Notes to Accounts of Mukand Engineers Ltd.

Mar 31, 2017

1. The Company has issued only one class of shares referred to as equity shares having par value of ''10/-. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each shareholder.

2. Nature of security for short term Loans

Cash credit facility from Central Bank of India is secured by :

(i) Hypothecation of all, present and future, stocks, book debts and fixed assets of the company excluding assets taken on hire purchase.

(ii) Pledge of 681,200 equity shares of Mukand Ltd.

(iii) Corporate Guarantee given by an Associate Company.

3. The Company has, as at 31^st March, 2017 loans aggregating Rs.44,300,000/- (Previous Year - Rs.58,800,000/-) and interest recoverable thereon aggregating Rs.22,271,683/- (net of provision) (Previous Year - Rs.29,228,810/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued up to 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1^st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1^st April, 2003. The management, based on its assessment of the estimated realizable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above

4. SEGMENT INFORMATION

Notes

5. Unallocated income includes interest received Rs.42,89,223/- (Previous Year Rs.5,666,174/-).

6. Unallocated assets mainly relate to loans to Companies, Advance tax and Investments. Unallocated Liabilities mainly relates to Loan Funds and Tax Liabilities.

7. Interest and Finance Cost is net of interest income from Trade Dues.

B : OTHER DISCLOSURES

8. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organization structure as well as the differential risks and returns of these segments.

9. The Company has disclosed Business Segment as the primary segment.

10. Types of products and services in each business segment :

Business Segment Types of Products and Services

a) Construction - Construction and Engineering Activities

b) Infotech - ERP Implementation and Infotech Services

11. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

12. Secondary Segment Information - Geographical Segment :

The operations of the Company are, at present, only in India within a single Geographical Segment.

13. Trade Payables includes '' NIL (Previous Year - '' NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the MSME Act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of suppliers under the said MSME Act.

14. As per section 73 of the Act, read with The Companies (Acceptance of Deposit) Rules, 2014, every Company having net worth less than '' 100 Crores or turnover less than '' 500 Crores, shall repay the deposits, on or before 31st March, 2015, accepted before the commencement of the Act, along with interest due thereon.

Though the Company has not made any default in repayment of deposits which were due on maturity dates, the Company not being an “Eligible Company”, was required to repay the deposits accepted before the commencement of the Act, on or before 31st March, 2015. The Company had preferred an appeal before the Company Law Board for granting permission to repay the deposits along with interest thereon on the respective maturity dates.

The Company Law Board by its order dated 19/05/2015, has granted the said permission to the Company subject to fulfilling of certain conditions therein. In view of the above, the Company has continued to repay its deposits along with its interest thereon, on the respective maturity dates.

During the year under review, the Company has repaid deposits to all the deposit holders who claimed their maturity Proceeds. The Company Communicates / sends letter & reminders to holders who have not claimed the maturity proceeds of their respective Fixed deposits. The balance of unclaimed deposits amounting to Rs 2,962,000/- has been shown under current liabilities which will be paid as & when claimed by the depositors.

15. The provisions of Section 135 of the Act, 2013 read together with the rules framed there under relating to CSR initiatives which need to be undertaken by specified companies are at present not applicable to the Company.

16. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

17. Balances of Trade Receivables, Loans & advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation, if any will not have any material impact on Loss / Net worth of the Company for the year.

18. We hereby certify that the details of Specified Bank Notes (SBNs) as defined in the Notification of the Government of India, Ministry of Finances Department of Economic Affairs S.O. 3407(E) dated 8th November, 2016 of the denomination of ''500/and ''1000/- held and transacted during the period from 8th November, 2016 to 30th December, 2016 as follows:

19. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2016

1. The Company has issued only one class of shares referred to as equity shares having par value of Rs.10/-. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each shareholder.

2.(i) Nature of security for short term Loans

Cash credit facility from Central Bank of India is secured by :

3. Hypothecation of all, present and future, stocks, book debts and fixed assets of the company excluding assets taken on hire purchase.

4. Pledge of 681,200 equity shares of Mukand Ltd.

5. Corporate Guarantee given by a Group Company.

6. The Company has recognized Rs.14,527,137 /- (Previous Year Rs.14,361,154/-) as contribution towards defined contribution plans as an expense.

7. The Company has, as at 31st March, 2016 loans aggregating Rs. 58,800,000/- (Previous Year - Rs. 80,550,000/-) and interest recoverable thereon aggregating Rs. 29,228,810/- (net of provision) (Previous Year - Rs. 42,957,419/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued up to 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realizable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above

8 : OTHER DISCLOSURES

9. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organization structure as well as the differential risks and returns of these segments.

10. The Company has disclosed Business Segment as the primary segment.

11. Types of products and services in each business segment :

Business Segment Types of Products and Services

12. Construction - Construction and Engineering Activities

13. Infotech - ERP Implementation and Infotech Services

14. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

15. Secondary Segment Information - Geographical Segment :

The operations of the Company are, at present, only in India within a single Geographical Segment.

16. (A) Details of loans and advances in the nature of loans to associates and shares held by loanees (stipulated under clause 32 of the listing agreement with Stock Exchanges).

17. Trade Payables includes Rs. NIL (Previous Year - Rs. NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the MSME Act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of suppliers under the said MSME Act.

18. As per section 73 of the Act, read with The Companies (Acceptance of Deposit) Rules, 2014, every Company having net worth less than Rs. 100 Crores or turnover less than Rs. 500 Crores, shall repay the deposits, on or before 31st March, 2015, accepted before the commencement of the Act, along with interest due thereon.

Though the Company has not made any default in repayment of deposits which were due on maturity dates, the Company not being an “Eligible Company”, was required to repay the deposits accepted before the commencement of the Act, on or before 31st March, 2015. The Company had preferred an appeal before the Company Law Board for granting permission to repay the deposits along with interest thereon on the respective maturity dates.

The Company Law Board by its order dated 19/05/2015, has granted the said permission to the Company subject to fulfilling of certain conditions therein. In view of the above, the Company has continued to repay its deposits along with its interest thereon, on the respective maturity dates.

19. The provisions of Section 135 of the Act, read together with the rules framed there under relating to CSR initiatives which need to be undertaken by specified companies are at present not applicable to the Company.

20. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realizable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

21. Balances of Trade Receivables, Loans & advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation, if any will not have any material impact on Loss / Net worth of the Company for the year.

22. In accordance with the provision of Schedule II of the Companies Act, effective from April 01, 2014, the Company has charged depreciation based on the remaining useful life of the assets. Due to above, the depreciation charge for the year ended March 31, 2015 was higher by Rs. 3,500,473/-. Further, based on the transition provision of Schedule II, an amount Rs. 10,092,113/- (net of deferred tax Rs. 4,846,993/-) has been recognized in the Retained Earning.

23. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2015

1.1 The Company has issued only one class of shares referred to as equity shares having par value of Rs. 10/-. Each holder of equity share is entitled to one vote per share.

* The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

* In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each shareholder.

2.1 Finance lease obligations are secured against leased assets. Terms of repayment and rates of interest are as under :

Finance Lease of Rs. 3,899,285 Repayable in FY 2015-2016 and FY 2016-2017 at 11.00% p.a.

Installments falling due in respect of the above loans aggregating to Rs. 5,322,083/- upto 31st March, 2016 have been grouped under "Current maturities of finance lease obligations" (Refer note 8)

2.2 Repayment Schedule of Public Deposits is as under:

Public Deposits of Rs. 56,468,000 Repayable in FY 2016-2017 at Interest rates ranging from 9.75% to 11.75% p.a.

Public Deposits of Rs. 42,768,000 Repayable in FY 2017-2018 at Interest rates ranging from 9.75% to 11.75% p.a.

3.1 Nature of security for short term Loans

Cash Credit facility from Central Bank of India is secured by :

(i) Hypothecation of all, present and future, stocks, book debts and fixed assets excluding assets taken on hire purchase, of the Company.

(ii) Pledge of 681,200 equity shares of Mukand Ltd.

(iii) Corporate Guarantee given by a group company.

3.1 The Company has recognised Rs.14,845,262/- (Previous Year Rs.15,250,460/-) as contribution towards defined contribution plans as an expense.

4. Contingent Liabilities not provided for: 31-3-2015 31-3-2014

(i) Disputed Income Tax Dues 27,478,583 27,258,733

(ii) Disputed VAT/Works Contract Tax Dues 24,486,486 24,486,486

(iii) Corporate Guarantee given by the Company on behalf of a Company - 60,000,000

(iv) The Company has given performance guarantees and / or guarantees against advances received from clients in the course of its business. Based on the past experience, Company is of the opinion that no liability would arise on this account and as such at present the liability, if any, can not be estimated.

5. The Company has, as at 31st March, 2015 loans aggregating Rs. 80,550,000/- (Previous Year - Rs. 101,450,000/-) and interest recoverable thereon aggregating Rs. 42,957,419/- (Previous Year - Rs. 42,957,419/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above.

5.1 During the year, one of the investment companies referred to in note 28 has paid an amount of Rs. 150,00,000/- as an instalment towards the same. Pending compliance of the pre-conditions, the amount so received has been shown as advance received under the heading"Other Current Liabilities".

6. As per the understanding reached by Mukand Limited with Commerz Bank AG (the Bank) as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during the financial year 2002-2003 joined as a surety under the said Consent Decree to pay a sum of Rs. 76,000,000/- in the manner specified in the Consent Terms, whereby the Company became entitled to assignment of the entire outstanding debt of Rs. 160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour.

During the subsequent years, the Company re-participated along with other secured creditors in restructuring of Mukand Limited's debts to receive the payment of principal amount and interest over a period as decided, on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell (CDR) for Mukand Limited. As per the aforesaid FRP and subsequent amendments thereto, Mukand Limited has paid all the outstanding dues towards principal and or interest and accordingly the Company during the year, has received an amount of Rs. 629,55,156/- towards the full and final payment of the said loan and ceded pari-passu charge created on certain current assets and fixed assets of Mukand Limited.

Notes

1. Unallocated income includes interest received Rs.14,069,750/- (Previous Year Rs. 17,855,930/-).

2. Unallocated assets mainly relate to loans to Companies, Advance tax and Investments. Unallocated Liabilities mainly relates to Loan Funds and Tax Liabilities.

3. Interest and Finance Cost is net of interest income from Trade Dues.

B : Other Disclosures

1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organisation structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment :

Business Segment Types of Products and services

a) Construction - Construction and Engineering activities

b) Infotech - ERP Implementation and Infotech Services

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

5. Secondary Segment Information - Geographical Segment :

7. Trade Payables includes Rs. NIL (Previous Year - Rs. NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the MSME Act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of suppliers under the said Act.

8. As per section 73 of the Companies Act, 2013, (the Act) read with The Companies (Acceptance of Deposit) Rules, 2014, every Company having net worth less than Rs. 100 Crores or turnover less than Rs. 500 Crores, shall repay the deposits, on or before 31st March, 2015, accepted before the commencement of the Act, along with interest due thereon.

Though the Company has not made any default in repayment of deposits which were due on maturity dates, the Company not being an "Eligible Company", is required to repay the deposits accepted before the commencement of the Act, on or before 31st March, 2015. The Company had preferred an appeal before the Company Law Board for granting permission to repay the deposits along with interest thereon on the respective maturity dates.

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Mar 31, 2014

1.1 The Company has issued only one class of shares referred to as equity shares having par value of Rs.10/-. Each holder of equity share is entitled to one vote per share.

* The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the Annual General Meeting.

* In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each share holder.

2.1 Finance lease obligations are secured against leased assets. Terms of repayment and rates of interest are as under :

Finance Lease of Rs.9,221,368 Repayable in FY 2014-2015,FY 2015-2016 and FY 2016-2017 at 11.00% p.a. Installments falling due in respect of the above loans aggregating to Rs. 551,794/- upto 31st March, 2015 have been grouped under "Current maturities offinance lease obligations" (Refer note 8)

2.2 Repayment Schedule of Public Deposits is as under:

Public Deposits ofRs. 74,620,000 Repayable in FY 2015-2016at Interest rates ranging from 9.75% to 11.75% p.a. Public Deposits ofRs. 56,700,000 Repayable in FY 2016-2017 at Interest rates ranging from 9.75% to 11.75% p.a.

3.1 Nature of security for short term Loans

Cash credit facility from Central Bank of India is secured by:

(i) Hypothecation of all, present and future, stocks, book debts and fixed assets excluding assets taken on hire purchase, of the Company.

(ii) Pledge of 681,200 equity shares of Mukand Ltd.

(iii) Corporate Guarantee given by an associate company.

4. Contingent Liabilities not provided for: As at As at 31.3.2014 31.3.2013

(i) Disputed Income Tax Dues 27,258,733 26,601,871

(ii) Disputed Works Contract Tax Dues 331,766 331,766

(iii) Corporate Guarantee given by the Company 60,000,000 60,000,000 on behalf of a company

(iv) The Company has given performance guarantees and / or guarantees against advances received from clients in the course of its business. Based on the past experience, Company is of the opinion that no liability would arise on this account and as such the liability, if any, can not be estimated.

4.1 The Company has, as at 31st March, 2014 loans aggregating Rs. 101,450,000/- (Previous Year - Rs. 103,400,000/-) and interest recoverable thereon aggregating Rs. 42,957,419/- (Previous Year - Rs. 49,548,194/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above.

4.2 During the year, the Company made one time settlement with an investment company referred to in Note 28.1 above, by entering into an agreement on 28th March, 2014, to settle the total outstanding amount of Rs. 16,940,775/- (Principal amount Rs. 10,350,000 and interest amount Rs. 6,590,775/-). As per the terms of the agreement, the Investment Company has paid an amount of Rs.1,00,000/- on 28th March, 2014 and the balance amount of Rs.84,00,000/- was paid on 11th April, 2014. The remaining amount of Rs. 8,440,775/- (Principal Rs. 1,850,000/- and interest Rs. 6,590,775/-) is written off during the year 2013-14.

5. As per the understanding reached by Mukand Limited with Commerz Bank AG (the Bank) as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during the financial year 2002-2003 joined as a surety under the said Consent Decree to pay a sum of Rs. 76,000,000/- in the manner specified in the Consent Terms, whereby the Company became entitled to assignment of the entire outstanding debt of Rs.160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour. The difference between the face value of debt assigned to the Company and the obligation discharged by it aggregating to Rs. 84,858,072/- was credited to the Statement of Profit and Loss as "Exceptional Income" during the Financial Year2002-2003.

During the year 2009-10, the Company re-participated along with other secured creditors in restructuring of Mukand Limited''s debts to receive the payment of principal amount and interest only over a period of 9 years (earlier 12 years), on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell (CDR) for Mukand Limited. As per the aforesaid FRP, interest for the period 1st April, 2002 to 30th September, 2004 was converted into a loan to be repaid till March 2013 (since repaid). The Principal amount will be repaid till March, 2015 as per the said FRP. The Company has ceded pari-passu charge on certain current assets and fixed assets of Mukand Limited to the extent of additional debts raised by Mukand Limited.

During the year, the lenders of CDR cell have revised the interest rates and agreed for an adhoc payment for recompense. Since the loan of the Company was on the same terms and conditions of the CDR loan, an amount of Rs. 90.32 lacs was accepted by the Company towards adhoc payment for recompense which will be paid by Mukand limited in 20 instalments commencing from August, 2013. Accordingly, the Company during the year, has received an amount of Rs. 36.13 lacs towards the said recompense.

6. During the year, the Company has revised its policy of valuation of Contract Work in Progress(WIP), to reflect the WIP value at cost of work performed on the contract plus proportionate margin, using the percentage completion method in case of certain projects which have achieved a predetermined minimum percentage of completion. As a result of this change, the value of WIP and the profit before tax has increased by Rs. 264 lacs.

7. Related parties disclosures :

(i) Relationships :

(a) Related parties where control / significant influence exists:

1.Mukand Limited (Mukand)

2.Mukand Global Finance Limited (MGFL)

3.Mukand International Limited, UK

4.Mukand International FZE, UAE

5.Vidyavihar Containers Limited (VCL)

6.Mukand Vijaynagar Steel Limited

7.Bombay Forgings Limited

8.Stainless India Limited

9.Hospet Steels Limited

10.KalyaniMukandLimited

11.Jamnalal Sons Private Limited

12.Mukand Vini Mineral Limited

13.Mukand Sumi Metal Processing Limited

14.Conquest Investments & Finance Limited (Conquest) *

15.Econium Investments & Finance Limited (Econium) *

16.Fusion Investments & Financial Services Limited (Fusion) *

17.Catalyst Finance Limited (Catalyst) *

18.Primus Investments & Finance Limited (Primus) *

19.Lineage Investments Limited (Lineage) * * up to 28th March, 2013.

(a) Key Management Personnel: Mr. K. P. Jotwani - Manager.

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

Notes

1. Unallocated income includes interest received / receivable Rs. 17,855,930/- (Previous YearRs. 15,939,164/-).

2. Unallocated assets mainly relate to Loans to Companies, Advance Tax and Investments.Unallocated liabilities mainly relate to Loan Funds and Tax Liabilities.

B : Other Disclosures

1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organisation structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment :

Business Segment Types of Products and services

a) Construction - Construction and Engineering activities

b) Infotech - ERP Implementation and Infotech Services

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

5. Secondary Segment Information - Geographical Segment :

The operations of the Company are, at present, only in India within a single Geographical Segment.

8. Trade Payables includes Rs. NIL (Previous Year - Rs. NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enter -prises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the MSME Act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of suppliers under the said Act.

8. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

9. Balances of Trade Receivables, Loans & advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation will not have any material impact on profitability of the Company for the year.

10. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2013

1. Contingent Liabilities not provided for:

As at 31.3.2013 As at 31.3.2012 Rs. Rs.

(i) Disputed Income Tax Dues 26,601,871 26,086,590

(ii) Disputed Works Contract Tax Dues 331,766 2,170,085

(iii) Corporate Guarantee given by the Company on behalf of a company 60,000,000 60,000,000

(iv) Counter Guarantees given by the Company on behalf of a company - 40,000,000

(v) The Company has given performance guarantees and / or guarantees against advances received from the clients in the course of its business. Based on the past experience, Company is of the opinion that no liability would arise on this account and as such the liability, if any, can not be estimated.

2.1 The Company has, as at 31st March, 2013 loans aggregating 7 103,400,000/- (Previous Year - 7 103,400,000/-) and interest recoverable thereon aggregating 7 49,548,194/- (Previous Year - 7 49,548,194/-) due from investment companies. The net worth of these companies has eroded. On the basis of undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above.

2.2 During the previous year, the Company made one time settlement with an investment company, referred to in Note 28.1 above, to settle the total outstanding amount as on 12-05-2011. Accordingly, the investment company has paid an amount of 7 11,658,370/- towards principal outstanding. The balance amount of 7 11,658,370/- (Principal 7 4,616,630/- and interest 7 7,041,740/-) was written off during the previous year.

3. As per the understanding reached by Mukand Limited with Commerzbank AG (the Bank) as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during the financial year 2002-2003 joined as a surety under the said Consent Decree to pay a sum of 7 76,000,000/- in the manner specified in the Consent Terms, whereby the Company became entitled to assignment of the entire outstanding debt of 7160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour. The difference between the face value of debt assigned to the Company and the obligation discharged by it aggregating 7 84,858,072/- was credited to the Statement of Profit and Loss as "Exceptional Income" during the Financial Year 2002-2003.

During the year 2009-10, the Company re-participated along with other secured creditors in restructuring of Mukand Limited''s debts to receive the payment of principal amount and interest only over a period of 9 years (earlier 12 years), on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell for Mukand Limited. As per the aforesaid FRP, interest for the period 1st April, 2002 to 30th September, 2004 was converted into a loan to be repaid till March 2013 (since repaid). The Principal amount will be repaid till March, 2015 as per the said FRP. The Company has ceded pari-passu charge on certain current assets and fixed assets of Mukand Limited to the extent of additional debts raised by Mukand Limited.

4. During the year, the Company has changed its accounting policy in respect of threshold limits to be applied for Income recognition, from 15% to 5% /10% /15%, depending upon the value of the contract. This has resulted in increase in Income from Operations and Profit before tax by 7 107,735,676/- and 7 5,707,456 respectively.

5. Trade Payables includes Rs. NIL (Previous Year - Rs. NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the said act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of suppliers under the said Act.

6. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

7. Balances of Trade Receivables, Loans & Advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation will not have any material impact on profitability of the Company for the year.

8. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

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Mar 31, 2012

1.1 The Company has issued only one class of shares referred to as equity shares having a par value of Rs10/-. Each holder of equity share is entitled to one vote per share.

The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all the preferential amount, in the proportion of the number of equity shares held by each share holder.

2.1 Nature of security for short term Loans

Cash credit facility from Central Bank of India is secured by:

(i) Hypothecation of all, present and future, stocks, book debts and fixed assets excluding assets taken on hire purchase, of the Company.

(ii) Pledge of 681,200 equity shares of Mukand Ltd.

(iii) Corporate Guarantee given by an associate company.

3.1 The Company has recognised t 12,976,674/- (Previous Year Rs 10,183,589/-) as contribution towards defined contribution plans as an expense.

4.1 The Company has, as at 31st March, 2012 loans aggregating Rs103,400,000/- (Previous Year - Rs 119,675,000/-) and interest recoverable thereon aggregating Rs 49,548,194/- (Previous Year - Rs 56,589,934/-) due from investment companies. The net worth of these companies has eroded. On the undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above and has accordingly treated the said loan amount and interest due thereon as current asset.

4.2 During the year, the Company made one time settlement with an investment company, referred to in Note 28.1 above, to settle the total outstanding amount as on 12-05-2011. Accordingly, the investment company has paid an amount of t 11,658,370/- towards principal outstanding. The balance amount of Rs 11,658,370/- (Principal Rs 4,616,630/- and interest Rs 7,041,740/-) is written off during the year.

5. As per the understanding reached by Mukand Limited with Commerzbank AG as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during financial year 2002-2003 joined as a surety under the said Consent Decree to pay a sum of Rs 76,000,000/- in the manner specified in the Consent terms, whereby the Company became entitled to assignment of the entire outstanding debt of Rs160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour. The difference between the face value of debt assigned to the Company and the obligation discharged by it aggregating Rs 84,858,072/- was credited to the Profit and Loss Account as "Exceptional Income" during Financial Year 2002- 2003.

During the year 2009-10, the Company re-participated along with other secured creditors in restructuring of Mukand Limited's debts to receive the payment of principal amount and interest only over a period of 9 years (earlier 12 years), on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell for Mukand Limited. As per the aforesaid FRP, interest for the period 151 April, 2002 to 30th September, 2004 was converted into a loan to be repaid till March 2013. The Principal amount will be repaid till March, 2015 as per the said FRP. The Company has ceded pari-passu charge on certain current assets and fixed assets of Mukand Limited to the extent of additional debts raised by Mukand Limited.

6. As per the practice, the Company assigns certain specific jobs to sub-contractors at various sites. As per the terms, the sub- contractors are primarily responsible for payment of wages and all other employee benefits to its workmen engaged at the site. Whenever the sub-contractors had left the site and abandoned the contract without fulfilling their obligation to the workmen, the Company, as a principal employer, had paid an amount of Rs 160,032,791/- in earlier years, to sub-contractors' workmen engaged and working on the site under Company's supervision. As the sub-contractors had not settled their accounts for a long time, the balances appearing in provision for expenses account and in sub-contractors' account were reversed during the previous year.

Notes

1. Unallocated income includes interest received Rs 16,005,427/- (Previous Year Rs 19,948,107/-).

2. Unallocated assets mainly relate to Loans to Companies, Advance Tax and Investments. Unallocated liabilities mainly relate to Loan Funds and Tax Liabilities.

B: Other Disclosures

1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organisation structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment:

Business Segment Types of Products and services

a) Construction - Construction and Engineering activities

b) Infotech - ERP Implementation and Infotech Services

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

5. Secondary Segment Information - Geographical Segment :The operations of the Company are, at present, only in India within a single Geographical Segment.

7. Trade Payables include Rs NIL (Previous Year - 7 NIL) due to Micro Small & Medium Enterprises registered under Micro Small & Medium Enterprises Development Act, 2006 (MSME Act). During the year, no amounts have been paid beyond the appointed day in terms of MSME Act and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the said act at the close of the year.

The disclosure above is based on the information available with the Company regarding the status of supplier's under the said Act.

8. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

9. Balances of Trade Receivables, Loans & advances and Trade Payables are subject to confirmation and are as per books of account only. However, in the opinion of management, the reconciliation will not have any material impact on profitability of the Company for the year.

10. On Account of application of revised Schedule VI for the preparation of financial statements, the disclosures, classification and presentation made in this financial statement have been significantly impacted / changed. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2011

1. Loan Funds :

Nature of security for Secured Loans:

Cash credit facilities from Central Bank of India are secured by hypothecation of all, present and future, stocks, book debts and moveable fixed assets excluding assets taken on hire purchase, of the Company. [Also refer footnote (@) under Schedule 5].

2. Contingent Liability not provided lor:

As at As at 31.3.2011 31.3.2010 Rs. Rs.

(i) Disputed Income Tax Dues 26,098,075 63,780,499

(ii) Disputed Works Contract Tax Dues 2,170,085 2,170,085

(iii) Corporate Guarantee given by the Company on behalf of a company 60,000,000 60,000,000

(iv) Counter Guarantees given by the Company on behalf of a company 291,287,071 664,334,669

(v) The Company has given performance guarantees and / or guarantees against advances received from the clients in the course of its business. Based on the past experience, Company is of the opinion that no liability would arise on this account and as such the liability, if any, can not be estimated.

3. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

6. The employee-wise break-up of liability on account of employee benefits based on actuarial valuation is not ascertainable. The amounts relatable to the Manager are, therefore, disclosed in the year of payment.

7. The Company has, as at 31 st March, 2011 loans aggregating Rs. 119,675,000/- (Previous Year - Rs. 151,675,000/-) and interest recoverable aggregating Rs. 56,589,934/- (Previous Year - Rs. 62,332,753/-) due from investment companies. The net worth of these companies has eroded. On the undertaking by these companies to pay the principal amount along with interest, (accrued upto 31st March, 2003) the Company had agreed to waive interest on these loans with effect from 1st April, 2003. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest as mentioned above.

8. During the year, the Company has approved one time settlement with an investment company, referred to in Note No. B (7) above, to settle the total outstanding amount as on 30.12.2010. Accordingly, the investment company has paid an amount of Rs. 7,071,410/- towards principal outstanding. The balance amount of Rs. 7,071,409/- (Principal Rs. 1,328,590/- and interest Rs. 5,742,819/-) is written off during the year.

9. As per the understanding reached by Mukand Limited with Commerzbank AG as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during financial year 2002-2003 joined as a surety under the said Consent Decree to pay a sum of Rs. 76,000,000/- in the manner specified in the Consent terms, whereby the Company became entitled to assignment of the entire outstanding debt of Rs. 160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour. The difference between the face value of debt assigned to the Company and the obligation discharged by it aggregating Rs. 84,858,072/- was credited to the Profit and Loss Account as "Exceptional Income" during 2002-2003.

During the year 2009-10, the Company re-participated along with other secured creditors in restructuring of Mukand Limiteds debts to receive the payment of principal amount and interest only over a period of 9 years (earlier 12 years), on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell for Mukand Limited. As per the aforesaid FRP, interest for the period 1st April, 2002 to 30th September, 2004 was converted into a loan to be repaid till March 2013. The Principal amount will be repaid till March, 2015 as per the said FRP. The Company has ceded pari-passu charge on certain current assets and fixed assets of Mukand Limited to the extent of Priority Debt raised by Mukand Limited.

10. As per the practice, the Company assigns certain specific jobs to sub-contractors at various sites. As per the terms, the sub-contractors are primarily responsible for payment of

wages and all other employee benefits to its workmen engaged at the site. Whenever the sub-contractors had left the site and abandoned the contract without fulfilling their obligation to the workmen, the Company, as a principal employer, had paid an amount of Rs. 160,032,791/- in earlier years, to sub-contractors workmen engaged and working on the site under Companys supervision. As the sub- contractors have not settled their accounts for a long time, the balances appearing in provision for expenses account and in sub-contractors accounts are reversed during the year.

11. During the year, the Company reconciled old balances appearing in Contract Control Accounts (grouped under Debtors balances) and accordingly an amount of Rs. 5,813,417/- (Net) is written off and included in "Sundry Balances Appropriated" in schedule 18.

15. Related parties disclosures : (i) Relationships:

(a) Related parties where control / significant influence exists:

1 Mukand Limited

2 Indian Thermal Power Limited

3 Mukand Global Finance Limited (MGFL)

4 Mukand International Limited, UK

5 Mukand International FZE, UAE

6 Vidyavihar Containers Limited (VCL)

7 Mukand Vijaynagar Steel Limited

8 Bombay Forgings Limited

9 Stainless India Limited

10 Hospet Steels Limited

11 Kalyani Mukand Limited

12 Jamnalal Sons Private Limited

13 Mukand Bekaert Wire Industries Private Limited

14 Mukand Vini Mineral Limited

15 Conquest Investments & Finance Limited (Conquest)

16 Econium Investments & Finance Limited (Econium)

17 Fusion Investments & Financial Services Limited (Fusion)

18 Catalyst Finance Limited (Catalyst)

19 Primus Investments & Finance Limited (Primus)

20 Lineage Investments Limited (Lineage)

(b) Key Management Personnel: Shri K. P. Jotwani- Manager.

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

16. SEGMENT INFORMATION

B : Other Disclosures

1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organisation structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment:

Business Segment Types of Products and services

a) Construction - Construction and Engineering activities

b) Infotech - ERP Implementation and EDP Services

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

5. Secondary Segment Information - Geographical Segment: The operations of the Company are, at present, only in India within a single Geographical Segment.

17. i) The Company has recognised Rs. 10,183,589/- (Previous Year Rs. 9,094,367/-) as contribution towards defined contribution plans as an expense in the Profit and Loss Account.

20. Sundry Creditors in Schedule 11 to the Accounts include (i) Rs. NIL (Previous Year Rs. Nil) due to Micro, Small and Medium Enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 289,128,025/- (Previous Year Rs. 293,767,085/-) due to other creditors.During the year, no amounts have been paid beyond the appointed day in terms of the MSME and there are no amounts paid towards interest. Further, there is no interest accrued / payable under the said act at the close of the year. The disclosure above is based on the information available with the Company regarding the status of suppliers under the MSME.

21. Balances of Sundry Debtors, Loans & advances and Sundry creditors are subject to confirmation and are as per books of account only.

22. Figures for Previous year, which were audited by a firm of Chartered Accountants other than K.K. Mankeshwar & Co., have been regrouped / recast wherever necessary.

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Mar 31, 2010

1. Loan Funds :

Nature of security for Secured Loans:

Cash credit facilities from Central Bank Of India are secured by hypothecation of all the stocks, book debts and moveable fixed assets of the Company. [Also refer footnote (@) under Schedule 5].

2. Contingent Liability not As at As at provided for:

31.3.2010 31.3.2009 Rupees Rupees

(i) Disputed Income Tax as the matters are in appeal 63,780,499 59,079,320

(ii) Disputed Entry Tax as the matters are in appeal 816,000 816,000

(iii) Corporate Guarantee given by the Company on behalf of a company 60,000,000 60,000,000

(iv) Counter Guarantees given by the Company on behalf of a company 664,334,669 904,918,123

(v) Works Contract Tax 2,165,086 2,165,085

3. In the opinion of the Board of Directors, all items of Current Assets, Loans and Advances continue to have a realisable value of at least the amounts at which they are stated in the Balance Sheet, unless otherwise stated.

4. The Company has, as at 31st March, 2010 loans aggregating Rs.151,675,000 (31.03.2009 Rs. 179,450,000) and interest recoverable aggregating Rs.62,332,753 (31.03.2009 Rs. 62,332,753) due from investment companies. The net worth of these companies has eroded. On the undertaking by these companies to pay the principal amount along with interest (accrued upto 31st March, 2003) before the end of the financial year 2008-2009, the Company had agreed to waive interest on these loans with effect from 1st April, 2003. Being unable to repay in full, these companies had made another undertaking to repay fifty percent of the principal outstanding by financial year 2009-10 and the balance before the end of financial year 2010-11, which during the year has been further extended to financial year 2011-12, and requested the Company to continue to waive the interest. The Company has accepted the same. As a matter of prudence, the Company had already stopped accounting for interest income on these loans with effect from 1st April, 2003. The management, based on its assessment of the estimated realisable values of the financial assets of these companies, believes that the Company would still be able to recover the loans and interest.

5. As per the understanding reached by Mukand Limited with Commerzbank AG as recorded in the Consent Terms filed in the Debt Recovery Tribunal, the Company during 2002-2003 joined as a surety under the said Consent Decree to pay a sum of Rs.76,000,000/- in the manner specified in the Consent terms, whereby the Company became entitled to assignment of the entire outstanding debt of Rs. 160,858,072/- due by Mukand Limited to the Bank together with the security held by the Bank. The Company discharged its obligations under the said Consent Terms and the aforesaid debt has been assigned in its favour. The difference between the face value of debt assigned to the Company and the obligation discharged by it aggregating Rs. 84,858,072/-was credited to the Profit and Loss Account as "Exceptional Income" during 2002-2003. During the year 2009-10, the Company re-participated along with other secured creditors in restructuring of Mukand Limiteds debts to receive the payment of principal amount and interest only over a period of 9 years (earlier 12 years), on similar lines, as other secured creditors, who have accepted the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring Cell for Mukand Limited. As per the aforesaid FRP, interest for the period 1st April, 2002 to 30th September, 2004 was converted into a loan to be repaid till March 2013. The Principal amount will be repaid till March, 2015 as per the said FRP. The Company has ceded pari-passu charge on the assets of Mukand Limited, to the extent of Priority Debt raised by Mukand Limited.

6. Related parties disclosures : (i) Relationships :

(a) Related parties where control exists:

1 Mukand Limited

2 Indian Thermal Power Limited

3 Mukand Global Finance Limited (MGFL)

4 Mukand International Limited, UK

5 Mukand International FZE, UAE

6 Vidyavihar Containers Limited (VCL)

7 Mukand Vijaynagar Steel Limited

8 Bombay Forgings Limited

9 Stainless India Limited

10 Hospet Steels Limited

11 Kalyani Mukand Limited

12 Jamnalal Sons Private Limited

13 Mukand Bekaert Wire Industries Private Limited

14 Mukand Vini Mineral Private Limited

15 Conquest Investments & Finance Limited (Conquest)

16 Econium Investments & Finance Limited (Econium)

17 Fusion Investments & Financial Services Limited (Fusion)

18 Catalyst Finance Limited (Catalyst)

19 Primus Investments & Finance Limited (Primus)

20 Lineage Investments Limited (Lineage)

(b) Key Management Personnel: Mr. K. P. Jotwani - Manager.

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

B. Other Disclosures

1. Segments have been identified in line with the Accounting Standard (AS) 17 on Segment Reporting taking into account the organisation structure as well as the differential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment : Business Segment Types of Products and services

a) Construction - Construction and Engineering activities

b) Infotech - ERP Implementation and EDP Services

4. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on a reasonable basis.

5. Secondary Segment Information - Geographical Segment:

The operations of the Company are, at present, only in India within a single Geographical Segment.

7. i) The Company has recognised Rs. 9,094,367 (previous year Rs 6,398,876) as contribution towards defined contribution plans as an expense in the Profit and Loss Account.

8. Sundry Creditors in Schedule 11to the Accounts include (i) Rs. Nil (Previous Year Rs.Nil) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 293,049,085/- (Previous Year Rs. 206,909,236/-) due to other creditors.

No interest is paid / payable during the year to any micro or small enterprise registered under the MSME.

The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME

9. Previous years figures have been regrouped / recast wherever necessary.