Notes to Accounts of Simplex Castings Ltd.

Mar 31, 2018

1. CORPORATE INFORMATION

Simplex Castings Limited (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act. It’s shares are listed on one stock exchanges in India. The company is mainly engaged in Manufacturing of SG Iron, Steel, Special Alloy Castings, C.I. Castings and Equipments.

The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION AND PRESENTATION

i) The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules,2016 and guidelines issued by the Securities and Exchange Board of India (SEBI).

ii) For all periods upto and including the year ended 31st March 2017, the company prepared its financial statements in accordance with accounting standards notified as Companies (Accounting Standards) Rules,2006 and considered as “Previous GAAP”.

iii) These financial statements for the year ended 31st March,2018 are the Company’s first Ind AS standalone financial statements.

iv) The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Certain financial assets and liabilities and

- Defined benefit plans - plan assets

v) Company’s financial statements are presented in Indian Rupees (‘ in lakhs), which is also its functional currency.

2.2 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Company’s financial statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets

Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. The estimated useful lives and residual values of the assets are reviewed annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company’s historical experience with similar assets and take into account anticipated technological changes and other related matters. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.

b) Recoverability of trade receivable

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the period of overdues, the amount and timing of anticipated future payments and the probability of default.

c) Provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of resources resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

d) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating Units (CGU’s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.

e) Measurement of defined benefit obligations

The measurement of defined benefit and other post-employment benefits obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

2.3 First Time adoption of Ind AS

The Company has adopted Ind AS with effect from 1st April 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.

a) Exemptions from retrospective application

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.

ii) Deemed cost for investment properties

The Company has elected to measure all its investment properties at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.

b) Transition to Ind AS - Reconciliations

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. Refer Note-3.1.

ii) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2017. Refer Note-3.2.

3.1 RECONCILIATIONS

The following reconciliations provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

1. Equity as at April 1, 2016 and March 31, 2017

2. Net profit for the year ended March 31, 2017

Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to INDAS

A) Property, Plant and Equipment (PPE)

As per Ind AS 16, PPE are defined as tangible items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and are expected to be used during more than one period. Certain spare parts now meets the definition of PPE and are accordingly classified as PPE.

Under previous GAAP, investment properties were presented as a part of property, plant and equipment. Based on Ind AS 40, the company has reclassified freehold land held for undetermined future use to Investment Property.

B) Investment

Under Ind AS, financial assets representing investments in equity shares have been fair valued. The company has designated such investments as FVTOCI investments. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognised as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes for investments measured at FVTOCI.

The company was having investment of Rs.0.52 lac in wholly owned subsidiary ‘Simplex Mash LLP at Kazakhstan’ as on the date of transition. As the company is not having any transaction and activity since 2013 and did not have any control since than, the investment amount of LLP has been considered as impaired as on the date of transition and has been eliminated against retained earnings.

C) Other Non-Current Assets

Recognition of deposit on leasehold land which was included alongwith leasehold land.

D) Inventory

Recognition of inventory on account of deferral of sales due to continuing managerial involvement and Stores and spare parts in the nature of property, plant and equipment has been reclassified.

E) Trade receivables

Under Indian GAAP, the company is to create provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the company impaired its trade receivable by INR 264.92 lacs on 1 April 2016 which has been eliminated against retained earnings. The impact of INR 18.85 lacs for year ended on 31 March 2017 has been recognized in the statement of profit and loss.

F) Other Current assets

Under Indian GAAP, amount receivable against funded defined benefit plans has been netted off with total liability of defined benefit which has now shown seperately.

G) Other equity

a) Adjustments to retained earnings and other comprehensive income has been made in accordance with Ind AS, for the above mentioned line items.

b) In addition, as per Ind-AS 19, actuarial gains and losses are recognized in other comprehensive income as compared to being recognized in the statement of profit and loss under IGAAP.

H) Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. The unamorized transaction cost is further classified in to non current and current.

I) Provisions

Adjustments that reflect unamortised negative past service cost arising on gratuity and leave encashment in an earlier period. Ind AS 19 requires such gains and losses to be adjusted to retained earnings.

Under the previous GAAP, dividends proposed by the Board of Directors after the Balance Sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and tax thereon, included under provisions has been reversed with corresponding adjustment to retained earnings.

I) Deferred Tax liabilities

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences land which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

Explanations for reconciliation of Statement of Profit and loss as previously reported under IGAAP to Ind AS

A. Revenue

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 1557.11 lacs with a corresponding increase in other expense.

Further, under Ind AS the timing of risk and reward varies to the extent that revenue can be recognized when there is no continuing control over or the managerial involvement over the goods. This has resulted in increment of revenue to the extent of INR 1460.48 lacs with a consequential impact on inventory and due increase in Excise Duty on sales.

B. Employee benefit expenses

As per Ind-AS 19- Employee Benefits , actuarial gains and losses are recognized in other comprehensive income and not reclassified to profit and loss in a subsequent period.

Adjustments reflect unamortised negative past service cost arising on modification of the gratuity plan in an earlier period. Ind AS 19 requires such gains and losses to be adjusted to retained earnings.

C. Finance costs

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. The unamorized transaction cost is further classified in to non current and current.

D. Depreciation

Recognition of additional PPE from spare parts has resulted in additional depreciation charge for the year ended 31 March 2017.

E. Other expenses

Under Indian GAAP, the company is to create provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL).

F. Current Tax

Tax related to earlier year has been considered as priod period adjustment and shown as appropriation with the balances in the Statement of Profit or Loss in Indian GAAP. Under Ind AS 12, the tax related to earlier year is the part of current tax and the reconciliation of the same should be seperately disclosed.

G. Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

H. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in the Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the Statement of Profit and Loss as ‘other compresive income’ includes remeasurements of defined benefit plans and fair valuation of investments. The concept of other comprehensive income did not exist under previous GAAP.

b. Terms/rights attached to equity shares

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

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

c. There is no holding/ultimte holding company of the Company.

e. Terms of Issue of Equity Share Warrants

During the year the company has taken approval from members to issued and allotment of 20,00,000 Convertible Equity Warrants on preferential basis to group of Strategic Investors, not forming part of the Promoter Group of the Company i.e. non promoter, with an option to convert the same into equal number of equity shares at a price of Rs. 160/- per share at par on face value of Rs. 10/- per share, within a period of 18 months from the date of allotment of warrants.

Security and terms & conditions for above loans:

a. Corporate Loan from Banks (State Bank of India (SBI) and Bank of Baroda (BOB)) are secured by 1st Pari Passu charge on the entire Factory Leasehold land at Bhilai & Urla, built-up area including plant & machineries on entire fixed assets (existing & proposed) of the company by way of hypothecation/mortgage.

b. Term Loan from State Bank of India (SBI) is secured by an exclusive charge on the Machinery to be purchased out from the said loan.

c. Term Loan from financial institutionsare secured by way of equitable mortgage on the freehold land at Kohka ward, Durg.

d. The facilities from banks are further secured by exclusive charge (First Charge) by way of equitable mortgage on the residential properties of the company at Vaishali Nagar- Bhilai, Kabeer Nagar - Raipur & the residential properties of the directors at Surya Vihar colony (phase I & II), Junwani, Bhilai, 2nd Pari Passu charge on the entire Factory Leasehold land at Bhilai, built-up area including plant & machineries on entire fixed assets (existing & proposed) of the company by way of hypothecation/mortgage and also guaranteed by two directors of the Company.

e. Other loans and advances from Banks and financial institutions are secured by Hypothecation of respective vehicles purchased under the loan.

f. Other loans bearing interest @9% from directors and body corporates are repayable after more than one year.

g. Unsecured loan from financial institutions are secured by personal guarantee of two directors of the company.

Terms & Conditions of Secured Loans

1. The cash credit facilities from Banks are secured by first pari passu charge over entire current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables of the Company and second charge over the other movable assets and immovable assets of the Company.

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company.

4. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs. 2234.01 lacs (Previous Year Rs. 2077.04 lacs.)

ii) Disputed liability of Rs. Nil (Previous Year Rs. 30.42 lacs) on account of Excise and Service Tax against which the matter has been decided in the favour of the company during the year.

iii) Disputed liability of Rs. Nil (Previous Rs. 9.49 lacs) on account of Sales Tax against which the order has been passed and the liability based on the order has been paid by the company.

iv) Disputed liability of Rs. Nil (Previous Year Rs. 149.21) on account of Income Tax against which the matter has been decided in favour of the company by the Income Tax Appeallate Tribunal during the year.

v) Puruant to the judgement of the State Industrial Court,Raipur, on the labour case relating to strike declared in the year 1990, the company has been directed to pay compensation to the retrenched workers amounting to Rs. 82.80 lacs in total, for which the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. The petition has since been heard by the Honourable High Court, Bilaspur and vide their order of April, 2016 the company is liable to pay a final compensation of Rs. 14.00 lacs. No provision has been made in the accounts for the said liability of Rs. 14.00 lacs.

vi) Etimated amount of contracts remaining to be executed on capital accounts Rs. Nil (Previous Year Rs. 86.79 lacs).

5. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Amount of Rs. 82.38 lakhs (P.Y. Rs. 78.14 lakhs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 26).

b. Defined benefit plan:

Gratuity:

The Company provides for gratuity, a defined banefit retirement plan covering eligible employees. The Gratuity plan provides a lumpsum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 to 30 days salary for each completed year of service subject to a maximum of Rs. 20 Lakhs. Vesting occurs upon completion of five continuous years of service in accordance with Indian law.

The Company makes annual contributions to LIC Group Gratuity Fund, which is funded defined benefit plan for qualifying employees.

Expected contribution to the defined plan for the next reporting period:

Notes:

(i) The actuarial valuation of plan assets and the present value of the defined obligation were carried out at 31st March, 2018. The present value of the defined benefit obligation and the related current service cost and past service cost,were measured using the projected Uniit Credit Method.

6. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company’s principal financial liabilities comprise of loans and borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include investments, other financial assets, trade and other receivables, and cash and shortterm deposits that derive directly from its operations.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Interest rate risk

- Currency risk

- Price risk

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.This note presents information about the risks associated with its financial instruments, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital.

Credit Risk

The Company is exposed to credit risk as a result of the risk of counterparties non performance or default on their obligations. The Company’s exposure to credit risk primarily relates to investments, accounts receivable and cash and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. The Company’s credit risk associated with accounts receivable is primarily related to party not able to settle their obloigation as agreed. To manage this the Company periodically reviews the finanial reliability of its customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivables.

Trade receivables

Trade receivables represent the most significant exposure to credit risk and are stated after an allowance for impairment and expected credit loss.

Bank, Cash and cash equivalents

Bank, Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to cash. These are subject to insignificant risk of change in value or credit risk.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Liquidity risk

The Company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The Company monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements. The Company has access to credit facilities and debt capital markets and monitors cash balances daily. In relation to the Company’s liquidity risk, the Company’s policy is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions as they fall due while minimizing finance costs, without incurring unacceptable losses or risking damage to the Company’s reputation.

Interest rate risk

Interest rate risk is the risk that an upward movement in the interest rate would adversley effect the borrowing cost of the company. The Company is exposed to long term and short-term borrowings, Commercial Paper Program. The Company manages interest rate risk by monitoring its mix of fixed and floating rate instruments, and taking action as necessary to maintain an appropriate balance.

The exposure of the Company’s borrowings to interest rate changes at the end of the reporting period are as follows:

FOREX EXPOSURE RISK

The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency (INR). The risk is measured through a forecast of highly foreign currency cash flows.

The company does not have any long term borrowings in foreign currency. However, short term borrowings have been hedged by the company including interest.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the hedge most of its currency exposure.

PRICE RISK:

The entity is exposed to equity price risk, which arised out from FVTOCI quoted equity shares and mutual funds. The management monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the management. The primary goal of the entity’s investment strategy is to maximize investments returns.

Sensitivity Analysis for Price Risk:

Equity Investments carried at FVTOCI are listed on the stock exchange and in case of mutual funds NAV is available. For equity investments and mutual funds classified as at FVTOCI, the impact of a 2 % in the index at the reporting date on profit & loss would have been an increase of Rs. 0.34 lacs (2016-17: Rs. 0.36 lacs); an equal change in the opposite direction would have decreased profit and loss.

7. CAPITAL MANAGEMENT

The Company’s main objectives when managing capital are to:

- ensure sufficient liquidity is available (either through cash and cash equivalents, investments or committed credit facilities) to meet the needs of the business;

- ensure compliance with covenants related to its credit facilities; and

- minimize finance costs while taking into consideration current and future industry, market and economic risks and conditions.

- safeguard its ability to continue as a going concern

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.

For the purpose of Company’s capital management, capital includes issued capital and all other equity reserves. The Company manages its capital structure in light of changes in the economic and regulatory environment and the requirements of the financial covenants.

The Company manages its capital on the basis of net debt to equity ratio which is net debt (total borrowings net of bank, cash and cash equivalents) divided by total equity.

The company has complied with the covenants of the terms of the major borrowing facilities through out the reporting period.

8. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to the short-term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2 : other techniques for which all inputs which have a ignificant effect on the recorded fair valueare observable, either directly of indirectly

Level 3 : techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

During the reporting period ending 31st March, 2018 and 31st March, 2017, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements.

9. INFORMATION ON RELATED PARTY DISCLOSURES ARE GIVEN BELOW :

i) Related Parties

a) Other Related Parties where significant influence exist

-Prabha Plantations Pvt. Ltd.

-Sim Prabha Estates & Trading Co. Pvt. Ltd.

-SEFW Projects Pvt. Ltd.

-Ssquare Corporate Consultants Pvt. Ltd.

b) Key Management Personnel

- Shri Ketan M. Shah, Chairman and Whole time Director - Shri K.R. Choksey, Independent Director

- Smt. Sangeeta K. Shah, Managing Director - Shri Rajendra A. Shah, Independent Director

- Shri Piyush P. Shah, Executive Director - Shri Champak K. Dedhia, Independent Director

- Shri G Gopalswamy, Executive Director - Mrs. Ushma N Khabaria, Independent Director

- Smt. D Meena, Company Secratery

- Shri Avinash Hariharno, CFO

c) Relatives of Key Management Personnel

- Shri Shantanu Ghosh (Brother of Smt. Sangeeta K. Shah)

- Smt Vinoda Gopalswamy (wife of Shri G Gopalswamy)

- Shri Praveen Goverdhan (son of Shri G Gopalswamy)

10. The Company gives warranty and guarantee on certain products in the nature of repairs / replacement, which fail to perform satisfactorily during the warranties period. Provision made represents the amount of the expected cost of meeting such obligatation on account of rectification/replacement. The timing of outflow is expected to be within two years. The movement of provision for warranties are as follows:

11. During the year the company has incurred ‘10.18 lacs on account of Corporate Social Responsibility Activities. According to provisions of section 135 of the Companies Act, 2013, the company is required to spent Rs. 6.28 lacs based on the average net profits of the previous three years. The break-up of amount spent during the year are as follows:

12. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2018. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006.

13. During the year the Company has received Rs. 797.48 lakhs (25% of the issue price) from the issue and allotment of 1839400 warrants (11,37,900 Warrants Dated 28/03/2018 and 7,01,500 Warrants Dated 31/03/2018 ) of Rs. 10/- each at a premium of ‘150/- to non promoters on preferential basis , in pursuance of the approval of the shareholder accorded through Postal Ballot on 24th March, 2018 from the objects of the issue stated in the explanatory statement to the Notice of Postal Ballot dated 15th February, 2018. The proceeds of convertiable warrants have been utilized for procurement of raw material and components alongwith routine expenses of working capital requirement of the company.

14. Previous year figures have been regroupped or rearranged wherever necessary.

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Mar 31, 2016

''Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company.

1) Corporate Loans from Bank (State Bank of India (SBI)) is secured by 1st Pari Passu charge by way of Hypothecation / Pledge of entire Current Assets including Raw-Materials, Stock-in-Process, Finished Goods, Stores & Spares at factory premises or such other places as may be approved by bank and assignment of Book Debts both present and future and 2nd Pari-passu charge on the entire Factory Leasehold land ay Bhilai & Urla, built-up area including plant & machineries on entire fixed assets (existing & proposed) of the company by way of hypothecation/mortgage.

2) The facility is further secured by exclusive charge (First Charge) by way of equitable mortgage on the residential properties of the company at Kabeer Nagar, Raipur & the residential properties of the directors at Surya Vihar colony (phase I & II), Junwani, Bhilai, and also guaranteed by two directors of the Company.

3) Vehicle Loans from Banks are secured by Hypothecation of respective vehicles purchased under the loan.

4) Cash credit, WCDL, Stand-by line of credit & Export Packing credit facility from Banks (State Bank of India (SBI) and Bank of Baroda (BOB)) under Cash Credit facilities are secured by 1st Pari Passu charge by way of Hypothecation / Pledge of entire Current Assets including Raw-Materials, Stock-in-Process, Finished Goods, Stores & Spares at factory premises or such other places as may be approved by bank and assignment of Book Debts both present and future and 2nd Pari-passu charge on the entire Factory Leasehold land ay Bhilai & Urla, built-up area including plant & machineries on entire fixed assets (existing & proposed) of the company by way of hypothecation/mortgage.

5) Credit facilities from State Bank of India are further secured by exclusive charge (First Charge) by way of equitable mortgage on the residential properties of the company at Kabeer Nagar, Raipur & the residential properties of the directors at Surya Vihar colony (phase I & II), Junwani, Bhilai, and also guaranteed by two directors of the Company.

Notes:

Simplex Mash is a subsidiary, registered as a limited liability partnership (LLP), in Temirtau City, Kazakhstan Also refer clause (c) of Note 32.

Penalties for late deliveries / liquidated damages in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

Pursuant to the judgment of the State Industrial Court, Raipur, on the labour case relating to strike declared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs.82.80 lacs in total, for which the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. The petition has since been heard by the Honorable High Court, Bilaspur and vide their order of April, 2016 the company is liable to pay a final compensation of Rs.14.00 lacs. No provision has been made in the accounts for the said liability of Rs.14.00 lacs.

NOTE 6 - OTHER NOTES

a) Interest on Investments under lien & in custody of Govt. Departments and Export Incentives the quantum of which is un-ascertainable with reasonable certainty, continue to be accounted for on cash basis.

b) As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c includes the amount of excise duty. Correspondingly the amount of such duty on finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head "Liability for Expenses''. As a result the effect of the same on the profit for the year is ''Nil''.

c) On 8th July, 2011, a wholly owned subsidiary ''Simplex Mash'' was registered in Temirtau city, Kazakhstan, as a Limited Liability Partnership (LLP) with an initial capital contribution of $ 1,000 (Rs.51,820/-). The company had incurred an expenditure of USD 133,232 (Rs. 72,90,526/-) during the period 2011-2013 towards Kazag Governmental expertise on further feasibility report, product designs, work permits and for other related preliminary/preoperative services for finalizing the agreement between the LLP and the government agency, which ultimately did not materialize due to its viability. Accordingly the company has decided not to proceed further on this project and the initial preliminary/ preoperative expenses have been written-off. No further transaction or activity has taken place from 2013 onwards both in the company and Simplex Mash. Accordingly neither other disclosure nor the consolidated balance sheet has been made.

d) During the year 2013-14 the company paid excess mangerial remuneration to directors amounting to Rs. 27.85 lacs. Against the application moved with the Central Government for its approval, the company has received partial approval during 2014-15 for Rs. 19.35 lacs paid to one of its director, from the appropriate authority. The company has submitted/ filed all the clarifications called for with regards to the balance amount of Rs. 8.50 lacs. The final order is awaited from the appropriate authority.

e) Pursuant to the final judgment dtd. 20.03.2013 of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the petition has been dismissed as withdrawn. Accordingly, the Company has made a provision for the balance 50% of the tax demand for the period from 1999-2000 to 2012-2013 amounting to Rs.27.07 lacs. However based on the said order of the Honorable High Court, Bilaspur the company has again filed an application dtd 06.12.2013 with the Municipal Corporation, Bhilai contesting the validity of imposition of Terminal Tax which is still pending for final review by Municipal Corporation, Bhilai. From the year 2013-14 onwards the company is providing for the full amount of Terminal Tax as applicable and depositing the same within the specified time.

f) Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognized on this account by the company.

g) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business. The Provisions for depreciation and all known liabilities are adequate and not in excess of amount considered reasonably necessary.

h) Trade Receivables and other debit and credit balances are subject to confirmation and reconciliation, if any.

i) Some of the Bank Balances are subject to reconciliation and balance confirmation.

j) Previous year''s figures have been re-arranged and/or regrouped wherever necessary to conform with the classification

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Mar 31, 2015

A) Interest on Investments under lien & in custody of Govt. Departments and Export Incentives the quantum of which is un-ascertainable with reasonable certainty, continue to be accounted for on cash basis.

b) As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c include the amount of excise duty. Correspondingly the amount of such duty on finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head 'Liability for Expenses'. As a result the effect of the same on the Profit for the year is 'Nil'.

c) On 8th July, 2011, a wholly owned subsidiary 'Simplex Mash' was registered in Temirtau city, Kazakhstan, as a Limited Liability Partnership (LLP) with an initial capital contribution of $ 1,000 (Rs.51,820/-). Further the company has also deposited by way of transfer to a/c of Simplex Mash with Halyk Bank, Kazakhastan a sum of USD 133,232 (Rs. 72,90,526/-) during the period 2011-2013 towards Kazag Governmental expertise on further feasibility report before fnalising the agreement between the LLP and the government agency. The bank balance has been included in Balance with Banks under Note 16 above. No further transaction has taken place and Simplex Mash is yet to commence it activity. Accordingly no other disclosure nor the consolidated balance sheet has been made.

d) During the year the company received the approval from Central Govt. in respect of the excess managerial remuneration paid to directors during 2012-13 amounting to Rs. 21.28 lacs . Further in respect of the application moved with the Central Government for approval of the excess managerial remuneration paid to directors during 2013-14 amounting to Rs. 27.85 lacs, the company has received partial approval for Rs. 19.35 lacs paid to one of its directors, from the appropriate authority. The company is in the process of complying with the clarifications called for with regards to the balance amount of Rs. 8.50 lacs.

e) Pursuant to the final judgement dtd. 20.03.2013 of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the petition has been dismissed as withdrawn. Accordingly, the Company has made a provision for the balance 50% of the tax demand for the period from 1999-2000 to 2012-2013 amounting to Rs.27.07 lacs. However based on the said order of the Honourable High Court, Bilaspur the company has again fled an application date 06.12.2013 with the Municipal Corporation, Bhilai contesting the validity of imposition of Terminal Tax which is still pending for fnal review by Municipal Corporation, Bhilai. From the year 2013-14 onwards the company is providing for the full amount of Terminal Tax as applicable and depositing the same within the specified time.

f) Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognised on this account by the company.

g) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The Provisions for depreciation and all known liabilities are adequate and not in excess of amount considered reasonably necessary.

h) Trade Receivables and other debit and credit balances are subject to confirmation and reconciliation, if any.

i) Some of the Bank Balances are subject to reconciliation and balance confirmation.

j) Previous year's figures have been re-arranged and/or regrouped wherever necessary to conform with the classification

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Mar 31, 2014

1. Rights of shareholders:

The Company has only one class of equity shareholders. Each holder is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval by the shareholders at the ensuing Annual General Meeting.

In the event of liquidation, the shareholders of equity shares are eligible to receive in proportion to their shareholdings, the remaining assets of the company after distribution of all preferential amounts.

2. contingent LIABILITIES : As at As at 31.03.2014 31.03.2013

a) Bank Guarantees 2,275.16 2,416.18 (Time deposits pledged with banks 187.65 226.75 agst. above)

b) Letters of Credit 2,404.39 2,509.31

c) Excise/Service Tax matters 4.10 -

d) Income Tax matters 1,331.56 979.27

e) ESI Demand 10.18 -

f) Penalties for late deliveries / liquidated damages in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

g) Pursuant to the judgement of the State Industrial Court, Raipur, on the labour case relating to strike declared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs.82.80 lacs in total. However the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. Since the management is hopeful of favourable decision, no provision has been made in the accounts for the said liability of Rs. 82.80 lacs.

3. other notes

a) Interest on Investments under lien & in custody of Govt. Departments and Export Incentives the quantum of which is un-ascertainable with reasonable certainity, continue to be accounted for on cash basis.

b) As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c include the amount of excise duty. Correspondingly the amount of such duty on finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head ''Liability for Expenses''. As a result the effect of the same on the profit for the year is ''Nil''.

c) On 8th July, 2011, a wholly owned subsidiary ''Simplex Mash'' was registered in Temirtau city, Kazakhstan, as a Limited Liability Partnership (LLP) with an initial capital contribution of $ 1,000 (Rs.51,820/-). Further the company has also deposited by way of transfer to a/c of Simplex Mash with Halyk Bank, Kazakhastan a sum of USD 133,232 (Rs. 72,90,526/-) during the period 2011-2013 towards Kazag Govermental expertise on furhter feasibility report before finalising the agreement between the LLP and the government agency. The bank balance has been included in Balance with Banks under Note 16 above. No further transation has taken place and Simplex Mash is yet to commence it activity. Accordingly no other disclosure nor the consolidated balance sheet has been made.

d) The company is moving an application with the Central Government for approval in respect of the excess mangerial remuneration paid to directors for the current year amounting to Rs. 27.85 lacs (prev. year Rs.21.28 lacs), arrived at based on the limits laid down under Schedule XIII of the Companies Act, 1956 and as specified in the terms of appointment. Further, in respect of the application filed with the Central Govt. for the year 2012-13 for approval of excess amount of Rs. 21.28 lacs, the same is still pending with the appropriate authority.

e) Pursuant to the final judgement dtd. 20.03.2013 of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the petition has been dismissed as withdrawn. Accordingly, the Company has made a provision for the balance 50% of the tax demand for the period from 1999-2000 to 2012-2013 amounting to Rs.27.07 lacs. For the current year 2013-14 the company has provided for the full amount of Terminal Tax amounting to 5.24 lacs. However based on the said order of the Honourable High Court, Bilaspur the company has again filed an application dtd 06.12.2013 with the Municipal Corporation, Bhilai contesting the validity of imposition of Terminal Tax which is still pending for final review by Municipal Corporation, Bhilai.

f) Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognised on this account by the company.

g) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The Provisions for depreciation and all known liabilities are adequate and not in excess of amount considered reasonably necessary.

h) Trade Receivables and other debit and credit balances are subject to confirmation and reconciliation, if any.

i) Some of the Bank Balances are subject to reconciliation and balance confirmation.

j) Previous years figure''s have been re-arranged and/or regrouped wherever necessary toconform with the classification.

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Mar 31, 2013

NOTE 1 - CONTINGENT LIABILITIES : As at As at 31.03.2013 31.03.2012

a) Bank Guarantees 2,416.18 2,546.08

(Time deposits pledged with banks agst. Above) 226.75 176.64

b) Letters of Credit 2,509.31 3,025.21

c) Excise/Service Tax matters - 0.80

d) Income Tax matters 979.27 158.43

f) Penalties for late deliveries / liquidated damages in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

g) Pursuant to the judgement of the State Industrial Court, Raipur, on the labour case relating to strike declared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs. 82.80 lacs in total. However the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. Since the management is hopeful of favourable decision, no provision has been made in the accounts for the said liability of Rs. 82.80 lacs.

h) Pursuant to the interim judgement of the Honourable High Court, Bilaspur in the case relating to levy of Termi- nal Tax by Municipal Corporation, Bhilai, the Company has been directed to deposit 50% of the tax demand for the period upto 31st December, 2001 subject to which the balance 50% has been stayed. Accordingly the company deposited Rs. 5.83 lacs on 14.02.02. However the said amount covers about 50% of the full liability (100%) upto 31.03.2005. The petition is yet to be heard. However from 2005-2006 onwards the company is making a provision / payment only for 50% of the tax liability for the respective year on the basis of the interim judgement. Since the management is hopeful of favourable decision no provision is being made in the ac- counts for the balance 50% of the liability.

NOTE 3 - OTHER NOTES

a) Interest on Investments under lien & in custody of Govt. Departments and Export Incentives the quantum of which is un-ascertainable with reasonable certainity, continue to be accounted for on cash basis.

b) As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Proft & Loss A/c include the amount of excise duty. Corre- spondingly the amount of such duty on fnished goods has been debited to Excise Duty Expenses in the Proft & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head "˜''Liability for Expenses''. As a result the effect of the same on the proft for the year is "˜Nil''.

c) On 8th July, 2011, a wholly owned subsidiary "˜Simplex Mash'' was registered in Temirtau city, Kazakhstan, as a Limited Liability Partnership (LLP). The initial capital contribution of $ 1,000 (Rs. 51,820/) and $ 144,840 (Rs. 79,34,971/-) other payments towards formation & other related expenditure has been made by Simplex Castings Ltd. This includes $ 128,560 (Rs. 71,43,111/-) invested during the year by way of transfer to the Bank a/c of Simplex Mash for Kazag Govermental expertise on furhter feasibility report before fnalising the agree- ment between the LLP and the government agency. No transation has taken place and Simplex Mash is yet to commence it activity. Accordingly no other disclosure nor the consolidated balance sheet has been made.

d) The company is moving an application with the Central Government for approval in respect of the excess mangerial remuneration paid to directors for the year 2012-13 amounting to Rs. 21.28 lacs, arrived at based on the limits laid down under Schedule XIII of the Companies Act, 1956 and as specifed in the terms of ap- pointment.

e) Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of as- sets, no loss has been recognised on this account by the company.

f) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The Provisions for depreciation and all known liabilities are adequate and not in excess of amount considered reasonably necessary.

g) Trade Receivables and other debit and credit balances are subject to confrmation and reconciliation, if any.

h) Some of the Bank Balances are subject to reconciliation and balance confrmation.

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Mar 31, 2012

A) Rights of shareholders:

The Company has only one class of equity shareholders. Each holder is entitled to one vote per share.

The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Direc- tors is subject to the approval by the shareholders at the ensuing Annual General Meeting.

In the event of liquidation, the shareholders of equity shares are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

1) Term Loans from Banks (State Bank of India (SBI) Bank of Baroda (BOB) & Axis Bank (Axis)) are secured by 1st Pari Passu charge by way of Equitable Mortgage of factory leasehold land located at Bhilai and Urla includ- ing hypothecation of Plant & Machineries and entire existing and proposed Fixed Assets of the company and 2nd Pari-passu charge on the entire Current Assets of the company by way of hypothecation/pledge.

2) Vehicle Loans from Banks are secured by Hypothecation of respective vehicles purchased under the loan.

1) Cash credit, WCDL, Stand-by line of credit & Export Packing credit facility from Banks (State Bank of India (SBI), Bank of Baroda (BOB) and Axis Bank) under Cash Credit facilities are secured by 1st Pari Passu charge by way of Hypothecation / Pledge of entire Current Assets including Raw-Materials, Stock-in-Pro- cess, Finished Goods, Stores & Spares at factory premises or such other places as may be approved by bank and assignment of Book Debts both present and future and 2nd Pari-passu charge on the entire Fixed Assets (existing & proposed) of the company by way of hypothecation/mortgage._

There are no Micro, Small & Medium Enerprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the information available with the Company.

* There is no amount due and outstanding to be paid to the Investor Education and Protection Fund as at 31st March, 2012. As informed by management these amounts shall be paid to the said fund as and when they be- come due.

NOTE 2 - CONTINGENT LIABILITIES : As at As at 31.03.2012 31.03.2011

a) Bank Guarantees 2,546.08 2,276.28 (Time deposits pledged with banks agst. Above) 176.64 166.58

b) Letters of Credit 3,025.21 2,072.63

c) Excise/Service Tax matters 0.80 2.52

d) Income Tax matters 158.43 477.72

f) Penalties for late deliveries / liquidated damages in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

g) Pursuant to the judgement of the State Industrial Court, Raipur, on the labour case relating to strike de- clared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs.82.80 lacs in total. However the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. Since the management is hopeful of favourable decision, no provision has been made in the accounts for the said liability of Rs. 82.80 lacs.

h) Pursuant to the interim judgement of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the Company has been directed to deposit 50% of the tax demand for the period upto 31st December, 2001 subject to which the balance 50% has been stayed. Ac- cordingly the company deposited Rs.5.83 lacs on 14.02.02. However the said amount covers about 50% of the full liability (100%) upto 31.03.2005. The petition is yet to be heard. However from 2005-2006 onwards the company is making a provision / payment only for 50% of the tax liability for the respective year on the basis of the interim judgement. Since the management is hopeful of favourable decision no provision is being made in the accounts for the balance 50% of the liability.

NOTE 3 - OTHER NOTES

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

b) Interest on Investments under lien & in custody of Govt. Departments and Export Incentives the quantum of which is un-ascertainable with reasonable certainity, continue to be accounted for on cash basis.

c) As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c include the amount of excise duty. Correspondingly the amount of such duty on finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head ''Liability for Expenses'. As a result the effect of the same on the profit for the year is 'Nil'.

d) Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognised on this account by the company.

e) On 8th July, 2011, a wholly owned subsidiary 'Simplex Mash' was registered in Temirtau city, Kazakhstan, as a Limited Liability Partnership (LLP). The initial capital contribution of $ 1,000 (Rs.51,820/) and $ 1,868 (Rs. 96,805/-) other payments towards formation & other related expenditure has been made by Simplex Castings Ltd. No further transaction has taken place between the two entities, and Simplex Mash has not commenced it activity during the year. Accordingly no other disclosure nor the consolidated balance sheet has been made.

f) In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The Provisions for depreciation and all known liabilities are adequate and not in excess of amount considered reasonably necessary.

g) Trade Receivables and other debit and credit balances are subject to confirmation and reconciliation, if any.

h) Some of the Bank Balances are subject to reconciliation and balance confirmation.

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Mar 31, 2011

1. Contingent Liabilities : (Rs. in lacs) Current Year Previous Year

a) i) Bank Guarantees 2,276.28 1728.82 (includes expired BGs-Rs. 82.57 lacs - Pre. Yr. Rs. Nil)

ii) Letters of Credit 2,072.63 886.14 Times deposits pledged with banks agst. (a-i) above 166.27 166.27

b) Excise/Service Tax matters 2.52 2.52

c) Sales Tax matters - 13.27

d) Income Tax matters 477.72 6.50

e) Penalties for late deliveries/liquidated damage in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

f) Pursuant to the judgement of the State Industrial Court, Raipur, on the labour case relating to strike declared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs.82.80 lacs in total. However the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. Since the management is hopeful of favourable decision, no provision has been made in the accounts for the said liability of Rs. 82.80 lacs.

g) Pursuant to the interim judgement of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the Company has been directed to deposit 50% of the tax demand for the period upto 31st December, 2001 subject to which the balance 50% has been stayed. Accordingly the company deposited Rs.5.83 lacs on 14.02.02. However the said amount covers about 50% of the full liability (100%) upto 31.03.2005. The petition is yet to be heard. However from 2005-2006 onwards the company is making a provision / payment only for 50% of the tax liability for the respective year on the basis of the interim judgement. Since the management is hopeful of favourable decision no provision is being made in the accounts for the balance 50% of the liability.

2. Interest on Investments under lien & custody of Government Departments and Export Incentives, the quantum of which are unascertainable with reasonable certainty, continue to be accounted for on Cash basis.

3. a) Sales include sale of scrap / surplus raw materials from manufacturing units. Sales and Job work receipts are exclusive of :

i) Sales Tax Rs. 6,62,02,706/- (Previous Year Rs. 5,21,90,286/-)

b) Sales of goods include direct & indirect exports as under;

-Direct Exports Rs. 7,57,44,878/- (Previous Year - Rs.5,02,32,936/-)

-Indirect Exports Rs. Nil (Previous Year - Rs. Nil)

4. During the year ending 31-03-2011 the company has generally worked on single shift. Hence depreciation has been provided on single shift basis.

5. Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognised on this account by the company.

6. Sundry Debtors and other debit and credit balances are subject to confirmation.

7. Previous year's figures have been re-arranged & re-grouped wherever necessary to conform to the classifications and make them comparable with those of current year.

8. Some of the Bank Balances are subject to reconciliation and balance confirmation.

9. As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c include the amount of excise duty. Correspondingly the amount of such duty on.finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/cwith an equivalent credit amount carried forward in the Balance Sheet under the head "Liability for Expenses'. As a result the effect of the same on the profit for the year is 'Nil'.

10. There are no Micro, Small & Medium Enerprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the information available with the Company.

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Mar 31, 2010

1. CONTINGENT LIABILITIES:

(Rs. in lacs) Current Year Prev. Year

a) i) Bank Guarantees 1726.82 1796.31

(includes expired BGs-Rs.Nil lacs-Pre.Yr. Rs.78.90 lacs)

ii) Letters of Credit 886,14 1135.35

Time deposits pledged with banks agst. (a-i) above 166.27 125.00

b) Excise/Service Tax matters 2,52 7.27

c) Sales Tax matters 13.27 49.78

d) Income Tax matters 6.50 7.27

e) Penalties for late deliveries / liquidated damage in respect of contracts are accounted for as and when claims are received and accepted. Aggregate amount of possible claims as at the year end is not ascertained.

f) Pursuant to the judgement of the State Industrial Court, Raipur, on ye labour case relating to strike declared in the year 1990, the Company has been directed to pay compensation to the retrenched workers amounting to Rs.82.80 lacs in total. However the company has obtained a stay against the said order from the High Court, Bilaspur vide order dated 28.11.2001, on account of a petition contending the order which is yet to be heard. Since the management is hopeful of favourable decision, no provision has been made in the accounts for the said liability of Rs. 82.80 lacs.

g) Pursuant to the interim judgement of the Honourable High Court, Bilaspur in the case relating to levy of Terminal Tax by Municipal Corporation, Bhilai, the Company has been directed to deposit 50% of the tax demand for the period upto 31st December, 2001 subject to which the balance 50% has been stayed. Accordingly the company deposited Rs.5.83 lacs on 14.02.02. However the said amount covers about 50% of the full liability (100%) upto 31.03.2005. The petition is yet to be heard. However from 2005-2006 onwards the company is making a provision / payment only for 50% of the tax liability for the respective year on the basis of the interim judgement. Since the management is hopeful of favourable decision no provision is being made in the accounts for the balance 50% of the liability.

2. Interest on Investments under lien & custody of Government Departments and Export Incentives, the quantum of which are unascertainable with reasonable certainty, continue to be accounted for on Cash basis.

3. a) Sales include sale of scrap / surplus raw materials from manufacturing units. Sales and Job work receipts are exclusive of:

Sales Tax Rs. 5,21,90,286/- (Prev.Year Rs. 5,71,16,936/-) b) Sales of goods include direct & indirect exports as under:

Direct Exports Rs. 5,02,32,936/- (Previous year - Rs. 14,67,53,945/-) Indirect Exports Rs. Nii (Previous year - Rs. 38,322/-)

4. During the year ending 31-03-2010 the company has generally worked on single shift. Hence depreciation has been provided on single shift basis.

5. Pursuant to Accounting Standard (AS) 28, as explained to us, there being no indication of impairment of assets, no loss has been recognised on this account by the company.

6. Sundry Debtors and other debit and credit balances are subject to confirmation.

7. Previous years figures have been re-arranged & re-grouped wherever necessary to conform to the classifications and make them comparable with those of current year.

8. Some of the Bank Balances are subject to reconciliation and balance confirmation.

9. Advances recoverable in cash or kind includes advances to companies / firms under the same management details of which are as follows :

10. As per the accounting policy followed by the company the valuation of Finished Goods is inclusive of excise duty. Accordingly the value of Finished Goods in Profit & Loss A/c include the amount of excise duty. Correspondingly the amount of such duty on finished goods has been debited to Excise Duty Expenses in the Profit & Loss A/c with an equivalent credit amount carried forward in the Balance Sheet under the head "Liability for Expenses. As a result the effect of the same on the profit for the year is Nil.

11. There are no Micro, Small & Medium to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the information available with the Company.