B. Nature and purpose of reserves

(a) Capital Reserve: Reserve is created on account of forfeited of share in the year 1999-2000

^ Retained Earnings: Retained earnings are the profits that the company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(c) Equity Instruments through Other Comprehensive Income: This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.

* (Against hypothecation of book debts of Repol Commodities & Collateral secured & guarantee given by Directors)

** (Against Hypothecation of stock of raw materials,finished goods & semi-finished goods of Electronic Calculators & Electrical Items and book debts and also collaterally secured by hypothecation of plant & machinery, EMT of Gala No. 44 & 45 at Pragati Industrial Estate Silvassa (& residential bunglow of relatives of Directors in previous year) & land at Daman belonging to a group Company of a debtor and Corporate Guarantee by it and guarantee by Directors )

***

23 Segment Reporting

During the year the Company has not been carried out any business activities. As such there are no other reportable segment as defined by Accounting Standard-17 on "Segment Reporting” issued by the Institute of Chartered Accountants of India.

24 Contingent Liabilities and Commitments

(a) In view of closure of the unit - II of Silvassa & non fulfillment of export obligations the Commissioner of Central Excise & Customs has raised demand of Rs. 1,65,20,069/-vide their order dated 18.10.2004 towards various duties, fine & penalty which is disputed in appeal before the Custom, Excise and Service Tax Appellate Tribunal.

(b) Bill of Exchange discounted and not matured - Rs. 90.30 Lacs (P.Y. 90.30 Lacs)

Note :

1 The Company had reviewed all its pending litigations and proceeding and has adequately provided for where provisions are required and disclosed as contigent liabilities where applicable, in the financial statements. The Company does not expect the outcomes of these proceedings to havce a materially adverse effect on its financial results.

2 It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

25 Previous year figures

Previous Year's figures have been regrouped/reclassified, wherever necessary, to correspond with the current year's classification/disclosures.

27 Capital Management

The net worth of the Company is totally eroded. The Company has incurred cash loss during the current year and earlier year. The Company has not carried out any manufacturing or trading activity since last few years. Company's manufacturing unit at Silvassa alongwith all the assets , inventories etc. are under control of it's banker Canara Bank in view of the loans taken from bank and GSFC which have been classified as NPA due to non payment of outstanding dues. Canara Bank has issued notice to company & guarantors under the securitization Act, one of the guarantor has appealed the said notice with DRT. The legal matter with bank is still not settled and is under progress. These Conditions indicates the existance of material uncertainty that may cast significant doubts abouts the company's ability to continue as a going concern. However, the financial statements of the compnay have been prepared on going concern basis as the management is hopeful of reviving the business.

28 Financial Risk

The Company has suffered from financial risk as the company has not carried out any business or trading activities since last few years. The capital of company is totally eorded as the company has suffered from losses since last few years.

29 No provision has been made in the accounts for the interest liabilty on various loans from Canara Bank & GSFC since the year 2004, as the loan account have been classified as NPA by the company's bankers Canara Bank and GSFC and accordingly stopped charging interest. As such the interest liabities amounting to Rs. 542.51 Lacs App. On Outstanding Liabilities ( Previous Year Rs. 512.56 Lacs) and cummulative since the year 2004 of Rs. 3616.71 Lacs App. (P.Y. Rs. 3417.07 Lacs) have not been provided in the books of accounts.

In view of above the current year's loss is understated by Rs. 542.51 Lacs and the total cummulative Loss ( negative reserve) is understated by Rs. 3616.71Lacs.

³⁰ The Balances of Loans and Advances, Sundry Creditors , Sundry Debtors and others are subject to confirmation and Reconcilation.

31 The Company does not operates its bank account and the statutory payments and other liabilities paid by the directors