Notes to Accounts of Shree Mahaganga Sugar Mills Ltd.

Mar 31, 2010

1. As per the past practice the company has not provided depreciation on Fixed Assets (other than office computers and Furniture & Fixture -) and no manufacturing activities as the same are lying unused for several years. As the company is in the process of disposing off those assets, the same has not been written off during the current year. The Loss/Profit, if any on the disposal of the same will be recognized in the next year.

2. As regards advances for capital goods aggregating Rs. 12,08,87,600/- the company initiated process of recovery. As the company is hopeful of recovery in the coming years, no Provision/Write-off in considered necessary.

3. During the year company has not sold any Finished Goods and same are laying in Inventories.

4. The company is engaged in trading activity and there is no activity during the year. Since reportable segments as defined in AS 17 on Segmental Reporting.

5. In respect of preference shares no provision for proposed dividend is considered necessary.

6. In the opinion of the management the provisions of payment of Gratuity Act, Provident Funds Act and other similar acts are not applicable and hence no provisions are considered necessary in this regard.

7. Previous years figures have been regrouped and rearranged, wherever considered necessary.

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Mar 31, 2009

1. Contingent liability not provided for in respect of:

Claim against the company not acknowledged as debt-Rs. 6.80 lacs. (Previous tear Rs. 6.80 lacs)

2. As per the past practice the company has not provided depreciation on Fixed Assets (other than office computers and Furniture & Fixture -) as the same are lying unused for several years. As the company is in the process of disposing off those assets, the same has not been written off during the current year. The Loss/Profit, if any on the disposal of the same will be recognized in the next year. As a result, the fixed assets are overstated by Rs. 63,78,706 /- and Profit and Loss Account (Debit) is under stated to that extent.

3. As regards advances for capital goods aggregating Rs. 29,36,850/- the company initiated process of recovery. As the company is hopeful of recovery in the coming years, no Provision/Write-off in considered necessary.

4. During the year company has not sold any Finished Goods and same are laying in Inventories.

5. The company is engaged in trading activity and there are no reportable segments as defined in AS 17 on Segmental Reporting.

6. In respect of preference shares no provision for proposed dividend is considered necessary.

7. In the opinion of the management the provisions of payment of Gratuity Act, Provident Funds Act and other similar acts are not applicable and hence no provisions are considered necessary in this regard.

8. Previous years figures have been regrouped and rearranged, wherever considered necessary.

9. GENERIC NAMES OF THREE PRINDIPAL SERVICES OF COMPANY:

(AS PER MONETARY TERMS)

Items code no Code : N.A.

Service Description : Trading & Investment in Shares

and Securities.