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Notes to Accounts of Cimmco Ltd.

Mar 31, 2017

1. Freehold land includes land aggregating to deemed cost of Rs. 5,556.07 lacs of which original registered sale deed / conveyance deed / transfer deed/assignment deed are not traceable. However, Company has photo copy/scan of the same.

2. Land includes land at Gwalior measuring 20 big has 8 biswa valuing Rs. 2,345.81 lacs for which a dispute was raised by the third party. Refer Note No. 33(e) for further details.

3. Refer Note 14bfor information on property, plant and equipment pledged as security by the Company.

4. The Company has opted to fair-value its property, plant and equipment as on 1st April 2015 (transition date to Ind AS) in terms of exemption given in Ind AS 101 ''First-time Adoption of Indian Accounting Standards'' and considered the same as deemed cost as at 1st April 2015.

5. INVESTMENT PROPERTY

During the year, the Company has decided to hold certain land for capital appreciation, consequent to which such land has been classified as investment property.

Information regarding Investment Property

The Company’s Investment property consists of two parcels of land situated at Bharatpur & Malanpur, Rajasthan respectively. As at31st March 2017,fair Valuation of the two properties is estimated to be Rs. 889.91 lacs. The same has been valued by an independent valuer. The fair-value was derived using the market comparable approach based on recent market prices and the fair-value measurement categorized within Level- 3, as disclosed below.

The Company has no restrictions on the reliability of its investment property and no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements. There is no income earned or expenditure incurred by the Company in relation to the investment property.

Significant increase/(decrease) in circle rate of land will result in significant higher/(lower) fair valuation of properties.

The fair value of the investment property as on March 31,2017 is Rs. 889.91 lacs.

6. Claims receivable represents lease rent receivable from Indian Railways amounting to Rs 854.81 lacs (Rs 759.83 lacs as at March 31, 2016, Rs 675.41 lacs as at March 31, 2015), net of expected credit loss amounting to Rs. 3097.53 lacs, measured and recognized as on the date of transition based on the management''s estimate of time for final outcome of the matter in Court/Arbitration proceedings and adjusted with opening retained earnings. The said matter was under arbitration proceedings since 2004 and finally, the Arbitrators, passed an award on 03/02/2016 whereby the Company''s claims were rejected. Being aggrieved by the award the Company has filed an appeal under section 34 of the Arbitration & Conciliation Act, 1996 (as amended) before the Hon''ble High Court, Delhi on 29/04/2016and hearing in the matter is expected to take place shortly. Considering the merit of the case, the management is hopeful to recover this claim in full. The Company recognizes interest on these claims to record the effect of time elapse every year.

7. Refer Note 14bfor information on other financial assets pledged as security by the Company.

8. Refer Note 14bfor information on trade receivable pledged as security by the Company.

9. Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.

10. For terms and conditions relating to related party receivables refer Note 32.

11. This note also covers the equity component of the issued 8% Non Convertible Non Cumulative Redeemable Preference Shares (included in Other Equity). The liability component is reflected in Borrowing.

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

There is no movement in the equity share capital during the current year and previous year.

13. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

14. Terms of NCNCRPS For terms and conditions refer Note 14a.

15. Terms of NCNCRPS

The Company had issued 400 lacs of8% NCNCRPS of Rs. 10each fully paid-up at par during the year ended 31 March 2015. NCNCRPS carry non cumulative dividend @ 8% p.a. Each holder of NCNCRPS is entitled to one vote per share only on the resolutions placed at general meetings which directly affect the rights attached to NCNCRPS. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

NCNCRPS are redeemable at par within 5 years from the date of issue i.e. Rs 2,500.00 lacs by June 27,2019and Rs 1,500.00 lacs by July 7,2019. The presentation of the liability and equity portion of these shares is explained in note no. 2.1 (l) (d), summary of significant accounting policies.

16. Terms of Repayment of Secured Loans:

17. Term Loan of Rs. 3120.90 lacs (March 31,2016: Rs. 3970.06 lacs, April 1,2015:3962.04 lacs) carries an interest @ 11.10% p.a (Base spread of 1.75%) and is repayable in 14 quarterly installments of Rs. 285.71 lacs each starting from September 2016 to December 2019. Further the loan covenants stipulates mandatory repayments up to 50% of the amount collected in relation to the refunds and claims recoverable. Consequently, current portion of term loan includes Rs. 371.51 lacs being 50% payable upon realization of claims from National Insurance Company of Rs. 743.02 lacs.

Above term loan is secured by a first pari passu charge on land admeasuring 18.75 acres situated at Gwalior and also first pari passu charge over the other fixed assets (including its land admeasuring 470 Bigha 1 Biswa at Bharatpur, Rajasthan) of the Company. The loan is further backed by a "Put Option" of Titagarh Wagons Limited (TWL, the holding company). In terms of the said put option, upon occurrence of any event of default as per the terms of the facility agreement, bank shall have the right to call upon TWL to pay the entire outstanding within such time as may be prescribed.

18. Cash credits from banks are secured by first pari passu charge overall current assets, both present and future and also by a second pari passu charge over the entire fixed assets of the Company (excluding land at Gwalior). The cash credit is repayable on demand and carry an interest banks MCLR Spread ranging from 3.5% to 4.5% p.a.

Terms of Repayment of Unsecured Loans:

Loan from related party carries interest rate of 15% p.a. and is repayable on demand.

19. EARNING PER SHARE (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

20. Terms and conditions of transactions with related parties

The sales / services to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free (except loan given to subsidiaries) and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: Nil, 1 April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

21. The remuneration to key managerial personnel does not include provisions made for gratuity and leave benefits as they are determined on an actuarial basis for company as a whole.

22. The Company had in earlier years (prior to lockout and take-over of the Company), obtained certain advance licenses for making duty-free import of inputs subject to fulfillment of export obligation (EO) within the specified time limit from the date of issuance of such licenses. Due to the closure of the factory and cancellation of the export orders, the Company could not fulfill the entire export obligation within the permitted time limit. Subsequently, the Company was referred to the Board for Industrial and Financial Reconstruction ("BIFR") vide case No. 372/2000 dated 27th November 2000 wherein a rehabilitation package was sanctioned by the BIFR on 11th March 2010. Pursuant to the rehabilitation scheme, the Company made an application to the Policy Relaxation Committee (PRC) of the Department of Foreign Trade for extension of the EO byfurther8years. The Zonal Director General of Foreign Trade (DGFT)vide its letter dated 21stDecember2010 had extended the EO period up to 31st March 2016. Based on the details available with the Company regarding the imports made prior to the lock out and as per its best estimates, the Company had made necessary payments to the tune of Rs 85.00 lacs for the unfulfilled export obligation and for the balance licenses a liability of Rs 11.00 lacs has been made in the books in the previous year. However, in absence of complete list of licenses along with the imports made against each license the amount of contingent liability towards custom duty saved on unfulfilled export obligations and penal interest if any, is presently unascertainable.

23. TheCompany had given 687 wagons to Indian Railways on sub-lease till October 2007 and as per the agreement the sub-lease was renewable at the consent of the Indian Railway on an annual basis. Postthe expiry of the original sub-lease term, Indian Railways continued to use the wagons without renewing the sub-lease arrangement. In year ended March 31, 2015 the Company had received a demand of Rs. 2582.32 Lakhs from Titagarh Capital Pvt. Ltd., the lessor of these wagons for the period October 2007 to March 2014. Titagarh Capital Pvt. Ltd. has pursued the matter in the Honourable High Court ofCalcutta and the Honourable Court in an interim measure directed the Indian Railway to set apart the lease rentals for the above period, at the last paid rate of rent, in a fixed deposit account till the matter is finally decided. The Company has not provided for this claim since it has a back-to-back claim for the sub-lease on Indian Railways.

24. SBI Capital market Limited ("SBI Caps") has raised a claim of Rs 1,128.95 lacs on the Company on account of disallowance of depreciation by the income tax authorities on the wagons leased by SBI Caps to Cimmco which in turn has been sub leased by the Company to Indian Railways. The same pertains to the assessment year 1998-99 to 2004-05 (period prior to change of management in terms of the BIFR order) and the matter is pending with ITAT Mumbai. As per the separate lease agreements entered between SBI Caps, Cimmco Limited and Indian Railways, any claims, charges, duties taxes and penalties as may be levied by the Government or any other authority pertaining to leased wagons shall be borne by the Indian Railways. Considering the terms contained in the above agreements the Company believes that there would not be any liability that would crystallize on account of the above.

25. A dispute has been raised by a third party (MITS) for the possession of Leasehold / Freehold land of the Company at Gwalior measuring 20 bighas 8 biswa, which is valued at Rs 2,345.81 lacs. In the said dispute, the Single Bench of the Hon''ble High Court of Madhya Pradesh (Gwalior Bench) held that the land in question belonged to the Company and possession was not to be parted with in favour of any third party. The Divison Bench also upheld such order of the Single Bench. Aggrieved by the above order, the third party has filed an appeal before the Hon''ble Supreme Court, which is pending adjudication. The management is confident that the above appeal would be dismissed at the time of final hearing.

26. The financial performance of the Company has been severely impacted by the overall industry scenario and lower wagon procurement by the Indian Railways. Titagarh Wagons Limited, the parent company is committed to provide suitable financial support to the Company for the near future. The Company is also confident of improvement in the industry scenario. In view of the above, these financial statements have been prepared on a going concern basis.

27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s financial assets include trade and other receivables, cash and cash equivalents and deposits.

The Company has a Risk Management Committee that ensures that risks are identified, measured and managed in accordance with Risk Management Policy of the Company. The Board of Directors also review these risks and related risk management policy, which are summarized below.

28. Credit risks

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Trade receivables

Customer credit risk is managed by the respective department subject to Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on credibility of the customers. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in Note 9 as the Company does not hold any collateral security.. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries.

30. Liquidity risks

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credits, bank loans among others.

31. CAPITALMANAGEMENT

The Company''s objective when managing capital (defined as net debt and equity) is to safeguard the Company''s ability to continue as a going concern in order to provide returns to shareholders and benefit for other stakeholders, while protecting and strengthening the balance sheet through the appropriate balance of debt and equity funding. The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions and strategic objectives of the Company.

32. The Board of Directors of the Company at its meeting held on September 9,2016 has approved a Scheme of Amalgamation of its fellow subsidiary Titagarh Agrico Private Limited with it in terms of the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act 1956 and Companies Act 2013 to the extent applicable, subject to necessary approvals. The Company is in the process of obtaining necessary approval from various concerned authorities and pending such approvals no adjustment has been made in these financial statements.

33. FIRSTTIMEADOPTIONOFINDAS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014(Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015and the financial statements as at and for the year ended 31 March 2016.

34. Fair value of Property, Plant and Equipment (PPE)

The Company has opted to fair value its property, plant and equipment as on 1st April 2015 (transition date to Ind AS) in terms of exemption given in Ind AS 101 ''First-time Adoption of Indian Accounting Standards''. Consequently the impact in fair valuation of the assets and incremental depreciation thereon has been accounted for.

35. Provision for expected credit loss (ECL)

The Company has measured and recognized expected credit loss (ECL) on lease rental receivable from Indian Railways as on the date of transition as the management believes that such receivables being subject matter of arbitration would be collected over a longer period than the usual time required. The Company has discounted the cash flows that it expects to receive at the effective interest rate determined at the date of transition, or an approximation thereof in order to calculate ECL.

36. Investments in equity shares

Under Indian GAAP, all investments in equity shares were measured at cost less provision for other than temporary diminution in the value of investments. As explained in accounting policy in Note 2.1(1)(b) under Ind AS, investment in equity shares (other than investment in subsidiaries) are accounted for at fair value. These estimates are based on conditions existing on the respective Balance Sheet date.

37. Financial Instruments

The Company has issued Non-cumulative non-convertible redeemable preference shares (NCNCRPS) to its Holding company and a fellow subsidiary company. These NCNCRPS are Compound Financial Instruments with both Equity and a Liability component and hence as per IND AS 109" Financial Instruments", have been fair valued as on the date of issue. The difference between the fair value and the transaction value has been considered in other equity. The liability component i.e. fair value on the date of investment is amortized using the effective interest rate method and interest till the date of transition has been adjusted with Retained Earnings and subsequently debited to Statement of Profit and Loss.

38. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences.

39. Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

40. Re-classifications

The Company has made following reclassification as per the requirements of Ind-AS:

41. Assets / liabilities which do not meet the definition of financial asset/financial liability have been reclassified to other asset/liability.

42. Re-measurement gain/loss on defined benefit plans are re-classified from statement of profit and loss to OCI.

43. Excise duty on sale of goods earlier netted off with Sales has been disclosed as a separate item in expenses, further increase/decrease of excise duty on closing finished goods inventory has been reclassified from other expenses to excise duty.

44. Other reclassifications.

45. Cost of raw material and components sold has been regrouped from other expenses to cost of raw material and components consumed.

46. Discount received on purchase of raw-materials and stores has been adjusted with raw-material consumption.

47. Reclassification done wherever necessary to meet the disclosure requirement of Schedule III of Companies Act 2013.

48. Other comprehensive income

IND-AS requires preparation of Statement of Other Comprehensive Income in addition to Statement of Profit and Loss.


Mar 31, 2016

1 Terms of Repayment of Secured Term Loans

(i) Term Loan of Rs. 4,000.00 lacs carries an interest @ 11.10% p.a (Base spread of 1.75%) and is repayable in 14 quarterly installments of Rs. 285.71 lacs each starting from September 2016 to December 2019. Further the loan covenants stipulate mandatory repayments up to 50% of the amount collected in relation to the refunds and claims recoverable as mentioned in Note 13. Accordingly an amount of Rs. 371.51 lacs (50% of Rs. 743.02 Lacs) has been disclosed as current maturities.

2 Details of Security

Above term loan is secured by first pari passu charge on the land admeasuring 18.75 acres situated at Gwalior and also first pari passu charge on other fixed assets (including its land admeasuring 470 bighas 1 biswa at Bharatpur, Rajasthan)

The loan is further backed by a "Put Option" of Titagarh Wagons Limited (TWL, the ultimate holding company). In terms of the said put option, upon occurrence of any event of default as per the terms of the facility agreement, bank shall have the right to call upon TWL to pay the entire outstanding within such time as may be prescribed.

i) Rs 3952.35 Lacs (Rs 3952.35 Lacs) recoverable from Indian Railway (Railways) on account of differential sub lease rental forthe leased wagons for the period 1997-98 to 2008-09, net of Rs 1316.84 Lacs, being the cost of wheel sets to be returned to the Railways. The said matter was under arbitration proceedings since 2004 and finally, the Arbitrators, passed an award on 03/02/2016whereby the Company''s claims were rejected. Being aggrieved by the award the Company has filed an appeal under section 34 of the Arbitration & Conciliation Act, 1996 (as amended) before the Hon''ble High Court, Delhi on 29/04/2016and hearing in the matter is expected to take place shortly. Considering the merit of the case, the management is hopeful to recover this claim in full.

ii) Rs. 743.02 Lacs, net of Rs. 150.00 Lacs received under guarantee given by the Company, recoverable from National Insurance Company Limited (NICL) towards insurance claims in terms ofan order passed by the Hon''ble High Court of Delhi in favour of the Company. NICL had referred the matter to the Honb''le Supreme Court. During the year, the Company has received a favorable decision from the Hon''ble Supreme Court of India whereby the Hon''ble Court has awarded the claim in favour of the Company and an amount of Rs 874.89 lacs (including interest of Rs 131.87 lacs) has been received subsequent to the balance sheet date.

3 Represents facility income received from Titagarh Agrico Private Limited (TAPL) under Memorandum of Agreement dated January 29, 2014 between Cimmco Limited (Cimmco) and TAPL, Cimmco intends to enter into a strategic alliance/joint venture with TAPL in the business of tractors / farm / agriculture machinery / equipments, for which Cimmco has agreed to allow TAPL to use a part of land for such business. TAPL has agreed to pay 3% of the sale price per tractor or a fixed amount of Rs 5.00 lacs per month, whichever is higher subject to a cap of Rs 200.00 lacs per annum. This arrangement is fixed for an initial period of three years and shall be reviewed immediately thereafter. The agreement is valid for 10years and shall be renewed on mutually agreed terms and conditions.

# Excise duty on sales amounting to Rs. 151.84 lacs (31 March 2015: Rs. 211.30 lacs) has been reduced from sales in Profit & Loss Account and excise duty on increase/(decrease) in stock amounting to Rs.(27.96) lacs (31 March 2015 Rs. 51.74 lacs) has been considered as (income)/expense inNote21 of financial statements.

4. SEGMENT INFORMATION

Business Segments : The Company has only one business segment, i.e., Wagon & Engineering Products and thus no further disclosures are required in accordance with Accounting Standard-17 as notified.

Geographical Segments : The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations. The revenue from operations in the current and previous year is entirely from sale of goods and services within India.

5. RELATED PARTY DISCLOSURES

(A) Names of related parties and related party relationship Related parties where control exists:

Ultimate Holding Company : Titagarh Wagons Limited (w.e.fApril 16,2014)

Holding Company : Cimco Equity Holdings Private Limited

Related Parties under AS-18 with whom transactions have taken place during the year

Fellow Subsidairies : Titagarh Capital Private Limited (w.e.f April 16,2014)

Titagarh Agrico Private Limited (w.e.fApril 16,2014)

Joint Venture of Holding Company : Titagarh Wagons Limited (ceased to beajointventure of a holding company

w.e.fApril 15, 2014)

Key Management Personnel (KMPs) : Mr.JP Chowdhary - Executive Chairman

Mr. Umesh Chowdhary-Vice Chairman Mr. R N Tiwari, Director (Works)

Additional related parties as per Companies Act2013withwhom transactions have taken place during the year

Directors : Mr. Anil Agarwal - Non Executive Director

Dr. G.B.Rao - Independent Director Mr. J.K. Shukla - Independent Director Mr. Kanwar Satya Brata Sanyal - Independent Director Mr. Matlubul Jamil Zillay Mowla - Independent Director Mr. Nandan Bhattacharya - Independent Director Mrs. Vinita Bajoria - Non Excecutive Director Key Management Personnel (KMPs) : Mr. Lokesh Agarwal, Chief Financial Officer (w.e.f. August 12,2015)

: Mr. Dipankar Ganguly, Company Secretary Enterprises over which KMP/ Shareholders/ : Kanishk Fabricators Private Limited

Relatives have significant influence

(B) The Company had in earlier years (prior to lockout and take-over of the Company), obtained certain advance licenses for making duty free import of inputs subject to fulfillment of export obligation (EO) within the specified time limit from the date of issuance of such licenses. Due to the closure of the factory and cancellation of the export orders, the Company could not fulfill the entire export obligation within the permitted time limit. Subsequently, the Company was referred to the Board for Industrial and Financial Reconstruction ("BIFR") vide case No. 372/2000 dated 27th November 2000 wherein a rehabilitation package was sanctioned by the BIFR on 11th March 2010. Pursuant to the rehabilitation scheme, the Company made an application to the Policy Relaxation Committee (PRC) of the Department of Foreign Trade for extension of the EO by further 8 years. The Zonal Director General of Foreign Trade (DGFT) vide its letter dated 21st December 2010 had extended the EO period up to 31st March 2016. In the current year, based on the details available with the Company regarding the imports made prior to the lock out and as per its best estimates, the Company has made necessary payments to the tune of Rs 85.00 lacs for the unfulfilled export obligation and for the balance licenses a liability of Rs 11.00 lacs has been made in the books. However, in absence of complete list of licenses along with the imports made against each license the amount of contingent liability towards custom duty saved on unfulfilled export obligations and penal interest if any, is presently unascertainable.

(C) The Company had given 687 wagons to Indian Railways on sub-lease till October 2007 and as per the agreement the sub-lease was renewable at the consent of the Indian Railway on an annual basis. Post the expiry of the original sub-lease term, Indian Railways continued to use the wagons without renewing the sub-lease arrangement. During the previous year, the company had received a demand of Rs. 1234.20 Lakhs from Titagarh Capital Pvt. Ltd., the less or of these wagons for the period October 2007 to March 2014. Titagarh Capital Pvt. Ltd. has pursued the matter in the Honourable High Court of Calcutta and the Honourable Court in an interim measure directed the Indian Railway to set apart the lease rentals for the above period, at the last paid rate of rent, in a fixed deposit account till the matter is finally decided. The Company has not provided for this claim since it has a back-to-back claim for the sub-lease on Indian Railways.

6. The financial performance of the Company for the year has been severely impacted due to overall industry scenario and delay in release of wagons procurement orders by the Indian Railways. Titagarh Wagons Limited, the ultimate parent company is committed to provide suitable financial support to the company for the near future and has also contributed additional capital in earlier years to meet the cash flow requirements. The Company has been awarded with a new wagon contract dated May 11th, 2016from the Indian Railways for supply of1,264 wagons. In view of the above, these financial statements have been prepared on a going concern basis.

7. In view of absence of virtual certainty supported with convincing evidence, the Company has not recognized the deferred tax asset arising on account of brought forward losses and unabsorbed depreciation.

8. Previous period''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to current year''s classification.


Mar 31, 2015

1. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is also an unfunded plan.

The following tables summaries the components of net benefit / expense recognised in the statement of profit and loss and the balance sheet for the respective plans. (Rs. in Lacs)

2. SEGMENT INFORMATION

Business Segments : The Company has only one business segment, i.e., Wagon & Engineering Products and thus no further disclosures are required in accordance with Accounting Standard-17 as notified.

Geographical Segments : The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations. The revenue from operations in the current and previous year is entirely from sale of goods and services within India.

In respect of above cases, based on favorable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability there against has been made in the financial statements.

The legal case pending at various courts referred to above includes a case relating to M/s Uppal Engg Co. Pvt. Ltd. for widening of road against a contract awarded to the Company by the Rajasthan PWD in 1992. Uppal Engg Co had invoked arbitration proceedings against the Company in 1998 for certain claims. The arbitration award was issued during the year, pursuant to which Cimmco has been directed to pay Rs 2,525.85 lacs (Rs 804.22 lacs as principle and Rs 1721.63 lacs as interest). Based on legal opinion obtained, the Company has been advised that it has a strong case to argue its position by filing an appeal against the award with the Hon'ble High Court of Delhi and get substantial relief from the amount demanded. Accordingly, the management do not foresee any liability crystallizing on the Company as a consequence of the award.

(B) The Company had in earlier years, obtained certain advance licenses for making duty free import of inputs subject to fulfillment of export obligation (EO) within the specified time limit from the date of issuance of such licenses. Due to the closure of the factory and cancellation of the export orders, the Company could not fulfill the entire export obligation within the permitted time limit. Subsequently, the Company was referred to the Board for Industrial and Financial Reconstruction ("BIFR") vide case No. 372/2000 dated 27th November 2000 wherein a rehabilitation package was sanctioned by the BIFR on 11 th March 2010. Pursuant to the rehabilitation scheme, the Company made an application to the Policy Relaxation Committee (PRC) of the Department of Foreign Trade for extension of the EO by further 8 years. The Zonal Director General of Foreign Trade (DGFT) vide its letter dated 21 st December 2010 has extended the EO period up to 31 st March 2016 and the management is confident to achieve the unfulfilled EO within such extended period. The amount of contingent liability towards custom duty saved on unfulfilled export obligations and penal interest if any, is presently unascertainable.

(C) The Company had given 687 wagons to Indian Railways on sub-lease till October 2007 and as per the agreement the sub-lease was renewable at the consent of the Indian Railway on an annual basis. Post the expiry of the original sub-lease term, Indian Railways continued to use the wagons without renewing the sub-lease arrangement. During the previous year, the Company had received a demand of Rs. 1234.20 Lakhs from Titagarh Capital Pvt. Ltd., the lessor of these wagons for the period October 2007 to March 2014. Titagarh Capital Pvt. Ltd. has pursued the matter in the Honourable High Court of Calcutta and the Honourable Court in an interim measure directed the Indian Railway to set apart the lease rentals for the above period, at the last paid rate of rent, in a fixed deposit account till the matter is finally decided. The Company has not provided for this claim since it has a back-to-back claim for the sub-lease on Indian Railways.

3. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods and saleable scrap

4. The financial performance of the Company for the year has been severely impacted by the overall industry scenario and delay in release of wagons procurement orders by the Indian Railways. Further, during the year, the Company has suffered exceptional losses on account of un-remunerative procurement prices set by Indian Railways as a result of intense unhealthy competition and also some tax disputes of the past relating to the pre- acquisition period. Titagarh Wagons Limited, the ultimate parent company is committed to provide suitable financial support to the Company for the near future and has also contributed additional capital amounting to Rs 4,000 lacs in the form of Preference Shares, directly as well as through another of its subsidiary company. The Company is also confident of improvement in the industry scenario and being awarded wagon supply contracts during the next year. In view of the above, these financial statements have been prepared on a going concern basis.

5. In view of absence of virtual certainty supported with convincing evidence, the Company has not recognized the deferred tax asset arising on account of brought forward losses and unabsorbed depreciation.

6. Previous period's figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to current year's classification.


Mar 31, 2014

1. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is also an unfunded plan.

The following tables summaries the components of net benefit/ expense recognised in the Statement of Profit and Loss and the Balance Sheet for the respective plans.

2 LEASES

The Company has operating leases for office premises and land that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause and restriction under the lease agreement. There are no subleases.

3 SEGMENT INFORMATION

Business Segments : The Company has only one business segment, i.e., Wagon & Engineering Products and thus no further disclosures are required in accordance with Accounting Standard-17 notified by the Companies (Accounting Standards Rules), 2006 (as amended). Geographical Segments : The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

4 RELATED PARTY DISCLOSURES

Names of related parties and related party relationship Related parties where control exists:

Holding Company : Cimco Equity Holdings Private Limited

Joint Venturer of Holding Company : Titagarh Wagons Limited

Related parties with whom transactions have taken place during the period :

Key Management Personnel (KMPs) : Mr. J P Chowdhary - Executive Chairman Mr. Umesh Chowdhary-Vice Chairman & Managing Director Mr. R N Tiwari, Director (w.e.f. February 25,2013)

Enterprises over which KMP/ : Titagarh Capital Shareholders/ Relatives Private Limited have significant influence Titagarh Agrico Private Limited

5. (A) CONTINGENT LIABILITIES As at As at March 31,2014 March 31,2013 Rs. in Lacs Rs. in Lacs

Disputed claims contested by the Company 7,774.09 9,019.96 and pending atvarious courts.*

Matters under appeal with :

Sales tax authorities 594.41 661.00

Excise Authorities 2,508.15 145.96

Custom Authorities 29.00 29.00

Letters ofCredit and BankGuarantees outstanding 3,844.44 3,480.54

* Includes Rs 5,034.56 Lacs (Rs 5,034.56 Lacs) which in terms of BIFR order, even if decided against the Company, would stand at Rs 503.46 Lacs (Rs 503.46 Lacs) only.

In respect of above cases, based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability thereagainst has been made in thefinancial statements.

(B) The Company had in earlier years, obtained certain advance licenses for making duty free import of inputs subject to fulfilment of export obligation (EO) within the specified time limit from the date of issuance of such licences. Due to the closure of the factory and cancellation of the export orders, the Company could not fulfil the entire export obligation within the permitted time limit. Subsequently, the Company was referred to the Board for Industrial and Financial Reconstruction ("BiFR") vide Case No. 372/2000 dated 27th November, 2000 wherein a rehabilitation package was sanctioned by the BIFR on 11th March 2010. Pursuant to the rehabilitation scheme, the Company made an application to the Policy Relaxation Committee (PRC) of the Department of Foreign Trade for extension of the EO by further 8 years. The Zonal Director General of Foreign Trade (DGFT) vide its letter dated 21st December 2010 has extended the EO period upto 31st March 2016 and the management is confident to achieve the unfulfilled EO within such extended period. The amount of contingent liability towards custom duty saved on unfulfilled export obligations and penal interest ifany, is presently unascertainable.

(C) The Company had given 687 wagons to Indian Railways on sub-lease till October 2007 and as per the agreement the sub-lease was renewable at the consent of the Indian Railway on an annual basis. Post the expiry of the original sub-lease term, Indian Railways continued to use the wagons without renewing the sub-lease arrangement. During the year, Company has received a demand of Rs. 1234.20 Lakhs from Titagarh Capital Pvt. Ltd., the owner and original lessor ofthese wagons for the period October2007 to March 2014. Titagarh Capital Pvt. Ltd. has pursued the matter in the Honourable High Court of Kolkata and the Honourable Court in an interim measure directed the Indian Railway to set apart the lease rentals for the above period, at the last paid rate of rent, in a fixed deposit account till the matter is finally decided. The Company has not provided for this claim since it has a back-to-back claim for the sub-lease on Indian Railways.

6. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock offinished goods and saleable scrap.

7. Thefinancial performance of the Company has been adversely affected due to delay in release of wagons procurement order by Indian Railways. Owing to accumulated losses, it was essential for the Company to arrange funds for the general corporate purposes, restructuring etc. Accordingly, the Company has approached Titagarh Wagons Limited (Joint Venturer of Holding Company)(TWL) to infuse necessary funds in the Company. TWL have informed the Company that they are willing to subscribe (either directly or through its subsidiaries) to Non-Convertible Redeemable Preference Shares upto an extent of Rs 5000 lacs. The Board of Directors of the Company, at its meeting held on April 12, 2014 has approved the issue of 5,00,00,000 Non-Redeemable Preference Shares of face value of Rs. 10/- each toTWL/Subsidiaries subject to necessary approvals. In viewoftheabove, thefinancial statements have been drawn upon the basis ofgoing concern assumption.

8. COMPARATIVES

Previous year''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to current year''s classification.


Mar 31, 2013

1. CORPORATE INFORMATION

Cimmco Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange, National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange and Madhya Pradesh Stock Exchange. The Company is engaged in the manufacturing and selling of wagons and engineering goods. The Company primarily caters to the domestic market.

2. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is also an unfunded plan.

3 The Company has only one business segment, i.e., Wagon & Engineering Products and thus no further disclosures are its Indian and Overseas Operations. have significant influence (Formerly Flourish Securities & Finance Private Limited)

4. CONTINGENT LIABILITIES

Disputed claims contested by the Company and pending at various courts* 9,019.96 9,215.46

Matters under appeal with:

Sales tax authorities 661.00 661.00

Income tax authorities - 2,661.00

Excise Authorities 145.96 366.15

Custom Authorities 29.00 29.00

DGFT 6,423.00 6,423.00

Letters of Credit and Bank Guarantees outstanding 3,480.54 2,991.57

Custom Duty on import of equipments and spare parts under EPCG-scheme 640.28 640.28

- Includes Rs 5,034.56 Lacs (Rs 5,034.56 Lacs) which in terms of BIFR order, even if decided against the Company, would stand at Rs 503.46 Lacs (Rs 503.46 Lacs) only.

In respect of above cases, based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability thereagainst has been made in the financial statements.

5. The Company and a Promoter Group Company had repaid in full the secured loan to Asset Reconstruction Company (India) Limited (ARCIL) in earlier period. However, ARCIL has raised certain demands to the extent of Rs 1,325 lacs plus interest thereon (amount unascertainable) in relation to the above secured loan. ARCIL had released all charges on the assets of the Company and had also invoked its exclusive security given by way of pledge of shares by the holding Company towards such demand. The management has disputed the said demand and does not expect any further liability in this regard. Pending final outcome in the matter, no provision against the above demand has been considered necessary

6. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of finished goods and saleable scrap.

7. COMPARATIVES

Previous year''s figures including those given in brackets have been regrouped/reclassified, where necessary, to conform to current year''s classification.


Mar 31, 2012

1. CORPORATE INFORMATION

Cimmco limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on five stock exchanges in India including Bombay Stock Exchange and National Stock Exchange. The Company is engaged in the manufacturing and selling of wagons and engineering goods. The Company primarily caters to the domestic market.

a) Terms/rights attached to equity shares

The Company has only one class of equity share shaving apar value ofRs.10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion to the number of equity shares held by the shareholders.

Notes :

a) Cash credits from banks are secured by first pari passu charge over all current assets, both present and future and also by a second pari passu charge over the entire fixed assets of the Company (excluding land at Gwalior). The cash credit is repayable on demand and carries interest @11%to14%p.a.

b) Loan from a related party is secured by first pari passu charge (created / to be created) over entire fixed assets (excluding land at Gwalior) and also by first pari passu chargeon all the current assets of the Company, both present and future. The loan is repayable on demand and does not carry any interest.

c) Loan from Exim Bank has become due for payment and does not bear interest.

i) Rs 3952.35 Lacs (Rs 3952.35 Lacs) recoverable from Indian Railway (Railways) on account of differential sub lease rental for the leased wagons for the period 1997-98 to 2008-09, net of Rs 1316.84 Lacs, being the cost of wheel sets to be returned to the Railways. The matter is under arbitration and the Company is pursuing the Railways for recovery of these dues in terms of directions issued by Board for Industrial and Financial Reconstruction (BIFR). The management is hopeful to recover the amount in full.

ii) Rs 203.97 Lacs (Rs 203.97 Lacs) due from SBI Capital Markets Limited (SBI Caps) on account of Company's share of lease rental. The amount is retained by SBI Caps due to certain tax disallowances, which are contested by SBI Caps separately. Further, SBI Caps has claimed Rs 1128.95 Lacs, being the amount of such disallowance from the Company which as per lease and sub lease arrangement with SBI Caps and Indian Railways is recoverable from Indian Railway on back to back basis and hence included in the contingent liabilities as indicated in Note 29. The Company is perusing the matter with SBI Caps and is hopeful to recover the dues.

iii) Rs. 743.02 Lacs, net of Rs. 150.00 Lacs received under a guarantee given by the Company, (Rs. 893.02 Lacs) recoverable from National Insurance Company Limited (NICL) towards insurance claims in terms of an order passed by the Honb'le High Court of Delhi in favour of the Company. NICL has referred the matter to the Honb'le Supreme Court. The management is taking necessary steps to recover the above claim amount and is certain about the realization of the total outstanding amount.

(a) The consumption figures shown above are after adjusting excess and shortages, if any, on physical count, unserviceable items, etc and excluding materials received from customer son free supply basis.

(b) It is not practicable to furnish in formation in view of the large number of it ems which differ in size and nature; each, how ever, being less than 10%in value of the total consumption figures.

2. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS

The Company has a defined benefit gratuity plan which is unfunded. Every employee who has completed five year so more of service is entitled togratuity on terms not less favorable than the provisions of the Payment of Gratuity Act,1972. The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is also an unfunded plan.

The following tables summaries the components of net benefit/expense recognized in the statement of profit and loss and the balance sheet for the respective plans.

3. SEGMENT INFORMATION

Business Segments : The Company has only one business segment, i.e., Wagon & Engineering Products and thus no further disclosures are required in accordance with AccountingStandard-17notified by the Companies (Accounting Standards Rules),2006 (as amended).

Geographical Segments :The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas Operations.

4. CONTINGENT LIABILITIES

Disputed claims contested by the Company and pending at various courts.* 9,215.46 9,382.37

Matters under appeal with :

Sales tax authorities 661.00 1,914.08

Income tax authorities 2,661.00 3366.22

Excise Authorities 366.15 436.78

Customs authorities 29.00 -

DGFT 6,423.00 2,122.00

Letters of Credit, Bills discounted and Bank Guarantees outstanding 2,991.57 8,167.70

Custom Duty on import of equipments and spare parts under EPCG-scheme 640.28 640.28

* Includes Rs 5034.56 Lacs (Rs 5034.56 Lacs) which in terms of BIFR order, even if decided against the Company, would stand at Rs 503.46 Lacs (Rs 503.46 Lacs) only.

In respect of above cases, based on favorable decisions In similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability there against has been made in the financial statements.

5. In respect of the secured loans which have already been repaid in full by the Company and a Promoter Group Company in earlier period, Asset Reconstruction Company (India) Limited (ARCIL) has raised certain demands to the extent of Rs 1,800 lacs plus interest thereon. ARCIL has released all charges on the assets of the Company and has also in voted guarantee given by way of pledge of shares by the holding Company. The Company has already provided liability to the extent of cost of shares pledged by the holding company and expects no further payment in the matter. The Company is also pursuing with ARCIL to obtain "no due certificate", pending which no additional provision has been made in the accounts during the year.

*Represents amount written off(net of custom duty liability of Rs.160 Lacs), considering the uncertainty in valve in reclaiming the said inventory Which are lying in the bond adware houses inkling.

6. Excise Duty& Cess on stocks represents differential excise duty and cess on opening and closing stock off in is had goods and saleable scrap.

7. COMPARATIVES

Previous period's figures including those given in brackets have been rearranged where necessary to conform to the current period's classification under Revised Schedule VI as stated in Note 2 above. Further, the previous period's figures being for nine months are not Comparable with the current period's figures, which are for twelve months.


Jun 30, 2010

1. Contingent Liabilities:

Particulars June 30, March 31, 2010 (Rs.) 2009 (Rs.)

A Legal cases against the Company by Creditors and Customers contested by the Company 66,01,55,494 66,65,98,144

B Claim by an Electricity Board Contested by the Company 3,38,62,000 3,38,62,000

C Matters under Appeal with Tax Authorities

- Sales Tax 49,84,076 40,47,09,532

- Income Tax 16,00,000 6,24,12,654

- Customs and Excise 4,36,73,193 6,94,22,102 D Claim by SBI Capital Markets Ltd. 8,64,19,957 8,64,19,957

2. Estimated amount of Capital contracts not provided for (net of advances) Rs. 6,05,13,190/- (Rs. 13,07,000/-).

3. Secured Loans:

a) Debentures were secured under Debentured Trust deed by way of joint equitable mortgage of immovable properties situated at Gwalior and Bharatpur and whole of movable properties for both the units at the two locations. In compliance with the Rehabilitation Scheme sanctioned by the Honble BIFR, amount payable to the Debenture holders have since been paid in full and final settlement of their claim against the Company, pending release of the underlying securities.

b) Term Loan from Rajasthan State Industrial Development & Investment Corporation Limited (RIICO) were secured by hypothecation of specified plant and machinery of the Company. In compliance with the Rehabilitation Scheme sanctioned by the Honble BIFR, amount payable to the RIICO have since been paid in full and final settlement of their claim against the Company, pending release of the underlying securities.

c) Pursuant to Assignment Agreements dated August 25, 2008, under the provisions of the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, JP Morgan Chase Bank assigned the Loans and financial assistance granted by IDBI through Stressed Assets Stabilization Fund and by Bank of Baroda, Central Bank of India, Punjab & Sind Bank and Uco Bank to Asset Reconstruction Company (India) Limited (ARCIL) together with underlying security interest and all its rights in respect thereof. These loans are secured by first pari passu mortgage over the immovable properties of the Company consisting of leasehold land situated at Bharatpur, Rajasthan, together with all buildings and super structures standing thereon, excluding the area covered by dwelling units, which have been mortgaged by the Company to the Government of Rajasthan and also by first pari passu charge on the current assets of the Company including its movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future.

4. Excise Duties on stocks represent differential excise duty on opening and closing stock of finished goods.

5. Implementation of the Rehabilitation Scheme sanctioned by BIFR

A. The Honble Board for Industrial and Financial Reconstruction (BIFR) by its order dated March 11, 2010 has sanctioned the Scheme for revival of the Company (Reference No. 372/2000) under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. Pursuant to and in compliance with the directives contained in the Scheme:

a) The pre-scheme share capital of the Company (1,42,60,887 equity shares of Rs.10/- each, fully paid-up) have been reduced by 80% against the accumulated losses and every 5 equity shares of Rs.10/- each, fully paid-up, have been consolidated into 1 equity share of Rs.10/- each, fully paid-up. As a result, the Companys pre-scheme equity share capital of 1,42,60,887 equity shares of Rs.10/- each stands reduced and consolidated into 28,52,177 equity shares of Rs.10/- each, fully paid-up. 7,237 equity shares of Rs.10/- each, fully paid-up, being total of the fractional shares arising out of the process of reduction and consolidation have been allotted in the name of the Company Secretary of the Company, who will hold the shares as trustee

on account of the beneficial owners thereof. Upon resumption of trading of shares in the Slock Market, these shares will be sold and net sale proceeds thereof shall be distributed amongst the beneficial owners thereof on pro-rata basis.

b) The Company has received an aggregate sum of Rs. 48,49,21,238 from Cimco Equity Holdings Private Limited (CEHPL). In consideration thereof, 1.62,88,923 equity shares ofRs.TO/- each, fully paid-up, at a premium of Rs.19.77 per share have been issued and allotted on 14.03.2010. Consequent upon such allotment, the Company has become the subsidiary company of CEHPL w.e.f. 14.03.2010.

c) 10,07,426 equity shares of Rs.10/- each, at par, credited as fully paid-up have been issued and allotted on 09.04.2010 by the Company to Asset Reconstruction Company (India) Limited (ARCIL) by way of conversion of part debt into equity after having passed necessary resolution at the extra-ordinary general meeting of the members of the Company held on 09.04.2010.

d) For settlement of the dues of the balance ex-workers who had not reported for collection of their cheques, the Company has handed over to the office of the Joint Labour Commissioner, Bharatpur, Govt, of Rajasthan, 390 cheques all dated 07.06.2010 aggregating to Rs.1,31,07,576/- drawn in favour of the respective ex-workers, for onward delivery as and when claimed by the beneficiaries thereof.

e) The name of the Company has been changed w.e.f. 09.04.2010 vide fresh Certificate of Incorporation issued by the Office of the Registrar of Companies, Madhya Pradesh & Chhattisgarh.

f) The Registered Office of the Company has been shifted from the State of Madhya Pradesh to Delhi, as per Certificate dated 25.06.2010 issued by the Office of the Registrar of Companies, NCT of Delhi & Haryana.

g) The accumulated loss of the Company as on 31.03.2008 has been written off against the reserves outstanding as on that date, to the extent available.

6. The Company has office premises under operating lease. The lease is renewable on a periodic basis. The amount of rent expenses included in Profit and Loss Account towards operating lease aggregate to Rs.8,60,000/- (previous year nil)

7. Grass Block and Net Block of fixed assets include Revalued amount of Rs. 40,31,00,678/- (40,31,00,678/-), and Rs. 17,73,71,816/- (Rs. 18,43,26,244/-) respectively arising from revaluation done on June 30, 1985 and March 1998 by crediting the corresponding amount to Revaluation Reserve. However, Pursuant to a Scheme of Arrangement sanctioned by the Honble High Courts of Kolkata and Madhya Pradesh on 12.04.1999 and 07.10.1999 respectively, the balance amount of Revaluation reserve amounting to Rs. 38,31,51,037/- remaining on the appointed date of the Scheme was adjusted with the net amount of values of assets and liabilities of the various divisions of the Company vested in Xpro India Limited (XIL), a Transferee Company under the Scheme.

8. In respect of residential units at Birlanagar, Gwalior which were sold to certain employees in terms of Arbitration award given by the then Collector of Gwalior in 1996, the Company has accounted for the sale value of such residential units in its books during the period and given effect to such sale in the building account. The Company is yet to convey the title of the residential units in view of certain legal difficulties. The Company has accounted for this sale, made during the year 1996 which is outside the purview of the Sanctioned Scheme. The ascertainment of the profit on sales has been made as per the available records.

9. Loans & Advances include:

a) Rs. 39,52,34,957/- (Rs. 5,41,8,19,427/-) being the amount recoverable from Indian Railway (under arbitration) on account of differential sub-lease rental receivable comprising Rs. 13,16,83,693/- net of cost of wheel sets (Rs. 27,82,68,163/-) and Rs. 26,35,51,264/- (Rs. 26,35,51,264/-) on account of difference in method of computation for change in the rate of corporate tax. Pursuant to the Scheme Sanctioned by Honble BIFR lease rent receivable by the Company from Indian Railways has been considered recoverable.

b) Rs. 4,85,04,925/- (Rs. 5,32,30,030/-) is Income-tax Recoverable (net of provisions for taxation) from Tax Authorities for which various appeals are pending against the adjustments and disallowances of expenditure by them at different stages. Adjustment, if any, will be made after the final disposal of the appeals.

c) Rs. 2,03,97,435/- (Rs. 2,03,97,435/-) being the amount retained by SBI Capital markets Limited (SBI capital) from the Companys share of lease rental on account of their claim against the Company for an amount of Rs.112,894,702/-. SBI Capitals claim is against disallowance of depreciation by the Income Tax authority on wagons leased by SBI Capital to the Company. The Company in turn, sub-leased these wagons to Indian Railways and thus the SBI Capitals claim is recoverable from Indian Railway on back to back basis. Separately the disallowance by tax authorities is being contested by SBI Capital before Income Tax Appellate Tribunal of appropriate jurisdiction

10. Sundry Debtors include Rs. 3,52,17,413/- (Rs. 3,52,17,413/-) recoverable from ECGC, which is subject to confirmation. In the opinion of the management this balance is recoverable and adjustments, if any, will be accounted for as and when confirmation is received. The Company is taking legal steps to recover this money.

11. Balances with Other Banks represents balance with Banco Financiero SA International, Cuba, Rs. 223/- (Rs. 223/-). Maximum debit balance during the year Rs. 223/- (Rs. 223/-). Confirmation for the said is awaited and adjustments, if any, will be accounted for as and when confirmation is received.

12. Inventories of Raw Material include an amount of Rs.12,50,20,021/- (140,647,528/-) for which the auction proceeding has been initiated by the Custom Authorities. The confirmation of these materials is awaited from the bonded warehouse under whose custody these materials have been kept.

13. In the opinion of the management Loans and Advances have a value on realization in the ordinary course of business, at least equal to the amount at which they are stated in the books. These balances are subject to confirmation.

14. Pursuant to the provisions of Section 205C of the Companies Act,1956 an aggregate amount of Rs. 61,367/- is pending for transfer to Investor Education & Protection Fund of the Central Government on account of Unpaid/Unclaimed Interest on Fixed Deposit.

15. The Company has not received intimation from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to their outstanding amount, interest etc. have not been made.

16. The Company has, vide the resolution of the Board of Directors dated 26.05.2010, changed its financial year 2,009-10 from 12 months to 15 months ending on June 30, 2010. Hence previous year figures are not comparable as those are for 12 months.

17. Previous years figures have been restated, wherever necessary to conform to current periods classification. Schedules 1 to 20 are annexed to and form part of the Accounts.

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