Notes to Accounts of SPEL Semiconductor Ltd.

Mar 31, 2021

The Chief Exective Officer of the Company has been identified as being the Chief Operating Decision Maker. Based on the internal reporting to the Chief Operating Decision Maker, the Company has identified that it has only one segment which is Integerated circuits based on nature of products, risks, returns and the internal business reporting system.

I he above information regarding Micro, Small and Medium Enterprises have been determined to the extent such parties have beenidentified on the basis of the information available with the company

11 Exception items consists of the following :

a) Unbilled Revenue aggregating to Rs. 1927.63 lakhs (2019-20: Rs.660.31 lakhs) considered no longer receivable based on assessment of recoverabilty of the balances by the Management have been written off in the books of account.

b) Credit Balances amounting to Rs.1647.55 lakhs (2019-20 : Rs.657.59 lakhs) considered no longer payable / required based on review

by the Management have been written back in the books of account.

The above mentioned amounts written off and written back in the books of of account were approved by a resolution passed by the Board of Directors.

(Note 3.14 to The Financial Statements)

The Company is engaged in-house technology upgradation in the process,

12 thereby strengthening the efforts to bring in new products

and improving capacity utilization. The Company''s brand image and capabilities are well acknowledged by customers who have a strong role in improving its top line and would generate commensurate cash accurals in the ensuing years. All the above efforts are supported by the Promoters who have infused funds to improve liquidity to settle obligations as and when they fall due.

( Note 3.15 to the Financial Statements).

The Company has taken into account all the possible impacts of COVID 19

13 pandemic in preparation of these financial statements,

including but not limited to its assessments of liquidity and going concern assumption,recoverable values of its financial and non-financial assets, impact on revenue recognition etc.The Company has carried out this review and assesment based on available internal and external sources of information upto the date of approval of these financial statements. The actual impact of COVID-19 pandemic on the financial results may deffer from that estimated by the Company as on the date of approval of this fiancial statement owing to the uncertain nature and duration of the pandemic.

(Note 3.16 to the Financial Statements)

14 The figures of the previous year have been reclassified / regrouped whever necessary.

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Mar 31, 2018

Notes to Abridged Ind AS Financial Statements for the year ended 31st March, 2018

(All amounts in Rs Lakhs unless otherwise stated)

1. Basis of Preparation

a) The Abridged Ind AS Financial statements have been prepared on the basis of the complete set of Ind AS financial statments for the year ended March 31st 2018, in accordance with first proviso to Section 136(1) read with Rule 10 of Companies (Accounts) Rules, 2014.

b) The financial statements have been prepared in accordance with Ind AS notified under the companies (Indian Accounting Standards) Rules, 2015, Up to the year ended March 31, 2017, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes, Standards notified under the Companies, (Accounting Standards) Rules, 2006, These are the Company''s frist Ind AS financial statements. The date of transition to Ind As is April 1, 2016. In accordance with Ind As 101 on First time adoption of Ind AS, the Company has prepared its first Ind AS financial statements which include :

i) Three balance sheets namely, the opening Balance sheet as at April 1, 2016 (the transition date) by reconignising all assets and liabilities whose recongnition is required by Ind AS, not recognising assets or liablilities which are not permitted by Ind AS, by reclassifying assets and liabilities from previous GAAP as required by Ind AS, and applying Ind AS in measurement of recognised assets and liabilities, and Balance sheets as at March 31, 2018 and 2017 and.

ii) Two statements each of profit and loss; cash flows and changes in equity for the years ended March 31, 2018 and 2017 together with related notes.

c) The same accounting policies have been applied for all the periods presented except when the Company has made use of certain exception and / or exemptions. The financial statements have been prepared on the historical cost basis except for Property, Plant and Equipment and Intangible assets that are measured at fair values at April 1, 2016 and such fair values are consirded as its deemed cost as on the transition date.

2. Complete Balance sheet, Statement of profit and Loss (Including Other Comprehensive Income), the statement of cash flows,the statement of Changes in equity, other statements and notes thereto prepared as per the requirements of Divison II to the Schedule III to the Act are available at the Company''s website at link : www.spel.com.Copy of the financial statements is also available for inspection at the registered office of the Company during working hours for period of 21 days before the date of AGM.

Notes to Abridged Ind AS Financial Statements for the year ended 31st March, 2018

(All amounts in Rs Lakhs unless otherwise stated)

5. DEFERRED TAX LIABILITIES (NET) (Note 1.4 to the Ind AS Financial Statements)
Particulars	As at March 31, 2018	As at March 31, 2017	As at April 1, 2016
a) Deferred tax liabilities	27,06.64	29,20.80	37,67.24
b) Deferred tax (assets)	(459.22)	(7,27.54)	(5,42.34)
	22,47.42	21,93.26	32,24.90

6. CURRENT FINANCIAL ASSETS - CASH AND BANK BALANCES

(Note 1.7(a) to the Ind AS Financial Statements)

Cash and Cash Equivalents

	As at March 31, 2018	As at March 31, 2017	As at April 1, 2016
i) Balances with banks in current ac	count 0.20	5,53.01	1.05
ii) Cash on hand	0.27	0.38	1.14
	0.47	5,53.39	2.19
b) Other Bank Balances
ii) Margin money deposits #	60.55	60.03	51.25
	61.02	6,13.42	53.44

7. REVENUE FROM OPERATIONS (Note 2.1 of Ind AS Financial Statements)	Year Ended March 31, 2018	Year Ended March 31, 2017
a) Sale of products
Export sales
	37,27.62	29,89.00
b) Revenue from services	-
	4,33.03	5,62.86
c) Other operating revenues	_
- Scrap sales	-	0.00
	5.66	1.36
	41,66.31	35,53.22

Notes to Abridged Ind AS Financial Statements for the year ended 31st March, 2018

(All amounts in Rs Lakhs unless otherwise stated)

8. EXCEPTIONAL ITEMS (Note 2.9 of the Ind AS Financial Statements)	Year Ended March 31, 2018	Year Ended March 31, 2017
a) Loss on Transfer of Immovable Property (Refer Note 2.9(a)	-	3,30.78
b) Provision for inventory written back (Net)	(1,66.81)	-
(Refer Note 2.9 (b))	-
c) Inventory written off (Refer Note 2.9 (b))	33.34	20,39.13
	(1,33.47)	23,69.91

(a) Provision for inventory written-back (net) in the current year is based on the accounting policy for obsolete/ non-moving inventory adopted from the transition date(April 1, 2016).Value of Inventory written off in current year represents loss on settlement of insurance claim .Inventory written-off in previous year is due to customers cancelling their orders due to change in technology and opting not to reimport the finished products produced from raw material supplied by them.

(b) Loss on transfer of Immovable Property comprising Land and Building in the previous year is recognised on the basis of agreements entered into, surrender of possession of the said properties in lieu of part consideration and legal opinion obtained in the matter during the previous year.

9. Contingent Liabilities
( Note 3.9 of the Ind AS Financial Statements) Claims against the Company not	As at March 31, 2018	As at March 31, 2017	As at April 1, 2016
acknowledged as debts (net)
i) Income tax demand (Refer Note 7(a) below	4,46.47	3,02.83	40.19
ii) Letter of credit for letter of purchases	1,84.81	2,56.27	1,41.09

(a) These have been disputed by the Company on account of issues of applicability and classification. Future cash outflows in respect of the above are determinable only on receipt of judgement / decisions pending with various forums / authorities.

10.

Commitments ( Note 3.10 of the Ind AS Financial Statements)

Nil

Nil

Nil

Significant Related Party Transactions	2018	2017	April 1, 2016
a) List of parties where control exists
Ultimate Holding company
- Natronix Semiconductor Technology Pvt. Limited
a. Business Promotion - Marketing fee	83.51	98.84
b. Trade payable (net)	2,25.47	1,64.31	94.28
b) Subsidiary company
- Spel America Inc.
a. Business Promotion - Marketing fee	-	-
b. Trade payable	35.79	35.60	54.11
c) Fellow subsidiaries
- Natronix Semiconductor Technology Limited
a. Sale of goods	4.25	-
b. Trade receivable	0.37	-
d) Key management personnel
Mr. D Balakrishnan, CEO and Director Remuneration	39.29	34.27
Mr.V.Srinivasan, Chief Financial Officer Remuneration (From April 02, 2016)	15.47	14.74
Mr S S Arunachalam, Company Secretary Remuneration	13.58	12.40

11. Segment Information

( Note 3.7 to the Ind AS Financial Statements)

The Company is principally engaged in a single business segment viz. Integerated circuits based on nature of products, risks, returns and the internal business reporting system, there is no other reportable segment in terms of Ind AS 108 "Operating Segments".

12. Related Party Disclosure

( Note 3.8 to the Ind AS Financial Statements )

a) List of Parties where control exists

Ultimate Holding Company

Natronix Semiconductor technology Pvt. Limited

Subsidiary Company

b) Other Related Parties Fellow Subsidiary

Natronix Semiconductor technology Pvt. Limited

Subsidiary

- Spel America Inc.

Key Managerial Personnel

Mr.D.Balakrishnan CEO and Director

Mr.V Srinivasan Chief Financial Officer

Mr. S S Arunachalam Company secretary

Notes to the Ind AS 2Financial Statements

(All amounts in Rs Lakhs unless otherwise stated)

13. Disclosures required under the Micro, Small & Medium Development Act, 2006

(Note 3.14 to the Ind AS Finanical Statements)

The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The disclosures pursuant to the said MSMED Act are as follows:

Particulars	2017-18	2016-17	2015-16
The Principal amount (2017-18 : 2.30; 2016-17 : 2.60; 2015-16: 3.76 ) and the interest due (2017-18 : 5.56 ;2016-17 : 3.99; 2015-16: 3.10 ) thereon remain unpaid to suppliers at the end of each accounting year.	7.86	6.59	6.86
The amount of Interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 along with the amount of payment made to the supplier beyond the appointed day during the accounting year.	-	-	-
Principal amounts paid to suppliers registered under the MSMED Act, beyond the appointed day during the year	0.30	0.98	2.48
The amount of interest accrued and remaining unpaid at the end of each accounting year.	1.57	0.89	1.04
The amount of further interest remaining due and payable even in the succeeding years until such date when the interest dues above are actually paid to the small enterprises, for the purpose of disallowance of a deductible expenditure u/s 23 of the Micro, Small and Medium Enterprises Development Act, 2006.	5.56	3.99	3.10

The above information regarding Micro, Small and Medium Enterprises have been detemined to the extent such parties have been indentified on the basis of information available with the Company.

14. The Company is facing the trend of declining top-line. The Company is engaged in-house technology upgradation in the process, thereby strengthening the efforts to bring in new products and improving Capacity utilization. The Company''s brand image and capabilities are well acknowledged by customers who have a strong role in improving its top line and would generate commensurate cash accruals in the ensuing years. All the above efforts are supported by promoters who have infused funds to improve liquidity to settle obligations as and when they fall due.The Company, in preparing the financial statements on a going concern basis, has kept in view all the above said parameters of business. (Note 3.16 to the Ind AS Finanacial Statements)

15. SPEL America Inc has elected to dissolve and consequently has not been considererd for consolidation for the year. (Note 3.17 to the Ind AS Finanacial Statements)

16. The figures for the previous year have been reclassified / regrouped wherever necessary.

As Per our report of even date	For and on behalf of the Board
For M.S.Krishnaswami & Rajan	K.Ravikumar	N.Suryanarayanan	M. Jayasankar
Chartered Accountants	Director	Director	Director
Firm Registration No. 01554S	DIN: 001 19753	DIN: 02282919	DIN: 00048351
M S Murali - Partner		D.Balakrishnan	Enakshi Bhattacharya
Membership No. 26453		Directors CEO	Director
Place: Chennai		DIN: 02131242	DIN: 05277571
Date: May 29, 2018		V Srinivasan	S.S. Arunachalam
		Chief Financial Officer	Company Secreatry

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Mar 31, 2016

1. Depreciation (Note 30 of the Financial Statement) -

During the previous year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from Apr 1, 2014, the Company revised the estimated useful life of some of its assets to align the useful life with those specified in Schedule II. The details of previously applied depreciation rates / useful life are as follows:

Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets,(net of residual value, if any), where the remaining useful life of the asset was determined to be nil as on Apr1, 2014, and has adjusted an amount of '' 31,40,593 (net of deferred tax of '' 14,04,404) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus in the previous year.

Further, pursuant to the adoption of lower useful life prescribed in Schedule II to the Companies Act, 2013, the depreciation expenses in the statement of profit and loss for the previous year is higher by Rs, 51,66,988 and consequent loss for the previous year is higher by the said amount as a result of the change in the useful life of the assets, as detailed above.

2. Long Term Borrowings (Note 3.2 & 3.3 of the Financial Statements)

i) The term loan is repayable in 16 equal quarterly installments commencing from 25.04.2012. The applicable interest rate is 14.25% p.a payable monthly. The principal amount of ''1,46,44,719 due on Jan 25, 2016 is outstanding as at Mar 31, 2015 along with overdue interest of Rs, 16,58,903.

ii) The interest payable on deposits from others are in the range of 10% to 10.25% p.a payable quarterly. The interest due on Dec 31, 2013, Mar 31, 2014 and for all four quarters of 2014-2015 amounting to Rs, 1,34,76,459 is outstanding as at Mar 31, 2015.

3. Exceptional Item (Note 28 of the Financial Statements)

The production was stopped for 27 days during the year due to the breakdown of the air-conditioning plant. The depreciation charged on plant and machinery Rs, 46,82,160, Employee benefit expenses Rs, 57,07,904, Power and Fuel Rs, 9,45,000 and Miscellaneous Expenses Rs, 1,04,424 for the staid period has accordingly been considered and disclosed as an Exceptional Item.

4. Segment information (Note 39 of the Financial Statements)

The Company’s primary segment is identified as business segment based on nature of products, risks, returns and the internal business reporting system and secondary segment is identified based on the geographical location of the customers as per Accounting Standard 17. The Company is principally engaged in a single business segment viz Integrated Circuits for overseas market. Hence, the Company does not have separate non-overseas reportable geographical segment.

5. The figures for the previous year have been reclassified / regrouped / amended, wherever necessary.

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Mar 31, 2015

1. Reconciliation of the Equity shares outstanding at the beginning and at the end of the reporting period

2. Rights attached to equity shares

The Equity share holders are entitled to receive dividends as and when declared; a right to vote in proportion to holding etc. and their rights, preferences and restrictions are governed by / in terms of their issue under the provisions of the Companies Act, 2013.

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 ownership of shares.

3. Details of Shareholders other than the Holding Company more than 5% of the total share capital -Nil

4. Aggregate number of shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceeding the report dated is Nil

5. Shares reserved for issue under options :

Company has not reserved any equity shares for issue under the employee stock option plan (ESOP) of the company.

6. Term loan from banks are secured by first charge on all immovable assets including land and building at 5, CMDA Industrial Estate, Maraimalai Nagar and other movable/immovable fixed assets of the Company. Further secured by second over entire stocks, book debts and all other current assets of the Company, both present and future. Term Loan and is also secured by personal gaurantee of Dr.A.C.Muthiah.

7. The term loan is repayable in 16 equal quarterly instalments commmencing from 25.04.2012. The applicable interest rate is 14.25% p.a payable monthly. The principal amount of ' 1,40,70,000 due on Jan 25, 2015 is outstanding as at Mar 31, 2015 along with overdue interest of ' 28,78,977.

8. The interest payable on deposits from others are in the range of 10% to 10.25% p.a payable quarterly. The interest due on Dec 31,2013, Mar 31,2014 and for all four quarters of 2014-2015 amounting to ' 1,34,76,459 is outstanding at year end.

9. The Secured borrowings representing Working Capital Loans (Packing Credit, Overdraft Facility and Buy- ers Credit) from Banks are secured by hypothecation by way of first charge over the entire stocks and all other current assets of the Company both present and future. Further secured by the second charge on the immovable assets of all the exisiting fixed assets of the Company.

10. Additions to Plant & Machinery during the year includes Rs. Nil (Previous year ' 11,45,628) towards exchange gain adjusted in fixed assets as per GOI Notification (GO No. GSR225(E) dated Mar 31, 2009).

11. Leasehold improvements comprise capital expenditure on leased premises and is depreciated over the period of lease being lower than the life specified in Schedule II to the Act..

e. Contingent Liabilities and commitments (to the extent not provided)

Mar 31, 2015 Mar 31, 2014

(i) Contingent Liabilities

* Letter of Credit for import purchases 2,96,58,183 4,83,63,368

* Income Tax Demand 40,19,136 40,19,136

Future cash outflows in respect of the above are determinable only on receipt of judgement/ decisions pending with various forums / authorities

(ii) Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Nil Nil

12. Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets,(net of residual value, if any), where the remaining useful life of the asset was determined to be nil as on Apr 1, 2014, and has adjusted an amount of ' 31,40,593 (net of deferred tax of ' 14,04,404) against the Opening Surplus Balance in the Statement of Profit and Loss under Reserves and Surplus.

13. Further, pursuant to the adoption of lower useful life prescribed in Schedule II to the Companies Act, 2013, the depreciation expenses in the statement of profit and loss for the year is higher by ' 51,66,988 and consequent loss for the year is higher by the said amount as a result of the change in the useful life of the assets, as detailed above.

14. Employee benefit plans - Defined Contribution Plans

The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 99,92,152 (Year ended Mar 31, 2014 Rs. 92,85,735) for Provident Fund contributions and Rs. 12,79,543 (Year ended Mar 31, 2014 Rs. 17,14,227) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The Company also makes Gratuity Scheme contributions in the nature of defined contribution plans, for qualifying employees. The Company recognised Rs. 46,00,638 (Year ended Mar 31, 201Rs.3,48,324) for Gratuity Fund contributions.

15. Gratuity

The Company has a gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following tables summarize the components of net benefit expense recognised in the statement profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan. Statement of Profit and Loss

16. Segment information

The Company's primary segment is identified as business segment based on nature of products, risks, returns and the internal business reporting system and secondary segment is identified based on the geographical location of the customers as per Accounting Standard 17. The Company is principally engaged in a single business segment viz Integrated Circuits for overseas market. Hence, the Company does not have seperate non-overseas reportable geographical segment.

17. The figures for the previous year have been reclassified / regrouped / amended, wherever necessary.

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Mar 31, 2014

1.1 Rights attached to equity shares

The Equity share holders are entitled to receive dividends as and when declared; a right to vote in proportion to holding etc. and their rights, preferences and restrictins are governed by / in terms of their issue under the provisions of the Companies Act, 1956.

1.2 Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates and details of shareholders holding more than 5% shares in the company:

Out of equity shares issued by the company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below:

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. The change in shareholding as above took place on Mar 24, 2014

1.3 Aggregate number of shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the report dated is NIL

1.4 Shares reserved for issue under options Company has not reserved any equity shares for issue under the employee stock option plan (ESOP) of the company.

2.1 Term loan from banks are secured by first mortgage of fixed assets acquired out of Bank Finance, Equitable Mortgage releating to factory land and building at 5, CMDA Industrial Estate, Maraimalai Nagar. First Charge on the existing Plant and Machinery and other Fixed Assets for Term Loan and is also secured by personal gaurantee of Dr.A.C.Muthiah.

2.2 The term loan is repayable in 16 equal quarterly instalments commmencing from 25.04.2012. The applicable interest rate is 13.25% p.a payable monthly. The principal amount of Rs.85,18,130 due on Jan 25, 2014 was paid on Apr 25, 2014. However there is no interest overdue.

2.3 The interest payable on deposits from others are in the range of 10% to 10.25% p.a payable quarterly. The interest due on Dec 31, 2013 and Mar 31, 2014 amounting to Rs.40,99,580 is outstanding at year end.

3.1 The Secured borrowings representing Working Capital Loans from Banks are secured by hypothecation by way of first charge on the current assets of the Company viz. Stock of Raw materials, Stocks in Process, Semi-finished and Finished Goods, Stores and Spares not relating to Plant and Machinery (Consumables, Stores and Spares) Bills receivables, Book debts, deposits and all other movables excluding such movables as may be permitted by Banks in their discretion from time to time, both present and future, wherever situated and further secured by the second charges on the immovable assets of the Company both present and future. The charge on current assets of the Company will rank pari passu with the existing charges created and/or agreed to be created thereon in favour of Banks.

Notes to Financial Statement for the year ended Mar 31, 2014

(All amounts are in Indian Rupees unless otherwise stated)

* Deposits is lien marked with IOB with respect to Buyer''s Credit for Nil (Previous year - Rs.1,34,20,000)

# Margin money deposit with a carrying amount of Rs.68,59,865 (Previous year:Rs.76,74,136) are given as security for opening of letter of credit with banks

Note:

Provisions for/contribution to employee retirement/post retirement and other employee benefits which are based on actuarial valuations done on an overall Company basis are excluded above

e. Contingent Liabilities and commitments (to the extent not provided). Mar 31, 2014 Mar 31, 2013

i) Contingent Liabilities

- Service Tax Demand - 1,86,100

- Letter of Credit for import purchases 4,83,63,368 3,55,10,607

- Income tax Demand 40,19,136 1,79,57,319

ii) Capital commitments

- Estimated amount of contracts remaining to be executed on capital account and not Nil Nil provided for

Notes to financial statements for the year ended Mar 31, 2014

(All amounts are in Indian rupees unless otherwise stated)

4. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The following tables summarize the components of net benefit expense recognised in the Statement Profit and Loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The assumptions of future salary increases, take into account of inflation,seniority, promotion and other relevant factors,such as supply and demand in the employment market.

5. Foreign currency exposures

The Company does not use any derivative instruments to hedge its foreign currency exposures. The details of foreign currency balances which are not hedged as at the balance sheet date are as below:

6. Dues to Micro, Small and Medium Enterprises

Dues to Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management.

Information required to be disclosed under Micro, Small and Medium Enterprises Development Act 2006 as at Mar 31, 2014 is Nil (Mar 31,2013 - Nil)

7. The figures for the previous periods have been reclassified / regrouped / amended, wherever necessary.

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Mar 31, 2013

1. Employee benefit plans - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarize the components of net benefit expense recognised in the statement profit and loss and the funded status and amounts recognised in the balance sheet for the Gratuity plan.

2. Dues to Micro, Small and Medium Enterprises

Dues outstanding to enterprises covered under Micro, Small and Medium Enterprises Development Act, 2006, based on the information available with the Company as at Mar 31, 2013 amounts to NIL.

3. Impairment of Assets has been considered as per AS 28 & there is no impairment as on Mar 31, 2013.

4. Prior year comparatives

Previous year''s figures have been regrouped wherever necessary.

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Mar 31, 2012

1-a Terms/rights attached to the equity shares

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

In the event of liquidation of the company, the holder of equity shars will be entitled to received remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1-b Shares reserved for issue under options Company has not reserved any equity shares for issue under the employee stock option (ESOP) plan of the company

Note :

A Term loans from Banks are secured by first mortgage of fixed assets acquired out of Bank Finance. Equitable Mortgage relating to Factory Land and Building at 5 CMDA Industrial Estate, Maraimalai Nagar. First Charge on the existing Plant & Machinery and other Fixed Assets for Term Loan.

B Working Capital Loans from Banks are secured by hypothecation by way of first charge on the current assets of the Company viz. Stock of Raw materials, Stocks in Process, Semi-finished and Finished Goods, Stores and Spares not relating to Plant and Machinery (Consumables, Stores and Spares) Bills receivables, Book debts, deposits and all other movables excluding such movables as may be permitted by Banks in their discretion from time to time, both present and future, wherever situated and further secured by the second charges on the immovable assets of the Company both present and future. The charge on current assets of the Company will rank pari passu with the existing charges created and/or agreed to be created thereon in favour of Banks.

C Other Terms and Condition of Sanction

C1 Security Documents Including Personal guarantee of Dr. A. C. Muthiah. Credit report of the guarantors to be provided.

C2 Any escalation in project cost due to exchange rate fluctuation will be borne by the Company.

1Contingent Liabilities

Estimated value of contracts remaining to be executed on capital account and not provided for Rs Nil (Previous year Rs 5,97,500 hundred)

Year ended Year ended Mar 31, 2012 Mar 31, 2011 (Rs in Hundred) (Rs in Hundred)

Claims against the Company not acknowledged as debts 19,500 19,500

Guarantees given to Central Excise/banks on behalf of other companies with corresponding counter guarantees from them 5,20,000 5,20,000

Service Tax Demand 1,861 -

Income-tax demand 2,23,089 36,410

Letters of Credit for import purchases 5,26,290 4,19,060

Labour Case 15,000 -

2-G3 Notes:

1 The effect of Morbidity and With drawal have been factored by Constructing a Multiple Decrement Table on assumption of above Mortality table.

2 All the assumptions above have been set following discussions with the Company in this regard.

3 We understand that the assumptions of Future Salary increases (Which has been set in Consultation with the company), take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

3-G1 One of the principal assumptions is the discount rate ,which should be based Upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities.

3-G3 Notes:

1 The effect of Morbidity and With drawal have been factored by Constructing a Multiple Decrement Table on assumption of above Mortality table.

2 All the assumptions above have been set following discussions with the Company in this regard.

3 We understand that the assumptions of Future Salary increases (Which has been set in Consultation with the Company), take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

4 Impairment of Assets has been considered as per AS 28 & there is no impairment as on Mar 31, 2012.

5 The company has changed its accounting policy during the year to account for gains or losses on cash flow hedge in the appropriate equity account i.e., Hedge Reserve account. This is different from the method hitherto followed to recognize the same in Profit and Loss account.

6 Previous year's figures have been regrouped wherever necessary.

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Mar 31, 2011

1. Estimated value of contracts remaining to be executed on capital account and not provided for Rs. 597.50 lakhs (Previous year Rs 13.11 lakhs)

2. Contingent Liabilities

Particulars Year ended Year ended

Mar 31, 2011 Mar 31, 2010

Rs. in lakhs Rs. in lakhs

i. Letters of Credit for import purchases 419.06 538.76

ii. Bank Guarantee given for Job work 0.10 0.10

iii. Guarantees given to Central Excise / banks on behalf of other companies with corresponding counter guarantees from them 520.00 520.00

iv. Claims against the Company not acknowledged as debts 45.91 45.91

3. The company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS-11) notifed by Government of India on Mar 31, 2009 (GO No.GSR225(E) dated Mar 31, 2009). The exchange difference adjusted in the carrying amount of fxed assets during the accounting period is Rs.18.99 lakhs (decrease) (Previous year decrease Net Rs. 409.71 lakhs).

The Company is having diverse package portfolio, from 4lead (1mm x 1mm) to 80leads (12mm x 12mm). To have a common base for capacity calculation, the widely accepted industry standard Twenty Lead Equivalent (TLE) for leaded packages and Three Millimetre equivalent (TMME) for Leadless packages is used.

In the above table, numbers are appropriately converted into TLE (available leaded capacity: 214 Million) and TMME( available lead- less capacity:259 Million) to address the statutory requirements. Accordingly the Capacity utilisation is 75% and 90% respectively.

4. Segmental Reporting

The Integrated Circuits is the only segment for the company

5. Impairment of Assets has been considered as per AS 28 & there is no impairment as on Mar 31, 2011

6. The Company has during the year, adopted the principles of Accounting Standard 30 - Financial instruments: Recognition and measure- ment, issued by the Institute of Chartered Accountants of India, in respect of forward contracts for frm commitments and highly probable forecast transactions meeting necessary criteria for designation as "Cash fow hedges". The gains and losses on effective Cash fow hedges are recognised in Hedge Reserve Account till the underlying forecasted transaction occurs. There is however no impact on the proft for the year due to the aforesaid change.

7. Previous years figures have been regrouped wherever necessary.

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Mar 31, 2010

1. Estimated value of contracts remaining to be executed on capital account and not provided for Rs.13.11 iakhs (Previous year Rs.7.60 lakhs)

2. Contingent Liabilities & Provisions

a. In respect of: Year ended Year ended Mar 31, 2010 Mar 31, 2009 Rs. in lakhs Rs. in iakhs

i. Letters of Credit for Import Purchases 538.76 395.87

ii. Bank Guarantee given for Job work 0.10 0.10

iii. Guarantees given to Central Excise/ Banks on 520.00 520.00 behalf of other companies with corresponding counter guarantees from them.

b. Claims against the Company not acknowledged as debts - Rs.45.91 iakhs (Previous year - Rs.45.91 iakhs).

3. The company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 (AS-11) notified by Government of India on Mar 31, 2009 (GO No.GSR225(E) dated Mar 31, 2009). The exchange difference adjusted in the carrying amount of fixed assets during the accounting period is Rs.409.39 lakhs (decrease) (Previous year increase Net Rs.1046.89 lakhs). The amount of profit on exchange differences included in the Profit and Loss Account for the period is Rs.99.39 lakhs (Net) (Previous year gain Net Rs.105.67 lakhs).

4. Other income of Rs.149.17 lakhs (Previous year Rs.222.27 lakhs) represents exchange profit Rs.99.39 lakhs, interest from deposits Rs.11.87 lakhs, scrap sales Rs.13.33 lakhs, lease rental income Rs.6.30 lakhs and Miscellaneous income of Rs.18.28 lakhs. (Tax deducted at source Rs.4.48 lakhs)

5. Segmental Reporting

The Integrated Circuits is the only segment for the company

6. Related party disclosure under Accounting Standard 18:

Nature of Relationship Name of the Party

A. Holding Company Southern Petrochemical

Industries Corporation Limited

B. Subsidiary Company SPEL America Inc.

C. Key Management Dr. AC Muthiah Personnel Chairman

Mr. Ar Rm Arun Vice Chairman Mr. D. Balakrishnan Chief Executive Officer Mr. N. Sivashanmugam Chief Financial Officer

D. Enterprise owned by/over ChipTest Engineering Limited which Key Management Vice Chairman is the Personnel is abie to Chairman for the exercise significant Holding Company of influence ChipTest Engineering Ltd

Cherrytec Intelisolve Limited Vice Chairman is the Chairman of Cherrytec Intelisolve Limited.

Valingro Exponenta Limited. Vice Chairman is Chairman in Valingro Exponenta Limited

Natronix Semiconductor Technology Limited Vice Chairman is Chairman in Natronix Semiconductor

Technology Limited.







D. Enterprise owned by/over which Key Management Personnel is abie to exercise significant influence

Name of Nature of Transaction with Value Relationship

A. Holding Company Balance as on Mar 31, 2010 :

a. Current Account P.s.1.77 lakhs (Dr) b. Guarantee issued Rs.520.00 lakhs

B.Subsidiary Company Marketing Fee - Rs.t 55.80 lakhs Balance Outstanding to them as on Mar 31,2010 Rs.0.90 lakhs

C. Key Management Personnel Personal Guarantee Commission - Rs.24.47 lakhs

Profit Commission - Rs.29.37 lakhs *

Remuneration - Rs.28.35 lakhs **

Remuneration - Rs.25.27 lakhs

D. Enterprise owned by/over which Key Management Personnel is abie to exercise significant influence Characterization Charges Rs.235.84 lakhs Test Engineering Charges Rs.69.79 lakhs Reliability Testing Income - Rs.4.68 lakhs Rental Income - Rs.5.52 lakhs Balance Outstanding to them as on Mar 31. 2010 Rs.113.41 lakhs

Balance Outstanding to them as on Mar 31, 2010 Rs.0.58 lakhs towards ERP implementation.

Corporate Communications charges of Rs. 18.00 lakhs. Balance Outstanding to them as on Mar 31,2010 Rs. 4.63 lakhs

Manpower Deputation Charges of Rs.15.00 iakhs. Balance Outstanding to them as on Mar 31, 2010 Rs.6.03 lakhs

* Provision has been made, subject to the statutory approvals.

** part of the year.

7. No Provision for Income Tax has been made in the current year considering the carried forward losses of the company. However, tax has been provided considering Minimum Alternate Tax as per the Income Tax Act. In pursuant to the provisions of Income Tax Act, MAT credit of Rs.49.26 iakhs has been for carry forward during this year for adjustment against the future tax payments.

8. impairment of Assets has been considered as per AS 28 & there is no impairment as on Mar 31, 2010.

9. Previous years figures have been regrouped wherever necessary.