1.1 Contingent Liabilities:
 
 (a) Claims against the Company not acknowledged as debts are Rs. NIL
 (Previous Year Rs. NIL).
 
 (b) Estimated amount of contracts remaining to be executed on Capital
 Account Rs. NIL (Previous Year Rs. NIL).
 
 (c) Bills Discounted Rs. NIL (Previous Year Rs. NIL).
 
 (d) Bank Guarantees given and Letters of Credit established by Banks on
 behalf of the Company Rs. 4473.24 Lacs (Previous Year Rs. 2680.44
 Lacs).
 
 (e) In respect of Income Tax, there is a-demand of Rs. 1,216,714 in
 respect of Assessment Year 2004-2005 but for which the appeal is
 pending before The Commissioner of Income Tax (Appeals), Meerut. The
 Company expects full relief in the above case on the basis of legal
 advice sought by the Company and moreover the Income Tax Assessment of
 the Company is pending for the Assessment Year 2008-2009. However, the
 Company does not envisage any liability in respect thereof in excess of
 provisions made.
 
 (f) In respect of Sales Tax, there is a demand of Rs. 883,285 in
 respect of Assessment Year 2004-2005 and Rs. 8,138,955 in respect of
 Assessment Year 2008-2009 but for which the appeals are pending before
 the Dy. Commissioner (Appeals) Sales Tax, Meerut, The Company expects
 full relief in the above cases on the basis of legal advice sought by
 the Company and moreover the Sales Tax Assessment of the Company for
 the Financial Year 2007-2008 and 2008-2009 are pending but the Company
 does not expect any liability for this other than what has been paid or
 provided.
 
 (g) Contingent Liabilities exists in respect of:
 
 (i) Additional Excise Duty of Rs. 1,746,360 levied by Central Excise
 and Customs Authorities for which Appeal is pending.
 
 (ii) Additional Stamp Duty of Rs. 95,192 levied by Collector, Meerut
 for which Writ Petition is pending with Honble High Court of U.P..
 
 (iii) Additional Electricity Charges of Rs. 5,47,500 levied by EE,
 EUDDI, Meerut for which case is pending with UPPCL, Meerut.
 
 The Company expects full relief in all the above cases on the basis of
 the legal advice sought by the Company.
 
 1.2 The Company has accepted certain deposits either from any other
 Company or from the Promoters and their relatives in pursuance of
 stipulation of State Bank of India and in both these cases these are
 exempted deposits under Section 58A and 58AA of the Companies Act, 1956
 and the Companies (Acceptance of Deposit) Rules, 1975.
 
 1.3 Pursuant to the clarification issued by Accounting Standards Board
 of The Institute of Chartered Accountants of India on Accounting
 Standard 9  Revenue Recognition, the Net Sales under Profit and Loss
 Account has been disclosed exclusive of Excise Duty and Educational
 Cess thereon.
 
 1.4 The Company is operating in manufacturing and repairing of
 transformers. Since there is only one segment in which the Company is
 operating, segment reporting as required under Accounting Standard 17
 issued by The Institute of Chartered Accountants of India is not
 applicable.
 
 1.5 As per Accounting Standard 18, Related Party Disclosures; issued
 by The Institute of Chartered Accountants of India, the disclosures of
 transactions with the related parties as defined in the Accounting
 Standards are given below:
 
 A. List of related parties with whom transactions have taken place
 during the year and relationship:
 
 SI. No.                               Name of Related Party
                                       Associate Company: 
 1.                                    Adesh Engineers Pvt. Ltd.  
 
                                       KEY MANAGEMENT PERSONNEL: 
 
 2.                                    Dinesh Singhal
 3.                                    Adesh Singhal
 4.                                    Brijesh Singhal
 5.                                    Mukesh Singhal
                               RELATIVES OF KEY MANAGEMENT PERSONNEL:
 
 6.                                    Kanohar Lai Singhal
 7.                                    Kanohar Lai Singhal HUF
 8.                                    Dinesh Singhal HUF
 9.                                    Adesh Singhal HUF
 10.                                   Brijesh Singhal HUF
 11.                                   Mukesh Singhal HUF
 12.                                   Trishla Singhal
 13.                                   Saroj Singhal
 14.                                   Deepa Singhal
 15.                                   Sashi Singhal
 16.                                   Vandana Singhal
 17.                                   Vivek Singhal
 18.                                   Virat Singhal
 19.                                   Aditya Singhal
 20.                                   Shubhda Singhal
 21.                                   Gaurav Singhal
 22.                                   Neha Singhal
 23.                                   Vivek Singhal HUF
 24.                                   Abhishek Singhal
 25.                                   Abhishek Singhal HUF
 26.                                   Kritika Singhal
 
 1.6 Depreciation on increase in value of Building and Plant and
 Machinery arising on revaluation of these assets over their Written
 Down Value as per books as on 31.12.1994 has been computed on the basis
 of remaining useful life. The depreciation of Rs. 576,702 has been
 deducted from Revaluation Reserve. The depreciation charged to Profit
 and Loss Account is however in accordance with provisions of Section
 205 (2) (b) of the Companies Act, 1956.
 
 1.7 (a) Sundry Creditors includes Rs.49,59,979/- due to small scale and
 ancillary undertakings (Previous Year Rs. 40,489,305/-)-
 
 (b) The undertakings from whom amounts outstanding for more than 30
 days in respect of small scale undertakings where such dues exceeds Rs.
 1 Lacs are as under :
 
 Jay Bee Laminations Pvt. Ltd. Noida.
 
 (c) The above information has been complied in respect of parties to
 the extent to which they could be identified as small scale and
 ancillary undertakings on the basis of information available with the
 Company.
 
 1.8 In the opinion of the Board of Directors, the Current Assets and
 Loans and Advances are approximately of the value stated, if realised
 in the ordinary course of business and provisions for all know
 liabilities are adequate and not in excess of the amount reasonably
 necessary.
 
 1.9 The figures of the previous years have been regrouped and recast
 wherever necessary.