అకౌంట్స్ గమనికలుDigjam Ltd.[Old]

Mar 31, 2015

1. Company Overview

DIGJAM Limited ("The Company") is a public limited company incorporated as Shree Digvijaya Woollen Mills Limited on March 15, 1948 under the Indian Companies Act, 1913. The present name was adopted w.e.f. April 9, 2008. Equity shares of the Company are listed on BSE and National Stock Exchange. The Company is engaged in the manufacture of woollen/worsted fabrics at Jamnagar, Gujarat under the brand "DIGJAM".

2.1 Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up.

The Company has on March 27, 2015 allotted 5,00,000 - 8% Non-Convertible Redeemable Preference Shares of Rs. 100 each for cash at par. The Preference Shares are entitled to dividend @ 8% p.a. (non-cumulative) in preference to the Equity Shares but are not entitled to vote at the General Meeting of the Company unless dividend has been in arrears for minimum 2 years. The Preference Shares are non-participating and shall have preferential right to repayment in the case of a winding up or repayment of capital of the amount of the share capital paid-up.

The 8% Non-Convertible Redeemable Preference Shares are redeemable at par at the end of 10 years from the date of allotment with an option to the Company to redeem at any time earlier thereto.

2.2 Shareholders holding more than 5% shares in the Company

I. Equity Shares of Rs.10 each

Central India General Agents Ltd.: 1,65,14,000 Shares; 18.84% (Previous Year: 1,61,00,000 Shares; 18.37%) ICICI Bank Ltd. 87,63,381 Shares; 10.00% (Previous Year: 91,77,381 Shares; 10.47%)

Birla Holdings Ltd.: 72,50,000 Shares; 8.27% (Previous Year: 72,50,000 Shares; 8.27%) iPro Capital Ltd.: 70,00,000 Shares; 7.99% (Previous Year: 70,00,000 Shares; 7.99%)

Sukriti Education Society: 48,09,881 Shares; 5.49% (Previous Year: 48,09,881 Shares; 5.49%)

II. 8% Non- Convertible Redeemable Preference Shares of Rs.100 each Central India General Agents Ltd.: 5,00,000 Shares; 100.00% (Previous Year: Nil)

3. Long Term Borrowings

Loan from a bank [total outstanding - Nil (Previous year: Rs 1,25,00,000)] which was secured by first charge on the fixed assets of the Company at Jamnagar, DIGJAM brand and pledge of part of the promoters'' shareholding in the Company was fully repaid during the year.

Loan from Housing Development Finance Corporation Limited [total outstanding - Rs. Nil (Previous year: Rs. 5,00,259)] together with the right of recompense, if any, on account of settlement is secured by mortgage on specified immovable properties.

Loans from banks and Financial Institutions for purchase of vehicles [total outstanding - Rs. 8,45,494 (Previous year: Rs. Nil)] are secured against the vehicles purchased out of those loans. The loans are repayable, in 49 equated monthly instalments, by April 2019. Loans from others for purchase of vehicles [total outstanding - Rs. 2,45,598 (Previous year: Rs. 4,63,194)] are secured against the vehicles purchased out of those loans. The loans are repayable, in 12 equated monthly instalments, by March, 2016.

Unsecured Intercorporate Deposits of Rs. 6,14,00,000 (Previous year: Rs. 3,84,00,000) are repayable by June, 2016 and Rs. 1,50,00,000 (Previous year: Rs. 1,50,00,000) thereafter.

4. In view of uncertainty that sufficient future taxable income will be available against unabsorbed depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised.

5. As on March 31,2015 Company''s current liabilities are over its current assets. The Company has taken steps to strengthen its liquidity position by infusing long term funds by way of Preference Shares and long term loans. The Company expects to earn operating profit and a positive cash flow during the current year from the operations.

6. Foreign Exchange Exposure

i. The outstanding foreign exchange exposures hedged under forward contracts:

Payable: AUD - 3,27,776, Rs. 1,55,79,203 (Previous year: AUD 3,18,970, Rs. 1,76,90,087).

ii. The foreign exchange exposures not covered under forward contracts -

Receivables: EURO - 3640, Rs. 2,44,257 (Previous year: EURO 8650, Rs. 7,12,158), USD - 1,56,946, Rs. 98,04,387 (Previous year: USD 2,09,122, Rs. 1,25,30,603) and GBP - 50, Rs. 4,619 (Previous year: GBP 5718, Rs. 5,69,698).

Payables: AUD - 7,60,053, Rs. 3,61,25,336 (Previous year: AUD 7,04,373, Rs. 3,90,64,507), EURO - 1,32,742, Rs. 89,13,625 (Previous year: EURO 1,74,538, Rs. 1,43,69,675), USD - 1,14,504, Rs. 71,55,331 (Previous year: USD 1,01,546, Rs. 60,84,636) and GBP - 205, Rs. 18,970 (Previous year: GBP 480, Rs. 47,831).

7. Related Party Disclosures

(in terms of AS 18)

i. Key Managerial Personnel:

Sri C. Bhaskar (Managing Director & Chief Executive Officer) - Remuneration - Rs. 42,31,817 (Previous year: Rs. 22,90,291). The above remuneration exclude gratuity funded through LIC, and leave obligation for which contribution/provision are not separately identified. There was no other transaction with them during the aforesaid tenure.

ii. Xpro India Ltd. (a company where common management may be deemed to exist) - aggregate of Short Term Deposits taken from them from time to time - Rs. 5,25,00,000 (Previous year: Rs. 14,00,00,000); Deposits repaid from time to time - Rs. 9,00,00,000 (Previous year: Rs. 13,75,00,000). Interest expense (gross) on above Deposits - Rs. 58,06,489 (Previous year: Rs. 69,54,414) and Expenses reimbursed - Rs. 6,97,577 (Previous year: Rs. 7,82,240). Maximum outstanding balance (credit) during the year - Rs. 5,12,62,825, (Previous year: Rs. 5,12,32,535). Outstanding balance (credit) as at March 31,2015 - Rs. 56,31,382 (Previous year: Rs. 4,25,00,000).

8. The previous year''s figures have been regrouped/reclassified as necessary.

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Mar 31, 2014

1. During the previous year, pursuant to sanction of the Scheme of Arrangement vide Order dated May 4, 2012 by the Hon''ble High Court of Gujarat, the Company, on June 4, 2012, allotted 1,49,13,325 Equity Shares of Rs. 10/- each at a price of Rs. 14.50 (including premium of Rs. 4.50) per Equity Share for Rs. 21,62,43,290, being the aggregate paid-up amount on Preference Shares thereby converted and cancelled and adjusted the said amount towards Equity Capital Rs. 14,91,33,250 and Securities Premium Rs. 6,71,10,040. There is no change in the Share Capital during the year.

2. Contingent Liabilities and Commitments (Rs.) (not provided for) As at 31.3.2014 As at 31.3.2013

Contingent Liabilities Service Tax matters under appeal 11,74,484 11,74,484 Commitments

Estimated amount of contracts remaining to be executed on capital account (Net of Advances) 29,33,480 76,21,471

3. In view of uncertainty that sufficient future taxable income will be available against unabsorbed depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised.

4. Related party disclosures

(in terms of AS 18)

i. Key Managerial Personnel:

a. Sri C. Bhaskar (Managing Director & Chief Executive Officer) - Remuneration - Rs. 22,90,291 (Previous year : Rs.19,08,176

- w.e.f June 1, 2012)

b. Sri C. L. Rathi (Managing Director upto May 31, 2012) - Remuneration - Rs. Nil (Previous year : Rs.33,22,708) including retirement benefits - Rs. 27,12,856.

The above remuneration exclude gratuity funded through LIC, and leave obligation for which contribution/provision are not separately identified. There was no other transaction with them during the aforesaid tenure.

ii. Xpro India Ltd. (a company where common management may be deemed to exist) - aggregate of Short Term Deposits taken from them from time to time - Rs.14,00,00,000 (Previous year: Rs. 10,50,00,000); Deposits repaid from time to time - Rs. 13,75,00,000 (Previous year: Rs. 11,50,00,000). Interest expense (gross) on above Deposits - Rs. 69,54,414 (Previous year: Rs. 75,85,927) and Expenses reimbursed - Rs. 7,82,240 (Previous year: Rs. 38,944). Settlement of other liability - Rs. Nil (Previous year: Rs. 22,10,455). Maximum outstanding balance (credit) during the year - Rs. 5,12,32,535, (Previous year: Rs. 5,84,42,988). Outstanding balance (credit) as at March 31, 2014 - Rs. 4,25,00,000 (Previous year: Rs. 4,00,00,000).

5. The previous year''s figures have been regrouped/reclassified as necessary.

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Mar 31, 2013

1.1 Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up.

1.2 Pursuant to sanction of the Scheme of Arrangement vide Order dated May 4, 2012 by the Hon''ble High Court of Gujarat, the Company has, on June 4, 2012, allotted 1,49,13,325 Equity Shares of Rs. 10/- each at a price of Rs. 14.50 (including premium of Rs. 4.50) per Equity Share for Rs.21,62,43,290, being the aggregate paid-up amount on Preference Shares thereby converted and cancelled and adjusted the said amount towards Equity Capital Rs.14,91,33,250 and Securities Premium Rs. 6,71,10,040. Upon the Scheme being effective, the Authorised Share Capital of the Company stood reclassified as above.

2. Contingent Liabilities and Commitments (Rs.)

(not provided for) As at 31.3.2013 As at 31.3.2012

Contingent Liabilities

Income Tax/Service Tax matters under appeal 11,74,484 8,39,512

Commitments

Estimated amount of contracts remaining to 76,21,471 - be executed on capital account (Net of Advances)

Defined benefits plans: The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India, who invests the funds as per the IRDA Regulations. The Company also provides leave encashment to the employees. The details of these defined benefit plans recognised in the financial statements are as under:

3. Exceptional Items during the previous year was on account of gain of Rs 3,60,07,255 on settlement of interest liability on term loan from a financial institution.

4. In view of uncertainty that sufficient future taxable income will be available against unabsorbed depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised.

5. Foreign Exchange Exposure

i. The outstanding foreign exchange exposures hedged under forward contracts:

Receivables: EURO - 6,216 (Previous year: 9,98,106), USD - 92,721 (Previous year: 8,62,362) and GBP - 18,220

(Previous year : Nil).

Payable: AUD - 9,23,546 (Previous year: 8,57,303) and USD - Nil (Previous year: 2,53,558)

ii. The foreign exchange exposures not covered-

Receivables: EURO - 90 (Previous year: 1,29,536), USD - 50,055 (Previous year: 2,20,169) and GBP - 50 (Previous year : 5,604).

Payables: AUD - Nil (Previous year: 10,87,657), EURO - 2,47,783 (Previous year : 1,63,234), USD - 92,409 (Previous year: 2,53,076) and GBP - 12,428 (Previous year: 6,455).

6. Foreign Exchange loss (net) of Rs. 1,40,33,024 (Previous year: Rs. 96,66,382) has been included in respective heads of the Statement of Profit and Loss.

7. Related party disclosures

(in terms of AS 18)

i. Key Managerial Personnel:

a. Sri C. L. Rathi (Managing Director upto May 31, 2012) - Remuneration - Rs. 33,22,708 (including retirement benefits Rs. 27,12,856) (Previous year: Rs. 35,17,846), and

b. Sri C. Bhaskar (Managing Director & Chief Executive Officer from June 1, 2012 onwards) - Remuneration - Rs. 19,08,176 (Previous year: Nil)

The above remuneration exclude gratuity funded through LIC, and leave obligation for which contribution/provision are not separately identified. There was no other transaction with them during the aforesaid tenure.

ii. Xpro India Ltd.(a company where common management may be deemed to exist) - aggregate of Short Term Deposits taken from them from time to time - Rs. 10,50,00,000 (Previous year: Rs. 10,00,00,000); Deposits repaid from time to time - Rs. 11,50,00,000 (Previous year: Rs. 6,00,00,000). Interest expense (gross) on above Deposits - Rs. 75,85,927 (Previous year: Rs. 25,52,338) and Expenses reimbursed - Rs. 38,944 (Previous year: Rs. 3,36,945). Settlement of other liability - Rs. 22,10,455 (Previous year: Nil). Maximum outstanding balance (credit) during the year - Rs. 5,84,42,988 (Previous year: Rs. 5,22,10,455). Outstanding balance (credit) as at March 31, 2013 - Rs. 4,00,00,000 (Previous year: Rs. 5,22,10,455).

8. The previous year''s figures have been regrouped/reclassified as necessary.

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Mar 31, 2012

1.1 Equity Shares carry voting rights at the General Meeting of the Company and are entitled to dividend and to participate in surplus, if any, in the event of winding up.

Preference Shares are entitled to the fixed rate of dividend @ 8% p.a. in preference to the Equity Shares but are not entitled to vote at the General Meeting of the Company unless dividend has been in arrears for the prescribed minimum period. 20,00,000 8%-Cumulative Redeemable Preference Shares of Rs.100 each allotted on February 23, 2009 have consequently acquired voting rights at the Annual General Meeting held on August 25, 2011. In the event of winding up, the preference shares have a preferential right to repayment of capital over Equity Shares.

The 8% Cumulative Preference Shares of Rs.100 each are redeemable on expiry of 10 years from the respective dates of allotment with option to the holders to call for redemption after 5 years therefrom with notice of 3 months.

The 8% Non-cumulative Preference Shares of Rs.10 each are redeemable on expiry of 5 years from the date of allotment.

1.2 The Company has proposed, during January, 2012, a Scheme of Arrangement with its Shareholders in terms of Sections 391-393 and other applicable provisions of the Companies Act, 1956 for conversion of outstanding preference share capital aggregating Rs 2162.43 lacs, as aforesaid, into appropriate number of equity shares at a price of Rs 14.50 (including premium of Rs 4.50) per share subject to necessary statutory and other approvals/consents including sanction of the Hon'ble High Court of Gujarat. Pending such approvals/consents, the effect of the said Scheme has not been given in the accounts.

Loans from a bank [total outstanding - Rs. 12,50.00 lacs (Previous period: Rs. 12,50.00 lacs)] is secured by first charge on the fixed assets of the Company at Jamnagar, DIGJAM brand and by pledge of part of the promoters' shareholding in the Company. The loan is repayable, in 16 quarterly instalments from the date of loan, by March, 2016.

Loans from banks for purchase of vehicles [total outstanding - Rs. 9.02 lacs (Previous period: Rs. 2.42 lacs)] are secured against the vehicles purchased out of those loans. The loans are repayable, in equated monthly instalments, by March, 2016.

Loan from Housing Development Finance Corporation Limited [total outstanding - Rs. 53.00 lacs (Previous period: Rs. 77.00 lacs)] is secured by mortgage on specified immovable properties. The loan is repayable, in monthly instalments, by June, 2014.

Loan from Export Import Bank of India [total outstanding - Rs. 2,84.58 lacs (Previous period: Rs. 5,20.39 lacs)] is secured by a mortgage and hypothecation, subservient to the charges in favour of term lenders/working capital lenders, over the movable and immovable fixed assets of the Company situated at Jamnagar, both present and future. The loan is repayable, in quarterly instalments, by July, 2013.

Unsecured Deposits are repayable latest by July, 2014.

Secured loans are for working capital from consortium of banks, and are secured by first charge on inventory and book debts besides second charge on movable machinery and fixed assets at Jamnagar as well as on DIGJAM brand, all ranking pari passu, and pledge of part of the promoters' shareholding in the Company.

There are no dues to Micro and Small Enterprises, determined to the extent such parties have been identified on the basis of information available with the Company, as at March 31, 2012, which requires disclosure under the Micro, Small and Medium Enterprises Development Act, 2006.

* The Capital Advances include Rs. 8,80.63 lacs (Previous period: Rs. 8,80.63 lacs) towards building, the physical possession of which has been arbitrarily withheld by the developer. The Company has taken necessary steps to get the possession of the said building/recovery of amounts paid alongwith interest. Necessary recognition of interest etc., if any, will be made on settlement of the ongoing legal/arbitration proceedings.

** includes interest free loan to employees - Rs. 3.00 lacs (Previous period : Nil)

* excludes doubtful debts - Rs. 2,59.25 lacs fully provided (Previous period: Rs. 3,58.09 lacs). Bad Debts written off during the year (i) against Provision for doubtful debts - Rs. 64.24 lacs (Previous period: Rs. 87.06 lacs), and (ii) charged to Profit & Loss Account for the year - Nil (Previous period: Rs. 1.48 lacs).

* exclude doubtful advances, against which provision made, of Rs. 5.58 lacs (Previous period: Rs. 8,79.93 lacs), Doubtful advance of Rs. 8,74.35 lacs (Previous period: Nil) written off during the year against provision for doubtful advances.

** include interest free loans to employees - Rs. 7.44 lacs (Previous period: Rs. 4.62 lacs). Maximum outstanding balance of such loans during the year - Rs. 14.93 lacs (Previous period: Rs. 8.19 lacs).

1.3 (Rs. in lacs)

Contingent Liabilities 31.3.2012 31.3.2011 (not provided for)

Income Tax matters under appeal 8.40 -

2. Arrears of Cumulative Preference Shares dividend - Rs. 5,98.15 lacs (Previous period: Rs. 3,98.25 lacs) including Dividend Distribution Tax - Rs. 83.49 lacs (Previous period : Rs. 55.59 lacs)

Defined benefits plans: The Company has defined benefit plans for gratuity to eligible employees, contributions for which are made to Life Insurance Corporation of India, who invests the funds as per the IRDA Regulations. The Company also provides leave encashment to the employees. The details of these defined benefit plans recognised in the financial statements are as under:

3. Exceptional Items during the year is on account of gain of Rs. 3,60.07 lacs on settlement of interest liability on term loan from a financial institution. Those during the previous period included writeback of old unsecured loan and interest provision of Rs. 3,69.89 lacs.

4. In view of uncertainty that sufficient future taxable income will be available against unabsorbed depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised.

5. Foreign Exchange Exposure

i. The outstanding foreign exchange exposures hedged under forward contracts :

Receivables: EURO - 9.98 lacs (Previous period: 3.40 lacs), USD - 8.62 lacs (Previous period: 2.78 lacs) and GBP - Nil (Previous period : 0.11 lacs).

Payable: AUD - 8.57 lacs (Previous period: 13.39 lacs) and USD - 2.54 lacs (Previous period: Nil)

ii. The foreign exchange exposures not covered -

Receivables: EURO - 1.30 lacs (Previous period : 0.24 lacs), USD - 2.20 lacs (Previous period: 0.74 lacs) and GBP - 0.06 lacs (Previous period : Nil).

Payables: AUD - 10.88 lacs (Previous period : 2.69 lacs) , EURO - 1.63 lacs (Previous period : 2.59 lacs), USD - 2.53 lacs (Previous period : 1.25 lacs) and GBP - 0.06 lacs (Previous period : 0.20 lacs).

6. Foreign Exchange loss (net) of Rs. 96.66 lacs (Previous period: Rs. 6.54 lacs) has been included in respective heads of the Statement of Profit and Loss.

7. Related party disclosures

(in terms of AS 18)

The Company has identified Shri C. L. Rathi, Managing Director, as a related party, being key managerial personnel. His remuneration (excluding gratuity funded through LIC, for which his contribution is not separately identified) was Rs 35.18 lacs (Previous period: Rs 21.06 lacs). There was no other transaction with him during the year.

8. The current year's figures are for 12 months ending March 31, 2012 whereas previous period's figures are for 6 months i.e. from October 1, 2010 to March 31, 2011. Hence these are not comparable.

9. In view of the revision to the Schedule VI as per notification issued by the Central Government, the financial statements for the year ended 31st March, 2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous period's figures have been accordingly regrouped/reclassified to confirm to the current year's classification.

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Sep 30, 2010

1. a. During the period, the Company issued and allotted 1,50.000 8% Cumulative Redeemable Preference Shares of Rs.100 each, aggregating to Rs. 1,50.00 lacs, on private placement basis.

b. Pursuant to settlement of loans with ARCIL (Note 7 below), debt amounting to Rs. 5,00.00 lacs is to be converted into redeemable preference shares, redeemable after five years from the date of issuance. Pending finalization of terms and allotment, the same has been shown as Preference Capital Suspense Account in the Balance Sheet.

2. Accumulated Depreciation upto September 30, 2010 (Schedule 4) includes impairment loss on Plant & Machinery - Rs. 11.85 lacs (Previous year: Rs. 22.79 lacs).

3. Closing Stock of Raw Materials, Finished Goods and Stores & Spare Parts includes those in transit/bonded warehouse and/or with third parties Rs. 1,26.79 lacs (Previous year: Rs. 1,46.86 lacs).

4. Debtors over six months are net of provision of Rs. 4,95.36 lacs (Previous year: Rs 5,20.28 lacs). Bad Debts written off during the period/year (i) against provisions - Rs. 24.92 lacs (Previous year: Rs. 5.84 lacs), and (ii) charged to Profit & Loss Account for the period/ year and included under Freight & Other Selling Expenses - Rs. 13.76 lacs (Previous year: Nil).

5. Advances are net of provision of Rs. 8,77.85 lacs (Previous year - Rs. 8,77.85 lacs). The advances include (i) Rs. 8,80.63 lacs (Previous year: Rs. 8,80.63 lacs) towards building, the physical possession of which has been arbitrarily withheld by the developer. The Company has taken necessary steps to get the possession of the said building/recovery of amounts paid alongwith interest. Necessary recognition of interest etc., if any, will be made on settlement of the ongoing legal/arbitration proceedings, (ii) Interest-free loans to employees - Rs.- 6.86 lacs (Previous year: Rs. 2.64 lacs), maximum amount due during the period/year-Rs. 11.08 lacs (Previous year: Rs. 12.13 lacs).

6. a. Sundry creditors include (i) Acceptances - Rs. 15,01.52 lacs (Previous year: Rs. 12,63.47 lacs), and (ii)Advance from Customers- Rs. 1,08.00 lacs (Previous year: Rs. 1,04.54 lacs).

b. There are no dues to Micro and Small Enterprises, determined to the extent such parties have been identified on the basis of information available with the Company, as at September 30, 2010, which requires disclosure under the Micro, Small and Medium Enterprises Development Act, 2006.

7. i. Secured Loans

a. Effect has been given in these accounts to the settlement with Asset Reconstruction Company (India) Limited ("ARCIL") whose sanction, effective from July 1, 2010, envisages , inter alia, the settlement of loans including through proceeds of Companys properties at Faridabad, transfer of shares held as long term investment, conversion into preference shares and waiver. Balance amount of loan of ARCIL - Rs. 14,00.00 lacs (Previous year: Rs. 84,53.19 lacs) is secured by first charge on fixed assets at Jamnagar, DIGJAM brand and by pledge of Promoters shareholding in the Company as per the Scheme of Arrangement under Sections 391-394 of the Companies Act, 1956, the Appointed Date of which was July 1, 2004.

The said settlement is subject to compliance with various conditions specified in the sanction. On occurrence of event of default, as specified in the sanction, the remedies of ARCIL will include, inter alia, revocation of reliefs and concessions granted under Scheme of Arrangement and/or settlement proposal with retrospective effect and forfeiture of amount paid till date, which will be accounted for if, and when, determined

In view of assignment of financial assistance to ARCIL, under Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, no reference is/was required to be made by the Company to the BIFR as provided under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985.

b. Loans from Banks for purchase of vehicles —Rs. 3.38 lacs (Previous year: Rs. 13.62 lacs) are secured against the vehicles purchased out of those loans.

c. Working capital borrowings from banks - Rs. 31,8394 lacs (Previous year: Rs. 31,46.33 lacs) are secured by hypothecation of stocks, and by second charge on fixed assets of Jamnagar division.

d. Loan from Housing Development Finance Corporation Limited- Rs. 89.00 lacs (Previous year: Rs. 1,27.00 lacs) is secured/to be secured by mortgage on specified immovable properties.

e. Loan from Export Import Bank of India (Exim Bank) - Rs. 6,38.28-lacs (Previous year: Rs. 8,74.08 lacs) is secured by a mortgage and hypothecation, subservient to the charges in favour of term lenders/ working capital lenders, over the movable and immovable fixed assets of the Company situated at Jamnagar, both present and future.

ii. Unsecured Loans include interest accrued and due on unsecured loans- Rs. 3,24.89 lacs (Previous year: Rs. 2,30.94 lacs).

8. Foreign exchange loss (net) of Rs. 1,62.94 lacs (Previous year: Rs. 79.27 lacs) has been included in respective heads of the Profit and Loss Account.

10. a. Interest and Financial Charges includes: (i) Interest: on Fixed Loans - Rs. 1,50.37 lacs (Previous year: Rs. 70.14 lacs); on Others - Rs. 7,90.90 lacs (Previous year: Rs. 9,02.53 lacs) which is net of interest income Rs. 2,02.88 lacs (Previous year: Rs. 69.94 lacs) (ii) Financial Charges: Bank Charges and Commission etc. - Rs. 1,83.49 lacs (Previous year: Rs. 1,25.86 lacs).

b. Tax deducted at source on: Processing charges - Rs. 0.64 lacs, Interest Rs. 11.53 lacs, Professional/Service charges - Rs. 1.16 lacs, Commission - Rs. 2.01 lacs and Contract - Rs. 0.07 lacs (Previous year: Rs. 0.95 lacs, Rs. 6.33 lacs, Rs. 0.58 lacs, Rs. 0.62 lacs and Nil respectively).

11. a. Remuneration of the Managing Director consists of Salaries Rs. 31.50 lacs, approximate value of perquisites Rs,10.98 lacs, contribution to PF & other funds Rs. 9.69 lacs (Previous year: Rs. 21.00 lacs, Rs. 0.33 lacs, and Rs. 5.86 lacs respectively). These exclude accumulated amount of gratuity (funded through LIC fund, contributions not separately identified).

b. Directors commission is not payable due to inadequacy of profits under Section 349 of the Companies Act, 1956 and thus computation is not given.

12. The Company is lessee under various operating leases under which Rental expenses for the period/year were Rs. 55.40 lacs (Previous year: Rs. 27.31 lacs). The Company has not executed any non-cancellable lease.

13. Exceptionai items include :

a. Profit on sale of inoperative land and other fixed assets (Net) -Rs. 10,36.63 lacs (Previous year: Rs. 1,18.90 lacs)

b. Profit on transfer of Long Term Investments - Rs. 58.80 lacs"(Previous year: Nil)

c. Gain on settlement of loans (Note 7. i.a above)-Rs. 49,53.18 lacs (Previous year: Nil).

14 . Sales are reported net of turnover discount, returns claims and include - Job receipts and miscellaneous sales Rs. 24.27 lacs (Previous year: Rs. 11.20 lacs), Export Benefits, Claims etc. - Rs. 4,84.22 lacs (Previous year: Rs. 3,01.50 lacs).

15. Research and Development expenses Rs. 25.03 lacs (Previous year: Rs. 19.22 lacs), accounted for in the respective heads of the Profit & Loss Account.

17. In view of uncertainty that sufficient future taxable income will be available against unabsorbed depreciation and carried forward losses under tax laws, deferred tax asset has not been recognised.

19. CONTINGENT LIABILITIES NOT PROVIDED FOR September 30,2010 March 31, 2009

i. Bills discounted with the Companys Bankers - 1.25

ii. Claims against the Company not acknowledged as debts* 1.13 1.13

iii. Income Tax/Wealth Tax/Sales Tax etc. matters pending in appeals* 4.73 79.95

iv. Arrears of Cumulative Preference Shares dividend -including 2,99.57 18.98

Dividend Distribution Tex - Rs. 42.67 lacs (Previous year: Rs. 2.76 lacs)

v. Estimated amount of contracts remaining to be executed on capital accounts - 34.42

* In the opinion of the Company the possibility relating to net outflow on these accounts is remote

20. RELATED PARTY DISCLOSURES

[in terms of Accounting Standard (AS) 18 issued by the Institute of Chartered Accountants of India (ICAI)]

The Company has identified Shri C.L. Rathi, Managing Djrector, as a related party, being key managerial personnel. Besides remuneration, the details of which are set out in Note No 11(a), there was no other transaction with him.

23. The current periods (2009-10) figures are for 18 months, pursuant to change in the accounting year, so as to be from April 1, 2009 to September 30, 2010. Hence, these figures are not comparable with those of previous year, which are for 12 months.

24. Previous years figures have been rearranged/regrouped as necessary.