101 & 102 of TJR house, Mithakhali, Ahmedabad AND office no. 203 of ABHIJIT, Mithakhali Six Roads, Ahmedabad and personal properties of Directors and their relatives.

No repayment terms & rate of interest mentioned in mortgage deed and no other loan agreement made available to us for verification.

(i) The company has a various matter for different assessment year and pending with different forum of sales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forum of sales tax department as details given below.

(i) Company has filed "VandhaArjee" against Municipal Tax and interest bills for several previous years. The matters are under litigation with authorities.

(ii) Details of Claims lodged against the company, not acknowledged as debts : Such amount is not ascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange can not be quantified.

2. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Deferred Tax Asset has not been recognised due to virtual uncertainties about realisation of profits in the forthcoming years in accordance with Accounting Standard-22.

3. Company''s Naroda division is closed since long time. Company has provided depreciation of Rs. 2.95 lacs due to normal wear and tear for assets.

4. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of the value stated, if realized in normal courses of business.

5. Related Party transactions:

No. Nature of Relationship Name of Related Parties

1. Associate Companies/Enterprise TJR Sons Pvt. Ltd.

Sun Retail Pvt. Ltd.

TJR Finance Ltd.

Kadam Exports Pvt. Ltd.

Shakti Nutraceuticals Pvt. Ltd.

Devika Proteins Ltd.

2 Key Management Person Dhiren K. Thakkar

Vinodchandra K. Pandya

Kiritbhai Chagganbhai Patel

Aditya Yogeshbhai Patel

Yogeshkumar Rajnikant Patel

3 Relative of key management person Hitesh K Thakkar

Devika H Thakkar

Gauri D. Thakkar

Jaysheel D. Thakkar

Monika H. Thakkar

Neela Thakkar

Gauri Thakkar

6. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available, and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorised officers of the company and entry passed in the accounts maintained by the company.

7. Computation of Net profit in accordance with section 349 of Companies Act, 1956 are not required as director''s were not paid commission during the year under audit.

8. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

Figures have been regrouped and rearranged wherever found necessary so as to make them comparable with in the current year and Figures in the Balance Sheet are rounded off to the nearest of the rupee.

9. Management have broadly reviewed the basis of compiling details and information and made test checked wherever considered necessary. The books and / or the details / information compiled in the company on the computer.

10. Writing off debtors, Bad and Doubtful debts, investments, loans and advances are as per management''s decision and opinion. Debtors/Creditors are accounted at the time of settlement of claims.

11. Contract remaining to executed on Capital Account not provided for Rs. Nil/- (Previous year Rs. Nil)

12. The company is operating only in one segment of trading of goods. Hence no separate Segment wise Accounting is required and given herewith.

13. Due to settlement dispute with debtor/creditor, advance given and advance taken we could not quantify closing balance at the end of year as such balances have been arrived by unilateral actions. Amount of dispute cannot be quantified. No fraud by company or on company has been initiated during the year.

14. NSC matured could not be encased as they are lying with sales tax department. Recoveries of such NSC are negligible. As per auditor these investment must be written off in absence of details.

15. We could not employ full time company secretary u/s.383A of Companies Act, 1956, due to non-availability of professional.

16. The information/details given in the Audit report are as per the books maintained and determined and information are compiled and furnished on the computer.

17. Prior Period Expenditure

Prior period expenditure / Incomehave been debited / Credited to the profit and loss account under the following account heads :

The statements of significant accounting policies and the notes numbered 1 to 58 from an integral part of the year ended 31st March 2014

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Mar 31, 2013

1. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so as to make them comparable with the current year.

2. The information''s / details are as per the books maintained and determined and information compiled and furnished on the computer.

3. Management have broadly reviewed the data on the basis of compiling details and information and have test checked wherever considered necessary the books and / or the details / information compiled in the company and also on the computer.

4. In the absence of complete information in respect of each SSI Registered creditors, outstanding as on 31.03.2013, the details of aggregate amount due to Small Scale industrial undertakings outstanding as on 31-3-2013 are not given.

5. Bank Account statement / balance certificate of Denabank [ No lien A/c ], SBI [ previously SBBJ ( No lien A/c ) 2.5%, previously SBBJ ( No lien A/c )10%, previously SBS ( No lien A/c ) 10% are not available for our verification. Management informed that statements are not given to the company by all bankers. Management have written letters to the above banks requesting them for submission of latest bank statements directly to the Auditor but the same are not received. Balance with No lien deposit account with banks does not reconcile with total transactions of Company.

6. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advances and some of the banks and financial institution have not been received and they are subject to confirmations and reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliation would not be material effecting current Year financial statements.

7. The company has not provided for listing fees of Jaipur, Calcutta and Ahmedabad Stock Exchange.

8. Certain documents, registers, etc. including fixed assets register were seized during the search operations as on 5th October, 2001. Such registers were not made available except fixed assets register prepared by management separately to us for inspections, usual verifications and periodical updation.

9. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporate governance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

10. The management is in the process to start commercial activities and will implement the stringent remedial actions for the recovery of outstanding dues, optimum utilisation of cash management, interdivision cash transfer, maintenance and updating of proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlement of debtors/creditors through journal entry and improving overall profitability and adequate capacity utilisation of the factories.

11. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimed dividend has to be transferred to special fund called Investor Protection and Education Fund from the date on which the unclaimed dividend has been transferred to a special bank account. Company has no information about the balance of unclaimed dividend with Bank. In absence of the above information, management is unable to comment about status of unclaimed dividend amount or its transfer to Investor Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 205C of Company''s Act, 1956. The company has received several complaints for revalidation of dividend cheques but in absence of banker''s cheque and details of unclaimed dividend, management is unable to solve their complaints.

12. Company is preparing for filing Income tax Return for the F Y 2008-09 and remaining all years shortly and till that the company have not made provision for income tax in the books of accounts.

13. Contingent liabilities not provided for in the books of accounts are as under:

(i) The company has a various matter for different assessment year and pending with different forum of sales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forum of sales tax department as details given below.

(iii) Details of Claims lodged against the company, not acknowledged as debts : Such amount is not ascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange can not be quantified.

14. The Company could not start commercial activities of Sales, Purchase or Manufacturing or processing during the year hence reporting requirements under Segment as required by AS-17 on Segment Reporting are not applicable.

15. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Deferred Tax Asset has not been recognised due to virtual uncertainties about realisation of profits in the forthcoming years in accordance with Accounting Standard-22.

16. Company''s Naroda division is closed since long time. Company has provided depreciation of Rs. 3.44 lacs due to normal wear and tear for assets.

17. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of the value stated, if realized in normal courses of business.

18. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available, and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorised officers of the company and entry passed in the accounts maintained by the company.

19. Computation of Net profit in accordance with section 349 of Companies Act, 1956 are not required as director''s were not paid commission during the year under audit.

20. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

21. Prior Period Expenditure : Prior period expenditure / Income have been debited / Credited to the profit and loss account under the following account heads :

Included under the Head of Account 2012-13 (Rs.)

EXPENSES :

01 Custodian fees 186

02 Membership & subscription fees 4015

The statements of significant accounting policies and the notes numbered 1 to 30 from an integral part of the year ended 31st March 2013.

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Mar 31, 2012

1. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so as to make them comparable with the current year.

2. The information's / details are as per the books maintained and determined and information compiled and furnished on the computer. .

3. Management have broadly reviewed the data on the basis of compiling details and information and have test checked wherever considered necessary the books and / or the details / information compiled in the company and also on the computer.

4. In the absence of complete information in respect of each SSI Registered creditors, outstanding as on 31.03.2012, the details of aggregate amount due to Small Scale industrial undertakings outstanding as on 31-3-2012 are not given.

5. Bank Account statement / balance certificate of Dena Bank [ No lien A/c, SBI [ previously SBBJ (No lien A/c ) 2.5%, previously SBBJ ( No lien A/c )10%, previously SBS ( No lien A/c ) 10% are not available for our verification. Management informed that statements are not given to the company by all bankers. Management have written letters to the above banks requesting them for submission of latest bank statements directly to the Auditor but the same are not received. Balance with No lien deposit account with banks does not reconcile with total transactions of Company.

6. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advances and some of the banks and financial institution have not been received and they are subject to confirmations and reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliation would not be material effecting current Year financial statements.

7. The company has not provided for listing fees of Jaipur, Calcutta and Ahmedabad Stock Exchange. The company has not paid listing fees of Ahmedabad Stock Exchange since 2003-04.

8. Certain documents, registers, etc. including fixed assets register were seized during the search operations as on 51" October, 2001. Such registers were not made available except fixed assets register prepared by management separately to us for inspections, usual verifications and periodical updation.

9. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporate governance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

10. The management is in the process to start commercial activities and will implement the stringent remedial actions for the recovery of outstanding dues, optimum utilization of cash management, interdivision cash transfer, maintenance and updating of proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlement of debtors/creditors through journal entry and improving Overall profitability and adequate capacity utilization of the factories.

11. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimed dividend has to be transferred to special fund called Investor Protection and Education Fund from the date on which the unclaimed dividend has been transferred to a special bank account. Company has no information about the balance of unclaimed dividend with Bank. In absence "of the above information, management is unable to comment about status of unclaimed dividend amount or its transfer to Investor Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 205C of Company's Act, 1956. The company has received several complaints for revalidation of dividend cheques but in absence of banker's cheque and details of unclaimed dividend, management is unable to solve their complaints.

12. Company is preparing for filing Income tax Return for the F Y 2008-09 and remaining all years shortly and till that the company have not made provision for income tax in the books of accounts.

13. Contingent liabilities not provided for in the books of accounts are as under:

(i) The company has a various matter for different assessment year and pending with different forum of sales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forum of sales tax department as details given below. '

(ii) Company has filed "Vandha Arjee" against Municipal Tax and interest bills for several previous years, The matters are under litigation with authorities.

(iii) Details of Claims lodged against the company, not acknowledged as debts : Such amount is not ascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange cannot be quantified.

14. The Company could not do substantial commercial activities of Sales, Purchase or Manufacturing or processing during the year hence reporting requirements under Segment as required by AS-17 on Segment Reporting are not applicable.

15. The company has huge, accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Defined Tax Asset has not been recognized due to virtual uncertainties about realization of profits in the forthcoming years in accordance with Accounting Standard-22.

17. Company's Naroda division is closed since long time. Company has provided depreciation of Rs. 9.99 lacs due to normal wear and tear for assets.

18. In the opinion of the Board of Director the Current Assets, Loans and, Advances are approximately of the value stated, if realized in normal courses of business.

19. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available, and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorized officers of the company and entry passed in the accounts maintained by the company.

20. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

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Mar 31, 2010

1. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so as to make them comparable with the current year.

2. The informations / details are as per the books maintained and determined and information compiled and furnished on the computer.

3. Management have broadly reviewed the data on the basis of compiling details and information and have test checked wherever considered necessary the books and / or the details / information compiled in the company and also on the computer.

4. In the absence of complete information in respect of each SSI Registered creditors, outstanding as on 31.03.2010, the details of aggregate amount due to Small Scale industrial undertakings outstanding as on 31-3-2010 are not given.

5. Account copy of current accounts, except HDFC bank, Kalol Nagrik Sahkari Bank Ltd., The Bhuj Mercantile Co. Op. Bank Ltd. C.A. No. 80766 and Kotak Mahindra Bank Ltd. , all the bankers are not available for reconciliation as statements are not given to the company by all bankers. Management have written letters to the above banks requesting them for submission of latest bank statements directly to the Auditor but they have not received any account copy. Balance with No lien deposit account with banks does not reconcile with total transactions of Company.

6. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advances and some of the banks and financial institution have not been received and they are subject to confirmations and reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliation would not be material effecting current Year financial statements.

7. The company has not provided for listing fees of Jaipur. Calcutta and Ahmedabad Stock Exchange. The company has not paid listing fees of Ahmedabad Stock Exchange since 2003-04.

8. Certain documents, registers, etc. including fixed assets register were seized during the search operations as on 511 October, 2001. Such registers were not made available except fixed assets register prepared by management separately to us for inspections , usual verifications and periodical updation.

9. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporate governance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

10. The management is in the process to start commercial activities and will implement the stringent remedial actions for the recovery of outstanding dues, optimum utilisation of cash management, interdivision cash transfer, maintenance and updating of proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlement of debtors/creditors through journal entry and improving overall profitability and adequate capacity utilisation of the factories.

11. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimed dividend has to be transferred to special fund called Investor Protection and Education Fund from the date on which the unclaimed dividend has been transferred to a special bank account. Company has no information about the balance of unclaimed dividend with Bank. In absence of the above information, management is unable to comment about status of unclaimed dividend amount or its transfer to Investor Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 205C of Companys Act, 1956. The company has received several complaints for revalidation of dividend cheques but in absence of bankers cheque and details of unclaimed dividend, management is unable to solve their complaints.

12. Company is preparing for filing Income tax Return for the F Y 2008-09 shortly and till that the company have not made provision for income tax in the books of accounts.

13. Contingent liabilities not provided for in the books of accounts are as under:

(1) The company has a various matter for different assessment year and pending with different forum of sales tax authority. Total demand of Rs. 553.87 lacs for which the appeals are pending at various forum of sales tax department as details given below.

AY. Order Dt. Amount Forum where dispute is pending

( Rs. In Lacs )

1997-98 14/07/03 245.92 Appeal pending with applet tribunal

1998-99 16/02/06 274.63 Matter reminded back to Assistant

commissioner of sales tax for fresh order.

1999-00 31/03/05 24 30 Appeal pending with joint Commercial

tax commissioner, Appeal division

1 Ahmedabad.

2000-01 08/12/05 6.14 Under reassessment order dtd.

08/12/2005 by commissioner of

Sales Tax. Appeal pending with

Joint commercial tax commissioner

Appeal division 1 Ahmedabad.

2000-01 05/03/05 2 88 Appeal pending with joint commercial

tax commissioner appeal dusion a Ahmedabad.

(ii) Company has filed "Vandha Arjee" against Municipal Tax and interest bills for several previous years. The matters are under litigation with authorities.

(hi) Details of Claims lodged against the company, not acknowledged as debts : Such amount is not ascertainable by the company.

(iv) Liabilities on account of Suspension of Trading activities on Stock Exchange can not be quantified.

14. The Company could not do any commercial activities of Sales. Purchase or Manufacturing or processing during the year hence reporting requirements under Segment as required by AS-17 on Segment Reporting are not applicable.

15. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Deferred Tax Asset has not been recognised due to virtual uncertainties about realisation of profits in the forthcoming years in accordance with Accounting Standard-22.

ASSOCIATED FIRMS

1. Devika Proteins Limited

2. T. J. R. SONS Limited.

3. T. J. R. Finance Limited.

4. Devika Roadlines Private Limited

- Notes:

a. Company does not maintain separate accounts for purchase and sales of goods or advances to related party. Net account after adjustment of purchase and sale has been shown as Advances paid and received, if any.

b. Above details includes only related party transactions during the year.

- Above transactions does not include the following transactions:

a. 6044317 shares of Kanel Oil & Export Industries Limited belonging to promoters and their friends and relatives have been pledged to SICOM as securities for availing the loan to the company.

16. Companys Naroda division is closed since long time. Company has provided depreciation of Rs. 12.04 lacs due to normal wear and tear for assets.

17. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of the value stated, if realized in normal courses of business.

18. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available, and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorised officers of the company and entiy passed in the accounts maintained by the company.

19. Company has reduced its staff at the plant, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

20. Prior Period Expenditure :-

Prior period expenditure / Income have been debited / Credited to the profit and loss account under the following account heads :

Notes: Other Income ofRs. 4.64 Lacs not considered as Turnover

V. Generic Names of Three Principal Products/Services of Company

ITEM CODE NO. : N.A.

PRODUCT DESCRIPTION : N.A.

The statements of significant accounting policies and the notes numbered 2 to 33 from an integral part of the year ended 31st March 2010.

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Mar 31, 2009

1. The figures of the previous year have been regrouped, rearranged and changed wherever necessary so as to make them comparable with the current year.

2. The informations / details are as per the books maintained and determined and information compiled and furnished on the computer.

3. Management have broadly reviewed the data on the basis of compiling details and information and have test checked wherever considered necessary the books and / or the details / information compiled in the company and also on the computer.

4. In the absence of complete information in respect of each SSI Registered creditors, outstanding as on 31.03.2009, the details of aggregate amount due to Small Scale industrial undertakings outstanding as on 31-3-2009 are not given.

5. All banking debts have been settelled under OTS and no due certificates have been obtained by the company from Kotak Mahindra Bank Ltd and ARCIL. The Secured Creditors under debts settlement have also withdrawn the recovery suits filed with DRT

6. Account copy of current accounts, except Central Bank of India Current account no. 20450 and The Bhuj Mercantile Co. Op. Bank Ltd. C.A. No. 80766 and Kotak Mahindra Bank Ltd., all the bankers are not available for reconciliation as statements are not given to the company by all bankers. Management have written letters to the above banks requesting them for submission of latest bank statements directly to the Auditor but they have not received any account copy. Balance with No lien deposit account with banks does not reconcile with total transactions of Company.

7. Account confirmations in respect of some of the accounts of Sundry Debtors, Creditors, Loans and Advances and some of the banks and financial institution have not been received and they are subject to confirmations and reconciliations. The management is of the opinion that adjustments, if any, arising out of such reconciliation would not be material effecting current Year financial statements.

8. The company has not provided for listing fees of Jaipur and Ahmedabad Stock Exchange. The company has not paid listing fees of Ahmedabad Stock Exchange since 2003-04.

9. Certain documents, registers, etc. including fixed assets register were seized during the search operations as on 5th October, 2001. Such registers were not made available except fixed assets register prepared by management separately to us for inspections, usual verifications and periodical updation.

10. In absence of sufficient non-executive/ professional directors, company could not comply with report on corporate governance and audit committee u/s 292A of the Companies Act, 1956 has not been formed.

11. The management is in the process of taking stringent remedial actions for the recovery of outstanding dues, optimum utilisation of cash management, interdivision cash transfer, maintenance and updating of proper stock records, stringent controls over production, receipt and dispatch of stock, direct settlement of debtors/creditors through journal entry and improving overall profitability and adequate capacity utilisation of the factories.

12. Factory at Meda Adraj Unit has been Sale out during the F.Y.2008-09 as a whole and banking debt have been settled under OTS and no due certificated from KMBL and ARCIL have been taken and in this arrangements, the company has taken Term Loan from Adani Enterprises Ltd ofRs. 5Cr.

13. The company had deposited the amount of dividend declared in preceding years with SBS Isanpur Branch and SBS IFC Branch. As per the amendments made in the Companies Act, 1956 the amount of unclaimed dividend has to be transferred to special fund called Investor Protection and Education Fund from the date on which the unclaimed dividend has been transferred to a special bank account. Company has no information about the balance of unclaimed dividend with Bank. In absence of the above information, management is Unable to comment about status of unclaimed dividend amount or its transfer to Investor Protection and Education Fund. Since dividend declared in year 1995, 1996, 1997 and 1998 are due from Transfer U/s. 205C of Companys Act, 1956. The company has received several complaints for revalidation of dividend cheques but inabsence of bankers cheque and details of unclaimed dividend, management is unable to solve their complaints.

14. Company have not made provision for income tax in the books of accounts.

15. In the opinion of the Board, the company has done processing jobwork only in the year under Audit and no other trading or manufacturing activities were done hence no separate segments are reported as perAS-17 on Segment Reporting.

16. The company has huge accumulated losses resulting into Deferred Tax Asset. As a prudent policy, the said Deferred Tax Asset has not been recognised due to virtual uncertainties about realisation of profits in the forthcoming years in accordance with Accounting Standard, 22.

KEY MANAGEMENT :

1. Dhiren K. Thakkar

2. Bachubhai K Patel

3. Vinodbhai K Pandya

ASSOCIATED FIRMS

1. Devika Proteins Limited

2. T. J. R. SONS Limited.

3. T. J. R. Finance Limited.

4. Devika Roadlines Private Limited

Notes :

a. Company does not maintain separate accounts for purchase and sales of goods or advances to related party. Net account after adjustment of purchase and sale has been shown as Advances paid and received.

b. Above details includes only related party transactions during the year. • Above transactions does not include the following transactions:

a. 6044317 shares of Kanel Oil & Export Industries Limited belonging to promoters and their friends and relatives have been pledged to SICOM as securities for availing the loan to the company.

18. Companys Naroda division is not technically viable due to obsolescence in technologies since long time. Company has provided depreciation of Rs. 13.63 lacs due to normal wear and tear for assets.

19. In the opinion of the Board of Director the Current Assets, Loans and Advances are approximately of the value stated, if realized in normal courses of business.

20. Wherever external evidence in the form of bills, invoice, debit notes, credit notes, etc are not made available, and Management have relied upon the internal vouchers prepared and authenticated by Directors/ Authorised officers of the company and entry passed in the accounts maintained by the company.

21. Company has reduced its staff at all the plants, division and Head Office. Company has engaged persons on retainer basis at Head office from March, 2003.Company has not provided for ESI Contribution.

22. Prior Period Expenditure :

Prior period expenditure / Income have been debited / Credited to the profit and loss account under the following account heads :

The statements of significant accounting policies and the notes numbered 2 to 36 from an integral part of the year ended 31st March 2009