Notes to Accounts of Kellton Tech Solutions Ltd.

Mar 31, 2023

a) Terms/rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs 5 each. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholder meeting.

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

* The share holding information is based on legal ownership of shares and has been extracted from the records of the Company including register of shareholders / members

b) In the period of five years immediately preceding March 31, 2022:

i) The Company has allotted 4,81,91,234 fully paid up equity shares during the quarter ended March 31, 2018, pursuant to 1:1 bonus share issue approved by shareholders passed through Postal Ballot concluded on 19.03.2018

ii) The Company has not bought back any equity shares.

iii) The Company has not allotted any equity shares as fully paid up without payment being received in cash

* The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate.

Note No 34. Gratuity

a) Gratuity

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an Independent actuary, at each balance sheet date using the projected unit credit method. The discount rate assumed is 7.52% (31-March-2023-7.52% and 31-March-2022 - 7.36%). The retirement age has been considered at 58 years

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the Balance Sheet for the respective plans.

b) Leave Encashment:-

Since leave encashment claims are settled on year-to-year basis, no actuarial valuation needs to be obtained. Note No 35. Financial risk management

The Company has exposure to the following risks arising from the financial instruments

Market Risk Liquidity Risk Credit Risk

i) Risk management framework

The Company''s risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of financial instruments and investment of excess liquidity.

ii) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. a) Foreign currency risk

b) Liquidity Risk

The Company requires funds both for short-term operational needs as well as for long-term investment programmers mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet

(c) Credit Risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

The customer''s credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management

Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.

On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company uses a provisioning policy approved by the Board of Directors to compute

the expected credit loss allowance for trade receivables. The policy takes into account available external and internal credit risk factors and the Company''s historical experience for customers.

Note No 36. Leases

The Company''s lease asset classes primarily consist of leases for land and buildings. At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option. Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

Note No 38. Employee stock option plan (ESOPS)

The company instituted Kellton Tech Solutions employee stock option, which was approved by shareholders at 19th AGM i.e 27-Dec-2013. The options granted under the ESOP scheme of the Company shall vest only if till the employee serves the Company. Company has made 12 grants under this scheme as of now.

The financial entries pertaining to ESOPS are subject to reconciliation after considering the terms and conditions of issue of ESOPS.

Note No 39. Segment Reporting

On standalone basis segmental revenue is 99% from Digital transformation services 1% from others.

Note No 40. Contingent liabilities

Contingent liabilities as at 31-March-2023 are Nil (previous year-Nil).

Note No 41. In the opinion of the management the sum of Rs 6,38,95,787 due from Enterprise Consulting Partner,Inc is overdue but good and recoverable, since the said entity is also having due of sum of Rs 6,57,76,000 (USD 800000) in Kellton Tech Inc, subsidiary company. The balance due of Rs.18,80,213 is good and recoverable.

Note No 42. There is no Inventory at the end of the year

Note No 43. Impairment of goodwill as an asset has been considered by management and it is of view that there is no impairment in view of business continuity post-acquisition of Tekriti.

Note No 44. Corporate social responsibility

The Company has incurred an expenditure on Corporate Social Responsibility in accordance with section 135(5) of the Companies Act, 2013.

Note No 45. Previous year''s figures have been regrouped where necessary to conform to current year''s classification.

Note No 46. Other statutory Information:

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

b) The Company does not have any charges or satisfaction of charges which is yet to be registered with ROC beyond the statutory period.

c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

d) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

e) Company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

g) The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India.

h) The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

i) The Company does not have any transaction which is not recorded in the books of accounts that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

j) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year

k) The company is not having any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

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Mar 31, 2018

1) Corporate Information

Kellton Tech Solutions Limited (“the Company”) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. The shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is global company and offers services in digital transformation, ERP and other IT services.

2) Basis of preparation

a) The financial statements are prepared under the historical cost convention and in accordance with the applicable accounting standards issued by the Institute of Chartered Accountants of India and requirements of the Companies Act 2013 and on a going concern concept other than Share based payment transactions and defined benefit and other long-term employee benefits.

b) The company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

Statement of compliance

For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India and complied with the accounting standards (Previous GAAP) as notified under Section 133 of the Companies Act, 2013 read together with Rule 7 of the Companies (Accounts) Rules, 2014, as amended, to the extent applicable, and the presentation requirements of the Companies Act, 2013.

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act,2013, (“the Act”) and other relevant provisions of the Act.

These are the Company’s first Ind AS financial statements. The date of transition is April 1, 2016. Previous year’s numbers in the financial statements have been restated to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, the Company has presented reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”) to Ind AS .

3) Use of Estimates

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes

a) Revenue recognition

The Company uses the percentage of completion method using the input (cost expended) method to measure progress towards completion in respect of fixed price contracts. Percentage of completion method accounting relies on estimates of total expected contract revenue and costs. This method is followed when reasonably dependable estimates of the revenues and costs applicable to various elements of the contract can be made.

b) Income tax

The Company tax jurisdictions are India. Significant judgments are involved in determining the provision for income taxes, including the amount expected to be paid or recovered in connection with uncertain tax positions.

c) Other estimates

The preparation of financial statements involves estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the reported amount of revenues and expenses for the reporting period. Specifically, the Company estimates the probability of collection of accounts receivable by analyzing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. The stock compensation expense is determined based on the Company’s estimate of equity instruments that will eventually vest.

*The Company increased its authorized share capital from 31,00,00,000 divided into 6,20,00,000 shares of Rs. 5 each to 60,00,00,000 divided into 12,00,00,000 shares of Rs. 5 each pursuant to the shareholders’ resolution passed through Postal Ballot concluded on 19.03.2018

b) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the reporting period are as given below:

*Equity shares allotted on March 31st, 2018 as fully paid bonus shares by capitalization of securities premium

(c) Terms/rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs 5 each. Each holder of the equity share, as reflected in the records of the Company as on the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholder meeting.

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

* The shareholding information is based on legal ownership of shares and has been extracted from the records of the Company including register of shareholders / members

e) In the period of five years immediately preceding March 31, 2018:

i) The Company has allotted 4,81,91,234 fully paid up equity shares during the quarter ended March 31, 2018, pursuant to 1:1 bonus share issue approved by shareholders passed through Postal Ballot concluded on 19.03.2018

ii) The Company has not bought back any equity shares.

iii) The Company has not allotted any equity shares as fully paid up without payment being received in cash

Note No 4. a) Gratuity

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an Independent actuary, at each balance sheet date using the projected unit credit method. The discount rate assumed is 7.42% (31-March-2018-7.42% and 31-March-2017 - 7.77% ). The retirement age has been considered at 58 years

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and amounts recognized in the Balance Sheet for the respective plans.

b) Leave Encashment:-

Since leave encashment claims are settled on year to year basis, no actuarial valuation needs to be obtained.

Note No 5. Financial risk management-

The Company has exposure to the following risks arising from the financial instruments Market Risk Liquidity Risk Credit Risk

i) Risk management framework

The Company’s risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of financial instruments and investment of excess liquidity.

ii) Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.

a) Foreign currency risk

The Company has export revenue and is exposed to foreign currency rate risk through operating activities. The foreign currency risks from financial instruments is as follows:

b) Liquidity Risk

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening balance sheet

(c) Credit Risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

The customer’s credit risk is managed by the Company’s established policy, procedures and control relating to customer credit risk management

Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.

On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company uses a provisioning policy approved by the Board of Directors to compute the expected credit loss allowance for trade receivables. The policy takes into account available external and internal credit risk factors and the Company’s historical experience for customers.

Note No 6 .Operating Leases

The company has entered into cancellable and non cancellable operating lease agreements for leasing office space. The lease agreement provides for cancellation by either party with a notice period, it also contains a clause for renewal of lease agreements either at the option of group or as mutually agreed by both the parties.

II) KEY MANAGERIAL PERSONNEL

a) Mr. Niranjan Chintam - Director and CFO

b) Mr. Krishna Chintam - Managing Director

c) Mr. Karanjit Singh- CEO and Executive Director

d) Ms. Pawni Bhave-Company Secretary

III) RELATIVE OF KEY MANAGERIAL PERSONNEL

Sreevidya Chintam- Wife of Chairman

Note No 7. Employee stock option plan (ESOPS)

The company instituted Kellton Tech Solutions employee stock option, which was approved by shareholders at 19th AGM i.e 27-Dec-2013.

The options granted under the ESOP scheme of the Company shall vest only if till the employee serves the Company. Company has made 9 grants under this scheme before the amendment of 27-Sep-2017 having grant price ranging from Rs 10 to Rs 161.50. No new options have been granted after the amendment of 27-Sep-2017.

Note No 8. Segment Reporting

On standalone basis segmental revenue is 99% from Digital transformation services 1% from others.

Note No 9. Contingent liabilities

Contingent liabilities as at 31-March-2018 is 8330000 (previous year-417916143).

The company is in arbitration in commercial matters that arise from time to time in the ordinary course of business. The Company, based on independent legal opinion obtained in respect of issues related to this matter, believes that the liability is not likely to arise and therefore, no provision is considered necessary in the financial statements.

Note No 10. In the opinion of the management the sum of Rs 6,38,95,787 overdue for more than three year is good and recoverable since the said entity is also having due of sum of Rs 5,20,32,000 (USD 800000) in Kellton Tech Inc, subsidiary company. The balance due of Rs. 1,18,63,787 is expected to be realized shortly.

Note No 11. Corporate social responsibility

The Company has incurred an expenditure of 15.79 Lacs during the financial year 2017-18 (Previous year 13.60 lacs) on Corporate Social Responsibility in accordance with section 135(5) of the Companies Act, 2013

Note No 12. Transition to Ind AS

Financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind-AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Statutory reporting requirements in India immediately before adopting Ind AS (‘previous GAAP’).

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

Note No 13. In preparing these financial statements, the Company has availed itself of certain exemptions and exceptions in accordance with Ind AS 101 as explained below:

a) Exceptions from full retrospective application:

Estimates exception: Upon an assessment of the estimates made under Indian GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, except where estimates were required by Ind AS and not required by Indian GAAP.

b) Exemptions from retrospective application:

Share-based payment exemption: The Company has availed exemption available under Ind AS 101 on application of Ind AS 102, “Share Based Payment”, to equity instruments that vested before the date of transition to Ind AS.

c) Reconciliations:

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Indian GAAP to Ind AS in accordance with Ind AS 101:

- equity as at April 1, 2016

- equity as at March 31, 2017;

- Profit for year ended March 31,2017

- There is no material adjustment to the cash flow statement.

In the reconciliations mentioned above, certain reclassifications are made to Indian GAAP financial information to align with the Ind AS presentation.

C) Notes of IND AS

Under Indian GAAP, the long-term security deposits are recognized at the transaction value. Under Ind AS, the long term security deposits (financial assets) are recognized at the fair value under amortized cost method. The difference between the fair value and the transaction value is considered as prepaid rent and amortized over the period of lease.

Under Indian GAAP, the actuarial gain / loss on defined benefit obligations and plan assets is recognized as employee benefit expenses in the statement of profit and loss. Under Ind AS, such actuarial gain / loss is recognized under other comprehensive income and classified as equity.

Under Ind AS, the Employee stock compensation expenses are recognized at the fair value as on the date of grant and the Employee stock compensation expenses related to employees of subsidiaries are recognized in the books of respective subsidiary companies.

Accordingly, under Ind AS 37, corporate guarantees under financial guarantee contracts given by parent company on behalf of subsidiary needs to be recognize liability as contra under other non-current assets and other non-current liability. Changes in position shall also be recognized every year till the guarantee are extinguishes.

Note No 14. Previous year’s figures have been regrouped where necessary to conform to current year’s classification.

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Mar 31, 2016

Note No 1. Depreciation:

Depreciation has been calculated based on estimated economic lives of the fixed assets prescribed by schedule 11 of the Act as per useful life of the assets, whichever is lower. No depreciation is revised on goodwill in view of policy No. 3

Note No 2.Employees Benefit:

a) Gratuity: The Company has provided for gratuity liability based on internal assessment subject to actuarial valuation by internal authority.

b) Leave Encashment: Since leave encashment claims are settled on year to year basis, no actuarial valuation needs to be obtained.

Note No 3. operating Leases

The company has entered into cancellable and non cancellable operating lease agreements for leasing office space. The lease agreement provides for cancellation by either party with a notice period, it also contains a clause for renewal of lease agreements either at the option of group or as mutually agreed by both the parties.

Note No 4. Segment Reporting Primary Segment

The group has determined its primary reportable segment as geography identified on the basis of revenue which in management''s opinion is the predominant source of risks and rewards.

Note No 5. Capital Work in Progress includes Research and Development expenditure onKLGAME a unique software product, which will be commercially exploited upon successful completion

Note No 6. Previous year figures have been regrouped wherever necessary.

Note No 7. In terms of the Company Act 2013, the Accounts of the company have been closed as on 31st Mar 2016, as against 30th June every year. Accordingly the current year figures represent only 9 months and are not comparable with the previous year figures as on 30 June 2015.

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Jun 30, 2015

1. Following are the 100% subsidiaries of the company:-

Kellton Dbydx Software Private Limited (India)

Kellton Tech Inc (USA)

Kellton Tech Solutions Inc (USA)

2. Capital Work in Progress includes Research and Development expenditure on KLGAME™ a unique software product, which will be commercially exploited upon successful completion.

3. Consequent to the enactment of the Companies Act 2013 (the Act) , the company has reworked depreciation on with reference to the estimated economic lives of the fixed assets prescribed by schedule II to the act or useful life of the assets , whichever is lower. The impact of additional depreciation on account of this is Rs 1683908.

In case of any assets whose life has completed as above the value has been adjusted against Reserve and Surplus and in other cases the carrying value has been depreciated over the remaining of the revised life of the assets and recognized in the statement of Profit and Loss Statement.

4. Previous year figures have been regrouped wherever necessary

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Jun 30, 2014

1. Contingent liabilities 30-06-2014 30-06-2013 Rs. Lakhs Rs. Lakhs

(f) Bank Guarantees 141.28 Lacs NIL

(g) SBLC Guarantee 1734.32 Lacs NIL

2. Related Party Transactions as per AS 18

Transactions with related parties in the ordinary course of business

30-06-2014 30-06-2013

Loans received 1) Kellton Financial 1) Kellton Financial Services Pvt. Ltd - Services Pvt. Ltd - Rs. 150,905 Rs. 1,02,00,000 2) Niranjan Chintam - 2) Niranjan Chintam - Rs. 91,061 Rs. 14,16,061 3) Krishna Chintam - 3) Krishna Chintam - Rs. 5,78,717 Rs. 6,47,869 4) Avid Software Solutions Pvt. Ltd. -Rs. 1,31,66,500

Loan Given - 1) Kellton Dbydx 1) Kellton Dbydx Subsidiary Software Pvt Ltd - Software Pvt Ltd - Company Rs. 2,028,0880 62,03,371 2) Kellton Tech Inc - Rs. 1,32,19,481

3. In the opinion of the management the investments of Rs 18149552 in IGLILY INC (USA) is good and recoverable in view of the future road map of the companies. The Company has already collected 50.27 % of the amount due.

4. Following are the 100% subsidiaries of the company:-

MCS GLOBAL INC-(USA) KELLTON DBYDX SOFTWARE PVT LTD (India) KELLTON TECH INC (USA)

5. Goodwill is subject to impairment testing on an annual basis. However, if indicators of impairment are present, the company will review goodwill for impairment when such indicators arise. The company performs an annual review and no impairment was recorded. In performing the review, the company determine the recoverable amount of goodwill based on fair value less any costs that would be incurred should the company sell a cash generating unit to which goodwill would be apportioned from the operating segment. Key assumptions used by management to determine the fair value of the goodwill include industry earnings multiples and earnings multiples from previous company acquisitions.

6. For the purpose of having uniform depreciation method in the company that has been merged, depreciation has been recalculated and the excess depreciation claimed earlier has been since reversed for amount of Rs 14,31,320/-, which has been taken to General Reserve as a prior period adjustment.

7. Previous year figures have been regrouped wherever necessary.

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Jun 30, 2013

(1) Equity shares issued by the company are Equity Shares within the meaning of Section 85(2) of the Companies Act, 1956.

(2) Each holder of equity share is entitled to one vote per share.

(3) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

(4) The distribution will be in proportion to the number of equity shares held by the shareholders

5. Confirmation of balances from parties as at the end of the year has not been received. The adjustments, if any, shall be made as an ongoing process. Current assets and Current liabilities are subject to confirmation and adjustments, if any.

6. Employees'' retirement benefits have not been provided pending actuarial valuation. The retirement benefits are accounted on cash basis.

7. In the opinion of the management the investments of Rs.18,149,552 in IGLILY INC (USA) is good and recoverable in view of the future road map of the companies.

8. Following are the 100% subsidiaries of the company:-

9. Goodwill is subject to impairment testing on an annual basis. However, if indicators of impairment are present, the company will review goodwill for impairment when such indicators arise. The company performs an annual review and no impairment was recorded. In performing the review, the company determine the recoverable amount of goodwill based on fair value less any costs that would be incurred should the company sell a cash generating unit to which goodwill would be apportioned from the operating segment. Key assumptions used by management to determine the fair value of the goodwill include industry earnings multiples and earnings multiples from previous company acquisitions.

10. Long term loans and advances includes an amount of Rs. 14,55,000 which is pending settlement and collections.

11. Previous year figures have been regrouped wherever necessary.

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Jun 30, 2010

1. Contingent liabilities 30-06-2010 30-06-2009

[a] Claims against the company not Nil Nil acknowledged as debts

[b] Uncalled liability on shares partly paid Nil Nil

[c] Arrears of fixed cumulative dividend Nil Nil

[d] Estimated amount of contracts remaining to be Nil Nil paid on capital account not provided for

[e] Other money for which the company is 20.73 Lakhs 20.73 Lakhs contingently liable

2. Confirmation of balances from parties as at the end of the year has not been received. The adjustments, if any, shall be made as an ongoing process. Current liabilities are subject to confirmation and adjustments, if any.

3. Employees retirement benefits have not been provided pending actuarial valuation.

4. In the opinion of the management the followings investments are good and recoverable in view of the future road map of the companies.

Technovention Tradex Private Limited - Rs. 14,55,000 IGLILYINC Rs. 1,81,49,552

5. Deferred Tax liability:- In conformity with the accounting standards no 22 issued by the Institute of Chartered Accountants of India on "Accounting for Taxes on income", provision for deferred tax Asset for current year has been taken to profit and loss account. The composition of deferred tax is on account of timing differences relating to depreciation.

6. Presently the company is not liable under Provident Fund and Employees State Insurance Act.

7. There are no miner small and medium enterprises units to whom the company owes a sum exceeding Rupees one lakh which is outstanding for more than 30 days

8. Previous years figures have been regrouped wherever necessary.