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Notes to Accounts of Suraj Ltd.

Mar 31, 2019

1 Corporate Information:

Suraj Limited ("The Company") is India''s leading Manufacturer of Stainless Steel Seamless Pipes, Tubes and "U" Tubes, Flanges & Fittings with Electro polishing having a plant at Thol, Mehsana. Our products find application in important industry segments like pharmaceuticals, dyes & pigments, Oil, Gas, Refinery, etc. The Company is a public company domiciled in India and is incorporated under the provisions of Companies Act applicable in India. Its shares are listed on Bombay Stock Exchange (BSE). The registered office of the company is located at Usmanpura, Ahmedabad. The Company caters to both domestic and international markets.

2 Basis of preparation of financial statement:

The financial statements of company have been prepared in accordance with Indian Accounting Standards ("IND AS") notified under the Companies (Indian Accounting Standards) Rules, 2015. The Financial Statements have been prepared on the historical cost convention basis except for certain financial assets and liabilities which have been measured at fair value. Refer accounting policy regarding financial instruments (financial assets and financial liabilities).

The financial statements were authorised for issue in accordance with a resolution of the Board of Directors at its meeting held on May 2, 2019.

The financial statements are presented in and all values are rounded to nearest Lakhs (Rs. 00,000), except where otherwise indicated.

Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each shareholder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

The working capital loan from Punjab National Bank Rs. 5,846.41 Lakhs, Standard Chartered Bank Rs. 1200.76 Lakhs and IDBI Bank Rs. 2300.83 Lakhs is secured by the first charge on pari pasu basis over the curent assets of the company and second charge over the fixed assets of the company and guaranted by the directors of the company 1. Mr. Ashok T. Shah, 2. Mr. Kunal T. Shah, 3. Mr. Gunvant T. Shah along with corporate guarantee of Suraj Impex Pvt. Ltd

The company does not have suppliers who are registered as micro or small enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 as at 31^st March, 2019.The information regarding Micro or small enterprises has been determined on the basis of information available with the management, which has been relied up on by the auditors.

3. DISLOSURE PURSUANT TO RELATED PARTIES

As per Indian Accounting Standard on âRelated Party Disclosuresâ (Ind AS 24), the related parties of the company are as follows:

3.1 Name of the related parties and nature of relationship Limited Liability Partnership (70% holding in LLP)

Suraj Impex LLP

Key Mangerial Personnel

Mr. Ashok Shah - Chairman & CFO

Mr. Gunvant Shah - Vice Chairman & Whole Time Director

Mr. Kunal Shah - Managing Director & CEO

Ms. Shilpa Patel - Whole Time Director

Directorship of Key Managerial Personnel in following :

Suraj Enterprise Private Limited

TBS Metal Private Limited

Non Executive Directors

Mr. Dipak Shah

Mr. Ketan Shah

Mr. Haren Desai

Mr. Bhupendrasinh Patel

3.2 Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan administered by Trust and the Company makes contributions to recognized Trust.

Note: method of accounting investment in subsidiary is at cost.

4. FINANCIAL INSTRUMENTS, RISK MANAGEMENT, OBJECTIVES AND POLICIES

4.1 Financial Risk Management

The company''s Board of Directors has overall responsibility for the establishment and oversight of the company''s risk management framework. The company''s risk management policies are established to identify and analyze the risks faced by the company, to set appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the company''s activities.

4.2 Credit Risk Management

Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends and ageing of accounts receivable. Individual risk limits are set accordingly.

4.3 Liquidity Risk

Liquidity Risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at reasonable price. The company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company''s net liquidity position through rolling forecast on the basis of expected cash flows.

4.4 Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loan borrowings.

The Company manages market risk through a treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, borrowing strategies, and ensuring compliance with market risk limits and policies.

a) Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the company''s position with regards to the interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in it total portfolio.

With all other variables held constant, the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings and excluding loans on which interest rate swaps are taken.

b)Commodity Price Risk

Principal Raw Material for company''s products is round bar Company sources its raw material requirements from domestic markets. Domestic market price generally remains in line with international market prices. Volatility in metal prices, currency fluctuation of rupee vis a vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price of scrap and pig iron. Company effectively manages availability of material as well as price volatility through well planned procurement and inventory strategy and also through approprate contracts and commitments.

c) Sensitivity Analysis

The table below summarises the impact of increase/decrease in prices of round bar by '' 0.50 per kg on profit for the period.

5. Capital management

For the purposes of the Company''s capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company''s Capital Management is to maximise shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.

The company monitors capital using gearing ratio, which is net debt divided by total equity plus debt.

6. Letters of balance confirmation have been sent to various parties and are subject to confirmation and reconciliation, if any.

7. Previous year''s figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current years figures.

8. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated in the balance sheet, if realised in the ordinary course of the business. Provision for depreciation and all known liabilities have been made in accounts.

9. In terms of IndAS 36 - Impairment of Assets issued by ICAI, the management has reviewed its fixed assets and arrived at the conclusion that impairment loss which is difference between the carrying amount and recoverable value of assets, was not material and hence no provision is required to be made.

10. EVENTS OCCURRED AFTER THE BALANCE SHEET DATE:

The company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of May 02, 2019, there were no subsequent events to be recognized or reported that are not already previously disclosed.

Mar 31, 2018

1 Corporate Information:

Suraj Limited ("The Company") is Indiaâs leading Manufaturer of Stainless Steel Seamless Pipes, Tubes and "U" Tubes, Flanges & Fittings With Electro polishing having a plant at Thol, Mehsana. Our products find application in important industry segments like pharmaceuticals, dyes & pigments, Oil, Gas, Refinery, etc. The Company is a public company domiciled in India and is incorporated under the provisions of Companies Act applicable in India. Its shares are listed on Bombay Stock Exchange (BSE). The registered office of the company is located at Usmanpura, Ahmedabad. The Company caters to both domestic and international markets.

2 Basis of preparation of financial statement:

The financial statements of company have been prepared in accordance with Indian Accounting Standards ("IND AS") notified under the Companies (Indian Accounting Standards) Rules, 2015. For all periods up to and including the year ended 31st March, 2017 the company prepared its financial statements in accordance with Accounting standards notified under Section133 of the Companies Act, 2013("the Act") read together with paragraph 7 of the Companies (Accounts) Rules, 2014 ("Indian GAAP"). These financial Statements for the year ended 31st March, 2018 are the first the company has prepared in accordance with IND AS. Refer note - 31 for the Information on how the company adopted IND AS.

The Financial Statements have been prepared on the historical cost convention basis except for certain financial assets and liabilities which have been measured at fair value. Refer accounting policy regarding financial instruments (financial assets and financial liabilities).

The financial statements were authorised for issue in accordance with a resolution of the Board of Directors at its meeting held on 26th April, 2018.

The financial statements are presented in Rs. And all values are rounded to nearest Lakhs (Rs..00,000), except where otherwise indicated.

Terms/Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs..10 per share. Each shareholder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realised value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

The working capital limit from Punjab National Bank Rs.5,674.22 Lakhs, Standard Chartered Bank Rs.1,428.93 Lakhs and IDBI Bank Rs.2,541.38 Lakhs is secured by the first charge on pari pasu basis over the curent assets of the company and second charge over the fixed assets of the company and guaranted by the directors of the company 1. Mr. Ashok T. Shah, 2. Mr. Kunal T. Shah, 3. Mr. Gunvant T. Shah along with corporate guarantee of Suraj Impex Pvt. Ltd.

The company does not have suppliers who are registered as micro or small enterprise under the Micro,Small and Medium Enterprises Development Act, 2006 as at 31st March, 2018.The information regarding Micro or small enterprises has been determined on the basis of information available with the management, which has been relied up on by the auditors.

3. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan administered by T rust and the Company makes contributions to recognised T rust.

4. FIRST TIME ADOPTION OF IND AS

Transition to Ind AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note1 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 31March 2017 and in the preparation of an opening Ind AS balance sheet at 1April 2016 (the Company''s date of transition).In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards)Rules,2006(as amended)and other relevant provisions of the Act (previous GAAP or Indian GAAP).An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position and financial performance is set out in the following tables and notes.

Exemption and exceptions availed:

Ind AS optional exemptions

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

IND AS mandatory exceptions:

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

Explanatory Notes to the transaction from previous GAAP to Ind AS:

1. Re-measurement cost of net defined liability:

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to statement of Profit and Loss. Under Ind AS, re-measurements comprising of actuarial gains and losses, the effect of the asset selling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI.

2. Excise duty:

Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under Ind AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the statement of Profit and Loss as part of expenses.

3. Other comprehensive income:

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP Statement of Profit and loss to Statement of Profit and loss as per Ind AS. Further, Indian GAAP Statement of Profit and loss is reconciled to total comprehensive income as per Ind AS.

4. Deferred tax adjustments:

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. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognized in co-relation to the underlying transaction either in retained earnings or a separate component of equity.

5. Statement of cash flow:

The transaction from Indian GAAP to Ind AS does not have material impact on the Statement of Cash Flow.

Note: method of accounting investment in subsidiary is at cost.

5. FINANCIAL INSTRUMENTS, RISK MANAGEMENT, OBJECTIVES AND POLICIES

5.1 - Financial Risk Management

The company''s Board of Directors has overall responsibility for the establishment and oversight of the company''s risk management framework. The company''s risk management policies are established to identify and analyse the risks faced by the company, to set appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the company''s activities.

5.2 - Credit Risk Management

5.3 - Liquidity Risk

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

5.4 - Market risk

a) Interest rate risk

b)Commodity Price Risk

Principal Raw Material for companyâs products is round bar Company sources its raw material requirements from domestic markets. Domestic market price generally remains in line with international market prices. Volatility in metal prices, currency fluctuation of rupee vis a vis other prominent currencies coupled with demand-supply scenario in the world market affect the effective price of scrap and pig iron. Company effectively manages availability of material as well as price volatility through well planned procurement and inventory strategy and also through approprate contracts and commitments.

c) Sensitivity Analysis

The table below summarises the impact of increase/decrease in prices of round bar by '' 0.50 per kg on profit for the period.

6 - Capital management

For the purposes of the Companyâs capital management, capital includes issued capital and all other equity reserves. The primary objective of the Companyâs Capital Management is to maximise shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirement of the financial covenants.

7. Letters of balance confirmation have been sent to various parties and are subject to confirmation and reconciliation, if any.

8. Previous year''s figures have been regrouped/re-arranged/recasted, wherever necessary, so as to make them comparable with current year''s figures.

9. In the opinion of the Board, the current assets, loans and advances are approximately of the value stated in the balance sheet, if realised in the ordinary course of the business. Provision for depreciation and all known liabilities have been made in accounts.

10. In terms of Ind as 36 - Impairment of Assets issued by ICAI, the management has reviewed its fixed assets and arrived at the conclusion that impairment loss which is difference between the carrying amount and recoverable value of assets, was not material and hence no provision is required to be made.

11. EVENTS OCCURRED AFTER THE BALANCE SHEET DATE:

The company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of April 26, 2018, there were no subsequent events to be recognized or reported that are not already previously disclosed.

Mar 31, 2017

1. The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for 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 all preferential amounts, in proportion of their shareholding.

2. Company has not bought back any equity shares during the priod of five years immediately preceeding the Balance sheet date. However the Company has alloted 1,13,39,400 equity shares as bonus shares during F.Y .2007-2008 and also alloted 22,55,000 equity shares for consideration other than cash pursuant to the scheme of amalgamation during F.Y. 2009-2010

3. Details of shares held by shareholders holding more than 5% of the aggregate shares in the Company

(The Working Capital limit from Punjab National Bank Rs. 69.48 Crores , Standard Chartered Bank Rs. 24.96 Crores and from IDBI Bank Rs. 47.56 Crore is Secured by the first charge on pari passu basis over the current assets of the company and second charge over the Fixed Assets of the company and guaranteed by the director of the company (1) Shri Ashok Kumar T. Shah (2) Shri Kunal T. Shah (3) Shri Gunvant Kumar T. Shah. further Working Capital loan from PNB,,SCB and IDBI Bank is Guaranteed by Corporate guarantee of Suraj Impex Pvt. Ltd.)

* Against the above demands, the company has paid Rs. 160.00 lacs (Previous year - Rs. 160 lacs) ** Against the above demands, the company has paid Rs. 36.82 lacs (Previous year - Rs. 36.82 lacs) *** Against the above demands, the company has paid Rs. 176.31 lacs (Previous year - Rs. NIL) The above amounts are based on the notices of demand or the assessment orders or notification by the relevant authorities, as the case may be, and the company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the company''s rights for future appeals before the Judiciary.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances)- Rs. 53,06,17,190/

5. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs 287.30 Lakh have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

6. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

7. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

8. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity ( (defined benefits plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

9. Segment Reporting :

a) Primary Segment :

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered as the only reportable business segment.

b)Secondary Segment:

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under :

Note : Since income from power generation is set off against Electricity Exp., it is not treated as a separate segment. Similarly Turnover and profit from share trading activity being less than 10% of Total Turnover and Profit, it is also not treated as separate segment.

10. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2017, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

11. Previous year figures have been regrouped and/or rearranged whenever necessary.

Mar 31, 2016

2. Company has not bought back any equity shares during the period of five years immediately preceding the Balance sheet date. However the Company has alloted 1,13,39,400 equity shares as bonus shares during F.Y .2007-2008 and also alloted 22,55,000 equity shares for consideration other than cash pursuant to the scheme of amalgamation during F.Y. 2009-2010

Nature of Security and term of Repayment for Long Term Secured borrowings

Corporate Loan from Punjab National Bank of Rs.15 Crore and Other Term Loan aggregating to Rs.37.50 Crores are Secured by equitable mortgage on Immovable Properties of the company situated at Survey No.771,772,773,774,769,779,779/A at village - Thol, Taluka Kadi Dist.Mehsanaa,& land of Wind mill at survey no.367/2 Village - Vanku,Taluka Abdasa, District Kutch,Gujarat and property of the company situated at " Suraj House",Vidhyanagar Soc,Usmanpura,Ahmedabad on first charge basis and personal guarantees of the Directors of the Company viz.Ashok T.Shah,Gunvant T.Shah,Kunal T.Shah and Corporate gurantee of M/s.Suraj Impex Pvt.Ltd.

Term Loan of Rs.37.50 Crore is repayable in 22 equal Quarterly installment of Rs.17050000/- starting from June 2010 and last installment due on September 2015 and Corporate Loan of Rs.15 Crore is repayable in 17 equal Quarterly installment of Rs.8823530/- starting from June 2011 and last installment due on Sep.2015

(The Working Capital limit from Punjab National Bank Rs.65.40 Crores, Standard Chartered Bank Rs. 23.58 Crores and from IDBI Bank Rs. 37.02Crore is Secured by the first charge on pari passu basis over the current assists of the company and second charge over the Fixed Assets of the company and guaranteed by the director of the company (1) Shri Ashok Kumar T. Shah (2) Shri Kunal T. Shah (3) Shri Gunvant Kumar T. Shah. further Working Capital loan from PNB,,SCB and IDBI Bank is Guranted by Corporate guarantee of Suraj Impex Pvt. Ltd.)

3. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances)- Rs. 12,91,145/

4. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs 321.98 Lakh have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

5. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

6. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

7. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity ( (defined benefits plans)

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

8. Segment Reporting :

a) Primary Segment :

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered as the only reportable business segment.

b)Secondary Segment:

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under :

9. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of I n d i a relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company : * Associate Companies :

1 Shri Ashok T. Shah 1 Suraj Enterprise Pvt. Ltd.

2 Shri Gunvant T. Shah 2 Suraj Impex Pvt. Ltd.

3 Shri Kunal T. Shah

4 Shri Ketan R. Shah

5 Shri Dipak H. Shah

6 Shri Haren R.Desai

7 Shri Bhupendrasinh B Patel

8 Ms. Shilpaben M Patel

b) Transactions that have taken place during the period April 1, 2014 to March 31, 2015 with related parties by the company.

10. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2016, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

11. Previous year figures have been regrouped and/or rearranged whenever necessary.

Mar 31, 2015

1. The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for 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 all preferential amounts, in proportion of their shareholding.

2. Company has not bought back any equity shares during the priod of five years immediately preceeding the Balance sheet date.However the Company has alloted 1,13,39,400 equity shares as bonus shares during F.Y .2007-2008 and also alloted 22,55,000 equity shares for consideration other than cash pursant to the scheme of amalgmation during F.Y. 2009-2010

Nature of Security and term of Repayment for Long Term Secured borrowings

Corporate Loan from Punjab National Bank of Rs.15 Crore and Other Term Loan aggregating to Rs.37.50 Crores are Secured by equitable mortgage on Immovable Properties of the company situated at Survey No.771,772,773,774,769,779,779/Aat village-Thol.Taluka Kadi Dist.Mehsana,& land of Wind mill at survey no.367/2 Village - Vanku,Taluka Abdasa, District Kutch,Gujarat and property of the commpany situated at" Suraj House",Vidhyanagar Soc,Usmanpura,Ahmedabad on first charge basis and personal guaranteesof the Directors of the Company viz.AshokT.Shah,GunvantT.Shah,Kunal T.Shah and Corporate gurantee of M/s.Suraj Impex Pvt.Ltd.

Term Loan of Rs.37.50 Crore is repayable in 22 equal Quarterly installment of Rs. 1,70,50,000/- starting from June 2010 and lastinstallment due on September 2015 and Corporate Loan of Rs.15 Crore is repayable in 17 equal Quarterly installment of Rs.88,23,530/-starting from June 2011 and last installment due on Sep.2015

(The Working Capital limit from Punjab National Bank Rs. 69.48 Crores , Standard Chartered Bank Rs. 24.96 Crores and from IDBI Bank Rs. 47.56 Crore is Secured by the first charge on pari passu basis over the current assests of the company and second charge over the Fixed Assets of the company and guarnted by the director of the company (1) Shri Ashok T. Shah (2) Shri Kunal T. Shah (3) Shri Gunvant T. Shah, further Working Capital loan from PNB,,SCB and IDBI Bank is Guranted by Corporate guamtee of Suraj Impex Pvt. Ltd.)

I. ADDITIONAL NOTES (Forming an integral part of Accounts)

1. Contingent liabilities not provided for :

(a) Demand of Rs. 2,24,379/- for the accounting year 2003-04, Demand of Rs. 1,40,975/- for the accounting year2004-05, Demand of Rs. 1,05,14,581/-for the accounting year 2008-09, Demand of Rs. 1,79,35,983/- for the accounting year 2009-10 and Rs. 1,69,11,583/-for the accounting year 2010-11 raised by Sales Tax authorities, which is disputed by the Company.

Demand of Rs. 4,57,300/- raised by Income Tax authorities, for Assessment year 2010-11 which is disputed by the Company.

Demand of Rs. 9,17,386/- raised by Income Tax authorities, for Assessment year 2001 -02 which is disputed by the Company.

Penalty of Rs. 73,62,856/- raised by Income Tax authorities, for Assessment year 2009-10 which is disputed by the Company.

For Criminal Cases filed under Factory Act against the Cimpany maximum Penalty of Rs. 5,25,000/- can be anticipated.

(b) During the year Preventing and Investigation Wing, Ahmedabad - III of Excise Department had filed a Criminal Case for Excise evasion of Rs. 3,51,62,064/- which is contested by the Company and ad-hoc amount of Rs. 85 Lacs has been deposited with Central Excise Department by the company and shown under the group "Short Term Loans & Advances" in the Balance Sheet.

(c) Since the statutory records of inventory had been seized by Excise Authority in connection with Search conducted on 06.12.2014 under the Provision of Central Excise Act, 1944, we have examined Xerox copies of such records for the period April'' 2014 to December'' 2014 for the purpose of our Audit.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL

3. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs 360.16 Lacs have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

4. Payment of Managerial Remuneration : In view of inadequacy of profit for the year 2014-15, remuneration paid by the company to the Chairman & C.F.O., Vice Chairman & Whole Time Director and Managing Director & C.E.O., is in excess of the limit prescribed u/s .197 read with Schedule - V to the Companies Act, 2013.

5. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

6. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

7. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity ((defined benefits plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

8. Segment Reporting :

a) Primary Segment :

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered as the only reportable business segment.

b) Secondary Segment:

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under:

Note : Since income from power generation is set off against Electricity Exp., it is not treated as a separate segment. Similarly Turnover and profit from share trading activity being less than 10% of Total Turnover and Profit, it is also not treated as seoarate seament.

9. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of I n d i a relating to Related Party Disclosure, information is as under: .

a) Related parties and nature of relationship

Associate Companies :

1 Suraj Enterprise Pvt. Ltd.

Directors of the Company :

1 Shri AshokT. Shah

2 Shri Gunvant T. Shah

3 Shri Kunal T. Shah

4 Shri Bipin K. Prajapati

5 Shri Ketan R. Shah

6 Shri Dipak H. Shah

7 Shri Haren R.Desai

8 Shri Bhupendrasinh B Patel

9 Shrimati Shilpaben M Patel

10. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2015, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

11. Previous year figures have been regrouped and/or rearranged whenever necessary.

Mar 31, 2014

1. Contingent liabilities not provided for :

(a) Demand of Rs. 2,24,379/- for the accounting year 2003-04, Demand of Rs. 1,40,975/- for the accounting year 2004-05, Demand of Rs. 1,05,14,581/- for the accounting year 2008-09 and Demand of Rs. 1,79,35,983/- for the accounting year 2009-10 raised by Sales Tax authorities, which is disputed by the Company.

Demand of Rs. 4,68,300/- raised by Income Tax authorities, for Assessment year 2010-11 which is disputed by the Company.

Demand of Rs. 9,17,386/- raised by Income Tax authorities, for Assessment year 2001-02 which is disputed by the Company.

Penalty of Rs. 73,62,856/- raised by Income Tax authorities, for Assessment year 2009-10 which is disputed by the Company.

(b) The Income tax authorities carried out a search and seizure operations on the premises of Company during the Financial Year. However the company has not received any order or appraisal report in connection with this search and seizure by the Income Tax Department.

(c) In connection with the Search conducted by Excise Department during the year to ascertain the facts regarding evasion of Central Excise Duty by the company, the department had insisted for reversal of Cenvat Credit of Rs.75 lacs in RG-23 Part - II on the basis of preliminary statement of the company. However, in absence of receipt of any final report for ascertainment of evasion of any excise duty by the company, the company had considered this reversal credit of Rs. 75 lacs as advance excise duty in the books of accounts and shown under the group "Short Term Loans & Advances" in the Balance Sheet.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL

3. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs 389.74 Lacs have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

4. (a) Payment of Managerial Remuneration : In view of inadequacy of profit for the year 2013-14, remuneration paid by the company to the Chief Financial Officer, Managing Director, Director & Whole Time Director is in excess of the limit prescribed u/s 198 read with Schedule - XIII to the Companies Act. 1956

(b) Since the statutory records of inventory had been seized by Excise Authority in connection with Search conducted on 06.12.2013 under the Provision of Central Excise Act, 1944, we have examined Xerox copies of such records for the period April'' 2013 to December'' 2013 for the purpose of our Audit.

5. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

6. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

7. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity ( (defined benefits plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

a) Primary Segment :

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered as the only reportable business segment.

b) Secondary Segment :

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under :

8 As required by Accounting Standard 18 issued by Institute of Chartered Accountants of India relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company : * Associate Companies :

1 Shri Ashok T. Shah 1 Suraj Enterprise Pvt. Ltd.

2 Shri Gunvant T. Shah

3 Shri Kunal T. Shah

4 Shri Bipin K. Prajapati

5 Shri Ketan R. Shah

6 Shri Dipak H. Shah

7 Shri Haren R.Desai

8 Shri Bhupendrasinh B Patel

9. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2014, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

Mar 31, 2013

1. Contingent liabilities not provided for :

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 and Demand of Rs. 1,40,975/- for the accounting year 2004-05 which is disputed by the Company.

Demand of Rs. 6,81,310/- after giving appeal effect raised by Income Tax authorities, for Assessment year 2008-09 which is disputed by the Company.

Demand of Rs. 2,29,491/- raised by Income Tax authorities, for Assessment year 2009-10 which is disputed by the Company.

Demand of Rs. 4,68,300/- raised by Income Tax authorities, for Assessment year 2010-11 which is disputed by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL

3. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs 228.35 Lacs have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

4. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

5. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

6. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Standard are given below :

a) Gratuity ( (defined benefits plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

7 As required by Accounting Standard 18 issued by Institute of Chartered Accountants of India relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company : * Associate Companies :

1 Shri Ashok Shah 1 Suraj Enterprise Pvt. Ltd.

2 Shri Gunvant Shah 2 TBS Metal Pvt. Ltd.

3 Shri Kunal Shah 3 Spice Metal Ltd.

4 Shri Bipin Prajapati

5 Shri Ketan Shah

6 Shri Dipak Shah

7 Shri Haren Desai

8 Shri Bhupendrasinh Patel

8. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2013, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

9. Previous year figures have been regrouped and/or rearranged whenever necessary.

Mar 31, 2012

1. Contingent liabilities not provided for

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs. 1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Demand of Rs. 68,35,283/- raised by Income Tax authorities, for Assessment year 2007-08 which is disputed by the Company.

Demand of Rs. 14,99,230/- after giving appeal effect raised by Income Tax authorities, for Assessment year 2008-09 which is disputed by the Company.

Demand of Rs. 2,29,491/- raised by Income Tax authorities, for Assessment year 2009-10 which is disputed by the Company.

Demand of Rs. 89,96,224/- raised by Income Tax authorities, for Assessment year 2009-10 which is disputed by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL

3. In terms of accounting policy (E) for the accounting of export incentives, estimated benefit of Rs. 295.36 Lacs have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

4. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

5. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

6. Employee Benefits

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity ( (defined benefits plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

7. Segment Reporting

a) Primary Segment

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

8. During the year Company has paid Managerial Remuneration to Managing Director and Whole-time Directors aggregating to Rs. 120.00 lacs which is in excess of the limit prescribed u/s. 198 and 309 of the Companies Act read with Schedule - XIII of the Companies Act, 1956 due to inadequacy of Profit. The company has initiated steps to obtain the approval of Shareholders in ensuing Annual General Meeting.

9. The Company has initiated the process of identifying the suppliers who qualify under the definition of micro and small enterprises, as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Since no intimation has been received from the suppliers regarding their status under the said Act as at 31st March 2012, disclosures relating to amounts unpaid as at the year end, if any, have not been furnished. In the opinion of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material.

10. Previous year comparatives

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

Signature to Notes 1 to 26

1. The Company has only one class of equity shares having a par value of Rs. 10 per share, each shareholder is eligible for 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 all preferential amounts, in proportion of their shareholding.

2. Company has not bought back any equity shares during the priod of five years immediately preceeding the Balance sheet date.However the Company has alloted 1,13,39,400 equity shares as bonus shares during F.Y .2007-2008 and also alloted 22,55,000 equity shares for consideration other than cash pursant to the scheme of amalgmation during F.Y. 2009-2010

Corporate Loan from Punjab National Bank of Rs. 15 Crore and other Term Loan aggregating to Rs. 48.5 Crores are secured by equitable mortgage on Immovable Properties of the company situated at Survey No. 771, 772, 773, 774, 779, 767, 779/A at village -Thol , Taluka Kadi Dist. Mehsana, & land of Wind mill at survey no. 367/2 Village -Vanku Taluka Abdasa, District Kutch Gujarat and Property of the company situated at "Suraj House", Vidhyanagar Soc, Usmanpura, Ahmedabad on first charge basis and personal guarantees of Directors of the Company viz. Ashok T. Shah, Kunal T. Shah & Gunvant T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd.

Term Loan of Rs. 8 Crore is repayable in 20 equal Quarterly installment of Rs. 4000000/- starting from July 2007 and last installment due on July 2012. Term Loan of Rs. 3 Crore is repayable in 20 equal Quarterly installment of Rs. 1500000/- starting from Nov 2007 and last installment due on Nov. 2012. Term Loan of Rs. 37.50 Crore is repayable in 22 equal Quarterly installment of Rs. 17050000/- starting from June 2010 and last installment due on Sep. 2015 and Corporate Loan of Rs. 15 Crore is repayable in 17 equal Quarterly installment of Rs. 8823530/- starting from June 2011 and last installment due on Sep. 2015.

Mar 31, 2011

1. Contingent liabilities not provided for :

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs. 1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Penalty Demand of Rs. 2,06,340/- raised by Income Tax authorities, for Assessment year 2001-02 which is disputed by the Company.

Demand of Rs. 92,796/- raised by Income Tax authorities, for Assessment year 2007-08 which is disputed by the Company.

Demand of Rs. 16,35,840/- raised by Income Tax authorities, for Assessment year 2008-09 which is disputed by the Company.

Demand of Rs. 30,09,730/- raised by Income Tax authorities, for Assessment year 2008-09 which is disputed by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL

3. In terms of accounting policy (J) for the accounting of export incentives, estimated benefit of Rs. 163.04 Lacs have been taken in to account under DES Scheme. Steps are being taken to import raw materials and utilize the same.

4. Securities :

a) Term Loan of Rs. 6200 Lacs availed from Punjab National Bank is secured by way of first charge over company''s block of assets including all the immovable properties, both present and future situated at Survey No. 771,772,773,774,777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana and also on land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch and first charge over Suraj House situated at Usmanpura Ahmedabad and personal guarantees of Directors of the Company viz. Ashokbhai T Shah, Kunalbhai T Shah & Gunvantbhai T Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd.

b) The working capital Limits of Rs. 73.50 Lacs from Punjab National Bank and 19.50 Lacs from State Bank of India are secured against Hypothecation of Raw Materials, Stock in process, Finished and Semi- finished Goods, Stores and spares, Book Debts, Other Current Assets of the company and personal guarantees of Directors of the Company viz. Ashokbhai T Shah, Kunalbhai T Shah & Gunvantbhai T Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. It is further secured by Second charge on all fixed assets of the company located at the factory premises at Survey No. 779/A, Thol, Taluka: Kadi Dist. Mehsana and assets of windmill at village-Vanku, Dist-Kutch.

5. Particulars of Managerial Remuneration :

As fixed monthly remuneration has been paid to the Directors'' as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

Managerial Remuneration paid to Managing Director and Whole Time Directors is Rs. 1,20,00,000 /- (previous year Rs. 1,17,00,000/-) included in salaries & wages.

6. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

7. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

8. Employee Benefits :

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Slandered are given below. :

a) Gratuity (defined benefit plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

b) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees a the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age.

9. Segment Reporting :

a) Primary Segment :

The Company''s operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

10. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of ndia relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company : * Associate Companies :

1 Shri Ashok T. Shah 1 Suraj Impex Pvt. Ltd.

2 Shri Gunvant T. Shah 2 Suraj Enterprise Pvt.Ltd.

3 Shri Kunal T. Shah 3 Suraj Retail Pvt. Ltd.

4 Shri Bipin K. Prajapati 4 Suraj Star Trading Pvt.Ltd.

5 Shri Ketan R. Shah 5 Suraj Commodities Pvt.Ltd.

6 Shri Dipak H. Shah 6 TBS Metal Ltd.

7 Shri Haren R.Desai

(b) Transactions that have taken place during the period April 1, 2010 to March 31, 2011 with related parties by the company.

11. Additional Information pursuant to the paragraphs 3, 4C and 4D of Part- II of Schedule VI of the Companies Act, 1956.

As certified by the management and relied upon by the auditors.

12. The Company has not received any information from ''Suppliers'' regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

13. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2011

14. Previous year''s figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

15. Particulars as required in part IV to schedule VI is annexed herewith.

Mar 31, 2010

1. Amalgamation Scheme :

The Scheme of Amalgamation of Suraj Limited with the Company as approved by the Honble High Court of Judicature at Ahmedabad has become effective on 25th August, 2010 upon obtaining all sanctions and approvals as required under the scheme and upon filing of certified true copies of the order with the Registrar of Companies, Gujarat. The appointed date of the Scheme is 1st April, 2009.

In terms of the Scheme,

i) The assets and liabilities, rights and obligation of erstwhile Suraj Limited have been vested with the Company w.e.f. April 1, 2009. The Scheme has, accordingly, been given effect to in these accounts. The amalgamation has been accounted for under the "Pooling of Interest Method" as prescribed under Accounting Standard - 14 issued by the Institute of Chartered Accountants of India as per Scheme of Amalgamation.

Accordingly, the assets and liabilities of the erstwhile Suraj Limited as at April 1, 2009 have been taken over at book value.

ii) The Authorised Share Capital of the Suraj Limited has been transferred to and merged with the Authorised Share Capital of the Company, without payment of any additional fee or stamp duty. Accordingly, Authorised Share Capital of the Company of Rs. 20,00,00,000(divided into 2,00,00,000 Equity Share of Rs. 10/- each) will be enhanced by an aggregate amount of Rs. 3,25,00,000 (divided into 32,50,000 Equity Shares of Rs. 10/- each.) making Authorised Share Capital at Rs. 23,25,00,000 (divided into 2,32,50,000 of Rs. 10/- each).

(iii) 22,50,000 equity shares of Rs. 10/- each fully paid are to be issued to the shareholders of Suraj Limited in the ration of 1 equity shares of the Company for every 1 share held in erstwhile Suraj Limited. Pending allotment as at 31st March, 2010, the amount has been included in Equity Share Suspense Account.

(iv) Current year result includes figures of the erstwhile Suraj Limited for the period 01.04.2009 to 31.03.2010, & therefore the current years figures are not comparable to those of previous year.

2. Contingent liabilities not provided for :

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs. 1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Penalty Demand of Rs. 2,06,340/- raised by Income Tax authorities, for Assessment year 2001-02 which is disputed by the Company.

Penalty Demand of Rs. 4,48,360/- raised by Income Tax authorities, for Assessment year 2004-05 which is disputed by the Company.

Demand of Rs. 10,48,579/- raised by Income Tax authorities, for Assessment year 2004-05 which is disputed by the Company.

Demand of Rs. 23,39,160/- raised by Income Tax authorities, for Assessment year 2007-08 which is disputed by the Company.

Demand of Rs. 21,53,467/- raised by Income Tax authorities, for Assessment year 2007-08 in respect of Transferee company which is disputed by the Company.

Demand of Rs. 9,85,448/- in respect of Service Tax for wrong availment of Service Tax credit on construction service and Rs.1,44,381/- for wrong availment and utilization of cenvat credit of capital goods.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL. (Previous year Rs. 298.48 Lacs)

4. In terms of accounting policy (J) for the accounting of export incentives, estimated benefit of Rs. 148.56 Lacs have been taken in to account under DES Schemes.Steps are being taken to import raw materials and utilize the same.

5. Securities :

a) Term Loan of Rs. 6200.00 Lacs availed from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No. 771,772,773,774,777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana and also on land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. Further the said Loan will be collaterally secured by way of second pari-passu charge on current assets of the company with SBI.

b) The working capital Limits from Punjab National Bank and State Bank of India are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares, Book Debts of the company and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. It is further secured by Second charge on block of Assets of the Company both movable and immovable except Office Building.

c) Term Loan of Rs. 2.00 Crore from AXIS Bank Ltd. is secured by way of first charge over companys office building & furniture fixture & equipment therein, both present and future situated at Suraj House Opp. Usmanpura Garden, Usmanpura, Ahmedabad - 14.

d) Other Loan is secured by hypothecation of cars and other vehicles..

6. Particulars of Managerial Remuneration :

As fixed monthly remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

Managerial Remuneration paid to Managing Director and Whole Time Directors is t 1,17,14,000 /- (previous year Rs. 1,17,14,000/-) included in salaries & wages.

7. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

8. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

9. Employee Benefits :

As per Accounting standered 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Standered are given below :

a) Gratuity (defined benefit plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

10. Segment Reporting :

a) Primary Segment :

The Companys operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

11. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of ndia relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company : * Associate Companies :

1 Shri Ashok T. Shah 1 Suraj Impex Pvt. Ltd.

2 Shri Gunvant T. Shah 2 Suraj Enterprise Limited

3 Shri Kunal T. Shah 3 Suraj Retail Pvt. Ltd.

4 Shri Bipin K. Prajapati 4 Suraj Star Trading Pvt. Ltd.

5 Shri Ketan R. Shah 5 Suraj Commodities Pvt. Ltd.

6 Shri Dipak H. Shah 6 TBS Metal Ltd.

7 Shri Haren R.Desai

(b) Transactions that have taken place during the period April 1, 2009 to March 31, 2010 with related parties by the company.

12. The Company has not received any information from Suppliers regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

13. Schedule 1 to 19 will form part of the Balance Sheet as at 31st March, 2010

14. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

15. Particulars as required in part IV to schedule VI is annexed herewith.

Mar 31, 2009

1. Provisions and Contingent Liabilities: .

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of that obligation. Contingent Liabilities which are considered significant and material by the company are disclosed in the Notes to Accounts

2. Contingent liabilities not provided for :

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs. 1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Demand of Rs. 9,11,830/- raised by Income Tax authorities, for penalty for Assessment year 2003-04 in which the department is in Appeal.

Demand of Rs. 4,48,360/- raised by Income Tax authorities, for penalty for Assessment year 2004-05 which is disputed by the Company.

Service Tax Demand of Rs. 5,06,038/- for F.Y. 2006-07 and Rs. 5,45,248/- for F.Y. 2007-08 raised by the Excise Department.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) NIL (Previous Year Rs. 298.48 lacs)

4. In terms of accounting policy (J) for the accounting of export incentives, estimated benefit of Rs 663.85 Lacs have been taken in to account under DES Schemes.Steps are being taken to import raw materials and utilize the same.

5. Securities :

a) Term Loan of Rs.6150.00 Lacs availed from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No. 771,772,773,774,777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana and also on land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. Further the said Loan will be collaterally secured by way of second pari-passu charge on current assets of the company with SBI. .

b) The working capital Limits from Punjab National Bank and State Bank of India are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares, Book Debts of the company and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. It is further secured by Second charge on block of Assets of the Company both movable and immovable except Office Building.

c) Term Loan of Rs. 2 Crore from AXIS Bank Ltd. is secured by way of first charge over companys office building & furniture fixture & equipment therein, both present and future situated at Suraj HouseOpp. Usmanpura Garden, Usmanpura, Ahmedabad - 14.

d) Other Loan is secured by hypothecation of cars and other vehicles..

6. Particulars of Managerial Remuneration :

As fixed monthly remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

Managerial Remuneration paid to Managing Director and Whole Time Directors is Rs. 1,17,00,000 /- (previous year Rs. 81,00,000/-) included in salaries & wages.

7. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

8. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

9. Employee Benefits:

As per Accounting standered 15 "Employee Benefits", the disclosure of Employee benefits as defined in the Accounting Standered are given below :

1) Gratuity (defined benefit plans)

The Company has defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

2) Leave wages (long term employment benefit)

The leave wages are payable to all eligible employees at the rate of daily salary for each day of accumulated leave on death or on resignation or upon retirement on attaining superannuation age

10. Segment Reporting : a) Primary Segment:

The Companys operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

11. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of ndia relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship * Directors of the Company :

1 Shri AshokT. Shah

2 Shri GunvantT. Shah

3 Shri KunalT. Shah

4 Shri Bipin K. Prajapati

5 Shri Ketan R. Shah

6 Shri DipakH. Shah

7 Shri Haren R.Desai

8 Shri Mahesh V. Parikh

9 Shri Nimesh N. Shah

* Associate Companies:

1 Suraj Impex Pvt. Ltd.

2 Suraj Limited

3 Suraj Enterprise Limited

4 Suraj Retail Pvt. Ltd.

5 Suraj Star Trading Pvt. Ltd.

6 Suraj Commodities Pvt. Ltd.

12. The Company has not received any information from Suppliers regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

13. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2009

14. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

15. Particulars as required in part IV to schedule VI is annexed herewith.

Mar 31, 2008

1. Provisions and Contingent Liabilities :

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of that obligation except Non provision/Non Payment of interest tax liability of Rs. 2,33,533/- for assessment year 1996-1997 and Rs. 4,23,014/-for assessment year 1997-1998. Further interest dues of Rs. 1,65,383/- under Central Excise Act, 1944 raised for earlier cenvat credit availed as per Audit report of Excise Department is not paid and provided during the year. Contingent Liabilities which are considered significant and material by the company are disclosed in the Notes to Accounts

2. Contingent liabilities not provided for :

Demand of Rs. 2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs. 1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Demand of Rs. 1,12,152/- raised by Income Tax authorities, for Assessment year 2005-06 which is disputed by the Company.

Demand of Rs. 9,11,830/- raised by Income Tax authorities, for Assessment year 2003-04 which is disputed Âby the Company.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) Rs. 298.48 Lacs. (Previous Year Rs. NIL)

4. In terms of accounting policy (K) for the accounting of export incentives, estimated benefit of Rs 240 Lacs have been taken in to account under DES Schemes.Steps are being taken to import raw materials and utilize the same.

5. Securities :

a) Term Loan of Rs.2400.00 Lacs availed from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No. 771,772,773,774,777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana and also land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch.

b) The working capital Limits from Punjab National Bank and State Bank of India are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares, Book Debts of the company and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ud. It is further secured by Second charge on block of Assets of the Company both movable and immovable except Office Building.

c) Term Loan of Rs. 2 Crore from U.T.I. Bank Ltd. is secured by way of first charge over companys office building & furniture fixture & equipment therein, both present and future situated at Suraj House Opp. Usmanpura Garden, Usmanpura, Ahmedabad - 13.

d) Other Loan is secured by hypothecation of cars and other vehicles.

6. Particulars of Managerial Remuneration :

As fixed monthly remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

Managerial Remuneration paid to C.E.O. Managing Director and Whole Time Directors is Rs. 81,00,000 /- (previous year Rs. 55,30,500/-) included in salaries, wages & bonus.

7. There are no employee receiving remuneration in excess of Rs. 24,00,000/- p.a., when employed through out the year or Rs. 2,00,000/- p.m. when employed for a part of the year.

8. Loss on sale of Investment:

The company has de-invested whole of its investment in its subsidiary company during the year, representing 49400 equity shares of Rs.10 each fully paid up of the said subsidiary costing Rs.4.94 Lakhs, in favour of Rs. 0.15 Lacs for Suraj Retail Pvt. Ltd., Rs. 0.15 Lacs for Suraj Commodities Pvt. Ltd., & Rs. 0.19 Lacs for Suraj Star Trading Pvt. Ltd., an associate of the company as per the definition of Accounting Standard-18.The loss arising there from amounting to Rs.4.45 Lakhs is taken to the Profit and Loss Account under "Loss on Sale of Investment".

9. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and provision for all known and determined liabilities (except wherever otherwise stated)are adequate and not in excess of the amount reasonably necessary.

10. Balances under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation and reconciliation with the respective parties/ concerns. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year of such confirmation / reconciliation.

11. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of ndia relating to Related Party Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company :

1 Shri Ashok T. Shah

2 Shri GunvantT. Shah

3 Shri Kunal T. Shah

4 Shri Bipin K. Prajapati

5 Shri Ketan R. Shah

6 Shri Dipak H. Shah

7 Shri Mahesh V. Parikh

a Shri Nimesh M. Shah

Associate Companies : Suraj Impex Pvt. Ltd. Suraj Limited Suraj Enterprise Limited Suraj Retail Pvt. Ltd. Suraj Star Trading Pvt. Ltd. Suraj Commodities Pvt. Ltd. Kamla Mension Pvt. Ltd.

12. A) The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/Small Scale Industrial Undertaking. Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

B) The Company has not received any information from Suppliers regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

13. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2008

14. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

Mar 31, 2007

1. Contingent liabilities not provided for :

Demand of Rs.2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

Demand of Rs.1,40,975/- raised by Sales Tax authorities, for the accounting year 2004-05 which is disputed by the Company.

Demand of Rs. 8,37,662/- raised by Income Tax authorities, for Assessment year 2004-05 which is disputed by the Company.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for in the Accounts (net of advances) Rs. Nil (Previous Year Rs. 145.33 Lacs)

3. In terms of accounting policy (K) for the accounting of export incentives, estimated benefit of Rs 100.78 Lacs have been taken in to account under DES Schemes. Steps are being taken to import raw materials and utilise the same.

The company has received an export incentive in the nature of claim of DFCE (Duty Free Credit Entitlement) for the status holders for total value of Rs. 1,60,56,920/- for F.Y. 2003-04 and export incentive in the nature of target plus scheme of Rs. 2,15,01,838/- for F.Y. 2004-05 during the year. Further allthough the claim is with regard to incremental export made during the earlier years, it has been accounted for in the F.Y. 2006- 07 since the same is received during this fiscal year.

4. Securities :

a) Term Loan of Rs.2400.00 Lacs availed from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No. 771,772,773,774,777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana. It is further secured by equitable mortgage on the office premises of the company at Office No. 1,2,3 & 4 on 6the floor Kalpana Complex, Nr. Memnagar Fire Station, Navrangpura, Ahmedabad. And also land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist. Kutch.

b) The working capital Limits from Punjab National Bank are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares, Book Debts of the company and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. It is further secured by First charge on block of Assets of the Company both movable and immovable.

c) Term Loan of Rs. 2 Crore from U.T.I. Bank Ltd. is secured by way of first charge over companys office building & furniture fixture & equipment therein, both present and future situated at Suraj House Opp. Usmanpura Garden, Usmanpura, Ahmedabad - 13

d) Other Loan is secured by hypothecation of cars and other vehicles..

5. Particulars of Managerial Remuneration :

As fixed monthly remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

Managerial Remuneration paid to C.E.O.,Managing Director and Whole Time Directors is Rs. 55,30,500 /- (previous year Rs. 34,37,700/-) included in salaries, wages & bonus.

6. There are no employee receiving remuneration in excess of Rs. 24,00,000/- p.a., when employed through out the year or Rs. 2,00,000/- p.m. when employed for a part of the year.

7. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business.

8. Balance under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation by respective parties. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year in which the same are finally settled.

9 A) The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/Small Scale Industrial Undertaking. Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

B) Necessary disclosers required under The Micro, Small & Medium Enterprises Development Act, 2006, can only be considered once relevant information to identify the suppliers who are covered under the said Act are received from such parties/suppliers.

10. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2007.

11. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

12. Particulars as required in part IV to schedule VI is annexed herewith.

Mar 31, 2006

1. Provisions and Contingent Liabilities :

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of that obligation except Non provision/Non Payment of interest tax liability of Rs.2,33,533/- for assessment year 1996-1997 and Rs.4,23,014/- for assessment year 1997-1998. Contingent Liabities which are considered significant and material by the company are disclosed in the Notes to Accounts.

3. Contingent liabilities not provided for :

Demand of Rs.2,24,379/- raised by Sales Tax authorities, for the accounting year 2003-04 which is disputed by the Company.

4. Estimated amount of contracts remaining to be executed on capita] account and not provided for in the Accounts (net of advances) Rs.145.33 Lacs. (Previous Year Rs, 32.01 Lacs)

5. In terms of accounting policy (i) for the accounting of export incentives, estimated benefit of Rs. 178.54 Lacs have been taken in to account under DES Schemes. Steps are being taken to import raw materials and utilise the same.

6. Securities :

a) Term Loan of Rs. 2400.00 Lacs availed from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No. 771, 772, 773, 774, 777 & 779/A, at Village Thol, Tal. Kadi, Dist. Mehsana. It is further secured by equitable mortgage on the office premises of the company at Office No. 1, 2, 3 & 4 on 6th floor Kalpana Complex, Nr. Memnagar Fire Station, Navrangpura, Ahmedabad.

And also land situated at Survey No. 767/2 at Village Vanku Moti Sondholli Dist Kutch.

b) The working capital Limits fro Punjab National Bank are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares, Book Debts of the company and personal guarantees of promoter Directors of the Company viz. Ashokbhai T. Shah, Kunalbhai T. Shah & Gunvantbhai T. Shah and corporate guarantee of M/s. Suraj Impex Pvt. Ltd. It is further secured by First charge on block of Assets of the Company both movable and immovable.

c) Term Loan of Rs. 2 Crore from U.T.I. Bank Ltd. is secured by way of first charge over companys office building & furniture fixture & equipment therein, both present and future situated at Suraj House Opp. Usmanpura Garden, Usmanpura, Ahmedabad-13.

d) Other Loan is secured by hypothecation of cars and other vehicles

7. Particulars of Managerial Remuneration :

a) As fixed monthly remuneration has been paid to the Directors as per Schedule XIII of the Companies Act, 1956, the company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

b) Managerial Remuneration paid to Managing Director and Whole Time Directors is Rs. 34,37,700/- (previous year Rs. 18,07,500/-) included in salaries, wages & bonus.

8. There is no employee receiving remuneration in excess of Rs. 24,00,000/- p.a., when employed through out the year or Rs. 2,00,000/- p.m. when employed for a part of the year.

9. Amount Paid/Payable to Auditors :

Sl Particulars 2005-2006 2004-2005

a) Audit Fees 1,75,000* 1,60.000*

b) Tax Audit Fees 70,000* 44,000*

c) For other works 96,000* 96,000*

Total 3,42,600 3,00,000

[II

10. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business.

11. Balance under Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation by respective parties. Necessary adjustment if any, thereon having an importance of revenue nature, will be made in the year in which the same are finally settled.

12. Segment Reporting :

a) Primary Segment :

The Companys operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

b) Secondary Segment

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under :

(Rs. in Lacs) Sales 2005-06 2004-05

* Domestic Sales 3007.83 3533.62

* Export Sales 8646.75 6489.45

Total 11,654.58 10,023.07

13. Earning per share (EPS) :

Sr. Particulars 2005-2006 2004-2005 No.

a) Weight average number of Shares at the beginning and end of the year 51,54,700 51,54,700

b) Net Profit after tax available for Equity Shareholders (Rupees) 2,86,48,866 1,92,30,805

c) Basic and Diluted Earning per Share (Rupees) 5,56 3.73

14. In compliance with the Accounting Standard 22 relating to "Accounting for Taxes on Income" issued by the institute of Chartered Accounting of India, the Company has recognized the deferred tax assets/liability in the accounts of current year as under :-

Particulars Balance as Adjusted Balance Carried on 01-04-05 During the year as on 31-03-06 A) Deferred Tax Liabilities:

On account of timing difference in Depreciation 136391.00 13459096.00 13595487.00

Net Deferred Tax Liability 136391.00 13459096.00 13595487.00

17. Details of Imported and Indigenous Materials Consumed : (Qty. in M.T.)

Particulars 2005-2006 2004-2005 Raw Materials Qty. % of Total Qty. % of Total Qty. Consumed Qty. Consumed

* Indigenous 1482.848 28.10 1362.305 23.89

* Imported 3794.053 71.90 4340.703 76.11

Total 5276.901 100% 5703.008 100%

18.Value of Imports on C.I.F. Basis

(Amount in Rs.)

Particulars 2005-2006 2004-2005

Raw Material 72,22,69,290.00 63,23,06,756.00

Total 72,22,69,290.00 63,23,06,756.00

19. Expenditure in Foreign Exchange (Amount in Rs)

Particulars 2005-2006 2004-2005

a) Traveling Expenses 13,40,573.80 11,94,938.00

b) Sales Commission 94,39,562.00 64,23,807.00

c) Advertisement 6,16,927.00 3,11,800,00

d) Business Development 10,34,807,00 2,03,804.00

Total 1,24,31,869.80 81,34.349,00

20. Earning in Foreign Exchange

Particulars 2005-2006 2004-2005

Export Sales [F.O.B. Value Rs.] 868492364.70 632137865

21. The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/Small Scale Industrial Undertaking. Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

22. Schedule 1 to 17 will form part of Balance Sheet as at 31st March, 2006.

23. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

Mar 31, 2005

1. Provisions and Contingent Liabilities :

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made, when there is a possible obligation or present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likehood of outflow of resources is remote, no provisions or disclosure is made.

2. Contingent liabilities not provided for :

Demand of Rs.5,69,805/- raised by income-tax authorities, which is disputed by the Company.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 32.01 Lacs. (Previous Year Rs. NIL)

5. In terms of accounting policy (J) for the accounting of export incentives, estimated benefit of Rs 126.53 Lacs have been taken in to account under DEC Schemes. Steps are being taken to import raw materials and utilise the same.

6. Securities :

a) Term Loan from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No-779/A, at Village Thol, Tal. Kadi, Dist. Mehsana.

b) Corporate loan from Punjab National Bank is secured by way of first charge over companys block of assets including all the immovable properties, both present and future situated at Survey No-779/A, at Village Thol, Tal. Kadi, Dist. Mehsana. It is further secured by equitable mortgage on the office premises of the company at Office No. 1,2,3 & 4 on 6th floor Kalpana Complex, Nr. Memnagar Fire station, Navrangpura, Ahmedabad.

c) The working capital Loans from Banks are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Stores and spares. Book Debts and persona! guarantees of promoter Directors of the Company and corporate guranteeof M/s. Suraj Chemtech Ltd. ft is further secured by First charge on block of Assets of the Company and Equitable mortgage of office Building..

d) Other Loan is secured by hypothecation of cars and other vehicles..

7. Particulars of Managerial Remuneration :

a) As fixed monthly remuneration has been paid to the Directors as per ScheduleXllI of the Companies Act. 1956, The company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

b) Managerial Remuneration paid to Managing Director and Whole Time Directors is Rs. 18,07,500. (previous year Rs.18,07,500/-) included in salaries, wages and bonus.

8. There is no employee receiving remuneration in excess of Rs. 24,00,000/- p.a., when employed through out the year or Rs. 2,00,000/- p.m. when employed for a part of the year.

9. Amount Paid/Payable to Auditors :

Sl Particulars 2004-2005 2003-2004

a) Audit Fees 1,60,000* 1,20,000

b) Tax Audit Fees 44,000* 30,000*

c) For other works 96,000* 78,000*

Total 3,00,000 2,28,000

* Excludes Service Tax

10. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business.

11. a) The account of Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation by respective parties. Necessary adjustment if any, thereon having an importance of revenue nature will be made in the year in which the same are finally settled.

b) Sundry Debtors outstanding over six months include amount of Rs. 19.08 lacs due for more than three years on account of pending settlements with the customers in respect of reconciliations of accounts legal cases, disputes on account of liquidated damages and technical rejection etc. Adjustments if any will be dealt with in the books of account upon settlement of the matters.

12. Segment Reporting :

a) Primary Segment :

The Companys operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

b) Secondary Segment :

Secondary Segment is geographical, which is determined on the basis of location of the customer is classified as either domestic or overseas and the same is as under :

(Rs. in Lacs) Sales 2004-05 2003-04

* Domestic Sales 3533.62 3117.19

Export Sales 6489.45 3944.71

* Trade Sales - 2.19

Total 10,023.07 7064.09

13. Earning per share (EPS) :

Sl. Particulars 2004-2005 2003-2004 No.

a) Weight average number of Shares at the beginning and end of the year 51,54,700 51,54,700

b) Net Profit after tax available for Equity Shareholders (Rupees) 1,92,30,805 1,05,94,741

c) Basic and Diluted Earning per Share (Rupees) 3.73 2.06

14. In compliance with the Accounting Standard 22 relating to "Accounting for Taxes on Income" issued by the institute of Chartered Accounting of India, the Company has recognized the deferred tax assets/liability in the accounts of current year as under :-

Particulars Balance as Adjusted Balance Carried on 01-04-04 During the year as on 31-03-05

A) Deferred Tax Liabilities:

On account of timing difference in Depreciation and preliminary Exp. 545131.00 - 545131.00

Total Deferred Tax Liability 545131.00 - 545131.00

B) Deferred Tax Assets :

On account of timing difference in Depreciation - 408740.00

Total Deferred Tax Assets 408740.00 - 408740.00

Net Deferred Tax Liability 545131.00 408740.00 136391.00

15. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of India relating to Related Parties Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company :

1 Shri Ashok T. Shah

2 Shri Gunvant T. Shah

3 Shri Kunal T. Shah

4 Shri Dinesh J. Shah

5 Shri Dipak H. Shah

6 Shri Ganpatbhai J. Rathod

7 Shri Mahesh V. Parikh

* Associate Companies, Firms, relatives of Directors :

1 Suraj Impe-x Pvt. Ltd.

18. Value of Imports on C.I. F. Basis (Amount in Rs.)

Particulars 2004-2005 2003-2004

Raw Material 632306756.00 276400528.00

Total 6323066756.00 276400528.00

19.Expenditure in Foreign Exchange (Amount in Rs.)

Particulars 2004-2005 2003-2004

a) Traveling Expenses 11,94,9138,00 671497.00

b) Sales Commission 64,23,807,00 2787706.00

c) Advertisement 3,11,800,00

d) Business Development 2,03,804,00 1431007.00

e) Retainership Exps. - 18200.00

Total 81,34,349,00 4908410.00

20. Earning in Foreign Exchange

Particulars 2004-2005 2003-2004

Export Sales [F.O.B. Value Rs.] 632137865 382768318

21. The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/Small Scale Industrial Undertaking, Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

22. Schedule 1 to 16 will form part of Annual Accounts as at 31st March, 2005.

23. Previous years figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

24. Particulars as required in part IV to schedule VI is annexed herewith.

Mar 31, 2003

1. Sales tax collected on sales and eligible under the said scheme is accounted separately and shown in the group of current liabilities.

2. This Balance sheet includes transaction of its Mumbai Branch.

3. Contingent Liabilities/Benefits :

Contingent liabilities are disclosed by way of notes to the accounts. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the year end till the finalization of accounts and have material effect on the position stated in the accounts.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. NIL (Previous Year Rs. NIL)

5. Company has temporarily advanced to M/s. Suraj Impex P..Ltd. without complying the provisions of section 295 of the companies Act.

6. In terms of accounting policy (J) tor the accounting of export incentives, estimated benefit of Rs 319.25 Lacs have been taken in to account under DEEC Schemes. Steps are being taken to import raw materials and utilise the same.

7. Securities

a) Term Loan from G.I.I.C. is secured by way of mortgage and charge of all the immovable properties, both present and future situated at Survey No. 779/A at Village Thol. Tal. Kadi, Dist. Mehsana and are further secured by Hypothecation of all the borrower's movables (Save and except Book Debts) including movable machinery, movable Spares, tools, accessories subject to prior charges created in favour of Company's Bankers on specified movables for securing borrowing for working capital requirement.

b) The working capital Loans from Banks are secured against Hypothecation of Raw Materials, Finished and Semi-finished Goods, Consumables Stores, Book Debts and personal guarantees of Directors of the Company. It is further secured by second charge on the factory land and building and other movable and immovable properties of the company. It is also secured by mortgage of title deeds of office premises and lien on L.C. margin money.

c) Other Loan is secured by hypothecation of car.

8. Particulars of Managerial remuneration

a) As fixed monthly remuneration has been paid to the Director's as per Schedule XIII of the Companies Act, 1956. The company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

b) Managerial Remuneration paid to Managing Director and Whole Time Directors is Rs. 7,63,500/- (previous year Rs. 5,40,000/-) included in salaries, wages and bonus.

9. There is no employee receiving remuneration in excess of Rs. 24,00,OOO/-p.a., when employed through out the year or Rs. 2,00.OOO/- p.m. when employed for a part of the year.

10. In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business. The provisions for all known liabilities adequate and not in excess of the amount reasonably necessary.-

11. The account of Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation by respective parties. Necessary adjustment if any, in the accounts will be made in the year in which discrepancy if any may be noticed.

12. Segment Reporting

a) Primary Segment :

The Company's operations predominantly relates to a single segment namely "Stainless Steel Tubes & Pipes" which as per Accounting Standards 17 is considered the only reportable business segment.

b) Secondary Segment :

Secondary Segment is geographical, which is determined on the basis of location of the customer, is classified as either domestic or overseas and the same is as under :

13. As required by Accounting Standard 18 issued by Institute of Chartered Accountants of India relating to Related Parties Disclosure, information is as under:

a) Related parties and nature of relationship

* Directors of the Company :

1 Shri Ashok T. Shah

2 Shri Gunvant T. Shah

3 Shri Kunal T. Shah

4 Shri Dinesh S. Shah

5 Shri Dipak H. Shah

6 Shri Ganpat J. Rathod

Associate Companies, Firms, relatives of Directors

1 Suraj Chemtech Ltd.

2 Suraj Impex Pvt. Ltd,

14. The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/ Small Scale Industrial Undertaking. Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

15. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2003.

16. Previous year's figures have been regrouped/reclassified and/or rearranged wherever considered necessary.

Mar 31, 2002

1. This Balance sheet includes transaction of its Mumbai Branch. All balances of its propertory firm M/s . Suraj Metal Depo are transferred in company's books to their respective accounts as on 1/4/2001.

2. Contingent Liabilities/Benefits :

Contingent liabilities are disclosed by way of notes to the accounts. Provision is made in the accounts in respect of those liabilities which are likely to materialise after the year end till the finalisation of accounts and have material effect on the position stated in the accounts.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. NIL (Previous Year Rs. NIL)

3. Company has temporarily advanced to M/s. Suraj Impex P.Ltd. without complying the provisions of section 295 of the companies Act.

4. In terms of accounting policy (J) for the accounting of export incentives, estimated benefit of Rs 401.85 Lacs have been taken in to account under DEEC & DEPB Schemes. Steps are being taken to import raw/materials and utilise the same.

5. Securities :

a) Term Loan from G.I.I.C. is secured by way of mortgage and charge of all the immovable properties, both present and future and are further secured by Hypothecation of all the borrower's movables (Save and except Book Debts) including movable machinery, movable Spares, tools, accessories subject to prior charges created in favour of Company's Bankers on specified movables for securing borrowing for working capital requirement.

b) The working capital Loans from Banks are secured against Hypothecation of Raw Materials, Finished and Semi- finished Goods, Consumables Stores, Book Debts and personal guarantees of Directors of the Company. It is further secured by second charge on the factory land and building and other movable and immovable properties of the company. It is also secured by mortgage of title deeds of office premises and lien on L.C. margin money.

6. Particulars of Managerial remuneration :

a) As fixed monthly remuneration has been paid to the Directors' as per Schedule XIII of the Companies Act, 1956. The company has not computed net profit for the purpose of Managerial remuneration under section 349 of the Companies Act, 1956.

b) Managerial Remuneration paid as Salary to Managing Director and Whole Time Director Rs.5,40,000/- (2001 - Rs. 5,40,000/-) included in personnel expenses.

7. There is no employee receiving remuneration in excess of Rs. 24,00,000/- p.a., when employed through out the year or Rs, 2,00,000/- p.m. when employed for a part of the year.

8. In the opinion of Board of Directors, value of current assets, loans and advances on realisation in the ordinary course of business will not be less than the amount at which these are stated in the Balance Sheet. The provisions for all known liabilities is adequate and not in excess of the amount reasonably necessary.

9. Sundry Debtors, Sundry Creditors, Loans & Advances are subject to confirmation by respective parties. Necessary adjustment in accounts will be made in the year in which discrepancy if any may be noticed.

10. The company does not possess information as to which of its suppliers are Ancillary Industrial Undertaking/ Small Scale Industrial Undertaking. Consequently the liability, if any, of interest which would be payable under the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, can not be ascertained. However, the Company has not received any claims in respect of interest.

11. Schedule 1 to 18 will form part of the Balance Sheet as at 31st March, 2002.

12. Previous year's figures have been regrouped/reclassified and/or rearranged wherever considered necessary,

13. Particulars as required in part IV to schedule VI is annexed herewith. Signature to Schedule 1 to 18

Mar 31, 1999

1. SURAJ STAINLESS LIMITED (SSL) has been amalgamated with the Company on and from March 31, 1999 with effect from April 1, 1998 in terms of the scheme of Amalgamation ("Scheme") sanctioned by the High Court of Gujarat vide their Order dated 28-04-1999, certified true copies thereof received by us on 22nd June, 1999. Accordingly, the undertaking and the entire business, all the properties, assets, rights and powers of SSL has been transferred to and vested in the Company and all the debts, liabilities, duties and obligations of SSL has been transferred to the Company.

Pending completion of the relevant formalities of transfer of certain assets and liabilities acquired pursuant to the Scheme, such assets and liabilities remain in the name of SSL. As the transferor Company was the Subsidiary Company of the Company and the Company holds 99.97% of the total equity of the transferer company, therefore, as per para 10 of the Scheme of Amalgamation sanctioned by the High Court of Gujarat, the said investment is deemed to have been automatically cancelled and be of no effect on and from such record date and the remaining equity are to be alloted to the shareholders of the transferor company in the ratio of 1:1 of the Company. the remaining equity are to be alloted to the shareholders of amalgamated company in the ratio of 1:1.

Subsequently, as per para no. 17 of the Scheme of Amalgamation, the name of the Company is changed to SURAJ STAINLESS LIMITED, as certified by the Registrar of Companies, Gujarat vide their letter dated 24th August, 1999.

2. This is a consolidated Balance Sheet of Amalgamated Company (SSL) and Amalgamatee Company (SFL).

3. In the opinion of Board of Directors, value of current assets, loans and advances on realisation in the ordinary course of business will not be less than the amount at which these are stated in the Balance Sheet.

4. Adequate provisions have been made for all known liabilities and these are not in excess of the amount reasonably necessary.

5. Investment amounting Rs. 59.32 Lacs held by the Company have been pledged with the GIIC for the security of term loan sanctioned by the GIIC to the transferor company.

6. During the year the Company (SFL) has changed its policy of charging depreciation from written down value method to straight line method with retrospective effect from the incorporation of the company on the basis of available data & book records. The effect of such change has been shown as prior period adjustment of depreciation below the line in the Profit & Loss Account, amounting Rs. 5,12,833/=, by which balance of Profit & Loss Account has been increased and thus the Block & Fixed Assets has also improved to that extent.

Had the depreciation been charged by W.D.V. method, the amount of depreciation would have been Rs. 3,37,643/=. As a result of this change the current year's losses has been reduced by Rs. 1,23,910/=.

7. The company has entered into a lease aggrement with Suraj Chemtech Limited for the Lease of Evaporator and Incinerator which has been terminated on 30th June 1998. As per the said agreement no lease rent is receivable by the company upto the date of termination from the date of the commencement of the current financial year thus for the said period of lease no income as well as depreciation has been considered.

8. Corresponding figures of the previous year have been regrouped and/or re-arranged wherever necessary. Previous year figures are not comparable with current year as current year includes all asset, liabilities, income and expenditure of the amalgamated company.

9. Contingent liability in respect of Guarantees issued Rs. 1,56,586/= (Previous year Rs. NIL).

10. The Company is in the process of compiling information regarding the status of suppliers falling under the category of Small Scale and/or Ancillary Industries. In the absence of the necessary data, the required information including their dues/overdues has not been furnished.

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