1.  The Management has capitalized under Fixed Assets Accumulated Lease
 Equalization Net of Lease adjustment Account Rs.47.01 lacs.
 
 2.  (a) A sum of Rs. 440.63 lacs included in Loans and Advances Net
 Investment on lease Rs. 280.37 lacs is not recoverable for which no 
 provision is made. Consequently the loss is understated by Rs. 784.37
 Lacs.
 
 (b) Secured loans from banks is secured by assignment of hire purchase
 and lease agreements, lien on fixed deposits and personal guarantee of
 some of the present and past directors of the company. There is no
 operation in the accounts with ING Vysya Bank since 18th September,
 2008 and the bank has filed a suit before the Debt Recovery Tribunal.
 The Company has paid Rs. 75 Lakhs to ING Vysya Bank Ltd subsequent to
 the balance sheet date towards One Time Settlement against term loan.
 
 The company has received a letter dated 16.08.2011 from Karur Vysya
 Bank Limited for One Time Settlement of their dues out of court.
 
 Interest is not provided for the above facilities.
 
 (c) The company has not provided interest on deposits amounting to Rs.
 16.36 lacs.
 
 Subject to (a) (b) and ( c ) above, the company has followed the
 prudential norms for income recognition, concentration of
 credit/investment, asset classification and provisioning in respect of
 non-performing assets, as per the norms prescribed by Reserve Bank of
 India.
 
 3.  Lease Equalization Charges for the year on Assets Leased up to
 31-03-2001 has been accounted for as per the Guidance Note (Revised)
 issued by the Institute of Chartered Accountants of India.
 
 4.  In the opinion of the management and based on legal opinion
 obtained by the Company, AS 28: Impairment of Assets is not applicable to 
 the Company since the Company is in the business of Equipment Leasing, 
 Hire Purchase, Bills Discounting and ICDs which are considered as financial assets.
 
 5.  Income from operations is inclusive of overdue compensatory charges
 and net of rebates and discounts. The overdue compensatory charges
 receivable as on 31-3-2011 is Rs. 38.25 Lacs (Previous Year Rs. 38.25
 Lacs).
 
 6.  Balances in Sundry debtors, hirers, lessees and other loans,
 advances and deposits are subject to confirmation.
 
 7.  Tax deducted at source on Income from Investments and Bank Deposits
 is Rs, 46,187/- (P.Y. Rs. 74,687/-)
 
 8.  Deposits with banks include: (a) Rs. 10.65 lacs (P.Y. Rs. 10.18
 Lacs) under lien for facilities availed from the State Bank of India
 and (b) Rs.4.25 lacs (P.Y. Rs.4.60 lacs) against bank guarantee availed
 from the Karur Vysya Bank furnished to Tamilnadu Sales Tax authorities
 for the year 2004-05, in respect of appeal pending before the appellate
 authorities.
 
 9.  The Company is primarily engaged in the business of Hire Purchase
 Financing and Equipment Lease Financing. Since these activities are
 covered by the same set of Risks and Rewards, these have been
 considered as a single segment, which is in accordance with the guiding
 principle enunciated by AS-17: Segment Reporting.
 
 10.  The Company has not considered Deferred Tax Asset for the year as
 per AS-22: in view of reliability of the said asset against
 sufficient future taxable income.
 
 The Components of Deferred Tax Asset arising out of Timing Differences
 are :-
 
 Deferred Tax Asset on account of Carry Forward Losses
 
 under the Income Tax Act Rs. 331.59 Lacs
 
 Deferred Tax Liability on account of difference in
 
 WDV of Fixed Assets Rs. 61.63 Lacs
 
 Deferred Tax Asset (Net) Rs. 269.96 Lacs
 
 11.  Contingent Liabilities :
 
 A bank guarantee has been furnished for Rs.4.60 lacs to Tamilnadu Sales
 Tax Authorities towards disputed tax, surcharge and penalty.
 
 Interest on delayed payments to STFCL Rs. Nil (Rs.34.80 lacs) has not
 been considered in the accounts.
 
 Interest on IC D received is not quantified and provided for.
 
 Gratuity, Earned Leave and Bonus were neither quantified nor paid to
 employees who left the employment during the year.
 
 12.  Related Party Disclosures as per AS 18 issued by the Institute of
 Chartered Accountants of India.
 
 (a) List of related parties Nature of relationship
 
 (i) Mukunda Insurance Services Ltd(MIS) Associate company
 
 (ii) Mukunda Securities Ltd(MS) Associate company
 
 (b) Key Management Personnel(KMP)
 
 Mr.B.R.Viswanath Setty - Chairman and Managing Director
 
 (c) Associate Companies/Firms : Transactions during the year (Rs.in
 lacs) : NIL (Previous
 
 Year NIL)
 
 Key Management Personnel :
 
 Remuneration to Chairman and Managing Director Rs. 72,600/- (Rs.
 4,34,400/-)
 
 13.  AS 21 : Consolidated Financial Statements is not applicable to the
 Company.
 
 14.  Sundry Debtors includes Rs. Nil (Rs.Nil) being amounts due from
 companies / firms in which some of the Directors of the Company are
 interested as Directors/Partners.
 
 15.  Due to fluctuations in electrical power supply and non-working of
 UPS the hard disk in the server crashed resulting in loss of data
 stored in the server as well as software programmes installed therein.
 With the available back-up and retrieved data the accounts were
 reconstructed. An amount of Rs. 76.36 lacs could not be reconciled.
 
 16.  Previous Year s figures have been rearranged, regrouped and
 restated wherever necessary to conform to current year s
 classification.