Notes to Accounts of ACS Technologies Ltd.

Mar 31, 2025

2.16 Provisions and Contingencies

Provisions are recognised when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. When the Company expects some or all of a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is recognised as a
separate asset, but only when the reimbursement is virtually certain.

The expense relating to a provision is presented in the statement of profit and loss net of any
reimbursement. If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.

A provision for onerous contracts is recognised when the expected benefits to be derived by
the Company from a contract are lower than the unavoidable cost of meeting its obligations
under the contract. The provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net cost of continuing with the contract.
Before a provision is established, the Company recognises any impairment loss on the assets
associated with that contract.

A contingent liability is a possible obligation that arises from past events whose existence will
be confirmed by the occurrence or non-occurrence of one or more uncertain future events
beyond the control of the Company or a present obligation that is not recognized because it is
not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably. The Company does not recognize a contingent liability
but discloses its existence in the standalone financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

2.17 Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds including interest expense calculated using the effective interest method,
finance charges in respect of assets acquired on finance lease. Borrowing cost also includes
exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of the asset until such time as the assets are substantially ready
for the intended use or sale. All other borrowing costs are expensed in the year in which they
occur.

2.18 Related party transactions

The transactions with related parties are made on terms equivalent to those that prevail in
arm''s length transactions. Outstanding balances at the period-end are unsecured and
settlement occurs in cash or credit as per the terms of the arrangement. Impairment
assessment is undertaken each financial year through examining the financial position of the
related party and the market in which the related party operates.

2.19 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset Subsequent measurement of financial assets: All recognised
financial assets are subsequently measured in their entirety at either amortized cost or fair
value, depending on the classification financial assets.

Following are the categories of financial instrument:

a) Financial assets at amortized cost.

b) Financial assets at fair value through other comprehensive income (FVTOCI)

c) Financial assets at fair value through profit or loss (FVTPL)

a) Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using the effective interest rate
method if these financial assets are held within a business whose objective is to hold these
assets in order to collect contractual cash flows and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.

b) Financial assets at fair value through other comprehensive income (FVTOCI) "

Debt financial assets measured at FVOCI:

Debt instruments are subsequently measured at fair value through other comprehensive
income if it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Equity Instruments designated at FVOCI:

On initial recognition, the Company makes an irrevocable election on an instrument-by¬
instrument basis to present the subsequent changes in fair value in other comprehensive
income pertaining to investments in equity instruments, other than equity investment which
are held for trading. Subsequently, they are measured at fair value with gains and losses
arising from changes in fair value recognised in other comprehensive income and
accumulated in the ''Reserve for equity instruments through other comprehensive income''.
The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

c) Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably
elects on initial recognition to present subsequent changes in fair value in other
comprehensive income for investments in equity instruments which are not held for trading.
Other financial assets such as unquoted Mutual funds are measured at fair value through
profit or loss unless it is measured at amortized cost or at fair value through other
comprehensive income on initial recognition.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e., removed from the Company''s balance sheet)
when:

a) the rights to receive cash flows from the asset have expired, or

b) the Company has transferred its rights to receive cash flows from the asset, and

i) the Company has transferred substantially all the risks and rewards of the
asset, or

ii) the Company has neither transferred nor retained substantially all the risks
and rewards of the asset but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks
and rewards of ownership. When it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control of the asset, the Company continues
to recognize the transferred asset to the extent of the Company''s continuing involvement. In
that case, the Company also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the
Company has retained. Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount of the asset and the
maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (''ECL'') model for
measurement and recognition of impairment loss on the following financial assets and credit
risk exposure:

a) Financial assets that are debt instruments, and are measured at amortized cost e.g.,
loans, deposits, trade receivables and bank balance.

b) Financial assets that are debt instruments and are measured at FVTOCI.

c) Financial guarantee contracts which are not measured as at FVTPL.

"The Company follows ''simplified approach'' for recognition of impairment loss allowance on
trade receivables. The application of simplified approach does not require the Company to
track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime
ECLs at each reporting date, right from its initial recognition."

"For recognition of impairment loss on other financial assets and risk exposure, the Company
determines whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If,
in a subsequent period, credit quality of the instrument improves such that there is no longer
a significant increase in credit risk since initial recognition, then the entity reverts to
recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL

which results from default events that are possible within 12 months after the reporting date.
_"

ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is
required to consider:

i) All contractual terms of the financial instrument (including prepayment,
extension, call and similar options) over the expected life of the financial
instrument. However, in rare cases when the expected life of the financial
instrument cannot be estimated reliably, then the entity is required to use the
remaining contractual term of the financial instrument.

ii) Cash flows from the sale of collateral held or other credit enhancements that
are integral to the contractual terms.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as
income/ expense in the Statement of Profit and Loss. This amount is reflected under the head
''other expenses'' in the Statement of Profit and Loss. In the balance sheet, ECL is presented as
an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet.
The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the
Company does not reduce impairment allowance from the gross carrying amount.

Offsetting:

Financial assets and financial liabilities are offset and the net amount is reported in the
standalone balance sheet if there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to realize the assets and settle the
liabilities simultaneously.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables. All financial liabilities are recognised
initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Company''s financial liabilities include trade and other
payables, loans and borrowings.

Subsequent measurement

"The measurement of financial liabilities depends on their classification, as described below:"
Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated
upon initial recognition as at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred
to P&L. However, the Company may transfer the cumulative gain or loss within equity. All
other changes in the fair value of such liability are recognised in the statement of profit or loss.
The Company has not designated any financial liability as at fair value through profit and
loss.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred
to P&L. However, the Group may transfer the cumulative gain or loss within equity. All other
changes in the fair value of such liability are recognised in the statement of profit or loss.

Loans and borrowings

"This is the category most relevant to the Company. After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortized cost using the EIR method.
Gains and losses are recognised in profit or loss when the liabilities are derecognized as well
as through the EIR amortization process. Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the EIR.
The EIR amortization is included as finance costs in the statement of profit and loss.

This category generally applies to borrowings."

De-recognition

"A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the de-recognition of the original
liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.

"Financial guarantee contracts issued by the Company are those contracts that require a
payment to be made to reimburse the holder for a loss it incurs because the specified debtor
fails to make a payment when due in accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction
costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability
is measured at the higher of the amount of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount recognised less cumulative amortization.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition.

After initial recognition, no reclassification is made for financial assets which are equity
instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those
assets. Changes to the business model are expected to be infrequent. The Company''s senior
management determines change in the business model as a result of external or internal
changes which are significant to the Company''s operations. Such changes are evident to
external parties. A change in the business model occurs when the Company either begins or
ceases to perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date
which is the first day of the immediately next reporting period following the change in
business model. The Company does not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.

For Gorantla & Co.,

Chartered Accountants For and on behalf of the Board of Directors of

Firm''s Registration No. 016943S ACS Technologies Limited

Sri Ranga Gorantla

Partner Ashok Kumar Buddharaju Anitha Alokam

Chairman and Managing Director

Membership No: 222450 Director

UDIN: 25222450BMIVEL3194 DIN: 03389822 DIN: 07309591

A. Prabhakara Rao Shilpi Gunjan

Place: Hyderabad Chief Financial Officer Company Secretary

Date: 28/05/ 2025 ACS: A64964

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Mar 31, 2024

2.16 Provisions and Contingencies

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the
Company expects some or all of a provision to be reimbursed, for example, under an insurance contract,
the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually
certain.

The expense relating to a provision is presented in the statement of profit and loss net of any
reimbursement. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A provision for onerous contracts is recognised when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable cost of meeting its obligations under the
contract. The provision is measured at the present value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with the contract. Before a provision is established,
the Company recognises any impairment loss on the assets associated with that contract.

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized because it is not probable that an
outflow of resources will be required to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognized because it cannot be measured
reliably. The Company does not recognize a contingent liability but discloses its existence in the
standalone financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

2.17 Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds including interest expense calculated using the effective interest method, finance charges in
respect of assets acquired on finance lease. Borrowing cost also includes exchange differences to the
extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as
part of the cost of the asset until such time as the assets are substantially ready for the intended use or
sale. All other borrowing costs are expensed in the year in which they occur.

2.18 Related party transactions

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the period-end are unsecured and settlement occurs in cash or
credit as per the terms of the arrangement. Impairment assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party
operates.

2.19 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the
financial asset Subsequent measurement of financial assets: All recognised financial assets are
subsequently measured in their entirety at either amortized cost or fair value, depending on the
classification financial assets.

Following are the categories of financial instrument:

a) Financial assets at amortized cost.

b) Financial assets at fair value through other comprehensive income (FVTOCI)

c) Financial assets at fair value through profit or loss (FVTPL)

a) Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost using the effective interest rate method if
these financial assets are held within a business whose objective is to hold these assets in order to collect
contractual cash flows and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial assets at fair value through other comprehensive income (FVTOCI) "

Debt financial assets measured at FVOCI:

Debt instruments are subsequently measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.

Equity Instruments designated at FVOCI:

On initial recognition, the Company makes an irrevocable election on an instrument-by-instrument
basis to present the subsequent changes in fair value in other comprehensive income pertaining to
investments in equity instruments, other than equity investment which are held for trading.
Subsequently, they are measured at fair value with gains and losses arising from changes in fair value
recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments
through other comprehensive income’. The cumulative gain or loss is not reclassified to profit or loss
on disposal of the investments.

c) Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects
on initial recognition to present subsequent changes in fair value in other comprehensive income for
investments in equity instruments which are not held for trading. Other financial assets such as unquoted
Mutual funds are measured at fair value through profit or loss unless it is measured at amortized cost or
at fair value through other comprehensive income on initial recognition.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Company’s balance sheet) when:

a) the rights to receive cash flows from the asset have expired, or

b) the Company has transferred its rights to receive cash flows from the asset, and

i) the Company has transferred substantially all the risks and rewards of the asset, or

ii) the Company has neither transferred nor retained substantially all the risks and
rewards of the asset but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to
the extent of the Company’s continuing involvement. In that case, the Company also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained. Continuing involvement that takes the form
of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the
asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (‘ECL’) model for
measurement and recognition of impairment loss on the following financial assets and credit risk
exposure:

a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans,
deposits, trade receivables and bank balance.

b) Financial assets that are debt instruments and are measured at FVTOCI.

c) Financial guarantee contracts which are not measured as at FVTPL.

"The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does not require the Company to track changes in
credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting
date, right from its initial recognition."

"For recognition of impairment loss on other financial assets and risk exposure, the Company
determines whether there has been a significant increase in the credit risk since initial recognition. If
credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period,
credit quality of the instrument improves such that there is no longer a significant increase in credit risk
since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-
month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected
life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from
default events that are possible within 12 months after the reporting date. "

ECL is the difference between all contractual cash flows that are due to the Company in accordance
with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

i) All contractual terms of the financial instrument (including prepayment, extension, call
and similar options) over the expected life of the financial instrument. However, in rare
cases when the expected life of the financial instrument cannot be estimated reliably,
then the entity is required to use the remaining contractual term of the financial
instrument.

ii) Cash flows from the sale of collateral held or other credit enhancements that are integral
to the contractual terms.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the Statement of Profit and Loss. This amount is reflected under the head ‘other expenses’
in the Statement of Profit and Loss. In the balance sheet, ECL is presented as an allowance, i.e., as an
integral part of the measurement of those assets in the balance sheet. The allowance reduces the net
carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment
allowance from the gross carrying amount.

Offsetting:

Financial assets and financial liabilities are offset and the net amount is reported in the standalone
balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans and borrowings, payables. All financial liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables, net of directly attributable transaction costs. The
Company’s financial liabilities include trade and other payables, loans and borrowings.

Subsequent measurement

"The measurement of financial liabilities depends on their classification, as described below:"
Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial
recognition as at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition and only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized
in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may
transfer the cumulative gain or loss within equity. All other changes in the fair value of such liability
are recognised in the statement of profit or loss. The Company has not designated any financial liability
as at fair value through profit and loss.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized
in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Group may transfer
the cumulative gain or loss within equity. All other changes in the fair value of such liability are
recognised in the statement of profit or loss.

Loans and borrowings

"This is the category most relevant to the Company. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognized as well as through the EIR amortization
process. Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs
in the statement of profit and loss.

This category generally applies to borrowings."

De-recognition

"A financial liability is derecognized when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is recognised in the statement of profit
and loss.

"Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are

recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of
loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised
less cumulative amortization.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for financial assets which are equity instruments and
financial liabilities. For financial assets which are debt instruments, a reclassification is made only if
there is a change in the business model for managing those assets. Changes to the business model are
expected to be infrequent. The Company’s senior management determines change in the business model
as a result of external or internal changes which are significant to the Company’s operations. Such
changes are evident to external parties. A change in the business model occurs when the Company either
begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date which is the
first day of the immediately next reporting period following the change in business model. The
Company does not restate any previously recognised gains, losses (including impairment gains or
losses) or interest.

For Gorantla & Co.,

Chartered Accountants For and on behalf of the Board of Directors of

Firm''s Registration No. 016943S ACS Technologies Limited

Sri Ranga Gorantla

Partner Ashok Kumar Buddharaju Anitha Alokam

Membership No: 222450 Chairman and Managing Director Director

UDIN: DIN: 03389822 DIN: 07309591

A. Prabhakara Rao Sridhar Pentela

Place: Hyderabad Chief Financial Officer Company Secretary

Date: 30/05/2024 ACS: A55735

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Mar 31, 2016

1) NOTES TO ACCOUNTS:

2 CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.1,400 Lacs - (previous Year Rs.1,400 Lacs).

3 Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

4. Unsecured Loans:

a. The Government of Andhra Pradesh, Commiserate of Industries, has vide its letter no. 20 / 2 / 6 / 01826, dated 16th February '' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July '' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March '' 2016 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2016 is shown under the head of account Unsecured Loans.

5 Balances appearing under Unsecured Loans, Investments, Loans and Advances, Capital Work - in -

Progress are subject to Confirmation and / or Reconciliation, if any.

6 The Company has return of the outstanding receivables considering the non reliability of the same.

7 The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

8 The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

9 Figures have been rounded off to the nearest rupee.

10 Previous year figures have been regrouped where necessary.

11 Notes 2 to 23 form an integral part of the Balance Sheet and Profit & Loss account.

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Mar 31, 2015

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following: a. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.1,400 Lacs - (previous Year Rs.1,400 Lacs).

2. Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint – Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work – in – process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire – Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commiserate of Industries, has vide its letter no. 20 / 2 / 6 / 01826, dated 16th February '' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July '' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March '' 2015 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2015 is shown under the head of account Unsecured Loans.

4. The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard – 17 is not furnished.

5. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard – 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

6. Figures have been rounded off to the nearest rupee.

7. Previous year figures have been regrouped where necessary. The previous year figures and current year figures are not comparable since financial year 2010-11 data represents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.

---

Mar 31, 2014

1.1 CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.1,400 Lacs - (previous Year Rs.1,400 Lacs).

1.2 Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

1.3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20 / 2 / 6 / 01826, dated 16th February '' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July '' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March '' 2014 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2014 is shown under the head of account Unsecured Loans.

1.4 Balances appearing under Unsecured Loans, Investments, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and / or Reconciliation, if any.

1.5 The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

1.6 The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

2.01 Quantitative Information

(Pursuant to the provisions of paragraphs 3, 4C & 4D of part II of Schedule VI of the Companies Act, 1956) CLASS OF GOODS, CAPACITY & PRODUCTION Class of Goods manufactured: Polyester / Nylon Texturised, Twisted Dyed Yarn.

2.02 Figures have been rounded off to the nearest rupee.

2.03 Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2010-11 data repesents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.

2.03 Notes 2 to 23 form an integral part of the Balance Sheet and Profit & Loss account.

---

Mar 31, 2012

1 CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs. 22.11 Lacs (Previous Year-Rs.-nil-Lacs)

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs. 1,400 Lacs - (previous Year Rs.1,400 Lacs).

1.2 Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

1.3 Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February'' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July''28,1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31 st March ''2012 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2012 is shown under the head of account Unsecured Loans.

1.4 Balances appearing under Unsecured Loans, Investments, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and/or Reconciliation, if any.

1.5 The Convertible Warrants Monies represents Monies Received against Fully convertible Warrants to be issued.

1.6 The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard -17 is not furnished.

1.7 The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

1.8 Figures have been rounded off to the nearest rupee.

1.9 Previous year figures have been regrouped where necessary. The previous year figures and current year figures are not comparable since financial year 2010-11 data repesents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.

1.10 Notes 2 to 25 form an integral part of the Balance Sheet and Profit & Loss account.

---

Mar 31, 2011

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs. -nil- ( Previous Year - Rs.-nil- Lacs )

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of ad- vances) not provide for, amounts to Rs. 1,400 Lacs - (previous Year Rs. 1,000 Lacs).

2. Secured Loans:

a. Dues to IDBI Bank Ltd. of Rs.2,852 Lakhs have been assigned to JMF ARC Pvt. Ltd., during the period September 2010.

As per the Terms of Restructuring, Company has to pay Rs. 1,000 Lakhs over a period of time along with interest. Apart from the dues, Company has issued 2,50,000 full paid up Equity Shares at Face Value of Rs. 10/-each to JMF ARC Pvt. Ltd., in lieu of conversion of part of the total dues during the year.

Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February'' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July '' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March'' 2011 out of the total Rs. 502.84 Lacs availed an amount of Rs. 384,21 is paid back. The Sales Tax amount due as at March, 31st 2011 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Investments, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and / or Reconciliation, if any.

5. The Convertible Warrants Monies, represents Monies Received against Fully convertible Warrants to be issued.

6. The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

7. '' The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

8. Figures have been rounded off to the nearest rupee.

9. Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2009-10 data repesents operations for 18 (Eighteen) Months, whereas current year data is for a oeriod of 6 (Six) Months.

10. Schedules A to O form an integral part of lie Balance Sheet and Profit & Loss account.

---

Sep 30, 2010

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs. -nil- ( Previous Year -Rs.-nil- Lacs)

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs. 1,000 Lacs - (previous Year Rs.75 Lacs).

c. The total dues of IDBI Bank are assigned to JM Financial Asset Reconstruction Company Pvt. Ltd. (JMF ARC). As per the Terms of Restructuring with JMF ARC Pvt. Ltd., the liability is to be settled at Rs.1,000 Lacs along with Interest. In case the Company fails to meet the terms of Restructuring as stipulated by JMF ARC Pvt. Ltd., they have a right to revoke the full liability of the amount to the extent of Rs.2,852 Lacs along with interest, penal interest and other applicable charges.

2. Secured Loans:

a. The Company has paid the Term Loan dues of Industrial Investment Bank of India Limited (IIBI) under One Time Settlement (OTS) in terms of the said OTS, the Company settled the liability of IIBI by paying Rs.250 Lakhs.

b. Dues to IDBI Lank Ltd. of Rs.2,852 Lakhs have been assigned to JMF ARC Pvt. Ltd.

As per the Terms of Restructuring, Company has to pay Rs.1,000 Lakhs over a period of time along with interest. Apart from the dues, Company has to issue 2,50,000 full paid up Equity Shares at Face Value of Rs.10/- each to JMF ARC Pvt. Ltd., in lieu of conversion of part of the total dues. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to he Companys immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

c. The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility from State Bank of Hyderabad is further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

d. Vehicle acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/ 6 / 01826, dated 16!h February 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 30,th September 2010 out of the total 502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at September, 30" 2010 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and / or Reconciliation, if any.

5. The amount of difference between amount outstanding in the books of the company and the amounts paid under OTS to Industrial Investment Bank of India Ltd. (IIBI), the difference on account of restructured dues to JMF ARC Pvt. Ltd. (after assignment of dues from IDBI) and the total amount due to IDBI is credited to Profit and Loss Account.

6. The Preference Shares Capital represents the Interest payable by the Company to Industrial Development Bank of India Limited (IDBI) converted into Preference Equity During the year December 2004 stands cancelled, as part of the settlement / restructuring.

7. The Company has only one segment of activity i.e., Manufacturing of Texturized Twisted Polyesters Dyed Yarn. Hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

8. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

9. Related Party:

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transaction with the related parties as defined in Accounting Standard are given below: (i) List of related parties with whom transactions have taken place and relationships:

Sr.No. Name of the Related Party Relationship

1 Capricorn Systems Global Solutions Limited. Associate Concern

2 Sri. S.Man Mohan Rao . Key Management Personnel

3 Sri.G.Surender Reddy Key Management Personnel

10. Figures have been rounded off to the nearest rupee.

11. Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2008-09 data repesents opera- tions for 9 (Nine) Months, whereas current year data is for a period of 18 (Eighteen) Months.

12. Schedules A to O form an integral part of the Balance Sheet and Profit & Loss account.

---

Mar 31, 2009

1. CONTINGENT LIABILITIES:

All known; and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credtfcopened by Bank is Rs.-nil-(Previous Year-Rs.- nil- Lacs)

b. Capital Commitments: Estimated amount of contacts remaining,1ebe executed on capital account (netOf advances.) for, previous Year Rs,145.00 Lacs)

2. Secured Loans;

b. The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work - in - process, airfiriisned and manufactured goods, stores, cohip pheftt arid spares (not Waht and Machinery) and book debts of the Company. The charge on the fixecfasSiefebf the Cbrhpany tothe extent ofRs.84M.akhs and the personal guarantees of the Directors of the Company

c. Vehicle acquired under Hire - Purchase agreement form, ICICI Bank Limited are secured by hypothecatrofrof the" respectivevehfcles:Ttte Ldans are further secured by the personal guarantee

3. Unsecured Loan

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20 72/6/0182&, dated 16*1 February 1996, fixedeligibifity towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period, ot.1.0 years with effect form duly 28, 1995. As the Company tias shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repayttheasaidSales Tax Deferremenfcaaseaared loan:infull. A&at 3.1?.March- 2009 out of the total 502.84 Lacs availed an amount of Rs. 209.34 is paid back. The Sates Tax amount due as at March 31 * 2009 is shown under the head of account UnsecureoHjaansa

4. Balances appearing under Unsecured Loans, Sundry Debtors,. Loans and Advances, Capital Work - In - Progress (are subject tp ConfirmationarKUo^Recxjr^liation, if any.

a Related Party:

As per Accounting Standard 18^ issued by the Institute of Chartered Ace^rffariti of India, the disclosures of transaction with #&He8ated parties as defined in Accenting Standard aregiven below: (i) List of related parties with WWSrn transactions have taken place and relationships:-

5. The benefit of tax losses has not been brought to account, as the related benefits are hot considered virtually certain. Hence the value of Deferred Tax is not determined and accounted e& pferffoe Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

6. Figures have been rounded off to the nearest rupee.

7. Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2007 - 08 data repesents operations for 15 (Fifteeen) Months, whereas current year data is for a period of 9 (Nine) Months.

8. Schedules A to O form an integral part of the Balance Sheet and Profit & Loss account.

1. The above Cash Flow Statement has prepared using as set out in Accounting Standard - 3. on Statement by the Institute of Chartered Accountants of India.

2. Previous Year Figures, have, been regrouped, wherever necessary to conform with the current year presentation.f

---

Mar 31, 2006

NOTES TO ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2006

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs.60.00 Lacs ( Previous Year- Rs.80.71 Lacs )

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.201.79 Lacs - (previous Year Rs.- nil - Lacs)

2. Secured Loans:

a. The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint - equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable proprieties, present and future, subject to prior charge created and / or to be created in favor of the Company's Banker on specified movable properties:. The Term Loans from IDBI and IIBI are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters amounting to Rs.300 Lakhs.

b. The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility from State Bank of Hyderabad is further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicle acquired under Hire - Purchase agreement from, ICICI & Associates India Finance Services Private Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect form July' 28,1995. The Sales Tax amount due as at March 31st 2006 is shown under the head of account Unsecured Loans.

4. Balances

appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work- In- Progress are subject to Confirmation and / or Reconciliation, if any.

5. The Interest on the Term Loans Outstanding to Industrial Investment Bank of India amount of Rs.780.00 lacs is calculated at 9% of the Principal Outstanding as at 31st March' 2006 as against 14.50% Original Rate of Interest. The Rate of Interest is considered basing on the Re-structuring proposal submitted by the Company under Re-structuring Packaging for Textiles announced by Government of India.

6. The Company has only one segment of activity i.e., Manufacturing of Texturized Twisted Polyesters Dyed Yarn. Hence segment wise reporting as defined in Accounting Standard - 17 is not furnished

7. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard -22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

Signed on: 3rd June, 2006

---

Mar 31, 2005

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank of Rs.80.71 Lacs (Previous Year - Rs.57.23 Lacs)

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.-Nil- (previous Year Rs.- nil - Lacs)

2. Secured Loans :

a The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint - equitable mortgage of title deeds relating to the Companys immovable properties and further secured by deed of hypothecation in respect of movable proprieties, present and future, subject to prior charge created and/or to be created in favor of the Companys Banker on specified movable properties. The Term Loans from IDBI and IIBI are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters amounting to Rs.300 Lakhs.

b The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility from State Bank of Hyderabad is further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c Vehicle acquired under Hire - Purchase agreement form, ICICI & Associates India Finance Services Private Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect form July 28, 1995. The Sales Tax amount due as at March 31st 2005 is shown under the head of account Unsecured Loans.

4. Balances :

appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work-In-Progress are subject to confirmation and/or reconciliation, if any.

5. The Preliminary and Public Issue Expenses are written off on pro-rata basis over a period of 10 years with effect form the accounting year 1995 - 1996.

6. The Interest on the Term Loans Outstanding to Industrial Investment Bank of India amounting to Rs.780.00 Lacs is calculated at 9% of the Principal Outstanding as at 31st March 2005 as against 14.50% Original Rate of Interest. The Rate of Interest is considered basing on the Re-structuring proposal submitted by the Company under Re-structuring Packaging for Textiles announced by Government of India. Further Industrial Development Bank of India Limited (IDBIL) has reduced the Interest on Term Loans availed (other than Loans under Technology Up-gradation Scheme) at 9% with effect from 01st Aprilt 2004.

7. The Company has allotted 33,44,296 number of (Rs.10/- each) Nine percent (9%) Redeemable Preference Shares with an option to convert the same into Equity to IDBI Limited towards part of the Interest dues to IDBI Limited, in terms of the Re-structuring package approved by them vide Letter of Indent No. IDBI (H) N0.1203/CFD (PNPL), dated 14th June 2004.

8. MANAGERIAL REMUNERATION :

(Rupees) Particulars 2004 - 2005 2003 - 2004

i) Managing Director:

Salaries 7,20,000 7,20,000

Allowances 1,80,000 1,80,000

II) Whole Time Director:

Salaries 7,20,000 7,20,000

Allowances 1,80,000 1,80,000

9. REMUNERATION TO AUDITORS : (Including Service Tax)

As Auditors 88,160 86,400

In Other Capacity :

i) Tax Audit & Tax Consultancy 49,590 32,400

ii) Certification 16,530 16,200

1,54,260 1,35,000

10.The Company has only one segment of activity i.e., Manufacturing of Texturized Twisted Polyesters Dyed Yarn. Hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

11. RELATED PARTY :

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transaction with the related parties as defined in Accounting Standard are given below:

(i) List of related parties with whom transactions have taken place and relationships:

Sl.No. Name of the Related Party Relationship

1. Capricorn Systems Global Solutions Limited. Associate Concern

2. LN Packaging Associate Concern

3. Sri. S.Man Mohan Rao Key Management Personnel

4 Sri.G.Surender Reddy Key Management Personnel

(ii) Transaction during the year with related parties:

Sl.No. Nature of Transaction Associate Key Total Concern Management Personnel A) Loans & Advances: (Rs. in Lakhs)

Balance as at 01st April 2004 00.00 Nil 0.00

Received During the Year 40.97 Nil 40.97

Paid During the Year 40.97 Nil 40.97

Balance as at 31st March 2005 Nil Nil Nil

B) Purchases 8.02 8.02

C) Expenditure: Remuneration and Perquisites 18.00 18.00

12. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

13. Figures have been rounded off to the nearest rupee.

14. Previous year figures have been regrouped where necessary.

15. Scheduls A to 0 form an integral part of the Balance Sheet and Profit & Loss account.

---

Mar 31, 2003

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Company has received a demand from Sales Tax Department amounting to Rs.34.78 lacs for the year 19197-1998. The Company has contested the claim by filing an appeal against the order. The value of claim has not been provided in the Books of Account.

b. The Unexecuted portion of Letter of Credit opened by Bank of Rs.37.02 Lacs (Previous Year-Rs. 15.25 Lacs)

c. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.-Nil- (previous Year Rs.839 Lacs)

2. Secured Loans:

a. The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint-equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable proprieties, present and future, subject to prior charge created and/or to be created in favour of the Company's Banker on specified movable properties. The Term Loans from IDBI and IIBI are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters amounting to Rs.300 Lakhs. During the year ended 31st March' 2003 Industrial Development Bank of India has rescheduled the repayment of the Principal of the Term Loans and further interest dues amount to Rs.282 lakhs for the year 2002-2003 were funded and treated as Term Loans Further the Company's application for re-schedule of the Terms Loans and Funding of Interest dues with Industrial Investment Bank of India is under consideration by IIBI.

b. The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work-in-process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility from State Bank of Hyderabad is further secured by Second charge on the fixed assets of the Company and the personal guarantees of the Directors of the Company.

c. Vehicle acquired under Hire-Purchase agreement from, ICICI Bank is secured by hypothecation of the vehicle. The Loan is further secured by personal guarantee of the Directors.

3. Unsecured Loans:

The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect form July' 28,1995. The Sates Tax amount due as at March 31st 2003 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work-in-Progress are subject to confirmation and/or reconciliation, if any.

5. Previous year figures has been re-arranged and re-grouped where ever necessary.

6. Amounts are rounded to off to the nearest rupee.

7. The Preliminary and Public Issue Expenses written off on pro-rata basis over a period of 10 years with effect from the accounting year 1995-1996.

8. During the period the Company's Expansion of its Existing Capacities was successfully completed.

9. The Company has only one segment of activity i.e., Manufacturing of Texturized Twisted Polyester Dyed Yarn. Hence segment wise reporting as defined in Accounting Standard-17 is not furnished.

10. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard-22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

11. Figures have been rounded off to the nearest rupee.

12. Previous year figures have been regrouped where necessary.

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Mar 31, 2001

1. CONTINGENT LIABILITIES

All known and undisputed liabilities have been duly provided for, except the following:-

a. The Company has received a demand from Sales Tax Department amounting to Rs. 34.78 lacs for the year 1997-98. The Company has contested the claim by filing an appeal against the order. The value of claim has not been provided in the books of account.

b. The Unexecuted portion of Letters of Credit opened by Bank Rs. 71.17 Lacs (Previous year - Rs. 64.15 Lacs)

c. Capital Commitments: Estimated amount of contracts remaining to be executed on Capital account (net of advances) not provided for, amounts to Rs. 59 Lacs (Previous year Rs. 1300 Lacs)

2. SECURED LOANS

a. The long term loans from Industrial Development Bank of India (IDBI) and industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint-equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable properties, present and future, subject to prior charge created and/or to be created in favour of the Company's bankers on specified movable properties. The Term Loans from IDBI and IIBI are further secured by the personal guaranties of the Directors of the Company.

b. The loans from the bank on cash credit account are secured by way of hypothecation of present and future stocks of raw materials, work-in-process, ail finished and manufactured goods, stores, components and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital Loan form State Bank of Hyderabad is further secured,by the personal guaranties of the Directors of the Company.

c. Certain Vehicles acquired under Hire-purchase agreement from, Citi Bank, Ford Credit Kotak are secured by hypothecation of the respective Vehicles. They are further secured by personal guaranties of the Direc- tors.

3. UNSECURED LOANS

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16-02-1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 Years with effect from July 28, 1995. The Sales Tax amount due as at March 31st 2001 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work-in-Progress are subject to confirmation and/or reconciliation, if any.

5. The Preliminary and Public Issue Expenses written off on pro-rata basis over a period of 10 years with effect from the accounting year 1995 - 96.

6. During the period the Company has undertaken expansion of the existing capacities with the financial assistance of IDBI under TUF Scheme, the total cost of the project is Rs. 1525 Lacs out of which Fts.1000 Lacs was sanctioned by IDBI and the balance of Rs. 525 Lacs is funded by Equity (Rs. 400 Lacs) and Unsecured Loans (Rs. 125 Lacs). The project has been successfully completed. The commercial operations of the expanded capacities commenced operation from January 2001.

7. Figures have been rounded off to the nearest rupee.

8. Previous year figures have been regrouped where necessary. Loss account.

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Mar 31, 2000

1. CONTINGENT LIABILITIES :

All known and undisputed liabilities have been duly provided for, except the following :-

a. The Company has received a demand from Sales Tax Department amounting to Rs.34.78 lacs for the year 1997-98. The Company has contested the claim by filing an appeal against the order. The value of claim has not been provided in the books of account.

b) The Unexecuted portion of Letters of Credit opened by Bank Rs.64.15 Lacs (Previous Year -- Rs.30.20 Lacs)

c. Capital commitments : Estimated amount of contracts remaining to be executed on Capital account (net of advances) not provided for, amounts to Rs.1300 lacs (Previous year Rs.120 lacs)

2. SECURED LOANS :

a. The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint-equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation ins respect of movable properties, present and future, subject to prior charge created and/or to be created in favour of the Company's bankers on specified movable properties. The Term Loans from IDBI and IIBI are further secured by the personal guaranties of three Directors of the Company.

b. The loans from the bank on cash credit account are secured by way of hypothecation of present and future stocks of raw materials, work-in-process, all finished and manufactured goods, stores, components and spares (not relating to Plant and Machinery) and book debts of the company.

c. Certain Machinery and vehicles acquired under Hire-purchase agreement form Manjira Finance Limited, Kotak Mahindra Primus Limited, Citi Bank are secured by hypothecation of the respective Machinery and Vehicles. They are further secured by personal guaranties of the Directors.

3. UNSECURED LOANS :

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no.20/2/6/01826, dated 16-02-1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 Years with effect from July 28, 1995. The Sales Tax amount due as a March 31st 2000 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Current Liabilities & provisions are subject to confirmation and/or reconciliation, if any.

5. The Loans and Advances includes an amount of Rs.11,03,310/- paid for acquiring 269100 Equity Shares of M/s.Badal Export & Consultants Ltd. Pending transfer of the shares in the name of the Company the same is reflected as Loans and Advances.

6. Figures have been rounded off to the nearest rupee.

7. Previous year figures have been regrouped where necessary.

8. Scheduls A to O form an integral part of the Balance Sheet and Profit & Loss account.

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Mar 31, 1999

1. Contingent liabilities not provided for Nil (Previous year Nil).

The Company has received a demand from Sates tax department amounting to Rs. 34.78 lacs for the year 1997-98. The Company has contested the claim by filing an appeal against the order. The value of claim has not been provided in The books of account

2. Capital commitments :

Estimated amount of contracts remaining to be executed an Capital account (net of advances) not provided for, amounts to Rs. 120 lacs (Previous year Rs. 234 lacs)

3. Secured Loans

a. The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint-equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable properties, present and further, subject to prior charge created and/or to be created In favour of the Company's bankers on specified movable properties. The Term loans from IDBI and IIBI are further secured by The personal guaranties of three Directors of The Company.

b. The loans from the bank an cash credit account are secured by way' of hypothecation of present and future stocks of raw materials, work-in-process. All finished and manufactured goods, stores, components and spares (not relating to Plant and machinery) and book debts of the Company.

c. Certain Machinery and Vehicles acquired under Hire-purchase agreements from Manjira Finance Limited, and Katak Mahindra Finance Limited and Kotak Mahindra Primus Limited are secured by hypothecatian of the respective Machinery and Vehicles. They are further secured by personal guaranties of the Directors.

d. The long term loan from IDBI includes Rs. 270 lacs of Rupee Term Loan received during the year for expansion and balancing of equipment of the Unit

4. Unsecured Loans

a. The Government of Andhra Pradesh, Commission rate of Industries, has vide its letter no. 20/2/6/ 01826, dated 16.02.1996, fixed eligibility towards Sales tax deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July 28, 1995. The Sales Tax amount due as at March 31, 1999 is shown under the head of account Unsecured loans.

b. Loans taken from BE Investments & Finance (P) Ltd., Japson Estates (P) Ltd. and Ramky Finance & Investment (P) Limited are guaranteed by the company. No security or charge has been created against those loans.

5. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Current Liabilities & Provisions are subject to confirmation and/or reconciliation, if any.

6. The Company has successfully completed major part of the expansion of the existing facilities curing the year. The new facilities are capitalised with effect from January 1999.

7. The Company is liable to pay Minimum Alternate Tax (MAT), as per the provisions of Sec. 115JA of the income Act on the Book Profits for The Year Ending 31st March `1999.

How ever the same is not provided for in the Backs of Account as the MAT would be treated as a current asset when it is actually paid and the same would be adjusted against the future tax liabilities if any during the next five year.

8. The Preliminary and Public Issue expenses written off on pro-rata basis over a period of 10 years with effect from the accounting year 1995-96.

9. MANAGERIAL REMUNERATION (RUPEES)

1998-99 1997-98 i) Managing Director

Salaries 2,40,000 2,40,000

Allowances 1,80,000 1,80,000

4,20,000 4,20,000

II) Whole time directors

Salaries 2,40,000 2,60,000

Allowances 1,80,000 1,80,000

4,20,000 4,40,000

10. Remuneration to Auditors (Rupees)

As Auditors 30,000 30,000

In other Capacity

i. Tax Audit & Tax Cansultancy

15,000 15,000

Certification 5,000 5,000

50,000 50,000

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Mar 31, 1998

1. Secured loans

a. The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint-equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable properties, present and future, subject to prior charge created and/or to be created in favour of the Company's bankers on specified movable properties. The Term loans from IDBI and IIBI are further secured by the personal guaranties of three Directors of the Company.

b. The loans from the bank on cash credit account are secured by way of hypothecation of present and future stocks of raw materials, work-in-process, all finished and manufactured goods, stores, components and spares (not relating to Plant and Machinery) and book debts of the Company.

c. Certain Machinery and Vehicles acquired under Hire-purchase agreements from Manjira Finance Limited, and Kotak Mahindra Finance Limited and Kotak Mahindra Primus Limited are secured goods, stores, components and spares (not relating to Plant and Machinery) and book debts of the Company.

4. Unsecured loans

a. The Government of Andhra Pradesh, Commissionerate of Industries, has vide its letter no 20/2/6/01826, dated 16.02.1996, fixed eligibility towards, Sales Tax deferment on the Sales Tax payable by the Company for a period of 10 years with effect from July 28, 1995. The Sales Tax amount due as at March 31, 1998 is shown under the head of account unsecured loans.

b. Loans taken from BE Investments & Finance (P) Ltd., Japson Estates (P) Ltd. and Ramky Finance & Investment (P) Limited are guaranteed by the Company. No security or charge has been created against those loans.

5. Balances appearing under Sundry Debtors, Loans and Advances. Current Liabilities & Provisions are subject to confirmation and/or reconciliation, if any.

7. The Preliminary and Public Issue expenses written off on pro-rata basis over a period of 10 years with effect from the accounting year 1995-96.

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Mar 31, 1997

1. The previous year figures furnished are not comparable with the present year results since the company has not become fully operational during the year 1995-96.

2. Secured loans

a) The long term loans from Industrial Development Bank of India (IDBI) and Industrial Investment Bank of India (IIBI, earlier known as Industrial Reconstruction Bank of India) are secured by joint - equitable mortgage of title deeds relating to the Company's immovable properties and further secured by deed of hypothecation in respect of movable properties, present and future. subject to prior charge created and/or to be created in favour of the Company's bankers on specified movable properties. The term loans from IDBI and IIBI are further secured by the personal guaranties of three Directors of the Company

b) The loans from the bank on cash credit account are secured by way of hypothecation of present and future stocks of raw materials, work-in-process. all finished and manufactured goods, stores, components and spares (not relating to Plant and Machinery) and book debts of the Company.

c) Certain Machinery and Vehicles acquired under Hire-purchase agreements from Manjira Finance Limited and Kotak Mahindra Finance Limited are secured by hypothecation of the respective Machinery and Vehicles. They are further secured by personal guaranties of the Directors.

3. Unsecured loans

a) The Government of Andhra Pradesh. Commissionerate of Industries, has vide its letter no 20/2/6/ 01826, dated 16.02.1996. fixed eligibility towards Sales tax deferment on the Sales Tax payable by the Company for a period of 10 years with effect from July 28, 1995. The Sales Tax amount due as at March 31. 1996 is shown under the head of account Unsecured loans.

b) Loans taken from SMIFS Capital Markets Limited & Ramky Finance & Investment (P) Limited are guaranteed by the company. No security or charge has been created against those loans.

4. The Preliminary and Public Issue expenses written off on Pro-rota basis over a period of 10 years with effect from the accounting year 1995-96.

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Mar 31, 1996

Not available since the information is taken from 199703 annual report.

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Mar 31, 1995

01. Contigent Liabilities not provided for NIL (Previous year NIL)

02. The estimated value of contracts outstanding on capital accounts (Net of Advances) not provided for amounts to Rs. 526 lacs (Previous year Rs. 194 lacs).

03. During the year the Company is still in the process of setting up the project and no commercial activities has started. Hence no profit and loss account has been prepared.

04. Balances under the heads Loans & Advances and advances Included in Capital Works in progress are subject to confirmation from the respective Parties.

05. As the Company has not yet commenced commercial production, the details regarding quantitative particulars under Part II of Schedule VI are not given.