Notes to Accounts of Cochin Minerals & Rutile Ltd.

Mar 31, 2018

A. CORPORATE INFORMATION

Cochin Minerals and Rutile Ltd is a public limited company incorporated in India. Its shares are listed in Bombay stock exchange. The Company is engaged in the manufacture of Synthetic Rutile, Ferric Chloride, Ferrous Chloride, Iron Hydroxide (Cemox), Recovered Ti02 and Recovered Upgraded ilmenite.

B. STANDARDS ISSUED BUT NOT YET EFFECTIVE

The MCA has notified IND AS 115 “Revenue from contract with customers”. It shall come into force w.e.f 01.04.2018. The Company intends to adopt these standards when they become effective.

1. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information. Revisions to accounting estimates are recognised prospectively in the statement of profit and loss in the period in which the estimates are revised and in any future periods attached.

1.1 CONTINGENCIES

The assessment of the existence and potential quantum of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

2. Explanation for transition to IND AS:

The transition as at 1st April 2016 to IND AS was carried out from previous GAAP as explained below:

First-time adoption of Ind AS

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

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

In preparing these IND AS financials statements CMRL has claimed certain exemptions and exceptions with the resulting difference as at the transition date and Previous GAAP being recognised directly in Other Equity

Exemptions applied:

2.1 Mandatory exemptions from retrospective application;

a) Estimate

The estimates at 1st April 2016 and at 31 March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) .

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

b) Derecognition of financial assets:

The company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of financial assets:

Financial Instruments:

a. Investments In Equity shares have been measured at Fair Value Through OCI (FVTOCI) since CMRL has taken an irrevocable decision regarding the same. At the date of transition the difference between Fair value and previous GAAP value has been recognised in OCI net off deferred tax.

b. Investments in unquoted equity shares of Kerala Enviro Infrastructure Ltd has been assumed to be at Fair value which is equal to cost.

c. Other financial assets has been classified and measured at amortised cost on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

d. Loans and borrowings : Transaction costs are included in the initial recognition of financial liability and charged to Statement of Profit & loss account using the effective interest rate method.

3. Optional exemptions availed:

a. Deemed cost-Previous GAAP carrying amount: (PPE and Intangible)

Company has opted to measure the Property Plant & Equipment and Capital work in progress as at deemed cost at the date of transition to IND AS, measured as per the previous GAAP

b. Investment in subsidiaries, Joint ventures and associates:

Company has elected to continue with the carrying value of its Associate and Society as recognised in the financial statements as per previous GAAP value.

3.1 Notes to the reconciliations

a. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability (except for Long Term Borrowings) at the date of transition to Ind AS by applying amortised cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

b. Deferred tax is accounted using the balance sheet approach which focuses on the temporary differences between the carrying amount of assets or liability in the Balance Sheet with its tax base.

c. Employee benefits: Actuarial gains/ losses are recognised through Other Comprehensive Income.

Note 4: The Company KEIL has accumulated losses as at March 31,2017. No provision for dimunition in value through OCI has been considered by the management. The Fair value is based on Level 3 and is expected to be the same as cost

Note 5: Share application money of KREML is still pending for allotment since the KREML has not obtained mining lease from Kerala government and the capital structure is not finalised. The management is hopeful for a solution in this matter and considering the high fair valuation expected on the mining rights and due to absence of audited accounts fair valuation and equity based consolidation is not considered at present.

Note : 6 Bank of Baroda Corporate loan was sanctioned on 03/01/2014 and repayable in 72 monthly instalments of Rs. 41.60 lacs and at a sacntioned interest rate of 12.40%.

Note : 7 Bank of Baroda Term loan was sanctioned on 19/02/2009 and repayable in 72 monthly instalments of Rs. 4.30 lacs and at a sanctioned interest rate of 12.40%.

1. First charge by way of equitable mortgage of 21.35 Acres of land in Survey Nos.92/4A, 92/4B,97/1A part, 97/1B1, 1B2, 1B3,97/2B2, 97/3-1, 97/3-2 part, 98/1A part, 98/1B part,95/4 Part,95/6 Part, 95/7 part, 96/1-1, 96/1-2,96/2, 96/3A part, 96/3B part, 96/4Part, 96/5-1part, 97/1B-3 part, 97/2A-1 part, 98/1A Part,132/11-A,132/12,132/13,95/3 part, 95/5 part, 97/3 part 135/3B,135/2B, 135/2A,135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and movables(save and except inventories of all nature, book debts and other current assets which form part of the primary security towards the working capital advance in the ordinary course of business) including movable machinery, machinery spares, tools and accessories present and future.

SECURITY : 2. The above two Bank of Baroda Corporte and term loans are secured by personal guarantee of Dr S.N.Sasidharan Kartha , Managing Director

8. Dues to Micro, Small and Medium Enterprises

Based on the information available with the management there are no dues to micro, small and medium enterprises in respect of whom information is to be disclosed under the Micro, Small and Medium Enterprises Development Act 2006

9. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:

The financial liabilities of the Company comprise of loans and borrowings, trade and other payables with the main purpose of financing the Company’s activities. The financial assets of the Company comprise of Investments, receivables, loans and advances and cash and cash equivalents. The Company is exposed to market risk, credit risk and liquidity risk. This is managed by the Company’s management team under guidance of the Board of Directors. This team ensures that the financial risk activities are governed by appropriate policies and procedures and financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Board of Directors reviews and agrees policies for managing these risks as summarised below.

a. Market Risk : Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market price and comprises of Interest rate risk, Currency risk and Other risks. Financial instruments affected by market risk includes loans and borrowings , deposits and interest on deposits.

(i) Interest Rate Risk : Risk that the fair value of future cash flows will fluctuate due to changes in market interest rates and primarily affects the long term debt obligations of the Company which is based on MCLR and reset annually. As per IND AS interest is charged as per Effective Interest Method based on the IRR of the loan.

(ii) Foreign currency risk : Company has no borrowings in foreign currency.

(iii) Other Risk The other risk factors are the unpredictable situation in the availability and price of ilmenite and Hydrochloric acid, the major and critical raw materials of the company.

The demand and volatile nature of prices of Synthetic Rutile and foreign exchange fluctuations also have an impact.

b. Credit Risk : Risk of the counterparty not meeting its obligations if a customer or counterparty fails to meet its contractual obligations and arises principally from the Company’s trade receivables and loans and advances. The carrying amounts of financial instruments represent the maximum exposure.

The Company’s exposure to credit risk is influenced mainly by the characteristics of each customer and the geography in which it operates. Credit risk is managed by credit approvals, establishing credit limits and continuously monitoring the credit worthiness of its customers to which the Company grants credit terms in the normal course of its business.

The Company’s export sales are backed by letters of credit.

The Company monitors each loans and advance given and makes any provision whenever required.

Based on prior experience and assessment of current business environment management believes there is no requirement for any credit provision and there is no significant concentration of credit risk.

10. CAPITAL MANAGEMENT

For the purpose of Company’s capital management, capital includes share capital and other equity with the primary objective of increasing shareholder value. The Company manages its capital structure in light of changes in economic conditions and requirements of the financial covenants through a mix of debt and equity.

The Company monitors capital using the adjusted net debt to capital ratio as below:

11. The figures appearing in financial statements are rounded off to the nearest Rs. in Lakhs. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.

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Mar 31, 2016

1) Paripassu first charge by way of equitable mortgage of 21.35 Acres of land in Survey Nos.92/4A, 92/4B, 97/1A part, 97/1B1,1B2,1B3, 97/2B2,97/3-1, 97/3-2 part, 98/1A part, 98/1B part,95/4 Part, 95/6 Part, 95/7 part, 96/1-1, 96/1-2, 96/2, 96/3A part, 96/3Bpart,96/4 Part,96/5-1part, 97/1B-3 part, 97/2A-1 part,98/1A Part , 132/11-A, 132/12, 132/13,95/3 part,95/5 part,97/3 part 135/3B,135/2B,135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and movables (Save and except inventories of all nature, book debts and other current assets which form part of the primary security towards the working capital advance in the ordinary course of business) including movable machinery, machinery spares, tools and accessories present and future.

2) Personal guarantee of Dr.S.N. Sasidharan Kartha, The Managing Director.

3. Terms of repayment of Packing Credits:

PC from Banks is repayable on demand and carries interest @ 10.90% (Current Rate)

Cash Credit/Packing Credit advances from Bank of Baroda are secured by:

4) First charge on all the Company''s stock of raw-materials, consumable stores, finished goods, work in progress, debtors etc. both present and future

5) Second charge by way of equitable mortgage of 21.35 Acres of land in Survey Nos.92/4A, 92/4B, 97/1A part, 97/1B1,1B2,1B3, 97/2B2,97/3-1, 97/3-2 part, 98/1A part, 98/1B part,95/4 Part, 95/6 Part, 95/7 part, 96/1-1, 96/1-2, 96/2, 96/3A part, 96/3Bpart,96/4 Part,96/5-1part, 97/1B-3 part, 97/2A-1 part,98/1A Part , 132/11-A, 132/12, 132/13,95/3 part,95/5 part,97/3 part 135/3B,135/2B, 135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and movables including movable machinery, machinery spares, tools and accessories present and future.

6) Personal Guarantee of Dr.S N Sasidharan Kartha, Managing Director.

7. Related party disclosures - As identified by the management and relied upon by the auditors.

8. List of Related parties and description of relationship

9.Parties with significant influence : M/s Sach Exports Pvt. Ltd.

10. Key Management Personnel : Dr. S. N.Sasidharan Kartha

: Shri Saran S Kartha

: Shri P Suresh Kumar

: Shri K S Suresh Kumar

11.. Contingent Liabilities and commitments.

11) Contingent Liabilities not provided for:

12. Bank Guarantees issued on behalf of the Company by Bank of Baroda outstanding as on 31/03/2016 is ''.1,13,83,125/- (''1,09,78,995/)- as on 31/03/2015) and USD30,54,500 for which the Company has given counter guarantee.

13. Bills discounted not maturing on:

31/03/2016 Rs. 3,35,89,224.00 31/03/2015 Rs. 13,88,99,465.00

14. The Additional commissioner of Income Tax has raised a demand of Rs..58,07,820/- while completing the assessment of assessment year 2009-10. The Company has filed an appeal before the Commissioner of Income Tax(Appeal) against the order.

15. Assistant Commissioner, Department of Commercial Tax has raised a demand of Rs..11,50,708/while completing the assessment of the year 2008-09. The Company has filed an appeal before the Deputy Commissioner of Appeals.

16. Micro, Small and Medium Enterprises Development Act 2006.

In accordance with the Notification No.GSR 719(E) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

17. Long Term Contract.

There are no long term contract as on 31.03.2016 including derivative contracts for which there are any material foreseeable losses.

18. Impairment of assets:

No material impairment of assets has been identified by the company and as such no provision is required as per Accounting Standards (AS-28) issued by the Institute of Chartered Accountants of India.

19. Transfer of unclaimed dividend to Investor Education and Protection Fund:

During the year company has transferred the unclaimed dividend for the year 2007-08 amounting to Rs.5,45,438/- to the Investor Education and Protection Fund.

20. Previous figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2015

1. Corporate Information

Cochin Minerals and Rutile Limited is a public company incorporated in India. Its shares are listed in Bombay Stock Exchange Ltd. The company is engaged in the manufacture of Synthetic Rutile, Ferric Chloride, Ferrous Chloride, Iron Hydroxide and Recovered TiO2.

2. Basis of Presentation.

The financial statement of the company have been prepared in accordance with the generally ac- cepted accounting principles in India (Indian GAAP). The company has prepared these finan- cial statements to comply in all material respect with the Companies (Accounts) Rules 2014 and the relevant provisions of Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those of the previous year.

3. Long Term Borrowings

b) Indian Rupee Term Loan from Bank of Baroda Account No 05620600010728 & Corporate Loan from Bank of Baroda Account No.05620600011975 are secured by:

i) Paripassu first charge by way of equitable mortgage of 21.35 Acres of land in Sur- vey Nos.92/4A, 92/4B, 97/1A part, 97/1B1,1B2,1B3, 97/2B2,97/3-1, 97/3-2 part, 98/1A part, 98/1B part,95/4 Part, 95/6 Part, 95/7 part, 96/1-1, 96/1-2, 96/2, 96/3A part, 96/3Bpart,96/4 Part,96/5-1part, 97/1B-3 part, 97/2A-1 part,98/1A Part , 132/11-A, 132/12, 132/13,95/3 part,95/5 part,97/3 part 135/3B,135/2B,135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and ma- chinery and movables (Save and except inventories of all nature, book debts and other current assets which form part of the primary security towards the work- ing capital advance in the ordinary course of business ) including movable ma- chinery, machinery spares, tools and accessories present and future.

ii) Personal guarantee of Dr.S.N. Sasidharan Kartha, The Managing Director.

4 Short Term Borrowings

1. Terms of repayment of Packing Credits:

PC from Banks is repayable on demand and carries interst @ 11.5% (Current Rate)

Cash Credit/Packing Credit advances from Bank of Baroda are secured by:

i) First charge on all the Company's stock of raw-materials, consumable stores, finished goods, work in progress, debtors etc. both present and future

ii) Second charge by way of equitable mortgage of 21.35 Acres of land in Survey Nos.92/4A, 92/4B, 97/1A part, 97/1B1,1B2,1B3, 97/2B2,97/3-1, 97/3-2 part, 98/1A part, 98/1B part,95/4 Part, 95/6 Part, 95/7 part, 96/1-1, 96/1-2, 96/2, 96/3A part, 96/3Bpart,96/4 Part,96/5-1part, 97/1B-3 part, 97/2A-1 part,98/1A Part , 132/11-A, 132/12, 132/13,95/3 part,95/5 part,97/3 part 135/3B,135/2B, 135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and mova- bles including movable machinery, machinery spares, tools and accessories present and future.

iii) Personal Guarantee of Dr.S N Sasidharan Kartha, Managing Director.

5. Excise duty on sales for the year has been disclosed as reduction from the turnover. Excise Duty payable on Stock of Finished Goods Rs.16,37,423.00 (previous year Rs.31,05,840.00) is provided for and included in the value of stock of finished goods.

6. Employee Benefits

The Company's obligation towards the Gratuity Fund is a defined benefit plan. The details of actuarial Valuation is given below:

7. Related party disclosures - As identified by the management and relied upon by the auditors.

a)List of Related parties and description of relationship

i) Parties with significant influence : M/s Sach Exports Pvt Ltd &

: M/s Kerala Rare Earths and Minerals Ltd : Mathew M Cherian

ii) Key Management Personnel : Dr. S. N.Sasidharan Kartha

: Shri Saran S Kartha : Shri P Suresh Kumar : Shri K S Suresh Kumar

8. Earnings per share.

Net Profit after tax for the year has been used as the numerator and number of shares has been used as denominator for calculating the basic and diluted earnings per share.

9. Contingent Liabilities and Commitments.

a) Contingent Liabilities not provided for:

i) Bank Guarantees issued on behalf of the Company by Bank of Baroda out- standing as on 31/03/2015 is Rs.1,09,78,995/- (Rs.37,33,565/- as on 31/03/2014) and USD54500 for which the Company has given counter guarantee.

ii) Bills discounted not maturing on:

31/03/2015 Rs. 13,88,99,465.00

31/03/2014 Rs. 5,90,25,460.40

b) . The Additional commissioner of Income Tax has raised a demand of Rs.58,07,820/- while completing the assessment of assessment year 2009- 10. The Company has filed an appeal before the Commissioner of Income Tax(Appeal) against the order.

c) Assistant Commissioner, Department of Commercial Tax has raised a de- mand of Rs.11,50,708/- while completing the assessment of the year 2008-09. The Company has filed an appeal before the Deputy Commissioner of Ap- peals.

10. Micro, Small and Medium Enterprises Development Act 2006.

In accordance with the Notification No.GSR 719(E) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

11. Long Term Contract.

There are no long term contract as on 31.03.2015 including derivative contracts for which there are any material forseeable losses.

12. Impairment of assets:

No material impairment of assets has been identified by the company and as such no provision is required as per Accounting Standards (AS-28) issued by the Institute of Chartered Accountants of India.

13. Transfer of unclaimed dividend to Investor Education and Protection Fund:

During the year company has transferred the unclaimed dividend for the year 2006-07 amounting to Rs.4,36,974/- to the Investor Education and Protection Fund.

14. Previous figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2013

1. Excise & ityon sales for the year has oeendisc losdasrductiOT Goods Rs. 2,321,899.00 (previous year Rs.255,831.00) is provided for and included in the value ofstock of finished goods.

2. Related party disclosures - As identified by the management and relied upon by the auditors.

a) List of Related parties and description of relationship

i)Parties with significant influence : M/sSach Exports Pvt Ltd

ii)Key Management Personnel : Shri S.N.Sasidharan Kartha

Shri SaranS Kartha

b) Transactions with related parties:

3. Earnings per share.

Net Profit tax for the year lias been used as the numerator and the basic and diluted earnings per share.

4. Micro, Small and Medium Enterprises Development Act 2006.

In accordance with the NotificationNo.GSR719(E)dt 16.11.2007 ,issued by the Ministry ofCorporateAf&irs, certain disclosures are required to be maderelating to Micro and Small Enterprises as definedunder die Micro, Small and Medium DevelopmentAct 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage underthesaidAct Since the relevant information is still not available, no disclosures have been made in die accounts.

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Mar 31, 2012

1 Primary Security:

a) DBITetm Loan Account Nos. COCMAR 0508011 and 137673200000064- (i) First charge by way of equitable mortgage of 21.35 Acres of land in Survey

Nos.92/4A.92/4B.97/lApart.97/lBl.lB2.1B3.97/2B2.97/3-1.97/3-2part.98/ lApart.98/lBpait95/4 Part, 95/6 Part, 95/7 part, 96/1-1,96/1-2,96/2,96/3A part, 96/3Bpart,96/4 Part,96/5- l part, 97/1B-3 part, 97/2A-1 part,98/l A Part, 132/11-A, 132/12,132/13,95/3 part, 95/5 part,97/3 part 135/3B, 135/2B, 135/2A, 135/1 aspirer Taluk, KadungallurVillage together with building, plant and machinery etc and movables (Save and except inventories of all nature, book debts and other current assets which form part of the primary security towards the working capital advance in the ordinary course of business) including movable machinery, machinery spares, tools and accessories present and future.

ii) Second charge on the Company's stocks of raw-materials, consumable stores, book debts and such other movables.

iii) Personal guarantee of Mr. S.N. Sasidharan Kartha, the Managing Director, and Mr. Mathew .M. Cherian Vice Chairman,

b) Indian Rupee Term Loan from Bank of Baroda Account No 05620600010728 is secured by - (i)Paripassu first charge by way of equitable mortgage of21.35 Acres of land in Survey Nos.92/4A, 92/4B, 97/l Apart, 97/lBl,lB2,lB3,97/2B2,97/3-1,97/3-2 part, 98/1A part, 98/IB part,95/4Part, 95/6 Part, 95/7 part, 96/1-1,96/1-2,96/2,96/3A part, 96/3Bpart,96/4 Part,96/5- l part, 97/1B-3 part, 97/2A-1 part,98/l A Part, 132/11-A, 132/12,132/13,95/3 part,95/5 part,97/3 part 135/3B, 135/2B, 135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and movables (Saveandexcept inventories of all nature, book debts and other current assets which form part of the primary security towards the working capital advance in the ordinary course of business) including movable machinery, machinery spares, tools and accessories present and future.

(ii) Personal guarantee of Mr. S.N. Sasidharan Kartha, The Managing Director.

1. Terms of repayment of Packing Credits: .

PC from Banks is repayable on demand and carries interest @ 11.5% (Current Rate) Cash Credit/Packing Credit advances from Bank of Baroda are secured by:

i) First charge on all the Company's stock of raw-materials, consumable stores, finished goods, work in progress, debtors etc. both present and future.

ii) Second chaise by way of equitable mortgage of 21.35 Acres of land in Survey Nos.92/4A, 92/4B, 97/1A part, 97/lBl,lB2,lB3, 97/2B2,97/3-1,97/3-2 part, 98/1A part, 98/IB part,95/4 Part, 95/6 Part, 95/7 part, 96/1-1,96/1-2,96/2,96/3A part, 96/ 3Bpart,96/4 Part,96/5- L part, 97/1B-3 part, 97/2A-1 part,98/La Part, 132/11-A, 132/12,132/13,95/3 pait,95/5 pait,97/3 part 135/3B,135/2B, 135/2A, 135/1 at Parur Taluk, Kadungallur Village together with building, plant and machinery and movables including movable machinery, machinery spares, tools and accessories present and future.

iii) Personal Guarantee of Shri.S N Sasidharan Kartha, Managing Director.

2. Excise duty on sales for the year has been disclosed as reduction from the turnover. Excise Duty payable on Stock of Finished , Goods Rs 2,55.831.00 (previous year Rs 11,26,415.00) is provided for andincluded in the value of stock of finished goods.

3. Contingent Liabilities: .

a). Additional Commissioner of Income Tax, Range 1, Kochi demanded Rs 58,07,820/- while completing the assessment for the Financial Year 2008 -09. The company has preferred an appeal before the Commissioner of Income Tax (Appeals). The Company Hashemite danamount of Rs 3,00,000/-towards the same.

b) Contingent Liabilities Not Provided for

i) Bank Guarantees issued on behalf of the Company by Bank of Baroda outstanding as on 31/03/2012 is Rs 35,90,685/- (Rs 28,29,785/- as on 31/03/2011) for which the Company has given counter guarantee.

ii) Bills discounted not maturing on:

31/03/2012 Rs. 25,86,26,422.40

31/03/2011 Rs.7,30,22,977.40

4. Micro, Small and Medium Enterprises Development Act 2006.

In accordance with the Notification No.GSR 719(E) dt 16.11.2007, issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro and Small Enterprises as defined under the Micro, Small and Medium Development Act 2006. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is still not available, no disclosures have been made in the accounts.

5. The Revised Schedule VI has become effective from 1 April 2011 for the preparation of financial statements. This has significantly impacted the disclosures and presentations made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification /disclosure.

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Mar 31, 2011

A) Term Loans from financial Institutions are secured by paripassu charge by way of hypoth- ecation of all the Company's immovable properties such as land, building, plant and machinery etc. and movables (Save and except inventories of all nature book debts and other current assets which form part of the primary security towards the working capital advances in the ordinary course of the business) including movable machinery, machinery spares, tools & accessories, present and future and second charge on the Company's stocks of raw-materials, consumable stores, book debts and such other movables. The Managing Director, Mr. S.N. Sasidharan Kartha and Vice Chairman, Mr. Mathew .M. Cherian have personally guaranteed the whole amount of such loans.

b) Cash Credit/Packing Credit advances from Bank of Baroda are secured by a second charge on the fixed assets and first charge on all the Company's stock of raw-materials, consumable stores, finished goods, work in progress, debtors etc. both present and future and guaran- teed personally by the Managing Director, Mr. S. N. Sasidharan Kartha and Vice Chairman, Mr. Mathew M Cherian.

c) Contingent Liabilities Not Provided for

i) Bank Guarantees issued on behalf of the Company by Bank of Baroda outstanding as on 31/03/2011 is? 28,29,785/-(Rs. 15,30,385/-as on 31/03/2010) for which the Company has given counter guarantee.

ii) Bills discounted not maturing on:

31/03/2011 - Rs. 7,30,22,977.40

31/03/2010 - Rs. 5,80,42,871.30

e) Previous year's figures have been regrouped wherever necessary so as to be in confirmity with the current year's layout.

1) Unpaiddividendamountsfor2006-07 Rs. 4,53,510/-,2007-08 Rs. 5,68,461/-,2008-09 Rs. 6,54,255/- and 2009-10 Rs. 4,90,261/- are deposited in separate accounts with the company's bank and are included in other liabilities.

m) There was no loans and advances in the nature of loans given to subsidiaries and associ- ates etc.

n) There was no investment by any loanee in the shares of the company.

p) In the opinion of the management, all the Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which these are stated.

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Mar 31, 2010

A) Term Loans from financial Institutions are secured by paripassu charge by way of hypothecation of all the Companys immovable properties such as land, building, plant and machinery etc. and movables (Save and except inventories of all nature book debts and other current assets which form part of the primary security towards the working capital advances in the ordinary course of the business) including movable machinery, machinery spares, tools & accessories, present and future and second charge on the Companys stocks of raw-materials, consumable stores, book debts and such other movables. The Managing Director, Mr. S.N. Sasidharan Kartha and Vice Chairman, Mr. Mathew .M. Cherian have personally guaranteed the whole amount of such loans.

b) Cash Credit/Packing Credit advances from Bank of Baroda are secured by a second charge on the fixed assets and first charge on all the Companys stock of raw-materials, consumable stores, finished goods, work in progress, debtors etc. both present and future and guaranteed personally by the Managing Director, Mr. S. N. Sasidharan Kartha and Vice Chairman, Mr. Mathew M Cherian.

c) Contingent Liabilities not provided for

i) Bank Guarantees issued on behalf of the Company by Bank of Baroda outstanding as on 31/03/2010 is Rs.15,30,385/- (Rs. 1, 10,33,139/- as on 31/03 2009) for which the Company has given counter guarantee.

ii) Bills discounted not maturing on:

31/03/2010 - Rs.5,80,42,871.30

31/03/2009 - Rs.4,69,15,859.00

e) Previous years figures have been regrouped wherever necessary so as to be in confirmity with the current years layout.

i) Excise Duty payable on Stock of Finished Goods Rs.15,09,141.00/- (previous year Rs.1,77,664.00) is provided for and included in the value of stock of finished goods.

f) Unpaid dividend amounts for 2006-07 Rs.4,55,784/- and 2007-08 Rs.5,73,914/- and 2008-09 Rs. 6,88,268/- are deposited in separate accounts with the companys bank and are included in other liabilities.

g) There was no loans and advances in the nature of loans given to subsidiaries and associates etc.

h) There was no investment by any loanee in the shares of the company.

i) In the opinion of the management, all the Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which these are stated.