Prakash Industries

1.  Contingent Liabilities not provided for in respect of:
 
                                             This year   previous year
                                         (Rs. in lacs)   (Rs. in lacs)
 
 Guarantees issued by banks on 
 behalf of the company                        953.84        487.01
 
 Disputed demands of Excise Duty / 
 Entry Tax/Sales Tax/Lease rentals          1,379.07        491.81
 (Amount paid there against Rs. 372.97 
 lacs (Rs.180.33 lacs))
 
 Claims not acknowledged as debts 
 by the Company                               313.45        313.45
 
 Disputed demand of Gujrat 
 Electricity Board                            952.00        952.00
 
 Disputed demands of Income Tax 
 pending under appeals(Amount paid
 there against Rs.Nil (Rs.191.78 lac))          -           209.73
 
 2.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for
 (Advances paid there against Rs.4,969.19 
 lacs (Rs.8,794.86 lacs))                   9,096.29     16,275.80
 
 3.  In the opinion of the management, the Current Assets, Loans and
 Advances have a value on realisation in the ordinary course of
 business atleast equal to the amount at which they are stated in the
 Balance Sheet.
 
 4.  The Company is in the process of identifying the Suppliers
 regarding their status under the Micro, Small and Medium Enterprises
 Development Act, 2006. Hence disclosures, if any, relating to amounts
 unpaid as at the year end together with interest paid / payable as
 required under the said Act have not been made.
 
 5.  In terms of the order dated 23rd August 2007 of the Honble Punjab
 & Haryana High Court, the net deferred tax liability computed in terms
 of the Accounting Standard 22 Accounting for Taxes on Income
 amounting to Rs. 7,027.45 lacs has been adjusted against Securities
 Premium Account. Consequently, the profit after tax is higher by the
 said amount.
 
 6.  Advance recoverable in cash or in kind or for value to be received
 include
 
 i) A sum of Rs. 1,956.16 lacs (Rs. 916.14 lacs) from group companies in
 which directors are interested. Maximum amount outstanding during the
 year Rs. 2,129.27 lacs (Rs. 1,127.43 lacs).
 
 ii) A sum of Rs. Nil lacs(Rs. 14.82 lacs) paid towards share
 application money to companies in which a director of the company is
 interested.
 
 iii) A sum of Rs.Nil lacs (Rs. 176.46 lacs) paid towards share
 application money to Madanpur (North) Coal Co. Pvt. Ltd., a joint
 venture Company .
 
 iv) A sum of Rs. 0.04 lacs (Rs. 5.07 lacs) paid to Madanpur (North)
 Coal Co. Pvt. Ltd., a joint venture Company. Maximum amount outstanding
 during the year Rs. 5.11 lacs (Rs. 5.07 lacs).
 
 7.  Exceptional items include amount of Rs 1,277.09 lacs being share
 warrant application money forfeited during the year and is net of
 liabilities of lease rentals relating to earlier years.
 
 8.  Advance income tax is subject to setoff with provision for
 corporate tax as and when assessed.
 
 9.  The company has taken certain plant and machinery under operating
 lease prior to the period 1st April, 2001 .The company is having legal
 disputes with the concerned lessors and there are counter claims which
 are pending under arbitration/court, as such the future liability on
 this account, if any, is not ascertainable.
 
 10.  The Company has repaid the matured non-convertible debentures to
 individual debenture holders. However, certain cheques amounting to Rs.
 48.89 lacs are yet to be realised by the concerned holders.
 
 11.  Share capital includes 4.50,000 equity shares issued on conversion
 of term loan and 2,60,22,648 equity shares allotted as Bonus shares by
 capitalisation of Securties Premium Account in earlier years.
 
 12.  Gross Block of Land and Plant & Machinery includes Rs. 2,014.11
 iacs and Rs. 19,823.69 lacs recpectively added on revaluation of assets
 as at 31st March 2005. The depreciation as shown in the Profit & Loss
 Account is net of amount of Rs. 1,449.47 lacs adjusted against the
 Revaluation reserve.
 
 13.  Excise duty relating to sales has been disclosed as a deduction
 from sales. Excise duty related to difference between closing stock and
 opening stock has been disclosed in Schedule 10 - Increase/Decrease in
 stocks.
 
 14. The Company raised amounts against the preferential issue of shares
 and warrants during the previous year. The unutilised money of Rs 6,450
 lacs kept with banks in fixed deposit accounts in the previous year has
 been utilised towards capital expenditure for expansion and
 modernisation plans and other corporate purposes during the year.
 
 15. Related party disclosure as required by Accounting Standard -18
 issued by the Institute of Chartered Accountants of India are as under
 :-
 
 (A) List of related parties and their relationship
 
 a) Enterprise on which key management personnel and their relatives
 excercise significant influence with whom transactions have taken place
 during the year.
 
 1.  Primenet Global Limited
 2.  Surya Roshni Limited
 3.  Prakash Thermal Power Limted
 4.  Prakash Natural Resources Limited
 5.  Prakash Mega Power Limted
 6.  Prakash Urja Limted
 7.  Prakash Vidyut Limted
 
 b) Key Management Personnel :
 
 1.  Shri V.P.Agarwal, Chairman & Managing Director
 2.  Shri Vikram Agarwal, Joint Managing Director
 3.  Shri G.LMohta, Whole Time Director
 4.  Shri Vipul Agarwal, Whole Time Director
 
 c) Joint Venture Entities:
 
 1.  Madanpur (North) Coal Co. Pvt. Ltd.
 
 17.  Previous years figures have been shown in brackets and regrouped
 and/or rearranged wherever considered necessary to conform with current
 years presentation. The figures have been rounded off to the nearest
 of Rupee.