Notes to Accounts of Modern Steels Ltd.

Mar 31, 2015

NOTE: 1.

SEGMENT REPORING

The Company is engaged in the business of Steel Manufacturing which in context of Accounting Standards – 17 – "Segment Report" issued by the Institute of Chartered Accountants of India is considered the only business segment. So separate segment reporting is not necessary.

NOTE: 2.

In the opinion of the Board of Directors, Current Assets, Loan and Advances have value on realization in the ordinary course of business at least equal to the amounts at which they are stated and provision for all known liabilities have been made in accounts.

NOTE: 3.

The Company has applied for its debts under Corporate Debt Restructuring Mechanism during the financial year 2012-13. The proposal to restructure all the debts from the lenders:

- State Bank of India

- Punjab National Bank

- State Bank of Patiala

- Canara Bank

CDR Empowered Group approved restructuring on 8th November, 2012 and CDR Cell issued Letter of Approval (LOA) on dated 27th April, 2013. Master Restructuring Agreement incorporating the terms of LOA was signed with the lenders on 25th July, 2013. The Company has created security in favour of the lenders.

NOTE: 4.

In term of Letter of Approval (LOA) and Master Restructuring Arrangement (MRA), the Company's debts have been restructured with longer repayment schedule stretching up to FY 2022-23 and low rate of interest. A part of the interest for the period from September 2012 to March 2014 has been funded by the lenders by way of Funded Interest Term Loan (FITL). However, CDR lenders would have the right to recompense for their sacrifices, at the time of Company's exist from CDR, the sacrifice amount for which lenders have right to recompense works out to M 12.33 Crores during the tenure of CDR, of which the amount for the period from 1st April, 2014 to 31st March, 2015 is M 1.70 Crores and the cumulative amount for the period up to 31st March, 2015 is M 5.99 Crores.

However no provision has been made in the books of accounts of the Company of the lenders right to recompense for their sacrifices as the liability shall arise only at the time of exit from CDR.

NOTE: 5.

As per the Accounting Standard – 18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure". In view of this the Company has given the following disclosures for the year.

The Company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off during the year.

NOTE: 6.

Figures for the previous year have been regrouped / rearranged wherever considered necessary.

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Mar 31, 2014

NOTE : I CORPORATE INFORMATION

Modern Steels Limited (the Company) is a public listed Company incorporated under the provisions of the Companies Act, 1956 on 19th November, 1973. The Company is engaged in manufacturing of Steel Rolled products.

NOTE : II

LONG TERM BORROWINGS

a) Details of Securities :-

Term loans from State Bank of India, Punjab National Bank, State Bank of Patiala and Canara Bank are secured by equitable mortgage of Land and Building of the Company''s properties situated at village Ajnali, Ambey Majra and Kukkar Majra & by hypothecation of all the movable properties forming part of the entire fixed assets of the Company on pari passu basis. The term loans from SBI, PNB, SBOP & Canara Bank are also secured by way of second charge on all the current assets of the Company.

Working Capital Term Loans and or Funded Interest Term Loans from State Bank of India, Punjab National Bank, Canara Bank and State Bank of Patiala are secured by equitable mortgage of Land and Building of the Company''s properties situated at village Ajnali, Ambey Majra and Kukkar Majra & by hypothecation of all the movable properties forming part of the fixed assets of the Company on pari passu basis. The Working Capital Term Loan and/or Funded Interest Term Loan from State Bank of India, Punjab National Bank,Canara Bank and State Bank of Patiala are also secured by way of second charge on all the current assets of the Company.

Collateral Security

Equitable mortgage of i) a vacant industrial plot on Truck Stand Road, Mandi Gobindgarh owned by Chandigarh Finance Pvt. Ltd. ii) residential property in the name of a Director at Sarvapriya Vihar, New Delhi.

Pledge of promoters entire shareholding i.e. 62.33% of the paid up capital.

c) Terms of Repayment :-

Pursuant to the rework proposal approved under the Corporate Debt Restructuring (CDR) scheme by CDR Empowerment Group duly sanctioned by respective banks under the consortium, following interest rates and schedules of repayment have been agreed with the Company.

IV) Working Capital Term Loan (WCTL)

In the previous year the amount of Working Capital Term Loan has been carved out of cash credit limits and same is repayable in 28 quarterly structured instalments commencing from 30th June, 2015.

V) Funded Interest Term Loan (FITL)

In the previous year the CDR Empowered Group has sanctioned the conversion of future interest into various instruments and repayments thereof keeping in view the present scale of operations and expected liquidity position in the initial years of post implementation of the restructuring scheme. The repayment of 28 quarterly structured instalments will be commencing from 30th June, 2015.

Other Loans (Unsecured Borrowings) @ 10% p.a. 6,25.54 Lacs (4,41.10 Lacs)

Unsecured borrowings from related parties & others are due for payment from the financial year 2015-16 to 2016-17.

NOTE : III

LONG TERM PROVISIONS

The Company has adopted Accounting Standard AS 15 (Revised 2005) on employment benefit on 1st April, 2007, consequent to the clarification issued by ASB of the Institute of Chartered Accountants of India for implementing AS 15, the liability in respect of the same of benefit have been reworked as on 31st March, 2014, based on the following assumptions.

NOTE : IV

SHORT TERM BORROWINGS

a) Detail of Securities

(i) Working Capital Borrowings such as Cash Credit from State Bank of India, Punjab National Bank, Canara Bank and State Bank of Patiala is secured by hypothecation on entire current assets of the Company on pari passu basis and second charge on Fixed Assets of the Company.

(ii) Working Capital Borrowings such as Buyer''s Credit from State Bank of India and Bank of India is secured by hypothecation on entire current assets of the Company on pari passu basis and second charge on Fixed Assets of the Company.

b) Collateral Security

Equitable mortgage of i) a vacant industrial plot on Truck Stand Road, Mandi Gobindgarh owned by Chandigarh Finance Pvt. Ltd. ii) residential property in the name of a Director at Sarvapriya Vihar, New Delhi.

NOTE:V

TRADE PAYABLE

According to communication received from suppliers regarding the applicability of the act to them by the Company, dues to micro, small and medium enterprises pursuant to Section 22 of the Micro, Small and medium Enterprises Development Act, 2006 (MSMED)

NOTE : VI

INVENTORIES

Method of Valuation:

1. Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventory is computed as under:

a. In case of Raw- material on FIFO Basis ( net of MODVAT , Service Tax & VAT).

b. In Case of Work in Process- Rolling Raw Material are Valued at Monthly average cost basis. Cost for this purpose includes direct cost and all appropriate allocable overheads.

c. In Case of Finished Goods at Cost plus all appropriate allocable overheads and Excise Duty thereon. Cost for this purpose includes direct cost on monthly average cost basis, all appropriate allocable overheads and Excise Duty thereon.

2. Fresh Stocks of Stores, spares & Fuel are valued at cost or net realizable value, whichever is lower and cost is computed on FIFO Basis (net of MODVAT, Service tax, VAT). Stocks in working condition are valued at depreciated value or realizable value whichever is less. Disposable and used stocks is valued at net realizable value.

NOTE : VII

CASH AND BANK BALANCES

Fixed deposit having remaining maturity more than 12 months Rs.Nil ( 0.50 Lacs)

Fixed deposits including interest given as security Rs.3,07.01 Lacs (2,87.83 Lacs) to the Banks against margin of the Letter of Credit.

NOTE: VIII

CONTINGENT LIABILITIES & COMMITMENTS

As at As at Particulars 31st March, 2014 31st March,2013 in Lacs in Lacs

Contingent Liabilities:

a) Claim against the Company not 2,98.14 3,00.03 acknowledged as debts

b) Other money for which Company 6,40.64 4,90.86 is contingent liable Commitments:

a) Estimated amount of contractors 6,70.00 11.65 remaining to be executed

on capital accounts and not provided for.

b) Letter of credit against import 2,29.23 3,39.41 of material

NOTE: IX

The Information required by paragraph 5 of general instructions for preparation of the Statement of Profit & Loss as per revised Schedule VI of Companies Act, 1956

NOTE: X

TREATMENT OF EXCISE DUTY

Excise duty amounting to Rs.32,27.69 Lacs (Previous year Rs.32,15.87 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the differences of excise duty between the closing stock and opening stock has been disclosed separately in the Other Expenses forming part of Statement of Profit & Loss.

NOTE: XI

CAPITALIZATION OF EXPENDITURE

The Company has not started any commercial activity in relation to Auto Components Unit as on 31 March, 2014. But has only trial run production on which cost amounting to Rs.6.30 lacs has been incurred which has been transferred to Capital Work in Progress.

The Company has made trial run sale amounting to Rs.0.16 lacs (net of excise) and recovered job work income in relation to auto components amounting to Rs.8.89 lacs on which Company has incurred net cost of Rs.6.30 lacs and same has been transferred to Capital work in progress.

NOTE: XII

SEGMENT REPORTING

The Company is engaged in the business of Steel Manufacturing which in context of Accounting Standards- 17 - "Segment Report" issued by the Institute of Chartered Accountants of India is considered the only business segment. So separate segment reporting is not necessary.

NOTE: XIII

In the opinion of the Board of Directors, Current Assets, Loan and Advances have value on realization in the ordinary course of business at least equal to the amounts at which they are stated and provision for all known liabilities have been made in accounts.

NOTE: XIV

The Company has applied for its debts under Corporate Debt Restructuring Mechanism during the financial year 2012-13. The proposal to restructure all the debts from the lenders:

State Bank of India

Punjab National Bank

State Bank of Patiala

Canara Bank

CDR Empowered Group approved restructuring on 8th November, 2012 and CDR Cell issued Letter of Approval (LOA) on dated 27th April, 2013. Master Restructuring Agreement incorporating the terms of LOA was signed with the lenders on 25th July, 2013. The Company has created security in favour of the lenders.

NOTE: XV

In terms of Letter of Approval (LOA) and Master Restructuring Arrangement (MRA), the Company''s debts have been restructured with longer repayment schedule stretching upto FY 2022-23 and low rate of interest. A part of the interest for the period from September, 2012 to March, 2014 is being funded by the lenders by way of Funded Interest Term Loan (FITL). However, CDR lenders would have the right to recompense for their sacrifices at the time of Company''s exit from CDR. The sacrifice amount for which lenders have right to recompense works out to Rs.12.33 Crores during the tenure of CDR, of which the amount for the period from 1st April, 2013 to 31st March, 2014 is Rs.2.35 Crores and the cumulative amount for the period upto 31st March, 2014 is Rs.4.29 Crores.

However no provision has been made in the books of accounts of the Company of the lenders right to recompense for their sacrifices, as the liability shall arise only at the time of exit from CDR.

NOTE: XVI

As per the Accounting Standard - 18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure ". In view of this the Company has given the following disclosures for the year.

The Company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off during the year.

A) Related Party and their relationship

Key Management Personnel Relatives of Key Management personnel''s (KMP)

Mr. Amarjit Goyal Mrs. Rattan Mala Goyal, Mrs. Alka Goyal, Mr. Aditya Goyal,

Mr. Krishan Kumar Goyal Mrs. Sonam Jhunjhunwala

Mr. P. L. Talwar

Enterprises over which KMP and relatives of such personnel are able to exercise significant influence

Amarjit Goyal HUF, Krishan Kumar Goyal HUF, M/s. Chandigarh Finance Pvt. Ltd., M/s. Mala Builders Pvt. Ltd., M/s. Modern Dairies Ltd., M/s. PHi Business Solutions Ltd., M/s. Nabha Commerce Pvt. Ltd.

Associates- M/s. Modern Automotives Ltd.

NOTE: XVII

Figures for the previous year have been regrouped / rearranged wherever considered necessary.

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Mar 31, 2013

NOTE: I

TREATMENT OF EXCISE DUTY

Excise duty amounting to Rs.32,15.87 lacs (Previous year Rs.35,01.29 iacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the differences of excise duty between the closing stock and opening stock has been disclosed separately in the Other Expenses forming part of Statement of Profit & Loss.

NOTE: II

SEGMENT REPORTING

The Company is engaged in the business of Steel Manufacturing which in context of Accounting Standards - 17 - "Segment Report" issued by the Institute of Chartered Accountants of India is considered the only business segment. So separate segment reporting is not necessary.

NOTE: III

As per the Accounting Standard - 18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure". In view of this the company has given the following disclosures for the year.

The company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off during the year.

A) Related Party and their relationship

Key Management Personnel Relatives of Key Management Personnel (KMP)

Mr. Amarjit Goyal Mrs. Rattan Mala Goyal, Mrs. Alka Goyal, Mr. Aditya Goya!,

Mr. Krishan Kumar Goyal Ms. Sonam Goyal

Mr. P. L Talwar

Enterprises over which KMP and relatives of such personnel are able to exercise significant influence

Amarjit Goyal (HUF), Krishan Kumar Goyal (HUF), M/s Chandigarh Finance Pvt. Ltd., M/s Mala Builders Pvt. Ltd., M/s. Modern Dairies Ltd., M/s. PHi Business Solutions Ltd., M/s Nabha Commerce Pvt. Ltd. Associates- M/s Modem Automotives Ltd.

NOTE: IV

Figures for the previous year have been regrouped / rearranged wherever considered necessary

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Mar 31, 2012

A) Rights, Preferences, Restrictions attached to Equity Shareholders:-

The Company has two classes of shares referred to as Equity Shares having par value of Rs 10/- each and 9.5% Redeemable Cumulative Preference Shares of Rs 100/- each.

The Company has issued equity shares only. Hence rights / preferences applicable for Redeemable Cumulative Preference Capital are not disclosed separately.

Each Equity Shareholder is entitled to one vote per share.

The Company declares and pays dividend in Indian Rupees. In respect to Equity Shares, the dividend if any, proposed by the Board of Directors will be subject to approval of shareholders in Annual General Meeting.

In the event of liquidation of Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

b) Detail of Equity shares alloted as fully paid up by way of Bonus Shares:-

During the last five years 71,78,400 Equity shares have been alloted as Bonus Shares.

c) Forfeiture of share warrants:-

7,71,641 warrants which were not converted into equity shares within stipulated period and henceforth the amount paid up on 7,71,641 warrants @ Rs 8.25 (per warrant) amounting to Rs 63.66 Lacs stands forfeited.

The Company alloted NIL (14,00,000) warrants convertible into Equity shares within a period of 18 months from the date of issue, on preferential basis to promoter and promoter group. Out of these NIL (6,28,359) warrants were converted into Equity shares.

Amount received on 7,71,641 share warrants stand forfeited during the year (P.Y. Nil) being unsubscribed.

a) Details of Securities

1) Term Loans from State Bank of India, Punjab National Bank and Canara Bank are secured by equitable mortgage of Land and Building of the Company's properties situated at village Ajnali, Ambey Majra and Kukkar Majra & by hypothecation of all the movable properties forming part of the fixed assets of the Company on pari passu basis. The term loans from SBI, PNB & Canara Bank are also secured by way of second charge on all the current assets of the Company.

2) Working Capital Term Loans from State Bank of India, Punjab National Bank, Canara Bank and State Bank of Patiala are secured by equitable mortgage of Land and Building of the Company's properties situated at village Ajnali, Ambey Majra and Kukkar Majra & by hypothecation of all the movable properties forming part of the fixed assets of the Company on pari passu basis

The Company has adopted Accounting Standard 15 (Revised 2005) on employment benefit on 1s'April, 2007, consequent to the clarification issued by ASB of the Institute of Chartered Accountants of India for implementing AS 15, the liability in respect of the same benefit have been reworked as on 31st March, 2012, based on the following assumptions.

a) Detail of Securities: -

(i) Working Capital Borrowings such as Cash Credit from State Bank of India, Punjab National Bank, Canara Bank and State Bank of Patiala is secured by hypothecation on entire current assets of the Company on pari passu basis and second charge on fixed assets of the Company.

(ii) Working Capital Borrowings such as Buyer's Credit from State Bank of India, Punjab National Bank, Bank of India and Indian Overseas Bank is secured by hypothecation on entire current assets of the Company on pari passu basis and second charge on fixed assets of the Company.

Metnoa or valuation:

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventory is computed as under:

1. In case of Raw- material, Stores & Spares & Fuel on FIFO Basis (net of MODVAT, Service Tax & VAT).

2. In case of Work in Progress- Rolling Raw material are valued at monthly average cost basis. Cost for this purpose includes direct cost and all appropriate allocable overheads.

3. In case of Finished Goods at cost plus all appropriate allocable overheads and Excise Duty thereon. Cost for this purpose includes direct cost on monthly average cost basis, all appropriate allocable overheads and Excise Duty thereon.

4. Disposable stores and used items have been valued at net realisable value.

1. Fixed deposit having remaining maturity more than 12 months Rs 2.00 Lacs (NIL)

2. Fixed deposits including interest given as security Rs 2,46 Lacs (1,85.27 Lacs) to the Banks against margin ofthe Letter of Credit and Rs 0.60 Lacs (Rs 0.58 Lacs) to the Punjab Pollution Control Board.

NOTE: I

CONTINGENT LIABILITIES & COMMITMENTS

As at As at Particulars 31th March, 2012 31st March,2011 Rs in Lacs Rs in Lacs

Contingent Liabilities:

a) Claim against the Company not acknowledged as debts 2,90.02 2,94.85

b) Other money for which Company is contingent liable 6,12.80 11,22.56

Commitments:

a) Estimated amount of contractors remaining to be executed 2,74.14 - on capital accounts and not provided for

b) Letter of credit against import of material 64.28 5,88.43

c) Unhedged foreign currency exposure as at year end:

(Amounts in Lacs)

Particulars Currency As at As at 31st March, 31st March, 2012 2011 Buyer's Credit USD $ 26.16 $ 21.24

Buyer's Credit Indian Rupees Rs 13,32 Rs 9,47

Foreign VendoRs USD $ 32.69 $ 10.54

Foreign VendoRs Indian Rupees Rs 16,64.81 Rs 4,70.03

NOTE: II

TREATMENT OF EXCISE DUTY

Excise duty amounting to Rs 35,01.13 Lacs (Previous year Rs 35,67.81 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the differences of excise duty between the closing stock and opening stock has been disclosed separately in the Other Expenses forming part of Statement of Profit & Loss.

NOTE: III

SEGMENT REPORTING

The Company is engaged in the business of Steel Manufacturing which in context of Accounting Standard- 17-"SegmentReport"issuedbythelnstituteofCharteredAccountantsoflndiais considered the only business segment. So separate segment reporting is not necessary.

NOTE: IV

As per the Accounting Standard - 18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure". In view of this the Company has given the following disclosures for the year.

The Company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off during the year.

A) Related Party and their relationship

Key Management Personnel Relatives of Key Management Personnel (KMP)

MrAmarjit Goyal Mrs. Rattan Mala Goyal, Mrs. Alka Goyal, Ms Sonam Goyal

Mr Krishan Kumar Goyal Mr Aditya Goyal Mr P L Talwar

Enterprises over which KMP and relatives of such personnel are able to exercise significant influence M/s. Amarjit Goyal HUF, M/s. Krishan Kumar Goyal HUF, M/s. PHi Business Solutions Ltd., M/s. Mala Builders Pvt. Ltd., M/s. Modern Dairies Ltd., M/s. Nabha Commerce Pvt Ltd., (formerly Nabha Finance Private Limited), M/s. Chandigarh Finance Pvt Ltd.

Associates - M/s. Modem Automotives Ltd.

NOTE: V

PREVIOUS YEAR FIGURES

Financial Statements for the year ended 31st March, 2011 has been prepared as per then applicable pre- revised schedule VI of the Companies Act, 1956. Consequent to the notification of revised schedule VI under the Companies Act, 1956, the financial statement for the year ended 31st March, 2012 are prepared as per revised schedule VI. Accordingly previous year figures have also been reclassified to confirm to this year classification.

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Mar 31, 2011

1. i) Contingent Liabilities As at As at

31st March, 31st March, 2011 2010 Rs 000 Rs 000

a) Letters of Credit 26,34,79 19,71,08

b) Bills Discounted 11,22,56 7,67,56

c) Disputed demand for Excise, 2,94,85 3,37,22 Power & Others

2. Market Promotion Expenses includes Rebate and Discount Rs. 204.88 lacs (Previous YearRs 281.70 lacs).

3. Payment to Auditors in addition to Fee refer in Schedule XIII to the extent of Rs 0.41 lacs (previous year Rs 0.41 lacs) on account of Service Tax paid.

4. Expenditure capitalized during the year under various projects commissioned and under capital work in progress includes Interest Rs. 30.86 lacs (Previous Year Rs 33.53 lacs), Salary Rs Nil (Previous Year Rs Nil lacs), PowerRs Nil (Previous YearRs Nil lacs).

5. Excise duty amounting to Rs 3567.81 lacs (Previous year Rs 2452.62 lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the differences of excise duty between the closing stock and opening stock has been disclosed separately in the Manufacturing Cost forming part of the Profit and Loss account.

6. Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on October 2, 2006 certain disclosures, are required to be made relating to Micro, Small and Medium Enterprises. The Company is in communication with its suppliers to ascertain the applicability of this Act. As on the date of this Balance Sheet, the Company has received communication from its suppliers regarding the applicability of this act to them and the Company has disclosed such information accordingly. This information has been relied upon by the Auditors.

7. The Company on 19th April, 2010 had issued 14,00,000 Equity Warrants carrying an option to the promoters and promoter group of such warrants to subscribe to equity share of Rs 10/- of every warrant held within 18 months from the date of allotment of warrants at premium of Rs 23/- per share. Since allottee of the warrants expressed its willingness to convert these warrants into equity shares, as a result 6,28,359 equity warrants @ Rs 33/- (including premium @ Rs 23/-) were converted into equity shares during the year.

8. In the opinion of the Board, the current assets, loans and advances, are approximately of the value stated which if realized in the ordinary course of business, except stated otherwise

9. As per the Accounting Standard - 18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure". In view of this the Company has given the following disclosures for the year.

The Company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off during the year.

A) Related Party and their relationship

Key Management Personnel Relatives of Key Management Personnel (KMP)

Mr.AmarjitGoyal Mrs. Rattan Mala Goyal, Mrs.Alka Goyal, Miss Sonam Goyal, Mr. Krishan Kumar Goyal

Mr. Aditya Goyal

Mr. P. L. Talwar Enterprises over which KMP and relatives of such personnel are able to exercise significant influence

Amarjit Goyal HUF, Krishan Kumar Goyal HUF,M/s. Chandigarh Finance Pvt. Ltd., M/s. Mala Builders Pvt. Ltd., M/s. Modern Dairies Ltd., M/s Modern Automotives Ltd., M/s. PHi Business Solutions Ltd., M/s. Times Finvest & Commerce Ltd., M/s. Shree Ganesh Investments & Industries Ltd., M/s. Nabha Finance Pvt Ltd.

Associates - Nil

10. Figures for the Previous Year have been regrouped rearranged wherever considered necessary.

11. Additional Information pursuant to Provisions of paragraphs 3 & 4 (Part-ll) of the Schedules - VI to the Companies Act, 1956.

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Mar 31, 2010

1.i) Contingent Liabilities As at As at

31st March, 2010 31st March, 2009 Rs. 000 Rs. 000

a) Letters of Credit 19,71,08 16,30,07

b) Bills Discounted 7,67,56 8,07,05

c) Disputed demand for Excise,

Sale Tax, 3,37,22 2,93,25

Power & Others

ii) Capital Commitments - Contract under Capital commitments for Rs. Nil (previous year Rs. 98.90 lac) for which liability not provided.

The Company has adopted Accounting Standard AS15 (Revised 2005) on employment benefit on 1s" April 2007, consequent to the clarification issued by ASB of Institute of Chartered Accountants of India for implementing AS15, the liability in respect of the same of the benefits have been reworked as on 31st March, 2010 based on the following assumptions -

Market Promotion Expenses includes Rebate and Discount Rs.281.70lacs. (Previous YearRs.244.20lacs).

Payment to Auditors in addition to Fee refer in Schedule XII to the extent of Rs. 0.41 iacs (previous year Rs.0.41 lacs) on account of Service Tax paid.

Expenditure capitalized during the year under various projects commissioned and under capital work in progress includes InterestRs.33.53 lacs (Previous YearRs.28.77 lacs), Salary Rs. Nil (Previous YearRs. 1.00 lac), PowerRs. Nil (Previous YearRs. 2.46 lacs).

Excise duty amounting to Rs. 2452.62 lacs (Previous year Rs. 3625.49 lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the differences of excise duty between the closing stock and opening stock has been disclosed separately in the Manufacturing Cost forming part of the Profit and Loss Account.

Under the Micro, Small and Medium Enterprises Development Act, 2006, which came into force on October 2, 2006 certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in communication with its suppliers to ascertain the applicability of this Act. As on the date of this Balance Sheet, the Company has received communication from its suppliers regarding the applicability of this act to them and the Company has disclosed such information accordingly. This information has been relied upon by the Auditors.

In the opinion of the Board, the current assets, loans and advances, are approximately of the value stated which if realized in the ordinary course of business, except stated otherwise.

2. As per the Accounting Standard -18 issued by the Institute of Chartered Accountants of India "Related Party Disclosure." In view of this the Company has given the following disclosures for the year.

The Company has identified the related parties having transactions during the year, as per detail given below. No provision for doubtful debts is required to be made & no amount was written off.

3. Figures for the Previous Year have been regrouped / rearranged wherever considered necessary.