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Notes to Accounts of Phoenix International Ltd.

Mar 31, 2018

1. CORPORATE AND GENERAL INFORMATION

Phoenix International Limited (“the Company'''') is a Public Company domiciled and incorporated in India and its shares are publicly traded on the National Stock Exchange (‘NSE'') and Bombay Stock Exchange (BSE) in India. The registered office of Company is situated at 3rd Floor, Gopala Tower,25 Rajendra Place, New Delhi110008, India.

The Company is in the business of leasing out buildings and is a leading manufacturer and supplier of Shoes and Shoe Uppers in Chennai, India.

These financial statements were approved and adopted by board of directors of the Company in their meeting dated May 30, 2018.

(b) Terms/ rights attached to equity shares

The company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entiled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Based on information available with the company there are no overdue amount payable to Micro, Small and Medium Enterprises, as defined in The Micro, Small and Medium Enterprises Development Act, 2006. This has been determined to the extent such parties have been identified on the basis of information available with the Company which has been relied upon by the Auditors.

2. First time adoption of Ind AS

These financial statements, for the year ended 31stMarch 2018, are the first the company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for period ending on 31stMarch 2018, together with the comparative period data as at and for the year ended 31stMarch 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1stApril 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1stApril 2016 and the financial statements as at and for the year ended 31stMarch 2017.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has, accordingly, applied following exemptions:

a) The Company has elected to consider carrying amount of all items of Property, Plant and Equipment''s (PPE) except for Land and Building (which has been revalued) as per Indian GAAP, as deemed cost at the date of transition.

b) The Company has availed the exemption of fair value measurement of financial assets or liabilities at initial recognition and accordingly will apply fair value measurement of financial assets or liabilities at initial recognition prospectively to transactions entered into on or after 01st April 2016.

c) The estimates at 1st April 2016 and at 31st March, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items under Indian GAAP did not require estimation:

- Fair value of investments in unquoted equity instruments.

- Impairment of financial assets based on expected credit loss model

- Discount rates

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions that existed as at 1st April, 2016 and 31st March, 2017.

d) The Securities Deposit have been reclassified on the bases of their maturities from Current to Non-Current.

e) The Bank Deposit have been reclassified as Non-Current Assets which have maturity more than 12 months.

f) The Preference share capital has been reclassified as other financial non-current liabilities from Equity as per Ind As.

g) The Term Loan from Oriental Bank Of Commerce has been revalued as per Ind AS.(Loan Processing fees)

Notes to the reconciliation of equity as at 1st April 2016 and 31st March 2017 and Total Comprehensive Income for the year ended 31st March 2017

1. Fair Valuation of Investments

Under Indian GAAP, investments in equity instruments were classified as long term investments or current investments based on the intended holding period and realisability. Long term investments were carried at cost less provision for other than temporary diminution in the value of investments. Current investments were carried at lower of cost and fair value. Ind AS requires such investments to be measured at fair value except investments in subsidiaries, associates and joint venture for which exemption has been availed.

Accordingly, the Company has designated investments in equity instruments as FVTPL investments. The difference between the instrument''s fair value and Indian GAAP carrying amounthas been recognized in retained earnings.

2. Financial instruments measured at amortized cost

Under Indian GAAP, interest free loan to employees are recorded at their transaction value. Under Ind AS, these loans are to be measured at amortized cost on the basis of effective interest rate method.

3. Defined benefit obligation

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gain and loss, are charged to profit and loss. Under Ind AS, such actuarial gain and loss is to be recognized separately through Other Comprehensive Income. Thus, employee cost has been reduced and actuarial gain/loss has been recognized in OCI net of taxes.

4. Sale of Goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Thus, sale of goods under Ind AS has increased by the excise duty with a corresponding increase in other expenses.

5. Sale of Service

Under Indian GAAP and IND AS, sale of service presents as net of taxes.

6. Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS has resulted in recognition of deferred tax on temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

7. Statement of cash flows

The transition from Indian GAAP to IND AS has not had a material impact on statement of cash flows.

Notes:-

a) The company does not expect any reimbursement in respect of the above contingent liabilities.

b) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at A above, pending resolution of the appellate proceedings.

3. Disclosures as required by Indian Accounting Standard (Ind AS) 19 Employee Benefits:

Gratuity plan: The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service subject to a maximum Rs.10 lacs, vesting occurs upon completion of five continuous years of service in accordance with Indian law.

The following tables set out the disclosures in respect of the gratuity plan as required under Ind AS 19.

The assumption of future salary increase takes into account the inflation, seniority, promotion and other relevant factors such as supply and demand in employment market. Same assumptions were considered for comparative period i.e. 2016-17 as considered in previous GAAP on transition to IND AS.

4. The Company operates in two business segment viz. “Shoe Manufacturing” & “Rental Services of Immovable Properties”, both segments are reportable in accordance with the requirements of Ind AS -108 on “Operating Segments”, prescribed by Companies (Indian Accounting Standards) Rules 2015. The Company''s business activities primarily fall within single geographical segments.

5. Related Party Disclosure:

In accordance with the requirements of IND AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:

Disclosure of Related parties and relationship between parties:-

a) Key Management Personnel :

Mr. P M Alexander (Director)

: Mr. Narendra Aggarwal (Director)

: Mr. Narender Makkar (Company Secretary)

6. Disclosures as required by Indian Accounting Standard (Ind AS) 17 Lease:-

Operating lease commitments:

(i) Company as lessor:-

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable with range from 11 months to 99 years and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals receivable are charged as Rent under ‘Rental Income''.

7. Earnings per Share

The calculation of Earnings per Share (EPS) as disclosed in the Statement of Profit and Loss has been made in accordance with Ind AS- 33 on “Earnings per Share”.

The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity, if any.

8. Income Tax:

a) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as ‘Deferred tax adjustment''.

b) Reconciliation of Deferred tax liabilities (Net)

9. Financial Risk Management

The financial assets of the company include investments, loans, trade and other receivables, and cash and bank balances that derive directly from its operations.

The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The company is mainly exposed to the following risks that arise from financial instruments:

(i) Market risk

(ii) Liquidity risk

(iii) Credit risk

The Company''s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise two types of risk: interest rate risk, foreign currency risk.

(a) Foreign currency risk

The company imports certain assets and material from outside India. The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognized assets and liabilities denominated in a currency other than company''s functional currency.

The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The Company''s exposure to foreign currency risk was based on the following amounts as at the reporting dates: (FC in Lacs)

Foreign currency sensitivity analysis

Any changes in the exchange rate of EURO and USD against INR is not expected to have significant impact on the Company''s profit due to the less exposure of these currencies. Accordingly, a 10% appreciation/depreciation of the INR as indicated below, against the EURO and USD would have increased/reduced profit by the amounts shown below. This analysis is based on the foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variable remains constant:

(b) Interest Rate Risk

The company is exposed to interest rate risk because company borrows funds at fixed interest rate.

(ii) Liquidity Risk

The financial liabilities of the company, other than derivatives, include loans and borrowings, trade and other payables. The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. Ultimate responsibility of liquidity risk management rests with board of directors.

The company monitors its risk of shortage of funds to meet the financial liabilities using a liquidity planning tool. The company plans to maintain sufficient cash and marketable securities to meet the obligations as and when falls due.

The below is the detail of contractual maturities of the financial liabilities of the company at the end of each reporting period:

(iii) Credit Risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the company. The company takes due care while extending any credit as per the approval matrix approved by ECRM.

Write off policy

The financials assets are written off in case there is no reasonable expectation of recovering from the financial asset.

10. Capital Management

The capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company''s capital management is to maintain optimum capital structure to reduce cost of capital and to maximize the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants which otherwise would permit the banks to immediately call loans and borrowings. In order to maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. There were no changes in the objectives, policies or processes for managing capital during the year ended 31 March 2018 and 31 March 2017.

11. In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

12. The Company owes dues of Rs Nil (previous year Rs. Nil) towards Micro and Small Enterprises, which are outstanding for more than 45 days as at 31st March, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

13. Previous Year figures have been regrouped/ reclassified wherever considered necessary.


Mar 31, 2015

1. RELATED PARTY DISCLOSURE

(i) In accordance with the requirements of Accounting Standard (AS-18) on Related Party Disclosures, the name of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships , as identified and certified by management are:-

2. SEGMENT REPORTING

A) PRIMARY SEGMENT INFORMATION

The Company has identified two reportable segments viz. Manufacturing of Shoes Upper and Rental Income from Immovable Property. As per Accounting Standard on Segment Reporting (AS-17), "Segment Reporting" the Company has reported segment information. Gross turnover of Company is Rs. 3,939.29 Lacs during the period 01.04.2014 to 31.03.2015 (Previous Year Rs. 3,778.34 Lacs).

3. Debit / Credit balances as on 31st March 2015 of Debtors, Creditors, Loans & Advances and other parties accounts are subject to confirmations.

4. The accounts of the company have been prepared on going concern basis as per Accounting Standard (AS-1) "Disclosure of Accounting Policies".

5. In the opinion of the management, there is no certainty that sufficient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Assets on account of timing differences as stipulated in Accounting Standard (AS - 22) "Accounting for Taxes of Income"

6. The Company generally enters into cancelable operating leases for office premises, factory premises and residence of the employees, normally renewable on expiry.

7. No creditor has intimated about their status being of small scale industrial undertakings.

8. As per Accounting Standard 5, Net Profit or loss for the period, and Prior Period Item and Change in Accounting Policy Issued by ICAI, Prior period expenses of Rs. 66,08,958/- are include in electricity & water charges.

9. Previous year figures have been regrouped / rearranged wherever considered necessary to conform to the classification adopted in the current year.


Mar 31, 2014

1. CONTINGENT LIABILITIES NOT PROVIDED FOR For the Year Ended For the Year Ended

31st March, 2014 (Rs.) 31st March, 2013 (Rs.)

Income Tax, Sales Tax, Service Tax, Excise Duty and Custom Duty 157.00 Lacs 157.00 Lacs Demands under Appeals

Employees Provident Fund, Pension Fund, Deposit Linked - 18.64 Lacs Insurance Fund Demands under Appeals

2. FAIR VALUE OF CURRENT AND NON CURRENT ASSETS

In the opinion of Management, Non Current/Current Assets, Loans and Advances are of the value stated. If realized in the ordinary course of business and provision for all known liabilities is adequate.

3. Debit/Credit balances as on 31st March, 2014 in Debtors, Creditors, Loans & Advances and other Parties accounts are subjected to confi rmations.

4. Based on the guiding principles given in Accounting Standard (AS-17) "SEGMENT REPORTING", there are no separate reportable segments.

5. The accounts of the company have been prepared on going concern basis as per Accounting Standard (AS-1) "Disclosure of Accounting Policies".

6. Unamortized Expense of Rs. Nil (Previous year of Rs. 71,40,233/-) has been recognized as an expense in the profit & loss account.

7. As the Company has unabsorbed depreciation and unabsorbed losses which are to be carried forward as per the provision of Income Tax Act, 1961. In the opinion of the management, there is no certainty that suffi cient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Assets on account of timing differences as stipulated in Accounting Standard (AS - 22) "Accounting for Taxes of Income"

8. The Company generally enters into cancelable operating leases for offi ce premises, factory premises and residence of the employees, normally renewable on expiry. Lease payments amounting to Rs. 23.45 lacs (Previous Year Rs. 19.89 Lacs) made under operating lease have been recognized as an expense in the profit and loss account.

9. Previous year''s figures have been regrouped/rearranged & reclassified as necessary.


Mar 31, 2013

1. RELATED PARTY DISCLOSURE

i) In accordance with the requiremnets of Accounting Standard (AS-18) on Related party Disclosures, the name of the related parties where control exist and/or with whom transactions have taken place during the year and description of relationships , as identified and certified by management are :-

(a) Key Managerial Personnel (KMP) Mr. Narender Kumar Makkar

Mr. Arun Kr. Sinha Mr. Narender Aggarwal Mr. P.M. Alexander

(b) Subsidiary Companies

Phoenix Industries Limited Phoenix Cement Limited

(c) Enterprise under direct/Indirect common control:

Focus Energy Limited

2. DISCLOSURE WITH RESPECT TO EMPLOYEES'' BENEFITS

Company has neither made the provision for Gratuity during the year nor provide the Acturial certificate for the Gratuity provision as stipulated in Accounting Standard AS-15 ''Employee Benefits". As per policy of the company , Leave Encashment has to be accounted for year to year basis, hereby as per management, there is no Leave Encahment during the year.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

Income Tax, Sales Tax, Excise Duty and Custom Duty Demands 157.00 Lacs 24.50 Lacs under Appeals

Employees Provident Fund, Pension Fund, Deposit Linked 18.64 Lacs

Insurance Fund Demands under Appeals

4. Debit/ Credit balances as on 31st March, 2013 in Debtors, Creditors, Loans & Advances and other Parties accounts are subjects to confirmations.

5. Based on the guiding principles given in Accounting Standard (AS-17)"SEGMENT REPORTING", there are no separate reportaDle segments.

6. The accounts of the company have been prepared on going concern basis as per Accounting Standard( AS-1) "Disclosure of Accounting Policies"

7. Unamortized Expense of Rs. 7140233/- (Previous year of RS. 6755964/-) has been recognised as an expense in the profit & loss account.

8. As the Company has unabsorbed depreciation and unabsorbed losses which are to be carried forward as per the provision of Income Tax Act, 1961. In the opinion of the management, there is no certainty that sufficient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Assets on account of timing differences as stipulated in Accounting Standard (AS - 22) "Accounting for Taxes of Income"

9. The Company generally enters into cancelable operating leases for office premises, factory premises and residence of the employees, normally renewable on expiry. Lease payments amounting to Rs. 18.20 lacs (Previous Year RS. 18.24 lacs) made under operating lease have been recognised as an expense in the profit and loss account.

10. Some Banks balances as on 31st March,2013 are subject to confirmations.

11. No Creditors has intimated about their status being of small scale industrial undertaking.

12. Previous year''s figures have been regrouped/rearranged & reclassified as necessary.


Mar 31, 2012

Note: Term Loan from Oriental Bank of Commerce Of Rs.5773.96 Lacs (Previous year Rs, 5967.98 Lacs) is secured by way of Equitable Mortagage of Land and Building measuring 61,690 Sq. Meters at A=37, Sector 60, Noida assigned by way of security of the rights of borrower under sub lease/lease agreements including assignment of receivables of future rentals/lease money and first charge on all moveable / Fixed Assets & Inventory (existing and future) of the Company. The Loan is Repayable in 120 Equated monthly installments from the date of disbursement. Due with in a year Rs. 936.00 Lacs including interest (Previous Year Rs.936.00 Lacs including interest)

1. RELATED PARTY DISCLOSURE

i) In accordance with the requiremnets of Accounting Standard (AS-18) on Related party Disclosures, the name of the related parties where control exist and/or with whom transactions have taken place during the year and description of relationships , as identified and certified by management are

(a) Key Managerial Personnel Mr. Narender Kumar Makkar Mr. Arun Kr. Sinha

Mr. Narender Aggarwal Mr. P.M. Alexander

(b) Subsidiary Companies Phoenix Industries Limited Phoenix Cement Limited

(c) Enterprise under direct/indirect common control:

2. DISCLOSURE WITH RESPECT TO EMPLOYEES' BENEFITS

"Every employee who has completed five years or more of service gets a gratuity on leaving at 15 days salary (last drawn salary) for each completed year of service. Year end liablity on account of retirement benefits to employees are provided and funded to approved Gratuity Fund under the Group Gratuity cum Life Assurance scheme of Life Insurance corporation of India. Acturial valuation regarding the emplyoee benefits have not been provided. Contribution to defined contribution scheme such as Provident and Family Pension fund are charged to Profit & Loss Account as incurred. Leave encashment is accounted for on year to year basis and not accumulated to be encashed at the time of retirement."

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

Year Ended 31st March, 2012 Year Ended 31st March, 2011 Rs. Rs.

Income Tax, Sales Tax, Excise Duty and Custom Duty Demands 24.50 Lacs 11.37 Lacs

under Appeals

4. Debit/ Credit balances as on 31st March,2012 in Debtors, Creditors, Loans & Advances and other Parties accounts are subjects to confirmations.

5. Based on the guiding principles given in Accounting Standard (AS-17)"SEGMENT REPORTING", there are no separate reportable segments.

6. The accounts of the company have been prepared on going concern basis.

7. No Creditors has intimated about their status being of small scale industrial undertaking.

8. As the Company has unabsorbed depreciation and unabsorbed losses to the tune of Rs. 280.22 lacs which are to be carried forward as per the provision of Income Tax Act, 1961. In the opinion of the management, there is no certainty that sufficient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Income Assets/Liabilities on account of timing differences as stipulated in Accounting Standard (AS - 22) "Accounting for Taxes of Income”

9. The Company generally enters into cancelable operating leases for office premises, factory premises and residence of the employees, normally renewable on expiry. Lease payments amounting to Rs. 18.24 lacs (Previous Year RS. 8.26 lacs) made under operating lease have been recognised as an expense in the profit and loss account.

10. Previous year's figures have been regrouped/rearranged & reclassified as necessary


Mar 31, 2010

1. Contingent Liabilities not provided for

As at 31.03.2010 As at 31.03.2009 (Rs. In Lacs) (Rs. in Lacs)

(a) Income Tax, Sales Tax, Excise Duty and Custom 11.37 11.37 Duty demands under Appeals.

(b) Corporate Guarantee for loans availed by Focus 19700.00 19700.00 Energy Limited.

2. The accounts of the Company have been prepared on going concern basis.

3. No creditor has intimated about their status being of small scale industrial undertaking.

4. As the Company has unabsorbed depreciation and unabsorbed losses to the tune of Rs. 4629.13 lacs which are to be carried forward as per the provisions of the Income Tax Act,1961, in the opinion of the management there is no certainty that sufficient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Assets / Liabilities on account of timing differences as stipulated in Accounting Standard (AS-22)" Accounting for Taxes on Income".

5 Disclosure pursuant to Accounting Standard - 15

a) Consequent upon the adoption of Accounting Standard - 15 (Revised) - Employee Benefits, in accordance with the stipulations contained therein, the company has adjusted Rs.6,78,205/- towards the transitional effect of defined benefit obligation in respect of employee benefits up-to 31st March, 2007 to the balance of General Reserve as on 1st April,2007.

b) Defined Contribution Plan

6. Segment Reporting:

i) Based on the guiding principles given in Accounting Standard (AS-17) "Segment Reporting" .there are no separate reportable segment.

7. Related Party Transactions:-

i) In accordance with the requirements of Accounting Standard -(AS-18) on Related Party Disclosures, the name of the related parties where control exists and / or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are:-

a) Key Managerial Personnel

Mr. Narender Kumar Makkar Mr. Narendra Aggarwal Mr. Arun K.Sinha Mr. P. M.Alexander

b) Subsidiary Companies

Phoenix Cement Limited Phoenix Industries Limned

c) Enterprises under direct / indirect common control:

Focus Energy Limited

8 The Company genetdfy enttrs it to cancelable operating leases for office premises, godowns, factory premises and residence of the employees, normally renewable on expiry. Lease payments amounting to Rs. 9.49 (Previous Year Rs.7.18 lacs) made under operating leases have been recognized as an expenses in the profit and loss account.

9 Pior Period expenditure of Rs. lacs have been included under normal head of expenses.

10 Debit / Credit balances as on 31st March, 2010 irt Debtors, Creditors, Loans & Advances and other parties accounts are subject to confirmations.

11 In the opinion of the management, the value on realization of Current Assets and Loans & Advances in the ordinary course of business would be at least equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities is adequate.

12 Previous period figures have been regrouped / rearranged wherever considered necessary to conform to the classification adopted in the current year.

13 Information pursuant to part IV of Schedule VI to the Companies Act, 1956 is attached.


Mar 31, 2009

1. Contingent Liabilities not provided for

As at 31.03.2009 As at 3103.2008 (Rs. in Lacs) (Rs. in Lacs)

(a) IncomeTax, Sales Tax, Excise Duty and Custom Duty demands under Appeals. 11.37 11.37

(b) Corporate Guarantee for loans availed by Focus Energy Limited. 19700.00 10832.00

2. The accounts of the Company have been prepared on going concern basis.

3. No creditor has intimated about their status being of small scale industrial undertaking.

4. As the Company has unabsorbed depreciation and unabsorbed losses to the tune of Rs. 4730.62 lacs which are to be carried forward as per the provisions of the Income Tax Act,1961, in the opinion of the management there is no certainty that sufficient future taxable income will be available, the Company has not recorded cumulative Deferred Tax Assets / Liabilities on account of timing differences as stipulated in Accounting Standard (AS-22 ) "Accounting for Taxes on Income".

5 Disclosure pursuant to Accounting Standard - 15

a) Consequent upon the adoption of Accounting Standard -15 (Revised) - Employee Benefits, in accordance with the stipulations contained therein, the company has adjusted Rs.6,78,205/- towards the transitional effect of defined benefit obligation in respect of employee benefits up-to 31st March, 2007 to the balance of General Reserve as on 1st April,2007.

6. Segment Reporting:-

i) Based on the guiding principles given in Accounting Standard (AS-17) "Segment Reporting" .there are no separate reportable segment.

7. Related Party Transactions:-

i) In accordance with the requirements of Accounting Standard -(AS-18) on Related Party Disclosures, the name of the related parties where control exists and / or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are:- a) Key Managerial Personnel

Mr. Narender Kumar Makkar

Mr. NarendraAggarwal

Mr. Arun K.Sinha

b) Subsidiary Companies

Phoenix Cement Limited Phoenix Industries Limited

c) Enterprises under direct / indirect common control:

Focus Energy Limited (Formerly known as Phoenix Overseas Limited)

8 The Company generally enters into cancelable operating leases for office premises, godowns, factory premises and residence of the employees, normally renewable on expiry. Lease payments amounting to Fts.7.18 lacs made under operating leases have been recognized as an expenses in the profit and loss account.

9. Prior Period expenditure of Rs. 16.86 lacs have been included under normal head of expenses.

10. Debit / Credit balances as on 31" March, 2009 in Debtors, Creditors, Loans & Advances and other parties accounts are subject to confirmations.

11. In the opinion of the management, the value on realization of Current Assets and Loans & Advances in the ordinary course of business would be at least equal to the amount at which they are stated in the Balance Sheet and provision for all known liabilities is adequate.

12. Previous period figures have been regrouped / rearranged wherever considered necessary to conform to the classification adopted in the current year.

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