Term Loan from Banks includes Term Loan from HDFC Bank of Rs. 32.75 Lacs (Outstanding as on 31-03-2015 Rs. 3.84 Lacs) which is secured against hypothecation of vehicles. The same is repayable by way of 48 monthly installments of Rs. 0.95 Lacs each.

AsonSl-OS-lOW the company has defaulted in payment of installment for the month of March low amounting

2. Long Term Liabilities of Finance Lease Obligations:

The Company has availed Term Loan from 'Sundaram Finance Limited' a Non Banking Financial Corporation amounting to Rs. l,268.741akhs for expansion off abilities. The Finance Lease obligations are secured against leased assets.-

Ason31-03-2015,the company has defaulted in Payment of installments aggregating to RsA62Lacs.

3. Deferred Payment Liabilities

Manufacture of MFL Brands owned by other Corporate

The Company manufactures and sells its own brand of liquors and also uses the brand of others. For the purpose of manufacture and sales of liquor brands not owned by the company the company has entered into arrangement / agreement with the respective brand owners. The terms of the Agreement / Arrangement with such brand owners provide for payment of consideration for use of Trade Mark / for the additional services rendered by the brand owners / other amount due to the Trade Mark owners in the agreed proportion. The payment towards use of Trade Mark / for the additional service rendered by the Trade Mark owners / other amounts due to the Trade Mark Owners are grouped as "Operational Support Cost". The Operational Support Cost is included under the head" Other Manufacturing Expenses"

Further the Agreements / Arrangements with other Brand owners provide a facility of Deferred Payment of the amount due under the agreement. These payables, as per the Terms, which are payable after a period exceeding 12 months are classified as "Deferred Credit from Corporate Suppliers" and are grouped under "Non Current Long Term Borrowings".

Other Long Term Liabilities represent 'Deposits' received from 'Tie Up Parties' which are not expected to be repaid back within aperiodofl2monthsfromthedateoffinancialstatements.

4. Working Capital Loans are secured by hypothecation of present and future stock of raw materials, Stock in Process, Finished Goods, Spares, Book Debts, Outstanding monies, receivables, claims, materials in transit etc.

5. Term Loan from Banks:

5.1 Term Loan from State Bank of lndia is collaterally secured by Equitable Mortgage of Factory and Building at RS No. 89 / 4A and 89 / 1, Katterikuppam, Mannadipet Commune, Pondicherry The collateral security as mentioned above is Common security for all facilities granted by the bank viz. Cash Credit, Term Loan, Bank Guarantee etc.

5.2 The promoters, directors and shareholders of the company have also given their personal assets as collateral security for Entire facilities sanctioned by State Bank of media. The disclosure of the same is given below:

5.3 Overdue Facilities with State Bank of India:

State Bank of India has classified entire facilities as 'Non Performing Assets' as on 31-03-2015 (Outstanding Rs. 2874 Lacs) (Principal Overdue Rs. 2386.37 Lacs and Interest Overdue Rs. 487.63 Lacs). Further, State Bank of India has initiated action under' SERFAESI Act'for recovery of dues outstanding amounting to Rs.2615.08Lacs.

The company has submitted a proposal in March 2015 for 'One Time Settlement (OTS) for repayment of over dues to Financial Institution which is under consideration. The company expects to derive economic benefit out of the above OTS in the form of waiver of overdue interest. Therefore, provision for interest amounting to Rs. 153.41 Lacs for the quarter ended March 2015 has not been made in the accounts.

The company has not received intimation from all the "Suppliers" regarding their status under Micro, Small and Medium Enterprises Development Act, 2006, and hence, the disclosure relating to amounts unpaid as at March 31, 2015 together with Interest paid/payable as required under the said Act has been provided only to the extent of intimations received.

6. During the Financial Year 2011-2012, the Company acquired 38.43% stake in 'Liquors India Limited'. However, due to various issues with Mr. Anil Agrawal, Managing Director of 'Comfort Securities Limited' (the Merchant Banker to the Initial Public Offerings of the Company) and M/s Comfort Intech Limited, the Company entered into an agreement with Mr. Anil Agrawal and'Lemonade Shares and Securities Private Limited' for sale of the entire undertaking. The agreement has been challenged and Civil Suit has been filed before Ilnd Additional District Judge, Ranga Reddy District, L. B. Nagar, Hyderabad with prayers in ter-aliatorescind the agreements as being voidandrestorethepartiesbacktothepositionprior to MOU dated 05-09-2012. Pending the outcome of the Suit, the amount received from 'M/s Lemonade Shares and Securities Private Limited' is shown under 'Other Current Liabilities'.

7. During the Financial Year 2011-2012, the Company acquired 38.43% stake in 'Liquors India Limited'. However, due to various issues with Mr. Anil Agrawal, Managing Director of 'Comfort Securities Limited' (the Merchant Banker to the Initial Public Offerings of the Company) and M/s Comfort Intech Limited, the Company entered into an agreement with Mr. Anil Agrawal and'Lemonade Shares and Securities Private Limited' for sale of the entire undertaking. The agreement has been challenged and Civil Suit has been filed before Ilnd Additional District Judge, Ranga Reddy District, L. B. Nagar, Hyderabad with prayers inter-alia to rescind the agreements as being void and restore the parties back to the position prior to MOU dated 05-09-2012. Pending the outcome of the Suit, the amount received from 'M/s Lemonade Shares and Securities Private Limited' is shown under' Other Current Liabilities'.

8. As on 31-03-2015,the company holds 49% stake of' SVD is toiletries Private Limited' amounting toRs.477Lacs.

9. In Financial Year 2010-2011, the Company made total investment of Rs. 1,311 Lacs in 'Liquor India Limited' and Rs. 2,423 Lacs in'SV Distilleries Private Limited'. Out of the above, investment in shares of Liqur India Limited' is Rs. 826 Lacs and in 'S V Distilleries Private Limited' is Rs. 477 Lacs respectively and investment in the form of acquisition cost of respective companies is Rs. 485 Lacs in 'Liquor India Limited' and Rs. 1,946 Lacs in 'S V Distilleries Private Limited' respectively. During the current Financial Year, the investment is Shares of above companies has been classified under the head 'Non Current investments' and other acquisition cost have been classified under the head' Short Term Loans and Advances'.

10. Other Loans and advances includes amounts transferred to various parties post IPO amounting to Rs. 2,900 Lacs given as advances to suppliers during Financial Year 2010-2011. However, since, the capital commitments were not acted upon by the parties, the management has decided to recall the advances paid. During the financial year 2013-2014, the company has sent legal notices to parties for refund of advances lying with them The management expects to get the advances back in due course. Hence, no provision has been made in the accounts for doubtful recovery of above advances. Further, the Company has also Filed a complaint with Economic Offences Wing,Unit-V,Mumbai,En for cement Director ate and other forums for Recovery

# "During the Financial Year 2014-2015, the High Court of Madras has dismissed the pending petitions of the Company regarding "Turnover Tax" payable to Financial Year 1999-2000, to Financial Year 2006-2007. The High Court has directed the Company to pay total demand of Rs. 119.72 to Department of Sales Tax. Accordingly, the Company has made provision in the accounts during the year for Turnover Tax payable and disclosed the same under the head "Exceptional Items"

The Balances of trade receivables are subject to confirmation and reconciliation. In the opinion of management, there would not be any substantial differences on reconciliation.

11. Balance with banks include unclaimed dividend of Rs.0.44Lacs (Previous Year Rs.0.44Lacs).

12. Fixed Deposits of Rs.lLacsarepledged with Electricity Departments as Deposit.

13. Margin onBankFacilitiesofRs.24.72 Lacs are pledged with State Bank of India for Non Funded Facilities granted.

14. Loans and Advances to related parties includes, working capital advance given to 'Liquor India Limited' (Also Refer Note No. 13.1 and Note No. 13.3) of Rs. 1,640 Lacs and'S V Distilleries Private Limited' (Also Refer Note No. 13.2 and Note No. 13.3) of Rs. 3,387Lacs. No interest has been charged on these loan on prudence basis.

15. During the Financial Year 2011-2012, the Company acquired 38.43% stake in 'Liquors India Limited'. However, due to various issues with Mr. Anil Agrawal, Managing Director of' Comfort Securities Limited' (the Merchant Banker to the Initial Public Offerings of the Company) and M/s Comfort Intech Limited, the Company entered into an agreement with Mr. Anil Agrawal and 'Lemonade Shares and Securities Private Limited' for sale of the entire undertaking. The agreement has been challenged and Civil Suit has been filed before Ilnd Additional District Judge, Ranga Reddy District! L. B. Nagar, Hyderabad with prayers inter-alia to rescind the agreements as being void and restore the parties back to the position prior to MOU dated 05-09-2012. Pending the outcome of the Suit, the amount received from 'M/s Lemonade Shares and Securities Private Limited' is shown under' Other Current Liabilities'.

The liability for Gratuity to employees as at the Balance Sheet date is determined on the basis of actuarial valuation based on Projected Unit Credit method and is funded to a Gratuity fund administered by the trustees and managed by Life Insurance Corporation of India. The contribution there of paid/ payable is charged in the books of accounts.

The employees and the Company make monthly fixed contributions to a Provident Fund Trust, equal to a specified percentage of the covered employee's salary: The interest rate payable by the Trust to the beneficiaries is being notified by the Government every year. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interstate.

In the absence of adequate information, the status of the Gratuity plan and the Superannuation and the other Pension Plans of The Company and the amount recognized in the Balance Sheet and Profit and Loss Account could not be disclosed.

16. Impairment of Assets:

Assets of the Company are being tested for impairment. Considering the internal and external sources of information, there was No indication of potential impairment loss, and hen estimation of recoverable amount does not arise.

17. Segment Reporting:

The company operates only in one reportable business segment namely manufacture and sale of Indian Manufactured Foreign Liquor. The liquor business;-incorporates the product groups (viz) IMFL and others, which have similar risks and returns. Hence Segment reporting is not applicable.

18. Exceptional Items: "DuringtheFinancialYear2014-2015,theHigh Court of Madras has dismissed the pending petitions of the Company regarding "Turnover Tax" payable to Financial Year 1999-2000, to Financial Year 2006-2007. The High Court has directed the Company to pay total demand of Rs. 119.72 to Department of Sales Tax. Accordingly, the Company has made provision in the accounts during the year for Turnover Tax payable and disclosed the same under the head "Exceptional Items"

19. Taxation Matters:

The Company has received a Demand Notice from Income Tax Department regarding Appeals filed by with the Commissioner of Income Tax (Appeals) against the orders of the Assessing Officer; in respect of the Assessment Year 2010-2011; on account of disallowance of expenditure under section 40 a (ia) of the Income Tax Act, 1961. The Department has raised a demand of Rs.138.94 Lacs for the said assessment year. The Company has decided to file an appeal with the Income Appellate Tribunal against the Appeal Orders issued by the Commissioner-of Income Tax (Appeals). Further, the Company has received a Demand Notice from Income Tax Department regarding Assessment Proceedings for the Assessment Year 2012-2013. The Department has raised a demand of Rs. 1,209.99 Lacs for the said assessment year. The Company has filed an appeal with the Commissioner of Income Tax (Appeals) against the Appeal Orders issued by the Assessing Officer: The Company is confident of succeeding in the said petition and the Company has also taken favorable opinion from legal experts. Hence no provision has been made in the books of accounts and the demand raised by the Department has been shown under "Contingent Liabilities".

In respect of other disputed liabilities pertaining to earlier years such as Turnover Tax, Bank Guarantee amount, the amounts Have been shown under" Contingent Liabilities" in there specie years.

Legal Cases Pertaining To The Company

The company's performance was also severely affected due to various issues and fraudulence committed by Mr. Anil Agrawal, Managing Director of M/s. Comfort Securities Limited, M/s. Comfort Intech Limited and his associates against the Company

Your Company has filed complaints against Mr. Anil Agrawal, M/s. Comfort Securities Ltd., Merchant Bankers, M/s. Comfort Intech Ltd. And rioter group companies with the foUowmg authorities.

1. A Civil Suit OS No. 103/2013 and LA. No. 405/2013 before 2nd Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad with prayers:

a. To rescind the agreements as being void and restore the parties back to the position prior to the MOU dated 05.09.2012.

b. To declare the notice for EGM dated 05.02.2013 as null and void and illegal. The court has passed an order restraining Mr. Anil Agrawal from holding the EGM till further orders in the case of M/s. Liquors India Ltd.,

c. LA. No. 1453 of 2013 filed with Ilnd Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad praying not to alienate, encumber assets of M/s. Liquors India Ltd.

d. LA. No. 1452 of 2013 filed with Ilnd Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad praying not to alter the Board.

i. The Court has passed interim order in IA No.1452 & 1453, not to alienate, encumber assets of LIL and not to alter the Board.

ii. Mr. Anil Agrawal filed appeal in High Court, Hyderabad and HC permitted to sub-lease with third parties.

iii. Aggrieved by this order, your company filed SLP with the Supreme Court of India against the above order. The Supreme Court has stayed the High Court Order till further hearings.

e. LA. No. 654of 2015 inOSno. 103/2013 filed with Ilnd Additional District Judge, Ranga Reddy District, L.B.Nagar, Hyderabad praying to appoint Official Receiver conferring powers on the receiver for the management, protection, collection of profits and improvement of M/s. Liquors India Limited. Thecase is in argument stage.

20. Writ Petition No. 12713 of 2014 with the Hon'ble High Court, Andhra Pradesh praying License of Liquors India Limited issued by the Excise Department should be cancelled and sub-lease agreement also be cancelled. The order has been passed that all transactions including financial transactions between Mr. Anil Agrawal and Tilaknagar Industries Limited shall be booked and recorded faithfully pending further consideration of this W.PM.PNo.l5944of2014inW.PNo.l2713of2014.Mr.AnilAgrawal and Tilaknagar Industries Limited shall not create any charge or third party interest relating to the assets of Liquors India Limited.

21. You company has filed a Complaint with the Commissioner of Police, Hyderabad against the fraud and cheating committed by Mr. Anil Agrawal. The Police has registered the FIR No.248/2013 dated 23.08.2013 against Mr. Anil Agrawal and others under Section406-IPC, 420-IPC, 447-IPC, 385-IPC, 386-IPC, 467-IPC, 468-IPC, 469-IPC, 471-IPC, 120B-IPC, 34-IPC.

a) Mr. Anil Agrawal has filed C.P No. 11292 of 2013 in the High Court of Hyderabad against FIR No. 248/2013 dated 23.08.2013 and High Court passed order to complete the investig ation with out arresting Mr. Anil Agrawal and others.

22. Your company has filed a Complaint with EOW, Mumbai for cheating and money laundering to recover company's money of Rs. 33.73crores. EOW has registered FIR No.34/14 dated 21.01.2014 under section 409,420,465,467,468,471,474,120(B).

a. Mr. Anil Agrawal filed W.P No. 2059 of 2014 in High Court of Mumbai and the Court has declared that the FIR registered by EOW is not maintain able since Nacharam Police Station has registered the FIR first.

i. Aggrieved by delay in investigation by the Hyderabad Police and order by the High Court, Mumbai, Your company has filed.

a. Two SLPs with the Supreme Court of India against High Court of Mumbai order and delay in investigation by Hyderabad Police. These SL Ps have been taken by the Supreme Court and the next hearing is onl4.09.2015.

23. Your company has filed a Complaint with SEBI, Mumbai against BRLM M/s. Comfort Securities Ltd., (DP) promoted by Mr. Anil Agrawal for violations of SEBI Regulations and others.

24. Your company has filed a Recovery suits No. SL/1135, 1136, 1137, 1138 and 1139 of 2013 filed against M/s. Ranisati Dealer PvtLtd., M/s. Vibhuti Multi Trade Pvt. Ltd., M/s. Gulistan Vanijya Pvt.Ltd., M/s. Sukusama Trading and Investments Pvt.Ltd. andM/s.BLC Trading and Agencies Pvt. Ltd. in the High Court of Mumbai. Matter pending before the court.

25. Your company has filed a Complaint with Enforcement Directorate, Mumbai to investigate the frauds committed by Mr. Anil Agrawal and his companies. Enforcement Directorate has initiated enquiries against Mr. Anil Agrawal, his companies and others under the provisions of prevention of Money aundering Act 2002 on the basis of the FIR No.34/14 dated 21.01.2014.

26. Your company has filed a Complaint with RBI and Ministry of Finance to appoint officer to investigate the affair of CIL and cancel the License to act as NBFC for violating the guidelines. RBI has cancelled the NBFC License of Comfort Intech Limited based on forgery and mis-representation by CIL in some other different matter for forging and fabricating RBI documents.

27. Your company has filed a Complaint with The Police Commissioner of Chennai against the fraud and cheating committed by Mr. Anil Agrawal. Mr. Anil Agrawal filed Writ Petition No. 32829 of 2013 with High Court of Chennai to direct the Police, Chennai not to proceed further with the investigation. The matter is pending before the Court.

28. Your company has filed a Petition Under section 111 A r/w 111(4) of the Companies Act filed before the Company Law Board, Chennai in the matter of Liquor lndia Limited, Mr. Anil Agrawal and others. Matter is pending before the CLB.

Mr. Anil Agrawal has filed complaints against the company with the following authorities:

1. The Company Law Board, Chennai under section 397, 398, 235(2) and 237(b) of the Companies Act, 1956. The Company has filed counter and the matter is pending before the CLB.

2. Mr. Anil Agrawal filed a Counter Complaint with Hyderabad Police against Mr. R.V. Ravikumar. The Hyderabad Police have not considered the complaint since there was no substance. Aggrieved, Mr. Anil Agrawal filed W.P No. 7956 of 2014 filed with Hon'ble High Court, Andhra Pradesh to register the complaint filed by him against Mr. R.V. Ravikumar with Hyderabad Police. The Police have submitted their report to the High Court, Hyderabad stating that there is no substance in the Complaint. The matter is pending before the court without further date.

3. Mr. Anil Agrawal has filed a Counter Complaint with Malad Police Station, Mumbai against the company and its Directors. Preliminary enquiry was conducted by the Malad Police and since there was no substance in the Complaint, Malad Police Did not pursue further.

4. M/s. First Financial Services Limited, Chennai has filed O.S. No. 6602 of 2013 alleging mis-management of the company. The court has rejected the suit.

5. M/s. Tilaknagar Industries Limited - accused A7, A8 and A9 in the Hyderabad Police FIR, filed W.P. No. 4945 of 2014 with the Hon'ble High Court, Andhra Pradesh to stay all further proceedings of the FIR. The W.P. is pending for admission.

29. Previous Year Figures:

The financial statements for the year ended March 31,2015 have been prepared as per Schedule III of the Companies Act, 2013. The figures for the previous year have been regrouped, reclassified or rearranged to meet the recognition and measurement principles followed for preparation of financial statements.