The demands at (b) and (c) above are payable with interest in case upheld against the Company.

The Company is contingently liable for excise duty of Rs.45,993,252/-, which demands were set aside by Central Excise and Service Tax Appellate Tribunal and appeals in respect whereof filed by Excise Department are pending before jurisdictional High Courts.

2. The Company's writ petitions before the High Court of Bombay disputing the Customs duty liability and applicable rate of customs duty on imported raw materials (for own consumption as well as sale on high seas basis) is pending disposal. Against this disputed liability the Company has furnished to the Customs Authority bank guarantee totaling Rs.1,957,376/- (previous year Rs.1,957,376/-). In respect of imported raw material sold on high seas basis there are advances received by the Company of Rs.1,033,628/- (Previous Year Rs.1,033,628/-) from the constituents towards the likely custom duty liability.

3. Registration of the Company with Board for Industrial and Financial Reconstruction(BIFR):

The Company was declared a sick industrial undertaking in terms of Section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Company had submitted a Draft Rehabilitation Scheme to Hon'ble BIFR through its Operating Agency IFCI Ltd. and is providing the required information and clarification.

The Company continues its manufacturing operations, and the accounts are prepared on going concern basis.

4. Borrowings from Banks and Term Lenders:

1. Restructuring by Standard Chartered Bank (SCB):

The Company's proposal for restructuring of borrowings was approved by SCB (member of consortium of lenders) in 2002. The liability of SCB in accordance with the aforesaid sanction was recognized in books of account of the Company. The Company has been amortizing borrowings in accordance with restructuring scheme as sanctioned by SCB. During the year the restructured liability has been repaid.

2. Working capital borrowings from Dena Bank (DB):

The Company had completed payment of one time settlement amount to Dena Bank except affect of release of a bank guarantee issued by Dena Bank on behalf of the Company for Rs.751,257/- (Rs.751,257/-) has yet to be given by the said Bank. The Company will give effect to the settlement on completion of consequential formalities by Dena Bank and release of charge over assets of the Company held by Dena Bank.

3. Acquisition of debts by Itz Online Payments Limited (IOPL):

IOPL acting as Strategic Investor in the revival and rehabilitation plan of the Company, settled and took over debt held by Central Bank of India (CBI) and purchased from Federal Bank Limited (FBL) the non-convertible debentures held by FBL.

5. The Company is holding Preference Shares of Indo Wind Energy Ltd., and is entitled to redemption proceeds thereof and dividend with certain additional amounts alongwith upto date interest. The Company has not accounted income in respect of its aforesaid amounts and claims.

The Company is initiating recovery measures and will account income accrued on the Preference Shares in the year of receipt.

6. As per Accounting Standard 15 "Employee benefits", the disclosures as defined in the Accounting Standard are given below: Defined Contribution Plans

Contribution to Defined Contribution Plans, recognised as expense for the year is as under :

Defined Benefit Plan

The employee's gratuity fund scheme managed by a Trust (Life Insurance Corporation of India for part of the organization) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit seperately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

7. The entire operation of the Company relates to only one segment viz. Thermoware Products. Hence as per AS(17) issued by ICAI, there is only one reportable segment.

8. The Company has not yet identified the total amount due to micro, small and medium scale enterprises.

9. The Basic Earning per share of the Company is Rs. 0.91 as defined in Accounting Standard 20 issued by ICAI.

10. The Company does not have any deferred tax liability as envisaged in Accounting standard 22 issued by the ICAI.

11. Sundry Creditors and Sundry Debtors are subject to confirmation by the respective parties.

12. Figures of the previous year have been regrouped and reclassified wherever necessary.

13. The amounts in the Balance Sheet & Statement of Profit & Loss are rounded off to the nearest rupee.