A.  NATURE OF OPERATION
 
 Halonix Limited (hereinafter referred to as the Company) is a
 manufacturer of Electric Lamps.
 
 1 (A) Contingent liabilities not provided for in respect of: (Rs. in
 Lacs)
 
 PARTICULARS Current Year Previous Year
 
 a) Unexpired Bank Guarantees/ Standby Letter of Credit 1838.49 397.73
 
 b) Suspension period wages 51.19 43.21
 
 c) Disputed demand of Income Tax :- For the Assessment Year
 2003-04,04-05,05-06 – 64.60 Disputed demand of Income Tax (TDS):- For
 Financial Year 2007-08,08-09,09-10 20.80 –
 
 d) Disputed demand of TradeTax/ SalesTax /Value added Tax Tax under
 appeal :- i) Delhi Sales Tax Act 1975 1.07 1.07 ii) Uttarakhand Vat Act
 2005 35.41 37.28 iii) U.P.Trade Tax Act 1948 2.07 2.07 iv) U.P.Vat Act
 2008 11.01 13.19
 
 e) Demand under Ex-party assessment for the F.Y.2007-08
 
 i.  U.P.Tax on Entry of Goods Act 2001 – 30.00
 
 ii.  U.P.Trade Tax Act 1948 – 622.34
 
 iii.  C.S.T.under CST Act 1956 – 2290.61
 
 f) Excise Duty Under Protest 66.18 70.84
 
 g) Pending Export obligation under Export Promotion
 
 Capital Goods scheme.  107.52 107.52
 
 Based on favourable decision in similar cases, discussions with the
 advocate etc, the Company believes that there is fair chance of
 decision in its favour and hence no provision is considered necessary
 against the same.
 
 (B) Outstanding Commitment of capital contracts Rs. 933.77 lacs
 (Previous year Rs. 2213.08 lacs ) net of advances.
 
 2. Capital Work in Progress Rs.836.62/-Lacs(Previous year Rs. 1216.98
 Lacs) {Includes Capital Advance Rs 576.70/-Lacs (Previous year Rs.
 850.44/- Lacs). Plant & machinery under errection Rs.256.76/- Lacs
 (Previous year Rs 342.55/- Lacs) & Other assets under errection Rs
 3.16/-Lacs (Previous year Rs 24/- Lacs).
 
 4.  Secured Loans (Short term) falling due within next 12 months Rs.
 1160.00 lacs (Previous Year Rs. 4510 lacs).
 
 5.  Sales includes sale of scrap of Rs. 217.13 lacs (Previous year Rs.
 334 lacs ).
 
 6.  As per the Schemes of Arrangement of Share Capital u/s 391 of the
 Companies Act, 1956 approved by Honble Allahabad High Court vide order
 dated 22.02.2000 & 22.04.2002, the Company had converted 13,160,000
 equity shares of face value of Rs.10/- each aggregating to
 Rs.131,600,000 into 1,316,000 Redeemable Preference Shares of Rs.100/-
 each aggregating to Rs. 131,600,000. Redeemable Preference Shares will
 not carry any dividend right. Out of this, 766,000 redeemable
 preference shares to be redeemed at par after 31st March ‘2007 on such
 date as the Board of Directors may determine, after the Preference
 Shares held by IDBI have been redeemed in full and their liabilities
 have been discharged AND 550,000 redeemable preference shares to be
 redeemed at par after 1st April 2010 on such date as the Board of
 Directors may determine after the Preference Shares held by IDBI have
 been redeemed in full and their liability have been fully discharged.
 The Preference Shares held by Industrial Development Bank of India
 Limited have since been redeemed.  The Board of Directors of the
 Company has not exercised its option to redeem the preference shares
 falling due after 31st March, 2007.
 
 7.  During the year 2010-11, the company acquired 100% shareholding of
 International Lamps Holding Company S.A (ILHC) and through ILHC two
 downstream subsidiaries namely Luxlite Lamps Sarl in Luxembourg and
 Trifa Lamps GmbH in Germany. The Company, including through its wholly
 owned subsidiary ILHC and downstream subsidiaries Luxlite Lamp Sarl and
 Trifa Lamps GmbH, entered into various agreements like Escrow
 Agreement, Business Transfer Agreements, Transfer document for Business
 Transfer Agreement, Deed of Assignments (for IPRs and Brands) and
 Transfer Document for Deed of Assignment, with Luxlite Sarl and Trifa
 Gluhlampenwerk am Trifels GmbH to acquire the business of Luxlite
 Sarl in Luxembourg and Trifa Gluhlampenwerk GmbH in Germany , in terms
 of the approval of the Board of Directors, effective 02.11.10. Under
 the terms of the stated agreements, following actions were to be
 completed by various parties:
 
 1.  As on 02.11.2010, Luxlite Sarl, including through its subsidiary
 Trifa Gluhlampenwerk am Trifels GmbH, was to make payment of Rs. 36.04
 crores ie the total outstanding of Luxlite Sarl towards the dues to the
 Company ie Halonix Limited (also the holding company through ILHC, of
 Luxlite Lamps Sarl and Trifa Lamps GmbH) before the Second Payment
 Date.
 
 2.  The Companies, Luxlite Lamps Sarl and Trifa Lamps GmbH, to take
 over the stock from Luxlite Sarl and Trifa Gluhlampenwerk am Trifels
 GmbH, amounting to Euro 5.94 million (Rs.36.96 crores) as on
 02.11.2010.
 
 3.  International Lamps Holding Company SA, Luxlite Lamps Sarl and
 Trifa Lamps GmbH to pay the consideration in two parts ie 10% payment
 upfront and balance 90% before May 31, 2011 or as mutually agreed
 between the parties.
 
 The status of the above stated agreements is :
 
 1.  Luxlite Sarl, still has to pay Rs. 16.38 crores out of total
 overdues of Rs 36.04 crores.
 
 2.  The Companies, Luxlite Lamp Sarl and Trifa Lamps GmbH, have already
 paid for the full stock, amounting to Euro 5.94 million ie Rs. 36.96
 crores).
 
 3.  ILHC, Luxlite Lamps Sarl and Trifa Lamps GmbH have not paid any
 consideration including 10% payment upfront for the business / assets.
 
 4.  The share certificates of International Lamps Holding Company SA
 (ILHC) are deposited with the Escrow agent and shall be released only
 on fulfillment of Release of Sale Consideration on or before May 31,
 2011 or as mutually agreed between the parties.
 
 The Board of Directors of Company, since the transaction has not been
 consummated either in terms of the spirit of the agreements signed or
 by action, has passed a Resolution on 20.05.11 whereby this acquisition
 of overseas entities has been called off. This has also been notified
 to the Assignor and the Escrow Agent. Accordingly, as per the terms of
 Clause 5 of the Escrow Agreement relating to Release of the Sale
 consideration, Sale shares and other documents invoked by Halonix
 Limited, Share Purchase Agreement, and the respective BTAs and DOAs,
 the transaction shall get RESTITUTED and the Seller shall be required
 to refund the purchase price towards sale and purchase of the Sale
 Shares / equity investment and / or unsecured loans made by the
 Purchaser to the Company.  The Management of the Company is of the
 opinion that all the dues from Luxlite Sarl, Luxlite Lamps Sarl, and
 Trifa Lamps GmbH are fully recoverable, including the Corporate
 guarantee of Euro 1 million and SBLC of Euro 1.7 million. Based on the
 above facts, the accounts of the subsidiaries have not been
 consolidated with the Companys accounts as on 31.03.2011.
 
 8. The Board of Directors of the Company in their meeting held on
 6.05.2010 approved the sale and transfer of its General Lighting
 Business, on a Slump Sale and Going concern basis, to its wholly owned
 subsidiary Halonix Technologies Limited (HTL), with effect from
 1.4.2010. The company bifurcated its operations into Automotive and
 General Lighting businesses and obtained two independent valuation
 reports for the General Lighting business as on 31.3.2010. The
 shareholders of the company, accorded their approval for the sale of
 the General Lighting business to HTL and its subsequent sale. In terms
 of the AS-24 on Discontinuing Operations, the company made requisite
 disclosures and reported its financial results for the quarters ended
 September 30, 2010 and December 31, 2010 since the proposed sale of
 business constituted discontinuing operation within the meaning of
 Accounting Standard-24. The Slump Sale Agreement for sale of General
 Lighting business has not been executed as on 31.3.2011. Based on
 Management recommendations, the Board of Directors of the Company, in
 their meeting held on 20.05.2011 i.e. before signing of the Accounts,
 has decided not to Sell and transfer its General Lighting business and
 continue both Automotive and General Lighting businesses as two
 separate and distinct reportable lines of business ie. Strategic
 Business units in terms of Accounting Standard 17 on Segmentation
 Reporting , to continue to avail economies of scale and synergies
 between the two businesses. The Management also feels that the General
 Lighting business is looking up and it is advantageous not to
 discontinue its operations Consequently, loss before tax for the year
 ended 31.03,2011 amounting to Rs.4597.97 Lacs for general lighting
 business could not be transferred.
 
 9.  Employee Benefits:
 
 a) Contribution to Provident Fund:
 
 Amount of Rs. 226.13 lacs (P.Y. Rs.264.33 lacs ) is recognized as an
 expense & included in Payment and Benefits to employees (Refer Schedule
 – 17) in the Profit & Loss account.
 
 b) The following table sets out the status of the gratuity scheme plan
 as at 31st March,2011.
 
 a.  There is a reasonable indication that current and future research
 and development costs to be incurred on the project together with
 expected production, selling and administrations costs are likely to be
 more than covered by future revenues/benefits and
 
 b.  The management has indicated its intention to produce and market
 the product .
 
 c.  Adequate resources exist, and are reasonably expected to be
 available to complete the project and market the product / process.
 
 d.  The Company has applied for Patent vide application no.
 1021/DEL/2009 dated 19/05/2009.
 
 11. The company has taken various residential, office and warehouse
 premises under operating lease agreements. These are generally not non
 cancelable and are renewable by mutually agreed terms. There are no
 restrictions imposed by Lease Agreements. There are no subleases.
 
 12.  Disclosure required by Accounting Standard (AS-29) relating to
 ‘Provisions, Contingent Liabilities and Contingent Assets.
 
 The provisions are recognized on the basis of past events and the
 probable settlement of the present obligation as a result of the past
 events during the year.
 
 14.  SEGMENT REPORTING
 
 Business segment
 
 During the year the company has bifurcated its business in two separate
 segments. Accordingly operating businesses are organized and managed
 separately according to the nature of products, with each segment
 representing a strategic business unit that offers different products
 and serves different markets. The identified segments are Manufacturing
 & Sale of Auto Lamps and General Lighting Lamps. The company has
 adopted Accounting Standard-17 for the first time, hence previous year
 figures have not been furnished.
 
 16.  RELATED PARTY DISCLOSURE
 
 a) List of related parties with whom transactions have taken place
 during the year is as under:
 
 Nature of Relationship   Name of the Person
 
 i) Subsidiaries         a) Halonix Technologies Limited (Wholly owned
                            subsidiary).
 
                         b) International Lamps Holding Company S.A.
                           (Wholly owned subsidiary).w.e.f. 2nd 
                            November2010
 
                         c) Luxlite Lamps SARL Luxemborg(Downstream 
                            Subsidiaries) w.e.f. 2nd November2010
 
                         d) Trifa Lamps Germany GmbH. (Downstream 
                            Subsidiaries) w.e.f. 2nd November2010
 
 ii) Common Control      a) Argon South Asia Limited
 
 iii) Holding Company    a) Argon India Limited
 
 iv) Key Management 
 personnel               a) Mr. Rajesh Kochhar (Managing Director)
 
                         b) Mr. S.K Neogi (Executive Director)
 
 22.  Previous year figures have been regrouped /rearranged wherever
 considered necessary.