Notes to Accounts of Vishal Malleables Ltd.

Mar 31, 2014

1. I) Terms Loans including current maturities are secured by charge on mortgage of movable / immovable of the assets at Plot No.104/105, GIDC Ankleshwar. They are also secured by hypothecation charge on properties and also guaranteed by some Directors.

II) Bank of Baroda has sanctioned moratorium period for repayment of all Term Loanss, WCDL & FITL Loan upto 31/3/2014, is now change due to NPA status of all the accounts.

Capital Loans are secured by hypothecation of inventories, book debts, etc. The working capital loans are further

2. secured by

second charge on immovable fixed assets and hypothecation of movable assets as well as guaranteed by some of the Directors.

3. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

4. * Includes TDS, Provident Fund, ESIC, Central Excise Duty, Central Sales Tax payable, Auditors Remuneration, etc

5. I) The Gross Block of Fixed Assets includes Rs. 310.42 lakhs (Previous year Rs. 310.42 lakhs) on account of revaluation of assets carried out in the year 2004-05. Consequent to the said revaluation there is an additional charge of depreciation ofRs. 2.91 lakhs (Previous year Rs.7.81 lakhs ) and an equivalent amount has been withdrawn from Revaluation Reserve and credited to the Profit and Loss Acocunt. This has no impact on profit for the year.

II) The Company does not have any Leased Assets and Intangible Assets

III) Deprication on assets at foundry unit and wind power project has been considered @ 40% and @ 70% respectively of the company law prescribd amount on account of their use and capacity utilization during the year under review.

6. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary to confirm to the current year presentation and rounded off to the nearest rupee.

7. letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

9. Contingent Liabilities:

a) Claims of ex-employees of the company for reinstatement in service with back wages. The amount in respect of which is unascertainable.

b) Disputed Demand of Rs. 9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling charges) against which the Company had preferred a Special Civil Application in the High Court of Gujarat, Ahmedabad.

c) Guarantee/Letter of Credit given by Bank on behalf of the Company to Railways, Govt.Undertaking and other parties for Rs. 199.00 lakhs (Previous year Rs. 125.00 lakhs)

10. The income tax assessment under the Income-tax Act, 1961 is completed upto the Assessment year 2011-12. Refund due and pending for Asst.Years for 2006-07, Asst.Year 2007-08 & Asst.Year 2009-10

11. Estimated amount of contracts yet to be executed on capital amount and not provided for Rs. 75/- lakhs (Previous year Rs. 75/- lakhs)

12. All the operations of the Company are considered as a single business segment. Further, there is no significant Export Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of Accounting Standard-17 issued by the Institute of Chartered Accountants of India.

13. The company is having Unclaimed Dividend Account with Axis Bank Ltd, Ankleshwar. The entire dividend has been transferred in this account

14. and register under section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA Act) for the revival scheme of the company duely registered by Hon''ble BIFR vide there letter No. 3(V-4)/BC/2013 dated 10-02-2014, as case no. 7/2014.

15. As informed to us by the management that the banker (Bank of Baroda) has take over the symbolic possassion of the units of the company vide their letter dated 13-05-2014 after servicing notice U/S 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 54 of 2002 (SARFAESI Act). The bank has also approched to the Debt Recovery Tribunal (DRT) and get injection order restraining the company and guarantors for transfer of hypothecated, mortgage and uncharged immovable properties.

16. As informed to us by the management that one of the supplier has made an application for winding up of the company with high court of Gujarat.

---

Mar 31, 2013

1 The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary to confirm to the current year presentation and rounded off to the nearest rupee.

2 Confirmation letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

4 Contingent Liabilities:

a) Claims of ex-employees of the company for reinstatement in service with back wages. The amount in respect of which is unascertainable.

b) Disputed Demand ofRs. 9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling charges) against which the Company had preferred a Special Civil Application in the High Court of Gujarat, Ahmedabad.

c) Guarantee/Letter of Credit given by Bank on behalf of the Company to Railways, Govt.Undertaking and other parties for Rs.125.00 lakhs (Previous year Rs. 315.00 lakhs)

5 The income tax assessment under the Income-tax Act, 1961 is completed up to the Assessment year2011-12. Refund due and pending for Asst.Years for 2006-07,Asst.Year 2007-08 & Asst.Year2009-10

6 Estimated amount of contracts yet to be executed on capital amount and not provided forRs. 75/- lakhs (Previous yearRs.1339/- lakhs)

7 All the operations of the Company are considered as a single business segment. Further, there is no significant Export Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of Accounting Standard-17 issued by the Institute of Chartered Accountants of India.

8 The company is having Unclaimed Dividend Account with Axis Bank Ltd, Ankleshwar. The entire dividend has been transferred in this account.

---

Mar 31, 2012

1.1 Terms Loans including current maturities are secured by charge on mortgage of movable / immovable of the assets at Plot No.104/105, GIDC Ankleshwar. They are also secured by hypothecation charge on properties and also guaranteed by some Directors.

1.2 Company has requested Bank of Baroda to extend the moratorium period for repayment of CAPEX Loan w.e.f. 1/4/2013

2.1 Working Capital Loans are secured by hypothecation of inventories, book debts, etc. The working capital loans are further secured by second charge on immovable fixed assets and hypothecation of movable assets as well as guaranteed by some of the Directors.

3.1 The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

4.1 The Gross Block of Fixed Assets includes Rs.310.42 lakhs (Previous year Rs.310.42 lakhs) on account of revaluation of fixed assets carried out in the year 2004-05. Consequent to the said revaluation there is an additional charge of depreciation ofRs. 8.41 lakhs (Previous year Rs.9.05 lakhs) and an equivalent amount has been withdrawn from Revaluation Reserve and credited to the Profit and Loss Acocunt. This has no impact on profit for the year.

5 The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary to confirm to the current year presentation and rounded off to the nearest rupee.

6 Confirmation letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

8 Contingent Liabilities:

a) Claims of ex-employees of the company for reinstatement in service with back wages. The amount in respect of which is unascertainable.

b) Disputed Demand of Rs. 9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling charges) against which the Company had preferred a Special Civil Application in the High Court of Gujarat, Ahmedabad.

c) Guarantee/Letter of Credit given by Bank on behalf of the Company to Railways, Govt.Undertaking and other parties for Rs. 315.00 lakhs (Previous yearRs. 324.16 lakhs)

9 The income tax assessment under the Income-tax Act, 1961 is completed upto the Assessment yea 2011-12. Refund due and pending for Asst.Years for 2006-07, Asst. Year 2007-08 & Asst.Year 2009-10

10 Estimated amount of contracts yet to be executed on capital amount and not provided forRs. 1339/- lakhs (Previous year Rs.1118/-

11 All the operations of the Company are considered as a single business segment. Further, there is no significant Export Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of Accounting Standard-17 issued by the Institute of Chartered Accountants of India.

12 The company is having Unclaimed Dividend Account with Axis Bank Ltd, Ankleshwar. The entire dividend has been transferred in the account

13 As informed to us by the Management that due to obsolete technology and required more manpower, the plant remain inoperative and hence depreciation @70% of the normal depreciation @ 5.28% on plant and machinery has been considered for the year. Depreciation on additions and/or sales of fixed assets during the year is provided on pro rata basis. Depreciation on revalued assets is provided on Written Down Value Method at the rates prescribed in Schedule XIV of the Companies Act, 1956 and the same is accepted by us, being technical matter.

---

Mar 31, 2011

1. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary and rounded off to the nearest rupee.

2. Confirmation letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

4. Contingent Liabilities:

(a) Claims of ex-employees of the company for reinstatement in service with back-wages. The amount in respect of which isunascertainable.

(b) Disputed Demand of Rs. 9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling Charges), against which the Company had preferred a Special Civil Application in the High Court of Gujarat. Ahmedabad.

(c) Guarantees/Letter of Credit given by bank on behalf of the Company to Railways, Govt. Undertakings and other parties forRs. 324.16 lakhs (Previous yearRs. 324.16 lakhs).

5. The Income tax assessment under the Income-tax Act, 1961 is completed upto the Assessment year 2010-11. There is demand with Income tax of Rs.79960/- for Asst.Year 2008-09 against refund amount of Rs. 1359191 /- for Asst. Years from 2006-07 to Asst.year 2009-10.

6. Estimated amount of contracts yet to be executed on capital account and not provided for Rs. 1118/- lakhs (Previous year Rs. 13.04 lakhs).

7. The Company has provided depreciation on its Wind Power Project Machines on the basis of re-assessed life as per the certificate obtained from qualified Chartered Engineers and accordingly the depreciation of Rs. 2835197/- is provided for the year under review.

8. The Company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

9. Payments to and provisions for employees includes provision for Bonus ofRs. 11.00 lakhs and gratuity for Rs. 4.60 lakhs for the year under review.

10 All the operations of the Company are considered as a single business segment. Further, there is no significant Export

Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of Accounting Standard-17 issued by Institute of Chartered Accountants of India.

11. Taxation: The Expenses comprising of both Current Tax (Including Fringe Benefit Tax) and Deferred Tax is included in determining the net results for the year. Deferred tax reflects the effect of temporary timing differences on account of depreciation of fixed assets, recognised for financial reporting purposes and the amount that are recognised for current tax purpose. Current tax (including Fringe Benefit Tax) is determined based on the provisions of Income tax Act, 1961.

Taxes on Income: The Company has adopted Accounting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. The Deferred Tax Liability of Rs. 41377/- for the current year has been debited to Profit & Loss Account and credited to Deferred Tax Assets of previous year, which is on account of difference in depreciation on fixed assets as per Company Law and Income tax for the Current year under review.

IS The company having Unclaimed Dividend Account with Axis Bank Ltd, Ankleshwar. The entire dividend has been transferred in the account. IS Company has taken Term Loan from Indian Renewable Energy Development Agency Ltd. The loan is secured by hypothecation of movable assets of wind power project and also guaranteed by some Directors.

12 The Company has taken Term Loan and Working Capital finance from Bank of Baroda. The Term Loan is secured by charge on mortgage of movable / immovable of the assets at Plot No. 104/105, GIDC, Ankleshwar and Working Capital is secured by hypothecation of inventories, book debts, etc. The working capital is further secured by second charge on immovable fixed assets and hypothecation of movable assets as well as guaranteed by some directors.

---

Mar 31, 2010

1. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary and rounded off to the nearest rupee.

2. Confirmation letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

4. Contingent Liabilities:

(a) Claims of ex-employees of the company for reinstatement in service with back-wages. The amount in respect of which is unascertainable.

(b) Disputed Demand of Rs. 9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling Charges), against which the Company had preferred a Special Civil Application in the High Court of Gujarat, Ahmedabad.

(c) Guarantees/Letter of Credit given by bank on behalf of the Company to Railways, Govt. Undertakings and other parties for Rs. 324.16 lakhs (Previous yearRs. 315.00 lakhs).

5. The Income tax assessment under the Income-tax Act, 1961 is completed upto the Assessment year 2006-07. No provision for Income Tax is required upto Assessment Year 2006-07 as there is NIL demand with Income-tax Department.

6. Estimated amount of contracts yet to be executed on capital account and not provided for Rs. 13.04 lakhs (Previous year Rs. 31.20 lakhs).

7. Tax Paid/Payable under the provisions of MAT (Minimum Alternate Tax) U/s.115JB of I.TAct, 1961 will be claimed for credit against the Income Tax Liability for adjustment as it is available upto subsequent five years assessment immediately succeeding the assessment year.

8. The Company has provided depreciation on its Wind Power Project Machines on the basis of re-assessed life as per the certificate obtained from qualified Chartered Engineers and accordingly the depreciation of Rs. 3150219/- is provided for the year under review.

9. The Company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

10. Payments to and provisions for employees includes provision for Bonus of Rs. 9.00 lakhs and gratuity for Rs. 1.69 lakhs for the year under review.

11. Taxation: The Expenses comprising of both Current Tax (Including Fringe Benefit Tax) and Deferred Tax is included in determining the net results for the year. Deferred tax reflects the effect of temporary timing differences on account of depreciation of fixed assets, recognised for financial reporting purposes and the amount that are recognised for current tax purpose. Current tax (including Fringe Benefit Tax) is determined based on the provisions of Income tax Act, 1961.

Taxes on Income: The Company has adopted Accounting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. The Deferred Tax Assets of Rs. 170483/- for the current year has been debited to the Deferred Tax Liabilities Account and credited to the Profit and Loss Account, which is on account of difference in depreciation on fixed assets as per Company Law and Income tax for the Current year under review.

12. All the operations of the Company are considered as a single business segment. Further, there is no significant Export Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of AS-17 issued by Institute of Chartered Accountants of India.

13. There was no impariment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

14. The company having Unclaimed Dividend Account with Axis Bank Ltd, Ankleshwar. The entire dividend has been transferred in the account.

15. Company has taken Term Loan from Indian Renewable Energy Development Agency Ltd. The loan is secured by hypothecation of movable assets of wind power project and also guaranteed by some Directors.

16. The Company has taken Term Loan and Working Capital finance from Bank of Baroda. The Term Loan is secured by charge on mortgage of movable / immovable of the assets at Plot No.104/105, GIDC, Ankleshwar and Working Capital is secured by hypothecation of inventories, book debts, etc. The working capital is further secured by second charge on immovable fixed assets and hypothecation of movable assets as well as guaranteed by some directors.

---

Mar 31, 2009

1. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary and rounded off to the nearest rupee.

2. Confirmation letters of debit and credit balances are not received by the Company. Balance due to or due by various parties are therefore, subject to adjustment on receipt of confirmation letters.

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

4. Contingent Liabilities:

(a) Claims of ex-employees of the Gompany for reinstatement in service with back-wages. The amount in respect of which isunascertainable.

(b) Disputed Demand of Rs.9.59 lakhs of Gujarat Electricity Board in respect of Wind Farm Project (Refund of wheeling Charges), against which the Company had preferred a Special Civil Application in the High Court of Gujarat, Ahmedabad.

(c) Guarantees/Letter of Credit given by bank on behalf of the Company to Railways, Govt. Undertakings and other parties for Rs.315.00 lakhs (Previous year Rs.242.48 lakhs).

5. The Income tax assessment underthe Income-tax Act, 1961 is completed upto the Assessment year 2005-2006. No provision for Income Tax is required upto Assessment Year 2005-2006 as there is NIL demand with Income-tax Department.

6. Estimated amount of contracts yet to be executed on capital account and not provided for Rs.31.20 lakhs (Previous year Rs.19.34 lakhs).

7. Tax Paid/Payable under the provisions of MAT (Minimum Alternate Tax) U/s.115JB of I.T.Act, 1961 will be claimed for credit against the Income Tax Liability for adjustment as it is available upto subsequent five years assessment immediately succeeding the assessment year.

8. The Company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

9. Payments to and provisions for employees includes provision for Bonus of Rs.9.00 lakhs and gratuity for Rs.0.46 lakhs for the year under review.

10. Taxation: The Expenses comprising of both Current Tax (Including Fringe Benefit Tax) and Deferred Tax is included in determining the net results for the year. Deferred tax reflects the effect of temporary timing differences on account of depreciation of fixed assets, recognised for financial reporting purposes and the amount that are recognised for current tax purpose. Current tax (including Fringe Benefit Tax) is determined based on the provisions of Income tax Act, 1961.

Taxes on Income: The Company has adopted Accounting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. The Deferred Tax Assets of Rs.788489/- for the current year has been debited to the Deferred Tax Liabilities Account and credited to the Profit and Loss Account, which is on account of difference in depreciation on fixed assets as per Company Law and Income tax for the Current year under review.

11. All the operations of the Company are considered as a single business segment. Further, there is no significant Export Sales during the year under review. As such all the activities are considered as a single business/ geographical segment for the purpose of AS-17 issued by Institute of Chartered Accountants of India.

12. There was no impariment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard 28 issued by the Institute of Chartered Accountants of India.

13. The company having Unclaimed Dividend Account with UTI Bank Ltd, Ankleshwar. The entire dividend has been transferred in the account.

14. The Company had installed a Wind Power Project in the year 1995-96 with the financial assistance in form of Soft Loan from IREDA, New Delhi, the agency promoting Non-Conventional Energy Resources. The Government of India and Reserve Bank of India had allowed to have a Debt Equity Ratio upto 4:1 looking to the heavy cost of project and huge financial assistance, to promote the non conventional energy avenues. The separate Balance Sheet abstract for the wind power project is shown hereunder, which form a part of annual accounts for the year.

15. Information pursuant to the provisions of paragraph 3, 4C and 4D of Part-ll of Schedule-VI of the Companies Act, 1956 (As certified by the Management and accepted by the Auditors being technical matters).