Notes to Accounts of Rexnord Electronics and Controls Ltd.

Mar 31, 2018

Note 1: CORPORATE INFORMATION

Rexnord Electronics and Controls Limited (“the Company”) is a public limited Company domiciled in India with its registered office located at 92-D, Government Industrial Estate, Sahyadrinagar Charkop, Kandivali (West), Mumbai-400067. The Company is listed on the Bombay Stock Exchange (BSE). The Company is manufacturer of fans & motors. The Company has manufacturing facility at Survey no. 62, 74, 75, 20, Village Devdal (Sagpada), Opp Sagar Hotel Kaman Bhiwandi Road, Kaman Tal- Vasai, Dist Thane- 401208 and sells Indian Market and is regularly exporting.

Note 2: SIGNIFICANT ACCOUNTING POLICIES 2.1) BASIS OF PREPARATION A) Statement of Compliance

a) These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

b) These financial statements for the year ended 31st March,

2018 are the first the Company has prepared under Ind AS. For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended 31st March, 2017 and the opening Balance Sheet as at 1st April, 2016 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company’s Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in Note 49.

c) The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2016 being the ‘date of transition to Ind AS’. All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

d) The financial statements of the Company for the year ended 31st March, 2018 were approved for issue in accordance with the resolution of the Board of Directors on 30th May, 2018.

B) Basis of Measurement

These financial statements are prepared under the historical cost convention, except for the following:

a) Certain financial assets and liabilities that are measured at fair value (refer- Accounting policy regarding financials instruments).

b) Defined benefit plans - present value of defined benefit obligation unless otherwise indicated.

C) Functional and Presentation Currency

These financial statements are presented in Indian Rupees, the functional currency of the Company. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the ‘functional currency’).

D) Use of Estimates

a) The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities prospectively.

b) Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:

i) Measurement of defined benefit obligations - Note 38.

ii) Measurement and likelihood of occurrence of provisions and contingencies - Note 20 & 26 and 36.

iii) Recognition of deferred tax liabilities - Note 21.

E) Measurement of fair values

The Company’s accounting policies and disclosures require the measurement of fair values for, both financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information is used to measure fair values, then the management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in measuring fair values is included in the Note 40.

3) REVENUE RECOGNITION

Revenue is measured at the fair value of consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes and duties collected on behalf of the Government.

Sale of goods

Revenue from sale of goods is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership, no longer retains control over the goods sold, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Depending on the contractual terms, risks and rewards of ownership is transferred when the delivery is completed. In case of exports

Interest income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding and effective interest rate applicable.

Dividend income

Dividend income from investments is recognized when the right to receive payment has been established.

Rental income

Rental income is recognized on a straight line basis over the term of the relevant arrangements.

4) EXPORT INCENTIVE

The benefits, on account of entitlement to import duty free raw material under the Advance License Scheme in respect of goods already exported, are not valued and brought into the books in the year of export. The raw materials are recorded at cost at which they are procured in the year of import.

The benefits under FMS/FPS/Incremental Export Incentivisation Scheme and Duty Drawback Scheme are recognized when the exports are made.

5 EMPLOYEE BENEFITS

a) Short term employee benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short-term employee benefits. Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Short-term benefits such as salaries, wages, bonus, ex gratia, short-term compensation absences, etc., are determined on an undiscounted basis and recognized in the period in which the employee renders the related service.

b) Post-employment benefits Defined contribution plans

Obligations for contributions to defined contribution plans such as Provident Fund maintained with Regional Provident Fund Office is expensed as the related service is provided.

Defined benefit plans

The following post - employment benefit plans are covered under the defined benefit plans:

- Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income.

c) Other long-term employee benefits Compensated absences

The Company does not have any leave encashment policy. Further any unutilized leave at the end of the year is lapsed and not eligible for carry forward.

6 FOREIGN CURRENCY TRANSACTIONS AND TRANSCLATION

Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.

Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to finance costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.

Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or Statement of Profit and Loss are also recognized in OCI or Statement of Profit and Loss, respectively).

7) ACCOUNTING FOR TAXES ON INCOME

Income tax expense for the period comprises of current tax and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable on the taxable income for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

A deferred tax liability is recognized based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are reversed when the probability of future taxable profits improves. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.

8) PROPERTY, PLANT & EQUIPMENT

Property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of purchase price and any attributable cost such as duties, freight, borrowing costs, erection and commissioning expenses incurred in bringing the asset to its working condition for its intended use. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted and depreciated for as separate items (major components) of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of profit and loss during the period in which they are incurred.

Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the Statement of profit and loss.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress”.

Upon first-time adoption of Ind AS, the Company has elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.

9 INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

Upon first-time adoption of Ind AS, the Company has elected to measure all its intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.

10) RESEARCH AND DEVELOPMENT EXPENDITURE

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss unless a product’s technological and commercial feasibility has been established, in which case such expenditure is capitalized.

11) DEPRECIATION

Depreciation on Property, Plant & Equipment is provided on straight line method at the rates and in the manner specified in Schedule II to the Companies Act, 2013. In the case of revalued assets, depreciation is calculated on straight line method on the revalued amounts as determined by the valuer.

Depreciation on Property, Plant & Equipment added/disposed off/discarded during the period is provided on the pro-rata basis with reference to the date of addition/disposal/discarding.

The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.

12) AMORTIZATION

Intangible assets (Application Software) acquired by the Company are amortized on a straight line basis over its useful life i.e. three years, as decided by the management.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively, if appropriate.

13) BORROWING COSTS

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.

14) LEASES

Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of the fair value or present value of minimum lease payment and liability is created for equivalent amount. Each lease payment is allocated between liability and finance cost so as to obtain constant periodic rate of interest on the outstanding liability for each period. Finance expenses are recognized immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognized as expenses in the periods in which they are incurred.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Assets acquired/given under leases other than finance leases are classified as operating leases. Operating lease payments/receivable are recognized as an expense/income in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying value of the leased asset and recognized on a straight line basis over the lease term.

15) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS

Provisions are recognized when the Company has a present obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is probable that an outflow of resources will not be required to settle the obligation. However, if the possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability. The company does not recognize a contingent liability but discloses its existence in the financial statement.

Contingent assets are neither recognized nor disclosed in the financial statements.

16) IMPAIRMENT OF NON-FINANCIAL ASSETS

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash generating units (“CGU”). The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.

17 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

18) INVENTORIES

Inventories are valued at lower of cost and estimated net realizable value. Obsolete, defective and unserviceable stocks are provided for. Materials-in-process are valued at raw material cost and estimated cost of conversion. Cost of finished goods includes conversion and other costs incurred in bringing the inventories to their present location and condition

Cost of Inventories is computed on FIFO basis. Goods in transit, if any, are stated at actual cost incurred up to the date of balance sheet.

NOTE 19: SEGMENT REPORTING

The Company is engaged in the business of manufacturing and selling of Instrument cooling fans/ motors. The company is presenting its Consolidated financial statements which is form parts of this report. In terms of para 4 of Ind AS 108 “Segment Reporting “ no disclosures related to segments are required in Standalone financial statements.

NOTE 20: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Enterprises over which exercising control Rexnord Enterprise Pvt Ltd (w.e.f. 08/02/2018)

b) Persons owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company.

Shri Kishore Chand Talwar

c) Key management personnel :

Executive directors

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Nainy K. Tanna (Wholetime Director)

Non-executive directors (Independent directors)

Shri Ayyaswami Sundram

Shri D.Ganapathy (director up to 06.05.2018)

Shri Ram Sanehi (director up to 31.03.2018)

d) Relatives of persons referred in b) and c) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Smt. Ramandeep Talwar (Daughter in law of Chairman and Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

e) Enterprises over which any person described in (d ) above is able to exercise significant influence. Excelum Enterprises (A proprietary concern of Shri Kunal Tanna)

NOTE 21: LEASES Cancellable leases

a) The Company has taken ceratin equipments under operating lease or on rental basis. This contract is not non-cancellable and for a period of three months and are renewable at the mutual consent on mutually agreeable terms. The rent paid in accordance with this agreement is debited to the statement of profit and loss for the year.

b) The Company has given its industrial galas under operating lease or on leave and licence basis. These agreements are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has taken refundable interest free security deposits in accordance with the agreed terms. The rent received in accordance with these agreements is credited to the statement of profit and loss for the year.

Non-cancellable leases

The Company has given its part premises under operating lease or on leave and license basis for a period of 3 years. The company has taken refundable interest free security deposits in accordance with the agreed terms. The lease rentals income for the year recognized in the Statement of profit and loss and future lease rental receivable as per the rentals stated in respective agreement are as follows:

(A mm i nt in I

NOTE 22: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed up to financial year 2006-2007 for its Daman unit and up to financial year 2014-15 for its Kandivali unit.

b) The income tax assessments of the company have been completed up to assessment Year 2016-2017.

NOTE 46 : ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

(a) (i) The Company, during the financial year 2014-15, had allotted 1200000 Warrants at a price of '' 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of '' 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to '' 73,50,000. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

(ii) Out of the above warrants, the Company had, during the year 2016-17, allotted 1200000 equity shares on conversion of 1200000 warrants on 11th April 2016 and had realized the balance 75% allotment money aggregating to '' 22050000. The Company had utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

NOTE 23:

The Company had, during the 2016-17, purchased a plot of land admeasuring 0.242 Hectare at S. No. 61, H. No. 1 Part at Village- Kaman, Taluka -Vasai District -Palghar by executing Memorandum of Understanding and taken possession of the same. The Company is in process of executing Sale Deed and getting the same registered with the appropriate authorities.

NOTE 24: DISCLOSURE UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013

During the year the Company has made investments in equity shares of wholly owned subsidiary namely Rexford Enterprise Private Limited and units of various mutual funds. The required details of the investments made during the year and investments outstanding as on 31.03.2018 are given in note 4 and 9 to the financial statements.

NOTE 25: FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

A. Transition to Ind AS:

For the purposes of reporting as set out in Note 2.1(A), the Company has transitioned the basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March

2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the “transition date”).

In preparing opening Ind AS balance sheet as at 1 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected the financial performance, cash flows and financial position is explained in this note.

B. Mandatory exceptions to retrospective application

The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

i) Estimates

On assessment of estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise such estimates under Ind AS, as there is no objective evidence of an error in those estimates. However, estimates that were required under Ind AS but not required under IGAAP are made by the Company for the relevant reporting dates reflecting conditions existing as at that date.

ii) Classification and measurement of financial assets/liabilities

The classification of financial assets to be measured at amortized cost or fair value through profit & loss is made on the basis of facts and circumstances that existed on the date of transition to Ind AS.

C. Optional exemptions from retrospective application

Ind AS 101 “First time Adoption of Indian Accounting Standards” permits Companies adopting Ind AS for the first time to take certain exemptions from the full retrospective application of Ind AS during the transition. The Company has accordingly on transition to Ind AS availed the following key exemptions:

i) Deemed cost for property, plant and equipment and intangible assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

D. The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

i) Reconciliation of Equity as at 1st April, 2016 and 31st March, 2017

ii) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2017

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

1 Investments

Under Previous GAAP, the current investment were measured at lower of cost and fair value. Under Ind AS, the Company has designated these investments at fair value through profit or loss (FVTPL). Accordingly, these investments are required to be measured at fair value. air value changes are recognized in the Statement of Profit and Loss for the year ended 31st March, 2017.

2 Borrowings

In accordance with Ind AS 109 “Financial Instruments”, transaction costs on issue of debentures are required to be considered as effective finance costs and recognized in the statement of profit and loss using the effective interest rate. Consequently, transaction costs recognized directly in equity or amortized using a different approach under the Previous GAAP has been reversed and are now recognized through the statement of profit and loss using the effective interest rate.

3 Employee benefits & Other comprehensive Income

In accordance with Ind AS 19, “Employee Benefits” re-measurement gains and losses on post employment defined benefit plans are recognized in other comprehensive income as compared to the statement of profit and loss under the Previous GAAP.

Under Ind AS, all items of income and expense recognized during the year are included in the profit or loss for the year, unless Ind AS requires or permits otherwise. Items that are not recognized in profit or loss but are shown in the statement of profit and loss as other comprehensive income include re-measurement gains or losses on defined benefit plans. The concept of other comprehensive Income did not exist under the Previous GAAP.

4 Deferred Taxes

In accordance with Ind AS 12, “Income Taxes”, the Company on transition to Ind AS has recognized deferred tax on temporary differences, i.e. based on balance sheet approach as compared to the earlier approach of recognizing deferred taxes on timing differences, i.e. profit and loss approach. The tax impacts as above primarily represent deferred tax consequences arising out of Ind AS re-measurement changes.

5 Excise Duty

Under Previous GAAP, excise duty was netted off against sale of goods. However, under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.

iii) Adjustments to Statement of Cash Flows for the year ended 31st March, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

NOTE 6:

Previous year figures have been regrouped, rearranged and recanted to make them comparable with the current year figures

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Mar 31, 2016

NOTE 1: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 2: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of ‘The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 3: ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

4. (i) The Company, during the previous year, had allotted 3478800 Warrants at a price of Rs. 13.40 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs. 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group and non promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23^rd September 2014 and received 25% of issue price as warrant allotment money aggregating to Rs. 1,16,53,980. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

5. Out of the above warrants, the Company had allotted 1098300 equity shares on conversion of 1098300 warrants on 13^th December 2014 and realized the balance 75% allotment money aggregating to Rs. 11037915. The Company had utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

6. Out of the above warrants, the Company has, during the year, allotted 2380500 equity shares on conversion of 2380500 warrants on 12th June 2015 and has realized the balance 75% allotment money aggregating to Rs. 23924025. The Company has utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

7. The Company, further during the previous year, had allotted 1200000 Warrants at a price of Rs. 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs. 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to Rs. 73,50,000. The company had utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

8. (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note “Accounting Treatment for Excise Duty” issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

9. As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

10. Previous year figures have been regrouped, rearranged and recasted to make them comparable with current year figures.

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Mar 31, 2015

1. The company has issued only one class of equity shares having a par value of Rs, 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

2. Shareholders holding more than 5% of share capital at the end of the year :

A Nature of security:

(I) Term loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067:

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802A and 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Sagpada), Kaman, Vasai (E), Palghar 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company

(II) All the vehicle loans are secured by hypothecation of specific vehicles acquired from the loans.

Nature of security:

Working capital loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai - 400 067:

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Sagpada), Kaman, Vasai (E), Palghar 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

3 (i) Cost of factory building include Rs, 1000.00 (previous year Rs, 1000.00) being cost of shares in the Kandivli Co-operative Industrial Estate Limited.

3 (ii) Pursuant to the requirements of the Companies Act, 2013 ("the Act") the Company has revised the depreciation rates based on the estimated economic useful lives of the fixed assets as prescribed by the Schedule II to the Act from 1st April 2014. Accordingly the unamortized carrying value is being depreciated / amortized over the revised / remaining useful lives. In respect of fixed assets whose useful life is already exhausted as on 1st April 2014, depreciation of Rs, 1255949.79 (net of deferred tax) has been adjusted in opening balance of the Statement of Profit and Loss in accordance with the requirements of the Schedule II of the Act.

(b) Defined benefit plan:

Compensated absences:

Rs, 105998.00 (previous year Rs, 129051.00) is charged off to the statement of profit and loss for the cost of

compensated absences for the year.

Gratuity :

The employee's gratuity scheme is non -fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation

The estimates of future salary growth considered in the actuarial valuation taken into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

NOTE 4: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company's operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

NOTE 5: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Whole time Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

Excelum Enterprises (A proprietary concern of Shri Kunal Tanna)

NOTE 6: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 7: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confirmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 8: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed up to financial year 2006-2007 for its Daman unit and up to financial year 2011-12 for its Kandivali unit.

b) The income tax assessments of the company have been completed up to assessment Year 2012-2013.

NOTE 9: ISSUE OF SHARE WARRANTS, THEIR CONVERSION AND UTILIZATION OF ITS PROCEEDS

(a) (i) The Company, during the year, has allotted 3478800 Warrants at a price of Rs, 13.40 per warrant carrying an entitlement to subsribe to an equivalent

number of equity shares of face value of Rs, 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group and non promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd September 2014 and received 25% of issue price as warrant allotment money aggregating to Rs, 1,16,53,980. The company has utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

(ii) Out of the above warrants, the Company has allotted 1098300 equity shares on conversion of 1098300 warrants on 13th December 2014 and realized the balance 75% allotment money aggregating to Rs, 11037915. The Company has utilized this proceed for its working capital requirements and other corporate purposes in accordance with the objects of the said Issue.

(b) The Company, further during the year, has allotted 1200000 Warrants at a price of Rs, 24.50 per warrant carrying an entitlement to subscribe to an equivalent number of equity shares of face value of Rs, 10/- each within 18 months from the date of allotment of warrants to promoter/promoter group in accordance of Regulations for Preferential Issue contained in Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended, on 23rd December 2014 and received 25% of issue price as warrant allotment money aggregating to Rs, 73,50,000. The company has utilized this proceeds for its working capital requirements and other corporate purposes in accordance with the object of the issue.

NOTE 10: The Company is in process of appointing professional directors to compose the Nomination and Remuneration Committee in conformity with the provisions of the Section 178 of the Companies Act, 2013.

NOTE 11: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

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Mar 31, 2014

1.b The company has issued only one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

2.c Shareholders holding more than 5% of share capital at the end of the year:

(I) Term loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067;

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Nagpada), Kaman, Vasal (E) Thane 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

Working capital loans from HDFC Bank Limited are :

(a) primarily secured by hypothecation of stocks, book debts and plant & machineries of the company ;

(b) further secured by way of equitable mortgage of land and building at Plot No. 92-D Government Industrial Estate, Charkop, Kandivli (W), Mumbai 400067;

(c) further collaterally secured by way of equitable mortgage of Residential Flats at 802Aand 802B, Beach Classic, J.P. Road, Versova, Andheri (W) Mumbai 400061 belonging to Shri Kishore Chand Talwar, Smt. Sharda Talwar and Shri Kundan Talwar and a plot of land at Survey No. 62, 74, 75, 20 Village Devdal (Nagpada), Kaman, Vasal (E) Thane 401202 belonging to Shri Kundan Talwar; and

(d) also personally guaranteed by Chairman & Managing Director, Whole time Director and two relatives of the Chairman & Managing Director of the Company.

NOTE 3: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Amount in Rs.)

As at 31.03.2014 As at 31.03.2013 (i) Contingent liabilities:

(a) Letter of credit issued by the bankers of the company 18578767.18 9216224.52

(b) Export sales bills discounted with the bankers of the company 11468000.88 0.00

(c) Disputed demand in the matters of Income tax 528937.00 364467.00

(d) Bonds/Undertakings given under duty exemption under advance licence scheme pending fulfilment of export 66950000.00 28473000.00 obligation.

(ii) Contingent commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of 221255.72 361800.00 advances).

NOTE 4: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company''s operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

NOTE 5: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him significant influence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Whole time Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman and Managing Director of the company) Shri Kundan Talwar (Son of Chairman and Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Whole time Director of the company)

NOTE 6: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

NOTE 7: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed upto financial year 2006-2007 for its Daman unit and upto financial year 2010-11 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2011-2012.

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Mar 31, 2013

NOTE 1: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

As at 31.03.2013 As at 31.03.2012

(i) Contingent liabilities:

(a) Guarantees given by the banks on behalf of the company 0.00 5372.00

(b) Letter of credit issued by the bankers of the company 9216224.52 177413.37

(c) Disputed demand in the matters of Income tax 364467.00 364467.00

(d) Bonds/Undetakings given under duty exemption under advance licence scheme pending fulflment of export obligation 28473000.00 0.00

(ii) Contingent commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 361800.00 0.00

NOTE 2: SEGMENT REPORTING

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company''s operations are predominantly comprises of only one business segment – Instrument cooling fans/ motors.

NOTE 3: RELATED PARTY DISCLOSURES:

I) Names of related parties and description of relationships

a) Individuals owning directly or indirectly, an interest in the voting power of the Company that gives him signifcant infuence over the Company. Shri Kishore Chand Talwar

b) Key management personnel :

Shri Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Wholetime Director)

c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman & Managing Director of the company) Shri Kundan Talwar (Son of Chairman & Managing Director of the company) Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

NOTE 4: LEASES

The company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non- cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of proft and loss for the year.

NOTE 5: DISCLOSURE UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

Based on the information available, there are certain vendors who have confrmed that they are registered under the Micro, Small and Medium Enterprises Development Act, 2006 as micro and small enterprises. Disclosures as required by section 22 of ‘The Micro, Small and Medium Enterprises Development Act, 2006, are given below:

NOTE 6: TAXATION MATTERS:

a) The sales tax assessments of the company have been completed upto fnancial year 2006-2007 for its Daman unit and upto fnancial year 2004-05 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2011-2012.

NOTE 7: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the proft of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the proft of the year.

NOTE 8: Previous year fguers have been regrouped, rearranged and recasted to make them comparable with the current year fgures in view of change of classifcation of items.

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Mar 31, 2012

1.a The company has issued only one class of equity shares having a par value ofrS. 10/- per share. Each shareholder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distribution of preferential amounts, in proportion of their shareholding.

Gratuity :

The employee's gratuity scheme is non -fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

Note 2: Segment reporting

The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the company as the company's operations are predominantly comprises of only one business segment - Instrument cooling fans/ motors.

Note 3: Related Party Disclosures:

I) Names of related parties and description of relationships

(a) Individuals owning directly or indirectly, an interest in the voting power of the company that gives him significant influence over the company

Shri. Kishore Chand Talwar

(b) Key management personnel:

Shri. Kishore Chand Talwar (Chairman & Managing Director) Smt. Nainy K. Tanna (Wholetime Director)

(c) Relatives of persons referred in a) and b) above

Smt. Sharda Talwar (Wife of Chairman & Managing Director of the company) Shri. Kundan Talwar (Son of Chairman & Managing Director of the company) Shri. Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

Note 4: Leases

a) The company has taken various residential premises industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to the statement of profit and loss for the year.

Note 5: Taxation Matters:

a) The sales tax assessments of the company have been completed upto financial year 2006-2007 for its Daman unit and upto financial year 2004-05 for its Kandivali unit.

b) The income tax assessments of the company have been completed upto assessment Year 2010-2011.

Note 6: (i) As per the consistent practice followed by the company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountant Of India . However the same does not have any impact on the profit of the year.

(ii) As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

Note 7 :Till the year ended 31 st March 2011, the company was using pre-revised Schedule VI to the companies Act, ] 956, for preparation and presentation of its financial statements. During the year ended 31 st March, 2012, the revised Schedule VI notified under the companies Act, 1956, has become applicable to the company. The company has accordingly reclassified previous period figures to conform to this year's classification.

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Mar 31, 2011

1. In the opinion of Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provisions for all the known liabilities are adequate.

2. Managerial remuneration (remuneration to whole-time directors) paid during the year Rs. 30,00,000/- (excluding the provision for gratuity for which separate figures are not available) (previous year Rs. 24,79,884/-), which is minimum managerial remuneration payable, hence no computation of managerial remuneration under section 349 of the Companies Act, 1956, is given.

*inclusive of service tax wherever applicable however debited to profit & loss account net of cenvat credit of service tax wherever available.

3. A. Contingent liabilities not provided for -

a. Guarantees given by the banks on behalf of the Company Rs. 5,372/- (previous year Rs. 30,372/-)

b. Letter of credit issued by the bankers of the Company Rs. 37,10,200.32 (previous year Rs. 46,66,358.73 )

c. Disputed income tax demand of Rs. 47,308/- (previous yearRs. 47,308/-) for the assessment year 2006-07 against which the Company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

d. Disputed fringe benefit tax demand of Rs. 13,430/- (previous year Rs. 13430/-) for the Assessment year 2007-08 against which the Company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

e. Disputed excise demand of Rs. 5,49,010/- (previous year Rs. 5,49,010/-) plus interest raised by the excise authorities reduced to Rs. 2,90,005/- (previous year Rs. 2,90,005/-) by the Commissioner (Appeal). The excise authorities have preferred an appeal with the Custom Excise & Service Tax Appellate Tribunal (the CESTAT) challenging the order of the Commissioner (Appeal). The Company has also preferred a further appeal with the CESTAT against the order of the Commissioner (Appeal). The CESTAT has stayed the recovery of the said demand. The Company has already provided and paid Rs. 2,59,005/- (previous year Rs. 2,59,005/-) against the said demand.

f Liability, if any, arising on account of Bonds/Undertakings given by the Company under concessional duty / exemption schemes to Custom and Excise authorities, pending fulfillment of specified export obligation.

B. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 54,37,061/- (previous year Rs. Nil).

4. The Company had revalued its fixed assets except furniture, factory building and vehicles on 31st March 1994, based on the report of an approved valuer at replacement value. The resultant increase in the book value of the said assets amounting to Rs. 1,13,65,701.78 was credited to Revaluation Reserve.

5. The Company had one foreign national shareholder holding 300000 equity shares ofRs. 10/- each during the year (Previous year - 300000 equity shares).

6. The Sales Tax Assessments of the Company have been completed upto financial year 2006-2007 for its Daman Unit and upto financial year 2004-05 for its Kandivali Unit.

7. The Income Tax Assessments of the Company have been completed upto Assessment Year 2008-2009.

8. The office of the Company Secretary has been vacant since 31st August 1999. The Company is in process of appointing a full time company secretary.

9. Under the Micro Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force 2 October 2006, certain disclosures are required to be made relating to Micro Small and Medium enterprises.

On the basis of the information and records available with Company, the following disclosures are made for the amounts due to the Micro and Small Medium Enterprises:

10. Disclosure as required under Accounting Standard 15 "Employee Benefits".

B. Defined Benefit Plans :

Compensated absences:

Rs. 19195/- (previous yearRs. 31901/-) is charged off to the profit and loss account for the cost of compensated absences.

Gratuity:

The employee's gratuity scheme is non fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The estimates of future salary growth considered in the actuarial valuation take into account inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

11. a. During the previous year, the Company, for the first time, made provision for gratuity on actuarial valuation method which was, till earlier year, charged off to profit and loss account on cash basis, therefore, gratuity pertaining to earlier years Rs. 3,41,074/- was taken under the head "Prior period items"; and

b. During the previous year, a sum of Rs. 7,795/-, representing payment towards compensated absences which was, till earlier year, charged off to profit and loss account on cash basis, being pertaining to earlier years, was taken under the head "Prior period items".

12. The segment reporting as required under Accounting Standard 17 "Segment Reporting" is not applicable to the Company as the Company's operations are predominantly comprises of only one business segment - Instrument Cooling Fans/ Motors.

13.a) The Company has taken various residential premises / industrial galas under operating lease or on leave and license basis. These are generally not non-cancellable and for a period ranging between 11 months and above and are renewable at mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. The rent paid in accordance with these agreements is debited to profit and loss account for the year.

14. Disclosures as required under Accounting Standard 18 "Related Party Disclosure".

1. Relationships:

Key managerial personnel and their relatives:

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Nainy K. Tanna (Wholetime Director)

Shri Ram Bahadur Roka (Wholetime Director till 2nd March 2010)

Smt. Sharda K. Talwar (Wife of Chairman and Managing Director of the Company)

Shri Kundan Talwar (Son of Chairman and Managing Director of the Company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the Company)

Note: Related party relationship is identified by the Company and relied upon by the auditors.

15.The Company has taken a land at Village-Devdal, Taluka-Vasai, Dist-Thane on lease for construction of its factory premises. Capital work in progress includes the following expenditure for site development and factory building on the said leasehold land:

16. a. As per the consistent practice followed by the Company in earlier years, the excise duty payable in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. However the same does not have any impact on the profit of the year.

b. As per the consistent practice followed by the Company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation of the inventories of such materials. However this practice does not have any impact on the profit of the year.

17. Deposit includes deposit given to Mr. Kishore Chand Talwar, Chairman and Managing Director and Mrs. Sharda K. Talwar, Vice President - Facilities Rs.18,25,000/- each as lease deposit for the premises taken on lease from them.

b) Premium (difference between the exchange rate at the date of the inception of the forward exchange contract and forward rate specified in the contract), paid to hedge the risk associated with foreign currency fluctuations relating to existing liabilities, of FEC amortized over the life of the contract, pertaining to the year under review has been accounted for under the head Interest and financial charges;

c) A sum of Rs. 0.85 lacs representing deferred premium on the FEC, adjustable against the profit and loss account of subsequent year, has been clubbed under Loans and advances; and

d) Net of, Forward contracts receivable amounting to Rs. 171.04 lacs and forward contracts payable amounting to Rs. 181.40 lacs, has been clubbed under Current Liabilities.

18. During the previous year, insurance claim receivable Rs. 39,30,341.84, on account of loss of inventories due to flood on 3rd August 2004, being, in the opinion of the management, irrecoverable, was written off to the profit and loss account.

19. Previous year figures have been regrouped, rearranged and recasted wherever necessary to make them comparable with the current year figures.

20. Additional information pursuant to the paragraph 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956.

I Manufacturing Activities

(a) Particulars of Capacity, Production, Sales and Stock Licensed Capacity : Not Applicable

Installed Capacity : Instrument Cooling Fan 1602000 Pieces

Note: The licensed capacity and installed capacity as mentioned above has been certified by the directors on which auditors have relied without verifying the same.

# It is impracticable to furnish quantitative information of components consumed in view of considerable number of items of diverse size & number.

(c) Separately percentage and value of imported and indigenous raw material, spare parts, components consumed are not exactly ascertainable.

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Mar 31, 2010

1. In the opinion of Board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course ofbusiness. The provisions for all the known liabilities are adequate.

2. Managerial remuneration (salary) paid during the year Rs. 24,79,8847- (excluding the provision for gratuity for which separate figures are not available) (Previous Year Rs.24,40,500/-), which is minimum managerial remuneration payable, hence no computation of managerial remuneration under section 349 ofthe Companies Act, 1956, is given.

3. The Company had revalued its fixed assets except furniture, factory building and vehicles on 31" March 1994, based on the report of an approved valuer at replacement value. The resultant increase in the book value ofthe said assets amounting to Rs. 1,13,65,701.78 wascreditedto Revaluation Reserve.1

4. The office ofthe Company Secretary has been vacant since 31 "August 1999. The Company is in process of appointing a full time company secretary.

5. The Sales Tax Assessments ofthe company have been completed upto financial year 2006-2007 for its Daman Unit and upto financial year 2004-05 for its Kandivali Unit.

6. The Income Tax Assessments of the company have been completed upto Assessment Year 2008-2009.

7. Contingent Liabilities not provided fora. Guarantees given by the banks on behalf oftheCompanyRs. 30,3727- (PreviousyearRs.30,372/-)

b. Letter of Credit issued by the bankers ofthe company Rs. 2,54,27,099.96 (Previous year Rs.2,58,10,324.23)

c. Disputed Income Tax demands of Rs. Nil (Previous Year Rs. 289,6487-) for the Assessment year 1999-2000 against which the company has preferred an appeal with the Commissioner of Income Tax (Appeals), which is yet to be decided by the said authority.

d. Disputed Income Tax demands of Rs. 47,3087- (Previous Year Rs. 47,3087-) for the Assessment year 2006-07 against which the company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

e. Disputed Fringe Benefit Tax demands of Rs. 13,4307- (Previous Year Nil) for the Assessment year 2007-08 against which the company has filed an application for rectification with the Assessing Officer, which is yet to be decided.

f. Disputed Excise Demand of Rs. 5,49,0107-plus interest raisedbythe Excise Authorities reduced to Rs. 2,84,0057-by the Commissioner (Appeal). The excise authorities have preferred an appeal with the Central Excise & Service Tax Appellate Tribunal (the SESTAT) challenging the order ofthe Commissioner (Appeal). The company has also preferred a further appeal with the CESTAT against the order ofthe Commissioner (Appeal). The CESTAT has stayed the recovery ofthe said demand. The company has alreadyprovided and paid Rs. 2,59,0057- against the said demand.

g. Liability, if any, arising on account of Bonds/Undertakings given by the company under concessional duty/exemption schemes to Custom and Excise authorities, pending fulfillment of specified export obligation.

8. Deposit includes deposit given to Mr. KishoreChandTalwar, Chairman and Managing Director and Mrs. Sharda K.Talwar, Vice President-Facilities Rs. 18,25,0007-each as lease deposit for the premises taken on lease from them.

9. The company has taken a land at village DevdalTalukaVasaiDist- Thane on lease for construction of its factory premises. Capital work in progress includes the following expenditure for site development and factory building on the said leasehold land:

10. a. As per the consistent practice followed by the company earlier years, the excise duty pay able in respect of goods manufactured during the year but not cleared from factory premises at the end of year, are neither included in expenses nor considered in valuation of the inventories of such goods which is contrary to the guidance note "Accounting Treatment for Excise Duty" issued by the Institute of Chartered Accountants of India. However the same does not have any impact on the profit of the year,

b. As per the consistent practice followed by the company in earlier years, the custom duty payable in respect of imported materials lying at custom bonded warehouse at the end of year, are neither included in expenses nor considered in valuation ofthe inventories of such materials. However this practice does not have any impact on the profit ofthe year.

11. Disclosure as required under Accounting Standard 15 "Employee Benefits".

2. Defined Benefit Plans: Compensated absences? During the year 2009-10, Rs. 319017- are charged off to the profit and loss account for the cost of compensated absences.

12. The segment reporting as required under Accounting Standards 17 "Segment Reporting" is not applicable to the company, as the companys operations are predominantly comprises of only one business segment -Instrument Cooling Fans/Motors.

13. Disclosures as required under Accounting Standard 18 "Related Party Disclosure".

1. Relationships:

(a) Key Management Personnel and their relatives:

Shri Kishore Chand Talwar (Chairman & Managing Director)

Smt. Sharda K. Talwar (Wholetime Director till 2nd March 2010)

Smt. Nainy K. Tanna (Wholetime Director)

Shri Ram Bahadur Roka (Wholetime Director till 2"" March 2010)

Shri Kundan Talwar (Son of Chairman and Managing Director of the company)

Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of the company)

(b) Enterprises over which key management personnel and their relatives have significant influence.

Camy Electronics, Sagar Engineering Works, Shree Engineering Works, Subham Electrnonics (All proprietorship concern of Shri Kundan Talwar) Magnus International (Proprietorship Concern of Shri Kunal Tanna) Gratuity:

The employees gratuity scheme is non fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

14. The company has, during the year, shifted its Kandivali and Daman manufacturing facilities at Vasai.

15. Insurance claim receivable Rs. 39,30,341.84, on account of loss of inventories due to flood on 3rd August 2004, being, in the opinion of the management, irrecoverable, written off to profit and loss account.

16. Previous year figures have been regrouped, rearranged and recasted wherever necessary to make them comparable with the current year figures. 28. Additional information pursuant to the paragraph 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956. cost of respective material accounts.