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Notes to Accounts of Jumbo Bags Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

As a part of the Rs.1,500 million BLISS Group of companies, Jumbo Bag Ltd. was established in the year 1990. Started with an initial capacity of 7,20,000 jumbo bags (FIBCs), we now have the capacity to manufacture over 3.6 million bags per annum and this has propelled us to the position of market leaders.

2.The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

Clause (e) – Rights, preference and restrictions attached to shares

Equity Shares:

The Company has one class of equity shares having a par value of Rs.10 each. Each share holder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

3. Earnings per share

The basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive equity shares outstanding during the year.

4. Depreciation

During the year, the Company has reassessed the depreciation for every asset based on their useful life as prescribed under part C of schedule II of the Companies Act, 2013. The depreciation for the assets whose useful life has expired and the additional depreciation till 31st March 2014 for the live assets totaling to Rs. 236.11 lakhs is recognized in Reserves & Surplus. The depreciation for the year 2014-15 for the live assets amounting to Rs. 170.84 lakhs is charged to Statement of Profit and Loss.

5. Investments

Long term Investments are valued at cost less provision for diminution in value other than temporary, if any.

6. Employee Benefits

i Short Term - Short term employee benefits are recognized as an expense as per the Company's Scheme based on expected obligations. ii. Post Retirement

Post retirement benefits comprise of provident fund, superannuation and gratuity which are accounted for as follows:

a) Provident fund

This is a defined contribution plan. Contributions in respect of staff and workers are remitted to provident fund authorities in accordance with the relevant statute and are charged to profit and loss statement as and when due. The Company has no further obligations for future provident fund benefits in respect of these employees other than its annual contributions.

b) Superannuation

This is a defined contribution plan. The Company makes contribution as per the scheme to Superannuation Fund administered by Life Insurance Corporation of India. The Company has no further obligation of future superannuation benefits other than its annual contributions and recognizes such contributions as expense as and when due.

c) Gratuity

This is a defined benefit plan. Provision for gratuity is made based on actuarial valuation using projected unit credit method. Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarial assumptions, are recognized immediately in the profit and loss statement as income or expense

7. Deferred Tax Liability

Deferred Tax resulting from timing difference between book and Tax profit is accounted for under liability method, at the current rate of tax, to the extent, the timing differences are expected to crystallize. The deferred tax charge or credit is recognized using prevailing enacted or substantively enacted tax rate. Where there is unabsorbed depreciation or carried forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax liabilities/assets are reviewed at each balance sheet date based on the law in force and shown net of assets/liabilities in the books.

8. Leases

Leases are classified as finance or operating leases depending upon the terms of the lease agreements. Assets held under finance leases are recognized as assets of the Company on the date of acquisition and depreciated over their estimated useful life or period of lease. Initial direct costs under the financial lease are included as a part of the amount recognized as asset under the finance lease.

Rentals payable under operating leases are treated as revenue expenses as and when incurred with reference to terms of agreement.

Operating leases

The company is obligated under cancelable operating leases for Jumbo Bag Ltd, Athipedu factory rent which is renewable at the options of both the lessor and the lessee. The expense under the contracted lease amounts to Rs.36.00 lakhs (previous year Rs.80.22 lakhs) is recognized in the statement of profit and loss.

9. Custom duty

Custom duty is accounted as and when paid and on actual.

10. Borrowing Costs

As per the Accounting Standard 16 (AS 16), borrowing costs that are directly attributable to the cost of acquisition, construction, production of a qualifying asset are capitalized as a part of cost of such asset till the asset is installed/ put to use. Cost that are not directly attributable to the qualifying the asset are determined by applying a weighted average rate and are capitalized as a part of the cost of asset of such qualifying asset till the time asset is ready to use/ installed

11. Dues to Micro, Small and Medium Enterprises

The management has written to vendors requesting them to inform whether they would fall under the preview of Micro, Small and Medium Enterprises Act, 2001. Based on disclosure received, amount payable to such enterprises as at 31st March 2015 is Nil. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company which has been relied upon by the auditors.

12. Provisions made with regard to Fire Accident

There is a pending claim amount recoverable to the extent of Rs.897 Lakhs with respect to the Fire Accident that the company faced at its Athipedu Unit. During the month of November, 2014, the company had received a letter of repudiation from one of the insurance company against the claim made in respect of loss of stock. The company is taking remedial measures and seeking expert legal advice to recover the claim money.

Based on the legal advice received the stand taken by the insurance company is not tenable and the company has already filed the objection/appeal against the said letter. The Company has made various representations to the insurance company to facilitate redressal of this claim through grievance mechanism laid down as per IRDA Guidelines. However, the insurance company has been denying an opportunity to present our case to them. The company has obtained legal advice on the matter and has approached the Honorable Court seeking appropriate directions to the Insurance Company for appointment of an Arbitrator to resolve this matter. The Company is confident that based on the facts available on record the process of arbitration will render justice to the Company's application. This has been dealt appropriately in the books of accounts.

13. Segmental Reporting

Information given in accordance with the requirement of Accounting Standard 17, on Segment Reporting. Company's business segments are as under:

Manufacturing:

Manufacture of Flexible intermediate bulk container packaging material used for industrial purposes. Trading:

Trading of Polymers.

Segment Accounting Policies:

a. Segment accounting disclosures are in line with accounting policies of the Company.

b. Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment.

c. Expenses that are directly identifiable with allocable to segments are considered for determining the Segment Result.

d. Major portion of segment liabilities and Assets relates to manufacturing segment

e. The company has no Secondary Reportable Segment.

f. Regrouping done wherever necessary.

14. Contingent Liabilities (Rs. in lakhs)

Contingent Liabilities not provided for 31st March 2015 31st March014

a. In respect of guarantees given by the 629.71 510.00 Company

b. Letter of credit for purchase of 695.36 49.89 raw-materials

c. Claims not acknowledged as debts Nil Nil

d. Estimated amount of contracts remaining Nil Nil to be executed on Capital accounts, not provided for

e. Disputed amount of Central Excise 53.45 53.45

f. Disputed amount on Income Tax 159.27 159.27

g. Disputed TDS 11.23 6.51

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

15. Balances of sundry debtors, creditors, advances & deposits received/paid are as per the books of accounts. Letters have been sent seeking confirmation of balances and replies from most of the cases are awaited. Adjustments, if any, will be made in the books of accounts on receipt of such confirmations.

16. PREVIOUS YEAR FIGURES

Previous year's figures have been regrouped/ recast wherever necessary to confirm to this year's classification.


Mar 31, 2014

1. Contingent Liabilities



Contingent Liabilities not As at As at provided for 31st March, 2014 31st March,2013 (Rs. in Lacs) (Rs. in Lacs)

a. In respect of guarantees given by the Company 510.00 510.00

b. Letter of credit for purchase of raw-materials 49.89 87.32

c. Claims not acknowledged as debts Nil Nil

d. Estimated amount of contracts remaining to be executed Nil Nil on Capital accounts, not provided for

e. Disputed amount of Central Excise 53.45 269.54

f. Disputed amount on Income Tax 159.27 105.89

g. Disputed TDS 6.51 6.33

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

2. Balances of sundry debtors, creditors, advances & deposits received/paid are as per the books of accounts. Letters have been sent seeking confi rmation of balances and replies from most of the cases are awaited. Adjustments, if any, will be made in the books of accounts on receipt of such confirmations.

The relevant information regarding Turnover, Production, Opening Stock and Closing Stock are given only in aggregate and no detailed breakup thereof is given as the items are too numerous to be conveniently grouped.

3. PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped/ recast wherever necessary to confi rm to this year''s classification.


Mar 31, 2013

1. Earnings per share

The basic and diluted earnings per share are computed by dividing the net profi t attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive equity shares outstanding during the year.

2. Investments

Long term Investments are valued at cost less provision for diminution in value other than temporary, if any.

3. Employee Benefi ts

i Short Term - Short term employee benefi ts are recognized as an expense as per the Company''s Scheme based on expected obligations.

ii. Post Retirement:

Post retirement benefi ts comprise of provident fund, superannuation and gratuity which are accounted for as follows:

a) Provident fund

This is a defi ned contribution plan. Contributions in respect of staff and workers are remitted to provident fund authorities in accordance with the relevant statute and are charged to profi t and loss statement as and when due. The Company has no further obligations for future provident fund benefi ts in respect of these employees other than its annual contributions.

b) Superannuation

This is a defi ned contribution plan. The Company makes contribution as per the scheme to superannuation Fund administered by Life Insurance Corporation of India. The Company has no further obligation of future superannuation benefi ts other than its annual contributions and recognizes such contributions as expense as and when due.

c) Gratuity

This is a defi ned benefi t plan. Provision for gratuity is made based on actuarial valuation using projected unit credit method. Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarial assumptions, are recognized immediately in the profi t and loss statement as income or expense.

4. Deferred Tax Liability

Deferred Tax resulting from timing difference between book and Tax profi t is accounted for under liability method, at the current rate of tax, to the extent, the timing differences are expected to crystallize. The deferred tax charge or credit is recognized using prevailing enacted or substantively enacted tax rate. Where there is unabsorbed depreciation or carried forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax liabilities/assets are reviewed at each balance sheet date based on the law in force and shown net of assets/liabilities in the books.

5. Leases

Leases are classifi ed as fi nance or operating leases depending upon the terms of the lease agreements. Assets held under fi nance leases are recognized as assets of the Company on the date of acquisition and depreciated over their estimated useful life or period of lease. Initial direct costs under the fi nancial lease are included as a part of the amount recognized as asset under the fi nance lease.

Rentals payable under operating leases are treated as revenue expenses as and when incurred with reference to terms of agreement.

Operating leases

The company is obligated under cancellable operating leases for Jumbo Bag Ltd, Athipedu factory rent which are renewable at the options of both the lessor and the lessee. The expense under the contracted lease amounts to Rs. 87.45/-lakhs (previous year Rs.79.73/- lakhs) is recognized in the profi t & loss statement.

6. Custom duty

Custom duty is accounted as and when paid and on actual.

7. Borrowing Costs

As per the Accounting Standard 16 (AS 16), borrowing costs that are directly attributable to the cost of acquisition, construction, production of a qualifying asset are capitalized as a part of cost of such asset till the asset is installed/ put to use. Cost that are not directly attributable to qualifying the asset are determined by applying a weighted average rate and are capitalized as a part of the cost of asset of such qualifying asset till the time asset is ready to use/ installed.

8. Dues to Micro, Small and Medium Enterprises:

The management has written to vendors requesting them to inform whether they would fall under the purview of Micro, Small and Medium Enterprises Act, 2001. Based on disclosure received, amount payable to such enterprises as at 31st March 2013 is Nil. The above information has been determined to the extent such parties have been identifi ed on the basis of information available with the Company which has been relied upon by the auditors.

9. Defined Contribution Plans:-

(a) Contribution to Provident Fund : 19.34/- lakhs

(b) Contribution to Superannuation Fund : 7.68/-lakhs

Defi ned Benefi t Plans:- Gratuity:- 7.94/- lakhs

The Gratuity liability is covered by a Master Policy taken out with LIC of India under the Cash Accumulation scheme. The company during the year has done actuarial valuation as on 31.03.2013 and the estimated liability amounted to Rs.7.94/-Lakhs which is debited to P & L Statement.

Retirement Benefi ts:

Disclosure as required by Accounting Standard (AS) – 15 (Revised 2005) "Employee Benefi ts" issued by the Institute of Chartered Accountants of India are given below:

10. Segmental Reporting

Information given in accordance with the requirement of Accounting Standard 17, on Segment Reporting. Company''s business segments are as under:

Manufacturing:

Manufacture of Flexible intermediate bulk container packaging material used for industrial purposes.

Trading:

Trading of Polymers.

Segment Accounting Policies:

a. Segment accounting disclosures are in line with accounting policies of the Company.

b. Segment Revenue includes Sales and other income directly identifi able with / allocable to the segment.

c. Expenses that are directly identifi able with allocable to segments are considered for determining the Segment Result.

d. Major portion of segment liabilities and Assets relates to manufacturing segment

e. The company has no Secondary Reportable Segment.

f. Regrouping done wherever necessary.

11. Balances of sundry debtors, creditors, advances & deposits received/paid are as per the books of accounts. Letters have been sent seeking confi rmation of balances and replies from most of the cases are awaited. Adjustments, if any, will be made in the books of accounts on receipt of such confi rmations.

12. PREVIOUS YEAR FIGURES

Previous year''s fi gures have been regrouped/ recast wherever necessary to confi rm to this year''s classifi cation.


Mar 31, 2012

Clause (a) - Rights preferences and restrictions attached to shares: Equity Shares:

The Company has one class of equity shares having a par value of Rs.10 each. Each Share holder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting.

Clause (b) - Shares held by Holding company and its subsidiaries: Not Applicable.

Clause (c) - Shares reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment, including the terms and amounts. - Not applicable.

Clause (d) - Shares allotted in the preceding five years without payment being received in cash: Not applicable.

Clause (e) - Terms of any securities convertible into issued along with the earliest date of conversion in descending order starting from the farthest such date – Not applicable

Clause (f) - Calls unpaid - Not applicable.

1. Earnings per share

The basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive equity shares outstanding during the year.

2. Investments

Long term investments are valued at cost less provision for diminution in value other than temporary, if any.

3. Employee Benefits

i Short Term - Short term employee benefits are recognized as an expense as per the Company’s Scheme based on expected obligations.

ii. Post Retirement.

Post retirement benefits comprise of provident fund, superannuation and gratuity which are accounted for as follows:

a) Provident fund

This is a defined contribution plan. Contributions in respect of staff and workers are remitted to provident fund authorities in accordance with the relevant statute and are charged to profit and loss statement as and when due. The Company has no further obligations for future provident fund benefits in respect of these employees other than its annual contributions.

b) Superannuation

This is a defined contribution plan. The Company makes contribution as per the scheme to superannuation Fund administered by Life Insurance Corporation of India. The Company has no further obligation of future superannuation benefits other than its annual contributions and recognizes such contributions as expense as and when due.

c) Gratuity

This is a defined benefit plan. Provision for gratuity is made based on actuarial valuation using projected unit credit method. Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarial assumptions, are recognized immediately in the profit and loss statement as income or expense

4. Deferred Tax Liability

Deferred Tax resulting from timing difference between book and Tax profit is accounted for under liability method, at the current rate of tax, to the extent, the timing differences are expected to crystallize. The deferred tax charge or credit is recognized using prevailing enacted or substantively enacted tax rate. Where there is unabsorbed depreciation or carried forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax liabilities/assets are reviewed at each balance sheet date based on the law in force and shown net of assets/liabilities in the books.

5. Leases:

Leases are classified as finance or operating leases depending upon the terms of the lease agreements. Assets held under finance leases are recognized as assets of the Company on the date of acquisition and depreciated over their estimated useful life or period of lease. Initial direct costs under the financial lease are included as a part of the amount recognized as asset under the finance lease.

Rentals payable under operating leases are treated as revenue expenses as and when incurred with reference to terms of agreement.

6. Custom duty

Custom duty is accounted as and when paid and on actuals.

7. Borrowing Costs

As per the Accounting Standard 16 ( AS 16) , borrowing costs that are directly attributable to the cost of acquisition, construction, production of a qualifying asset are capitalized as a part of cost of such asset till the asset is installed/ put to use. Cost that are not directly attributable to the qualifying the asset are determined by applying a weighted average rate and are capitalized as a part of the cost of asset of such qualifying asset till the time asset is ready to use / installed.

8. Dues to Micro, Small and Medium Enterprises:

The management has written to vendors requesting them to inform whether they would fall under the preview of Micro, Small and Medium Enterprises Act, 2001. Based on disclosure received, amount payable to such enterprises as at 31st March 2012 is Nil. The above information has been determined to the extent such parties have been identifed on the basis of information available with the Company which has been relied upon by the auditors.

9. Leases

Operating leases

The company is obligated under cancellable operating leases for Jumbo Bag Ltd, Athipedu factory rent which are renewable at the options of both the lessor and the lessee. The expense under the contacted lease amounts to Rs. 79.73/-Lakhs (previous year Rs. 78.05 Lakhs) is recognized in the proft & loss statement.

DISCLOSURE UNDER AS-15

10. Defined Contribution Plans:-

(a) Contribution to Provident Fund : Rs. 16.58 Lakhs

(b) Contribution to Superannuation Fund : Rs. 4.50 Lakhs

Defined Benefit Plans:-

Gratuity:- The Gratuity liability is covered by a Master Policy taken out with LIC of India under the Cash Accumulation scheme. The company during the year has done actuarial valuation as on 31.03.2012 and the estimated liability amounted to Rs. 24.51 Lakhs which is debited to P & L statement.

Retirement Benefits:

Disclosure as required by Accounting Standard (AS) – 15 (Revised 2005) “Employee Benefi]ts” issued by the Institute of Chartered Accountants of India are given below:

11. Segmental Reporting

Information given in accordance with the requirement of Accounting Standard 17, on Segment Reporting.

Company's business segments are as under:

Manufacturing:

Manufacture of Flexible intermediate bulk container packaging material used for industrial purposes.

Trading:

Trading of Polypropylene granules which are used in the manufacture of plastics.

Segment Accounting Policies:

a. Segment accounting disclosures are in line with accounting policies of the Company.

b. Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment.

c. Expenses that are directly identifiable with allocable to segments are considered for determining the Segment Result.

d. Major portion of segment liabilities and Assets relates to manufacturing segment

e. The company has no Secondary Reportable Segment.

12. Contingent Liabilities

As at As at Contingent Liabilities not provided 31st March, 31st March, for 2012 2011 (Rs. in Lakhs) (Rs. in Lakhs)

a. In respect of guarantees given by the Company 505.62 405.62

b. Letter of credit for purchase of raw-materials 108.37 194.75

c. Claims not acknowledged as debts Nil Nil

d. Estimated amount of contracts remaining to be executed 75.60 465.00 on Capital accounts, not provided for

e. Disputed amount of Central Excise 277.20 50.69

f. Disputed amount on Income Tax 106.56 33.64

g. Disputed TDS 5.99 5.14

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

13. Balances of sundry debtors, creditors, advances & deposits received/paid are as per the books of accounts. Letters have been sent seeking confirmation of balances and replies from most of the cases are awaited. Adjustments, if any, will be made in the books of accounts on receipt of such confirmations.

14. PREVIOUS YEAR 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 fnancial statements. During the year ended 31st March 2012, the revised Schedule VI notifed under the Companies Act 1956, has become applicable to the Company. The company has reclassifed previous year fgures to conform to this year's classifcation. It signifcantly impacts presentation and disclosures made in the fnancial statements, particularly presentation of Balance Sheet.


Mar 31, 2011

1. Contingent Liabilities (Rs. in Lakhs)

As at As at Contingent Liabilities not provided for 31st March, 2011 31st March, 2010

a. In respect of guarantees given by the Company 405.62 104.62

b. Letter of credit for purchase of raw-materials 194.75 203.88

c. Claims not acknowledged as debts Nil Nil

d. Estimated amount of contracts remaining to be 465.00 45.00 executed on Capital accounts, not provided for

e. Disputed amount of Sales Tax 2.11 2.11

f. Disputed amount of Central Excise 50.69 50.69

g. Disputed interest on Income Tax 33.64 33.64

h. Disputed TDS 5.14 -

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

2. Terms Loan (Including Medium Term and Corporate Loans) and working capital facilities from State Bank of India and State Bank of Hyderabad are secured by pari passu charges on the fixed assets and current assets of the company and also secured by personal guarantees of directors Sri. G.Sudhakar, Sri. G.P.N.Gupta, Sri. G.Radhakrishna, further secured by personal guarantees of Sri. G.V.Gopinath and Sri. G.V.Balaji.

Term Loan from Indian Overseas Bank Ltd is secured by frst charge on the fixed assets fnanced by them and second charge on the existing fixed assets and also personal guarantees of directors Sri. G.Sudhakar, Sri. G.P.N.Gupta and Sri. G.Radhakrishna.

3. Loans and advances includes a sum of Rs.12 Lakhs misappropriated by an employee during 1998- 1999 for which no provision has been made in the accounts. The Company has got the verdict in its favour in the Criminal proceedings. The Civil Suit has not yet been disposed off and the company believes that a reliable estimate of any probable loss, if any, can be made only on its disposal.

4. Deferred Tax Liability accruing during the year aggregating to Rs.13,37,706/- (Previous year Rs.10,94,140/-) has been recognized in profit & Loss A/c.

5. Confirmation of Balances in respect of debtors, creditors are not obtained in few cases.

6. The earning include Rs. 40.07 Lakhs on account of 24.67 Lakhs of Market Linked Focus Product Scheme and 15.4 Lakhs on account of focus product scheme. While Market Linked Focus product scheme covers a specifed list of countries and is applicable for the entire year, the focus product scheme covers exports of all countries and is applicable from 1st January 2011.

7. All amounts have been rounded off to the nearest rupee.

8. Previous year's figures have been regrouped/ recast where ever necessary to conform to this year's classification.


Mar 31, 2010

1. Disclosure Under As-15

Defined Contribution Plans:-

(a) Contribution to Provident Fund : Rs.27,37,407/-

(b) Contribution to Superannuation Fund : Rs. 6,32,147/-

Defined Benefit Plans:-

Gratuity:-

The Gratuity liability is covered by a Master Policy taken out with LIC of India under the Cash Accumulation scheme. The company during the year has done actuarial valuation as on 31.03.2010 and the estimated liability amounted to Rs.9.22 Lakhs which is debited to P & L Account.

Retirement Benefits:

Disclosure as required by Accounting Standard (AS) - 15(Revised 2005) "Employee Benefits" issued by the Institute of Chartered Accountants of India are given below:

2. Segmental Reporting

The company is engaged in the manufacture of FIBC and in the purchase / sale of raw material used in the process of manufacture which in the opinion of the management relied upon by the auditors, constitute single business segment in terms of Accounting Standard 17 on segment reporting taking into account the Organization structure and nature of Risk / return.

3. Contingent Liabilities

Contingent Liabilities not provided for As at As at 31st March 31st March 2010 2009 (Rs. in Lakhs) (Rs. in Lakhs)

a. In respect of guarantees given by the Company 104.62 18.40

b. Letter of credit for purchase of raw-materials 203.88 306.23

c. Claims not acknowledged as debts Nil Nil

d. Estimated amount of contracts remaining to be . 45.00 1,817.00 executed on Capital accounts, not provided for

e. Disputed amount of Sales Tax 2.11 2.11

f. Disputed amount of Central Excise 50.69 50.69

g. Disputed interest on Income Tax 33.64 33.64

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

4. Terms Loan (Including Medium Term and Corporate Loans) and working capital facilities from State Bank of India and State Bank of Hyderabad are secured by pari passu charges on the fixed assets and current assets of the company and also secured by personal guarantees of directors Sri.G.Sudhakar, Sri.G.P.N.Gupta, Sri.G.Radhakrishna, further secured by personal guarantees of Sri.G.V. Gopinath and Sri. G.V.Balaji.

1. Term Loan from Indian Overseas Bank Ltd is secured by first charge on the fixed assets financed by them and second charge on the existing fixed assets and also personal guarantees of directors Sri.G.Sudhakar, Sri.G.P.N.Gupta and Sri.G.Radhakrishna.

5. Loans and advances includes a sum of Rs.12 Lakhs misappropriated by an employee during 1998-1999 for which no provision has been made in the accounts for the probable loss since this can be reliable estimated only after the disposal of the civil suit and the consequent recovery proceedings, though the verdict in the criminal proceedings is in favour of the company.

6. Jumbo Bag LLC

Jumbo bag Ltd is currently a strategic investor in Jumbo Bag LLC, as of now, Joint Ventures are being explored and a clear picture of the holding structure is likely to emerge only during the current year, when the ultimate holding structure is decided upon by the respected parties. Also presently the size of business of Jumbo Bag LLC is still immaterial and insignificant to that of the parent and therefore the accounts are not presented. However a statement pursuant to Section 212 of the Companies Act, 1956 forms part of this annual report.

7. All amounts have been rounded off to the nearest rupee.

8. Previous years figures have been regrouped/ recast where ever necessary to conform to this years classification.

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