Notes to Accounts of Gujchem Distillers India Ltd.

Mar 31, 2014

1. CORPORATE INFORMATION

Gujchem Distillers India Limited is a public limited company and is deemed to have been incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the stock exchange. The Company is engaged in the manufacturing and selling of Industrial Alchohol, Acetaldehyde, Acetic Acid and Auxilaries & Chemicals and also provides services as Commission Agent.

2. Terms / Rights attached to Equity Shares

The company has only one class of Equity Shares having a par value of Rs. 10 each. Each shareholder of equity share is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares would be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Contingent liability not provided for on account of:

i) Excise Duty disputed by the Company pending disposal 16,62,494 16,62,494

ii) Back wages and reinstatement demand made by certain dismissed workers at Ankleshwar factory, pending Amount not Amount not adjudication. Ascertainable Ascertainable

4. Remuneration to Managing Directors charged to accounts including perquisites as per Income Tax Rules where applicable 24,16,272 19,14,454

(Remuneration has been paid as minimum remuneration in accordance with the provisions of schedule XIII of the Companies Act, 1956.)

5. As at 31st March, 2014 , there are no amounts outstanding in respect of suppliers registered as Micro, Small and Medium Enterprises.

6. The Company is primarily engaged in business of manufacturing and selling of Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals. Since the inherent nature of activities as a whole are governed by the same set of risk and returns these have been grouped as a single segment, the results of which are reflected in the financial statements. The said treatment is in accordance with the Accounting Standard (AS) 17 Segment Reporting .

7. Net deferred tax assets, mainly representing past losses and unabsorbed depreciation, have not been recognized following the principles of prudence due to uncertainty of the quantum of future profits in terms of Accounting Standard (AS) 22 Accounting for taxes on income.

8. Figures for the previous year are re-grouped wherever necessary.

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Mar 31, 2013

1. CORPORATE INFORMATION

Gujchem Distillers India Limited is a public limited company and is deemed to have been incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the stock exchange. The Company is engaged in the manufacturing and selling of Industrial Alchohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals and also provides services as Commission Agent.

2. As at 31st March, 2013, there are no amounts outstanding in respect of suppliers registered as Micro, Small and Medium Enterprises.

3. The Company is primarily engaged in business of manufacturing and selling of Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals. Since the inherent nature of activities as a whole are governed by the same set of risk and returns these have been grouped as a single segment, the results of which are reflected in the financial statements. The said treatment is in accordance with the Accounting Standard (AS) 17 Segment Reporting .

4. Related Party Disclosures (a) Relationship :

i. Key Management Personnel :

Manish Navnitlal Patel - Managing Director (Also controls majority of voting powers of the Company)

ii. Relatives of Key Management Personnel :

Devika Navnitlal Patel (Mother), Hem Manish Patel (Wife), Bela Sandip Jhaveri (Sister), Chaula Navnitlal Patel (Sister) and Hemangini Sameer Sinha (Sister)

iii. Enterprises over which key management personnel alongwith relatives is able to exercise significant influence :

Gujarat Alcohol and Allied Chemicals Pvt. Ltd. / Mahalaxmi Trading Agency.

5. Net deferred tax assets, mainly representing past losses and unabsorbed depreciation, have not been recognized following the principles of prudence due to uncertainty of the quantum of future profits in terms of Accounting Standard (AS) 22 Accounting for taxes on income.

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Mar 31, 2012

1. CORPORATE INFORMATION

Gujchem Distillers India Limited is a public limited company and is deemed to have been incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the stock exchange. The Company is engaged in the manufacturing and selling of Industrial Alchohol, Acetaldehyde, Acetic Acid and Auxilaries & Chemicals and also provides services as Commission Agent.

2. Share Capital

Terms/Rights attached to Equity Shares

The company has only one class of Equity Shares having a par value of Rs. 10 each. Each shareholder of equity share is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares would be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. During the financial year 2003-04, pursuant to the BIFR order the partly paid up equity shares have been converted in to fully paid up equity shares based on the value of shares already paid and thereafter, all the fully paid up equity shares have been converted in to fresh fully paid up equity shares of Rs.10 each after reducing the total number of shares by 90%. During the year the company has complied with the procedures prescribed in the listing agreements with the stock exchanges including issue of fresh equity share certificates in lieu of old equity share certificates.

4. Contingent liability not provided for on account of:

31-03-2012 31-03-2011 Rupees Rupees

i) Excise Duty disputed by the Company pending disposal 16,62,494 16,62,494

ii) Drainage charges disputed by the Company pending disposal 8,80,975 8,80,975

iii) Back wages and reinstatement demand made by certain Amount not Amount not dismissed workers at Ascertainable Ascertainable Ankleshwar factory, pending adjudication.

5. As at 31st March, 2012 there are no amounts outstanding in respect of suppliers registered as Micro Small and Medium Enterprises.

6. The Company is primarily engaged in business of manufacturing and selling of Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals. Since the inherent nature of activities as a whole are governed by the same set of risk and returns these have been grouped as a single segment, the results of which are reflected in the financial statements. The said treatment is in accordance with the Accounting Standard - 17 on 'Segment Reporting' issued by the Institute of Chartered Accountants of India.

7. Related Party Disclosures

(a) Relationship :

i. Key Management Personnel :

Manish Navnitlal Patel - Managing Director (Also controls majority of voting powers of the Company)

ii. Relatives of Key Management Personnel :

Devika Navnitlal Patel (Mother), Hem Manish Patel (Wife), Bela Sandip Jhaveri (Sister), Chaula Navnitlal Patel (Sister) and Hemangini Sameer Sinha (Sister)

iii. Enterprises over which key management personnel alongwith relatives is able to exercise significant influence :

Gujarat Alcohol and Allied Chemicals Pvt. Ltd. and Mahalaxmi Trading Agency.

8. Net Deferred Tax Assets, mainly representing past losses and unabsorbed depreciation, have not been recognized following the principles of prudence due to uncertainty of the quantum of future profits in terms of Accounting Standard - 22 for 'Taxes on Income' issued by The Institute of Chartered Accountants of India.

9. Previous Years Figures :

Till the year ended 31st March, 2011, the company was using Pre-Revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The company has reclassified the previous year figures to confirm to this year's classification.

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Mar 31, 2011

1. During the year as per the order dated 1/12/2010 issued by the Board for Industrial and Financial Reconstruction (BIFR) the Company has been ceased to be a sick industrial company under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) as in opinion of the Board the net worth of the company turned positive and its revival is sustainable and therefore discharged from the purview of SICA / BIFR.

2. Loans and Advances : -

Advances recoverable in cash or in kind, include the following :

a) the Company uses industrial alcohol as a raw material and has been paying sales-tax and vend fees on the same. During the year 1989-90, on 25th October, 1989 in the matter of Synthetics & Chemicals Limited V/s. state of UP. and others industrial alcohol consumer, the Supremo Court held that payment of vend fee and sales tax on industrial alcohol, unfit for human consumption, is illegal and should not bo levied, prospectively. the company has accordingly, filed separate writ petition in the High Court of Gujarat, for stay of future recovery. the High Court granted an interim stay for the recovery, against which Government of Gujarat filed a special leave petition with respect to the sales tax matter but was unable to obtain a stay from the Supreme Court against the interim stay order granted by the High Court.

In the year 1991-92 based on the judgement of Supreme Court in the matter of Synthetics & Chemicals Limited V/s. state of U.P. on sales-tax, Gujarat High Court vacated the interim stay obtained by the company on 22nd October 1991. Accordingly sales tax is being charged from 23rd October, 1991 by the suppliers of industrial alcohol in the state and the company paying the same. However, the company's petition both in the matter of salos-tax and vend fees remains pending for disposal.

Ponding disposal as aforementioned of the Company's cases the Company had set-up as recoverable the amount of vend fees and sales-tax of Rs. 15.91 lacs and 7.24 lacs respectively for the year 1989-90 and 1990-91. the Company has received refund of the entire amount against the vend fees before 31st March, 2003 leaving a balance of Rs. 7.24 lacs yet to bo received towards sales-tax. the company has considered the said amount under Loans & Advances as " Advances recoverable in cash or in kind".

b) During the year 1991-92, a levy of 0.20 paise per bulk litre of industrial alcohol had been made by the proscribed authorities on purchase of alcohol as administration fees.

the Company has paid a sum of Rs. 2.54 lacs up to 27th April, 1991 under protest, which has been set up as recoverable as Loans and Advances, and filed a Special Civil Application for stay which was granted on 23rd April 1991, by the High Court. Accordingly no further sum up to 31st March 1992 was paid.

During the year 1991-92, the said High Court, without prejudice to the rights and contentions of the parties, has ordered a reduced levy of 5 paise per bulk litre.

the company has also received a demand notice for Rs. 4.40 lacs for the period up to 10th June, 1992 towards administrative fees from the prescribed authorities.

Adjustment, if any, to the cost of purchase of Alcohol will be made on the final disposal of the application.

c) the company has paid Rs.1.52 lacs under protest towards excise duty for the period from January, 1992 to March, 1993 on the sale of waste acid which has been set up as recoverable as Loans and Advances since the company has disputed the classification and levy of Excise Duty. Adjustments, if any, will be made on the final disposal of the matter.

3. During the financial year 2003-2004, pursuant to the BIFR order the partly paid up equity shares have been converted in to fully paid up equity shares based on the value of shares already paid and thereafter, all the fully paid up equity shares have been converted in to fresh fully paid up equity shares of Rs. 10 each after reducing the total number of shares by 90%. During the year the company has complied with the procedures prescribed in the listing agreements with the stock exchanges including issue of fresh equity share certificates in lieu of old equity share certificates.

4. Contingent liability not provided for on account of:

31-03-2011 31-03-2010

i) Excise Duty disputed by the Company pending disposal 16,62,494 16,62,494

ii) Drainage charges disputed by the Company pending disposal 8,80,975 8,80,975

iii) Back wages and reinstatement demand made by certain dismissed at Ankleshwar Amount not Amount not factory, pending adjudication. Ascertainable Ascertainable

5. the Company is primarily engaged in business of manufacturing of Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals. Since the inherent nature of activities as a whole are governed by the same set of risk and returns these have been grouped as a single segment, the results of which are reflected in the financial statements. the said treatment is in accordance with the Accounting standard - 17 on 'Segment Reporting'issued by the Institute of Chartered Accountants of India.

6. Related Party Disclosures (a) Relationship:

i. Key Management Personnel:

Manish Navnitlal Patel - Managing Director (Also controls majority of voting powers of the Company)

ii. Relatives of Key Management Personnel :

Devika Navnitlal Patel (Mother), Hem Manish Patel (Wife), Bela Sandip Jhaveri (Sister), Chaula Navnitlal Patel (Sister) and Hemangini Sameer Sinha (Sister)

iii. Enterprises over which key management personnel alongwith relatives is able to exercise significant influence:

Gujarat Alcohol and Allied Chemicals Pvt. Ltd., Shree Maulikarjun Trade Invest Pvt. Ltd., Shree Bhuvanakaram Trade Invest Pvt. Ltd., Shree Vishvamurte Trade Invest Pvt. Ltd., Shree Suprinit Trade Invest Pvt. Ltd., Mahalaxmi Trading Agency, Chandramani Chemicals and Prakruti Enterprise.

7. Net Deferred Tax Assets, mainly representing past losses and unabsorbed depreciation, have not been recognized following the principles of prudence due to uncertainty of the quantum of future profits in terms of Accounting standard - 22 for 'Taxes on Income' issued by the Institute of Chartered Accountants of India.

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Mar 31, 2010

1. The Company has been declared as a sick industrial company vide an order dated 8/12/2000 issued by the Board for Industrial and Financial Reconstruction (BIFR) under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The company had submitted a proposal for rehabilitation. The same has been sanctioned by BIFR vide their order dated 16.09.2003. Pursuant to the said order, necessary changes in the carrying amounts of various assets and liabilities have been appropriately dealt with in the accounts for the financial year 2003-2004. Presently, the net worth of the company stands negative. The Directors are of the opinion that after implementation of rehabilitation scheme the companys operations can be run on a viable basis. In view of the same, the accounts have been prepared on a going concern basis.

2. Loans and Advances : - Advances recoverable in cash or in kind, include the following :

a) The Company uses industrial alcohol as a raw material and has been paying sales-tax and vend fees on the same. During the year 1989-90, on 25th October, 1989 in the matter of Synthetics & Chemicals Limited V/s. State of U.P. and others industrial alcohol consumer, the Supreme Court held that payment of vend fee and sales tax on industrial alcohol, unfit for human consumption, is illegal and should not be levied, prospectively. The company has accordingly, filed separate writ petition in the High Court of Gujarat, for stay of future recovery. The High Court granted an interim stay for the recovery, against which Government of Gujarat filed a special leave petition with respect to the sales tax matter but was unable to obtain a stay from the Supreme Court against the interim stay order granted by the High Court.

In the year 1991-92 based on the judgement of Supreme Court in the matter of Synthetics & Chemicals Limited V/s. State of U.P. on sales-tax, Gujarat High Court vacated the interim stay obtained by the company on 22nd October 1991. Accordingly sales tax is being charged from 23rd October, 1991 by the suppliers of industrial alcohol in the state and the company paying the same. However, the companys petition both in the matter of sales-tax and vend fees remains pending for disposal.

Pending disposal as aforementioned of the Companys cases the Company had set-up as recoverable the amount of vend fees and sales-tax of Rs. 15.91 lacs and 7.24 lacs respectively for the year 1989-90 and 1990-91. The Company has received refund of the entire amount against the vend fees before 31st March, 2003 leaving a balance of Rs. 7.24 lacs yet to be received towards sales-tax. The company has considered both the said amount under Loans & Advances as " Advances recoverable in cash or in kind".

b) During the year 1991-92, a levy of 0.20 paise per bulk litre of industrial alcohol had been made by the prescribed authorities on purchase of alcohol as administration fees.

The Company has paid a sum of Rs. 2.54 lacs up to 27th April, 1991 under protest, which has been set up as recoverable as Loans and Advances, and filed a Special Civil Application for stay which was granted on 23rd April 1991, by the High Court. Accordingly no further sum up to 31st March 1992 was paid.

During the year 1991-92, the said High Court, without prejudice to the rights and contentions of the parties, has ordered a reduced levy of 5 paise per bulk litre.

The company has also received a demand notice for Rs. 4.40 lacs for the period up to 10th June, 1992 towards administrative fees from the prescribed authorities.

Adjustment, if any, to the cost of purchase of Alcohol will be made on the final disposal of the application.

c) The company has paid Rs.1.52 lacs under protest towards excise duty for the period from January, 1992 to March, 1993 on the sale of waste acid which has been set up as recoverable as Loans and Advances since the company has disputed the classification and levy of Excise Duty. Adjustments, if any, will be made on the final disposal of the matter.

3. During the financial year 2003-2004, pursuant to the BIFR order the partly paid up equity shares have been converted in to fully paid up equity shares based on the value of shares already paid and thereafter, all the fully paid up equity shares have been converted in to fresh fully paid up equity shares of Rs.10 each after reducing the total number of shares by 90%. The company is in process of complying the procedures prescribed in the listing agreements with the stock exchanges including issue of fresh equity share certificates in lieu of old equity share certificates.

4. Contingent liability not provided for on account of:

31-03-2010 31-03-2009

Rupees Rupees

i) Excise Duty disputed by the Company pending disposal 16,62,494 16,62,494

ii) Drainage charges disputed by the

Company pending disposal 8,80,975 15,68,634

iii) Back wages and reinstatement demand made by Amount not Amount not certain dismissed workers at Ankleshwar factory, Ascertainable Ascertainable pending adjudication.

5. In absence of any information received from any of the supplier regarding their status as a Micro Small and Medium Enterprises or otherwise, amount due to said units has not been disclosed separately.

6. The Company is primarily engaged in business of manufacturing of Industrial Alcohol, Acetaldehyde, Acetic Acid and Auxiliaries & Chemicals. Since the inherent nature of activities as a whole are governed by the same set of risk and returns these have been grouped as a single segment, the results of which are reflected in the financial statements. The said treatment is in accordance with the Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India.

7. Related Party Disclosures

(a) Relationship:

i. Key Management Personnel :

Manish Navnitlal Patel - Managing Director (Also controls majority of voting powers of the Company)

ii. Relatives of Key Management Personnel :

Devika Navnitlal Patel (Mother), Bela Sandip Jhaveri (Sister) and Chaula Navnitlal Patel (Sister)

iii. Enterprises over which key management personnel alongwith relatives is able to exercise significant influence :

Gujarat Alcohol and Allied Chemicals Pvt. Ltd., Gujarat Ceratech Pvt. Ltd., Shree Maulikarjun Trade Invest Pvt. Ltd., Shree Bhuvanakaram Trade Invest Pvt. Ltd., Shree Vishvamurte Trade Invest Pvt. Ltd., Shree Suprinit Trade Invest Pvt. Ltd., Mahalaxmi Trading Agency, Chandramani Chemicals and Prakruti Enterprise.

8. Net Deferred Tax Assets, mainly representing past losses and unabsorbed depreciation, have not been recognized following the principles of prudence due to uncertainty of the quantum of future profits in terms of Accounting Standard - 22 for Taxes on Income issued by The Institute of Chartered Accountants of India.