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Notes to Accounts of Shri Gang Industries and Allied Products Ltd.

Jun 30, 2010

1. Contingent Liabilities not provided for is Rs. 0.16 Lacs (Previous year Rs. 0.16 Lacs) on account of payment made to Trade Tax authorities, pending final assessment.

2. The company had made reference to Board for Industrial and Financial Reconstruction (BIFR), under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, due to complete erosion of its net worth as on 30th June 2000. The company was thereafter declared a Sick company by BIFR vide its order-dated 28.5.2001.

3. As per the rehabilitation scheme sanctioned by BIFR, Punjab National Bank (PNB) has agreed to charge interest at the prime lending rate (PLR) with effect from 1.7.2001. However, the dues of the bank have since been fully discharged by the Company.

4. In accordance with the Rehabilitation Scheme sanctioned by BIFR, the Government of U. P. has deferred the Trade Tax / Compounding Tax / State Development Tax/ Turnover Tax amounting in aggregate to Rs. 3375.68 Lacs (P.Y. Rs. 3197.88 Lacs) and power charges amounting to Rs.641.14 Lacs (P.Y. Rs. 827.65Lacs).During the year the company has repaid a sum of Rs. 186.51 Lacs out of deffered power charges A part of the amount of deferred Trade Tax amounting to Rs. 446.00 Lacs (P.Y. Rs 446.00 Lacs) has already been converted into interest-free loan by PICUP during the year 2002-2003 out of which 206.25 Lacs is to be paid on 30.04.2012 and 239.25 Lacs is to be paid on 30.04.2013 as per the G.O. issued by Govt. Of U.P. Dated 04.11.2006. The rest of the deferred payment liability, as extended, on account of Trade Tax / Compounding Tax / State Development Tax and power charges being in the nature of deferred credit has been shown under the head Loan Fund in the accounts as per schedule'C to the notes of accounts.

5. Due to adverse market conditions and lack of orders and inspite of the implementation of the rehabilitation scheme by BIFR, the management of the company has temporarily suspended its manufacturing activities at the factory effective from 25th March 2010 and accordingly declared lay Off' for indefinite period. In the opinion of the management the manufacturing operations may be resumed once the market conditions improve and thus the present situation has not been identified as 'Discontinued Operations'.

6. In the opinion of the Directors and to the best of their knowledge and belief, the value on realisation of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet. Balances of sundry debtors, sundry creditors, loans & advances are subject to letters of confirmation from some of the parties. In the opinion of the Management, no major variation in these accounts is anticipated.

7. Fixed assets installed and put to use have been certified by the management & relied on by the auditors being a technical matter.

14. The value of Imports by the company on C.I.F. basis during the financial year is Rs.2,748.43 Lacs (Previous Year Rs. 8,064.19 Lacs).

15. The indications listed in paragraph 8 to 10 of Accounting Standard 28 on Impairment of Assets, have been examined and on such examinations, it has been found that none of the indicators are, prima facie, present in the case of the company. A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss, as per the management.

16. Company has sent communications to its creditors for identification of Micro, Small and Medium enterprises. On the basis of response, to the extent received, to such communication, the disclosures in respect to Micro, Small and Medium Enterprise Development Act, 2006 is as follows:

S.No Particulars 2009-10 2008-09

i) The Principal amount and the interest due - - thereon remaining unpaid to any supplier

ii) - Principal amount - -

iii) - Interest there on - -

iv) The amount of Interest paid by the Company - - in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 along with the amounts of the payments made to the supplier beyond the appointed day.

v) The amount of interest due and payable for - - the year of delay in making payment (which have been paid but beyond the appointed day during the year but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006)

vi) The amount of interest accrued and - - remaining unpaid

vii) The amount of further interest remaining - - due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to small enterprises for the purpose of disallowance as a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006

19. Provision for Income Tax

a) The provision for the current Income Tax is not considered necessary for the financial year 2009-2010 in view of the brought forward business loss, unabsorbed depreciation allowance, other deductions and benefits under the provisions of Income Tax Act, 1961.

c) Since the net effect of tax due to timing difference results in Net Deferred Tax Asset, as at the Balance Sheet date,

the same has not been recognised in the accounts on conservative basis.

d) Deferred tax has been calculated as on March 31st, 2010 by following the fiscal year, as the depreciation as per income tax and other allowances/losses are calculable only for fiscal year ending March 31st, 2010.However, it is expected that this method shall not affect substantially the deferred tax asset as calculated above.

20. Lease Transactions -

a) Assets taken under operating lease

Certain offices/Residential premises are obtained on Operating lease. There is no contingent rent in the lease agreement. These agreements have been entered in the earlier Years for a period of one to three year and are renewable as per mutual agreement of both the parties. There is no escalation clause in lease agreement. There are no restrictions imposed by these arrangements. There are no Sub leases and all the leases are cancellable in nature

21. Related Party Disclosures

The information given below is only in respect of the transactions entered into by the company or any outstanding, during the year with the related parties.

A) Related Party Disclosures

The information given below is only in respect of the transactions entered into by the company or any outstanding, during the year with the related parties.

(I) Names of Related Parties and description of Relationship:

i) Key Managerial Personnel:

a) Gopai Das Agrawal Whole time Director

b) Rajesh Gupta Managing Director (01.04.2009 to 30.11.2009) (Resigned w.e.f 01.12.2009)

c) Janeshwar Kumar Jain Director (31.10.09 to 31.12.09)

22. The company is primarily engaged in the business of Manufacturing of Vanaspati and Refined Oil. The Management has identified the above business as primary business segment and the same has been identified for the analysis and review of performance of the company.

23. Previous year figures have been regrouped restated wherever considered necessary to conform with the current year figures.

24. Information pursuant to Part IV of Schedule VI to the Companies Act, 1956 as regards Balance Sheet abstract and general profile of the company is annexed separately.


Jun 30, 2009

1. Contingent Liabilities not provided for:

A. Rs. 0.16 Lacs (Previous year Rs. 0.16 Lacs) on account of payment made to Trade Tax authorities, pending final assessment.

2. The company had made reference to Board for Industrial and Financial Reconstruction (BIFR), under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, due to complete erosion of its net worth as on 30th June 2000. The company was thereafter declared a Sick company by BIFR vide its order-dated 28.5.2001.

3. As per the rehabilitation scheme sanctioned by BIFR, Punjab National Bank (PNB) has agreed to charge interest at the prime lending rate (PLR) with effect from 1.7.2001. However, PNB shall have a right to recompense for the losses / sacrifice undertaken by it and enhance the rate of interest, if in its opinion the profitability of the company or its cash flow so warrants.

4. In accordance with the Rehabilitation Scheme sanctioned by BIFR, the Government of U. P. has deferred the Trade Tax / Compounding Tax / State Development Tax/ Turnover Tax amounting in aggregate to Rs. 3197.88 Lacs (P.Y. Rs. 2738.99 Lacs) and power charges amounting to Rs. 827.65 Lacs (P.Y. Rs. 1182.83 Lacs).During the year the company has repaid a sum of Rs.355.18 Lacs out of deffered power charges A part of the amount of deferred Trade Tax amounting to Rs. 446.00 Lacs (P.Y. Rs 446.00 Lacs) has already been converted into interest free loan by PICUP during the year 2002-2003 out of which 206.25 Lacs is to be paid on 30.04.2012 and 239.25 Lacs is to be paid on 30.04.2013 as per the GO. issued by Govt. Of U.P. Dated 04.11.2006. The rest of the deferred payment liability, as extended, on account of Trade Tax / Compounding Tax / State Development Tax and power charges being in the nature of deferred credit has been shown under the head Loan Fund in the accounts as per schedule C to the notes of accounts.

5. In the opinion of the Directors and to the best of their knowledge and belief, the value on realisation of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet

6. Balances of sundry debtors, sundry creditors, loans & advances are subject to letters of confirmation from some of the parties. In the opinion of the Management, no major variation in these accounts is anticipated.

7. Fixed assets installed and put to use have been certified by the management & relied on by the auditors being a technical matter.

(i) Out of the total installed capacity of 49,500 MT per annum, the capacity to produce Vanaspati is only 37,500 MT per annum.

(ii) The installed capacity and the date of installation of machinery is as per certificate given by the Companys technical expert and relied on by the auditors, being a technical matter.

(iii) Capacities are expressed on the basis of triple shift working of the Factory.

(iv) Sales quantity includes loss in transit/ theft/ samples of 6.678 M.T.(Previous year 17.105 M.T.).

(v) The production quantity is net of quantity rejected and reprocessed.

8. The value of Imports by the company on G.I.F. basis during the financial year is Rs. 8,064.19 Lacs (Previous Year Rs. 9,219.26 Lacs).

9. The indications listed in paragraph 8 to 10 of Accounting Standard 28 on Impairment of Assets, have been examined and on such examinations, it has been found that none of the indicators are, prima facie, present in the case of the company. A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss, as per the management.

c) Since the net effect of tax due to timing difference results in Net Deferred Tax Asset, as at the Balance Sheet date, the same has not been recognised in the accounts on conservative basis.

d) Deferred tax has been calculated as on March 31st, 2009 by following the fiscal year, as the depreciation as per income tax and other allowances/losses are calculable only for fiscal year ending March 31", 2009.However, it is expected that this method shall not affect substantially the deferred tax asset as calculated above.

10. Lease Transactions -

a) Assets taken under operating lease

Certain offices/Residential premises are obtained on Operating lease. There is no contingent rent in the lease agreement. These agreements have been entered in the earlier Years for a period of one to three year and are renewable as per mutual agreement of both the parties. There is no escalation clause in lease agreement. There are no restrictions imposed by these arrangements. There are no Sub leases and all the leases are cancellable in nature *

11. Related Party Disclosures

The information given below is only in respect of the transactions entered into by the company or any outstanding, during the year with the related parties. A) Names of Related Parties and description of Relationship: i) Key Managerial Personnel:

a) Gopal Das Agrawal Whole time Director

b) Rajesh Gupta Chief Executive Officer (01-08-2008 to 29-12-2008)

Managing Director (w.e.f 30-12-2009)

c) Inder Mani Mittal Director

d) Sanam Gambhir. Director

e) S.KJain Director (Retired 30.04.2009)

12 The company is primarily engaged in the business of Manufacturing of Vanaspati and Refined OIL. The Management has identified the above business as primary business segment and the same has been identified for the analysis and review of performance of the company.

13 Previous year figures have been regrouped/ restated wherever considered necessary to conform with the current year figures.

14 Information pursuant to Part TV of Schedule VI to the Companies Act, 1956 as regards Balance Sheet abstract and general profile of the company is annexed separately.

 
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