అకౌంట్స్ గమనికలుCIFCO Finance Ltd.

Mar 31, 2014

1) The application of the Company for registration to carry on the business of a Non-Banking Financial Company (NBFC) was not considered favourably by the Reserve Bank of India (Department of Non-Banking Supervision) by its Order of November 25,1998. However, the Company was legally advised that it can carry on business of Non-Banking Financial Company for the benefit of its deposit holders to repay the outstanding principals and interest thereon in respect of the deposits matured, and also to meet its administrative and other related expenses. The Company can also continue to service its existing contracts and obligations and business already concluded.

However, with the Company not being permitted to undertake any NBFC activity. The Company has applied for revision in the Schedule of Repayments, approved earlier by the Company Law Board (CLB), Western Region Bench, Mumbai vide Order dated April 4, 2000 read together with corrigendum dated May 10, 2001, the approval of which is awaited. The Company has also advised CLB that one of the promoters of the Company will be bringing in the necessary funds to facilitates the repayment of deposits on the lines of the revised Schedule submitted to CLB and pending consideration, as also to meet the Company''s administrative and other related expenses and revival of the Company thereafter.

2) a. Contingent liabilities not provided for in respect of :

As at As at March 31, 2014 March 31, 2013

i. Income-tax and other demands for earlier years, as the Company has 3,00,98,640 3,00,98,640 disputed the relevant orders and preferred appeals [against which NIL (Previous year Rs. NIL) has since been paid]

ii. Guarantee given on behalf of a Company under the same management 2,00,00,000 2,00,00,000

iii. Arrears of Cumulative Preference Dividend for the period March 30, 1998 to 1,92,02,000 1,80,02,000 March 31, 2014 (Free of Income - Tax and subject to Dividend Tax)

iv. Interest due to Khetan Industries as per Court order 23,50,000 22,00,000

v. a) Bill discounting (Principle) due to Vijaya Bank 3,92,552 3,92,552

b) Overdue interest on bill discounting due to Vijaya Bank 7,65,472 NIL

3) During a search in an earlier year in the premises of the Company, the investigating agency of the Government of India, had seized, inter-alia, certain Shares of the Company. These shares have since been released by the agency, however the company has been restrained from dealing with same.

4) Under the Miscellaneous Petition filed by the Custodian for recovery of principal of Rs. 2,88,00,000/- received from a company in an earlier year, and interest thereon, the Special Court, set up at Bombay under the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance, 1992, passed an Order on July 5, 1995, and directed the Company to repay the principal amount with interest @ 20% p.a. from March 25,1992, i.e. from the date of receipt of the deposit within a period of three years. However, the Company has till date paid only Rs. 3,14,87,341/- (Previous yearRs. 3,14,87,341/-) against the said liability. The balance liability of Rs. 12,40,16,591/- (Previous year Rs. 11,82,56,591/-) is included as "Other Liabilities" under "Current Liabilities - Note 6".

5) a. The Company Law Board, Western Region Branch, Mumbai (CLB), in terms of Section 58A (9) of the Companies Act, 1956/Section 45QA(2) of the Reserve Bank of India Act, 1934, vide Order dated April 4, 2000 read together with Corrigendum dated May 10, 2000 had directed the Company to follow a Schedule of Repayment in respect of Fixed Deposits accepted by the Company from Public and thereby complete the repayment process within a period of 30 months from April 1, 2000. The repayments, though started as per the Schedule, had to be aborted subsequently, due to continual financial hardships and non- recoveries of amounts due. Despite the financial problems, the Company repaid Rs. 30,000/- by way of principal during the year.

b. 19% Non-convertible Debentures - 1997 Series (NCDs) aggregating to Rs. 78,60,850/- which have already become due for redemption and have remained unpaid as on June 30, 2000 for which the Company had decided to repay on the same lines with the Order of CLB for Public Deposits. Accordingly, the Company was expected to pay including accrued interest an aggregate sum of Rs. 82,81,835/- upto March 31, 2014. Till date the Company has not been able to repay and the balance ofRs. 92,45,835/- has remained unpaid. The aggregate overdue NCDs as on March 31, 2013 was Rs. 60,53,401/- The Company may pay these overdue NCDs on the same lines, as may be revised by the CLB, for the Public Deposits.

c. The Company has approached the Company Law Board (CLB), Western Region Bench, Mumbai, for revision in the Schedule, earlier approved by CLB vide order dated April 4, 2000, in respect of payment of outstanding deposits. The Company''s request for the said revision is under consideration by CLB.

6) Amount due to Khetan Industries Private Limited against Inter-Corporate Deposit placed with us for X 25,00,000/- for three months and the same was due for repayment on 24th January 1996. Thereafter same were converted into advance received for purchase of equity shares under instructions of Company official''s letter dated 22nd January 1996. Same advance were not invested in equity shares due to existing market conditions. Thereafter advance were not repaid due to dispute between promoters of the company. However company had filed Summary Suit in 1998 before the Hon''ble High Court, Mumbai which had been instituted under Order 37 of the Code of Civil Procedure, 1908 and Hon''ble High Court has passed vide Order dated 2nd September 2009, directed that interest @ 6% per annum be payable by the Company from 1st August 1998, being the date of suit, till the payment or realization of the amount due.

7) The Company has not been able to comply with provision of Sections 372Aof the Companies Act, 1956. The Company as explained earlier has not been carrying on any activities. Further the Company is restrained from selling its investments as explained in Note 4.

8) 12,00,000 10% Cumulative Preference shares of Rs. 10/- each fully paid-up, aggregating Rs. 1.20 crores, allotted by the Company in 1998, were redeemable at par on March 31, 2003. However, on account of acute financial crisis being faced by the Company, the repayment was not done. Further, the Company was unable to issue any equity shares to facilitate such redemption.

9) Accounting Standard 16 - Segment Reporting :

The Company considers its entire operations under single segment ''Investment''. The Companies operations are only in India.

10) Accounting Standard 18 - Related Party Disclosures : A. Relationship:

i Key Management Personnel

Mr. S. K. Nandi

Mr. V. M. Satyan

Mr. P. Krishnan ii. Other related parties where controls/significant influence exists:

Kalpavruksh Holdings & Investments Pvt. Ltd.

11) Deferred Taxation :

The Company has, on prudence, not recognised Deferred Tax Assets (net) Rs. 1,78,33,421/- mainly representing past losses and unabsorbed depreciation due to uncertainty of future profits in terms of Accounting Standard 22-Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India,

12) Figures in brackets indicate figures of previous year.

13) Previous year figures have been regrouped / reclassified wherever necessary.

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Mar 31, 2013

1) TREATMENT OF CONTINGENT LIABILITIES :

No provision is made for contingent liabilities

2) TAXATION :

i) Current tax is determined as an amount of tax payable in respect of taxable income for the year.

ii) In accordance with Accounting Standard 22 - Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences is accounted for, using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

iii) Deferred tax assets arising from timing differences are recognised only on the consideration of prudence. [Refer Note 12 to the Accounts]

3) The application of the Company for registration to carry on the business of a Non-Banking Financial Company (NBFC) was not considered favourably by the Reserve Bank of India (Department of Non-Banking Supervision) by its Order of November 25, 1998. However, the Company was legally advised that it can carry on business of Non-Banking Financial Company for the benefit of its deposit holders to repay the outstanding principals and interest thereon in respect of the deposits matured, and also to meet its administrative and other related expenses. The Company can also continue to service its existing contracts and obligations and business already concluded.

However, with the Company not being permitted to undertake any NBFC activity, the Company let out is premises at Navsari to an associate company for its operations. Unfortunately the rental income received by the Company has been nominal and inadequate to discharge the various liabilities. The Company has applied for revision in the Schedule of Repayments, approved earlier by the Company Law Board (CLB), Western Region Bench, Mumbai vide Order dated April 4, 2000 read together with Corrigendum dated May 10,2001, the approval of which is awaited. The Company has also advised CLB that one of the promoters of the Company will be bringing in the necessary funds to facilitate the repayment of deposits on the lines of the revised Schedule submitted to CLB and pending consideration, as also to meet the Company''s administrative and other related expenses and revival of the Company thereafter.

As at As at March 31, 2013 March 31, 2012 Rs. Rs.

4) a. Contingent liabilities not provided for in respect of:

i. Income-tax and other demands for earlier years, as the Company has disputed 3,00,98,640 3,00,98,640 the relevant orders and preferred appeals [against which Rs. NIL (Previous year Rs. 67,98,228) has since been paid ]

ii. Guarantee given on behalf of a Company under the same management 2,00,00,000 2,00,00,000

iii. Arrears of Cumulative Preference Dividend for the period March 30, 1998 to . 1,80,02,000 1,68,02,000 March 31, 2010 (Free of Income -Tax and subject to Dividend Tax)



b. During a search in an earlier year in the premises of the Company, the investigating agency of the Government of India, had seized, inter-alia, certain shares, debentures and unit certificates of the Company. These shares, debentures and unit certificates have since been released by the agency, however the Company has been restrained from dealing with the same.

5) a. The Company has provided depreciation on plant and machinery given on lease on triple shift basis or otherwise on the same basis as the last time for which information is available from the respective lessees.

b. Depreciation on assets given on lease prior to April 1, 2001, is provided as described in Clause 5(b) of Significant Accounting Policies under Schedule 13 and not as required by the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India. If the Company were to provide depreciation as per the Guidance Note, what would be the impact on losses for the year and the balance to be carried to the Net Block of Fixed Assets have not been worked out.

6) Under the Miscellaneous Petition filed by the Custodian for recovery of principal of Rs. 2,88,00,000, received from a company in an earlier year, and interest thereon, the Special Court, set up at Bombay under the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance, 1992, passed an Order on July 5, 1995, and directed the Company to repay the principal amount with interest @ 20% p.a. from March 25,1992, i.e. from the date of receipt of the deposit within a period of three years. However, the Company has till date paid onlyRs. 3,14,87,341 (Previous yearRs. 3,14,87,341) against the said liability. The balance liability of Rs. 11,82,56,591 (Previous year Rs. 11,24,96,591) is included as "Other Liabilities" under "Current Liabilities - Note 6".

7) a. The Company Law Board, Western Region Branch, Mumbai (CLB), in terms of Section 58A (9) of the Companies Act, 1956/Section 45QA(2) of the Reserve Bank of India Act, 1934, vide Order dated April 4, 2000 read together with Corrigendum dated May 10, 2000 had directed the Company to follow a Schedule of Repayment in respect of Fixed Deposits accepted by the Company from Public and thereby complete the repayment process within a period of 30 months from April 1, 2000. The repayments, though started as per the Schedule, had to be aborted subsequently, due to continual financial hardships and non- recoveries of amounts due. Despite the financial problems, the Company repaid Rs. 81,000/- by way of principal during the year.

b. 19% Non-convertible Debentures - 1997 Series (NCDs) aggregating to Rs. 78,60,850, which have already become due for redemption and have remained unpaid as on June 30, 2000 for which the Company had decided to repay on the same lines with the Order of CLB for Public Deposits. Accordingly, the Company was expected to pay including accrued interest an aggregate sum of Rs. 82,81,835 upto March 31, 2013. Till date the Company has not been able to repay and the balance of Rs. 92,92,835 has remained unpaid. The aggregate over due NCDs as on March 31, 2013 was Rs. 61,01,046. The Company may pay these overdue NCDs on the same lines, as may be revised by the CLB, for the Public Deposits.

8) The Company has not been able to comply with provision of Sections 372A of the Companies Act, 1956. The Company as explained earlier has not been carrying on any activities. Further the Company is restrained from selling its investments as explained in Note 2b.

9) 12,00,000 10% cumulative preference shares of Rs. 10/- each fully paid-up, aggregating Rs. 1.20 crores, allotted by the Company in 1998, were redeemable at par on March 31, 2003. However, on account of acute financial crisis being faced by the Company, the repayment was not done. Further, the Company was unable to issue any equity shares to facilitate such redemption.

10) Accounting Standard 16 - Segment Reporting :

The Company considers its entire operations under single segment ''Investment''. The Companies operations are only in India.

11) Accounting Standard 18 - Related Party Disclosures :

A. Relationship:

i Key Management Personnel: Mr. S. K. Nandi Mr. V.M. Satyan Mr. P. Krishnan

ii. Other related parties where controls/significant influence exists: Kalpavruksh Holdings Pvt. Ltd.

12) As referred to in Note 6 earlier, the Company has approached the Company Law Board (CLB), Western Region Bench, Mumbai, for revision in the Schedule, earlier approved by CLB vide order dated April 4, 2000, in respect of payment of outstanding deposits. The Company''s request for the said revision is under consideration by CLB.

13) Figures in brackets indicate figures of previous year.

14) Previous year figures have been regrouped/reclassified wherever necessary.

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Mar 31, 2010

1. The application of the Company for registration to carry on the business of a Non-Banking Financial Company (NBFC) was not considered favourably by the Reserve Bank of India (Department of Non-Banking Supervision) by its Order of November 25,1998. However, the Company was legally advised that it can carry on business of Non-Banking Financial Company for the benefit of its deposit holders to repay the outstanding principals and interest thereon in respect of the deposits matured, and also to meet its administrative and other related expenses. The Company can also continue to service its existing contracts and obligatbns and business already concluded.

However, with the Company not being permitted to undertake any NBFC activity. The Company let out is premises at Navsari to an associate company for its operations. Unfortunately the rental income received by the Company has been nominal and inadequate to discharge the various libilities. The Company has applied for revision in the Schedule of Repayments, approved earlier by the Company Law Board (CLB), Western region Bench, Mumbai vide Order dated April 4,2000 read together with corrigendum dated May 10,2001, the approval of which is awaited. The Company has also advised CLB that one of the promoters of the Company will be bringing in the necessary funds to facilitates the repayment of deposits on the lines of the revised Schedule submitted to CLB and pending consideration, as also to meet the Companys administrative and other related expenses and revival of the Company thereafter.

Asat Asat March 31,2010 March 31.2009

Rupees Rupees

2. a. Conttgent liabilities not

provided for in respect of:

i. Income-tax and other 2,69,51,433 5.99.59.411

demands for earlier years, as the Company has disputed the relevant orders and preferred appeals [againsi which Rs.69,13.228 (Previous year Rs. 67.98,228) has since been paid ]

ii. Guarantee given on behalf 2,00,00,000 2,00,00,000 of a Company under the same management

iii. Arrears of Cumulative 1,44,02,000 1,32.02,000

Preference Dividend lor the period March 30,1998 to March 31.2010 (Free of Income -Tax and subject to Dividend Tax)

b. During a search in an earlier year in the premises of the Company, the investigating agency of the Government of India, had seized, inter-alia, certain Shares, Debentures and Unit Certificates of the Company. These shares, debentures and Unit Certificates have since been released by the agency, however the company has been restrained from dealing with same.

3. a. The Company has provided depreciation on plant and

machinery given on lease on triple shift basis or otherwise on the same basis as the last time for which information is available from the respective lessees.

b. Depreciation on assets given on (ease prior to April 1, 2001, is provided as described in Clause 5(b) of Significant Accounting Policies under Schedule 13 and not as required by the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India. If the Company were to provide depreciation as per the Guidance Note, what would be the impact on losses for the year and the balance to be carried to the Net Block of Fixed Assets have not been worked out.

4. Under the Miscellaneous Petition filed by the Custodian for recovery of principal of Rs. 2,88,00,000, received from a company in an earlier year, and interest thereon, the Special Court, set up at Bombay under the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance, 1992, passed an Order on July 5,1995, and directed the Company to repay the principal amount with interest @ 20% p.a. from March 25,1992, i.e. from the date of receipt of the deposit within a period of three years. However, the Company has till date paid only Rs.3,14,87,341 (Previous year Rs. 3,14,87,341) against the said liability. The balance liability of Rs. 1,00,97,6591 (Previous year Rs. 9,52,16,591) is included as "Other Liabilities" under "Current Liabilities - Schedule 10th.

5. The Company has been legally advised that since its "Net Owned Funds" are below Rs. 25,00,000 and has stopped accepting fresh deposits though hold existing deposits and as it has been refused registration to carry on the business as an NBFC by the Reserve Bank of India, though it carries on business of a non- banking financial company restricted to effecting recoveries and repaying deposits and other obligations, the direction of Non- Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 are not applicable to the Company. Accordingly, the Company has not made provisions for Non-Performing Assets, the details of which are as under:

6. a. The Company Law Board, Western Region Branch, Mumbai (CLB), in terms of Section 58A (9) of the Companies Act, 1956/Section 45QA(2) of the Reserve Bank of India Act, 1934, vide Order dated April 4, 2000 read together with Corrigendum dated May 10, 2000 had directed the Company to follow a Schedule of Repayment in respect of Fixed Deposits accepted by the Company from Public and thereby complete the repayment process within a period of 30 months Irom April 1, 2000. The Company Law Board, Western Region Bench, Mumbai (CLB), in terms of Section 58(A)(9) of the Companies Act, 1956/Section 45QA(2) of the Reserve Bank of India Act, 1934, vide Order dated April 4, 2000, read together with Corrigendum dated May 10, 2000, had directed the Company to follow a Schedule of Repayment, in respect of Fixed Deposits accepted by the Company from public and thereby complete the repayment process within a period of 30 months from April 1,2000. The repayments, though started as per the Schedule, had to be aborted subsequently, due to continual financial hardships and non- recoveries of amounts due. Despite the financial problems, the Company repaid Rs. 2,29,752/- by way of principal during the year.

b. 19% Non-convertible Debentures - 1997 Series (NCDs) aggregating to Rs. 78,60,850, which have already become due for redemption and have remained unpaid as on June 30, 2000 for which the Company had decided to repay on the same lines with the Order of CLB for Public Deposits. Accordingly, the Company was expected to pay including accrued interest an aggregate sum of Rs. 1,04,71,835 upto March 31,2010. Till date the Company has not able to repay and the balance of Rs.1,14,82,835 has remained unpaid. The aggregate over due NCDs as on March 31,2010 was Rs. 68.02,114. The Company may pay these overdue NCDs on the same lines, as may be revised by the CLB, for the Public Deposits.

7. The Company has not been able to comply with provision of Sections 372A of the Companies Act, 1956. The Company as explained earlier has not been carry on any activities. Further the Company is restrained from selling its investments as explained in Note 2b.

8. 12,00,00010% cumulative preference shares of Rs. 10/- each fully paid-up, aggregating Rs. 1.20 crores, allotted by the Company in 1998, were redeemable at par on March 31,2003. However, on account of acute financial crisis being faced by the Company, the repayment was not done. Further, the Company was unable to issue any equity shares to facilitate such redemption.

9. Accounting Standard 16 - Segment Reporting:

The Company considers its entire operations under single segment Investment. The Companies operations are only in India.

11. Accounting Standard 18 - Related Party Disclosures:

A. Relationship:

i Key Management Personnel :

Mr. S. K. Nandi

Mr. V.M. Satyan

Mr. P. Krishnan

ii. Other related parties where controls/significant influence exists:

Kalpavruksh Holding Pvt. Ltd.

10. Deferred Taxation

The Company has, on prudence, not recoginsed Deferred Tax Assets (net) Rs. 11,17,15,159/- mainly representing past losses and unabsorbed depreciation due to uncertainty of future profits in terms of Accounting Standard 22-Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India.

11. As referred to in Note 6 earlier, the Company has approached the Company Law Board (CLB), Western Region Bench, Mumbai, for revision in the Schedule, earlier approved by CLB vide order dated April 4, 2000. in respect of payment of outstanding deposits. The Companys request for the said revision is under consideration by CLB.

12. Figures in brackets indicate figures of previous year.

13. The previous years figures have been regrouped/rearranged/re- classified, to conform with the Current Periods classification.