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Notes to Accounts of Tirupati Starch & Chemicals Ltd.

Mar 31, 2015

1. Contingent Liability not provided for in respect of :

(i) Regarding demand cases pending against the company from Custom & Central Excise Department:

a. The Company have show cause notices from the Custom & Central Excise Department for wrong classification of maize starch powder under Chapter Heading 11.03 instead of classified as modified starch falling under Chapter Heading 35.05 and raised demand of Rs. 11,35,74,846/- upto 31.03.2014 and further Rs. 1,95,70,093/- for the year 2014-15. But the Hon'ble Customs, Excise & Service Tax Appellate Tribunal Principal Bench New Delhi vide their order dated 21.11.2013 had rejected the Department Appeal being it is settled that maize starch powder is classifiable as plain starch falling under Chapter 11 and same cannot be held to be falling under Chapter 35. Hence the company have no demand pending for payment despite the fact the Central Excise Department have gone to higher Court. The company has already filed application for set-a-side the demand raised upto 31.12.2014.

b. The Company have another show cause notices from the Custom & Central Excise Department by disallowing the Centvat Credit as common input used in Hydrol cleared under S.H.1703.90 and raised demand of Rs. 88,15,748/- upto 31.03.2014 and further Rs. 9,00,254/- for the year 2014-15. But the Hon'ble Customs, Excise & Service Tax Appellate Tribunal Principal Bench New Delhi vide their order dated 09.07.2013 had set aside. The Tribunal also set aside the penalty and interest liability imposed in term of Section 11AA/AB of the Act. Hence the company have no demand pending for payment despite the fact the Central Excise Department have gone to Higher Court. The company has already filed application for set-a-side the demand raised upto 31.12.2014.

c. The Company have another show cause notices from the Custom & Central Excise Department for demanded of Rs.4,27,981/- on account of Cenvat Credit of Service Tax paid on outward transportation of finished goods which is not justified as credit on outward transportation is taken by Company as per provision of the Act and as advice by Excise consultant. The matter is still pending with D.C. Custom & Central Excise Pithampur.

d. The Company have another show cause notices from the Custom & Central Excise Department for Input used in Excisable Production & Credit taken of Service Tax on Input Services and Inward freight amounting to Rs.4,10,05,661/-. The aforesaid show cause notices has been issued without ascertaining as to whether the Company has violated the condition of Rule 6. The show cause notices will have to be dropped as in the Finance Act, 2010-11, retrospective amendment has been made wherein it has been provided that the assessee shall reverse the credit of input and input services used in manufacture of exempted goods and file application with the Commissioner who shall order for dropping of all such demands.

e. The Company have another show cause notices from the Custom & Central Excise Department for Input & Return Goods amounting to Rs.1,66,334/-. The liability is unconfirmed & matter is pending with CESTAT. However no provision for the same has been made on the basis of opinion of the Excise Consultants.

The Company has disputed the demand and preferred appeal before Appellate Authorities. No provision has been made for taxation related to the said demands on the basis of contention of the Board of Directors of the Company that the appeals will be in favour of the company.

iii) Bank Guarantee fav. Western Rs.11,25,000/- (11,25,000/-)

Coal field Ltd., Nagpur Krishiupaj Mandi Samiti Rs. 5,00,000/- (5,00,000/-)

iv) Court Decree in the case of Smt. Sharda Bai for Rs. 2,53,852/- before Hon'ble MP High Court, Indore out of which Rs. 1,28,000/- has been deposited & kept in advance as appeal is pending against the Court Decree and the appeal is likely to be decided in favour of the Company.

v) Mandi tax has been recognized as expenses upto June, 2013, which has been given to Mandi Authority and keep in separate account in pursuance of Court Order. In case the amount is refunded the same will be considered as Income in the year of its receipt. However from July 2013, Mandi Tax has not been deposited in view of decision of Hon'ble High Court of Madhya Pradesh, in the matter of Writ Petition No. 14227/2010 Dated 05/07/2013.

2. Provision on of Income Tax has been made during the year as per Taxation Laws.

3. Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs.100.00 Lacs (900.00 lacs) (net of credits) against which a sum of Rs.79.22 Lacs (Rs.496.10 Lacs) has been paid as advance.

4. During the year provision has been made in the accounts in respect of Excise Duty (including Cess) of Rs.18,03,811.25 (Rs.6,37,778/- ) payable on nucleated stock of finished goods lying in the factory premises as on 31/03/2015 and the same has been considered as an element of cost for the purpose of valuation of inventory at the year end.

5. Earning per share (EPS) for the Computation as per (AS 20)

i. Earning per share (EPS) for the year has been computed in accordance with the Accounting Standard-20 issued by the Institute of Chartered Accountants of India after considering provision for net deferred tax liability for the year as stated in note No.36.

6. Segment Reporting :

The Company has only a single reportable Segment in terms of the requirements of Accounting Standard-17 of the Institute of Chartered Accountants of India.

7. Related Party Disclosure (AS-18):

Disclosure of related party transactions as per Accounting Standard 18 of the Institute of Chartered Accountants of India.

(a) In accordance with Accounting Standard 22, 'Accounting for Taxes on Income' (AS 22), issued by the Institute of Chartered Accountants of India, the company has adjusted the difference for deferred tax during the year.

(b) The Company expects to generate taxable income in the coming years which will enable it to utilize the carried forward unabsorbed depreciation and MAT credit, but on conservative basis. No provision has been made for Deferred Tax Assets, while Deferred Tax Liability has been provided.

8. (a) In view of insufficient information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained.

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 2006. The Management does not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

9. Figures for the previous year have been regrouped and recasted wherever necessary.

10. Figures in brackets pertain to the previous year.

11. Debit, Credit balances and Balances with Banks, are subject to confirmation and reconciliation.


Mar 31, 2014

1. CONTINGENT LIABILITY NOT PROVIDED FOR

(I) The following cases were pending against the company as confirmed by company's excise consultants :

(a) Cases related to classification of Plain Starch as modified Starch: Total Amount Involved Rs.11,35,74,846/-

* In the opinion of Excise Consultants An application has to be submitted to the department to drop the SCN's in the face of CESTAT's Older No A/5B390-58392/2013- EX(DB) dt, 21.11.2013.

(b) In the matter of disallowance of Cenvat Credit as Common input used in hydrol and demand of 8%, 10% on the value of clearance of Hydrol : Total Amount Involved Rs.88.15.748/- :-

In the opinion of Excise Consultants' An application has to be submitted to the DC/AC to drop the SCN's in the face of CESTAT's Order No. A/57063/2C13-EX(DB dt 09-07-2013 which has attained finality

(c) Demand for Rs.4,27,981/- Cenvat Credit of Service Tax paid on outward transportation of finished goods

* in the opinion of Excise Consultants undoubtedly credit on outward transportation can not be denied and the demards will be ultimately dropped, matter is pending with D.C. Pithampur.

(d) Show Cause Notices for input used in Excisable Production & Credit taken of Service Tax on Input Services ana Inward freight amounting to Rs.4,10,05,661/- :

* In the opinion of Excise Consultants the aforcsaid show cause notices has been issued without ascertaining as to whether the Company has violated the condition of Rule 6. Even if it s assumed that the Company has violated the condition of Rule 6 in that case also the snow cause notices will be dropped as in the finance Act, 2010-11, retrospective amendment has been made wherein it has been provided that the assessee shalI reverse the credit of input and input services used in manufacture of exempted goods and after certification of the same by the Chartered Accountant shall the application with the Commissioner who shall order for dropping of all such demands Thus ultimately the show cause notice are going to be dropped The liability is unconfirmed and matter is pending with CESTAT

(e) Show cause Notices for Input & Return Goods amounting to R$. 1,66,334/- :

The liability is unconfirmed & matter is pending with CESTAT.

No provision for the same has been made on the basis of above contention of the Excise Consultants'

(II) The assessment of Entry Tax, Madhya Pradesh Commercial Tax & Central Sates Tax for the different years are completed and the following demands were raised and are disputed

1995-96 1997-98 1906-90

MPST - 27041 -

Central sales Tax 175731 1796323 318392

The Company has disputed the demand and preferred appeal before appealing authorities No provision has been made for taxation related to the said demands on the basis of contention of the Beard of Directors of the Company that, the appeals will be accepted

iii) Bank Guarantee fav Western Rs 12,00,000/ (12,80 000/-) Coat feld ltd Nagpur

Krishiupa. Mandi Samiti Rs. 5,00,OOO/- (5,00.000/-) Margin Money against above

In form of fixed deposit Rs. 12.677'8/- 1197,718/-)

iv) Court Decree in the case of Smt. Sharda Bai for R$. 2,53,852/- before Hon'ble MR -High Court Indore out of which Rs. 1,28,000/- has been deposited & kapt in advance as appear, is bending against tie court Decree & the appeal is likely to be decided in Company s favour

v) Mandi tax has been recognized as e
2 Prnvtsicn on of Income Tax has been made during the year as pci Taxation Laws

3, Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs.900.'- Lacs (1200 lacs) against which a sum of Rs. 41382/- Lscs (Rs.495.10 Lacs) has been paid as advance

4 During the year provision has been made in the accounts in respect cf Excise duty (Including Cess) of Rs.36650/- (Rs 6,37,778.'-) payable on uncleared stock of finished goods lying in the factory premises as on 31/C3/2014 and the same has been considered as an element of cost for the purpose of valuator of Inventory as on 31/03/2014

5 The Auditors' Remuneration during the year is os under

2013 14 2012-13

Audit Fees lax Audit &Certification 2,27.500 00 1,60.000.00 Other Services 1.60 260.00 80.000.0C

Total 3,87.760.00 2.40,000.00

6. Figures for the previous year have been regrouped and recasted wherever necessary

7 Value of import ana indigenous material consumed (please refer Financial Statements and other information relating import and export are is under

(a) Value of imports calculated on GIF basis by the" company during the financial year in respect of

I, Raw Materials - Nil

II. Components and spare parts Nil

III. Capital Goods 11,26 765.00 1

(b) Eexpenditure in foreign currency during the Nil financial year on account ofroyaty, know-how professional and consultation fees, interest and other matters;

(ci) Total value if all imported raw materials, Nil spare parts and components. consumed during 'he financial year and the total value of all indigenous aw materials spare parts and components similarly consumed and the percentage of each to the total consumption (d) The amount remitted during the year in foreign currencies on account ot Nildividends with a specific mention of the total number of non--esidentshareholders the total number of shares held by them on which thedividends were due and the year tn which the dividends related

(5) Earnings in foreign exchange classified under the following heads, namely: -

I, Export of goods calculated on F O B basis 45573923,00 II. Royalty, know-how professionai and consultation fees, Nil lII. Interest and dividend Nil IV Other income, indicating the nature thereof Nil

8 Figures in brackets pertain to the previous year,

9. Debt, credit balances and Balances with Banks, are subject to confirmation and reconciliation

10 In Current years Excise Duty, coal consumption &. Stores Consumption are subject to reconciliations and confirmation. The outstanding balances of Trade Receivables Trade payables deposits advances and other current assets liabilities are subject to confirmation and reconciliation However in the opinion of the management adjustment if any will not be material.

11. in earlier years, the comeany has acquired the coa from Western Coal Field Ltd (WCL) through the intermediaries at e-auction price instead of Notified price and the difference was kept as Fixed Deosit which was to be refunded or adjusted as the case nay be as per judgments of Hon'ble court against petition. No adjustments in accounts was made due to uncertainty. During the year 2007-08 on judgment in the favour of coal users the company received a refund of Rs, 27,45010'- along with interest of Rs.4,05,900/- from WDL and the same was treated as miscellaneous income. The balance amount refundable if any is not ascertainable and therefore the same will be accounted for as miscellaneous income if any in the year of receipt,

12 A Export Benefits

The amount available towards Export Benefits under duty exemption or any other Scheme during the years has been ascertained on the basis of availabie records.

13 (a) In view of Insufficient information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained,

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 2006. The Management dees not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

14. [he Company has only a single reportable Segment in terms of the requirements of Accounting Standard 17 of the Institute of Chartered Accountants Of India

15 Related party disclosure [AS-18} Disclosure of resiled party transactions as per Accounting Standard 16 of the Institute of Chartered Accountants of India

(a) Key Management personnel

Dr Damodar Modi Chairman & M D

Shri Ramdas GoyaI Executive Director

Shri prakash Bapna Director

Shri Ramesh Chandra Coyal Director

Shri Yogesh Agrawai Director

Smt. Pramila Jajodia Director

Smt. Shochikaio IVtangal Director

Shi Vinod Gsrg Independent Director

Shi Ashish Agrawai Independent Director

Shri Satisli Chandra Vtangal Independent Director


Mar 31, 2013

1. CONTINGENT LIABILITY NOT PROVIDED FOR :

(i) The following cases were pending against the company as confirmed by company''s excise consultants :

(a) Cases related to classification of Plain Starch as modified Starch: Total Amount Involved Rs.200948751/ :-

– In the opinion of Excise Consultants'' since the chemical examiner report clearly says that the starch is plain starch and not modified starch, the pending Show Cause Notices are likely to be dropped on the basis of previous order of the Commissioner.

(b) In the matter of disallowance of Cenvat Credit as Common input used in Hydrol and demand of 8%, 10% on the value of clearance of Hydrol : Total Amount Involved Rs.86,75,435/- :- – In the opinion of Excise Consultants'' moreover recently this issue has already been settled by the Hon''ble High

Court of Bombay in the case of RALLIS INDIA LTD. Versus UNION OF INDIA 2009 (233) E.L.T. 301 (Bom.) wherein it was held that Rule 6(b)(3) has no application in case of waste and residue. Thus all the demands has no legal base and will eventually will result into dropping of demands as the Tribunals is bound to follow High Court Orders.

(c) Demand for Rs.4,27,981/- Cenvat Credit of Service Tax paid on outward transportation of finished goods :- – In the opinion of Excise Consultants'' undoubtedly credit on outward transportation can not be denied and the demands will be ultimately dropped.

(d) Show Cause Notices issued under Rule 6(3)(b) i.e. demand of 10% of the value of exempted goods on the ground

of availment of Cenvat Credit Total demand Rs.4,10,05,661/- :- – In the opinion of Excise Consultants'' the aforesaid show cause notices has been issued without ascertaining as to whether the Company has violated the condition of Rule 6. Even if it is assumed that the Company has violated the condition of Rule 6, in that case also the show cause notices will be dropped as in the Finance Act, 2010-11, retrospective amendment has been made wherein it has been provided that the assessee shall reverse the credit of input and input services used in manufacture of exempted goods and after certification of the same by the Chartered Accountant shall file application with the Commissioner who shall order for dropping of all such demands. Thus ultimately the show cause notice are going to be dropped.

No provision for the same has been made on the basis of above contention of the Excise Consultants''.

iv) Court Decree in the case of Smt. Sharda Bai for Rs. 2,53,852/- before Hon''ble MP High Court, Indore out of which Rs. 1,28,000/- has been deposited & kept in advance as appeal is pending against the court Decree & the appeal is likely to be decided in Company''s favour.

v) Mandi tax has been recognized as expenses, which has been given to Mandi Authority to keep in a separate account in pursuance of Court Order and if the money is refunded the same will be considered as Income in that year.

2. Provision on of Income Tax has been made during the year as per Taxation Laws.

3. Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs. 1200 Lacs (600 lacs) against which a sum of Rs.496.10 Lacs (Rs.130.81 Lacs) has been paid as advance.

4. During the year provision has been made in the accounts in respect of Excise duty (Including Cess) of Rs.6,37,778/- (Rs.4,78,390/-) payable on uncleared stock of finished goods lying in the factory premises as on 31/03/2013 and the same has been considered as an element of cost for the purpose of valuation of inventory as on 31/03/2013.

7. Figures for the previous year have been regrouped and recasted wherever necessary.

8. Value of import and indigenous material consumed (please refer Financial Statements).

9. Figures in brackets pertain to the previous year.

10. Debit Credit balances and Balances with Banks are subject to confirmation and reconciliation.

11. There is a difference of Rs. 5,12,849/- (Rs 5,12,849/-) in books records and Excise records pertaining to earlier years and Current years Excise Duty Accounts, coal consumption details & Stores Accounts are subject to reconciliations and confirmation.

12. In earlier years, the company has acquired the coal from Western Coal Field Ltd. (WCL) through the intermediaries at e- auction price instead of Notified price and the difference was kept as Fixed Deposit which was to be refunded or adjusted as the case may be as per judgments of Hon''ble Court against petition. No adjustments in accounts was made due to uncertainty. During the year 2007-08 on judgment in the favour of coal users, the company received a refund of Rs.27,45,910/ - alongwith interest of Rs.4,05,900/- from WCL and the same was treated as miscellaneous income. The balance amount refundable if any is not ascertainable and therefore the same will be accounted for as miscellaneous income if any in the year of receipt.

13A. Export Benefits

The amount available towards Export Benefits under duty exemption or any other Scheme during the years has been ascertained on the basis of available records.

14. (a) In view of insufficient information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained.

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 2006. The Management does not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

15. The Company has only a single reportable Segment in terms of the requirements of Accounting Standard-17 of the Institute of Chartered Accountants of India.

Nature and amount of Transactions :

i) Managerial Remuneration (As detailed in 10 above) Rs.1,00,42,466/- (Rs.1,01,03,770.00) (Subject to approval in Annual General Meeting)

ii) Amount received as Unsecured Loan Rs.4,24,85,464/- (Rs.3,87,12,157/-) from key Management Personnel & relatives.

iii) Interest on the above Rs.43,63,581/- (Rs.42,63,009/-).

16. Earning per share (EPS) for the Computation as per (AS 20)

a. Earning per share (EPS) for the year has been computed in accordance with the Accounting Standard-20 issued by the Institute of Chartered Accountants of India after considering provision for net deferred tax liability for the year as stated in note No.42.

(a) In accordance with Accounting Standard 22, ''Accounting for Taxes on Income'' (AS 22), issued by the Institute of Chartered Accountants of India, the company has adjusted the difference for deferred tax during the year.

(b) The Company expects to generate taxable income in the coming years which will enable it to utilize the carried forward unabsorbed depreciation and MAT credit.

Note :

1. Figures in brackes represents cash outflow.

2. Figures for previous year have been rearranged and re-grouped wherever necessary.

3. For purpose of Trade Advance and Trade Payables current liabilities directly related to other activities have been excluded.

4. Previous years figures have been reclassified to confirm to the current years presentation.


Mar 31, 2012

CONTINGENT LIABILITY NOT PROVIDED FOR:

i) The following cases were pending against the company as confirmed by company's excise consultants :

(a) Cases related to classification of Plain Starch as modified Starch -.Total Amount Involved Rs18,51,55,150/-

- In the opinion of Excise Consultants' since the chemical examiner report clearly says that the starch is plain starch and not modified starch the pending Show Cause Notices are likely to be dropped on the basis of previous order of the Commissioner.

(b) In the matter of disallowance of Cenvat Credit as Common input used in Hydrol and demand of 8%, 10% on the value of clearance of Hydrol: Total Amount Involved Rs. 69,34,608/-.

- In the opinion of Excise Consultants' moreover recently this issue has already been settled by the Hon'ble High Court of Bombay in ithe case of RALLIS INDIA LTD. versus UNION OF INDIA2009 (233) E.L.T. 301 (Bom.) wherein it was held that Rule 6(b)(3) has no application is case of waste and residue. Thus all the demands has no legal base and will eventually will result into dropping of demands as the Tribunals is bound to follow High Court Orders.

(c) Demand for Rs. 4,21,765/- Cenvat Credit of Service Tax paid on outward transportation of finished goods:

- In the opinion of Excise Consultants' undoubtedly credit on outward transportation can not be denied and the demands will be ultimately dropped.

(d) Show Cause Notices issued under Rule 6(3)(b) i.e. demand of 10% of the value of exempted goods on the ground ofavailment of Cenvat Credit Total demand Rs. 4,10,05,661/-.

- In the opinion of Excise Consultants' the aforesaid show cause notices has been issued without ascertaining as to whether the Company has violated the condition of Rule 6. Even if it is assumed that the Company has violated the condition of Rule 6, in that case also the show cause notices will be dropped as in the Finance Act, 2010-11, retrospective amendment has been made wherein it has been provided that the assessee shall reverse the credit of input and input services used in manufacture of exempted goods and after certification of the same by the Chartered Accountant shall file application with the Commissioner who shall order for dropping of all such demands. Thus ultimately the show cause notice are going to be dropped.

(e) As regard Appeal No. E/3683/2003-NB(SM) Rs. 1,66,334/-in the matter of Credit on returned goods. In this case the commissioner (Appeals) vide Order-in-appeal has allowed credit of Rs. 1,04,242/- vide Order-in-Appeal and disallowed the credit of Rs. 62,592/-. The Company has filed appeal before Tribunal against disallowance of credit of Rs. 62,592/-. The Tribunal vide Final Order No. A/699/04-NB(SM) dated 16.04.2004 has allowed the appeal by way of remand. Hence as on today there is no demand against the Company.

(f) As regard Appeal No. E/995/2012 for disallowance of Cenvat of Rs. 1,95,254/of common use of GTAin dutiable and exempted goods against the order of Commissioner (Appeals) vide Order-in-Original No. 01-03/COMMER/ CEX/IND/2012 dated 04.01.2012. The company has filed appeal before Tribunal and hearing date is fixed on 09.10.2012.

No provision for the same has been made on the basis of above contention of the Excise Consultants.

ii) The assessment of Entry Tax, Madhya Pradesh Commercial Tax & Central Sales Tax for the different years are completed and the following demands were raised and are disputed :

The Company has disputed the demand and preferred appeal before appealing authorities. No provision has been made for taxation related to the said demands on the basis of contention of the Board of Directors of the Company that the appeals will be accepted.

iii) The assessment of assessment year 2009-10 has been completed & appeal with CIT (A)ll, Indore was decided on 19/06/201. The liability thereof is not ascertainable after appeal effect. The liability will be recognized after receiving revised computation for appeal effect.

v) Court Decree in the case of Smt. Sharda BaiforRs. 2,53,852/-before Hon'bleMP High Court, Indore out of which Rs. 1,28,000/- has been deposited & kept in advance as appeal is pending against the court Decree & the appeal is likely to be decided in Company's favour.

vi) Mandi tax has been recognized as expenses, which has been given to Mandi Authority to keep in a separate account in pursuance of Court Order and if the money is refunded the same will be considered as Income in that year.

1. Provision on of Income Tax has been made during the year as per Taxation Laws.

2. Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs. 600 Lacs (NIL) against which a sum of Rs. 13.09 Lacs (Rs.5.93 Lacs) has been paid as advance.

3. During the year provision has been made in the accounts in respect of Excise duty (Including Cess) of Rs. 4,78,390/- (Rs. 4,20,807/-) payable on uncleared stock of finished goods lying in the factory premises as on 31/03/2012 and the same has been considered as an element of cost for the purpose of valuation of inventory as on 31/03/2012.

4. Figures for the previous year have been regrouped and recasted wherever necessary.

5. Figures in brackets pertain to the previous year.

6. Debit, Credit balances and Balances with Banks, are subject to confirmation and reconciliation.

7. There is a difference of Rs. 5,12,849/- (Rs. 5,12,849/-) in books records and Excise records pertaining to earlier years and current year Excise Duty Accounts, coal consumption details & store account are subject to reconciliations and confirmation.

8. In earlier years, the company has acquired the coal from Western Coal Field Ltd. (WCL) through the intermediaries ate- auction price instead of Notified price and the difference was kept as Fixed Deposit which was to be refunded or adjusted as the case may be as per judgments of Hon'ble Court against petition. No adjustments in accounts was made due to uncertainty. During the year 2007-08 on judgment in the favour of coal users, the company received a refund of Rs. 27,45,910/- alongwith interest of Rs.4,05,900/- from WCL and the same was treated as miscellaneous income. The balance amount refundable if any is not ascertainable and therefore the same will be accounted for as miscellaneous income if any in the year of receipt.

9. Export Benefits :

The amount available towards Export Benefits under duty exemption or any other Scheme during the years has been ascertained on the basis of available records.

10. (a) In view of insufficient information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained.

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 2006. The Management does not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

11. The Company has only a single reportable Segment in terms of the requirements of Accounting Standard-17 of the Institute of Chartered Accountants of India.

12. Related party disclosure (AS-18)

Disclosure of related party transactions as per Accounting Standard 18 of the Institute of Chartered Accountants of India.

13.a. Key Management personnel:

Dr. Damodar Modi Chairman & M.D.

Shri Ramdas Goyal Executive Director

Shri Prakash Bafna Whole Time Director

Shri Ramesh Chandra Goyal Whole Time Director

Shri Yogesh Agrawal Whole Time Director

Smt. Pramila Jajodia Director

Smt. Shashikala Mangal Director

Shri Vinod Garg Director

Shri Ashish Agrawal Director

Shri Satishchandra Mangal Director

Nature and amount of Transactions :

(i) Managerial Remuneration (As detailed in 10 above) Rs. 97,03,770 (Rs. 55,36,960) (Subject to approval in Annual General Meeting)

(ii) Amount received as Unsecured Loan Rs. 3,87,12,157/- (Rs. 3,90,00,483/-) from key Management Personnel & relatives.

(iii) Interest on the above Rs. 42,63,009/- (Rs. 42,58,338/-).

14. Earning per share (EPS) for the Computation as per (AS 20)

(a) Earning per share (EPS) for the year has been computed in accordance with the Accounting Standard-20 issued by the Institute of Chartered Accountants of India after considering provision for net deferred tax liability for the year as stated in note No. 18.

a) In accordance with Accounting Standard 22, 'Accounting for Taxes on Income' (AS 22), issued by the Institute of Char- tered Accountants of India, the company has adjusted the difference for deferred tax during the year.

b) The company expects to generate taxable income., in the coming years which will enable it to utilize the carried forward unabsorbed depreciation of MAT credit.

15. The financial statements for the year ended March 31, 2011 were prepared as per the then applicable, erstwhile Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous years figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

16. Information pursuant to the provision of Part IV of Schedule VI of the Companies Act, 1956 are enclosed.


Mar 31, 2011

1. CONTINGENT LIABILITY NOT PROVIDED FOR:

i) The following cases were pending against the company as confirmed by company's excise consultants :

(a) Cases related to classification of Plain Starch as modified Starch : Total Amount Involved Rs. 18,51,55,150/- In the opinion of Excise Consultants' since the chemical examiner report clearly says that the starch is plain starch and not modified starch the pending Show Cause Notices are likely to be dropped on the basis of previous order of the Commissioner.

(b) In the matter of disallowance of Cenvat Credit as Common input used in Hydrol and demand of 8%, 10% on the value of clearance of Hydrol: Total Amount Involved Rs. 69,34,608/-.

In the opinion of Excise Consultants' moreover recently this issue has already been settled by the Hon'ble High Court of Bombay in ithe case of RALLIS INDIA LTD. versus UNION OF INDIA2009 (233) E.L.T. 301 (Bom.) wherein it was held that Rule 6(b)(3) has no application is case of waste and residue. Thus all the demands has no legal base and will eventually will result into dropping of demands as the Tribunals is bound to follow High Court Orders.

(c) Demand for Rs. 4,21,765/- Cen vat Credit of Service Tax paid on outward transportation of finished goods:

In the opinion of Excise Consultants' undoubtedly credit on outward transportation can not be denied and the demands will be ultimately dropped.

(d) Show Cause Notices issued under Rule 6(3)(b) i.e. demandof10% of the value of exempted goods on the ground of a ailment of Cen vat Credit Total demand Rs. 4,10,05,661/-.

In the opinion of Excise Consultants' the aforesaid show cause notices has been issued without ascertaining as to whether the Company has violated the condition of Rule 6. Even if it is assumed that the Company has violated the condition of Rule 6, in that case also the show cause notices will be dropped as in the Finance Act, 2010-11, retrospective amendment has been made wherein it has been provided that the assesses shall reverse the credit of input and input services used in manufacture of exempted goods. Thus ultimately the show cause notice are going to be dropped.

(e) As regard Appeal No. E/3683/2003-NB(SM) Rs. 1,66,334/- in the matter of Credit on returned goods. In this case the commissioner (Appeals) vide Order-in-appeal has allowed credit of Rs. 1,04,242/- vide Order-in-Appeal and disallowed the credit of Rs. 62,592/-. The Company has filed appeal before Tribunal against disallowance of credit of Rs. 62,592/-. The Tribunal vide Final Order No. A/669/04-NB(SM) dated 16.04.2004 has allowed the appeal by way of remand. Hence as on today there is no demand against the Company.

No provision for the same has been made on the basis of above contention of the Excise Consultants.

The Company has disputed the demand and preferred appeal before appealing authorities. No provision has been made for taxation related to the said demands on the basis of contention of the Board of Directors of the Company that the appeals will be accepted.

ii) Court Decree in the case of Smt. Sharda Bai for Rs. 2,53,852/- before Hon'ble MP High Court, Indore out of which Rs. 1,28,000/- has been deposited & kept in advance as appeal is pending against the court Decree & the appeal is likely to be decided in Company's favour.

2. Provision on of Income Tax has been made during the year as per Taxation Laws.

3. Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs.NIL (Rs.25,00,000/-) against which a sum of Rs.Nil (Rs. 12,37,064/-) has been paid as advance.

4. During the year provision has been made in the accounts in respect of Excise duty (Including Cess) of Rs. 4,20,807/- (Rs. 1,50,836/-) payable on uncleared stock of finished goods lying in the factory premises as on 31/03/2011 and the same has been considered as an element of cost for the purpose of valuation of inventory as on 31/03/2011.

5. Figures for the previous year have been regrouped and recasted wherever necessary.

6. Figures in brackets pertain to the previous year.

7. Debit, Credit balances and Balances with Banks, are subject to confirmation and reconciliation.

8. There is a difference of Rs. 5,12,849/- (Rs 5,12,849/-) in books records and Excise records pertaining to earlier years and current year Excise Duty accounts coal consumption details of store account are subject to reconciliations and confirmation.

9. In earlier years, the company has acquired the coal from Western Coal Field Ltd. (WCL) through the intermediaries at e- auction price instead of Notified price and the difference was kept as Fixed Deposit which was to be refunded or adjusted as the case may be as per judgments of Hon'ble Court against petition. No adjustments in accounts was made due to uncertainty. During the year 2007-08 on judgment in the favour of coal users, the company received a refund of Rs. 27,45,910/- along with interest of Rs.4,05,900/- from WCL and the same was treated as miscellaneous income. The balance amount refundable if any is not ascertainable and therefore the same will be accounted for as miscellaneous income if any in the year of receipt.

10. Export Benefits:

The amount available towards Export Benefits under duty exemption or any other Scheme during the years is not ascertainable. Therefore the same has not been accounted for during the year and the same will be accounted for on ascertainment of amount involves.

11. Increase in Managerial Remuneration :

The managerial remuneration has been increased w.e.f. 01.10.2010 and the same is subject to confirmation of Share Holders in next Annual General Meeting.

12. (a) In view of insufficient/information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained.

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 206. The Management does not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

13. The Company has only a single reportable Segment in terms of the requirements of Accounting Standard-17 of the Institute of Chartered Accountants of India.

14. Related party disclosure (AS-18)

Disclosure of related party transactions as per Accounting Standard 18 of the Institute of Chartered Accountants of India.

Nature and amount of Transactions :

(i) Managerial Remuneration (As detailed in 10 above) Rs. 55,50,710 (Rs. 69,15,033) (Subject to approval in Annual General Meeting)

(ii) Amount received as Unsecured Loan Rs. 3,90,00,483/- (Rs. 4,28,12,817,/-) from key Management Personnel & relatives.

(iii) Interest on the above Rs. 42,58,338/- (Rs.50,71,537/-).

15. Earning per share (EPS) for the Computation as per (AS 20)

(a) Earning per share (EPS) for the year has been computed in accordance with the Accounting Standard-20 issued by the Institute of Chartered Accountants of India after considering provision for net deferred tax liability for the year as stated in note No. 18.

a) In accordance with Accounting Standard 22, 'Accounting for Taxes on Income' (AS 22), issued by the Institute of Char- tered Accountants of India, the company has adjusted the difference for deferred tax during the year.

The company expects to generate taxable income. In the coming years which will enable it to utilize the carried forward unabsorbed depreciation of MAT credit.

16. Information pursuant to the provision of Part IV of Schedule VI of the Companies Act, 1956 are enclosed.

Note:

1. Figures in brackets represents cash outflow.

2. Figures for previous year have been rearranged and re-grouped wherever necessary.

3. For purpose of Trade Advances and Trade Payables current liabilities directly related to other activities have been excluded.


Mar 31, 2010

1. CONTINGENT LIABILITY NOT PROVIDED FOR:

(i) The following cases were pending against the company as confirmed by company excise consultants :

a) Appeal by Central Excise Department against Order in Original No.26-27 dtd.21.07.06 f 9,34,36,459/- in the matter of classification of Maize Starch

b) SCN No. V(35)15-04/2007/Adj. 1/31986 dated 03.12.2007 Rs.26663128/- in the matter of Classification dispute of Notice No.3/2006.

c) SCN NO. V(35)15-01/2008/Adj.l/28532 dated 22.10.2008 Rs.26458042/- in the matter of Classification dispute of Maize Starch.

d) Appeal No.E/2990/06/C.Excise dated 06.09.2006 Rs. 4,58,096/-

e) Appeal No.E/1241/06 Rs. 7,33,488/-

f) SCN NO. IV(16)30-318/OT/Pith/Adj/8795 dated 07.12.2007 Rs. 393622/- in the matter of Disallow of Cenvat Credit as common Input used in Hydrol.

g) SCN NO. IV(16)30-76/08/Pith/Adj/1666 dated 10.03.2008 Rs. 477802/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

h) SCN NO. IV(16)30-336/08/Adj/8667 dated 05.12.2008 Rs. 495842/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

i) SCN NO. iV(16)30-95/08-09/Adj/11450 dated 06.03.2009 Rs. 484387/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

j) SCN NO. IV(16)30-136/06/Pith/5975 dated 11.09.2006 Rs. 470576/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

k) SCN NO. IV(16)30-65/07/Pith/1003 dated 28.02.2007 Rs. 466136/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

l) SCN NO. IV(16)30-66/07/Pith/Adj/1006 dated 28.02.2007 Rs. 484341/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

m) SCN NO. IV(16)30-43/08/Pith/Adj/3433 dated 12.05.2008 Rs. 406131/- in the matter of Disallow of Cenvat Credit as common input used in Hydrol.

n) SCN NO. IV(16)30-12/09/Pith/Adj/10048 dated 19.01.2009 Rs. 42464/- in the matter of Credit availed on service tax paid on outward transportation.

o) SCN NO. IV(16)30-219/08/Adj/5092 dated 0.07.2008 Rs. 302663/- in the matter of Credit availed on service tax paid on outward transportation.

p) SCN NO. V(35) 15-02/07/Adj/23327 dt.09.08.2007. Demand of Rs. 20843640/- has been issued on the ground that M/ s Tirupati Starch availed credit of service tax availed on Input Services which were also used for exempted goods.

q) SCN NO. V(17) 15- /2007/Adj.1/25123 dt.06/09/2007. Demand of Rs. 16399760/- i.e.10% of value of exempted goods.

r) SCN NO. V(935) 15-02/15982 dt.25.06.2008. Demand of Rs. 3762261/-i.e.10% of value of exempted goods on the ground of non maintenance of separate record of inputs of dutiable and exempted goods.

s) Appeal No.E/3683/2003-NB(SM) Rs. 166334/- in the matter of Credit on returned goods.

In opinion of the excise consultant the demand have no legal base and will eventually result in dropping of demands and company will not be required to pay the amount therefore no provision has been made in the accounts.

(ii) a) The Income Tax assessments for the assessment year 1988-89 to 1994-95 had already been completed and the authorities have made certain additions due to unsecured loans/share capital etc. and reducing the amount of unabsorbed depreciation & investment allowance. The total demand disputed by the company is Rs. 1,12,564/-(Rs. 1,12,564/-) and against this an amount equivalent to demand of earlier year (alongwith upto date interest) amounting to Rs. 99,114/- (Rs. 99,114) has been deposited and is kept in other advances. The Tribunal authorities have given some relief and have also confirmed some disallowances.

b) The Income Tax Assessment for the assessment year 1995-96 was pending with Honble Tribunal and case was remanded back to AO with certain direction. Assessing Officer and CIT (A) had confirmed the addition and raised a demand of Rs. 1,92,586/- The company had preferred an appeal with Honble ITAT and the same has been settled during the year no provision for taxation has been made for the said demands on basis of contention of the board of directors of the company that it will be made after receipt of revised demand note from IT Authorities. Although company has made payment of Rs. 1,92,586/-. The interest demand of Rs. 1,53,648/- is pending.

c) The Income Tax Assessment for the assessment year 1998-99 has also been completed and the authorities had made additions of Rs. 5,58,640/- reducing the amount of unabsorbed depreciation and Tribunal has partly allowed the appeal. The provisions if any will be made on receipts of amendment of orders after giving effect of the appeal as no demand has been raised so far.

d) The Income Tax Assessment for the assessment year 2000-2001 has also been completed and the tribunal has partly allowed the appeal. The authorities have made an addition of Rs. 95,009/- reducing the amount of unabsorbed depreciation. The provision if any will be made on receipts of amendment of earlier orders after giving affect of the appeal as no demand has been raised so far.

e) The Income tax Assessment for the assessment year 2004-2005 has also been completed and the authorities have made an addition of Rs. 2,87,094/- with Nil demand reducing the amount of unabsorbed depreciation. The company had made an appeal with commissioner of Income Tax (Appeal), Indore against the addition and disallowance.

f) The Income Tax Assessment for the assessment year 2005-2006 has also been completed and the authorities have made an addition of Rs. 6,00,834/- with Nil demand reducing the amount of unabsorbed depreciation. The matter is pending with learned CIT (Appeals) II, Indore.

The Company has disputed the demand and preferred appeal before appealing authorities. No provision has been made for taxation related to the said demands pertaining to Excise, Income Tax and Sales Tax on the basis of contention of the Board of Directors of the Company that the appeals will be accepted.

v) Court Decree in the case of Smt. Sharda Bai for Rs. 2,53,852/- before Honble MP High Cpurt, Indore out of which Rs. 1,28,000/- has been deposited & kept in advance as appeal is pending against the court Decree & the appeal is likely to be decided in Companys favour.

2. Provision on of Income Tax has been made during the year as per Taxation Laws.

3. Estimated amount of contracts remaining to be executed on Capital account are not provided is Rs. 25,00,000/-(Rs. 30,00,000/-) against which a sum of Rs.12,37,064/- (Rs.16,57,974/-) has been paid as advance.

4. During the year provision has been made in the accounts in respect of Excise duty (Including Cess) of (Rs. 1,50,836/-) (Rs. 1,12,938/-) payable on uncleared stock of finished goods lying in the factory premises as on 31/03/2010 and the same has been considered as an element of cost for the purpose of valuation of inventory as on 31/03/2010.

5. The Auditors Remuneration during the year is as under:

6. Figures for the previous year have been regrouped and recasted wherever necessary.

7. Figures in brackets pertain to the previous year.

8. Debit, Credit balances and Balances with Banks, are subject to confirmation and reconciliation.

9. Managerial Remuneration includes :

10. There is a difference of Rs. 5,12,849/- (Rs. 5,12,849/-) in books records and Excise records pertaining to earlier years and Excise Duty accounts are subject to reconciliations and confirmation.

11. In earlier years, the company has acquired the coal from Western Coal Field Ltd. (WCL) through the intermediaries at e-auction price instead of Notified price and the difference was kept as Fixed Deposit which was to be refunded or adjusted as the case may be as per judgments of Honble Court against petition. No adjustments in accounts was made due to uncertainty. During the year 2007-08 on judgment in the favour of coal users, the company received a refund of sf 27,45,910/- alongwith interest of Rs. 4,05,900/ from WCL and the same was treated as miscellaneous income. The balance amount refundable if any is not ascertainable and therefore the same will be accounted for as miscellaneous income if any in the year of receipt.

12. Export Benefits

Export Benefits under duty exemption advance licence scheme. During the year the claims amounting to Rs. 9,16,282/- towards Vishesh Krishi Upaj Yojna and DBPB from Govt.of India, Ministry of Commerce and Industries has been admitted and Rs. 4,10,242/ has been utilized during the year by crediting DEPB benefits and VAT ITR. The balance Rs. 5,06,040.00 has been accounted for as other receipts and any further claim if any under. Duty exemption pass book scheme duty drawback scheme or other schemes will be accounted for on ascertainment of amount involved.

13. (a) In view of insufficient information from suppliers regarding their status as SSI units amount overdue to such undertaking could not be ascertained.

(b) The company is in the process of compiling the additional information require to be disclosed under the Micro Small Enterprises Development Act 2006. The Management does not envisage any material impact on the financial statement in this regard which has been relied upon by the Auditors.

14. The Company has only a single reportable Segment in terms of the requirements of Accounting Standard-17 of the Institute of Chartered Accountants of India.

15. Related party disclosure (AS-18)

Disclosure of related party transactions as per Accounting Standard 18 of the Institute of Chartered Accountants of India.

Key Management personnel :

Dr. Damodar Modi Chairman & M.D.

Srjri Ramdas Goyal Executive Director

Shri Prakash Bapna Whole Time Director

Shri Ramesh Chandra Goyal Whole Time Director

Shri Yogesh Agrawal Whole Time Director

Smt. Pramila Jajodia Director

Smt. Shashikala Mangal Director

Shri Vinod Garg Director

Shri Ashish Agrawal Director

Shri Tejpal Lunawat Director



Nature and amount of Transactions:

(i) Managerial Remuneration (As detailed in 10 above) Rs. 69,15,033.00 (Rs. 44,41,608.00) (Subject to approval in Annual General Meeting)

(ii) Amount received as Unsecured Loan Rs. 4,28,12,817/- (Rs. 5,23,62,981/-) from key Management Personnel & relatives.

(iii) Interest on the above Rs. 50,71,537/- (Rs. 58,93,374/-).

16. Earning per share (EPS) for the Computation as per (AS 20)

17. Information persuant to the provision of Part IV of Schedule VI of the Companies Act, 1956 are enclosed.

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