Ahmednagar Forgings

1.  Schedule 1 to 12 form an integral part of the Balance Sheet and
 Profit & Loss Account.
 
 2.  Contingent Liabilities: 
                                                          (Rs. in Lacs)
                                           Current Year   Previous Year
 
 a) Estimated amount of contracts               502.30         1,215.77
    remaining to be executed on
    Capital Account and not provided for
 b) Unexpired Letters of Credit                 118.85           142.87
 c) Disputed Statutory Dues in respect 
    of Excise Duty/Service Tax                   69.24            27.59
    Contingent Assets are neither 
    recognized, nor disclosed
 
 4.  In the opinion of the Board of Directors, the current assets and
 loans and advances, If realized in the ordinary course of business,
 would be realised at least equal to the amounts at which they have been
 stated in the Balance Sheet. Provision for all known liabilities have
 been made in the books of accounts.
 
 5.  The company is primarily focused on manufacturing Steel Forgings.
 Therefore, there are no separate segments within the company as defined
 by Accounting Standard 17 (Segment Reporting ), issued by the Institute
 of Chartered Accountants of India and hence the same is not reported
 
 6.  Other liabilities under current liabilities include amount
 recovered from customers on account of CST/VAT/ Surcharge, but not
 deposited, as the company had been issued an eligibility certificate
 for Sales Tax deferment under the Maharashtra Sales Tax Act, 1959 and
 HP Sales Tax Act.
 
 7.  Maximum amount outstanding at any time during the year due from /
 due to directors is Rs. Nil. (Previous year Rs. Nil).
 
 8.  Confirmation of Balances in some of debtors and creditors accounts
 as at 30th June 2008 are yet to be received as at the date of the
 Auditor report.
 
 9.  (a) Sundry Creditors include a Sum of Rs 57.58 Lacs (Previous Year
 Rs 45.25) due to Small & Medium Enterprises.
 
 (b) The List of SMEs to whom company owes a sum exceeding Rs. 1,00,000
 and which is outstanding for more than 30 days is as under:-
 
 Ray Heat Treatment, Universal Engg. & Mfg. Industries, Tusker Trading
 Pvt. Ltd., Laxmi Sagar Engineers, ARS Engg. Pvt Ltd., Omkar
 Refractories Pvt Ltd, Micron CNC Machines Pvt Ltd. Jain Chemicals &
 Gases Pvt. Ltd. Shree Krishna Safety Products Pvt. Ltd.
 
 (c) The Payments to SMEs have been made as per stipulated terms.
 
 (d) The above information has been compiled in respect of parties to
 the extent to which they could be identified as SMEs on the basis of
 information available with the company.
 
 10.  The company, during the year has made preferential allotment of
 17,00,000 equity shares of Rs.10/- each at a premium of Rs.230/- per
 share and 38,00,000 warrants (carrying option/ entitlement to subscribe
 to one no of equity share of Rs.10/- each at a premium of Rs.230/- per
 share on or before 14th July 2009) to parties and companies covered in
 the register maintained under section 301 of the Companies Act, 1956.
 
 11.  The Board of Directors in their meeting held on 31st July 2008 had
 approved merger of Ahmednagar Forgings Ltd. (AFL), With Amtek Auto Ltd.
 The merger is subject to various approvals including approval from
 Honable High Court of the concerned state(s). As per scheme of
 arrangement, the appointed date of merger is 1st July 2007, As per
 scheme of arrangement, approved by the board, the shareholders of the
 Ahmednagar Forgings Ltd. will get 56 Equity shares of Rs. 2/- each of
 Amtek Auto Ltd for every 100 shares of Rs. 10/- each held by the
 shareholder of Ahmednagar Forgings Ltd.
 
 12.  RETIREMENT BENEFITS
 
 Effective from financial year 2007-08, the company implemented
 Accounting Standard (AS)-15 (Revised- 2005) dealing with Employees
 Benefits, issued by the Institute of Chartered Accountants of India.
 AS-15 (Revised 2005) deals with recognition, measurement and disclosure
 of short term, post employment, termination and other long term
 employee benefits provided by the company. Adoption of AS-15 (Revised-
 2005) has resulted in certain changes in accounting policies followed
 by the company in respect of post employment and other long term
 employee benefits. However, the changes are not expected to have a
 material impact on the financial statement for the current year.
 
 The Company has various Schemes of retirement benefits schemes such as
 Provident Fund, Gratuity and Earned Leaves.
 
 1) Post Employment Benefit Plans:
 
 Payments to defined contribution retirement benefit schemes is charged
 as an expense as they fall due.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using Projected Unit Credit Method, with actuarial valuation
 being carried out at each Balance Sheet date. Actual gain & losses are
 recognised in full in the profit & loss account for the period in which
 they occur. Past service cost is recognized to the extent the benefits
 are already vested, and otherwise is amortised on a Straight line
 Method over the average period until the benefits become vested.
 
 The retirement benefit obligations recognized in the Balance Sheet
 represent the present value of the defined benefit obligations as
 adjusted for unrecognized past service cost, and as reduced by the fair
 value of available refunds and reductions in future contributions to
 the scheme.
 
 a) Defined Benefit plan:
 
 i) Gratuity Plan
 
 The Company makes annual contribution to the Employees Group Gratuity
 Scheme of the Life Insurance Corporation of India, a funded defined
 benefit plan for qualifying employees. The Scheme provided for lump sum
 payment to vested employees at retirement, death while in employment or
 on termination of employment of an amount equivalent to 15 days salary
 payable for each completed year of service or part thereof in excess of
 6 months. Vesting occurs upon completion of 5 years of service.
 
 ii) Leave Encashment Plan
 
 The Company has, hitherto, been making provision for leave encashment.
 However the company, pursuant to adoption of Accounting Standard -15
 (Revised) has made the provision on projected unit cost method.
 
 As a result of adopting AS-15 ( Revised), the transitional liability
 amounting to Rs. 39.50 Lacs accruing as on 01.04.2007 has been charged
 by debiting the opening balance in Reserve Account.
 
 13.  Export sales include sale in transit to its overseas customers
 acknowledged in subsequent year, indirect export/deemed export.
 
 14.  Details of units manufactured, material consumed and sales include
 component bought and sold.
 
 15.  Previous years figures have been regrouped and rearranged
 wherever necessary.