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Notes to Accounts of Gayatri BioOrganics Ltd.

Mar 31, 2015

1. Company overview

Gayatri BioOrganics Limited ("GBOL" or "the Company"), was incorporated under the name Starchem Industries Limited on 2nd December 1991 and later on the name was changed to Gayatri Starchem Limited on 24th October 1997. On 13th February 2008 the name was changed to Gayatri BioOrganics Limited and is listed on the Bombay Stock Exchange (BSE). The Company is into the manufacturing of Starch, Modified Starches, Liquid Glucose, Sorbitol, and its allied products, and trading in Maize in South India.

2. Rights preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company's residual assets. The equity shareholders are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. The voting rights of an equity share- holder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

3. Rights preferences and restrictions attached to 6% cumulative redeemable optionally convertible preference shares

The The Company had issued 3,838,135,6% cumulative redeemable convertible preference shares of INR 100 each to the promoters on 12 September 2007. Out of these shares, 752,500 shares were converted into equity shares of the company after the expiry of 36 months at par on 10th November,2010. The remaining 3,085,635 shares shall carry the option of being converted at the option of the holder into ordinary equity shares of the Company after the expiry of a period of sixty months at a price to be determined in accordance with the then prevailing SEBI (DIP) guidelines or can be redeemed by the Company at par after the end of year 5,6,7 and 8 from the date of allotment. None of the preference shareholders exercised the option for conversion as at 31st March,2015.

4. * The term loan from bank is taken from Punjab National Bank in the financial year 2010-11 which carries an interest rate of 13.50% per annum. It is repayable in 36 equal monthly installments of INR 2,778,000 commencing from January 2012. The loan is secured against the first charge on fixed assets of the Company situated at Balabadrapuram including land of 30.16 acres.

5. *** Details of term loans obtained from the financial institutions "Term loan - I is obtained from State Industrial and Investment Corporation of Maharashtra Limited and carry an interest rate of 14.00% per annum and are repayable in 1 quarterly installment of INR 7,500,000 and 15 quarterly installments of INR 9,500,000 commencing from January 2011. "The term loan - II from financial institutions is obtained from State Industrial and Investment Corporation of Maharashtra Limited and carry an interest rate of 18.00% per annum and is repayable in 1 quarterly installment of INR 4,000,000 and 16 quarterly installments of INR 6,000,000 commencing from December 2011. "The term loan - III from financial institutions is obtained from State Industrial and Investment Corporation of Maharashtra Limited and carries an interest rate of 18.00% per annum and is repayable in 16 quarterly installment of INR 10,000,000 and 1 quarterly installment of INR 40,000,000 commencing from June 2015. "As on the balance sheet date the company has delayed repayment of principal and interest in respect of SICOM Loans amounting to Rs. 170 lacs and Rs. 120 lacs respectively."The loans are secured against first charge and hypothecation of entire fixed assets of the Company, both present and future, including land and building together with plant and machinery at Nandikandi unit and irrevocable personal guarantee of the promoter director.'1"

6. *** Loans from Mr T Sandeep Kumar Reddy, Director of the Company (related party) includes an amount of Rs.10,762,154 (previous year INR 10,762,154) carrying no interest and INR 23,85,393(previous year INR 23,85,393) carries an interest rate of 15% per annum. The loans does not have a fixed repayment term and will be repaid subject to the Company having adequate cash profits.

7. * The cash credit and over draft facilities from bank carry an interest rate of 13.50% per annum computed on a monthly basis on the actual amount utilised and are repayable on demand. The loan is secured against hypothecation on entire stocks, book debts, loans and advance etc., at the Balabadrapuram and Nandikandi units along with personal guarantee of Mr. T Sandeep Kumar Reddy.

8. ** The Key cash credit facilities from bank carry an interest rate of 14.50% per annum computed on a monthly basis on the actual amount utilised and are repayable at the convenience of the company before June 30, 2015. The loan is secured against the stocks in specific gowdown marked under the control of National Bulk holding Corporation along with personal guarantee of Mr. T Sandeep Kumar Reddy.

9. *** Loans from related parties carry an interest rate of 14.50% per annum and are repayable on demand. As the same cease to be related parties from May 2013 Classified as loan from others in current year.

Notes to the financial statements for the year ended 31 March 2015 (Continued)

(All amounts in Indian rupees, except share data and where otherwise stated)

10. In November 2000, the Company was declared to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, (SICA) 1985. Industrial Development Bank of India, which was appointed as the operating agency has sanctioned the Rehabilitation Scheme on 29 May 2008. The scheme among other things envisages the reliefs and the concessions to be provided to the Company by various authorities, sources of finance and the application funds. On 28 June 2010 the Board of Industrial and Financial Reconstruction (BIFR) passed orders relieving the Company from the purview of SICA considering the net worth of the Company. Accordingly the Company ceased to be a Sick Industrial Company.

11. Capital commitments and contingent liablities

As at As at 31 March 2015 31 March 2014

i. Estimated amount of contracts, net of advances, remaining to be executed on capital account and 1,40,00,000 — not provided for

ii. Contingent liabilities

a. Customs and sales tax * 41,587,220 83,174,440

b. Claim against the Company not acknowledged as debts 23,708,122 23,708,122

* Amount paid under protest INR 3,700,000

12. Income tax expense

Current tax: Current tax provision for the year is Rs. Nil (previous year: Rs. Nil)

Deferred tax: Deferred tax assets have been recognised only to the extent of deferred tax liability on excess depreciation provided in the books of account over depreciation allowable under the income tax laws since this is virtually certain of realisation. In absence of virtual certainty of realisation, deferred asset on carry forward losses and other timing differences have not been recognised. Accordingly there was no impact on profit and loss account for the year.

13. Related party transactions A) Related parties

Key Management Personnel (KMP) represented on the Board of Directors

* T Sandeep Kumar Reddy, promoter director * C V Rayudu, Whole time director * T Sarita Reddy, Director

Enterprises where key management personnel have control or significant influence

* Deep Corporation Private Limited

14. Segment reporting

The entire operations of the Company relate to only one segment namely, "Maize" Processing and its sales in India" and accordingly there is only one business and geographical segment.

15. Leases

The Company has taken office facilities on lease under cancellable and non-cancellable operating lease arrangements. The total rental expenses under cancellable operating lease was INR 30,98,105/- (previous year INR 29,15,309) has been included under "Rent" in the Statement of Profit and Loss. An amount of Rs. Nil (previous year INR 1,341,600) was remitted as non cancellable lease deposit.

16. Employee benefits

Defined contribution plan

The company makes contributions, determined as a specified percentage of employee's salaries, in respect of qualifying employees towards provident fund and employee state insurance, which are defined contribu- tion plans. The company has no obligations other than the above to make specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund and employee state insurance aggregated to Rs 63,12,849/- (Previous Year Rs. 60,49,878/-).

17.Defined benefit plans

The company operates two defined benefit plans that provide gratuity benefit ad compensated absences benefit. The gratuity plan entitles an employee, who has rendered atleast 5 years of continuous service to receive one-half month's basic salary for each year of completed service at the time of retirement/resigna- tion/ termination of employment.

18. Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the aforesaid act is not expected to be material. The Company had received a claim for Rs. 7,987,616 from a small and micro enterprise towards overdue interest. During the earlier years the Company has received a stay order from the High Court of Andhra Pradesh. Hence, no provision towards the interest is made during the current year.

19. CIF value of imports

There are no imports made during the current year and previous year.

20. Expenditure in foreign currency

There are no expenditure in foreign currency in current year and previous year.

21. Unhedged foreign currency exposure NIL

22. Previous year figures have been regrouped/ reclassified wherever necessary, to conform to the current classification.


Mar 31, 2014

1. Company overview

Gayatri BioOrganics Limited ("GBOL" or "the Company"), was incorporated under the name Starchem Industries Limited on 2nd December 1991 and later on the name was changed to Gayatri Starchem Limited on 24th October 1997. On 13th February 2008 the name was changed to Gayatri BioOrganics Limited and is listed on the Bombay Stock Exchange (BSE). The Company is into the manufacturing of Starch, Modified Starches, Liquid Glucose, Sorbitol, and its allied products, and trading in Maize in South India.

Rights preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from time to time subject to payment of dividend to preference shareholders. The voting rights of an equity share- holder are in proportion to its share of the paid-up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Rights preferences and restrictions attached to 6% cumulative redeemable optionally convertible preference shares

The Company had 3,838,135 outstanding 6% Cumulative Redeemable Optionally Convertible Preference Shares of Rs.100 each to the Promoters issued on 12 September 2007. Out of these shares 752,500 are due for conver- sion since 12 September 2010 and accordingly the Board of Directors in their meeting held on 10 November 2010 approved the conversion of the above mentioned shares into 7,525,000 Equity Shares of Rs.10 each and the balance 3,085,635 shares carry the option of being converted at the option of the holder into ordinary Equity Shares of the Company after the expiry of a period of sixty months at a price to be determined in accordance with the then prevailing SEBI (DIP) guidelines or can be redeemed by the Company at par at the end of year 5, 6, 7 and 8 from the date of allotment. None of the preference shareholders have exercised the option in the above period.

* The term loan from bank is taken from Punjab National Bank in the financial year 2010-11 which carries an interest rate of 13.50% (Floating) per annum. It is repayable in 36 equal monthly installments of INR 2,778,000 commencing from January 2012. The loan is secured against the first charge on fixed assets of the Company situated at Balabadrapuram including land of 30.16 acres and second charge of preent and future assets at Nandikandi Unit.

** Details of term loans obtained from the financial institutions Term loan - I is obtained from State Industrial and Investment Corporation of Maharashtra Limited and carries an interest rate of 17.50% (floating) per annum

and is repayable in 1 quarterly installment of INR 7,500,000 and 15 quarterly installments of INR 9,500,000 commencing from January 2011.The term loan - II is obtained from State Industrial and Investment Corporation of Maharashtra Limited and carry an interest rate of 16.25% (floating) per annum and are repayable in 1 quarterly installment of INR 4,000,000 and 16 quarterly installments of INR 6,000,000 commencing from December 2011. The loans are secured against first charge and hypothecation of entire fixed assets of the Company, both present and future, at Nandikandi unit including land and building together with plant and machinery and irrevoca- ble personal guarantee of the promoter director.

Defaults as on the balance sheet date in repayment of principal in respect of SICOM Loan Rs. 60 lacs cleared by end of April 2014 and PNB Term Loan of Rs. 27.78 lacs by the 10th April .

*** Loans from Mr T Sandeep Reddy, Director of the Company (related party) includes an amount of Rs.10,762,154 (previous year INR 10,762,154) carrying no interest and INR 23,85,393(previous year INR 2,385,393) carries an interest rate of 15% per annum. The loans do not have a fixed repayment term and will be repaid subject to the Company having adequate cash profits.

# Vehicle loan is obtained from Karur Vysya Bank in the financial year 2009-10 and carries an interest rate of 11.50% per annum and is repayable in 60 equal monthly installment including interest of INR 15,835 with the last installment due in September 2014. The loan is secured against the hypothecation of vehicle.

* The cash credit and over draft facilities from bank carry an interest rate of 13.50% (floating) per annum computed on a monthly basis on the actual amount utilised and are repayable on demand. The loan is secured against hypothecation on entire stocks, book debts, loans and advance etc., at the Balabadrapuram and Nandikandi units. ** Loans from related parties carry an interest rate of 14.50% per annum and are repayable on demand.

2. In November 2000, the Company was declared to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, (SICA) 1985. Industrial Development Bank of India, which was appointed as the operating agency has sanctioned the Rehabilitation Scheme on 29 May 2008. The scheme among other things envisages the reliefs and the concessions to be provided to the Company by various authorities, sources of finance and the application funds. On 28 June 2010 the Board of Industrial and Financial Reconstruction (BIFR) passed orders relieving the Company from the purview of SICA considering the net worth of the Company. Accordingly the Company ceased to be a Sick Industrial Company.

3. Capital commitments and contingent liablities

As at As at 31 March 2014 31 March 2013

i.Estimated amount of contracts, net of advances remaining to be executed on capital account and not — — provided for

ii. Contingent liabilities

a. Customs duty * 83,174,440 83,174,440

b. Claim against the Company not 23,708,122 23,708,122 acknowledged as debts

* Amount paid under protest INR 3,700,000

4. Arrears of dividend on cumulative preference shares including tax on dividends not provided for Rs. 155,079,259/- (previous Year Rs. 133,419,027/-).

5. Income tax expense

Current tax: Current tax provision for the year is Rs. Nil (previous year: Rs. Nil)

Deferred tax: Deferred tax assets have been recognised only to the extent of deferred tax liability on excess depreciation provided in the books of account over depreciation allowable under the income tax laws since this is virtually certain of realisation. In absence of virtual certainty of realisation, deferred asset on carry forward losses and other timing differences have not been recognised. Accordingly there was no impact on profit and loss account for the year.

The conversion of outstanding Cumulative Redeemable Optionally Convertible Preference Shares into equity, if made would have the effect of increasing/ (reducing) the earning/ (loss) per share and would therefore be anti-dilutive. Hence the preference shares are anti-dilutive and are ignored in the calculation of diluted earnings per share.

6. Related party transactions

A) Related parties

Key Management Personnel (KMP) represented on the Board of Directors

* T Sandeep Kumar Reddy, promoter director

* C V Rayudu, Whole time director

* Maruti Babu Ponnuru, Director

Enterprises where key management personnel have control or significant influence

* Cosmo Chem Agro Agencies Private Limited

* Mohan Projects Contractors Private Limited (ceased to be related party from 20/05/2013)

* Deep Corporation Private Limited

7. Segment reporting

The entire operations of the Company relate to only one segment namely, ''''Maize Processing and its sales in India" and accordingly there is only one business and geographical segment.

8. Leases

The Company has taken office facilities on lease under cancellable and non-cancellable operating lease arrangements. The total rental expenses under cancellable operating lease was INR 29,15,309 (previous year INR 4,36,109) has been included under "Rent" in the Statement of Profit and Loss. An amount of Rs. 1,341,600 (previous year INR 1,776,320) was remitted as non cancellable lease deposit.

9. Employee benefits

Defined contribution plan

The company makes contributions, determined as a specified percentage of employee''s salaries, in respect of qualifying employees towards provident fund and employee state insurance, which are defined contribu- tion plans. The company has no obligations other than the above to make specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognised as an expense towards contribution to provident fund and employee state insurance aggregated to Rs 6,049,878/ - previous year (Rs. 5,978,909/-).

Defined benefit plans

The company operates two defined benefit plans that provide gratuity benefit ad compensated absences benefit. The gratuity plan entitles an employee, who has rendered atleast 5 years of continuous service to receive one-half month''s basic salary for each year of completed service at the time of retirement/resigna- tion/ termination of employment.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The Company does not have any plan assets.

10. Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the aforesaid act is not expected to be material. The Company had received a claim for Rs. 7,987,616 from a small and micro enterprise towards overdue interest. During the earlier years the Company has received a stay order from the High Court of Andhra Pradesh. Hence, no provision towards the interest is made during the current year.

11. Previous year figures have been regrouped/ reclassified wherever necessary, to conform to the current classification.


Mar 31, 2013

COMPANY OVERVIEW

Gayatri Bio-organics, previously called Gayatri Starchkem Limited, was set-up in 1993 and is listed on the Bombay Stock Exchange (BSE). The Company is into the manufacturing of Starch, Modified Starches, Liquid Glucose, Sorbitol, and its allied products in south India.

1.1. Income tax expense (continued)

*In view of unabsorbed depreciation and carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty as required by the Explanation in Accounting Standard 22 ''Accounting for taxes on income''. Accordingly, no deferred tax asset has been recognized as at the year-end as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized.

The conversion of outstanding Cumulative Redeemable Optionally Convertible Preference Shares into equity, if made would have the effect of increasing/ (reducing) the earning/ (loss) per share and would therefore be anti-dilutive. Hence the preference shares are anti-dilutive and are ignored in the calculation of diluted earnings per share.

1.2. Related party transactions A) Related parties Key management personnel (KMP)

- T Sandeep Kumar Reddy, Promoter Director

- C V Rayudu, Whole Time Director

- Maruthi Babu Ponnuru, Director

Enterprises where key management personnel have control or significant influence

- Cosmo Chem Agro Agencies Private Limited

- Mohan Projects Contractors Private Limited

- Deep Corporation Private Limited

1.3. Segment reporting

The entire operations of the Company relate to only one segment namely, ''''Maize Processing and its sales" and the operations are primarily concentrated in India. Accordingly there is only one business and geographical segment.

1.4. Leases

The Company leases office facilities under cancellable and non-cancellable operating lease arrangements. The total rental expenses under cancellable operating lease was INR 436,109 (previous year INR 864,115) and under non-cancellable operating lease was INR 1,776,320 (previous year INR Nil) and has been included under "Rent" in the Statement of Profit and Loss.

1.5. Employee benefits

Defined contribution plan

The Company makes contributions, determined as a specified percentage of employee''s salaries, in respect of qualifying employees towards Provident Fund and Employee State Insurance, which are defined contribution plans. The Company has no obligations other than to make specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund and Employee State Insurance for the year aggregated to INR 5,978,909 (previous year: INR 5,142,637)

Defined benefit plans

The Company operate two defined benefit plans that provide gratuity benefit and compensated absences benefit. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month''s basic salary for each year of completed service at the time of retirement/ resignation/termination of employment.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The Company does not have any plan assets.

1.6. Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26th August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the aforesaid act is not expected to be material. The Company had received a claim for INR 7,987,616 from a small and micro enterprise towards overdue interest. However, during the current year the Company has received a stay order from the High Court of Andhra Pradesh. Hence, no provision towards the interest is made during the current year.


Mar 31, 2012

A. The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share.

b. The Company had issued 3,838,135 outstanding 6% cumulative redeemable convertible preference shares of Rs. 100 each to the promoters on 12 September 2007. Out of these shares, 752,500 shares were due to be converted after the expiry of 36 months at par. The remaining 3,085,635 shares shall carry the option of being converted at the option of the holder into ordinary equity shares of the Company after the expiry of a period of sixty months at a price to be determined in accordance with the then prevailing SEBI (DIP) guidelines or can be redeemed by the Company at par after the end of year 5,6,7 and 8 from the date of allotment. In the previous year, on 10 November 2010 the Company converted 752,500 convertible preference shares into equity shares of the Company.

1. Secured against first charge and hypothecation of entire fixed assets of the Company, both present and future, including land and building together with plant and machinery at Nandikandi unit and irrevocable personal guarantee of the promoter director.

2. Secured against hypothecation of vehicles.

B. Terms of repayment of secured loans are given below:

1. Loan taken from a bank for plant and machinery outstanding Rs. 94,444,000 is repayable in monthly installments of Rs. 2,778,000 each. The loan carries floating rate of interest. During the year, the interest rate was 14.50% p.a.

2. Loan taken from a bank for vehicle outstanding Rs. 3,98,454 is repayable in monthly installments ranging from Rs. 10,812 to Rs. 11,782 each. The loan carries interest rate of 11.50% p.a.

3. Two loans from financial institution outstanding Rs. 192,500,000 are repayable in quarterly installments of Rs. 15,500,000 each. The loan carries floating rate of interest. During the year, the interest rate was in the range of 15.00% to 17.50% p.a.

C. Represents loan from a director. This includes amount of Rs. 10,762,154 (previous year: Rs. 10,762,154) which carries no interest. The balance amount of Rs.2,385,393 (previous year: Rs. 2,385,393) carries interest @ 15% p.a. The loan does not have fixed repayment terms and will be repaid subject to the company having adequate cash profits.

1. Secured against the first charge by way of hypothecation on entire block of assets, present and future, including entire stocks, book debts, loans and advance etc., at the Balabadrapuram unit and second charge on the current assets at Nandikandi unit. The loan carries floating rate of interest. During the year, the interest rate was in the range of 13.50% to 14.50% p.a.

2. The above mentioned unsecured loans are repayable fully in the year 2012-13. One loan carries interest rate of 14.00% p.a and another carries interest rate of 14.75% p.a.

3.1. In November 2000, the Company was declared to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, (SICA) 1985. Industrial Development Bank of India, which was appointed as the operating agency has sanctioned the Rehabilitation Scheme on 29 May 2008. The scheme among other things envisages the reliefs and the concessions to be provided to the Company by various authorities, sources of finance and the application funds. On 28 June 2010 the Board of Industrial and Financial Reconstruction (BIFR) passed orders relieving the Company from the purview of SICA considering the net worth of the Company. Accordingly the Company ceased to be a Sick Industrial Company in the previous year.

3.2. Income tax expense

Current tax

Current tax provision for the year is Rs. Nil (previous year: Rs. 3,850,000)

Deferred tax

Deferred tax assets have been recognised only to the extent of deferred tax liability on excess depreciation provided in the books of account over depreciation allowable under the income tax laws since this is virtually certain of realisation. In absence of virtual certainty of realisation, deferred asset on carry forward losses and other timing differences have not been recognised. Accordingly there was no impact on profit and loss account for the year.

3.4. Segment reporting

The entire operations of the Company relate to only one segment namely, ''Maize Processing and its sales in India" and accordingly there is only one business and geographical segment.

3.5. Leases

There are no non-cancellable operating leases and accordingly there are no future minimum lease payments. Rental expense under cancellable operating leases during the year was Rs. 864,115 (previous year: Rs. 663,467) and has been included under "Rent" in the Statement of Profit and Loss.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The Company does not have any plan assets.

3.6. Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the aforesaid act is not expected to be material. The Company has received a claim for Rs. 7,987,616 from a small and micro enterprise towards overdue interest. Based on a legal advice received by the Company, the Company believes the amount is not payable.

3.7. Previous year comparatives

On applicability of revised Schedule VI from current year, the Company has reclassified previous year figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet.


Mar 31, 2011

1. In November 2000, the Company was declared to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, (SICA) 1985. Industrial Development Bank of India, which was appointed as the operating agency has sanctioned the Rehabilitation Scheme on 29 May 2008. The scheme among other things envisages the reliefs and the concessions to be provided to the Company by various authorities, sources of finance and the application funds. On 28 June 2010 the Board of Industrial and Financial Reconstruction (BIFR) passed orders relieving the Company from the purview of SICA considering the net worth of the Company. Accordingly the Company ceased to be a Sick Industrial Company during the year.

2. Capital commitments and contingent liabilities

As at As at 31 March 2011 31 March 2010

i. Estimated amount of contracts, net of advances, 250,000 2,645,000 remaining to be executed on capital account and not provided for

ii. Contingent liabilities

a. Customs and sales tax* 79,512,120 75,949,800

b. Claim against the Company not acknowledged as debts 18,022,000 18,022,000

c. Arrears of dividend on cumulative preference shares including tax on dividends 90,384,509 68,795,787 * Amount paid under protest Rs.3,700,000.

3. Income tax expense

Current tax

Current tax provision for the year is Rs. 3,850,000 (previous year: Rs. Nil)

Deferred tax

Deferred tax assets has been recognised only to the extent of deferred tax liability on excess depreciation provided in the books of accounts over depreciation allowable under the income tax laws since this is virtually certain of realisation. In absence of virtual certainty of realisation, deferred asset on carry forward losses and other timing differences have not been recognised. Accordingly there was no impact on profit and loss account for the year.

D) No managerial remuneration has been paid during the year

4. Segment reporting

The entire operations of the Company relate to only one segment namely, ''Maize Processing and its sales in India" and accordingly there is only one business and geographical segment.

5. Employee benefits

The following table sets out the status of the gratuity plan as required under AS 15 (Revised) Reconciliation of opening and closing balances of the present value of the defined benefit Obligation

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The Company does not have any plan assets.

5. Amounts payable to Micro, Small and Medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises has been made in the financial statements based on information received and available with the Company. Further, in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

6. Previous year comparatives

Previous year's figures have been regrouped / reclassified, where necessary, to conform to current year's classification.


Mar 31, 2010

1. Capital commitments and contingent liabilities

As at As at 31 March 2010 31 March 2009

i. Estimated amount of contracts, net of advances. remaining to be executed on capital account and not provided for 26,45,000 28,00,000

ii. Contingent liabilities

a. Customs and sales tax 7,59,49,800 7,26,03,232

b. Claim against the Company not acknowledged as debts 1,80,22,000 1,80,22,000

c. Arrears of dividend on cumulative preference shares including tax on dividends 6,87,95,787 4,18,53,231

* Amount paid under protest Rs.3,700,000.

3. Income tax expense

Current tax

Current tax provision for the year is Rs. Nil (previous year: Rs. Nil)

Deferred tax

The Company has recorded the deferred tax liability of Rs. 6.02,16,913 (previous year Rs. 6,54,70,737) on account of timing differences as at 31 March 2010 and recognized the deferred tax asset on unabsorbed depreciation, carried forward losses and other timing differences on the basis of prudence, only to the extent of the above mentioned deferred tax liability. Accordingly, there was no impact on profit and loss account.

In view of accumulated losses and in accordance with Accounting Standard 22 - "Accourding for taxes on income" prescribed by the Companies (Accounting Standards) Rules, 2006, deferred tax assets on unabsorbed depreciation, carried forward losses and other temporary differences have not been recognise i as there are no timing differences, the reversal of which, will result in sufficient taxable income.

4. In November 2000, the Company was declared to be a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985. Industrial Development Bank of India, which was appointed as the operating agency has sanctioned the Rehabilitation Scheme on 29 May 2008. The scheme among other things envisages the reliefs and the concessions to be provided to the Company, by various authorities, sources of finance and the application funds. As envisaged in the scheme, the net worth of the Company would become positive post conversion of 7,52,500 promoter preference shares (face value of Rs. 100 each) after the expiry of a period of thirty six months at par and 30.85.635 promoter preference shares shall carry the option of being converted at the option of the holder into ordinary Equity Shares of the Company after the expiry of a period of sixty months at a price to be determined in accordance with the then prevailing SEBI (DIP) guidelines or can be redeemed by the Company at par end of year 5,6,7 and 8 from the date of allotment. The Company is continued to be supported by the promoters for any shortfall in working capital. Further, the Company is considering option to finance the future capital investment requirement to support the expansion plans and the hew facilities as envisaged in the Scheme. Sanctions for financial restructuring as accorded by the Scheme are being pursued.

5. Earnings per share (EPS)

The conversion of outstanding Cumulative Redeemable Optionally Convertible Preference Shires into equity, if made, would have the effect of reducing the loss per share and would therefore be anti-dilutive. Hence, the preference shares are anti-dilutive and are ignored in the calculation of diluted earnings per share.

Additional information pursuant to the provisions of paragraph 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956

6. Related Parties

A) Related parties where control exists:

Name of the related party Nature of relationship

T. Sandeep Kumar Reddy Promoter Director

7. Segment accounting

The entire operations of the Company relate to only one segment namely, "Maize Processing" and accordingly there is only one business and geographical segment.

8. Employee benefits

The following table sets out the status of the gratuity plan as required under AS 15 (Revised)

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

The Company does not have any plan assets.

9. Amounts payable to Micro, Small and Medium enterprises

The management is in the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2009 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

10. Previous year comparatives

Previous years figures have been regrouped / reclassified, where necessary, to conform to current years classification.

 
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