1. Unsecured Term Loan from Sowraj Investments Pvt. Ltd., and Easun Products of India Pvt. Limited do not carry any interest. The Company is making necessary efforts to repay this loan against business realization.

2. Working Capital a. Primary Security

Hypothecation of entire current assets including stocks, receivables and other current assets of the Company on pari-passu basis favouring Axis Bank, DBS Bank, Standard Chartered Bank, Canara Bank and State Bank of India.

3. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.69.45 lakhs by the Department of Sales tax, Government of Tamilnadu.

The same has been repaid in September, 2015 with interest.

4. Gratuity and Leave for AS 15 Disclosure

A Defined Benefit Plan:

(i) Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

(ii) Leave Encashment (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

B Defined Contribution Plan (Funded)

Provident Fund

All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund Commissioners as per law.

5. The Company has incurred expenditure aggregating to Rs. NIL during the year (Rs.95.29 lakhs) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2016. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 “ Intangible Assets” and its carrying value is appropriate.

6. a) In respect of company’s operations which includes execution of the turnkey projects. These

turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

b) Revenue from operations includes invoicing on customers towards execution of turnkey projects. These turnkey project invoicing is predominantly milestone associated and is independent of customer acceptance of agreement, Revenue recognized in this regard with appropriate provision for anticipated procurement / cost of manufacturing components the outcome of eventual acceptability of the claims of the company is ascertained at the closure of the respective project and is accounted accordingly.

7. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.NIL) and net off product development expenses Rs. NIL (Rs.95.29 lakhs).

8. Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.

9. Trade Receivables includes an amount of Rs.1,224.75 lakhs (Rs.1,191.69 lakhs) being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages. During this financial year Rs.0.14 Lakhs (Rs.59.50 Lakhs) recovered from Customers against written off in earlier years has been adjusted against Liquidated Damages recoverable.

10. Trade Receivables includes an amount of Rs.487.52 lakhs (Rs.626.88 Lakhs) being the outstanding from Foreign Debtors for more than One Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection. Out of which Rs. Nil (Rs.509.85 Lakhs) received subsequently.

11. The Company has made an investment of Rs.15,502.10 lakhs in its wholly owned subsidiary at Singapore and for onward investment into its wholly owned subsidiaries. Considering the long term nature of investment and future plans of the management, no provision towards any impairment of investment is considered necessary as the management is of the opinion that this investments represents appropriate carrying value.

12. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign Exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entities which had not opted for such relaxation earlier. The Company during the financial year 2012-13 has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 lakhs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written-off over the period of 3 years, being the loan tenure. During the financial year 2015-16, the Company has written off Rs.801.45 lakhs towards loss on foreign exchange and reinstated the liability by Rs.322.37 lakhs.

13. Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.68.14 lakhs (Rs.94.48 lakhs).

14. The value of inventory pertaining to the “Metering Business” amounting to Rs.215.41 lacs is continued to be carried at cost despite no activity in the business for considerable period and realizable value has not been ascertained consequently the impact on the financial statements is not quantifiable.

15. In respect of certain turnkey contracts which have been terminated by the customers resulting in encashment of bank guarantees given by the company amounting to Rs.4,603.99 lacs has been shown recoverable from parties in respect of which negotiation with customers are stated to be in progress. Pending the outcome of negotiations no adjustment in the financial statements has been made.

16. Confirmation of balance has not been obtained from some of the supply creditors and debtors to certain parties to whom the Company has given advances.

17. The Company has applied for the extension of time limit under FEMA rules for material advances given to the associate enterprises amounting Rs.624.19 lakhs as on 31st March 2016.

18. As a matter of prudence, the Deferred Tax Assets arising predominantly on account of Carry over of Business Loss is not recognized in the books of account in line with Accounting Standard 22 “Taxes on Income”.

19. Previous year’s figures have been re-grouped / re-classified, wherever necessary to conform to the current year’s presentation.