HEG

(Rs. in lac)
                                                  As at            As at
                                             31.03.2008       31.03.2007
 
 1.  Contingent liabilities
 
 a) Claims against the company not 
 acknowledged as debts :
 
 i) Excise duty under appeal                      59.22           29.60
 
 ii) Other matters                               258.55          382.17
 
 b) Bank Guarantee                             7,130.92        6,392.84
 
 c) Bills discounted with bankers              4,292.35        5,828.47
 
 d) Pending export obligation against 
 Advance Licence & EPCG Licence                6,536.64        6,643.44
 
 2.  Estimated amount of contracts remaining 
 to be executed on capital                     4,265.14        1,234.33 
 account, not provided for (net of advances of
 Rs.1,946.75 lac (Rs.1,925.84 lac))
 
 3.  There are no unprovided present obligations requiring provision in
 accordance with the guiding principles as enunciated in Accounting
 Standard (AS)-29 as it is not probable that an outflow of resources
 embodying economic benefit will be required.
 
 4.  Pursuant to the notification of Accounting Standard AS-11 in the
 Companies (Accounting Standards) Rules, 2006, the Company has changed
 the accounting policy of treating foreign exhange differences on
 foreign exchange loans /liabilities from considering them as part of
 the cost of fixed assets acquired from a country outside India to
 charging them of to profit & loss account this year.This has resulted
 in credit to profit & loss account for the year by Rs.420.71 lac.
 
 5.  a) The Board of Directors of the Company at their meeting held on
 18th July, 2007 had approved the proposal in principle to Hive Off the
 Steel Division (including WHRS) situated at Borai, Durg (Chhatisgarh)
 and authorized the Planning & Review Committee to finalise a Scheme of
 Arrangement u/s. 391-394 of the Companies Act, 1956.The Planning &
 Review Committee of directors at its meeting held on 20th September,
 2007 approved the Scheme of Arrangement to hive-off the Steel Division
 to M/s. Jai Balaji Industries Ltd (hereinafter referred as JBIL) w.e.f.
 01.08.2007.The decision of the Board as well Committee of directors was
 disclosed through Stock Exchange(s) and Press.
 
 b) The Management started taking steps to hive-off the Steel Division
 of the Company. Necessary in- principle approval of the Stock
 Exchange(s) i.e. BSE, NSE, MPSE & CSE were obtained vide their letters
 dated 07.01.2008,09.01.2008,09.02.2008 and 22.02.2008 respectively.
 Equity Shareholders, Secured & Un-secured creditors approved the Scheme
 of Arrangement at their meeting held on 8th March, 2008 at the
 direction of the Honble High Court at Jabalpur.
 
 c) As per the Scheme of Arrangement agreed between HEG Ltd and JBIL, a
 sum of Rs. 88.50 crore was agreed to be paid to HEG Ltd. for fixed
 assets and a sum of Rs. 32.30 crore towards Current Assets. JBIL also
 took over unsecured interest free sales tax loan of Rs. 9.58 crore. The
 above said consideration has since been received alongwith the
 stipulated interest.
 
 d) In the case of HEG Final Order was passed by the Honble High Court
 at Jabalpur on 16th May, 2008 and certified true copy of the order was
 received on 23rd May, 2008.The order was filed with the Registrar of
 Companies, which was registered on 29th May, 2008.
 
 e) In the case of Jai Balaji Industries Ltd., Final Order was passed by
 the Honble High Court at Calcutta on 9th May, 2008 and certified true
 copy was received on 7th June, 2008. The same was filed with the
 Registrar of Companies on 9th June, 2008.
 
 6.  The following transactions are accounted for on the basis of
 estimates/ available data ,with final adjustments being carried out in
 the year of settlement.
 
 a) Graphite Export Development Trust subsidy.
 
 b) Claims lodged with insurance companies.
 
 c) Interest on income tax refunds granted on summary basis, pending
 finalisation of assessments, is treated as income in the year of
 accrual. Final adjustments are carried out in the year of completion of
 Assessment.
 
 7.  Term loan, debentures and Interest free Sales Tax Loan falling due
 in next 12 months Rs. 7,712 lac (previous year Rs. 9,467 lac).
 
 8. On the basis of information obtained by the company from its
 creditors regarding registration under the provisions of Micro, Small
 and Medium Enterprises Development Act,2006 (Act), dues to the Small
 Scale Industrial Undertakings are Rs.1.25 lac (Previous year Rs. 1.22
 lac), none of which are exceeding the limit of 45 days. In view of
 above, disclosure specified below is not given:
 
 a) Delayed payments due as at the end of each accounting year on
 account of principal and interest thereon
 
 b) Total interest paid on all delayed payments during the year under
 the provisions of the Act
 
 c) Interest due on principal amounts paid beyond the due date during
 the year but without the interest amounts under the Act
 
 d) Interest accrued but not due
 
 e) Total interest due but not paid
 
 9.  The Board of Directors in their Meeting held on 7th February,
 2008, approved issue of 63,40,000 Warrants of Rs. 365/- each with
 option of conversion of each Warrant into One Equity Share of Rs. 10/-
 each within a period of 18 months from the date of issue and allotment
 to Promoters, Directors and Persons acting in concert, which includes
 Associates, Relatives and Friends of such Promoters and Directors and
 Employees of the CompanyGroup Companies and Associate Companies. The
 same was approved by the shareholders u/s 81 (A) of Companies Act, 1956
 at their meeting held on 3rd March, 2008.
 
 Subsequently, applications for issue of 47,78,000 warrants were
 received for which amount of Rs. 1,743.93 lac towards 10% of the face
 value of the Warrant i.e.@ Rs. 36.50 per warrant was received.
 
 The initial amount received on preferential allotment is lying in
 schedule bank in current account at the end of the year.
 
 10.  As per Accounting Standard 15 Employee Benefits the disclosure
 of employee benefits as defined in the Accounting Standard are given
 below:
 
 The Company has adopted Revised Accounting Standard-15 Employee
 Benefit In accordance with the transitional provision of revised
 AS-15, additional liability (net of tax) under new method as at 1st
 April, 2007 as compared to liability provided under Pre-revised AS-15
 to be adjusted against the balance of General Reserve as at 1st April,
 2007 is NIL.
 
 11.  (a) Previous Years figures have been regrouped and recast
 wherever considered necessary.
 
 (b) Figures in amount have been rounded off to nearest lac upto two
 decimals. Figures in bracket relate to the previous year.
 
 (c) The Schedules referred to in the Balance Sheet and Profit and Loss
 Account form an integral part of the accounts.