Notes to Accounts of MITCON Consultancy & Engineering Services Ltd.

Mar 31, 2019

a) Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of INR 10/- per share. Each equity holder is entitled to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to necessary approval from the shareholders.

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

# - 12,000,000 Equity Shares of KWDPL are pledged with Axis Trustee Services Ltd. for term loan of INR 420,000,000/- availed by KWDPL from L & T Infrastructure Finance Company Limited.

## - During the year the company converted partial loan given to M/s Krishna Windfarms Developers Private Limited of INR.75,000,000/-into 75,00,000 compulsarily convertible debentures (@ 10.50% p.a.) of Rs.10/- each, convertible into Equity Shares after fifteen months.

1 Utilisation of Incubatee Grant

a) Technology Development Board (TDB), Govt. of India has approved scheme ‘Seed Support System for Start-ups in Incubators’ for providing financial assistance as seed support for start-ups in the MITCON incubator as growth oriented initiative between the TDB and MITCON. The scheme is to make available early stage financial assistance as seed support for start-up units located at the MITCON incubator for further development and precommercialization of technologies. Accordingly MITCON has received grant of INR 4,000,000/- from TDB during the year ended 31st March, 2012. Term Loan disbursed and outstanding to incubatees aggregating to INR 2,390,653/- outstanding as on 31st March, 2019 is classified as current / non current assets. Refund to TDB / Disbursement against this grant has been deducted from Grant received. Grant remaining unutilised aggregating to INR 4,820,317/- being repayable on demand is classified under current liability.

b) Interest received on deployment of unutilised grant amount and interest received on loans disbursed to incubatee, is credited to grant (net of taxes).

2 Disclosure pursuant to Accounting Standard (AS 15) - Revised 2005 “Employee Benefits”

A Defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the year :

i Contribution to employees provident fund INR 6,221,138/- (P.Y. INR 6,407,650/- )

ii Contribution to employees family pension Fund INR. 2,155,092/- (P.Y. INR 2,292,070/-)

B Defined benefit plans - Gratuity

The company makes annual contribution to the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part there of in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

C The company provides for accumulation of compensated absences by its employees. The employees can carry forward a portion of the unutilised compensated absences and utilise it in future periods to receive cash in lieu thereof as per company policy. The company records an obligation for compensated absences in the period in which the employee renders the service that increases this entilement The total liability recorded by the company towards this benefit as at 31 March, 2019 is INR 14,203,469/-(Previous Year INR 12,894,662/-).

3 The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either ofthe parties and also contain a clause for renewal of the lease agreement. Lease payments and receipts on cancellable operating lease arrangements debited / credited to Statement of Profit and Loss are as under.

4 Related Party Disclosures Under Accounting Standard 18 - “Related Party Disclosures”, have been identified on the basis of representation made by the Management and taken on record by the Board of Directors and relied upon by the auditors. Disclosures of transactions with Related Parties are as under:

a Related Parties

Subsidiary of Company

Krishna Windfarms Developers Private Limited (KWDPL)

MITCON Sun Power Limited (MSPL)

MITCON Forum for Social Development (MFSD)

MITCON Trusteeship Services Private Limited (MTSPL)

MITCON Valuers & Advisors Private Limited (MVAPL)

Subsidiary of MSPL

MITCON Solar Alliance Limited (MSAL)

Associate :

MITCON Insolvency Professinal Services Private Limited (MIPSPL)

Related Party where significant influence exists:

Mitcon Foundation (Charitable Trust) (Common Managing Director and Managing Trustee)

Key Management personnel:

Dr. Pradeep Bavadekar, Managing Director

5 Balances of trade receivables and trade payables are subject to reconciliation and confirmation by respective parties.

6 Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of Agreement. However as the Company’s share of fees is not independently determinable by the Company prior to actual receipt thereof, these are accounted for on receipt basis.

7 Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 “Segment Reporting’ issued by the Institute of Chartered Accountants of India, the company’s Primary Segments are

1 Consultancy and Training

2 Project Services

3 Wind Power Generation

The above business segments have been identified considering :

a. The nature of the products/ operation

b. The related risks and returns

c. The internal financial reporting systems of the organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

8 i During the year ended 31st March, 2019 the company has incorporated wholly owned subsidiary companies viz.

a) MITCON Sun Power Limited (paid up capital of INR 100,000/-),

b) MITCON Forum for Social Development (paid up capital of INR 100,000/-)

c) MITCON Valuers and Advisors Private Limited (paid up capital of INR 100,000/-) and

d) MITCON Trusteeship Services Private Limited (paid up capital of INR 23,000,000/-)

ii During the year ended 31st March, 2019, the company’s subsidiary viz. MITCON Sun Power Limited (MSPL) has incorporated a subsidiary in association with Pudumjee Paper Products Limited viz. MITCON Solar Alliance Limited in which the MSPL holds 50.01% Equity interest .

iii During the year ended 31st March, 2019, the Company has invested INR 11,074,000/- (including premium of INR 11,025,000/-) for acquisition of 4,900 Equity Shares of INR 10/- each, being 49% of the paid up Equity share capital of Versatile Insolvency Professional Services Private Limited. Subsequently the name of the company was changed to MITCON Insolvency Professional Services Private Limited (MIPSPL). MIPSPL is an Associate Company.

iv On 23rd March, 2019, through postal ballot, shareholders approved the acquisition of 51% (25,500 equity shares) of the share capital of Shrikhande Consultants Private Limited (SCPL) from shareholders of SCPL and to issue upto 16,28,077 equity shares of the Company having face value of INR 10/- each at premium of INR 42/- each for consideration other than cash by way of preferential allotment to the shareholders of SCPL. Allotment of equity shares of the company is pending as on 31.3.2019.

9 i During the year the company acquired additional 51% equity shares of Krishna Windfarms Developers Private Limited (KWDPL) on 20th February, 2019 whereby KWDPL has become a wholly owned subsidiary of the company. The Equity holding of the Company in KWDPL is 12,000,049 Equity shares of Face Value of INR 10/- each, aggregating to INR 120,388,690/-

KWDPL has during the year ended 31st March, 2018 availed Term Loan facility °f INR 420,000,000 from L & T Infrastructure Finance Company Ltd. As security against this loan, the company has -

(a) pledged its investment in 1,20,00,000 equity shares of KWDPL aggregating to face value of INR 120,000,000/- with Axis Trustee Services Ltd.

(b) issued

Corporate Guarantee of INR 420,000,000 in favour of L & T Infrastructure Finance Company Ltd

During the year, company has partly converted existing loan given to Krishna Windfarms Developers Private Limited into 75,00,000, 10.50% Compulsorily Convertible Debentures of INR 10/- each aggregating to Rs.7,50,00,000/- The debentures issued are convertible into equity shares after 15 months from the date of issue. There is no payment schedule specified in respect of interest due on debentures. Debenture interest outstanding as on 31st March, 2019 is INR 3,926,714/Balance of loan outstanding as on 31st March, 2019 is INR 148,149,525/-, interest outstanding thereon is INR 24,650,634/- and trade receivable outstanding is INR 7,910,859/-

ii The company has given intercorporate loan to MITCON Solar Alliance Limited (MSAL) during the year ended 31st March, 2019 amounting to INR270,917,324/-out of which INR 170,917,324/- is outstanding and interest outstanding thereon is INR 4,876,191/-

iii The company has given intercorporate loan to MITCON Sun Power Limited (MSPL) during the year ended 31st March, 2019 amounting to INR 9,600,000/- which is outstanding and interest outstanding thereon is INR 376,136/The solar power projects of KWDPL, MSAL and MSPL are fully operational as on balance sheet date. Subsidiaries are negotiating with existing / propective lenders and are in process of switching lender in order to get benefit of reduced finance cost to improve profitability. Based on certain estimates like future business plans, growth prospects and valuation report of independent valuer, the management is of the opinion that above stated inter corporate loans, interest on inter corporate loans and trade receivable are good and recoverable and investment in debenture and equity of the subsidiaries does not require any reduction in value of investment.

10 i During the year, MITCON Multiskills Limited, a subsidairy company has been struck off from the the Register of Companies under section 248(5) of the Companies Act, 2013 vide letter dated 27th March, 2019 received from Office of the Registrar of Companies, Pune.

ii During the year entire stake of 26% held by the company in MITCON Megaskill Centers Private Limited (MMCPL) has been disposed off and sold . Consequently MMCPL has ceased to be an Associate of the Company.

11 Para 5 of the Memorandum of Association of MITCON Forum for Social Development (MFSD) prohibits payment or transfer of profit to the member by way of dividend, bonus or otherwise. Para 10 of the Memorandum of Association of MFSD prohibits distribution of remaining assets of the company on winding up or dissolution to the members. As the company will not recover any amount from the investment made in MFSD in future, company has written down the value of investment in MFSD to INR 1/-

12 Provision for current tax is made on the basis of taxable profits computed for the current accounting period in accordance with provisions of the Income Tax Act, 1961. The company has estimated its income tax liabilities according to the Tax Laws. Management makes interpretation in terms of application of tax laws and rules to determine the possible outcome of tax provisions taken. Provision is made for income Tax annually, based on the tax liability computed after considering tax allowances and exemptions.

13 The Board of Directors have proposed final dividend of INR 1/- per equity share (10%) of INR 10 each for the financial year 2018-19 (P Y INR 1/- per Equity Share)

14 Previous years figures have been re-grouped , reclassified wherever necessary to make them comparable with current year’s figures

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Mar 31, 2018

A) Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of INR 10/- per share. Each equity holder is entitled to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to necessary approval from the shareholders.

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

1 Utilisation of Incubatee Grant

a. Technology Development Board (TDB), Govt, of India has approved scheme ‘Seed Support System for Start-ups in Incubators’ for providing financial assistance as seed support for start-ups in the MITCON incubator as growth oriented initiative between the TDB and MITCON. The scheme is to make available early stage financial assistance as seed support for start-up units located at the MITCON incubator for further development and pre-commercialization of technologies. Accordingly MITCON has received grant of INR 4,000,000/- from TDB during the year ended 31^st March, 2012. Term Loan disbursed to incubatees aggregating to INR 3,439,562/-is outstanding as on 31^st March, 2018. Refund to TDB / Disbursement against this grant has been deducted from Grant received (note no. 3(2)).

b. Interest received on deployment of unutilised grant amount and interest received on loans disbursed to incubatee, is credited to grant (net oftaxes).

2 Based on the documents / information available with the Company, there are no acknowledged dues to suppliers covered under The Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act).

3 Disclosure pursuant to Accounting Standard (AS 15)- Revised 2005 "Employee Benefits"

a) Defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the year:

i) Contribution to employees provident fund INR 6,407,650/- (PY. INR 6,754,247/-)

ii) Contribution to employees family pension Fund INR. 2,292,070/- (PY. INR 2,740,267/-)

b) Defined benefit plans - Gratuity

The company makes annual contribution to the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part there of in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

c) The company provides for accumulation of compensated absences by its employees. The employees can carry forward a portion of the unutilised compensated absences and utilise it in future periods to receive cash in lieu thereof as per company policy. The company records an obligation for compensated absences in the period in which the employee renders the service that increases this entilement. The total liability recorded by the company towards this benefit as at 31 March, 2018 is INR 12,894,662/- (Previous Year INR 13,116,506/-).

4 The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either of the parties and also contain a clause for renewal of the lease agreement. Lease payments on cancellable operating lease arrangements debited to Statement of Profit and Loss are as under.

5 Related Party Disclosures Under Accounting Standard 18 - “Related Party Disclosures”, have been identified on the basis of representation made by the Management and taken on record by the Board of Directors and relied upon by the auditors. Disclosures of transactions with Related Parties are as under:

a) Related Parties

Subsidiary : MITCON Multiskills Limited

Associate : Krishna Windfarms Developers Private Limited (KWDPL)

MITCON Megaskill Centers Private Limited (MMCPL)

Related Party where control exists: Mitcon Foundation (Charitable Trust)

Key Management personnel : Dr. Pradeep Bavadekar, Managing Director

6 Balances of trade receivables and trade payables are subject to reconciliation and confirmation by respective parties.

7 Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of Agreement. However as the Company’s share of fees is not independently determinable by the Company prior to actual receipt thereof, these are accounted for on receipt basis.

8 Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 “Segment Reporting” issued by the Institute of Chartered Accountants of India, the company’s Primary Segments are

1. Consultancy and Training

2. Project Services

3. Wind Power Generation

The above business segments have been identified considering :

a. The nature ofthe products/ operation

b. The related risks and returns

c. The internal financial reporting systems ofthe organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities ofthe segment and amounts allocated on a reasonable basis.

9. The Board of Directors have proposed final dividend of INR 1/- per equity share (10%) of INR 10 each forthe financial year2017-18 (P Y INR 1/- per Equity Share)

10. UTILIZATION OF MONEY RAISED THROUGH INITIAL PUBLIC OFFER

During the year ending 31^st March, 2014 the company has made a public offer of 4,100,000 shares, which were fully subscribed.

Pursuant to the provisions ofclause 43 ofthe listing agreement with the exchange, the disclosure is as follows:

The utilisation ofthe issue proceeds is as under:

# The objects of utilisation of unutilised IPO proceeds have been changed for use of funds for general corporate purpose by passing special resolution by the members through postal ballot on 28^th December, 2017.

11. The Company opened the offer of its Qualified Institutional Placement (QIP) on 1^st September, 2017. In view ofthe then current market conditions, the Board at its meeting held on 28^th September, 2017 has withdrawn the proposed QIP and the offer made by the company for the Issue accordingly stands cancelled. Expenses incurred by the company, have been disclosed as Extraordinary Item

12. During the year ended 31^st March, 2018 the company has formed a subsidiary company viz. MITCON Multiskills Ltd. in association with CMC Skills Private Limited in which the company is holding 51% ofthe paid up capital i.e INR 51,000/- (5,100 equity shares of INR 10/- each.)

13. During the year ended 31^st March, 2018, the Company has invested 26% ofthe paid up capital i.e. 2600 Equity Shares of INR 10 each in MITCON Megaskill Centers Private Limited (MMCPL) by investing INR 26,000. MMCPL is an Associate Company of MITCON Consultancy and Engineering Services Limited.

14. During the year, a Special Purpose Vehicle (SPV) viz. MITCON Megaskills Centers Private Limited (MMCPL) was incorporated in association with CMC Skills Private Limited, in which the company holds 26% ofthe paid up capital i.e INR 26,000/- (2,600 equity shares of INR 10/- each.). The SPV is an Associate ofthe company. The said SPV has received a Work Order worth INR 1,294,780,000/- from Jharkhand Skill Development Mission Society (JSDMS), Govenment of Jharkhand for establishing, operating and maintaining Megaskill Training Center(s) on Public Private Partnership (PPP) mode. The company has provided Bank Guarantee of INR 127,247,200/- towards mobilisation advance and Performance Bank Guarantee of INR 10,048,000/- in favour of JSDMS, Govenment of Jharkhand on behalf of said SPV which required approval of the Audit Committee and Board of Directors of the Company u/s 177 and 188 ofthe Companies Act, 2013. However, the Audit Committee and the Board of Directors ofthe Company in their meeting held on 10th November, 2017 have not approved and not ratified the transaction in the present form and considering the financial exposure faced by the company advised the management to relook the entire transaction and reduce the financial risk of the company. After end ofthe year, Performance Bank Guarantee of INR 10,048,000/- was retruned by the JSDMS and the same is cancelled.

15. Krishna Windfarms Developers Pvt.Ltd. (KWDPL) is an Associate Company in which the company holds 49% stake. KWDPL has availed of Term Loan facility of INR 420,000,000 from L & T Infrastructure Finance Company Ltd. As security against this loan, the company has -

(i) pledged its investment in 5,880,000 equity shares of KWDPL aggregating to face value of INR 58,800,000 with Axis Trustee Services Ltd.

(ii) issued Corporate Guarantee of INR 420,000,000 in favour of L & T Infrastructure Finance Company Ltd.

The company has given intercorporate loan to KWDPL out of which principal amount of INR 225,309,605/is outstanding and interest thereon of INR 12,778,561/- is receivable from KWDPL as on 31st March 2018.

16. Change in Accounting Policy

Upto the previous year ended 31^st March, 2017, the company was recognising revenue from the participants of in-house training programmes, at the commencement of the course. During the year company has changed the basis ofrecognising revenue to percentage completion oftenure oftraining programe. As a result of this change profit for the year is lower by INR 375,027/-.

17. Previous years figures have been re-grouped , reclassified wherever necessary to make them comparable with current year’s figures

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Mar 31, 2016

b) Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of INR 10/- per share. Each equity holder is entitled to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to necessary approval from the shareholders.

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

# - Capital advances Rs. 26.69 lakhs (PY Rs. 22.00 lakhs) pertain to full payment as per demand letter ref no C30642/2015 dated 31^st July, 2015 received from MIDC, Nanded. for lease of office at Udyog Bhavan, Nanded The company has taken possession and occupied this office during the year. Capitalization of the leasehold rights and amortization thereof is pending for execution and registration of formal lease deed with MIDC

1. Utilization of Incubate Grant

A. Technology Development Board (TDB), Govt. of India has approved scheme ‘Seed Support System for Start-ups in Incubators’ for providing financial assistance as seed support for start-ups in the MITCON incubator as growth oriented initiative between the TDB and MITCON. The scheme is to make available early stage financial assistance as seed support for start-up units located at the MITCON incubator for further development and pre-commercialization of technologies. Accordingly MITCON has received grant of INR 40,00,000/- form TDB till 31^st March, 2016. Financial assistance by way of Term Loan to two incubates aggregating to INR 27,75,530/- is outstanding as on 31^st March, 2016. Disbursement against this grant has not been deducted from Grant received, but separately disclosed under Loans and Advances.

B. Interest received on deployment of unutilized grant amount and interest received on loans disbursed to incubate, is credited to grant (net of taxes).

2. Based on the available documents / information, the Company has no suppliers covered under The Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act).

3. Disclosure pursuant to Accounting Standard (AS 15) - Revised 2005 “Employee Benefits”

a) Defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the year :

i) Contribution to employees provident fund INR 72,38,391/- (P.Y. INR 73,38,903/- )

ii) Contribution to employees family pension Fund INR. 29,05,142/- (P.Y. INR 24,97,470/-)

b) Defined benefit plans - Gratuity

The company makes annual contribution to the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

Fair value of plan assets , in excess of present value of obligations, being adjustable against future contributions is recognized in the books of account.

c) The company provides for accumulation of compensated absences by its employees. The employees can carry forward a portion of the unutilized compensated absences and utilize it in future periods to receive cash in lieu thereof as per company policy. The company records an obligation for compensated absences in the period in which the employee renders the service that increases this entitlement. The total liability recorded by the company towards this benefit as at 31^st March, 2016 is INR 83,55,012/- (Previous Year INR 82,80,382/-).

4. The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either of the parties and also contain a clause for renewal of the lease agreement. Lease payments on cancellable operating lease arrangements debited to Statement of Profit and Loss are as under.

5. Related parties, as defined under Clause 3 of Accounting Standard (AS 18) “Related Party Disclosures”, have been identified on the basis of representation made by the Management and taken on record by the Board of Directors and relied upon by the auditors. Disclosures of transactions with Related Parties are as under:

a) Name of the related party and nature of relationship where control exists :

Name of Related Party Nature of Relationship

MITCON Foundation Charitable Trust promoted by the Company

* As the liabilities for gratuity and leave encashment are provided on actuarial basis for the Company as a whole, the amounts pertaining to the KMP are not included above.

6 Balances of trade receivables and trade payables are subject to reconciliation and confirmation by respective parties.

7 A) Service Tax

i) The company has received Service Tax refund aggregating to INR 89,48,928/- against Service Tax paid by the company for the period 1^st August, 2010 to 30^th June, 2011 in terms of Order passed in favour of the company by Commissioner (Appeals III) Central Excise Pune. However the Service Tax Department is in further appeal with Customs, Central Excise and Service Tax Appellate Tribunal against the said Order. Pending disposal of Appeal with Customs, Central Excise and Service Tax Appellate Tribunal, the Commissioner Central Excise Pune III. has issued on 26^th February, 2014 show cause cum demand notice for recovery of service tax amount refunded. The company has refuted demand of recovery of Service Tax amount refunded.

ii) The Company has received show cause cum demand notices dated 16^th April 2013 and 29^th April, 2014 from the Commissioner of Central Excise Pune - III, calling upon the Company to Show cause as to why an amount of INR 1,46,40,244/- should not be charged / demanded and recovered from it for the period from 01^st July 2011 to 31^st March 2012 and a further amount of INR 86,01,654/- should not be charged / demanded and recovered from it for the period 1^st April, 2012 to 30^th June 2012 (being periods for which Company did not pay service tax). This claim is disputed and being contested by the Company by filing written submission before The Commissioner, Central Excise & Service Tax, Pune III Authorities.

Status of the issues enumerated (i) & (ii) above remained unchanged during the year.

B) Income Tax

Tax for A.Y.2009-10 amounting to INR 22,560/-, for A.Y.2011-12 amounting to INR 2,77,58,980/are shown by the Department as outstanding are without taking due cognizance of prepaid taxes. In fact, the Company is entitled to receive refund of income tax as per return of income filed for these years. Rectification proceedings for these years are pending before the Assessing Officer.

8 Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of

9. Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 “Segment Reporting” issued by the Institute of Chartered Accountants of India, the company’s Primary Segments are :

1. Consultancy and Training

2. Wind Power Generation

The above business segments have been identified considering :

a. The nature of the products/ operation

b. The related risks and returns

c. The internal financial reporting systems of the organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

10. Utilization of money raised through Initial Public Offer

During the year ending 31^st March, 2014 the company has made a public offer of 41,00,000 shares, which were fully subscribed.

Pursuant to the provisions of clause 43 of the listing agreement with the exchange, the disclosure is as follows:

The utilization of the issue proceeds as on 31^st March 2016 is as under:

* The above unutilized proceeds from the Issue have been deployed in the Fixed Deposits with NBFC

11. Previous year’s figures have been re-grouped , reclassified wherever necessary to make them comparable with current year''s figures.

Signatures to the Notes 1 to 42, forming part of the Financial Statements.

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Mar 31, 2015

A) Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of INR 10/- (Previous Year INR 10/-) per share. Each equity holder is entitled to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to necessary approval from the shareholders.

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

NOTE NO.

1 Utilisation of Incubatee Grant

Technology Development Board (TDB), Govt. of India has approved scheme ''Seed Support System for Start-ups in Incubators'' for providing financial assistance as seed support for start-ups in the MITCON incubator as growth oriented initiative between the TDB and MITCON. The scheme is to make available early stage financial assistance as seed support for start-up units located at the MITCON incubator for further development and pre-commercialization of technologies. Accordingly MITCON has received grant of INR 4,000,000/- form TDB till 31st March, 2015. Financial assistance by way of Term Loan to two incubatees aggregating to INR 2,283,606/- is outstanding as on 31st March, 2015. Disbursement against this grant has not been deducted from Grant received, but separately disclosed under Loans and Advances.

2 Contingent liability not provided for

Year ended Particulars 31st March, 2015 31st March, 2014 INR INR

a) Guarantees given by bankers to customer on behalf of 1,73,02,347.00 1,58,57,573.00 the Company

b) Service Tax Demand (see Note No. 38) 3,21,90,826.00 3,21,90,826.00

c) Claims against the company not acknowledged as -- -- debt - Arbitration petition in respect of money claim is pending before Artbitration Tribunal. The company has made counter claims against the claimant before the said Tribunal. Pending completion of Arbitration proceedings, the liability (if any) is not ascertainable.

d) An ex-employee has filed a claim before First Labour 1,64,000.00 1,64,000.00 Court, Pune. The company has filed written statement for dismisal of the claim.

3 Based on the available documents / information, the Company has no suppliers covered under The Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act).

4 Disclosure pursuant to Accounting Standard (AS 15) - Revised 2005 "Employee benefits"

a) defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the year :

i) Contribution to employees provident fund INR 7,338,903/- (P.Y. INR 6,977,195/- )

ii) Contribution to employees family pension Fund INR. 2,497,470/- (P.Y. INR 1,450,405/-)

b) defined benefit plans - Gratuity

The company makes annual contribution to the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part there of in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

c) The company provides for accumulation of compensated absences by its employees. The employees can carry forward a portion of the unutilised compensated absences and utilise it in future periods to receive cash in lieu thereof as per company policy. The company records an obligation for compensated absences in the period in which the employee renders the service that increases this entilement. The total liability recorded by the company towards this benefit as at 31st March, 2015 is INR 8,280,382/- (Previous Year INR 6,452,379/-).

5 The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either of the parties and also contain a clause for renewal of the lease agreement. Lease payments on cancellable operating lease arrangements debited to Statement of Profit and Loss are as under.

6 Balances of trade receivables and trade payables are subject to reconciliation and confrmation by respective parties

7 An amount of INR 21,273,260/- is receivable from MITCON Foundation, a Trust promoted by the Company, against sale of land. The Company has given undertaking to Bank of Baroda that the said receivable shall not be recovered by the Company until the Term Loan availed of by MITCON Foundation from the Bank is repaid in full. In the opinion of the Management this receivable is good and fully recoverable.

8 a) Service Tax

i) The company has received Service Tax refund aggregating to INR 89,48,928/- against Service Tax paid by the company for the period 1st August,2010 to 30th June, 2011 in terms of Order passed in favour of the company by Commissioner (Appeals III) Central Excise Pune. However the Service Tax Department is in further appeal with Customs, Central Excise and Service Tax Appelate Tribunal against the said Order. Pending disposal of Appeal with Customs, Central Excise and Service Tax Appelate Tribunal, the Commisioner Central Excise Pune III. has issued on 26th February, 2014 show cause cum demand notice for recovery of service tax amount refunded. The company has refuted demand of recovery of Service Tax amount refunded.

ii) The Company has received show cause cum demand notices dated 16th April 2013 and 29th April, 2014 from the Commissioner of Central Excise Pune - III, calling upon the Company to Show cause as to why an amount of INR 1,46,40,244/- should not be charged / demanded and recovered from it for the period from 01st July 2011 to 31st March 2012 and a further amount of INR 86,01,654/- should not be charged / demanded and recovered from it for the period 1st April, 2012 to 30th June 2012 (being periods for which Company did not pay service tax). This claim is disputed and being contested by the Company by fling written submission before The Commissioner, Central Excise & Service Tax, Pune III Authorities.

Status of the issues enumerated in i) & ii) above remained unchanged during the year

b) Income Tax

Tax for A.Y.2009-10 amounting to INR 22,560/-, for A.Y.2011-12 amounting to INR 2,77,58,980/- and for A.Y.2013-14 amounting to INR 3,17,17,480/- shown by the Department as outstanding are without taking due cognizance of prepaid taxes. In fact, the Company is entitled to receive refund of income tax as per return of income fled for these years. Rectifcation proceedings for these years are pending before the Assessing officer.

9 Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of Agreement. However as the Company''s share of fees is not independently determinable by the Company prior to actual receipt thereof, these are accounted for on receipt basis.

10 Change in Accounting Policy

Consequent to applicability of the Schedule II of the Companies Act, 2013, read with "Application Guide on the Provisions of Schedule II of the Companies Act, 2013" issued by Institute of Chartered Accountants of India, depreciation on revalued portion of the fixed asset has been charged to Statement of Profit and Loss instead of being recouped from revaluation reserve. Consequently depreciation for the year is higher by INR 402,031/- and Profit for the year is lower by said amount. Further in accordance with the said application guide, equivalent amount has been transferred from revaluation reserve to general reserve.

11 Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the company''s Primary Segments are

1 Consultancy and Training

2 Wind Power Generation

The above business segments have been identified considering:

a. The nature of the products/ operation

b. The related risks and returns

c. The internal financial reporting systems of the organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

12 Utilization of money raised through Initial Public Offer

During the year ending 31st March, 2014 the company has made a public offer of 4,100,000 shares, which were fully subscribed.

13 Previous years figures have been re-grouped, reclassified wherever necessary to make them comparable with current year''s figures.

Signatures to the Notes 1 to 44, forming part of the Financial Statements.

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Mar 31, 2014

1. Rights, preferences and restrictions attached to shares:

The company has one class of equity shares having a par value of INR 10/- (Previous Year INR 100/-) per share. Each equity holder is entitled to one vote per share and have a right to receive dividend as recommended by Board of Directors subject to necessary approval from the shareholders.

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Utilisation of Incubatee Grant

Technology Development Board (TDB), Govt. of India has approved scheme ''Seed Support System for Start-ups in Incubators'' for providing financial assistance as seed support for start-ups in the MITCON incubator as growth oriented initiative between the Board and MITCON. The scheme is to make available early stage financial assistance as seed support for start-up units located at the MITCON incubator for further development and pre-commercialization of technologies. Accordingly MITCON has received grant of INR 40 lacs form TDB. INR 25 lacs were sanctioned to one incubatee towards Term Loan @ 5.50% interest rate with moratorium of one year and repayable within 5 years , out of which INR 11.12 lacs were disbursed during the year. This disbursement has not been deducted from Grant received, but separately disclosed under Loans and Advances.

3. Contingent liability not provided for

Year ended

Particulars 31st March, 2014 31st March, 2013

INR INR

Corporate Guarantee to Bank - - 78,820,000.00 given on behalf of MITCON Foundation

(Outstanding loan against this bank guarantee as on 31/03/2014 INR Nil PY INR 31.23 lacs)

Guarantees given by bankers to 15,857,573.00 9,772,975.00 customer on behalf of the Company

Service Tax Demand 32,190,826.00 14,640,244.00 (see Note No. 38)

4, The Company has no suppliers covered under The Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act).

5. Disclosure pursuant to Accounting Standard (AS 15) - Revised 2005 "Employee Benefits"

A Defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the year :

i Contribution to employees provident fund INR 69,77,195/- (P.Y. INR 59,45,399 )

ii Contribution to employees family pension Fund INR. 14,50,405/- (P.Y. INR 14,93,461)

B Defined benefit plans - Gratuity

The company makes annual contribution to the life insurance corporation of india, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part there of in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

6. The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either party or by the Company and also contain a clause for renewal of the lease agreement. Lease payments on cancellable operating lease arrangements are debited to Statement of Profit and Loss.

7. Balances of trade receivables and trade payables are subject to reconciliation and confirmation by respective parties

8. An amount of INR 21,273,260/- is receivable from MITCON Foundation, a Trust promoted by and under the same management of the Company, against sale of land. The Company has given undertaking to Bank of Baroda that the said receivable shall not be recovered by the Company until the Term Loan availed of by MITCON Foundation from the Bank is repaid in full. In the opinion of the Management this receivable is good and fully recoverable.

9. A Service Tax

i) The company has received Service Tax refund aggregating to INR 89,48,928/- against Service Tax paid by the company for the period 1st August,2010 to 30th June, 2011 in terms of Order passed in favour of the company by Commissioner (Appeals III) Central Excise Pune. However the Service Tax Department is in further appeal with Customs, Central Excise and Service Tax Appelate Tribunal against the said Order. Pending disposal of Appeal with Customs, Central Excise and Service Tax Appelate Tribunal, the Commisioner Central Excise Pune III. has issued on 26th February, 2014 show cause cum demand notice for recovery of service tax amount refunded. The company has refuted demand of recovery of Service Tax amount refunded.

ii) The Company has received show cause cum demand notices dated 16th April 2013 and 29th April, 2014 from the Commissioner of Central Excise Pune - III, calling upon the Company to Show cause as to why an amount of INR 1,46,40,244/- should not be charged / demanded and recovered from it for the period from 01st July 2011 to 31st March 2012 and a further amount of INR 86,01,654/-should not be charged / demanded and recovered from it for the period 1st April, 2012 to 30th June 2012 (being periods for which Company did not pay service tax). This claim is disputed and being contested by the Company by filing written submission before The Commissioner, Central Excise & Service Tax, Pune III Authorities.

B Income Tax

Tax for A.Y.2009-10 amounting to Rs.22,560/-, for A.Y.2011-12 amounting to Rs. 2,77,58,980/- and for A.Y.2012-13 amounting to Rs.3,35,24,011/- shown by the Department as outstanding are without taking due cognizance of prepaid taxes. In fact, the Company is entitled to receive refund of income tax as per return of income filed for these years. Rectification proceedings for these years are pending before the Assessing Officer.

Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS-CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of Agreement. However as the Company''s share of fees is not independently determinable by the Company prior to actual receipt thereof, these are accounted for on receipt basis.

10. Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the company''s Primary Segments are

1 Consultancy and Training

2 Wind Power Generation

The above business segments have been identified considering:

a. The nature of the products/ operation

b. The related risks and returns

c. The internal financial reporting systems of the organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

11. Previous years figures have been re-grouped , reclassified wherever necessary to make them comparable with current year''s figures.

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Mar 31, 2013

1 Contingent liability not provided for

Year ended Particulars 31st March, 2013 31st March, 2012 INR INR

1) Corporate Guarantee to Bank given on behalf of MITCON 78,820,000.00 78,820,000.00 Foundation (Outstanding loan against this bank guarantee as on 31/03/2013 is Rs.31.23 lacs)

2) Guarantees given by bankers to customer on behalf of the 9,772,975.00 14,636,845.00 Company

3) Show Cause cum Demand Notice received from 14,640,244.00 - Commissioner of Central Excise, Pune - III, pertaining to the period 01/07/2011 to 31/03/2012. This claim is disputed by the Company and is being contested before the Service Tax Authorities.

2. The Company has no suppliers covered under The Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act).

3. Disclosure pursuant to Accounting Standard (AS 15) - Revised 2005 "Employee Benefits" A Defined contribution plans:

The company has recognized the following amounts in the Statement of Profit & Loss for the period :

i Contribution to employees provident fund INR 59,45,399/- (P.Y. INR 52,95,250 )

ii Contribution to employees family pension Fund INR. 14,93,461/- (P.Y. INR 14,58,320)

B Defined benefit plans - Gratuity

The company makes annual contribution to the insurance corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 month. Vesting occurs only upon completion of 5 years of service except in case of death or permanent disability. The present value of defined benefit obligation and the related current service cost are measured using the Projected Unit Credit Method with actuarial valuation being carried out at the balance sheet date.

C The liability for the Leave Encashment as defined in AS 15 (revised 2005) has been provided on actuarial basis. Para 132 of AS 15 (revised 2005) does not require any specific disclosure except where the expense resulting from compensated absences is of such size, nature of incidence that its disclosure is relevant under other accounting standard. In the opinion of the management, the expenses resulting from leave encashment pertaining to current year is not significant and hence no disclosure is prepared under various paragraph of AS 15 (revised 2005). Unfunded liability as at 31 March, 2013 is INR 84,32,010/- Previous Year INR 63,28,784/-.

4 The Company has entered into operating lease arrangements for office space. Lease arrangements provide for cancellation by either party or by the Company and also contain a clause for renewal of the lease agreement. Lease payments on cancellable operating lease arrangements are debited to Statement of Profit and Loss.

5. Confirmation of balances from some trade receivables and trade payables are awaited.

6. An amount of INR 2,12,73,260/- is receivable from MITCON Foundation, a Trust promoted by and under the same management of the Company, against sale of land. The Company has given undertaking to Bank of Baroda that the said receivable shall not be recovered by the Company until the Term Loan availed of by MITCON Foundation from the Bank is repaid in full. In the opinion of the Management this receivable is good and fully recoverable.

7. Service Tax Refund

Central Board of Excise and Customs (CBEC) issued notification number 03/ 2010 dated 27th February 2010 withdrawing exemption from levy of service tax on Vocational Training Programmes. Consequently the Company paid service tax without charging the same for such programmes.

The Company had sought clarification from CBEC on applicability of Service Tax on Vocational training programmes conducted under centrally sponsored schemes. As per CBEC communication these services fall under commercial training and coaching services and are liable to levy of Service tax.

However, the Company has received clarification from the Tax Research Unit (TRU), Department of Revenue, Ministry of Finance, Government of India that the Vocational Training Programmes conducted by the Company under Centrally Sponsored Schemes fall under Business Auxiliary Services. This service provided by the Company is in relation to Educational training and hence exempt from levy of Service tax under exemption notification number 14/2004 ST dated 10th September 2004. Based on this clarification, the Company did not pay service tax for the period 1st July 2011 to 30th June 2012 and has claimed refund of Service Tax paid for the period 1st August 2010 till 30th June 2011 aggregating to INR 91,17,683/-. An amount of INR 53,67,520/- pertaining to the financial year 2010-11 and INR 37,50,163/- pertaining to financial year 2011-12 (aggregating to INR 91,17,683/- as aforesaid) appears as receivable under Other Non-current Assets from the financial year 2011-12. The claim for refund was rejected by Service Tax Department, Pune. The Company has appealed against the said order to Service tax Appellate Authority. The appeal has been decided in favor of the Company by the Commissioner (Appeals - III ), Central Excise Pune on 31-03-2013.

Necessary adjustments in the books for the refund will be made only on actual receipt of refund.

However, subsequently the Company has received show cause cum demand notice dated 16th April 2013 from the Commissioner of Central Excise Pune - III, calling upon the Company to Show cause as to why an amount of INR 1,46,40,244/- should not be charged / demanded and recovered from it for the period from 01st July 2011 to 31st March 2012 (being part of the period for which Company did not pay service tax). This claim is disputed and being contested by the Company by fling written submission on 10th July 2013 before The Commissioner, Central Excise & Service Tax, Pune III Authorities.

8. Tuition fees received from MKCL

MITCON is a Training provider to Maharashtra Knowledge Corporation Limited (MKCL) for their MS- CIT and other courses. Fees of these training courses are directly collected by MKCL. On completion of these training programmes Tuition fees are shared by MKCL with the Company as per the Terms of Agreement. However as the Company''s share of fees is not independently determinable by the Company prior to actual receipt thereof, these are accounted for on receipt basis.

9. Segment Reporting

Based on the guiding principle given in the Accounting Standard-17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the company''s Primary Segments are

1 Consultancy and Training

2 Wind Power Generation

The above business segments have been identified considering:

a. The nature of the products/ operation

b. The related risks and returns

c. The internal financial reporting systems of the organization.

Segment revenue, results, assets and liabilities have been accounted for on the basis of their relationship to the operating activities of the segment and amounts allocated on a reasonable basis.

10 Material Changes / Events subsequent to the end of the Accounting Period Changes in Face Value of each equity share and increase in Authorised Share Capital At the Extra Ordinary General Meeting of the Shareholders held on April 25, 2013 the Company has effected subdivision in the face value of equity share and increase in Authorised Capital as under :

a) Each existing equity share of Company of INR 100/- has been subdivided into 10 equity shares of Face Value of INR 10/- each and consequently the authorised share capital of Company INR 5,00,00,000/- now comprises of 50,00,000 equity shares of INR 10/- each.

b) The Authorised Share Capital of the Company has been increased from INR 5,00,00,000/- divided into 50,00,000 equity share of INR 10/- each to INR 15,00,00,000/- divided into 1,50,00,000 equity shares of INR 10/- each.

ii Issue of Bonus Shares and capitalisation of Reserves 75,00,000 equity shares of INR 10/- each have been issued and allotted as fully paid up bonus shares in the proportion of 15 equity shares for every one equity share held by utilisation of balance in Accumulated Profits. Consequently the issued, subscribed and paid up capital of the Company stands increased to INR 8,00,00,000/- divided into 80,00,000 equity shares of INR 10/- each.

iii The Company has received show cause cum demand notice dated 16th April 2013 from the Commissioner of Central Excise Pune - III, calling upon the Company to Show cause as to why an amount of INR 1,46,40,244/- should not be charged / demanded and recovered from it for the period from 01st July 2011 to 31st March 2012 (being part of the period for which Company did not pay service tax). This claim is disputed and being contested by the Company before the Service Tax Authorities.

11. Previous years figures have been re-grouped , reclassified wherever necessary. Signatures to the Notes 1 to 42, forming part of the Financial Statements.