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Notes to Accounts of Talbros Automotive Components Ltd.

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

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

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

During the year ended 31^s1 March 2022, the amount of dividend per share distributed to equity holders was I NR ^2.00i- per share. For the Financial year ended on 31^st March 2023, the directors have proposed a dividend to Equity Shareholders at 20%, being ?2.00/- per share.

As per the records of the company, including its register of shareholders/ members and other declarations received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares

*The facilities from banks are secured byway of hypothecation of stock in trade and book debts and further secured by way of a second charge on immovable properties of the company. The facilities of working capital from banks are further secured by personal guarantees of President and COO of the company.

*The above information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information provided by the parties to the Company.

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The scheme is funded.

The following tables summarize the components of net benefit expense recognized in the Statement of Profit & Loss, the funded Status and amounts recognized in the balance sheet forthe respective plans (As per Actuarial Valuation as on 31st March, 2023)

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

In the opinion of the management, the value on realization of current assets, loans & advances in the ordinary 47 course of business would not be less than the amount at which they are stated in the Balance Sheet and provisions for all known liabilities has been made.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2023

TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

SEGMENT REPORTING

The entire operations of the company relates to only one operating Segment, VIZ. Automobile Components. Hence, as per Ind AS-108 issued by ICAI, there is no reportable Segment

ASSETS TAKEN ON OPERATING LEASE AS PER IND AS-17

(a) The Company has during the year taken assets on non-cancellable operating lease.

Minimum lease payments for Company charged to Profit & Loss account during the year is ?112.71 Lakhs

(b) Future commitments in respect of mimimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

		As at 31st	As at 31st
		March 2023	March 2022
39	CONTINGENT LIABILITIES AND COMMITMENTS CONTINGENT LIABILITIES
a)	Guarantees	8.00	8.00
b)	Bills discounted from Kotak Mahindra Bank Ltd with recourse, not due for payment	925.00	973.96
	Estimated amount of contracts remaining to be executed on capital account
^CJ	and not provided
	Total value of Contracts	1,821.56	893.54
	Contracts Remaining to be executed	1,462.42	632.87
40	LICENSED AND INSTALLED CAPACITY	Axles Shafts (Nos)	Axles Shafts (Nos)
	Licensed Capacity	N.A.	N.A.
	Installed Capacity Per Annum ( As certified by the Management and relied upon by the Auditors being a technical matter)	2700000	2400000
	Actual Production	2431924	1955503

43.1 LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

a) Mortality Table : LIC 1994-96 Ultimate

b) Suitable adjustment in respect of withdrawals and other Restrictive provisions.

c) Future ( expected ) payment based on terminals salary.

EMPLOYEE BENEFITS Defined Contribution Plans: -

The Company has recognised I NR NIL as expenses in the Statement of Profit and loss account for the year,

(P.Y. INR 3,96,056/-)

Defined Benefit Plans: -

The scheme is funded.

Explanation for Variance Exceeding 25%

a) There has been improvement in Trade Receivable Turnover Ratio on account of faster recovery of receivables

,. Improvement in Trade paypables Turnover ratio as the company has been able to pay off its suppliers on time on '' account of improved cash flow.

Previous year figures have been regrouped/ reclassified wherever found necessary to correspond with the current year classification

.. All amounts in the financial statements are rounded off to Lakhs rounded off to two digits, except as otherwise stated.

50 Current year figures are shown in bold prints

Mar 31, 2018

1. RELATED PARTY DISCLOSURE AS PER (IND AS-24) ISSUED BY ICAI:-

2. KEY MANAGERIAL PERSONNEL AND THEIR RELATIVES

Mr. Tarun Talwar C.O.O

Mr. Sanjay Sharma Director (upto November 2017)

Mr. Vijay Kumar Sharma Director

Mr. Ankush Jindal Company Secretary

Mr. Kanwar Pal Pawar CFO

Mr. Tarun Talwar (HUF) HUF of Mr. Tarun Talwar

Mr. Rajesh Talwar Father of Tarun Talwar

Ms. Gita Talwar Mother of Mr. Tarun Talwar

Ms. Sameena Talwar Sister of Mr. Tarun Talwar

Ms. Shweta Talwar Wife of Mr. Tarun Talwar

3. FIRST TIME ADOPTION OF IND AS

These are the Company''s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 and note 3 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements as at and for the year ended 31 March 2016 and in the preparation of the opening Ind AS balance sheet at 1st April 2015 (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 section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âprevious GAAP'' or âIndian GAAP''). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following notes and tables :

a) Note on Adjustments

i) Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a statement of profit and loss as âother comprehensive income'' includes remeasurement of defined benefit plans and effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous GAAP.

ii) Under Ind AS, remeasurement of net defined benefit liabilities i.e., actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of statement of profit or loss. Under the previous GAAP, these remeasurement were forming part of the profit or loss for the year. There is no impact on the total equity as at March 31, 2017.

iii) Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty of sale of goods paid/ provided is presented on the face of the statement of profit and loss as part of expenses. There is no impact on the total equity and profit due to the said change.

iv) Under the Ind AS, Dividend including tax thereon are recognized when declared by the members in a general meeting as opposed to recognition on recommendation by the board of directors under the previous GAAP. The impact of the same has been taken.

v) Trade discount, rebates, etc. are to be netted off from revenue as opposed to classification in other expenses under Previous GAAP. There is no impact on total equity and profit due to such change

b) IND AS OPTIONAL EXEMPTIONS

Ind AS 101 First-time Adoption of Indian Accounting Standards allows first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. The Company has availed the following exemption:

i) Deemed cost of Property plant and equipments, intangible assets and investments

Ind AS 101 allows the first time adopter elect to continue with the carrying value of all of its property, plant and equipment as recognized in the financial statements as on 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 âIntangible assetsâ and investment property covered by Ind AS 40 âInvestment propertiesâ. Accordingly the company has elected to measure all of its property plant and equipment, intangible assets and investment property at their previous GAAP carrying values

ii) Designation of previously recognized financial instruments

Ind AS 101 gives an option to an entity to designate investments in equity instruments at fair value through other comprehensive income (FVOCI) on the basis of the facts and circumstances at the date of transition to Ind AS. The company has opted to apply this exemption for its investment in equity Investments and has measured its investments in the previous GAAP carrying values.

c) RECONCILIATION BETWEEN PREVIOUS GAAP

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from erstwhile Indian GAAP to Ind AS.

iii) Reconciliation of cash flows for the year ended March 31, 2017

The transition from erstwhile Indian GAAP to Ind AS has not made a material impact on the statement of cash flows.

4. In the opinion of the management, the value on realization of current assets, loans & advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet and provisions for all known liabilities has been made.

5. Previous year figures have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.

6. All amounts in the financial statements are rounded off to the nearest of Rupee, except as otherwise stated.

7. Current year figures are shown in bold prints.

Mar 31, 2018

1. RELATED PARTY DISCLOSURE AS PER (IND AS-24) ISSUED BY ICAI:-

2. KEY MANAGERIAL PERSONNEL AND THEIR RELATIVES

Mr. Tarun Talwar C.O.O

Mr. Sanjay Sharma Director (upto November 2017)

Mr. Vijay Kumar Sharma Director

Mr. Ankush Jindal Company Secretary

Mr. Kanwar Pal Pawar CFO

Mr. Tarun Talwar (HUF) HUF of Mr. Tarun Talwar

Mr. Rajesh Talwar Father of Tarun Talwar

Ms. Gita Talwar Mother of Mr. Tarun Talwar

Ms. Sameena Talwar Sister of Mr. Tarun Talwar

Ms. Shweta Talwar Wife of Mr. Tarun Talwar

3. FIRST TIME ADOPTION OF IND AS

a) Note on Adjustments

v) Trade discount, rebates, etc. are to be netted off from revenue as opposed to classification in other expenses under Previous GAAP. There is no impact on total equity and profit due to such change

b) IND AS OPTIONAL EXEMPTIONS

i) Deemed cost of Property plant and equipments, intangible assets and investments

ii) Designation of previously recognized financial instruments

c) RECONCILIATION BETWEEN PREVIOUS GAAP

iii) Reconciliation of cash flows for the year ended March 31, 2017

The transition from erstwhile Indian GAAP to Ind AS has not made a material impact on the statement of cash flows.

5. Previous year figures have been regrouped/reclassified wherever necessary to correspond with the current year classification/ disclosure.

6. All amounts in the financial statements are rounded off to the nearest of Rupee, except as otherwise stated.

7. Current year figures are shown in bold prints.

Mar 31, 2018

1. CORPORATE INFORMATION

Talbros Automotive Components Limited (âthe Companyâ) is a public company incorporated and domiciled in India. The Companyâs shares are listed with Bombay Stock Exchange and National Stock Exchange. The Company is in the business of manufacturing Gaskets and forging. The Company has its registered place of business at 14/1, Mathura Road, P.O Amar Nagar, Faridabad 121003, Haryana, India.

1.1 Basis of preparation

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

For all periods up to and including the year ended 31^st March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) which is considered as âPrevious GAAPâ. The financial statements for the year ended 31^st March, 2018 are the first Ind AS Financial statements of the Company. As per the principles of Ind AS 101, the transition date to Ind AS is 1^st April, 2016 and hence the comparatives for the previous year ended 31^st March, 2017 & balances as on 1^st April, 2016 have been restated as per the principles of Ind AS, wherever deemed necessary. Refer note 47for understanding the transition from previous GAAP to Ind AS and its effect on the Companyâs financial position and financial performance.

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

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments); and

- Defined benefit plans - plan assets measured using actuarial valuation.

The significant accounting policies that are used in the preparation of these financial statements are summarized below. These accounting policies are consistently used throughout the periods presented in the financial statements.

The financial statements for the year ended 31^st March, 2018 were authorized and approved by the Board of Directors on 25^th May, 2018.

1.2 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in note 1.4. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.3 Significant management judgments in applying accounting policies and estimation uncertainty

The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.

Significant management judgments

Recognition of deferred tax assets â The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.

Provisions, contingent liabilities and contingent assets- The Company is the subject of legal proceedings and tax issues covering a range of matters, which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matters related to litigation and taxes. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated.

Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.

Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Significant estimates

Useful lives of depreciable/amortizable assets - Management reviews its estimate of the useful lives of depreciable/amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, IT equipment and other plant and equipment.

Defined benefit obligation- Managementâs estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Fair value measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

1.4 Standard issued but not yet effective:

i. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On 28^th March, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 1^st April, 2018. The effect on adoption of Ind AS 21 is expected to be insignificant.

ii. Ind AS 115- Revenue from Contract with Customers:

On 28^th March, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors;

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach), The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1^st April, 2018.

The Company will adopt the standard on 1^st April, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31^st March, 2018 will not be retrospectively adjusted. The Company is in the process of evaluating the impact of Ind AS 115.

(i) Expenditures capitalised in the carrying amount of property, plant and equipment

The Company has capitalised the following expenses under Plant and equipment (dies and moulds):

(ii) Contractual obligations

Refer note 39B for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iii) Assets pledged as security

Refer note 16 for disclosure of property, plant and equipment pledged as securities against Borrowings.

âRepresents deemed cost on the date of transition to Ind AS. Gross block and accumulated depreciation from the previous GAAP have been disclosed for the purpose of better understanding of the original cost of assets.

*Direct operating expenses attributable to investment property cannot be specifically identified with property, although management does not expect them to be material.

(ii) Leasing arrangements

Investment property comprises of a building which is leased to tenant under long-term operating leases with rentals payable monthly. Refer note 40 for details on future minimum lease rentals.

The Company obtains independent valuation for its investment property at least annually and fair value measurement has been categorised as Level 3. The best evidence of fair value is current prices in an active market for similar property. Where such information is not available, the Company considers the average price of similar property and appropriate depreciation has been accounted for arriving at fair and reasonable value.

Notes:

(i) Represents deemed cost on the date of transition to Ind AS. Gross block and accumulated amortisation from the Previous GAAP have been disclosed for the purpose of better understanding of the original cost of assets.

(ii) Intangibles under development comprise of the softwares under development.

(iii) Research and development expenses

Refer note 45 for expenses incurred on research and development activities.

iv Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of shareholders in ensuing Annual General Meeting.

vi There are no shares issued for consideration other than cash and no shares have been bought back in last five years.

vii There are no shares reserved for issue under options or other purpose.

Nature and purpose of other reserves

i General reserve

General reserve is created out of the accumulated profits of the Company as per the provisions of Companies Act. The transfers from retained earnings to General reserve represents transfer as per the provision of Companies Act on dividend distribution.

ii Retained earnings

All the profits made by the Company are transferred to retained earnings from statement of profit and loss.

iii Capital reserve

Capital reserve includes the amount of share application money forfeited by the Company.

iv Securities premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with provisions of the Companies Act.

v âEquity instruments through Other Comprehensive Incomeâ

Other comprehensive income represents balance arising on account of changes in fair value of FVOCI equity instruments, net of any tax impact.

Notes:

1. Term loan from IDFC Bank is secured by first charge on fixed assets to be purchased out of proceeds of term loan and is further secured by personal guarantee of three directors.

2. The Company has taken vehicle loans from banks and others. The amount is secured against moveable fixed assets.

3. Term loan-I from Bajaj Finance Ltd is secured by first and exclusive charge over existing plant and machinery of the Companyâs gasket division situated at Faridabad and is further secured by personal guarantee of two directors.

4. Term loan-II from Bajaj Finance Ltd is secured by first and exclusive charge over existing plant and machinery of Companyâs gasket division situated at Faridabad and is further secured by personal guarantee of three directors.

5. Term loan from Tata Capital Financial Services Ltd is secured by first charge on all assets financed under this facility and is further secured by personal guarantee of three directors.

6. For Repayment terms and Interest rates for the outstanding long term borrowings, refer table below:

Notes:

* Working capital loans from State Bank of India, ICICI Bank, Indusind Bank, HDFC Bank, DBS Bank,Yes Bank, IDFC Bank and Axis Bank are secured by way of first pari-passu charge to all current assets, both present and future. Further, secured by second pari-passu charge on all the fixed assets, both present and future, excluding those exclusively charged to other lenders and personal guarantee of two directors of the Company.

** Working capital loans from HDFC Bank, Bajaj Finance Ltd and Tata Capital Financial Services Ltd are secured by personal guarantee of two directors of the Company.

*Refer note 38 for related party transactions

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 (âMSMED Act, 2006â) as at 31^st March, 2018, 31^st March, 2017 and 1^st April, 2016:

*The Government of India introduced the Goods and Services Tax (GST) with effect from 1^st July, 2017. GST is collected on behalf of the Government and no economic benefit flows to the entity and hence Revenue from Operations under GST regime is presented excluding GST as per Ind AS 18 âRevenueâ. However, Revenue from Operations under pre-GST regime included Excise Duty which is now subsumed in GST. Consequently, the figures for the year ended 31^st March, 2018 are not comparable with the previous periods presented in the above table

i Corporate social responsibility expenses

The requisite disclosure relating to CSR expenditure in terms of Guidance Note on Corporate Social Responsibility (CSR) issued by Institute of Chartered Accountants of India:

a) Gross amount required to be spent by the Company during the year is Rs. 20.72 lakhs (31^st March,, 2017: Rs. 18.85 lakhs).

b) Amount spent during the financial year ended 31^st March, 2018 and 31^st March, 2017 on:

NOTE - 2 FAIR VALUE DISCLOSURES_

(i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the balance sheet are categorised into three levels of fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: unobservable inputs for the asset or liability

(ii) Financial assets and liabilities measured at fair value - recurring fair value measurements

(iii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of net asset value for mutual funds on the basis of the statement received from investee party.

- the use of adjusted net asset value method for certain equity investment and discounted cash flow method (income approach) for remaining equity instruments.

(iv) The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value measurements. See (iii) above for the valuation techniques adopted.

The management assessed that cash and cash equivalents, other bank balances, trade receivables, other receivables, trade payables and short-term borrowings approximate their carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(i) Long-term fixed-rate and variable-rate receivables are evaluated by the Company based on parameters such as interest rates, individual creditworthiness of the customer and other market risk factors. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

(ii) The fair values of the Companyâs interest-bearing borrowings, loans and receivables are determined by applying discounted cash flows (âDCFâ) method, using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non-performance risk as at 31^st March, 2018 was assessed to be insignificant.

(ii) Risk management framework

The Companyâs activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

The Companyâs risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

(A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers and investments in debt securities. The carrying amount of financial assets represents the maximum credit exposure.

- cash and cash equivalents,

- trade receivables,

- loans & receivables carried at amortised cost, and

- deposits with banks and financial institutions

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system, continuously monitoring defaults of customers and other counterparties, identified either individually or by the company, and incorporates this information into its credit risk controls. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

A: Low B: Medium C: High

Cash & cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors through internal systems that are configured to define credit limits of customers, thereby, limiting the credit risk to pre-calculated amounts. The Company assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts receivable become past due.

Other financial assets measured at amortised cost

Other financial assets measured at amortized cost includes loans and advances to employees, security deposits and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses Trade receivables

(i) The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach, wherein Company has defined percentage of provision by âanalysing historical trend of default relevant based on the criteria defined above. And such provision percentage determined have been âconsidered to recognise life time expected credit losses on trade receivables (other than those where default criteria are met).

Other financial assets measured at amortised cost

Company provides for expected credit losses on other financial assets by assessing individual financial instruments for expectation of any credit losses. Since this category includes loans and receivables of varied natures and purpose, there is no trend that the Company can draw to apply consistently to entire population For such financial assets, the Companyâs policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each subcategory of such financial assets.

(B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Financing arrangements

The Company has access to the following undrawn borrowing facilities at the end of reporting period:

Maturities of financial liabilities

The tables below analyse the Companyâs financial liabilities into relevant maturity of Group based on their contractual maturities for all non-derivative financial liabilities.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

(C) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) Foreign exchange risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar, Yen and Euro. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the functional currency of any of the Company entities. Considering the low volume of foreign currency transactions, the Companyâs exposure to foreign currency risk is limited.

Exposure to currency risk:

Particulars of unhedged foreign currency exposures as at year end:

The Company does not enter into any derivative instruments for trading or speculative purposes. The forward exchange contracts outstanding as at year end are as under:

Sensitivity

A reasonably possible strengthening (weakening) of the INR against all other currencies at 31^st March, would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

(ii) Interest rate risk

The Companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Companyâs variable rate borrowing is subject to interest rate. Below is the overall exposure of the borrowing:

iii) Assets

The Companyâs fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

iv) Price risk Exposure

The Companyâs exposure price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

Sensitivity

Investments carried at fair value through other comprehensive income

The table below summarises the impact of increases/decreases of the index on the Companyâs equity for the period:

NOTE - 3

A Capital management

The Companyâs capital management objectives are

- to ensure the Companyâs ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Companyâs capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Companyâs various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

The Companyâs adjusted net debt to equity ratio at 31^st March, 2018 was as follows.

NOTE - 4 RELATED PARTY TRANSACTIONS_

In accordance with the requirements of Ind AS 24 the names of the related party where control exists/able to exercise significant influence along with the aggregate transactions and year end balances with them as identified and certified by the management are given below:

i) Parties where control exists: Jointly controlled entities

(i) Nippon Leakless Talbros Private Limited

(ii) Magneti Marelli Talbros Chassis Systems Private Limited

(iii) Talbros Marugo Rubber Private Limited

Investing party in respect of which the Company is an associate

(i) Talbros International Private Limited

Key management personnel and their relatives

(i) Mr. Naresh Talwar

(ii) Mr. Umesh Talwar

(iii) Mr. Varun Talwar

(iv) Mr. Anuj Talwar

(v) Mrs. Kum Kum Talwar (mother of Mr. Varun Talwar)

(vi) Mr. Vidur Talwar

(vii) Mr. Navin Juneja

(viii) Mr. Anil Kumar Mehra

(ix) Mr. Ra jive Sawhney

(x) Mr. V. Mohan

(xi) Mr. Amit Burman

(xii) Mr. R. R. Vederah

(xiii) Ms. Pallavi Sadanand Poojari*

(xiv) Mr. Manish Khanna - Chief Financial Officer

(xv) Ms. Seema Narang - Company Secretary

* Ms. Pallavi Sadanand Poojari has resigned from Directorship of the Company w.e.f. 23.08.2017

Enterprise over which key management personnel exercise significant influences

(i) QH Talbros Private Limited

(ii) Transactions with related parties carried out in the ordinary course of business:

(a) Transactions with joint ventures and associates:

âRetrospective bonus liability for F.Y 2014-15 consequent to enactment of Payment of Bonus (Amendment) Act, 2015 has been considered as contingent liability, since stay has been granted by various High Courts.

(2) Guarantees executed in favour of various authorities/ customers/ others amounting to Rs. 20.01 lakhs (31^st March, 2017: Rs. 5.33 lakhs, 1^st April, 2016: Rs. 11.07 lakhs).

B Estimated amount of contracts remaining to be executed on capital accounts and not provided for:

Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) - Rs. 285.71 lakhs (31^st March, 2017: Rs. 388.18 lakhs, 1^st April, 2016: Rs. 54.10 lakhs).

NOTE - 5

(i) Leases disclosure as lessee Operating leases

A The Company has taken few residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

B The Company has also taken a commercial premise under non-cancellable operating lease. There are no restrictions placed upon the Company by entering into this lease and there is no sublease. The lease arrangement is for a period of 3 years. Lease rental is recognised in the statement of profit and loss under âOther Expensesâ (refer note 31). The total of future minimum lease payments in respect of such lease are as follows:

(ii) Leases disclosure as lessor Operating leases

The Company has also given surplus office and factory building on operating lease. The lease arrangement is for a period of 5 years and renewable with mutual consent. The lease rentals of Rs. 153.33 lakhs (31^st March, 2017: Rs. 117.44 lakhs, 1^st April, 2016: Rs. 139.83 lakhs) on such lease is included in other incomes. Lease income is recognised in the statement of profit and loss under âOther Incomeâ (refer note 24). With respect to non-cancellable period of the operating lease, the future minimum lease rentals receivable are as follows:

NOTE - 6 EMPLOYEE BENEFITS

1 Defined contribution plans:

A The Company operates defined contribution retirement benefit plans under which the Company pays fixed contributions to separate entities (funds) or financial institutions or state managed benefit schemes. The Company has no further payment obligations once the contributions have been paid. Following are the schemes covered under defined contributions plans of the Company:

Provident Fund Plan & Employee Pension Scheme: The Company makes monthly contributions at prescribed rates towards Employee Provident Fund/ Employee Pension Scheme to fund administered and managed by the Government of India.

Superannuation Scheme: The Company contributes towards a fund established to provide superannuation benefit to certain employees in terms of Group Superannuation Policies entered into by such fund.

B The expense recognised during the period towards defined contribution plans are as follows:

Sensitivities due to mortality and withdrawals are not material. Hence impact of change is not calculated. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

The weighted average duration of the defined benefit obligation as at 31^st March, 2018 is 18 to 19 years (31^st March, 2017: 18 to 19 years).

NOTE - 7 SEGMENT INFORMATION

In accordance with Ind AS 108, the Board of directors being the Chief operating decision maker of the Group has determined its only one operating segment of manufacturing of âAuto Componentsâ. Further, in terms of Paragraph 4 and 31 of Ind AS 108 âOperating Segmentsâ, entity wide disclosures have been presented below.

i Information about major customers

There is only one customer that contributes more than 10% of the total revenue from operating activities on an individual basis.

ii Information about geographical areas

* Outstanding amount excludes Interest accrued on deposits.

NOTE - 8

Balance with central excise & other authorities includes Rs. 83.75 lakhs (31^st March, 2017: Rs. 80 lakhs, 1^st April, 2016: Rs. 80 lakhs) deposited by the Company as advance excise duty in view of investigation by the excise department, objecting excise exemption on some of the products sold from Sitarganj Plant. The matter is still to be decided.

NOTE - 9

Research and development costs on inhouse Research and development centers amounting to Rs. 168.04 lakhs (31^st March, 2017: Rs. 142.02 lakhs) were incurred during the year.

NOTE - 10

The Company is entitled for Minimum Alternate Tax (MAT) Credit amounting to Rs. 753.47 lakhs (31^st March, 2017: Rs. 710.77 lakhs, 1^st April, 2016: Rs. 996.48 lakhs) to be adjusted against Companyâs future normal tax liabilities as per provisions of Income Tax Act, 1961. The management of the Company, based on the future projections, is of the opinion that the entire MAT credit will be utilised and therefore, no provisioning has been made.

* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note.

B First time adoption of Ind AS

These are the Companyâs first financial statements prepared in accordance with Ind AS.

The accounting policies have been consistently applied in preparing the financial statements for the year ended 31^st March, 2018, the comparative information presented in these financial statements for the year ended 31^st March, 2017 and in the preparation of an opening Ind AS balance sheet at 1^st April, 2016 (the Companyâs date of transition). An explanation of how the transition from Previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.

C Ind AS optional exemptions 1 Deemed cost for property, plant and equipment, investment property and intangible assets

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 recognised 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 and investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their Previous GAAP carrying value.

2 Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

D Ind AS mandatory exemptions

1 Estimates

An entityâs 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^st April, 2016 are consistent with the estimates as at the same date made in conformity with Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Previous GAAP:

a) Investment in equity instruments carried at FVTPL or FVOCI

b) Impairment of financial assets based on expected credit loss model.

c) Financial instruments carried at amortised cost

d) Fair value of forward contracts

e) Expected credit loss on financial assets

2 Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application or retrospective restatement are not determinable;

b) The retrospective application or restatement requires assumptions about what managementâs intent would have been in that period;

The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

The Company has elected to apply these exemptions wherever required.

3 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a firsttime adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

E Other reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

3 Transition to IND AS has no material impact in cash flow statement

NOTE - 1

Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under Previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31^st March, 2017 have been reduced with a corresponding adjustment to relevant head in statement of profit and loss and retained earnings respectively. The total equity increased by an equivalent amount. The profit for the year ended 31^st March, 2017 reduced as a result of the additional interest expense.

NOTE - 2

Amortised cost financial instruments

Under Previous GAAP, all financial assets and financial liabilities were carried at cost. Under Ind AS, certain financial assets and financial liabilities are subsequently measured at amortised cost which involves the application of effective interest method. In applying the effective interest method, an entity identifies fees that are an integral part of the effective interest rate of a financial instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or financial liability.

NOTE - 3

Proposed dividend

Under the Previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.

NOTE - 4

Financial instruments carried at fair value through profit and loss or through other comprehensive income

Under Previous GAAP, investments in long-term equity instrument were carried at cost and tested for other than temporary diminution. Under Ind AS, such investments are carried at fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI) (except for investment in subsidiaries, associates and joint ventures).

NOTE - 5

Fair value gain/loss on forward contracts

Under Previous GAAP, the Company did not record any gain/loss on marked to market derivative instruments. Under Ind AS, such derivative instruments are recorded at fair value through profit and loss.

NOTE - 6 Deferred tax

Under Ind AS, deferred taxes are adjusted to reflect the impact on adjustments made to opening retained earnings at transition date and impact on statement of profit and loss for the year ended 31^st March, 2017.

NOTE - 7

Retained earnings

Retained earnings as at 1^st April, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

NOTE - 8

Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit/(loss) but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans and fair value gains/(losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under Previous GAAP.

Mar 31, 2016

1. TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

The company has only one class of equity shares having par value of INR Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. During the year ended 31st March 2016, the amount of dividend per share recognized as distribution to equity holders was INR NIL (P.Y. INR 6.00). The total dividend appropriation for the year ended 31st March 2016 amounts to INR NIL (P.Y. INR 1,52,29,512/- ) excluding Dividend Distribution Tax of INR NIL (P.Y. INR 31,86,750/- )

2. LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

3. Mortality Table : LIC 1994-96 Ultimate

4. Suitable adjustment in respect of withdrawals and other Restrictive provisions.

5. Future ( expected ) payment based on terminals salary.

Determined by assuming salary rise of 6% per annum have been discounted by assuming the imputed rate of interest of 8 % per annum

6. ASSETS TAKEN ON OPERATING LEASE AS PER AS-19

7. The Company has taken industrial shed on non-cancellable operating lease. Minimum lease payments of 16,50,000/

- ( P.Y. NIL) are charged to Profit & Loss during the year.

8. Future commitments in respect of minimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

9. In the opinion of the management, the value on realization of current assets, loans & advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet and provisions for all known liabilities has been made.

10. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year classification/ disclosure.

11. All amounts in the financial statements are rounded off to the nearest of Rupee, except as otherwise stated.

12. Current year figures are shown in bold prints

Mar 31, 2016

1. TERMS/ RIGHTS AND RESTRICTIONS ATTACHED TO EQUITY SHARES

2. LEAVE ENCASHMENT

Following Basis were adopted for the computation of the said liabilities

3. Mortality Table : LIC 1994-96 Ultimate

4. Suitable adjustment in respect of withdrawals and other Restrictive provisions.

5. Future ( expected ) payment based on terminals salary.

Determined by assuming salary rise of 6% per annum have been discounted by assuming the imputed rate of interest of 8 % per annum

6. ASSETS TAKEN ON OPERATING LEASE AS PER AS-19

7. The Company has taken industrial shed on non-cancellable operating lease. Minimum lease payments of 16,50,000/

- ( P.Y. NIL) are charged to Profit & Loss during the year.

8. Future commitments in respect of minimum lease payments payable in respect of aforesaid lease entered by the company are as follows:

10. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year classification/ disclosure.

11. All amounts in the financial statements are rounded off to the nearest of Rupee, except as otherwise stated.

12. Current year figures are shown in bold prints

Mar 31, 2016

1 Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of H10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of shareholders in ensuing Annual General Meeting.

Notes:

* Term Loan from IndusInd bank carrying rate of interest @ base rate plus 1 % per annum is secured by first charge by way of hypothecation over specific assets created out of the term loan both present and future, second paripassu charge over entire current assets of the Company both present and future and personal guarantee of two directors.

** Term loan from Bajaj Finance Ltd carrying rate of interest @ 11.15 % to 12.15% per annum is secured by first and exclusive charge over existing plant & machinery of the Company''s Gasket division situated at Faridabad and is further secured by personal guarantee of two directors.

*** Term loan from Tata Capital Financial Services Ltd. carrying rate of interest @ 11.50 % per annum is secured by first charge on all assets financed under this facility and is further secured by personal guarantee of three directors.

Notes:

* Working capital loans from State Bank of India, ICICI Bank, DBS Bank, IndusInd Bank, Yes Bank, State Bank of Patiala, HDFC Bank and Punjab National Bank are secured by way of first pari-passu charge on all current assets, both present & future. Further, secured by second pari- passu charge on all the fixed assets, both present and future, excluding those exclusively charged to other lenders and personal guarantee of two directors of the Company.

** Working capital loans from HDFC Bank, Bajaj Finance Ltd and Tata Capital Financial Services Limited are secured by personal guarantee of two directors of the Company.

2 Contingent liabilities and commitments:

(to the extent not provided for)

3 Contingent liabilities:

(i) Claims against the Company not acknowledged as debts:

(i) *Retrospective bonus liability for financial year 2014-15 consequent to enactment of Payment of Bonus (Amendment) Act, 2015 has been considered as contingent liability, since stay has been granted by various High Courts

(ii) Guarantees executed in favour of various authorities/customers/others amounting to Rs.11,06,931 (previous year Rs.77,26,944)

(iii) Bills discounted with banks Rs.Nil (previous year Rs.1,26,54,808).

4 Estimated amount of contracts remaining to be executed on capital account and not provided for:

Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) - Rs.54,10,497 (previous year Rs.4,03,26,633 )

5 Excise duty

The finished goods at Sohna plant ( material division ), Gurgaon is considered as raw material for the Company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2016, estimated at Rs.3,88,921 ( previous year Rs.3,35,731) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.3,88,921 ( previous year Rs.3,35,731). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2016.

6 Balance with central excise & other authorities includes Rs.80 lacs deposited by the company as advance excise duty in view of investigation by the excise department, objecting excise exemption on some of the products sold from Sitarganj Plant. The matter is still to be decided.

7 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure required under schedule III of the Companies Act, 2013 has not been given.

8 Based on the technical assessment of useful life of tools carried out during the year, the amortization has been done considering life of 72 months instead of 36 months presently. Had the Company continued with the previously assessed useful life, the consumption of stores & spares parts for the year ended 31st March, 2016 would have been higher by Rs.277.12 Lacs".

9 Segment reporting

a) Primary segment:

The Company''s operations comprise of only one segments viz , "Auto Components & Parts" .

b) Secondary segment:

The Company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

10 Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

11 The Company is entitled for Minimum Alternate Tax (MAT) Credit amounting to Rs.9,96,47,586 (previous year Rs.7,40,25,582) to be adjusted against company''s future normal tax liabilities as per provisions of Income Tax Act, 1961. The management of the company, based on the future projections, is of the opinion that the entire MAT credit will be utilized and therefore, no provisioning has been made.

12 (a) The Company has taken few residential / commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

13 Previous year''s figures have been regrouped wherever considered necessary to conform to this year''s classification.

Mar 31, 2015

(ii) Guarantees executed in favour of various authorities/ Customers/Others amounting to Rs.77,26,944 ( Previous Year Rs.3,20,54,736)

(ii) Bills discounted with Banks Rs.1,26,54,808 (Previous year Rs.3,37,03,339).

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs.4,03,26,633 (Previous Year Rs.3,99,77,003 )

2. Excise Duty

The finished goods at Sohna Plant ( Material Division ), Gurgaon is considered as raw material for the Company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2015, estimated at Rs.3,35,731 ( Previous year Rs.4,16,918) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.3,35,731 ( Previous year Rs.4,16,918). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2015.

3. Balance with Central Excise & Other Authorities includes Rs.80 lacs deposited by the company as advance excise duty in view of investigation by the excise department, objecting excise exemption on some of the products sold from Sitarganj Plant. The matter is still to be decided.

4. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the yearend together with interest paid/payable under this Act have not been given.

5. Small Industries Development Bank of India ( SIDBI ) has sanctioned a limit of Rs.600 lacs for discounting handiest of Micro, Small and Medium enterprises supplying materials to the company . This facility is secured by way of second pari - passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semi finished goods, consumable stores, etc. both present and future and is further secured by personal guarantee of two directors. The hundies accepted by the Company and outstanding balance as at 31st March, 2015 amounted to Rs. NIL ( Previous Year Rs.2,69,53,396).

6. Segment Reporting

a) Primary Segment :

The Company''s operations comprise of only one segments viz , "Auto Components & Parts" .

b) Secondary Segment :

The Company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

7. Pursuant to enactment of the Companies Act, 2013, during the year ended March 31, 2015, the company has applied useful lives of tangible fixed assets as prescribed in Schedule II of the Companies Act, 2013 except for certain class of assets where different useful life is taken based on independent technical evaluation, taking into account the nature of the asset, the estimated usage of the asset and the operating conditions surrounding the use of the asset etc. Accordingly the depreciation has been provided by depreciating the carrying value of the asset (Net of residual value of 5%) over the revised/remaining life of individual assets.

Had the company continued with the previously assessed useful lives, charge for depreciation for the year ended 31st March 2015 would have been higher by Rs.94.36 Lacs.

8. Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverable. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

9. In accordance with the requirements of Section 135 of the Companies Act, 2013, the company has during the financial year ending 31st March 2015 spent in pursuance of its Corporate Social Responsibility policy as follows:-

10. Interest in Joint Ventures

The Company has invested in three joint venture companies namely, Nippon Leakless Talbros Pvt. Limited, Magneti Marelli Talbros Chassis Systems Pvt. Limited and Talbros Marugo Rubber Pvt. Limited wherein Company holds 40%, 50% and 50% ownership interests respectively. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

11. The Company is entitled for Minimum Alternate Tax (MAT) Credit amounting to Rs.7,40,25,582 (Previous Year Rs.8,03,30,447) to be adjusted against company''s future normal tax liabilities as per provisions of Income Tax Act, 1961. The management of the Company, based on the future projections, is of the opinion that the entire MAT credit will be utilized and therefore, no provisioning has been made.

12. Previous year figures have been regrouped/rearranged wherever considered necessary.

Mar 31, 2014

1.Notes:-

* Term Loan from State Bank of India carrying rate of interest @13.65% per annum is secured by first exclusive charge over the fixed assets at the Sitarganj Plant including Land & Building and is further secured by personal guarantee of two directors.

* * Term Loan from IndusInd Bank carrying rate of interest @ base rate plus 1 % per annum is secured by first charge by way of

hypothecation over specific assets created out of the Term Loan both present and future, second pari passu charge over entire current assets of the Company both present and future and personal guarantee of two directors.

*** Term loan from Bajaj Finance Ltd carrying rate of interest @ 11.15 % to 12.15% per annum is secured by first and exclusive charge over existing plant & machinery of the Company''s Gasket division situated at Faridabad and is further secured by personal guarantee of two directors.

# Term loan from Yes Bank carrying rate of interest @ base rate plus 1.65% p.a. is secured by way of exclusive charge on all the assets financed by bank located anywhere and second pari passu charge on all the current assets of the Company both present and future and personal guarantee of three directors.

## Term Loan from Punjab National Bank carrying rate of interest @ 13.75% per annum was secured by way of first charge on the specific fixed assets financed out of this loan and was further secured by second pari passu charge on entire current assets, present & future and personal guarantee of two directors.

2.Notes:-

* Working Capital Loans from State Bank of India, ICICI Bank, State Bank of Patiala,IndusInd Bank and Punjab National Bank are secured by way of first pari-passu charge on the Company''s entire current assets, both present & future. Further, secured by second charge on all the fixed assets of the Company, both present & future, ranking pari passu and personal guarantee of two directors of the Company.

** Working Capital Loan from HDFC Bank is secured by way of first pari passu charge on entire current assets of the Company, second pari passu charge on entire fixed assets of the Company including equitable mortgage of land and building situated at Faridabad and Chennai and personal guarantee of two directors of the Company.

# Working Capital Loan from Yes Bank is secured by first pari passu charge on all the current assets both present and future, second pari passu charge on all the movable fixed assets of the Company excluding those exclusively charged to other banks and personal guarantee of two directors of the Company.

*** Against personal guarantee of two directors of the Company.

3. CONTINGENT LIABILITIES AND COMMITMENTS :

(to the extent not provided for)

4. CONTINGENT LIABILITIES :

(i) Claims against the Company not acknowledged as debts: As at As at Nature of Dues March 31, 2014 March 31, 2013

(a) Central Excise Classification 14,17,866 14,17,866 of paper gasket

(b) Service Tax Cenvat credit 11,52,989 55,47,875 disallowed

(c) Central Sales Central Sales 4,97,936 15,51,616 Tax Tax

(d) Haryana Value Disallowance of 2,73,548 2,73,548 Added Tax input tax

(e) Central Excise Demand on - 60,25,898 Assessable value (Ex.)

(f) Customs Act Demand of Custom 12,09,782 - Duty

(g) E.S.I ESI Demand 41,29,111 41,29,111 (Includes Rs. 4,34,130 paid under protest)

(h) Income Tax Disallowances 4,47,739 4,47,739

(i) District Judge Claim of freight 8,13,484 - bills

(j) High Court, Fees for building 55,000 2,05,000 Mumbai work

(k) Central Sales Tax Non filing of 35,000 35,000 return

(l) Central Excise Objection on 80,00,000 - exemption on some of the products sold from Sitarganj Plant

TOTAL 1,80,32,455 1,96,33,653

(ii) Guarantees executed in favour of various authorities/ Customers/Others amounting to Rs. 3,20,54,736 (Previous Year Rs. 2,79,01,046)

(iii) Bills discounted with Banks Rs. 3,37,03,339 (Previous year Rs. 2,23,62,956).

5. EXCISE DUTY

The finished goods at Sohna Plant ( Material Division ), Gurgaon is considered as raw material for the Company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2014, estimated at Rs. 4,16,918 (Previous year Rs. 6,50,173) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 4,16,918 (Previous year Rs. 6,50,173). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2014.

6. Balance with Central Excise & Other Authorities includes Rs. 80 lacs deposited by the company as advance excise duty in view of investigation by the excise department, objecting excise exemption on some of the products sold from Sitarganj Plant. The matter is still to be decided.

7. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under this Act and as required by Schedule VI of Companies Act, 1956 have not been given.

8. Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 1300 lacs for discounting hundies of Micro, Small and Medium Enterprises supplying materials to the Company. This facility is secured by way of second pari - passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semi finished goods, consumable stores, etc. both present and future and is further secured by personal guarantee of two directors. The hundies accepted by the Company and outstanding balance as at 31st March, 2014 amounted to Rs. 2,69,53,396 (Previous Year Rs. 6,05,22,344). These amounts have already been provided in the books of account.

9. Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

10. During the year, the Company disposed off one of its lands including building and immovable fixtures thereon which were not being used currently and earned a profit of Rs. 8,80,67,548/- on sale of these fixed assets.

11. Interest in Joint Ventures

The Company has invested in three joint venture companies namely, Nippon Leakless Talbros Pvt. Limited, Magneti Marelli Talbros Chassis Systems Pvt. Limited and Talbros Marugo Rubber Pvt. Limited wherein Company holds 40%, 50% and 50% ownership interests respectively. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

12. The Company has provided Minimum Alternate Tax (MAT) due to brought forward unabsorbed depreciation and accumulated losses of the amalgamating Companies, and is entitled for MAT Credit amounting to Rs. 8,03,30,447 (Previous Year Rs. 7,63,72,157) as per provisions of Income Tax Act, 1961.

13. Previous year figures have been regrouped/rearranged wherever considered necessary.

Mar 31, 2013

1. EXCISE DUTY

The finished goods at Sohna Plant (Material Division), Gurgaon is considered as raw material for the Company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2013, estimated at Rs. 6,50,173 (Previous year Rs.6,73,291) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 6,50,173 (Previous year Rs.6,73,291). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2013.

2. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/ payable under this Act and as required by Schedule VI of Companies Act, 1956 have not been given.

3. Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 1300 lacs for discounting hundies of Micro, Small and Medium enterprises supplying materials to the company. This facility is secured by way of second pari - passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semi finished goods, consumable stores, etc. both present and future and is further secured by personal guarantee of two directors. The hundies accepted by the Company and outstanding balance as at 31st March, 2013 amounted to Rs. 6,05,22,344 (Previous Year Rs. 10,03,50,773 ). These amounts have already been provided in the books of account.

4. SEGMENT REPORTING

a) Primary Segment:

The Company''s operations comprise of two segments viz , "Auto Components & Parts" and " IT Activities". In terms of the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting " , IT Activities segment does not fall within the purview of Reportable Segments.

b) Secondary Segment :

The Company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

5. Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

6. The management, in order to move up the supply chain and acquire designing and developing capabilities for Suspension Systems, decided to sell its Stamping Business currently limited to manufacture of Sheet Metal parts and components of suspension systems by way of slump sale on a going concern basis to a separate 50:50 joint venture with Sistemi Suspensioni, a wholly owned subsidiary of Magneti Marelli, Italy. It was approved by the shareholders on January 6, 2012 and accordingly, all the related movable fixed assets and net current assets amounting to Rs.717.11 Lacs and Rs.332.85 Lacs respectively, were transferred at their book value to the joint venture company, Magneti Marelli Talbros Chassis Systems Private Limited effective April 1, 2012. Stamping business during the previous year contributed Rs. 4,042.62 Lacs to the gross revenue of the company. In view of this, cuurent year figures are not directly comparable with the corresponding figures of previous year.

7. The management in order to acquire new technology to move up in the supply chain and to design and manufacture new Rubber Components, decided to sell its Rubber Components business (other than Rubber Gaskets) by way of slump sale on a going concern basis to a seperate joint venture company, Talbros Marugo Rubber Private Limited, wherein Talbros Automotive Components Limited holds one share less than 50% equity capital. The remaining equity is held by the other JV partner, Marugo Rubber Industries, Japan. It was approved by the shareholders on September 29, 2012 and accordingly, all the related movable fixed assets and net current assets amounting to Rs. 2,51.97 Lacs and Rs.96.93 Lacs respectively, were transferred at their book value to the joint venture company, effective January 15, 2013. Rubber business during the previous year contributed Rs. 6,65.59 Lacs to the gross revenue of the company. In view of this, cuurent year figures are not directly comparable with the corresponding figures of previous year.

8. Interest in Joint Ventures

The Company has invested in three joint venture companies namely, Nippon Leakless Talbros Pvt. Limited, Magneti Marelli Talbros Chassis Systems Pvt. Limited and Talbros Marugo Rubber Pvt. Limited wherein Company holds 40%, 50% and 50% ownership interests respectively. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

9. The Company has provided Minimum Alternate Tax (MAT) due to brought forward unabsorbed depreciation and accumulated losses of the amalgamating Companies, and is entitled for MAT Credit amounting to Rs. 7,63,72,157 (Previous Year Rs. 6,14,84,626) as per provisions of Income Tax Act, 1961.

10. Previous year figures have been regrouped/rearranged wherever considered necessary.

Mar 31, 2012

*It includes :-

a) 5,24,349 Equity Shares allotted as fully paid up on 16.08.2007 to erstwhile shareholders of XO Stampings Ltd., pursuant to the sanction of the Hon''ble High Court of Punjab & Haryana, to a scheme of arrangement of the said Company with the Company under Section 391 read with Section 394 of the Companies Act, 1956 for consideration other than cash.

b) 2,03,315 Equity Shares allotted as fully paid up on 16.08.2007 to shareholders of XO Infotech Ltd., pursuant to the sanction of the Hon''ble High Court of Punjab & Haryana, to a scheme of arrangement of the said Company with the Company under Section 391 read with Section 394 of the Companies Act, 1956 for consideration other than cash.

1.1 The Company has only one class of Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders.

Notes:-

* Term Loan from State Bank of India is secured by first exclusive charge over the fixed assets at the Sitarganj Plant including Land & Building. Further secured by personal guarantee of two directors and repayable with in 6 1/2 years (including moratorium of 1 3/4 years) in 20 quarterly instalments beginning from 01.04.2010.

** ECB Loan from ICICI Bank was secured by way of first charge on the specific fixed assets including movable fixed assets and movable properties financed out of this loan. Further, secured by second pari-passu charge over all the existing fixed assets of the Company situated at Faridabad, Chennai, Pune, Sohna & Bawal plants and personal guarantee of two directors. Fully repaid in October 2011.

# Term loan from Yes Bank is secured by way of subservient charge on current assets and movable fixed assets and personal guarantee of three directors and repayable in 21 equal monthly instalments after a moratorium period of three months.

## Term Loan from Punjab National Bank is secured by way of first charge on the specific fixed assets financed out of this loan. Further, secured by second pari-passu charge on entire current assets, present & future and personal guarantee of two directors and repayable with in 5.5 years in 20 quarterly instalments beginning from 31.03.2012.

### Non current portion of Fixed deposits from public repayable during financial year 2013-14 and 2014-15 amounting to Rs. 5,05,24,220 and Rs. 2,98,42,000 respectively.

Notes:-

* Working Capital Loans from State Bank of India, ICICI Bank, State Bank of Patiala and Punjab National Bank are secured by way of first pari-passu charge of hypothecation on the Company''s entire current assets, both present & future. Further, secured by second charge on all the fixed assets of the Company, both present & future, ranking pari-passu and personal guarantee of two directors of the Company.

** Working Capital Loan from Yes Bank is secured by way of sub servient charge on current assets and movable fixed assets and is further secured by personal guarantee of three directors of the Company.

*** Working Capital Loan from Bajaj Finance Ltd. is secured by personal guarantee of two directors of the Company.

(ii) Guarantees executed in favour of various authorities/ Customers/Others amounting to Rs. 2,82,44,065 (Previous Year Rs. 36,47,945)

(iii) Corporate Guarantee executed in favour of ICICI Bank Ltd. amounting to Rs. 9.86 Crore (USD 1.91 Millions) {Previous Year Rs. 8.64 Crores (USD 1.91 Millions)} against term borrowing of QH Talbros Ltd., an Associate Company, the outstanding as on March 31, 2012 is Rs. 4.93 Crore (USD 9,55,000.12).

(iv) Bills discounted with Banks Rs. 1,80,77,110 (Previous year Rs. 2,65,96,629).

2. EXCISE DUTY

The finished goods at Sohna Plant (Material Division), Gurgaon is considered as raw material for the Company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly, the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2012, estimated at Rs. 6,73,291 (Previous year Rs. 2,33,666) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 6,73,291 (Previous year Rs. 2,33,666). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2012.

3 Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 1,300 lacs for discounting hundies of Micro, Small and Medium enterprises supplying materials to the company. This facility is secured by way of second pari-passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semi finished goods, consumable stores, etc. both present and future and is further secured by personal guarantee of two directors. The hundies accepted by the Company and outstanding balance as at March 31,2012 amounted to Rs. 10,03,50,773 (Previous Year Rs. 8,20,49,976). These amounts have already been provided in the books of accounts.

4 Pursuant to the notification dated March 31, 2009 issued by the Ministry of Corporate Affairs, the Company has exercised the option available under the newly inserted paragraph 46 to the Accounting Standard AS -11 " The Effect of Changes in Foreign Exchanges Rates" to add or deduct the foreign Exchange fluctuation to capital cost of the Assets. As a result, the exchange gain of Rs. Nil (Previous Year Rs. 0.23 lacs) during the year has been deducted from the cost of fixed assets.

5. SEGMENT REPORTING a) Primary Segment :

The Company''s operations comprise of two segments viz , "Auto Components & Parts" and "IT Activities". In terms of the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", IT Activities segment does not fall within the purview of Reportable Segments .

b) Secondary Segment :

The Company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

6. RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS-18) Related Party Disclosure issued by the Institute of Chartered Accountants of India, the Company''s related parties are as follows : a) Name of the Party and Relationship

i) Joint Ventures

Nippon Leakless Talbros Pvt. Ltd.

Magneti Marelli Talbros Chassis Systems Pvt. Ltd.

ii) Associates

QH Talbros Ltd.,

Talbros International Ltd.

iii) Key Management Personnel (Whole time Directors)

Mr. Umesh Talwar

Mr. Varun Talwar

iv) Relatives of Key Management Personnel

Mr. Anuj Talwar, Son of Mr. Umesh Talwar

7. Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

8. The management, in order to move up the supply chain and acquire designing and developing technologies/capabilities for Suspension Systems and Modules, has decided to sell and to transfer the Stamping Business, currently engaged in the manufacture of parts and components of suspension systems including but not limited to sheet metal automotive components for vehicle suspension and steering linkage by way of slump sale and on a going concern basis to a separate 50:50 joint venture with Sistemi Suspensioni S.p.A, Italy, a wholly owned subsidiary of Magneti Marelli, Italy. It was duly approved by the shareholders on January 6, 2012 and the joint venture started its operations from 1st April, 2012 under the name Magneti Marelli Talbros Chassis Systems Private Limited.

9. Interest in Joint Venture

The Company has a joint venture in M/s. Nippon Leakless Talbros Private Limited, a Company incorporated in India engaged in manufacturing Gaskets, wherein Company holds 40% ownership interest. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

10 The Company has provided Minimum Alternate Tax (MAT) due to carrying forward of unabsorbed accumulated losses and unabsorbed depreciation of the amalgamating Companies, and further, the Company is entitled for MAT Credit amounting to Rs. 6,14,84,626 (Previous Year Rs. 4,47,34,626) as per provisions of Income Tax Act, 1961.

11 Till the year ended 31 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 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. Consequently, the Company has reclassified previous year figures to conform to this year''s classification.

Mar 31, 2011

1 Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. 1,07,92,476 (Previous Year Rs. 2,57,73,970).

2 Contingent Liabilities :

2.1 Bills discounted with Banks Rs. 2,65,96,629 ( Previous year Rs. 2,08,31,448 ).

2.2 Demands disputed by the Company and not provided for :-

(Amount in Rs.)

NATURE OF DUES As at March As at March 31, 2011 31, 2010 (a) Central Excise Classification of paper gasket 14,17,866 14,17,866

(b) Central Excise Cenvat credit - 1,64,496

(c) Service Tax Cenvat credit 61,18,185 39,51,811

(d) Central Sales Tax Central Sales Tax 1,19,180 1,19,180

(e) Haryana Value Disallowing input tax 2,73,548 - Added Tax (f) Central Excise Demand on Assessable value (Ex.) 42,95,902 38,39,495

(g) E.S.I ESI Demand (Includes Rs.4,34,130 45,63,241 12,35,717 paid under protest)

(h) Income Tax Disallowances 4,47,739 4,47,739

(i) Demand from HSIIDC Demands for enhance 1,29,47,554 86,88,515 -ment of land cost by HSIIDC

(j) High Court, Mumbai Fees for building 2,05,000 2,05,000 work

(k) Demand from Disputed amount for building contractor building work - 14,08,880

Total 3,03,88,215 2,14,78,699

2.3 Guarantees executed in favour of Customs / Excise / Sales Tax / Customers amounting to Rs. 36,47,945 (Previous Year Rs. 23,75,445)

2.4 Corporate Guarantee executed in favour of ICICI Bank Ltd. amounting to Rs. 8.64 Crore (USD 1.91 Millions) {Previous Year Rs. 8.73 Crores (USD 1.91 Millions)} against term borowing of QH Talbros Ltd., an Associate Company.

8 LICENSED/INSTALLED CAPACITY ETC:*

Auto Components IT Activities & Parts

8.1 Licensed Capacity Not Applicable Not Applicable

8.2 Installed Capacity (As certified by the Not ascertainable Not ascertainable Management and on which Auditors due to the nature & due to the nature & have placed reliance, this being a varities of the end product varities of the end product a technical matter)

8.3 Actual Production (Completed) 14,06,75,503 (11,39,49,280) -

* (Note:Corresponding figures for the previous year, wherever applicable, appear in brackets)

10 EXCISE DUTY:

The finished goods at Sohna plant (Material Division), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2011, estimated at Rs. 2,33,666 (Previous year Rs. 3,84,600) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 2,33,666 (Previous year Rs. 3,84,600). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2011.

12 Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 900 lacs for discounting hundies of SSI vendors. This facility is secured by way of second pari-passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semifinished goods, consumable stores, etc. both present and future and is further secured by personal guarantee of two directors. The hundies accepted by the Company and outstanding balance as at 31st March, 2011 amounted to Rs. 8,20,49,976 (Previous Year Rs. 4,55,12,851). These amounts have already been provided in the books of accounts.

13 Pursuant to the notification dated March 31, 2009 issued by the Ministry of Corporate affairs, the Company has exercised the option available under the newly inserted paragraph 46 to the Accounting Standard AS -11 ÂThe Effect of Changes in Foreign Exchanges RatesÂ to add or deduct the foreign Exchange fluctuation to capital cost of the Assets. As a result, the exchange gain of Rs. 0.23 lacs (Previous Year Rs. 32.73 lacs) during the year has been deducted from the cost of fixed assets.

14 SEGMENT REPORTING - AS-17 :

a) Primary Segment :

The CompanyÂs operations comprise of two sagments viz , ÂAuto Components & PartsÂ and ÂIT ActivitiesÂ. In terms of the disclosure requirements of Accounting Standard (AS-17) ÂSegment ReportingÂ, IT Activities segment does not fall within the purview of Reportable Segments.

b) Secondary Segment :

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable

15 RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS-18) Related Party Disclosures issued by the Institute of Chartered Accountants of India, the CompanyÂs related parties are as follows :-

a) Relationship

i) Joint Ventures Nippon Leakless Talbros Pvt. Ltd.

ii) Associates QH Talbros Ltd., Talbros International Ltd.

iii) Key Management personnel (Whole time Directors) Mr. Umesh Talwar, Mr. Varun Talwar

iv) Relatives of Key Management Personnel Mr. Anuj Talwar, Son of Mr. Umesh Talwar

17 Amounts written off (net) include advances of Rs. 8,58,124 that are not recoverable and have been written off and Rs. 8,82,141 being amounts due to different parties that are no more payable and have been written back.

18 Letters seeking confirmation of outstanding balances at year end have been sent to all the customers / suppliers / recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

19 Interest in Joint Venture

The Company has a joint venture in M/s. Nippon Leakless Talbros Private Limited, a Company incorporated in India engaged in manufacturing Gaskets, wherein Company holds 40% ownership interest. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

21. The Company has provided Minimum Alternate Tax (MAT) due to carrying forward of unabsorbed accumulated losses and unabsorbed depreciation of the amalgamating Companies, and further, the Company is entitled for MAT Credit amounting to Rs. 4,47,34,626 (Previous Year Rs. 3,07,65,000) as per provisions of Income Tax Act, 1961.

22 Previous year figures have been regrouped/rearranged wherever necessary.

Schedules 1 to 13 are annexed to and form an integral part of the Balance Sheet as at March 31, 2011 and the Profit & Loss Account for the year ended on that date.

Mar 31, 2010

1 Estimated Amount of Contracts :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) -Rs. 2,57,73,970 (Previous Year Rs. 84,93,276).

2 Contingent Liabilities:

2.1 Bills discounted with Banks Rs. 2,08,31,448 ( Previous year Rs. 32,58,277 ).

2.2 Demands disputed by the Company and not provided for :

(Amount in Rs.) NATURE OF DUES As at March As at March 31,2010 31,2009 (a) Central Excise Classification of paper gasket 14,17,866 14,17,866

(b) Central Excise Cenvat credit disallowed 1,64,496 3,80,543

(c) Service Tax Cenvat credit disallowed 39,51,811 23,96,100

(d) Central Excise Interest on Cenvat Credit - 6,18,626

(e) Central Excise Interest on Excise duty - 4,02,001

(f) Central Sales Tax Central Sales Tax 1,19,180 11,67,568

(g) Central Excise Demand on Assessable value38,39,495 -

(h) E.S.I ESI Demand (Includes Rs.4,34,130 paid under protest) 12,35,717 8,01,587 (i) Income Tax Income Tax demand 4,47,739 4,47,739 (j) Demand from HSIIDC Demands for enhancement of land cost by 86,88,515 86,88,515 HSIIDC

(k) High Court,Mumbai Fees for building work 2,05,000 - (I) Demand from building contractor Disputed amount for building work 14,08,880 - Total 2,14,78,699 1,63,20,545

2.3 Guarantees executed in favour of Customs / Excise / Sales Tax / Customers amounting to Rs.23,75,445 (Previous year Rs. 19,46,747)

2.4 Corporate Guarantee executed in favour of ICICI Bank Ltd. amounting to Rs. 8.73 Crore (USD 1.91 Millions) {Previous year Rs. 9.65 Crores (USD 1.91 Millions)} against term borowing of QH Talbros Ltd., an Associate Company.

The Managing Director of the Company was paid remuneration (without any commission) in accordance with the provisions of Schedule XIII to the Companies Act,1956. Therefore computation of net profit under section 198 of the Companies Act, 1956 is not applicable. Remuneration paid to Mr. Varun Talwar, Joint Managing Director during previous year was for the period from Sep-08 to Mar-09 only.

3 FIXED ASSETS ACQUIRED UNDER FINANCE LEASES

i) Addition to Gross Block of Fixed Assets include Rs.2,75,65,588 being the assets acquired between 1st April 2009 and 31st March 2010 under finance lease and capitalised in line with the requirement of Accounting Standards-19 "Leases". Depreciation for the year includes an amount of Rs.17,84,501 being depreciation charged on these assets.

ii) The yearwise break-up of outstanding lease obligations as at Balance Sheet date.

4 EXCISE DUTY:

The finished goods at Sohna plant (Material Division), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2010, estimated at Rs.3,84,600 (Previous year Rs. 1,78,512) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.3,84,600 (Previous year Rs.1,78,512). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2010.

5 The Micro & Small Enterprises have been indentified by the Company from the available information. According to such identification, the disclosure in respect of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 is as under:

6 Small Industries Development Bank of India ( SIDBI) has sanctioned a limit of Rs. 500 lacs for discounting hundies of SSI vendors This facility is secured by way of second pari - passu charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semifinished goods, consumable stores, etc. both present and future. The hundies accepted by the Company and outstanding balance as at 31st March, 2010 amounted to Rs.4,55,12,851 (Previous Year Rs.3,36,81,463)

7 Pursuant to the notification dated March 31, 2010 issued by the Ministry of Corporate affairs, the Company has exercised the option available under the newly inserted paragraph 46 to the Accounting Standard AS -11 " The Effect of Changes in Foreign Exchanges Rates" to add or deduct the foreign Exchange fluctuation to Capital cost of the Assets. As a result, the exchange gain of Rs.32.73 lacs during the year has been deducted from the cost of fixed assets.

8 SEGMENT REPORTING -AS-17:

a) Primary Segment:

The Companys operations comprise of two sagments viz , "Auto Components & Parts" and " IT Activities ". In terms of the disclosure requirements of Accounting Standard (AS - 17) "Segment Reporting " , IT Activities segment does not fall within the purview of Reportable Segments .

b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable

9 RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS-18) Related Party Disclosures issued by the Institute of Chartered Accountants of India, the Companys related parties are as follows:

a) Relationship

i) Joint Ventures

Nippon Leakless Talbros Pvt. Ltd.

ii) Associates

QH Talbros Ltd., Talbros International Ltd.

Hi) Key Management personnel (Whole time Directors)

Mr. Umesh Talwar, Mr. Varun Talwar

iv) Relatives of Key Management Personnel

Mr. Anuj Talwar, Son of Mr. Umesh Talwar

10 Amounts written off (net) include advances of Rs. 37,67,182.00 that are not recoverable and have been written off and Rs. 35,86,802.00 being amounts due to different parties that are no more payable and have been written back.

11 Letters seeking confirmation of outstanding balances at year end have been sent to all the customers/ suppliers/ recoverables. Confirmations have been received in few cases. Adjustments, if any, will be made in the current year on receipt / reconciliation of remaining confirmations.

12 Interest in Joint Venture

The Company has a joint venture in M/s. Nippon Leakless Talbros Private Limited, a Company incorporated in India engaged in manufacturing Gaskets, wherein Company holds 40% ownership interest. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

13 The Company has provided Minimum Alternate Tax (MAT) due to carrying forward of unabsorbed accumulated losses and unabsorbed depreciation, and further, the Company is entitled to MAT Credit amounting to Rs.3,07,65,000 (Previous Year Rs.2,42,65,000) as per provisions of Income Tax Act, 1961.

14 Previous year figures have been regrouped/rearranged wherever necessary.

Schedules 1 to 14 are annexed to and form an integral part of the Balance Sheet as at March 31,2010 and the Profit & Loss Account for the year ended on that date.

Mar 31, 2009

1 Contingent Liabilities:

1.1 Bills discounted with Banks Rs.32,58,277 ( Previous year Rs. 2,69,54,036 ).

1.2 Demands disputed by the Company and not provided for :

(Amount in Rs.) NATURE OF DUES As at March As at March 31, 2009 31, 2008 (a) Central Excise Classification of paper gasket 14,17,866 14,17,866 (b) Central Excise Cenvat credit 3,80,543 - (c) Service Tax Cenvat credit 23,96,100 - (d) Central Excise Interest on Cenvat credit 6,18,626 - (e) Central Excise Excise duty refund 2,29,758 4,74,878 (f) Central Excise Interest on Excise duty4,02,001 - (g) Central Sales Tax Central Sales Tax 11,67,568 11,67,568 (h) Service Tax Service Tax on Royalty - 10,19,431 (i) E.S.I. ESI Demand 8,01,587 8,01,587 (j) Income Tax Disallowances 4,47,739 - (k) Demand from HSIIDC Demands for enhancement86,88,515 - of land cost by HSIIDC Total 1,65,50,303 48,81,330

2 Estimated Amount of Contracts :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) -Rs.84,93,276 (Previous Year Rs.2,10,77,651). 3 Contingent Liabilities:

3.1 Bills discounted with Banks Rs.32,58,277 ( Previous year Rs. 2,69,54,036 ).

3.2 Guarantees executed in favour of Customs / Excise / Sales Tax / Customers amounting to Rs. 19,46,747 ( Previous Year Rs.45,96,955 )

3.3 Corporate Guarantee executed in favour of ICICI Bank Ltd. amounting to Rs. 9.65 Crore (USD 1.91 Millions) {Previous Year Rs. 7.66 Crore (USD 1.91 Millions)} against term borowing of QH Talbros Ltd., an Associate Company.

4 FIXED ASSETS ACQUIRED UNDER FINANCE LEASES

i) Addition to Gross Block of Fixed Assets include Rs. 73,11,135 being the assets acquired between 1st April 2008 and 31st March 2009 under finance lease and capitalised in line with the requirement of Accounting Standards-19 "Leases". Depreciation for the year includes an amount of Rs. 10,79,269 being depreciation charged on these assets.

5 EXCISE DUTY:

The finished goods at Sohna plant ( Material Division ), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2009, estimated at Rs.1,78,512 ( Previous year Rs. 3,13,440 ) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.1,78,512 ( Previous year Rs.3,13,440 ). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2009.

6 Small Industries Development Bank of India ( SIDBI ) has sanctioned a limit of Rs. 350 lacs for discounting hundies of SSI vendors This facility is secured by way of second charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semifinished goods, consumable stores, etc. both present and future . The hundies accepted by the Company and outstanding balance as at 31st March , 2009 amounted to Rs. 3,36,81,463 (Previous Year Rs. 1,82,23,730)

7 Pursuant to the notification dated March 31,2009 issued by the Ministry of Corporate affairs, the Company has exercised the option available under the newly inserted paragraph 46 to the Accounting Standard AS -11 " The Effect of Changes in Foreign Exchanges Rates" to add or deduct the foreign Exchange fluctuation to Capital cost of the Assets. As a result, the exchange loss of Rs. 142.51 lacs has been added to the cost of fixed assets. Further, exchange difference amounting to Rs. 108.30 lacs recognised in the Profit & Loss Account in the earlier year relating to the ECB Loan has been adjusted against General Reserve.

8 SEGMENT REPORTING-AS-17:

a) Primary Segment:

The Companys operations comprise of two sagments viz , "Auto Components & Parts" and " IT Activities ". In terms of the disclosure requirements of Accounting Standard (AS - 17 ) "Segment Reporting ", IT Activities segment does not fall within the purview of Reportable Segments.

b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable

9 RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS-18) Related Party Disclosures issued by the Institute of Chartered Accountants of India, the Companys related parties are as follows :-

a) Relationship i) Joint Ventures Nippon Leakless Talbros Pvt. Ltd.

ii) Associates QH Talbros Ltd., Talbros International Ltd.

iii) Key Management personnel (Whole time Directors) Mr. Umesh Talwar, Mr. Varun Talwar

iv) Relatives of Key Management Personnel Mr. Anuj Talwar, Son of Mr. Umesh Talwar

10 Interest in Joint Venture

The Company has a joint venture in M/s. Nippon Leakless Talbros Private Limited, a Company incorporated in India engaged in manufacturing Gaskets, wherein Company holds 40% ownership interest. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

11 The Company has provided Minimum Alternate Tax (MAT) due to carrying forward of unabsorbed accumulated losses and unabsorbed depreciation of the amalgamating Companies, and further, the Company is entitled for MAT Credit amounting to Rs.2,42,65,000 ( Previous Year Rs. 2,40,50,000 ) as per provisions of Income Tax Act, 1961.

12 Previous year figures have been regrouped/rearranged wherever necessary.

Schedules 1 to 14 are annexed to and form an integral part of the Balance Sheet as at March 31,2009 and the Profit & Loss Account for the year ended on that date.

Mar 31, 2008

1 Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs.2,10,77,651 (Previous Year Rs.2,01,11,787 ).

2 Contingent Liabilities:

2.1 Bills discounted with Banks Rs.2,69,54,036 ( Previous year Rs. 1,24,64,319 ).

2.2 Excise Duty/Sales-Tax / Service Tax demands disputed by the Company and not provided for - Rs.48,81,330 (Previous year Rs.63,15,170 ).

2.3 Guarantees executed in favour of Customs / Excise / Sales Tax / Customers amounting to Rs.45,96,955 ( Previous Year Rs.48,04,878)

2.4 Corporate Guarantee executed in favour of ICICI Bank Ltd. amounting to USD 3.82 Millions (Previous year Nil) against term borowing of QH Talbros Ltd., an Associate Company.

3 EXCISE DUTY:

The finished goods at Sohna plant ( Material Division ), Gurgaon is considered as raw material for the cdmpany because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.03.2008, estimated at Rs.3,13,440 ( Previous year Rs. 3,04,367 ) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.3,13,440 ( Previous year Rs.3,04,367 ). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2008.

4 (a) The Company has not received information from Vendors/Suppliers regarding their status under the "Micro,Small and Medium Enterprises Develpopment Act,2006" and hence disclosure relating to amount unpaid at the year end together with interest paid or payable under this Act has not been given.

(b) Small Industries Development Bank of India ( SIDBI ) has sanctioned a limit of Rs. 300.00 lacs for discounting hundies of SSI vendors. This facility is secured by way of second charge in favour of SIDBI on all the current assets of the Company including stock, raw material, stock in process, finished & semifinished goods, consumable stores, etc. both present and future . The hundies accepted by the Company and outstanding balance as at 31st March , 2008 amounted to Rs.1,82,23,730 ( Previous Year Rs. 96,94,529 )

5 SEGMENT REPORTING - AS-17 :

a) Primary Segment :

The Companys operations comprise of four segments viz , "Auto Components & Parts"," Hardware" , "Software" and "Leasing. In terms of the disclosure requirements of Accounting Standard (AS - 17 ) "Segment Reporting" , none of the segments other than "Auto Components & Parts" fall within the purview of Reportable Segments .

b) Secondary Segment :

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

6 Interest in Joint Venture

The Company has a joint venture in M/s. Nippon Leakless Talbros Private Limited, a Company incorporated in India engaged in manufacturing Gaskets, wherein Company holds 40% ownership interest. The proportionate assets, liabilities, expenses and incomes have been disclosed in the Consolidated Financial Statements.

7 The Company has provided Minimum Alternate Tax (MAT) due to carrying forward of unabsorbed accumulated losses and unabsorbed depreciation of the amalgamating Companies, and further, the Company is entitled for MAT Credit amounting to Rs. 2,40,50,000 (Previous Year Rs. 1,44,50,000 ) as per provisions of Income Tax Act, 1961.

8 Previous year figures have been regrouped/rearranged wherever necessary.

Mar 31, 2007

1. Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. 2,01,11,787 (Previous Year Rs. 10,35,361).

2. Contingent Liabilities :

2.1 Bills discounted with Banks Rs. 1,24,64,319 ( Previous year Rs. 2,56,03,856 .

2.2 Excise Duty/Sales-tax/Service tax demands disputed by the Company and not provided for - Rs.^3,15,170 (Previous year Rs. 48,74,928 ).

NATURE OF DUES AMOUNT AMOUNT (2006-07) Rs. (2005-06) Rs.

(a) Central Excise Classification of paper gasket 14,17,866 14,17,866 (b) Central Excise Modvat credit 8,31,707 9,84,101 (c) Central Sales Tax Central Sales Tax 17,26,166 15,01,166 (d) A. C. Service Tax Service tax on Royalty 10,19,431 9.71,795 (e) Demand from HSIDC Demands for enhancement of 13,20,000 - land cost by HSIDC _ _ Total 63,15,170 48,74,928

In respect of items (a) to (e), above future cashflow are determinable only on outcome of judgements and decisions pending at various forum / authorities.

2.3 Guarantees executed in favour of Customs / Excise / Sales Tax / Customers amounting to Rs. 48,04,878 (Previous Year Rs. 43,33,501)

3. The funds raised during 2005-2006 through FPO have been fully utilised for the purposes it was raised as per details given in the Prospectus.

4. During the year ended 31st March, 2007 the company has issued 12,00,000 Zero Coupon fully Convertible Warrants to the Promoters, as approved by the shareholders in the Extra-ordinary General Meeting held on 15th March 2007. These warrants were issued at a price of Rs. 65/- each and are convertible into equal number of Equity Shares of the face value of Rs. 10 each at a premium of Rs. 55 per share within 18 months from the date of allotment. Equity shares issued upon conversion shall remain under "lock-in" for a period of 3 years with effect from the date of allotment of such warrants.

5. Based on information available with the Company, there are no dues to Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 as at March 31, 2007 .

6. SEGMENT REPORTING - AS-17 :

a) Primary Segment:

After the merger of the Information Technology business of XO Infotech Limited, the Companys operations comprise of four sigments viz, "Auto Components & Parts", "Hardware", "Software" and "Leasing". In terms of the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting", none of the segments other than "Auto Components & Parts" fall within the perview of Reportable Segments.

b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

7. On and from the appointed date, the unabsorbed depreciation and unabsorbed accumulated losses of the amalgamating Companies shall be unabsorbed depreciation and unabsorbed accumulated losses of the amalgamated Company. As per provisions of Sec. 72A of the Income Tax Act, 1961, the amalgamated Company would be entitled to set off and / or carry forward such unabsorbed depreciation and unabsorbed accumulated losses. ...

8. MAT Credit Entitlement includes MAT Credit for the FY 2005-06 Rs. 71,00,000 and for the FY 2006-07 Rs. 73,50,000.

9. Previous year figures have been regrouped/rearranged wherever necessary. Figures of previous year are not comparable with that of the current year figures as financial results for the current year include the financial results of the erstwhile XO Stampings Limited and demerged IT Business undertaking of XO Infotech Limited with effect from 01.04.2006 and 01.03.2006 respectively being the appointed dates.

Schedules 1 to 14 are annexed to and form an integral part of the Balance Sheet as at March 31, 2007 and the Profit & Loss Account for the year ended on that date.

Mar 31, 2006

1. Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances)- Rs. 10,35,361 (Previous Year Rs. 1,10,60,592).

2. Contingent Liabilities :

2.1 Bills discounted with Banks Rs. 2,56,03,856 (Previous year Rs. 1,93,76,188).

2.2 Excise Duty/Sales-tax/Service tax demands disputed by the Company and not provided for - Rs. 48,74,928 (Previous year Rs.39,16,135).

NATURE OF DUES AMOUNT Rs,

(a) Central Excise Classification of paper gasket 14,17,866 (b) Central Excise Modvat credit 9,84,101 (c) Central Sales Tax Central Sales Tax 15,01,166 (d) A. C. Service Tax Service tax on Royalty 9,71,795

Total 48,74,928

In respect of items (a) to (d) above future cashflow are determinable only on outcome of judgements and decisions pending at various forum / authorities.

2.3 As at March 31,2006 the Company has reviewed the future earnings of its cash generating units in accordance with AS-28- Impairment of Assets issued by the Institute of Chartered Accountants of India. The carrying amount of assets do not exceed the future recoverable amounts. Consequently no impairment of assets has been considered.

6. 6.1 During the year the company issued 49,01,963 equity shares of Rs. 10.00 each at a premium of Rs. 92.00 per share and collected Rs. 5000.00 lacs (including promoters contribution of Rs. 250.00 lacs) for setting up a forging project, investing in a joint venture company with Nippon Leakless Corpn., Japan and for capital expenditure at the existing gasket plants.

7. The company has appointed Mr. Varun Talwar son of Mr. Naresh Talwar, Chairman as Executive Director with effect from 1 st. January, 2006 for its Forging Project at a remuneration consisting of; Basic Salary Rs. 1,05,000.00 p.m., House Rent Allowance Rs. 73,500.00 p.m. and other perquisites like Electricity, Water, Medical Reimbursement, Club Fee etc. upto Rs.21,500.00 per month in addition to other bebefits of like RF. Gratuity, Superannuation, LTA, Leave Encashment, Telephone facility as per the rules of the company, subject to approval from the Central Government in pursuance to the provision of Section 314 (1B) of the Companies Act, 1956. The company has made an application to Central Government and approval is awaited.

8. The Board of Directors of the company, in its meeting held on March 22, 2006 have approved a Scheme of Arrangement for;

a) merger of the demerged IT undertaking (comprising Hardware and Software business) of XO Infotech Ltd. with effect from 1 st. March,2006 into the company and

b) merger of XO Stamping Ltd. and Talbros International Ltd. into the company with effect from 1st. April,2006.

Pending receipt of regulatory approvals, these financial statements do not take into account the effect of the afforesaid Scheme of Arrangement.

9. EXCISE DUTY:

The finished goods at Sohna plant (Material Division), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal / clearance from the factory premises as at 31.3.2006, estimated at Rs.363113 (Previous year Rs. 316825) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 363113 (Previous year Rs. 316825). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2006.

10. SEGMENT REPORTING - AS-17 :

a) Primary Segment:

The company operates only in one business segment viz. "Gaskets of all kinds"

b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

11. RELATED PARTY DISCLOSURE

As per the Accounting Standard (AS-18) Related Party Disclosures issued by the Institute of Chartered Accountants of India, the Companys related parties are as follows :-

a) Relationship

i) Joint Ventures and Associates Q.H.Talbros Ltd., Talbros Motors Pvt.Ltd. Talbros International Ltd. X. O. Infotech Ltd. X. O. Stampings Ltd. Nippon Leakless Talbros Pvt. Ltd.

ii) Key Management personnel (Whole time Directors) Mr. Umesh Talwar, Mr. Nikhil Talwar

iii) Relatives of Key Management Personnel

Mrs. Bimpi Talwar, Wife Mrs.Shashi Talwar, Mother

Mr. Anuj Talwar, Son Mrs.Shefali Aswani, Sister

Mr. Naresh Talwar, Brother Mr. Nakul Talwar, Brother

Mrs. Asha Burman, Sister

12 Previous year figures have been regrouped/rearranged wherever necessary.

Mar 31, 2005

A) 47,37,145 (6,30,000) Equity Shares allotted as fully paid up by way of Bonus Shares by capitalisation of the General Reserve/Share Premium Account and Capital Reserve Account,

b) 75,358 Equity Shares allotted as fully paid up on 22.8.1978 to erstwhile shareholders of AEW Janson Limited, pursuant to the sanction of the Hon'ble High Court of Delhi, to a scheme of amalgamation of the said Company with the Company under Section 391 read with Section 394 of the Companies Act, 1956.

B. NOTES ON ACCOUNTS:

1. Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances)- Rs. 1,10,60,592 (Previous Year 50,05,466).

2. Contingent Liabilities :

2.1 Bills discounted with Banks Rs.1,93,76,188 ( Previous year Rs. 1,72,34,823).

2.2 Excise Duty/Income tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs.39,16,135 (Previous year Rs.41,00,110).

The above liabilities at serial nos. 1 to 4 are dependent on outcome of court/arbitration/out of court settlement/disposal of appeals, terms of contractual obligations and raised demands by concerned parties. No reimbursement is expected in such cases.

2.3 The Company had signed a Technical Assistance Agreement with M/s. Federal Mogul Sealing Systems (Slough) Ltd. for a period of 10 years starting from 3rd. November 2003. One time Technical Know-how fee of Euro 3,60,000 (Rs. 1,94,79,600) was payable under the agreement in three equal instalments at six monthly intervals. The second and third instalment of Euro 1,20,000 each plus taxes thereon (Rs.1,72,17,716) were paid during the year. The Company has also signed a new technical agreement for a period of 5 years. The lump-sum fee of Rs. 8,92,060 (JPY 20,00,000) is being amortised over the period of the agreement.The technical know-how fees have been recognised to that extent as an intangible asset during the year.

2.4 As at March 31, 2005 the Company has reviewed the future earnings of its cash generating units in accordance with AS-28-Impairment of Assets issued by the Institute of Chartered Accountants of India. The carrying amount of assets do not exceed the future recoverable amounts Consequently no impairment of assets has been considered.

3. EXCISE DUTY :

The finished goods at Sohna plant (Material Division), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal/clearance from the factory premises as at 31.3.2005, estimated at Rs.3,16,825 (Previous year Rs. 3,36,727) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 3,16,825 (Previous year Rs. 3,36,727). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2005.

4. (a) The names of Small Scale Industrial Undertakings to whom the Company owes any sum for more than thirty days as at the year end - Nil (Previous year - Nil)

(b) Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 100 lacs for discounting hundies of SSI vendors. This facility is secured against secured charge on Company's current assets. The hundies accepted by the Company and outstanding as on 31st March, 2005 amounted to Rs. 94,47,953.58 (Previous year Rs. 63,40,649)

5. SEGMENT REPORTING-AS-17 :

a) Primary Segment :

The company operates only in one business segment viz. "Gaskets of all kinds"

b) Secondary Segment :

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

6. Previous year figures have been regrouped/rearranged wherever necessary.

Schedule 1 to 13 are annexed to and form an integral part of the Balance Sheet as at March 31, 2005 and the Profit & Loss account for the year ended on that date.

Bonus shares of Rs. 410.71 lacs were issued on 31st December, 2004. Thereafter equity share capital increased from Rs. 164.29 lacs to Rs.575.00 lacs. No. of equity shares : since the bonus issue is an issue without consideration, the issue is treated as if it had occurred prior to the beginning of the financial year ending as on 31st March, 2004, the earliest audited yearly accounts reported herewith. The total nos. equity shares have been taken as 57,50,003.

Mar 31, 2004

1. Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances)-Rs.50,05,466 (Previous Year Rs. 7,07,198).

2. Contingent Liabilities:

2.1 Bills discounted with Banks Rs. 1,72,34,823 (Previous year Rs. 3,79,130).

2.2 Excise Duty/Income tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs.41,00,110 (Previous year Rs.15,01,166).

2.3 During the year the Company has signed a new Technical Assistance Agreement with M/s. Federal Mogul Sealing Systems (Slough) Ltd. for a period of 10 years starting from 3rd November 2003. One time Technical Know-How fee of Euro 3,60,000 ( Rs.1,94,79,600) is payable under the agreement in three equal instalments at six monthly intervals. The first instalment of Euro 1,20,000 (Rs.65,28,000) plus taxes thereon was due prior to 31st March 2004. The technical know-how fee has been recognised to that extent as an intangible asset during the year.

3. EXCISE DUTY:

The finished goods at Sohna plant (Material Division), Gurgaon is considered as raw material for the company because the same is used for manufacturing gaskets at Faridabad and other plants. Accordingly the excise duty liability on excisable goods manufactured at Sohna, but pending removal/clearance from the factory premises as at 31.3.2004, estimated at Rs.3,36,727 (Previous year Rs. 3,94,955) is not accounted for. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 3,36,727 (Previous year Rs. 3,94,955). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.03.2004.

4. (a) The names of Small Scale Industrial Undertakings to whom the Company owes any sum for more than thirty days as at the year end - Nil (Previous year - Nil)

(b) Small Industries Development Bank of India (SIDBI) has sanctioned a limit of Rs. 100 lacs for discounting hundies of SSI vendors. This facility is secured against secured charge on Company's current assets. The hundies accepted by the Company and outstanding as on 31st March, 2004 amounted to Rs. 63,40,649 (Previous year Rs. 46,05,083)

5. SEGMENT REPORTING :

a) Primary Segment :

The company operates only in one business segment viz. "Gaskets of all kinds"

b) Secondary Segment :

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the Company. Hence it is not reportable.

6. Previous year figures have been regrouped/rearranged wherever necessary.

Mar 31, 2003

1. Estimated Amount of Contracts :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. 7,07,198 (Previous Year Rs. 35,97,020).

2. Outstanding Gurantees :

The Company has given a guarantee of Rs. 1,36,29,000 (Previous year Rs. 9,18,59,000) in favour of certain banks for grant of loans to a Company in which some directors are interested.

3. There is a contingent liability of:

3.1 In respect of bills discounted with Banks Rs. 3.79,130 (Previous year-NIL).

3.2 Excise Duty/income tax/Sales tax demands and claims from a local authority disputed by the Company and not provided for Rs. 15,01,166 (Previous year Rs. 10,401).

4. FIXED ASSETS ACQUIRED UNDER FINANCE LEASES

(i) Addition to Gross Block of Fixed Assets include Rs. 2,07,87,830/- Being the assets acquired between 1st April'2002 and 31st March'2003 under finance lease and capitalised in line with the requirement of Accounting Standards-19. Depreciation for the year includes an amount of Rs. 18,32,967/-, being depreciation charged on these assets.

5. Local area development tax paid during the year includes Rs. 10,80,978 relating to previous year. This is considered for calculating the cost of production during the year.

6. EXCISE DUTY:

Excise duty liability on excisable goods manufactured at our Material Division at Sohna, (Gurgaon) Haryana but pending removal/ clearance from the factory premises as at 31.3.2003, is estimated at Rs.3,94,955 (Previous year Rs. 4,55,232). If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs.3,94,955 (Previous year Rs. 4,55,232). However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.3.2003.

7. (a) Names of small Scale Industrial Units each with outstanding of Rs.one lac or more as at the year end, where the outstandings or a part thereof exceeds a period of 30 days as at the year end - Rs. Nil

(b) Small Industries Development Bank of India (SIDBI) has sanction a limit of Rs. 100 lacs for discounting hundies of SS1 venders. This facility is secured against second charge on company's current assests. The hundies accepted by the company and outstanding as on 31st March, 2003 amounted to Rs. 46,05,083.

8. SEGMENT REPORTING :

(a) Primary Segment:

The company operates only in one business segment viz. "Gaskets of all kinds"

(b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the company. Hence it is not reportable.

Mar 31, 2002

1. Estimated Amount of Contracts:

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) - Rs. 35,97,020 (Previous Year 1,245,780).

2. Oustanding Gurantees:

The Company has given a guarantee of Rs. 91,859,000 ( Previous year Rs. 91,859,000) in favour of certain banks for grant of loans to a Company in which some Directors are interested

3. There is a contingent liability of:

3.1 In respect of bills discounted with Banks - NIL - ( Previous year Rs. 1,705,369).

3.2* For Local Area Development Tax Rs. 1,093,311 (Previous year Rs. 325,528)

3.3 Excise Duty/income tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs. 10,401 (Previous year - NIL -).

* The judgement of the High Court relating to the validity of the levy has been admitted in the Supreme Court. Pending this verdict the company does not consider the same as payable.

4. Government Grants/Subsidy:

The Director of Industries, Haryana had given a grant by way of capital investment subsidy for setting up a project in backward area. The assets purchased were subject to a second charge in their favour. Though the period of the charge has expired, the charge has not yet been vacated.

5. In accordance with the Accounting Standard AS 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the provision for deferred tax liability of Rs. 1,294,362 has been made for the year ended 31st March 2002. The deferred tax liability of the earlier years of Rs, 17.518.275/- has been recognised as a deduction in the General Reserve as on 1st April 2001.

6. EXCISE DUTY:

Excise duty liability on excisable goods manufactured at our Material Division at Sohna, (Gurgaon) Haryana but pending removal/clearance from the factory premises as at 31.3.2002, is estimated at Rs. 455.232. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with corresponding adjustment of liability and a higher inventory by Rs. 455,232. However, this would have no effect on the net profit of the Company for the accounting year or on the net current assets as at 31.3.2002.

7. Names of small Scale Industrial Units each with outstanding of Rs. one lac or more as at the year end, where the outstandings or a part thereof exceeds a period of 30 days as at the year end. - Rs. Nil

8. SEGMENT REPORTING:

a) Primary Segment:

The company operates only in one business segment viz. "Gaskets of all kinds".

b) Secondary Segment:

The company caters to the needs of the Indian as well as foreign market. The risk and returns vary from country to country and export to none of the countries exceeds 10% of the sales turnover of the company. Hence it is not reportable.

9. Previous year figures have been regrouped/rearranged wherever necessary.

Mar 31, 2001

Share Capital

a) 6,30,000 Ordinary Shares allotted as fully paid up by way of Bonus Shares by capitalisation of the General Reserve/Share Premium Account.

b) 75,358 Ordinary Shares allotted as fully paid up on 22.8.1978 to erstwhile shareholders of AEW Janson Limited, pursuant to the sanction of the Hon'ble High Court of Delhi, to a scheme of amalgamation of the said Company with the Company under Section 391 read with Section 394 of the Companies Act, 1956.

Secured Loans

a) Secured by way of first charge of hypothecation on pari-passu basis of the borrower's entire stock, book-debts and receivables and second charge of hypothecation of the entire fixed assets both present and future ranking pari-passu with the ther consoritum members; further secured by the personal guarantees of two directors.

b) Cash Credit and export facilities from Bank of India and Vijaya Bank are also covered by the Corporate Guarantee of Talbros Engineering Ltd.

c) Secured by first charge on the movable and immovable fixed assets of the company, further secured by joint and several guarantees of two directors and corporate guarantee of Talbros Engineering Ltd.

Other Notes :

1. Estimated Amount of Contracts :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances)- Rs. 12,45,780 (Previous Year Rs. 6,24,338).

2. Bank Guarantee Etc.:

Outstanding Bank Guarantees and Letters of Credit - Rs. 54,83,502 (Previous year Rs. 77,17,919).

3. Contingent Liabilities :

3.1 In respect of bills discounted with Banks - Rs. 17,05,369 (Previous year Rs.10,74,088).

3.2 For Local Area Development Tax Rs. 3,25,528 (Previous year Nil)

3.3 Oustanding Gurantees :

Rs. 9,18,59,000 (Previous year Rs. 6,76,29,000) in favour of certain banks for grant of loans to a Company in which some Directors are interested.

3.4 Excise Duty/income tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs.Nil (Previous year Rs. 4,58,301).

4. Government Grants/Subsidy :

The Director of Industries, Haryana had made a grant by way of capital investment subsidy for setting up a project in backward area. The assets purchased were subject to a second charged in thetr favour. Though the period of the charge has expired, the charge has not yet been vacated.

Mar 31, 2000

NOTES :

1. * Secured by way of first charge on pari passu basis on the fixed assets of the Company, both present and future.

** Secured by way of first exclusive charge of hypothecation of the specific plant and machinery acquired under the said facility, further covered by corporate guarantee of Talbros Engineering Ltd. and guarantee of one director. (Previous year two directors).

*** Secured by first charge by way of hypothecation and / or pledge on pari passu basis of the borrower's entire stock, book debts and receivables and by mortgage and charge in favour of the Bank of all the borrower's immovable and movable properties both present and future, including movable machinery, machinery spares, tools and accessories, present / future ranking second and subservient to the mortgage and charges created/to be created in favour of Bank of India and Exim Bank.

**** Secured by way of first charge of hypothecation of the borrower's stock and book-debts and second charge of hypothecation of entire fixed assets, both present and future ranking pari passu with the other consortium members.

$ Cash Credit and Export facilities are covered by the personal guarantee(s) of one (previous year two) director(s); and facilities from Bank of India and Vijaya Bank are also covered by the corporate guarantee of Talbros Engineering Ltd.

2. Term Loan payable within one year as at the date of the Balance Sheet amounted to :

- Rs. 1,00,04,330 (Previous year Nil) against working capital loan from Exim Bank.

- Rs. 71,89,996 (Previous year Rs. 91,88,442) against loan from Bank of India and

- Rs. 27,09,057 (Previous year Rs. 19,57,120) against Hire Purchase Liability.

B. NOTES ON ACCOUNTS :

1. ESTIMATED AMOUNT OF CONTRACTS :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances)- Rs.6,24,338 (Previous year Rs.25,68,281).

2. BANK GUARANTEES ETC. :

Outstanding Bank Guarantees and Letters of Credit - Rs.77,17,919 (Previous year Rs.35,59,077).

3. CONTINGENT LIABILITIES :

3.1 In respect of bills discounted with Banks - Rs.10,74,088 (Previous year Rs. 7,52,422).

3.2 OUTSTANDING GUARANTEES :

Rs.6,76,29,000 (Previous year Rs.5,59,85,000) in favour of certain banks for grant of loans to a Company in which some Directors are interested.

US$ 1 million but not exceeding Rs.350 lacs (Previous year US$ 1 million but not exceeding Rs.350 lacs) in favour of Exim Bank for grant of term loan to a Company in which some directors are interested.

3.3 Excise Duty/Income-tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs.4,58,301 (Previous year Rs.12,15,157).

4. LIABILITY FOR LEAVE ENCASHMENT :

Due to a change in the Accounting Policy during the year (refer Policy No. 9.2 above) provision of Rs. 28,76,822 has been made towards liability for leave encashment including the incremental liability of Rs. 84,262 for the year ended 31st March, 2000. But for the change in Accounting Policy, the profit for the year an the Reserves and Surplus would have been higher by Rs.27,92,560.

5. LIABILITY FOR GRATUITY :

To cover the Company against shortfall in gratuity on pre-mature retirement of employees as well as for past service liabilities the terms of the Group Gratuity-cum-life Policy taken by the Employees Gratuity Fund Trust from Life Insurance Corporation of India were changed from Endowment Plan to Cash Accumulation Plan resulting in an additional liability of Rs. 9,15,588 payable to the Life Insurance Corporation. But for this change, the profits of the Company and Reserves and Surplus would have been higher by Rs. 9,15,588 (which includes the incremental amount for the year ended 31st March, 2000, not separately ascertained).

6. GOVERNMENT GRANTS/SUBSIDY :

The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs. 1,25,19,070 comprising Land (Rs.2,81,000), Building (Rs.31,84,043), Plant and Machinery (Rs.81,04,183) and Electric Installation (Rs.9,49,844) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

7. CONSIDERATION FOR ASSIGNMENT OF KEY-MAN INSURANCE POLICY

The Keyman insurance policy taken from L.I.C. on the life of Mr. Pran Talwar, the Vice Chairman and Managing Director of the Company was assigned to him against payment of Rs. 19,26,755 being surrender value as at 1.1.2000 as certified by the Life Insurance Corporation of India. The company has been advised that such surrender value is adequate consideration for assignment and on receipt thereof, there is no benefit accruing as remuneration under the Companies Act, 1956 to the assignee and that the company has no liability under the Income Tax Act, 1961 except in respect of the consideration received.

Mar 31, 1999

A) NOTES ON SECURED LOANS:

1. Secured by way of first exclusive charge of hypothecation of the specific moveable assets acquired under Production Equipment Finance Programme of Exim Bank together with pari-passu charge on assets located at Gasket Plant at Faridabad. The term loan is net of the liability not considered attributable to the Company. Out of the total term loan facility granted by EXIM Bank, an amount of Rs. 100 lakhs has been demarcated to TEL, to which the Company has transferred the loan liability to give effect to the Scheme of Arrangement and pending completion of documentation formalities, which includes inter-alia, the furnishing of a corporate guarantee by the Company to EXIM Bank, the Company continues to assume responsibility for the undischarged liability of TEL, which, as at the year end, amounted to Rs. 12.50 lakhs (Previous Year Rs. 37.50 lacs).

Secured by way of first charge on pari passu basis on the fixed assets of the Company, both present and future.

Secured by way of first exclusive charge of hypothecation of the specific plant and machinery acquired under the said facility.

Secured by first charge by way of hypothecation and/or pledge on pari passu basis of the borrowers entire stock, book- debts and receivables and by mortgage and charge in favour of the Bank of all the borrowers' immoveable and moveable properties both present and future, including moveable machinery, machinery spares, tools and accessories, present and future ranking second and subservient to the mortgages and charges created/to be created in favour of Bank of India and Exim Bank.

2. Term loan instalments payable within one year as at the date of the Balance Sheet amounted to; Rs. 31,25,000 (Previous Year Rs. 62,50,000) against loan from Exim Bank;

Rs. 87,60,000 (Previous year Rs. 87,60,000) against loan from Bank of India and

Rs. 19,57,120 (Previous Year Rs. 21,63,116) against Hire Purchase Liability.

B) OTHER NOTES ON ACCOUNTS :

1. ESTIMATED AMOUNT OF CONTRACTS :

Estimated amount of contracts remaining to be executed on capital account not provided for (Net of advances) Rs. 25,68,281.00 (Previous year Rs. 26,18,000.00).

2. BANK GUARANTEES ETC. :

Outstanding Bank Guarantees and Letters of Credit - Rs. 35,59,077 (Previous year Rs. 31,40,815).

3. CONTINGENT LIABILITIES :

3.1 In respect of bills discounted with Banks - Rs. 7,52,422 (Previous year Rs. 42,06,457).

3.2 OUTSTANDING GUARANTEES :

- Rs. 5,59,85,000 (Previous Year Rs. 4,69,85,000) in favour of certain banks for grant of working capital facilities to a Company in which three Directors are interested.

- US$ 1 million but not exceeding Rs. 350 lacs (Previous year US$ 1 million but not exceeding Rs. 350 lacs) in favour of Exim Bank for grant of term loan to a Company in which three directors are interested.

3.3 Excise Duty/Income-tax/Sales-tax demands and claims from a local authority disputed by the Company and not provided for - Rs. 12,15,157 (Previous year Rs. 11,25,157)

4. LIABILITY FOR LEAVE ENCASHMENT :

Liability for leave encashment to employees has not been provided in accordance with Accounting Standard-15 `Accounting for retirement benefits in the financial statements of the employers'- for the reason that the same is accounted and paid in cash on "pay as you go" basis. Total of accrued liability computed on acturial basis upto the year end amounted to Rs. 27,92,560 (previous year Rs. 25,92,319), which includes the incremental liability of Rs. 2,00,241 for the year.

5. LIABILITY FOR GRATUITY :

Total liability as at 31.3.1999 on account of gratuity for past services prior to coverage by the Group Gratuity-Cum Life Policy has been computed as at 31.3.1999 on acturial basis by the Life Insurance Corporation of India at Rs. 26,52,610. The said amount has neither been funded to the Gratuity Fund Trust nor provided upto 31.3.1999 and of this, the amount attributable for the year ended 31.3.1999 has not been ascertained and the effect thereof on the net profit for the year has not been determined.

6. GOVERNMENT GRANTS/SUBSIDY :

The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs. 1,24,92,800 comprising Land (Rs. 2,81,000), Building (Rs. 31,84,043), Plant and Machinery (Rs. 80,91,745) and Electric Installation (Rs. 9,36,012) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

Year ended Year ended March 31, 1999 March 31, 1998 Rs. Rs. Rs. Rs.

7. REMUNERATION TO DIRECTORS :

The total remuneration of the directors included in the Profit and Loss Account is as under : a) Salaries 13,20,000 13,20,000 b) House Rent Allowance 8,88,000 8,88,000 Contribution to : c) Provident Fund 1,58,400 1,45,860 d) Employees Group Gratuity-cum-Life Assurance Fund 87,340 2,45,740 85,129 2,30,989

e) Medical Expenses 54,361 49,821 f) Other Perquisites 64,302 56,387

TOTAL 25,72,403 25,45,197 g) Directors' Fee 1,500 1,000

h) Besides the Company has taken Keyman insurance Policy on the life of its keyman i.e. Mr. Pran Talwar (Vice Chairman cum Managing Director) for a sum of Rs. 80 Lakhs, for which premium amounting to Rs. 5,49,304 has been paid.

Mar 31, 1998

Notes on Secured Loans:

1. * Secured by way of first exclusive charge of hypothecation of the specific movable assets acquired under Production Equipment Finance Programme of Exim Bank together with pari-passu charge on assets located at Gasket Plant at Faridabad. The term loan is net of the liability not considered attributable to the Company. Out of the total term loan facility granted by EXIM Bank, an amount of Rs.100 lakhs has been demarcated to TEL, to which the Company has transferred the loan liability to give effect to the Scheme of Arrangement and pending completion of documentation formalities, which includes inter-alia, the furnishing of a corporate guarantee by the Company to EXIM Bank, the Company continues to assume responsibility for the undischarged liability of TEL, which, as at the year end, amounted to Rs.37.50 lakhs.

2. ** Secured by way of first exclusive charge of hypothecation of the specific plant and machinery acquired under the said facility.

General Notes:

1. LIABILITY FOR LEAVE ENCASHMENT :

Total accrued liability for Leave Encashment as per actuarial valuation upto 31.3.1998 is Rs.25,92,319 (including for the year Rs.5,06,941), Previous year Rs.20,85,378 has not been provided for in the accounts and the same is accounted on Cash Basis.

2. GOVERNMENT GRANTS/SUBSIDY :

The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs.1,24,03,412 comprising Land (Rs.2,81,000), Building (Rs.31,84,043), Plant and Machinery (Rs.80,02,357) and Electric Installation (Rs.9,36,012) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

3. EXCISE DUTY :

Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.1998, is estimated at Rs.43,58,451. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.43,58,451. However, this would have no effect on the net profit of the Company for the accounting year or on the `net current assets' as at 31.3.1998.

Mar 31, 1997

1.a. Term loan from ICICI is secured on pari passu basis by hypothecation of movables (except book debts), both present and future, and subject to prior charge in favour of Company's bankers on inventories and other movables as may be agreed/permitted by lenders for securing borrowings for working capital requirements. In addition, the term loans from financial institutions are secured by a first mortgage and charge on the Company's immovable properties, both present and future, except as stated in respect of Exim Bank/Bank of India term loan at (b & c) hereunder.

b. Term loan from Exim Bank is secured by way of first exclusive charge of hypothecation of the specific movable assets acquired under Production Equipment Finance Programme together with pari-passu charge on assets located at Gasket Plant at Faridabad. The term loan is net of the liability not considered attributable to the company. Out of the total term loan facility granted by EXIM Bank, an amount of Rs.100 lakhs has been demarcated to TEL, to which the Company has transferred the loan liability to give effect to the Scheme of Arrangement and pending completion of documentation formalities, which includes inter-alia, the furnishing of a corporate guarantee by the Company to EXIM Bank, the Company continues to assume responsibility for the undischarged liability of TEL, which, as at the year end, amounted to Rs.62.50 lakhs.

c) The Bank of India term loan is secured by way of first exclusive charge of hypothecation of the specific plant and machinery acquired under the said facility.

2. Of the term loans, amounts repayable within one year as at the date of the Balance Sheet -Rs.1,72,06,150: Previous year Rs.1,39,78,000.

3. Future obligations, for the rentals under the finance lease arrangements for vehicles and plant and machinery amount to Rs. NIL. (Previous year Rs.23,393).

4. LIABILITY FOR LEAVE ENCASHMENT

Total accrued liability for leave encashment as per actuarial valuation upto 31.3.1997 is Rs.20,85,378 (including for the year Rs.7,72,868), Previous year Rs.17,42,091 has not been provided for in the accounts and the same is accounted on cash basis.

5. GOVERNMENT GRANTS/SUBSIDY

The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs.1,18,27,564 comprising Land (Rs.2,81,000), Building (Rs.31,84,043), Plant and Machinery (Rs.7426,509) and Electric Installation (Rs.9,36,012) in respect of the project at Sohna, Gurgaon(Haryana), are subject to a second charge.

6. EXCISE DUTY:

Excise duty liability for goods pending removal/clearance from the factory premises of exercisable manufactured goods as at 31.3.1997, is estimated at Rs. 43,90,488. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs. 43,90,488. However, this would have no effect on the net operating profit of the Company for the accounting year or on the 'net current assets' as at 31.3.1997

7. Schedules 1 to 14 are annexed to and form an integral part of the Balance Sheet as at March 31,1997 and the Profit & Loss Account for the year ended on that date.

Mar 31, 1996

1. In terms of its order dated 28th July, 1995, the Hon'ble High Court of Delhi has approved a Scheme of Arrangement in terms of which, with effect from 1.4.95 (the date of arrangement), all the property, rights and powers of the erstwhile Engineering Division of the Company shall, pursuant to Section 394(2) of the Companies Act, 1956, be transferred to and vest in Talbros Engineering Ltd. (TEL) for all the estate and interest of the Company therein, subject nevertheless to all charges affecting the same; and that all the liabilities and duties of the said Division shall similarly be transferred to and become the liabilities and duties of TEL.

2. PENDING LEASE OBLIGATIONS:

Future obligations, for the rentals under the finance lease arrangements for vehicles and plant and machinery amount to Rs.23,393 (Previous year Rs.11,19,468).

3. LIABILITY FOR LEAVE ENCASHMENT:

Total accrued liability for Leave Encashment as per actuarial valuation upto 31.3.1996 is Rs.17,42,091 which has not been provided for in the accounts as the same is accounted on cash basis.

4. GOVERNMENT GRANTS/SUBSIDY:

The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs.1,02,40,865 comprising Land (Rs.2.81,000), Building (Rs.20,51,112), Plant and Machinery (Rs.70,70,181) and Electric Installation (Rs.8,38,572) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

5. EXCISE DUTY:

Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.1996, is estimated at Rs.35,01,872. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.25,01,872. However, this would have no effect on the net profit of the Company for the accounting year or on the 'net current assets' as at 31.3.1996.

Mar 31, 1995

GOVERNMENT GRANTS/SUBSIDY:

The Director of Industries, Haryana has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Government to claim back the subsidy along with interest @ 10% per annum. As per terms of the grant, fixed assets of the aggregate cost of Rs.91,82,930 comprising Land (Rs.2,81,000), Building (Rs. 20,51,112), Plant and Machinery (Rs.60,62,790) and Electric Installation (Rs.7,88,028) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

8. TECHNICAL KNOW-HOW FEE:

As per Technical Assistance agreement entered into with Payen International Ltd., U.K. which became effective from 1st May, 1992, the company acquired new technology on a continuing basis for manufacture of gaskets for the international market for a lump sum fee of U.K. Pounds 1,20,000 payable over a period of three year have been paid and charged on pro-rata basis to the Profit & Loss Account.

DEPRECIATION

Depreciation has been recomputed with effect from 1.1.1986 in respect of Plant, Machinery, Equipments & Computers of the Engineering Division on the basis of accounting policy 6.2 and the difference upto 31.3.1994 to the extent of Rs.39,27,135 has been reversed and separately disclosed in Profit & Loss Account. Had the company follow the same method of depreciation as in the past, the net profit for the accounting year and the Fixed Assets would have been higher by Rs.4,58,984 and Rs.43,86,119 respectively.

13. EXCISE DUTY

Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.95, is estimated at Rs.34,79,221. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.34,79,221. However, this would have no effect on the net profit of the Company for the accounting year or on the `net current assets' as at 31.3.1995.

Mar 31, 1994

BANK GUARANTEES ETC.: Outstanding Bank Guarantees and Letters of Credit - Rs.53,22,612 (Previous year Rs.47,21,438).

GOVERNMENT GRANTS/SUBSIDY: The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs.91,82,930 comprising Land (Rs.2,81,000), Building (Rs.20,51,112), Plant and Machinery (Rs.60,62,790) and Electric Installation (Rs.7,88,028) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

TECHNICAL KNOW-HOW As per technical assistance agreement entered into with Payen International Ltd, UK, which became effective for 1st May, 1992 the company acquired new technology on a continuing basis for manufacture of gaskets for the international market for a lump sum fee of U.K. Pound 1,20,000 payable over a period of 3 years in six half yearly instalments of pound 20,000 each. The instalment due during the year have been paid and charged on pro-rata basis to the Profit and Loss Account.

While the technical assistance continues to be provided in terms of the said agreement, there is a basic change in the terms of payment of renegotiation, to the effect that the balance lump-sum liability ceases and would be substituted by a direct yearly charge to revenue. Accordingly, and pending formal documentation, no provision/adjustment has been considered necessary in respect of the deferred payment liability and corresponding `Technical Know-how'.

EXCISE DUTY: Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.1994, is estimated at Rs.27,22,323. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.27,22,323. However, this would have no effect on the net profit of the Company for the accounting year or on the `net current assets' as at 31.3.1994.

Mar 31, 1993

BANK GUARANTEES ETC.: Outstanding Bank Guarantees and Letters of Credit - Rs.47,21,438 (Previous year Rs.52,27,162).

GOVERNMENT GRANTS/SUBSIDY: The Director of Industries, Haryana, has made a grant by way of capital investment subsidy for setting up a project in a backward area in terms of the applicable scheme and based on certain terms and conditions, default in compliance of which may entitle the State Govt. to claim back the subsidy along with interest @ 10% per annum. As per the terms of the grant, fixed assets of the aggregate cost of Rs.88,69,679 comprising Land (Rs.2,81,000), Building (Rs.20,51,112), Plant and Machinery (Rs.57,49,539) and Electric Installation (Rs.7,88,028) in respect of the project at Sohna, Gurgaon (Haryana), are subject to a second charge.

EXCISE DUTY: Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.1993, is estimated at Rs.35,07,790. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.35,07,790. However, this would have no effect on the net profit of the Company for the accounting year or on the `net current assets' as at 31.3.1993.

GRATUITY: The Company contributes annually to the Employees Gratuity Fund Trusr, amounts equivalent of the group gratuity-cum-life policy premium demanded by Life Insurance Corporation of India to meet the liability for gratuity on death/retirement of employees. Liability, If any, for shortfall in gratuity on premature retirement of employees, is not provided and is met by the Company, in the year when such liability arises.

TECHNICAL KNOW-HOW As per technical assistance agreement entered into with Payen International Ltd, UK, which became effective for 1st May, 1992 the company acquired new technology on a continuing basis for manufacture of gaskets for the international market for a lump sum fee of U.K. Pound 1,20,000 payable over a period of 3 years in six half yearly instalments of pound 20,000 each. The instalment due during the year have been paid and charged on pro-rata basis to the Profit and Loss Account.

No provision/adjustment has been considered necessary in respect of the Deferred Payment Liability and Corresponding "Technica Know-how".

Exercise duty claims/Income Tax/ Sales-tax demands and claims from a local authority disputed by the company and not provided for Rs. 12,22,453 (Rs.5,97,068) .

Term loans, amounts repayable within one year as at the date of the Balance Sheet - Rs. 46,22,848 (Rs. 52,09,626) .

Mar 31, 1992

Bank Guarantees etc: Outstanding Bank Guarantees and Letters of Credit Rs.52,27,162 (Previous year Rs. 51,66,233)

Outstanding Guarantees Rs. 120 lakhs(previous year Rs. 120 lakhs) in favour of certain financial institutions for grant of term loans to a Company in which three directors are interested.

Excise Duty Claims/Income-Tax/ Sales-tax demands and claims from a local authority disputed by the Company and not provided for Rs. 5,97,068 (Previous year Rs. 5,95,244)

EXCISE DUTY: Excise duty liability for goods pending removal/clearance from the factory premises of excisable manufactured goods as at 31.3.1923, is estimated at Rs.34,41,652. If the said liability would have been accounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs.34,41,652. However, this would have no effect on the net profit of the Company for the accounting year or on the `net current assets' as at 31.3.1992.

GRATUITY: The Company contributes annually to the Employees Gratuity Fund Trusr, amounts equivalent of the group gratuity-cum-life policy premium demanded by Life Insurance Corporation of India to meet the liability for gratuity on death/retirement of employees. Liability, If any, for shortfall in gratuity on premature retirement of employees, is not provided and is met by the Company, in the year when such liability arises.

TECHNICAL KNOW-HOW Payment towards know-how technical information are charged to revenue onver the period for which the benefits accure to the company, in terms of the relavent agreement/arrangement.

Term loans, amounts repayable within one year as at the date of the Balance Sheet - Rs. 52,09,626 (Rs. 42,96,104).

Mar 31, 1991

EXCISE DUTY : Excise Duty in respect of goods manufactured by the Company, according to the method of accounting consistently followed by the Company and also considering the accepted practice of the Excise Authority, that excise duty is generally payable on removal of goods, is accounted at the time of removal of goods from the factory. Such excise duty liability for goods pending clearance from the factory premises of excisable manufactured goods as at 31.3.1991, is estimated at Rs 26,73,018. If the said liability would have been acccounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs 26,73,018. However, this would have no effect on the net profit of the company for the accounting year or on the `net current assets' as at 31.3.91.

Bank Guarantees etc. - outstanding bank guarantees and letter s of credit - Rs. 51,66,233 (Rs.33,61,710).

Exercise duty claims/Income Tax/ Sales-tax demands and claims from a local authority disputed by the company and not provided for Rs. 5,94,244 (Rs.22,65,860).

Term loans, amounts repayable within one year as at the date of the Balance Sheet - Rs. 42,96,104 (Rs. 29,92,000).

Mar 31, 1990

EXCISE DUTY : Excise Duty in respect of goods manufactured by the Company, according to the method of accounting consistently followed by the Company and also considering the accepted practice of the Excise Authority, that excise duty is generally payable on removal of goods, is accounted at the time of removal of goods from the factory. Such excise duty liability for goods pending clearance from the factory premises of excisable manufactured goods as at 31.3.1990, is estimated at Rs 21,85,511. If the said liability would have been acccounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs 21,85,511. However, this would have no effect on the net profit of the company for the accounting year or on the `net current assets' as at 31.3.90.

Bank Guarantees etc. - outstanding bank guarantees and letters of credit - Rs. 33,61,710 (Rs.73,69,200).

Exercise duty claims/Income Tax/ Sales-tax demands and claims from a local authority disputed by the company and not provided for Rs. 22,65,860.(Rs.11,39,758).

Term loans, amounts repayable within one year as at the date of the Balance Sheet - Rs. 29,92,000 (Rs. 19,00,000).

Mar 31, 1989

EXCISE DUTY : Excise Duty in respect of goods manufactured by the Company, according to the method of accounting consistently followed by the Company and also considering the accepted practice of the Excise Authority, that excise duty is generally payable on removal of goods, is accounted at the time of removal of goods from the factory. Such excise duty liability for goods pending clearance from the factory premises of excisable manufactured goods as at 31.3.1989, is estimated at Rs 19,50,962. If the said liability would have been acccounted, it would have resulted in a higher charge of excise duty with a corresponding adjustment of liability and a higher inventory by Rs 19,50,962. However, this would have no effect on the net profit of the company for the accounting year or on the `net current assets' as at 31.3.89.

Bank Guarantees etc. - outstanding bank guarantees and letters of credit - Rs. 73,69,200 (Rs.16,53,904).

Exercise duty claims/Income Tax/ Sales-tax demands and claims from a local authority disputed by the company and not provided for Rs. Rs.11,39,758 (Rs.3,92,424).

Term loans, amounts repayable within one year as at the date of the Balance Sheet - Rs. 19,00,000 (Rs.24,22,029).

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