Bells Controls Ltd. के अकाउंट के लिये नोट

Sep 30, 2010

I) The accounts for the period under review is for 12 months, 30.09.2010 30.09.2009

Rs. Rs. ii) Contingent liabilities

Demands for Sales Tax against

which appeals are pending 5,67,76,984 5,67,76,984 Demands made by DG

FT for Duties against which 9,47,98,947 9,47,98,947

appeals are pending

iii) Auditors' Remuneration:

Audit fees (including service tax) 20,000 20,000

Tax audit fees (including - - service tax)

Miscellaneous certificates - - and other matters

Reimbursement of expenses 3,000

20,000 23,000

iv) Directors Remuneration:*

Salary 204000 204000

Perquisites - -

Contribution to Provident and Superannuation Funds - -

Sitting fees -

There are no Directors drawing remunerations

ii) a) Freehold land and buildings, Leasehold land and buildings and Plant and Machinery were revalued on 31st March, 1994 and the resultant increases of Rs.3,98.50,960, Rs,2,03,74,826 and Rs.1,15,40,796 respectively were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

b) Freehold land and buildings, leasehold land and buildings and Plant and Machinery of certain divisions of the Company were revalued on 31st March, 2000 by an external value appointed for the purpose. As per the revaluation report, based on current replacement value of such assets taking into account the present use thereof, there has been a net increase of Rs.5,01,22,683, Rs1,27,33,687 and Rs.7,09,48,088 respectively which were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

iii) Overdrafts from Banks are secured by hypothecation of stocks and book debts and also partly by a second charge on all movable/ immovable properties. Development loan from the Government of Karnataka is to be secured by second charge on the assets of the Belagola, Mysore unit of the Company, The term loan is secured/to be secured by way of first charge on the Company's fixed assets, both present and future, and by way of second charge on the Company's current assets.

iv) Amounts jn respect of various show cause and demand notices and claims raised by revenue and other authorities and other liabilities contingent in nature or otherwise have been disclosed / accounted for based on the details so far available and/or as compiled by the management. Further liability, if any, depending on its nature will be suitably recognised as and when ascertained.

v) The operations of the manufacturing units of the Company at Kolkata and at Mysore have been closed from May 2002 and August 2000 respectively. The operations at all the sites have also been suspended. Further, branches of the Company and various other divisions/departments of the Company have become non-operational. Although due to settlement of the dues of the workers, enabled the management to access the factory records the books of accounts, files, records or related computers and accounting packages/papers etc. at these locations, the same had deteriorated in quality and substantial portions could not be traced. This situation prevails also on matters relating to personnel records and certain statutory books. Consequently, in the current state of affairs there being inherent limitations and constraints/ the accounts and accordingly the balance of various assets and liabilities as given in the Balance Sheet and sales, income and revenue expenses including depreciation as given in the Profit and Loss Account and the quantitative information to paragraph 3,4C and 4D of Part II of Schedule VI have been compiled on the basis and to the extent available at Head Office. Consequently certain accountings inputs have been prepared on estimate basis, based on volume of transactions during relevant, periods, certain figures/details received from the factories, branches, various departments of the Company, details retrieved prior to the suspension of operations and other such adjustments as considered necessary by the management.

The balances compiled as above as such could not be fully reconciled with the primary and secondary records since various supporting and other related details are not accessible and these records could not be made available for verification. Reconciliation /validation of these figures with primary and secondary records, supporting, details, vouchers and quantitative statements for receipts, consumption, production, sales etc and adjustments with respect to events occurring after the date of the accounts will be carried out on availability of related detail Is on resumption of normal operations and necessary adj ustments will then be according by carried out on ascertainment of amounts thereof.

vi) a) Physical verification of fixed assets including capital work in progress has not been carried out. Also, reconciliation of balance of fixed assets with records containing individual asset-wise details has not been carried out. Accordingly, accurate discrepancies therein, if any, are presently not ascertainable.

b) Physical verification of inventories comprising of stocks of finished goods, stores, spare parts, raw materials and jobs in progress at factory could not be carried out Hence, discrepancies if any, with regard to balances as per book could not be accurately ascertained. As the Kolkata Port Trust, has acquired control of the go down on 23.09.2009 at B1, Hide Road, Kolkata as a means of settlement of their rental dues, the company does not have access to its stock of Plant & Machinery as well as certain raw materials.

c) Physical verification of cash in hand has not been conducted during the period. Consequently the discrepancies, if any, with regard to the book balance of such cash in hand are not ascertainable. However, a Management Certificate for the same has been furnished by the Company.

d) The period end realignment of foreign currency assets and liabilities could only be done to the extent readily ascertainable as party wise details of certain sundry debtors and sundry creditors were under compilation.

e) The balances of sundry debtors, sundry creditors, loans and advances and bank balances are subject to confirmation and consequential reconciliation. Necessary adjustments including those relating to any shortfall in assets that may arise on this account wilI be made on ascertainment of amounts thereof. ,

vii) a) Certain debit and credit balances including in respect of sundry debtors, sundry creditors, loans and advances are subject to the reconciliation with respect to individual details. Necessary adjustments, in this respect will be carried out on ascertainment of amounts thereof and confirmation from concerned parties.

The Bank balances including overdraft amounts are pending reconciliation with respect to the Bank statements due to absence of receipts of such statements from the respective Banks. Further, all the Bank balances are subject to confirmation and consequently reconciliation. Pending completion thereof the impact on revenue, sundry debtors, sundry creditors and other balances is presently not ascertainable.

b) The accumulated losses of the Company had exceeded its entire net worth in year 2001 - 2002. Consequent to the negative net worth, your Company applied for registration with the Board of industrial and Financial Reconstruction (BIFR) on 11.01.2003 and BIFR acknowledged the acceptance by registering your Company on 18.03.2003. The Registration no. is 133/2003. The case of hearing came up in BIFR before the Hon'ble Bench on 16-05.2007 when the Hon'ble BIFR ignoring the submissions made by your company at the time of hearing and ignoring the views/submissions of Kotak Mahindra Bank who holds majority percentage of total debt of the Company, confirmed its opinion of winding up of the Company.

Being thus aggrieved your Company moved in the Appellate Authority for Industrial and Financial Reconstruction, an appeal u/s 25 of the sick industrial companies (special provisions) Act. 1985 against order dated 16.05.2007 passed by the Hon'ble Bench-1 of the BIFR. The said appeal was up held in favour of your Company and the order of BIFR dated 16.05.07 was stayed on 26.09-2007.

Under the direction of Hon'ble bench of AAIFR, your company attended several Lenders Meet, conducted by State Bank of India (O/A) to decide upon the revival route. It emerged from the meetings that One Time settlement (OTS) with secured lenders was the only way to revive the company and accordingly proposal for such settlements has been made to two banks and the same is under active discussion. The company has also submitted the Draft Revival Scheme on 14.07.2009 to Hon'ble bench of AAIFR wherein the OTS proposal is embedded.

The management is confident of the successful outcome in the matter and accordingly the Accounts have been prepared under going concern concept

viii) Sundry Creditors include:

Tax deducted at source Rs.5333 (Previous year Rs.7086); (b) Sales Tax Rs.1,30,47,527 (Previous year Rs.1,30,47,527); Provident Fund for Employees Rs.nil (Previous year Rs. nil)

Pending final determination and compilation of details, necessary adjustments, if any, for the ultimate amounts payable, including on account of interest, would be made as and when ascertained,

ix) Liability for accrued interest (including on overdue amounts) on secured and unsecured loans and liabilities have been provided for on estimated basis at the normal rates as per the agreement with the parties. Consequential adjustments with respect to the above including for penal interest for. the period of default will be carried out as and when amounts thereof are determined.

x) The liability for custom duty, port charges etc., on items lying as on 30.09.2006 (including those which have been written off or fully provided for) could not be ascertained and provided for. Interest, if any payable on the custom duty or other charges as above will be accounted for as and when ascertained.

xi) Depreciation on fixed assets including the amount adjusted from Capital Reserve has been computed on estimated basis, with respect to entire block of assets, due to non-availability of individual assets-wise details.

xii) (a) Sundry Debtors of Rs3.59 lacs, are overdue for recovery. This amount is withheld by a customer on legal dispute.

(b) Loans and advances of Rs.28.16 lacs (Previous year Rs.53.24 lacs) are overdue for recovery. Steps are being taken for realisation of the same.

xii) Pending outcome of legal and other claims against the Company, additional liability that may arise in respect of final settlement is currently not ascertainable and has accordingly not been provided for.

xiii) The quantum of dues to small scale and ancillary industrial undertakings, being not ascertainable, in absence of relevant documents / information could not be identified and disclosed separately in the accounts.

xiv) In accordance with the Accounting Standard 20 on Earning Per Share issued by The Institute of Chartered Accountants of India, the Earning per share have been calculated as below:

xv) Details with respect to segmental reporting (AS 17).consolidated financial statements (AS 21), deferred taxation (AS 22) and related party transaction (AS 18), as required in terms of accounting1 standards issued by ICAI could not be compiled and disclosed in these accounts due to the reasons stated in Note (xii) above,

xvi) Previous year's figures have been rearranged and regrouped wherever necessary.

The figures of installed capacity are on single shift basis as certified by management. * No production during the year

* In absence of production and in absence of trading no material consumption of raw materials and components occurred during the year under review.

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Sep 30, 2009

I) a) Freehold land and buildings, Leasehold land and buildings and Plant and Machinery were revalued on 31st March, 1994 and the resultant increases of Rs.3,98,50,960, Rs.2,03,74,826 and Rs.1,15,40,796 respectively were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

b) Freehold land and buildings, leasehold land and buildings and Plant and Machinery of certain divisions of the Company were revalued on 31st March, 2000 by an external value appointed for the purpose. As per the revaluation report, based on current replacement value of such assets taking into account the present use thereof, there has been a net increase of Rs.5,01,22,683, Rs.1,27,33,687 and Rs.7,09,48,088 respectively which were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

ii) Overdrafts from Banks are secured by hypothecation of stocks and book debts and also partly by a second charge on all movable/ immovable properties. Development loan from the Government of Karnataka is to be secured by second charge on the assets of the Belagola, Mysore unit of the Company, The term loan is secured/to be secured by way of first charge on the Company's fixed assets, both present and future, and by way of second charge on the Company's current assets.

iii) Amounts in respect of various show cause and demand notices and claims raised by revenue and other authorities and other liabilities contingent in nature or otherwise have been disclosed / accounted for based on the details so far available and/or as compiled by the management. Further liability, if any, depending on its nature will be suitably recognised as and when ascertained.

iv i) The operations of the manufacturing units of the Company at Kol kata and at Mysore have been dosed from May 2002 and August 2000 respectively. The operations at all the sites have also been suspended. Further, branches of the Company and various other divisions/departments of the Company have become non-operational. Although due to settlement of the dues of the workers, enabled the management to access the factory records the books of accounts, files, records or related computers and accounting packages/papers etc, at these locations, the same had deteriorated in quality and-substantial portions could not be traced. This situation prevails also on matters relating to personnel records and certain statutory books, Consequently, in the current state of affairs there being inherent (imitations and constraints, the accounts and accordingly the balance of various assets and liabilities as given in the Balance Sheet and sales, income and revenue expenses including depreciation as given In the Profit and Loss Account and the quantitative information to paragraph 3,4C and 4D of Part II of Schedule VI have been compiled on the basis and to the extent available at Head Office. Consequently certain accountings inputs have been prepared on estimate basis, based on volume of transactions during relevant periods, certain figures/details received from the factories, branches, various departments of the Company, details retrieved prior to the suspension of operations and other such adjustments as considered necessary by the management.

The balances compiled as above as such could not be fully reconciled with the primary and secondary records since various supporting and other related details are not accessible and these records could not be made available for verification. Reconciliation / validation of these figures with primary and secondary records, supporting, details, vouchers and quantitative statements for receipts, consumption, production, sales etc and adjustments with respect to events occurring after the date of the accounts will be carried out on availability of related details on resumption of normal operations and necessary adjustments will then be accordingly carried out on ascertainment of amounts thereof.

v) a) Physical verification of fixed assets including capital work in progress has not been carried out. Also, reconciliation of balance of fixed assets with records containing individual asset-wise details has not been carried out. Accordingly, accurate discrepancies therein, if any, are presently not ascertainable,

b) Physical verification of inventories comprising of stocks of finished goods, stores, spare parts, raw materials and jobs in progress at factory could not be carried out. Hence, discrepancies if any, with regard to balances as per book could not be accurately ascertained. Considering the sharp deterioration of the condition of the inventory, non- marketability of customized products and Obsolescence of certain inventories an additional provision of Rs.13,00,000 has been made in the accounts of 2008-2009

c) Physical verification of cash in hand has not been conducted during the period. / Consequently the discrepancies, if any, with regard to the book balance of such cash in hand are not ascertainable. However, a Management Certificate for the same has been furnished by the Company.

d) The period end realignment of foreign currency assets and liabilities could only be done to the extent readily ascertainable as party wise details of certain sundry debtors and sundry creditors were under compilation.

e) The balances of sundry debtors, sundry creditors, loans and advances and bank balances are subject to confirmation and consequential reconciliation. Necessary adjustments including those relating to any shortfall in assets that may arise on this account will be made on ascertainment of amounts thereof.

vi) a) Certain debit and credit balances including in respect of sundry debtors, sundry creditors, loans and advances are subject to the reconciliation with respect to individual details. Necessary adjustments, in this respect will be carried out on ascertainment of amounts thereof and confirmation from concerned parties.

The Bank balances including overdraft amounts are pending reconciliation with respect to the Bank statements due to absence of receipts of such statements from the respective Banks. Further, all the Bank balances are subject to confirmation and consequently reconciliation. Pending completion thereof the impact on revenue, sundry debtors, sundry creditors and other balances is presently not ascertainable.

b) The accumulated losses of the Company had exceeded its entire net worth in year 2001 - 2002. Consequent to the negative net worth, your Company applied for registration with the Board of Industrial' and Financial Reconstruction (BIFR) on 11.01.2003 and BIFR acknowledged the acceptance by registering your Company on 18.03.2003. The - Registration no. is 133/2003. The case of hearing came up in BIFR before the Hon'ble Bench on 16.05.2007 when the Hon'ble BIFR ignoring the submissions made by your company at the time of hearing and ignoring the views/submissions of Kotak Mahtndra Bank who holds majority percentage of total debt of the Company, confirmed its opinion of winding up of the Company.

Being thus aggrieved your Company moved in the Appellate Authority for Industrial and Financial Reconstruction, an appeal u/s 25 of the sick industrial companies (special provisions) Act. 1985 against order dated 16.05.2007 passed by the Hon'ble Bench 1 of the BIFR. The said appeal was up held in favor of your Company and the order of BIFR dated 16.05.07 was stayed on 26.09.2007.

Under the direction of Hon'ble bench of AAIFR, your company attended several Lenders Meet, conducted by State Bank of India (O/A) to decide upon the revival route, It emerged from the meetings that One Time settlement (OTS) with secured lenders was the only way to revive the company and accordingly proposal for such settlements has been made to two banks and the same is under active discussion. The company has also submitted the Draft Revival Scheme on 14.07.2009 to Hon'ble bench of AAIFR wherein the OTS proposal is embedded.

The management is confident of the successful outcome in the matter and accordingly the Accounts have been prepared under going concern concept.

vii) Sundry Creditors include:

Tax deducted at source Rs.7086 (Previous year Rs.5297); (b) Sales Tax Rs.1,30,47,527 (Previous year Rs.1,30,37,279); Provident Fund for Employees Rs.nil (Previous year Rs,86,209)

Pending final determination and compilation of details, necessary adjustments, if any, for the ultimate amounts payable, including on account of interest, would be made as and when ascertained.

viii) Liability for accrued interest (including on overdue amounts) on secured and unsecured loans and liabilities have been provided for on estimated basis at the normal rates as per the agreement with the parties. Consequential adjustments with respect to the above including for penal interest for the period of default will be carried out as and when amounts thereof are determined.

ix) The liability for custom duty, port charges etc., on items lying as on 30.09.2006 (including those which have been written off or fully provided for) could not be ascertained and provided for. Interest, if any payable on the custom duty or other charges as above will be accounted for as and when ascertained.

x) Depreciation on fixed assets including the amount adjusted from Capital Reserve has been computed on estimated basis, with respect to entire block of assets, due to non-availability of individual assets-wise details.

xi) (a) Sundry Debtors of Rs.3.59 lacs, are overdue for recovery. This amount is withheld by a customer on legal dispute. However, considering the difficulties of operation, a further provision Rs.6.12 lacs is made on account of Sundry Debtors in 2008-2009.

(b) Loans and advances of Rs.28.16 lacs (Previous year Rs.53.24 lacs) are overdue for recovery. Steps are being taken for realisation of the same. However due to difficult economic situation and absence of availability of base documents with the company, the management has made a provision of Rs.30,00,000 in the year under review.

xii) Pending outcome of legal and other claims against the Company, additional liability that may arise in respect of final settlement is currently not ascertainable and has accordingly not been provided for,

xiii) The quantum of dues to small scale and ancillary industrial undertakings, being not ascertainable in absence o1 relevant documents / information could not be identified and disclosed separately in the accounts.

xiv) In accordance with the Accounting Standard 20 on Earning Per Share issued by The Institute of Chartered Accountants of India, the Earning per share have been calculated as below:

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Sep 30, 2008

I) a) Freehold land and buildings, Leasehold land and buildings and Plant and Machinery were revalued on 31st March, 1994 and the resultant increases of Rs.3,98,5Q,960, Rs.2,03,74,826 and Rs.1,15,40,796 respectively were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve. b) Freehold land and buildings, leasehold land and buildings and Plant and Machinery of certain divisions of the Company were revalued on 31st March, 2000 by an external value appointed for the purpose. As per the revaluation report, based on current replacement value of such assets taking into account the present use thereof, there has been a net increase of Rs. 5,01,22,683, Rs.1,27,33,687 and Rs.7,09,48,088 respectively which were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

ii) Overdrafts from Banks are secured by .hypothecation of stocks and book debts and also partly by a second charge on all movable/ immovable properties. Development loan from the Government of Karnataka is to be secured by second charge on the assets of the BeJagola, Mysore unit of the Company. The term loan is secured/to be secured by way of first charge on the Company's fixed assets, both present and future, and by way of second charge on the Company's current assets.

iii) Amounts in respect of various show cause and demand notices and claims raised by revenue and other authorities and other liabilities contingent in nature or otherwise have been disclosed / accounted for based on the details so far available and/or as compiled by the management. Further liability, if any, depending on its nature will be suitably recognised as and when ascertained.

iv) The operations of the manufacturing units of the Company at Kolkata due to lock out and at Mysore have been closed from May 2002 and August 2000 respectively. The operations at all the sites have also been suspended. Further, branches of the Company and various other divisions/departments of the Company have become non-operational. Although due to settlement of the workers enabled the management to access the factory records the books of accounts, files, records or related computers and accounting packages/papers etc. at these locations had deteriorated in quality and substantial portions could not be traced. This situation prevails also on matters relating to personnel records and certain statutory books.

Consequently, in the current state of affairs there being inherent limitations and constraints, the accounts and accordingly the balance of various assets and liabilities as given in the Balance Sheet and sales, income and revenue expenses including depreciation as given in the Profit and Loss Account and the quantitative information to paragraph 3, 4C and 4D of Part II of Schedule VI have been compiled on the basis and to the extent available at Head Office on estimate basis based on volume of transactions during the period, certain figures/details received from the factories, branches, various departments of the Company, details retrieved prior to the suspension of operations and other such adjustments as considered necessary by the management.

The balances compiled as above as such could not be fully reconciled with the primary and secondary records since various supporting and other related details are not accessible and these records could not be made available for verification. Reconciliation / validation of these figures with primary and secondary records, supporting, details, vouchers and quantitative statements for receipts, consumption, production, sales etc and adjustments with respect to events occurring after the date of the accounts will be carried out on availability of related details on resumption of normal operations and necessary adjustments will then be accordingly carried out on ascertainment of amounts thereof,

v) a) Physical verification of fixed assets including capital work in progress has not been carried out. Also, reconciliation of balance of fixed assets with records containing individual asset-wise details has not been carried out. Accordingly, accurate discrepancies therein, if any are presently not ascertainable. Considering the likely deterioration of value due to lack of maintenance, lack of usage, corrosion and general neglect, the management has made a provision of Rs,4,68,24,100 by way of impairment of the value of fixed assets in the year 2005-2006 and the same has been realigned in the fixed assets schedule of the current year,

b) Physical verification of inventories comprising of stocks of finished goods, stores, spare parts, raw materials and jobs in progress at factory could not be carried out. Hence, discrepancies if any, with regard to balances as per book could not be accurately ascertained. Considering the sharp deterioration of the condition of the inventory, non-marketability of customized products and Obsolescence of certain inventories an additional provision of Rs.2,50,00,000 has been made in the accounts of 2005-2006 and no further provisions is deemed necessary for the year 2007-2008.

c) Physical verification of cash in hand has not been conducted during the period. Consequently the discrepancies, if any, with regard to the book balance of such cash in hand are not ascertainable. However, a Management Certificate for the same has been furnished by the Company,

d) The period end realignment of foreign currency assets and liabilities could only be done to the extent readily ascertainable as party wise details of certain sundry debtors and sundry creditors were under compilation,

e) The balances of sundry debtors, sundry creditors, bans and advances and bank balances are subject to confirmation and consequential reconciliation. Necessary adjustments including those relating to any shortfall in assets that may arise on this account will be made on ascertainment of amounts thereof.

vi) a) Certain debit and credit balances including in respect of sundry debtors, sundry creditors, loans and advances are subject to the reconciliation with respect to individual details. Necessary adjustments, in this respect will be carried out on ascertainment of amounts thereof and confirmation from concerned parties.

The Bank balances including overdraft amounts are pending reconciliation with respect to the Bank statements due to absence of receipts of such statements from the respective Banks. Further, all the Bank balances are subject to confirmation and consequently reconciliation. Pending completion thereof the impact on revenue, sundry debtors, sundry creditors and other balances is presently not ascertainable,

b) The accumulated losses of the Company have exceeded its entire net worth. Consequent to the negative net worth, your Company applied for registration with the Board of Industrial and Financial Reconstruction (BIFR) on 1101.2003 and BIFR acknowledged the acceptance by registering your Company on 18.03.2003. The Registration no. is 133/2003. The case of hearing came up in BIFR before the Hon'ble Bench on 16.05.2007 when the Hon'ble BIFR ignoring the submissions made by your company at the time of hearing and ignoring the views/submissions of Kotak Mahindra Bank who holds majority percentage of total debt of the Company, confirmed its opinion of winding up of the Company

Being thus aggrieved your Company moved in the Appellate Authority for Industrial and Financial Reconstruction, an appeal u/s 25 of the sick industrial companies (special provisions) Act. 1985 against order dated 16.05.2007 passed by the Hon'ble Bench - 1 of the BIFR. The said appeal was up held in favor of your Company and the order of BIFR dated 16.05.07 was stayed on 26.09,2007.

The management has been, for the past 12 months, negotiating with all the consortium bankers and have presented a viable 'one time settlement' proposal with the bankers. The matter is under discussion and the management hopes that the issue will be resolved soon for final presentation to the Honourable AAIFR Bench,

The management is confident of successful outcome in the matter and accordingly the Accounts have been prepared under going concern concept.

vii) Sundry Creditors include:

Tax deducted at source Rs.5,297 (Previous year Rs.27,750); (b) Sales Tax Rs,1,30,37,209 (Previous year Rs.1,30,20,462); Provident Fund for Employees Rs.86,209 (Previous year Rs.2,45,474) Pending final determination and compilation of details, necessary adjustments, if any, for the ultimate amounts payable, including on account of interest, would be made as and when ascertained.

viii) Liability for accrued interest (including on overdue amounts) on secured and unsecured loans and liabilities have been provided for on estimated basis at the normal rates as per the agreement with the parties. Consequential adjustments with respect to the above including for penal interest for the period of default will be carried out as and when amounts thereof are determined.

ix) The liability for custom duty, port charges etc., on items lying as on 30.09.2006 (including those which have been written off or fully provided for) could not be ascertained and provided for Interest, if any payable on the custom duty or other charges as above will be accounted for as and when ascertained.

x) Depreciation on fixed assets including the amount adjusted from Capital Reserve has been computed on estimated basis, with respect to entire block of assets, due to non-availability of individual assets-wise details.

xi) (a) Sundry Debtors of Rs.9.86 lacs, are overdue for recovery. These include amounts withheld by the customers for suspension of work by the Company, However, considering the difficulties of operation, a further provision Rs.20,00,000 is made on account of Sundry Debtors in 2007-2008.

(b) Loans and advances of Rs,53.24 lacs (Previous year Rs.59.98 lacs) are overdue for recovery. Steps are being taken for realisation of the same. The balance amount aggregating to Rs.29.53 lacs relate to security deposits given by the Company. In view of the management's continuous efforts for recovery of advances, no provision has been considered there against.

xii) Pending outcome of legal and other claims against the Company, additional liability that may arise in respect of final settlement is currently not ascertainable and has accordingly not been provided for.

xiii) (a) In the absence of determination of the stage of completion of the contracts under progress, revenue in respect of the long term contracts has been booked on the basis of the amounts falling due for invoicing.

(b) In the absence of details, foreseeable loss in respect of continuing contracts has not been provided for.

xiv) Adjustment on account of prior year relate to write back of impairment provision of fixed assets which has been accounted for in the current year through reduction of fixed asset and adjustment of depreciation provision, net off excess depreciation charged in 2006-2007.

xv) The quantum of dues to smelt scale and ancillary industrial undertakings, being not ascertainable in absence of relevant documents / information could not be identified and disclosed separately in the accounts.

xvi) In accordance with the Accounting Standard 20 on Earning Per Share issued by The Institute of Chartered Accountants of India, the Earning per share have been calculated as below:

xvii) Details with respect to segmental reporting (AS 17)Consolidated financial statements (AS 21), deferred taxation (AS 22) and related party transaction (AS 18), as required in terms of accounting standards issued by ICAI could not be compiled and disclosed in these accounts due to the reasons stated in Note (xii) above.

xviii) Previous year's figures have been rearranged and regrouped wherever necessary.

xviii) SALES

In absence of production and in absence of trading no consumption of raw materials and components occurred during the year under review,

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Sep 30, 2006

I) The accounts for the period under review is for 12 months.

30.09.2006 30.09.2005 Rs. Rs.

ii) Contingent liabilities

Demands for Sales Tax against which appeals are pending 5,67,76,984 5,67,76,984

Demands made by DG FT for Duties against which appeals are pending 9,47,98,947 9,47,98,947

iii) Auditors 'Remuneration:

Audit fees (including service tax) 20,000 20,000

Tax audit fees (including service tax) _ _

Miscellaneous certificates and other matters _ -

Reimbursement of expenses 3,000 3,000

23.000 23.000

iv) Directors Remuneration:

Salary - -

Perquisites - -

Contribution to Provident and Superannuation Funds - -

Sitting fees - -

* There are no directors, drawing remuneration.

v) a) Freehold land and buildings, Leasehold land and buildings and Plant and Machinery were revalued on 31st March, 1994 arid the resultant increases of Rs.3,98,50,960, Rs.2,03,74,826 and Rs.1,15,40,796 respectively were added to the book value of the said Fixed Assets with corresponding ' credit to Capital Reserve, ,

b) Freehold land and buildings, leasehold land and buildings and Plant and Machinery of certain divisions of the Company were revalued on 31st March, 2000 by an external valuer appointed for the purpose. As per the revaluation report, based on current replacement value of such assets taking into account the present use thereof, there has been a net increase of Rs. 5,01,22,683, Rs.1,27,33,687 and Rs. 7,09,48,088 respectively which were added to the book value of the said Fixed Assets with corresponding credit to Capital Reserve.

vi) Overdrafts from Banks are secured by hypothecation of stocks and book debts and also partly by a second charge on an movable/ immovable properties. Development loan from the Government of Karnataka is to be secured by second charge on the assets of the Belagola, Mysore unit of the Company. The term loan is secured/to be secured by way of first charge on 1he Company's fixed assets, both present and future, and by way of second charge on the Company's current assets.

vii) Amounts in respect of various show cause and demand notices and claims raised by revenue and other authorities and other liabilities contingent in nature or otherwise have been disclosed/accounted for based on the details so far available and/or as compiled by the management. Further liability, if any, depending on its nature will be suitably recognised as and when ascertained.

viii) a) During the year under review, on leasing out of Kolkata factory a bipartite settlement was arrived at between the management and the factory workers on the outstanding dues and the same was paid in December 2005 out of the proceeds of the said lease arrangements, leading to retrenchment of all union workers. Additionally the services of the management staff at Kolkata factory were also settled at similar terms.

On examination it was further discovered that there were physical discrepancies in inventories, stores,, fixed assets and the existing material had undergone significant deterioration considering its marketability usage and consequently its value.

b) The operations of the manufacturing units of the Company at Kolkata due to lock out and at Mysore have been closed from May 2002 and August 2000 respectively. The operations at most of the sites have also been suspended. Further, branches of the Company and various other divisions/departments of the Company have become non-operational. Although due to settlement of the workers enabled the management to access the factory records the books of accounts, files, records or related computers and accounting packages/papers et6 at these locations had deteriorated in quality and substantial portions could not be traced. This situation prevails also on matters relating to personnel records and certain statutory books. Consequently, in the current state of affairs there being inherent limitations and constraints, the accounts and accordingly the balance of various assets and liabilities as given in the Balance Sheet and sates, income and revenue expenses including depreciation as given in the Profit and Loss Account and the quantitative information to paragraph 3, 4C and 4D of Part II of Schedule VI have been compiled on the basis and to the extent available at Head Office on estimate basis based on volume of transactions during the period, certain figures/details received from the factories, branches, various departments of the Company, details retrieved prior to the suspension of operations and other such adjustments as considered necessary by the management.

The balances compiled as above as such could not be fully reconciled with the primary and secondary records since various supporting and other related details are not accessible and these records could not be made available for verification. Reconciliation / validation of these figures with primary and secondary records, supporting, details, vouchers and quantitative statements for receipts, consumption, production, sales etc and adjustments with respect to events occurring after the date of the accounts will be carried out on availability of related details on resumption of normal operations and necessary adjustments will then be accordingly carried out on ascertainment of amounts thereof.

ix) a) Physical verification of fixed assets including capital work in progress has been carried out. However reconciliation of balance of fixed assets with records containing individual asset-wise details has not been carried out. Accordingly, discrepancies therein, if any, are presently not ascertainable. Considering the likely deterioration of value due to lack of maintenance, lack of usage, corrosion, and general neglect, the management has made a provision of Rs, 4,68,24,100 by way of impairment of the value of fixed assets.

b) Physical verification of inventories comprising of stocks of finished goods, stores, spare parts, raw materials and jobs in progress at factory could be carried out. However discrepancies if any, with regard to balances as per books, could not be accurately ascertained. Considering the sharp deterioration of the condition of the inventory, non marketability of customised products and obsolescence of certain inventories an additional provision of Rs.2,50,00,000 has been made in the accounts.

c) Physical verification of cash in hand has not been conducted during the period. Consequently the discrepancies, if any, with regard to the book balance of such cash In hand are not ascertainable. However, a Management Certificate for the same has been furnished by the Company.

d) The period end realignment of foreign currency assets and liabilities could only be done to the extent readily ascertainable as party wise details of certain sundry debtors and sundry creditors were under compilation.

e) The balances of sundry debtors, sundry creditors, loans and advances and bank balances are subject to confirmation and consequential reconciliation. Necessary adjustments including those relating to any shortfall in assets that may arise on this accepts will be made on ascertainment of amounts thereof

x) a) Certain debit and credit balances including in respect of sundry debtors, sundry creditors, loans and advances are subject to the reconciliation with respect to individual details. Necessary adjustments, in this respect will be carried out on ascertainment of amounts thereof and confirmation from concerned parties.

The Bank balances including overdraft amounts are pending reconciliation with respect to the Bank statements in absence of receipts of such statements from the respective Banks. Further, all the Bank balances are subject to confirmation and consequently reconciliation. Pending completion thereof the impact on revenue, sundry debtors, sundry creditors and other balances is presently not ascertainable.

b) The accumulated losses of the Company have exceeded its entire net worth. Consequent to the negative net worth, your Company applied for registration with the Board of Industrial and Financial Reconstruction (BIFR) bn 11.01.2003 and BIFR acknowledged the acceptance by registering your Company on 18.03.2003. The Registration no. is 133/2003; These measures are designed to enable improvement in operations of the Company and hence the accounts have been prepared on the basis that the Company is a going concern.

xi) Sundry Creditors include ;

(a) Tax deducted at source Rs. 27,713 (Previous year Rs.63,012); (b) Sates Tax Rs. 1,29,90,735 (Previous year Rs. 1,29,15,500)

Pending final determination and compilation of details, necessary adjustments, if any, for the ultimate amounts payable, including on account of interest, would be made as and when ascertained.

xii) Liability for accrued interest (including on overdue amounts) on secured and unsecured loans and liabilities have been provided for on estimated basis at the normal rates as per the agreement with the parties. Consequential adjustments with respect to the above including for penal interest for the period of default will be carried out as and when amounts thereof are determined.

xiii) The liability for custom duty, port charges etc., on items lying as on 30.09.2006 (including those which have been written off or fully provided for) could not be ascertained and provided for. Interest, if any payable on the custom duty or other charges as above will be accounted for as and when ascertained.

xiv) Depreciation on fixed assets Including the amount adjusted from Capital Reserve has been computed on estimated basis, with respect to entire block of assets due to non-availability of individual assets- wise details.

xv) (a) Sundry Debtors of Rs 57.87 lacs, are overdue for recovery. These include amounts withheld by the customers for suspension of work by the Company. En view of the management's continuous efforts for recovery of the debtors advances, no provision has been considered there against:

(b) Loans and advances of Rs. 30.45 lacs (Previous year Rs. 29.74 lacs) are overdue for recovery. Steps are being taken for realisation of the same. The balance amount aggregating to Rs 29.53 lacs relate to security deposits given by the Company. In view of the managements continuous efforts for recovery of advances, no provision has been considered there against.

xvi) Pending outcome of legal and other claims against the Company, additional liability that may arise in this respect of the settlement is currently not ascertainable and has accordingly not been provided.

xvii) (a) In the absence of determination of the stage of completion of the contracts under progress revenue In respect of the long term contracts has been booked on the basis of the amounts falling due for invoicing.

(b) In the absence of details, forseable loss in respect of continuing contracts has not been provided for.

xviii) The quantum of dues to small scale and ancillary industrial undertakings, being not ascertainable in absence of relevant documents / information could not be Identified and disclosed separately in the accounts.

xix) Details with respect to segmental reporting (AS 17),consolidated financial statements (AS 21), deferred taxation (AS 22) and related party. transaction (AS 18), as required in terms of accounting standards issued by ICAI could not be compiled and disclosed in these accounts due to the reasons stated in Note (xii) above.

xx) Previous year's figures have been rearranged and regrouped wherever necessary.