(All amounts are in Indian Rupees, except share data and as stated)
 
 a.  Background of the Company
 
 Indo Tech Transformers Limited (Indo Tech / the Company) is engaged
 in the business of manufacturing power and distribution transformers
 and various special application transformers and mobile sub-station
 transformers. The Company has four manufacturing plants located at
 Pallakad in Kerala and Chennai and Kancheepuram in Tamil Nadu.
 
 i) Amalgamation of Indo Tech Electric Company Limited (ITECL /
 Transferor) with the Company
 
 Pursuant to a scheme of amalgamation approved by the Honble High Court
 of Madras on September 30, 2005, ITECL was amalgamated with the Company
 with effect from April 1, 2003. The amalgamation was accounted under
 the purchase method in the earlier year. During the year, the
 management has noted that the sanctioned scheme qualified to be given
 effect as amalgamation in the nature of merger and accordingly, such
 amalgamation should have been accounted in accordance with the pooling
 of interest method prescribed by AS - 14. Necessary accounting effect
 has now been given in the financial statements for the current year 
 under the pooling of interest method instead of purchase method.
 Consequently, general reserve has been increased by Rs. 10,737,933 
 with a corresponding effect to Capital Reserve and profit and loss 
 account for Rs. 9,219,605 and Rs. 1,518,328 respectively.
 
 ii) State Subsidy
 
 During the financial year 1998-99, the Company had received a
 Government Grant of Rs. 1,500,000 as investment subsidy towards setting
 up a Power Transformer plant at its Thirumazhisai factory in SIDCO
 Industrial Estate, Chennai. The Company had adopted the capital
 approach prescribed under Accounting Standard- 12 (AS - 12) Accounting
 for Government Grants and had accounted the grant as State Subsidy
 under Reserves and Surplus.
 
 Management noted that as the grant was received towards plant and
 machinery, the grant should have been treated as deferred income to be
 recognized in the profit and loss account on a systematic and rational
 basis over the useful life of the asset as prescribed by income
 approach in AS - 12. Since the estimated useful life had expired in an
 earlier period the subsidy amount has been transferred to Profit and
 Loss account as a prior period item.
 
 iii) Land and Building
 
 a) The Company is in the process of registering land measuring 0.132
 acres and DP-36 land at SIDCO Industrial Estate, Thirumazhisai,
 Chennai.
 
 b) During the year, in respect of building at NIDA, Kanjikode amounting
 to Rs. 2,518,083 a Memorandum of understanding has been entered to
 transfer the building. The Company is in the process of getting refund
 of the land cost of Rs. 271,500 from NIDA.
 
 Note a: Export Obligations - A demand of Rs. 29,395,120 was raised in
 an earlier year, by JDCFT, Chennai towards non- compliance of certain
 export obligation. The Company has made a provision of Rs. 7,500,000
 towards this demand. Any liability in excess of the provision will be
 met by the ex-promoters to the benefit of the Company.
 
 Note b: Income Tax - During the year, the Company has received
 income-tax assessment orders raising demand of Rs. 3,669,549 and Rs.
 5,129,608 for AY 2005-06 and AY 2008-09 respectively. Any liability in
 respect of these orders will be met by the ex-promoters to the benefit
 of the Company.
 
 iv) Based on the information received and available, the management
 believes that there are no enterprises which have provided goods and
 services to the Company and which qualify under the definition of micro
 and small enterprises, as defined under Micro, Small and Medium
 Enterprises Development Act, 2006. Accordingly, the disclosure in
 respect of the amounts payable, if any to such enterprises as at March
 31, 2011 has been made in the financial statements based on information
 received and available with the Company, to the extent identified by
 the management and rel ied upon by the auditors.
 
 v) Segment Reporting
 
 The Company is engaged into only one business namely manufacture of
 transformers and the operations primarily cater to the needs of the
 domestic market. Accordingly there are no separate reportable segments
 according to AS 17 Segment Reporting issued under the Companies
 (Accounting Standards) Rules, 2006.
 
 vi) Transfer Pricing
 
 The Company has international transactions with related parties. For
 the financial year 2009-10, the company has obtained the Accountants
 Report from a Chartered Accountant as required by the relevant
 provisions of the Income Tax Act, 1961 and has filed the same with the
 tax authorities. For the financial year 2010 -11, management confirms
 that it maintains documents as prescribed by the Income- tax Act, 1961
 to prove that these international transactions are at arms length
 considering the economic scenario, prevailing market conditions etc and
 the aforesaid legislation will not have any impact on the financial
 statements, particularly on the amount of tax expense and that of
 provision for taxation.
 
 xxvi) Previous year figures have been regrouped wherever necessary to
 conform to current year classification.  Previous years financial
 statements were audited by a firm other than B S R and Co.