Notes to Accounts of Bee Electronic Machines Ltd.

Mar 31, 2014

1) Liability for gratuity and leave encashment on actuarial basis has not been provided for, amount being unascertained and the same is treated on cash bbsis.

2) (a) The Excise duty payable on finished goods is accounted for on clearance of goods from the Factory. The amount of Excise duty payable on finished goods not cleared from factory as on the above date is estimated at Rs. 196,892/- (Rs. 196,892).

(b) Interest on Excise duty payable of Rs 531,300/- (Rs 483,000/-) has. not been provided for.

(c) Property tax has not been provided for Rs 698,169/- (PY Rs. 630,418/-)

3) In the opinion of the management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business except otherwise stated. The provision for all known liabilities is adequate and not in excess of the amount deemed necessary. There are no contingent liabilities other than those stated above.

4) a) The Non Convertible Debentures of UTI are to be secured by equitable mortgage of the Company's immovable properties, and by way of hypothecation of plant and machinery and aft movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created/to be created in favor of the company's banker's on Its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shal rank pari passu-wkh the existing charge holders. Trust deed and the charge on the said assets are not created.

b) The debentures shown under secured loans have become due for redemption on May 18, 1998, along with premium of 5% of face value. Management has approached UTI tor a rollover. Therefore, the same has been showp under the head short term borrowings in current liabilities as secured loan. However, due to this secured loan is overstated to that extent Confirmation from UTI in respect of rollover of debentures is st#l awaited.

c) Provision of penal interest due to non-payment of principal along with a premium of 5% has not been made as the Company has requested UTI for waiver of the same. Amount not being ascertained, the same will be accounted for as & when settled. On account of this, the profit for the year Is overstated.

d) On account of the ongoing one time settlement talks going on with UTI, interest of Rs 18.75 lacs (PY Rs 18.75 lacs) for the year under review is not provided for as the management is hopeful that the interest would be waived off. Due to this, loss for the year is understated. Total accumulated non provision of interest is Rs 307.45 lacs (PY Rs 288.70 lacs).

e) Provision for interest on premium of Rs 625,000/- payable to UTI has not been made as the company has requested UTI lor waiver of the same. Due to this the toss for the year is understated by Rs 93,750/- and secured loans is also understated to that extent Accumulated Interest Rs 15,00,000/- has not been provided for.(PY Rs 14,06,250)

5) Sundry Debit, credit balances and secured loans from UTI and banks are subject to confirmation, reconciliations and adjustments, required, if any.

6) Loans and advances include doubtful advances of Rs 581,279 (Rs. 611,279). However, no provision has been made.

7 a) Bankers of the Company have filed suit against the company for recovery of their dues with the Debt Recovery Tribunal. Adjustment, if any, will be accounted for as and when, settled. Therefore, the stone has been shown under the head short term borrowings In current liabilities.

b) In view of the on-going one time settlement talks with the bankers, the company has not provided interest on the working capital facilities amounting to Rs 171.88 lacs (PY Rs 171.88 lacs), as the management Is hopeful that interest would be waived off. Due to this, the loss is understated to that extent. Total accumulated non provision of interest is Rs 2723.20 lacs (PY Rs 2551.32 lacs)

c) The Company hasnot provided penal interest and interest on interest accrued and due as the Company is in the process of negotiating with the bankers to waive the same off. The same if any payable, in future shall be accounted for as and when settled.

d) Security against the working capital facility is Rs 409.83 lacs as against foe total working capital of Rs 1053.26 lacs. Hence the secured loan is unsecured to that extent

e) The Hon'ble Board for industrial and Financial Reconstruction (B1FR), New Delhi in furtherance to their earlier directions In the hearing on 12* March 2012 ruled and directed that the Company is permitted to sell itssurplus assets to settle its secured creditors and statutory liabilities. The Bench of the Hon'ble BIFR accordingly directed Canara Bank (Operating Agency) to constitute an Asset Sales Committee (ASC) to sell the Company's surplus assets at Tarapur and Daman. The Operating Agency floated a tender for sale of the two properties. The ASC received a total of 5 (five) bids and at the hearing of Hontrie BIFR held on 15 April 2013, the Hon'ble BIFR directed the Company and the Operating Agency to accept the highest bid received for Rs 270 lacs. Hon'ble BIFR further directed that the sale proceeds of Rs. 270 lacs be utilized a) to meet al the statutory liabilities of the company, b) the cost incurred by Operating Agency in issuing advertisement and c) the cost of valuation done by ARGIL The balance left with to be shared by all the secured lenders on a pro rata based on the liability outstanding on a common date. The Company has accordingly identified the following statutory dues 1) Employee dues Rs 53.85 lacs 2) Excise dues Rs 14.75 lacs 3) Sales tax dues Rs 1.71 lacs 4) Electricity Exps Rs 2 lacs, water & Fire cess Rs 2.10 lacs, Transfer charges Rs 7.83 lacs and security charges Rs 0.55 lacs relating to the above properties sold 5) Service tax dues Rs 0.24 lacs 6) Profession tax dues Rs 0.08 lacs 7) Stock Exchange and STA dues Rs 4.70 Lacs 8) SICOM dues Rs 3.30 lacs 9) Consumer forum cases Rs 2.62 lacs 10) Capital Gain tax arising on the sale of properties-Rs 65 lacs.

f) The Company has had to prefer an Appeal before Hon'ble AAIFR as the lenders have taken a contrary view than agreed upon earlier and have taken a stand that Capital Gains Tax and such similar liabilities are not statutory in nature and hence should not be paid from the sale proceeds of Rs 270 lacs. Their other contention is that once the balance Sale proceeds are shared amongst the lenders, the settlement would not be full and final but only part settlement of dues; a stand which is contrary to the understanding reached earlier and hence the Appeal. The matter is presently before the Hon'ble AAIFR. The Company continues to hold possession of the said assets. Necessary accounting effects shall be given in the books at the time of final settlement.

g) inventories of finished goods. Raw materials and Spares include value of old / slow moving stocks Of Rs. 401 lacs; the realizable value of this stock Is estimated at Rs. 1 lac by the management However, no provision for the loss of Rs. 400.00 Lacs Is made during the year. Further valuation of these inventories is not in accordance with AS 2- Valuation . of Inventories issued by ICAl.

(b) The Company is of fire opinion that computation of net profit u/S. 35Q of The Companies Act, 1956 need not be made since no commission is payable to the Whole time Director (or the year ended March 31st, 2014.

8) Deferred Tax: - In view of the applicability of Accounting Standard 22, Accounting for Taxes on Income for the year, the company does not have current tax as well as deferred tax BabHHy due to carry forward losses. In the opinion of the 1 Management, deferred tax asset is not recognized in view of the uncertainty of future taxable profit.

9) Segment Reporting: -

a. Business Segment: - The Company is primarily engaged in the business of selling and servicing office automation products. As the sales and the after sales service forms the part and parcel of the same business activity, the 1 management has considered both the sales and after sale service as one segment only.

b. Geographical Segment - The Company sells the office Automation products within India and also does the after sales service of the office Automation products in India only. The Condition prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

10) The Management had in earlier years carried out assessment of impairment test as per the Accounting Standard (AS) 28 and have provided for impaired loss in the books. However, no such impairment is carried out in the current year.

11) Related Party Disclosure: - Transactions made by the Company during the year with related parties is disclosed pursuant to Accounting Standard 18 on Related Party Disclosures issued by the ICAl Is given here under. Related party relationship is as identified by the Company and relied upon by the Auditory ''

12 Contingent liabilities As at As at (to the extent not provided for) 31 March, 2014 31 March, 2013

Contingent liabilities

(a) Claims against the Company not acknowledged as debt 24,863,538 25,028,538

(b) Disputed Excise Duty Liability 51,284,133 51,284,133

(c) Disputed Sales tax Liability 4,021,385 4,021,385

*** In the case pending before The Civil Judge (Senior division), Palghar filed against the Company by MZs. K. Rohit Grinders, Dahanu in 2006 for specific performance of alleged Agreement for Sale signed between the Company and the said party for the sale of the Company's property at Dahanu. The case was decided against the Company. The Company has been asked to complete the transaction and handover possession of the property by accepting Rs.26.06 lacs being the amount payable by the party in 1999 when the Agreement for Sale had been signed. It is the Company's case that the Company now being registered with Hon'ble BIFR, thp Company cannot enter, complete and/ or execute any transaction relative to the assets of the Company without consent of BIFR. It is further understood that said Agreement for Sale had been terminated and there exists no contract between the parties as on date. Being aggrieved by the Order passed, the Company has preferred an Appeal in The High Court of Judicature at Bombay. The case is registered and is now being heard for admission and other judicial consideration. The possession of the Dahanu factory continues with the company.

13) Previous Year figures have been regrouped, rearranged, and recasted wherever necessary on account of the changes required in the new format under schedule VI of The Companies Act, 1956.

14) Figures within the brackets for previous year.

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Mar 31, 2013

1) Liability for gratuity and leave encashment on actuarial basis has not been provided for, amount being unascertained and the same is treated on cash basis.

2) (a) The Excise duty payable on finished goods is accounted for on clearance of goods from the Factory. The amount of Excise duty payable on finished goods not cleared from factory as on the above date is estimated at Rs. 196,892/- (Rs. 196,892).

(b) Interest on Excise duty payable of Rs 483,000/- (Rs 434,700/-) has not been provided for.

(c) Property tax has not been provided for Rs 630,418/- (PY Rs. 562,667/-)

3) In the opinion of the management, the current assets, loan and advances are approximately of the value stated, if realized in the ordinary course of business except otherwirj stated. The provision for all known liabilities is adequate and not in excess of the amount deemed necessary. There are no contingent liabilities other than those stated above.

4) a) The Non Convertible Debentures of UTI are to be secured by equitable mortgage of the Company''s immovable properties, and by way of hypothecation of plant and machinery and all movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created / to be created in favor of pt the company''s banker''s on its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shall rank pari passu with the existing charge holders. Trust deed and the charge on the said assets are not created.

b) The debentures shown under secured loans have become due for redemption on May 18, 1998, along with premium of 5% of face value. Management has approached UTI for a rollover. Therefore, the same has been shown under the head short term borrowings in current liabilities as secured loan, However, due to this secured loan is overstated to that extent. Confirmation from UTI in respect of rollover of debentures is still awaited.

c) Provision of penal interest due to non-payment of principal along with a premium of 5% has not been made as the Company has requested UTI for waiver of the same. Amount not being ascertained, the same will be accounted for as & when settled On account of this, the profit for the year is overstated.

On account of the ongoing one time settlement talks going on with UTI, interest of Rs 18.75 lacs (PY Rs 18.75 lacs) for the year under review is not provided for as the management is hopeful that the interest would be waived off. Due to this, loss for the year is understated. Total accumulated non provision of interest is Rs 288.70 lacs (PY Rs 269.95 lacs).

e) Provision for interest on premium of Rs 625,000/- payable to UTI has not been made as the Company has requested UTI for waiver of the same. Due to this the loss for the year is understated by Rs 93,750/- and secured loans is also understated to that extent. Accumulated interest Rs 14,06,250/- has not been provided for.(PY Rs 13,12,500)

5) Sundry Debit, credit balances and secured loans from UTI and banks are subject to confirmation, reconciliations and adjustments, required, if any.

6) Loans and advances include doubtful advances of Rs 611,279 (Rs. 626,279). However, no provision has been made.

7) a) Bankers of the Company have filed suit against the company for recovery of their dues with the Debt Recovery Tribunal. Adjustment, if any, will be accounted for as and when settled. Therefore, the same has been shown under the head short term borrowings in current liabilities.

b) In view of the ongoing one time settlement talks with the bankers, the company has not provided interest on the working capital facilities amounting to Rs 171.88 lacs (PY Rs 171.88 lacs), as the management is hopeful that f interest would be waived off. Due to this, the loss is understated to that extent. Total accumulated non provision of interest is Rs 2551.32 lacs (PY Rs 2379.44 lacs)

c) The Company has not provided penal interest and interest on interest accrued and due as the Company is in the process of negotiating with the bankers to waive the same off. The same if any payable, in future shall be accounted for as and when settled.

d) Security against the working capital facility is Rs 410.30 lacs as against the total working capital of Rs 1053.26 lacs. Hence the secured loan is unsecured to that extent.

e) As per the order past in the case of the Company, in the hearing held on 17" March 2012, the Hon''ble Board for Industrial and Financial Reconstruction (BIFR), New Delhi on 12* March 2012 ruled that the Company is permitted to sell its surplus assets to settle its secured creditors and statutory liabilities. The Bench accordingly directed Canara Bank (Operating Agency) to constitute an Asset Sales Committee (ASC) as per BIFR guidelines to sell the Company''s surplus assets. In the subsequent hearing, Hon''ble BIFR directed the Operating Agency to sell two of the Company''s properties viz., Tarapur and Daman. The Operating Agency floated the tender for sale of two properties. The ASC received a total of 5 (five) bids and at the hearing of Hon''ble BIFR held on 15a April 2013, the Hon''ble BIFR directed the Company and the Operating Agency to accept the highest bid received on the recommendation of ASC and the sale proceed of Rs 270 lacs be utilized i. meet all the statutory liabilities, the cost incurred by Operating Agency in issuing advertisement and the cost of valuation done by ARCIL. The balance left
8) Inventories of finished goods, Raw materials and Spares include value of old / slow moving stocks of Rs. 409.70 lacs; the realizable value of this stock is estimated at Rs. 9.70 lacs by the management. However, no provision for the loss of Rs. 400.00 Lacs is made during the year. Further valuation of these inventories is not in accordance with AS 2- Valuation of Inventories issued by ICAI.

(b) The Company is of the opinion that computation of net profit u/s. 35G of The Companies Act, 1956 need not be made since no commission is payable to the Whole time Director for the year ended March 31st, 2013

9) Deferred Tax: - In view of the applicability of Accounting Standard 22, Accounting for Taxes on Income for the year, the company does not have current t* as well as deferred tax liability due to carry forward losses. In the opinion of the Management, deferred tax asset i. lot recognized in view of the uncertainty of future taxable profit.

10) Segment Reporting: -

a. Business Segment. - The Company is primarily engaged in the business of selling and servicing office automation products. As the sales and the after sales service forms the part and parcel of the same business activity, the management has considered both the sates and after sale service as one segment only.

b. Geographical Segment: - The Company sells the office Automation products within India and also does the after sales service of the office Automation products in India only. The Condition prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

11) The Management had in earlier years carried out assessnw.; of impairment test as per the Accounting Standard (AS) 28 and have provided for impaired loss in the books. However, no such impairment is carried out in the current year.

12) Related Party Disclosure: - Transactions made by the Company during the year with related parties is disclosed pursuant to Accounting Standard 18 on Related Party Disclosures issued by the ICAI is given here under. Related party relationship is as identified by the Company and relied upon by the Auditors.

13) Previous Year figures have been regrouped, rearranged, and recasted wherever necessary on account of the changes required in the new format under schedule VI of The Companies Act, 1956.

14) Figures within the brackets for previous year.

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Mar 31, 2012

Note 1 Share capital

Notes

a) The Company has only one class of equity shares having a par value of Rs. 10/-

b) Each shareholder is eligible for one vote per share

c) During the year under review, the company had not issued any additional shares nor there has been any transactions of bonus, ESOP, conversion or buyback of any shares

d) Shareholding above 5% - Only one equity shareholder i.e Ms. Abhilasha Bhargava holds 1,417,150 shares constituting 44,56% shares

Note 2 Short-term borrowings

Notes:

* The Non convertible debentures of UTI are to be secured by equitable mortgage of the Company's immovable properties, and by way of hypothecation of plant and machinery and all movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created/to be created in favor of the company's banker's on its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shall rank pari passu with the existing charge holders. Trust deed and charge on the said assets are not created, as a result secured loan is overstated to that extent. These debentures have become due for redemption on May 18, 1998 alongwith a premiun of 5% of Face value. However, the company has not repaid the same to UTI as the management had approached for a rollover. Confirmation from UTI in respect of Rollover of Debentures is still awaited.

Note: Working Capital loans from Banks :

Working Capital from banks is secured by hypothecation of stock of raw materials, finished goods, stores and spares and colateral security of book debts and personally guaranteed by the whole time Director of the company. The Company has defaulted in repayment to the above working capital lenders from FY 1999-00 onwards, as a result of which a suit is pending in Debt Recovery Tribunal. The Company is a sick Industrial unit registered with BIFR.

1) Liability for gratuity and leave encashment on actuarial basis has not been provided for, amount being unascertained and the same is treated on cash basis.

2) (a) The Excise duty payable on finished goods is accounted for on clearance of goods from the Factory. The amount of Excise duty payable on finished goods not cleared from factory as on the above date is estimated at Rs. 196,892/- (Rs. 164,076).

(b) Interest on Excise duty payable of Rs. 434,700/- (Rs. 386,400/-) has not been provided for.

(c) Property tax has not been provided for Rs. 562,667/- (PY Rs. 494,916/-)

3) In the opinion of the management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business except otherwise stated. The provision for all known liabilities is adequate and not in excess of the amount deemed necessary. There are no contingent liabilities other than those stated above.

4) a) The Non Convertible Debentures of UTI are to be secured by equitable mortgage of the Company's immovable properties, and by way of hypothecation of plant and machinery and all movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created/to be created in favor of the company's banker's on its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shall rank pari passu with the existing charge holders. Trust deed and the charge on the said assets are not created.

b) The debentures shown under secured loans have become due for redemption on May 18, 1998, along with premium of 5% of face value. Management has approached UTI for a rollover. Therefore, the same has been shown under the head short term borrowings in current liabilities as secured loan. However, due to this secured loan is overstated to that extent. Confirmation from UTI in respect of rollover of debentures is still awaited.

c) Provision of penal interest due to non-payment of principal along with a premium of 5% has not been made as the Company has requested UTI for waiver of the same. Amount not being ascertained, the same will be accounted for as & when settled. On account of this, the profit for the year is overstated.

d) On account of the ongoing one time settlement talks going on with UTI, interest of Rs. 18.75 lacs (PY Rs. 18.75 lacs) for the year under review is not provided for as the management is hopeful that the interest would be waived off. Interest accrued and due up to March 2005 in books for Rs. 138.70 lacs is written back during the year. Due to this, profit for the year is overstated. Total accumulated non provision of interest is Rs. 269.95 lacs (PY Rs. 251.20 lacs).

e) Provision for interest on premium of Rs. 625,000/- payable to UTI has not been made as the company has requested UTI for waiver of the same. Due to this the profit for the year is overstated by Rs. 93,750/- and secured loans is also understated to that extent. Accumulated interest Rs. 13,12,500/- has not been provided for (PY Rs. 12,18,750)

5) Sundry Debit, credit balances and secured loans from UTI and banks are subject to confirmation, reconciliations and adjustments, required, if any.

6) Loans and advances include doubtful advances of Rs. 626,279 (Rs. 611,279). However, no provision has been made.

7. a) Bankers of the Company have filed suit against the company for recovery of their dues with the Debt Recovery Tribunal. Adjustment, if any, will be accounted for as and when settled. Therefore, the same has been shown under the head short term borrowings in current liabilities.

b) In view of the ongoing one time settlement talks with the bankers, the company has not provided interest on the working capital facilities amounting to Rs. 171.88 lacs (PY Rs. 171.88 lacs), as the management is hopeful that the interest would be waived off. Interest accrued and due up to March 2005 in books of Rs. 1176.26 lacs is written back during the year under review. Due to this, the profit is overstated to that extent. Total accumulated non provision of interest is Rs. 2379.44 lacs (PY Rs. 2207.56 lacs)

c) The Company has not provided penal interest and interest on interest accrued and due as the Company is in the process of negotiating with the bankers to waive the same off. The same if any payable, in future shall be accounted for as and when settled.

d) Security against the working capital facility is Rs. 412.23 lacs as against the total working capital of Rs. 1053.26 lacs. Hence the secured loan is unsecured to that extent.

e) Hon'ble BIFR vide its order dated 12.03.2012 has directed the operating agency to form an Asset sale committee and sell the company's surplus assets, It has also directed to retain the proceeds in no lien account and be a part of Draft Rehabilitation package to settle the secured lenders and statutory liabilities with the approval of BIFR.

8) Inventories of finished goods, Raw materials and Spares include value of old/slow moving stocks of Rs. 410.64 lacs; the realizable value of this stock is estimated at Rs. 10.64 lacs by the management. However, no provision for the loss of Rs. 400.00 Lacs is made during the year. Further valuation of these inventories is not in accordance with AS 2- Valuation of Inventories issued by ICAI.

9) (a) Managerial remuneration includes

(b) The Company is of the opinion that computation of net profit u/s. 350 of The Companies Act, 1956 need not be made since no commission is payable to the Whole time Director for the year ended March 31st, 2012.

10) Deferred Tax: - In view of the applicability of Accounting Standard 22, Accounting for Taxes on Income for the year, the company does not have current tax as well as deferred tax liability due to carry forward losses. In the opinion of the Management, deferred tax asset is not recognized in view of the uncertainty of future taxable profit.

11) Segment Reporting:-

a. Business Segment:- The Company is primarily engaged in the business of selling and servicing office automation products. As the sales and the after sales service forms the part and parcel of the same business activity, the management has considered both the sales and after sale service as one segment only.

b. Geographical Segment:- The Company sells the office Automation products within India and also does the after sales service of the office Automation products in India only. The Condition prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

12) The Management has carried out assessment of impairment test as per the Accounting Standard (AS) 28 and accordingly the loss on impairment of Rs. 108,183/- is debited to Profit and loss account.

13) Related Party Disclosure:- Transactions made by the Company during the year with related parties is disclosed pursuant to Accounting Standard 18 on Related Party Disclosures issued by the ICAI is given here under. Related party relationship is as identified by the Company and relied upon by the Auditors.

Particulars

Related party transactions

Details of related parties:

Description of relationship Names of related parties

Associates a) Fuji Electronics Private Limited

b) Kaka Company Private Limited

c) Flexcord Cables Private Limited

Key Management Personnel (KMP) a) Ms Abhilasha Bhargava - Wholetime Director

b) Mr. Umesh K Phalorh - Chief Financial Officer

c) Mr. K Sudeshkumar - Director

Relative Late Shri Krishna Kumar Bhargava - Ex Managing Director

Note: Related parties have been identified by the Management.

As at As at 31 March, 2012 31 March, 2011

14. Contingent liabilities (to the extent not provided for)

Contingent liabilities

(a) Claims against the Company not acknowledged as debt 25,028,538 25,056,230

(b) Disputed Excise Duty Liability 50,892,793 52,648,247

(c) Disputed Sales tax Liability 4,021,385 4,021,385

15) Previous Year figures have been regrouped, rearranged, and recasted wherever necessary on account of the changes required in the new format under schedule VI of The Companies Act, 1956.

16) Figures within the brackets for previous year.

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Mar 31, 2010

A; Disputed excise demand raised by excise authorities, pending in appeal is Rs. 5,26,48,247 (P.Y. Rs, 5,26,48,247)

b. Sales tax demand pending in appeals Rs 40,21,385 (PY Rs. 40,21,385).

c. Claims against the company not acknowledge, as debt is Rs 2,50,56,230/- (PY Rs. 2,49,40,220)

2) Liability for gratuity and leave encashment on acturial basis have not been provided for, amount is being unascertained at. the same is treated on cash basis.

3) (a) The Excise duty payable on finished goods is accounted for on clearance of goods from the Factory. The amount of Excise duty payable on finished goods not cleared from factory as oh the above date is estimated at Rs. 1,64,076 (Rs. 131,261).

(b) Interest on Excise duty payable of Rs 338.100A (Rs 289,800/-) has not been provided for.

(c) Property tax has not been provided for Rs 427,165/- (PY Rs. 359.414A)

4) In the opinion of the management, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business except otherwise stated. The provision for all known liabilities is adequate and not in excess of the amount deemed necessary. There are no contingent liabilities other than those stated above.

5) a) The Debentures issued to UTI are to be secured by equitable mortgage of the Companys immovable properties, and by way of hypothecation of plant and machinery and all movable properties, (first charge) both present and future (save and except book debts) subject to the prior charges created / to be created in favour of the companys bankers on its raw materials, finished goods and consumable stores for securing borrowings for working capital requirement, the said charge shall rank pari passu with the existing charge holders. Trust deed and the charge on the said assets are not created.

b) The debentures shown under secured loans have become due for redemption on May 18,1998, along with premium of 5% of face value. Management has approached UTI for a rollover; Therefore, the same has been shown as secured loan. However, due to this secured loan is overstated to that extent. Confirmation from UTI in respect of rollover of debentures, is still awaited.

c) Provision of penal interest due to non-payment of interest as well as principal alongwith a premium of 5% has not been made as the Company has requested UTI for waiver of the same. Amount not being ascertained, the same will be accounted for as & when settled. Similarly. Interest on accrued interest on maturity date has also not been provided for, amount not being ascertained. On account of this, the loss for the year is understated, amount not being ascertained.

d) Provision for interest on premium of Rs 625,000/- payable to UTI has not been made as the company has requested UTI for waiver of the same. Due to this the toss for the year is understated by Rs 93,750/- and secured loans is also understated to that extent Accumulated interest Rs 11,25,000 has not been provided for

6) Sundry Debit. credft balances and secured loans from UT1 and banks are subject to confirmation, reconcaiations and adjustments, required, if any.

7) Loans and advances include doubtful advances of Rs 611,279 (Rs. 611.279). However, no provision has been made.

8) a) In view of the ongoing one time settlennert talks with the banloens working capital facllites amounting to Rs 858.41 lacs (PY 687.53lacs), as the management Is hopeful that the Interest would be waived off. Due to this, the teas is undsrstatea- to that extent

b) The Compary has Provldod Interest on Working Capiatl

However provision for penal Interest of Rs 21.07 Lata (PY Rs 21.07 lacs) approximateiy on Working Capital Facillites have: not been made as the Company is In the process of negotiating with the bankers to waive the same off.

c) Provision for interest on Interest Accrued and dus wwtettm for Rs 406.65 lacs (P.Y.Rs 374.24 lacs).

d) Bankers of the Company have fiied suit against the company for recovery of their dues with the Debt Recovery Tribunal. Adjustment, if any, will be accounted for as and when settled.

e) Security against the working capital factty is Rs 437.05 lakhs as against the total working capital of Rs 2229 lakhs. Hence the secured loan Is unsecured to that extent

f) Total Accumulated interest including penal Interests Rs. 343,202,962 (PYRs 285,350,129) not provided for.

9) Inventories of finished goods. Raw materials and Spares include value of old slow moving stocks of Rs. 426.74 lacs, The realizable value of this stock Is estimated at Rs. 20,74 tecs by the management However, no provision for the loss of Rs. 400.00 Lacs Is made during the year. Further valuation of these Inventories are not in accordance with AS 2- Valuation of Inventories Issued by ICAI.

(b) The Company is of the opinion mat computation of net profit u/s. 350 of The Companies Act, 1956 need not be made since no commission is payable te the Whole time Director for the year ended March 31st, 2010.

10) Deferred Tax: In view of the applicability of Accounting Standard 22, Accounting for Taxes on Income for the year, the company does not have current tax as well as deferred tax liability due to carry forward losses: in the opinion of the Management, deferred tax asset is not recognized in view of the uncertainty of future taxable profit.

11) Segment Reporting: -

a. Business Segment: - The Company is primarily engaged in the business of selling and servicing office automation products. As the sales and the after sales service forms the part and parcel of the same business activity, the management has considered both the sales, and after sale service as one segment only.

b. Geographical Segment: - The Company sells the office Automation products within India and also does the after sales service of the office Automation products in India only. The Condition prevailing in India being uniform, no separate geographical segment disclosure is considered necessary.

12) Related Party Disclosure: - Transactions made by. the Company during the year with related parties is disclosed pursuant to Accounting Standard 18 on Related Party Disclosures issued by the ICAI is given here under. Related party relationship is as identified by the Company and relied upon by the Auditors.

a) Associate: - Fuji Electronics Private Limited

Kaka Company Private Limited

Flexcord Cables Private Limited

b) Key Management Personnel (KMP): -

Ms. Abhilasha Bhargava, Whole time Director

Mr. Umesh Phalorh - Chief Financial Officer

Mr. K Sudeshkumar Acharya - Director

c) Relative: -

Late Shri K K Bharagava - Ex Managing Director

13) Pursuant to Accounting Standard 20 Earnings per share, Is calculated as under

14) The Management has carried out assessment of impairment test as per the Accounting Standard (AS) 28 and accordingly the loss on impairment of RS 18,57,877 is debited to Profit and loss account

15) Quantitative and value-wise information in respect of each class of goods dealt with by the Company. (As certified by management).

16) Previous Year figures have been regrouped, rearranged, recasted wherever necessary

17) Figures within the brackets for previous year.