SIL Business Enterprises Ltd. के अकाउंट के लिये नोट

Mar 31, 2012

1 Contingent Liabilities not provided for liability if any, in respect of various cess, taxes and statutory dues including liability on account of delay in payments to Government, Semi-Government and suppliers.

2. Attention is invited to Note No. 2 forming part of the notes annexed to the accounts for the year ended March 31, 2011, an un-provided liability of Rs 6450 Lacs and accured interest thereon, if any, is not acknowledged by the Company and hence, it is not provided in the books of account.

3. The Company does not remain a going concern since the secured lenders have sold all the fixed assets mortgaged to them and there is no definite source of income. However, the accounts have been prepared in the best possible manner on the basis of available information.

4. Attention is invited to Note No. 8 forming part of the notes annexed to the accounts for the year ended March 31, 2001. The said note referred to the adjustments made in the accounts for that year, as a result of which an amount of Rs 2463 Lacs then due to Global Trust Bank Limited (GTBL) and now merged and known as Oriental Bank of Commerce (OBC), (hereinafter referred to as "the said bank") in respect of unsecured debentures and the amount of Rs 2463 Lacs due by Sashak Nobel Metals Limited (SNML) were transferred to Killick Financial Services Limited (KFSL).

The said note also specifically stated that the said transfers were made in pursuance of Memorandum of Understanding entered into between the Company, the said bank and KFSL and the other Memorandum of Understanding between the Company, KFSL and SNM. The said MOUs have not been revoked so far.

Further, in month of June 2001, Global Trust Bank Ltd. has credited Company''s account by Rs 565 Lacs . In terms of the said MOUs KFSL had agreed to allow the aforesaid amount due by Snowcem India Limited to the said bank to be adjusted against the security deposit of Rs 7400 Lacs agreed to be paid by the bank to KFSL in consideration of the latter company agreeing to execute sub-lease of the land in favour of the bank. We are informed by the KFSL that they have filed a suit against the bank for specific performance and damages

The said bank has called upon the Company to pay to it the aforesaid amount of Rs 2425 Lacs after adjusting a credit of Rs 565 Lacs towards the amount received by them for which the bank provided no details to the company. The said bank has also initiated proceedings against the Company in Debt Recovery Tribunal. The Company is contesting the proceedings and has been legally advised not to make any changes in the accounts till the final outcome of the proceedings is known. The said transfers were made in pursuance of the MOUs agreed to by the Board of the said bank and the Boards of respective companies. In terms of the said MOUs, the liability to the said bank has to be met by KFSL and the Company stands fully discharged of its liability. This stand of the Company finds support in the judgment of the Bombay High Court and Supreme Court in another similar matter. The Debts Recovery Tribunal has stayed proceedings against the Company as the Company is also registered with Board of Industrial and Financial Reconstruction (BIFR). The company also maintains that under various MOUs as referred to above the amount was to be appropriated against Company''s liabilities from the consideration of the land sold and purchased by them.

5. Provision has not been made in the accounts:

(a) For disputed income tax liability in respect of various Assessment orders aggregating to Rs 2343 Lacs (Previous year Rs 2343 Lacs) . The appeals filed by the Company against relevant orders are pending before various authorities. Liability in respect of interest/penalty under Income Tax Act, 1961 will be accounted for as and when the orders are passed.

(b) For disputed Sales tax liability in respect of various Assessment Years aggregating to Rs 95.46 Lacs relating to West Bengal Territory. The company has preferred appeals, which are pending before the competent authorities.

6. The Company has not provided the following, in the books of accounts.

(i) Interest on overdue fixed deposit of Rs 1264.08 Lacs due from time to time, amount unascertained.

(ii) Interest on loan from MPSIDC of Rs 2800 Lacs and ADCB of Rs 250 Lacs . However, MPSIDC has made an aggregate claim of Rs 26518. 31 Lacs as on 31st March 2012, which is not acknowledged by the Company. Further there are no details available regarding the same.

7. a) In view of the liquidity crunch, the Company could not pay the matured FDs of Rs 1264.08 Lacs (Rs. 1270 Lacs ) and interest due up to maturity of Rs 246.50 Lacs ( 248 Lacs ) . Some of the FD holders have taken legal action and obtained orders from CLB regarding payment in installments. The Company has made all attempts to comply with the orders However, due to acute cash crunch, the Company could not fully comply with the orders of CLB as required under Section 58A (9) of the Companies Act, 1956. Accordingly, the CLB has directed the ROC of Maharashtra to take appropriate action in the matter, and the Company has submitted a scheme with Principal Bench of CLB at New Delhi, which is pending for its consideration. The total number of cases pending before various authorities are 6 aggregating to Rs 1.55 Lacs (previous year aggregating to Rs 1.55 Lacs )

(b) During the year, some of the Fixed Deposit holders approached the Company expressing their willingness to accept partial payment in full and final settlement of their dues. The Company has settled such claims for gross amount of Rs 7.82 Lacs during the current year, which has resulted in reduction of Company''s liability to the extent of Rs 6.1 Lacs towards principal and Rs 1.72 Lacs towards interest, which were earlier provided to the accounts. The Company has been legally advised that after the settlement the Company''s liability towards those deposit holders is fully extinguished and no claim thereafter is tenable and the same can be reversed in the books. Accordingly, Rs 0.06 Lacs , being the writing back of interest has been credited to profit and loss account and Rs 0.23 Lacs , being the reduction in liability of unsecured loan has been credited to FD Settlement account grouped under the Reserves and Surplus.

8 Some of the Sundry debtors, creditors, loans and advances and unsecured loans are subject to confirmation and re-conciliation.

9. The Company has fulfilled all the conditions referred to in the clarification No. 3/5/84 CLX dated 5- Dec.1984 given by the Department of Company Affairs to the Institute of Chartered Accountants of India with regard to treatment of subsidy received from the Government as "Free Reserve" as defined in the Rule 2(d) of the Companies (Acceptance of Deposits) Rules. In view of the said clarification, the amount of subsidy received by the Company is deemed to be part of Free Reserves.

10. The Company was declared a sick unit under section 3(1) (O) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA) on July 5, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). However, Fixed Assets have been sold by the secured lenders under the Securitisation and Reconstruction of the Financial Assets & Enforcement of Security Interest Act, 2002 (SARFESAI) and forwarded the intimation to BIFR. Appropriate order from Honorable BIFR is awaited.

11. As a prudent accounting policy, the Company has decided not to recognise Deferred Tax Assets on accumulated losses.

12. Previous year figures have been regrouped and/or rearranged wherever necessary.

Notes :

1) In the previous year Snowcem Products Lanka Pvt. Ltd. had agreed to buy back its shares at the face value. The refund has since been received . However, the proceeds are yer to be credited in Company''s account by the Bank, pending certain formalities.The relevant information is as below -

2) National Saving Certificate is deposited with the government authorities since a long time and the same is not traceable.

2) The Company does not have any Managing Director as required under section 269 of the Companies Act, 1956 because the Company cannot pay remuneration as per the Schedule XIII of the Act. Hence, the Company is being managed by various Committees of the Directors for looking after day to day working. Total Directors Fees and Committees Fees paid during the year amounted to Rs. 2.6 lacs (Rs 3.36lacs).

3) The Board has approved the expenses for which requisite evidences/documents are not available on the records and has confirmed that these have been incurred in the normal course of business and out of business expediency.

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Mar 31, 2011

1. Secured Loan is due to Kotak Mahindra Bank Ltd and all the securities have been sold by them and there are no tangible assets as security as on date. R is invited to note no 2 in the Part B of Notes on Accounts.

2. Rs50,22,000/- is due for repayment to government in current year out of sales Tax Deferred Payment.

3. Contingent Liabilities not provided for:

a. Liability if any, in respect of various cess, taxes and statutory dues including liability on account of delay in payments to Government, Semi-Government and suppliers.

b. Guarantees given by Bank to Excise Department on the Company's counter guarantee Rs.50,000/- (Previous year Rs.50,000/-) against which the Company has provided margin for the full amount to the Bank.

4. (a). Further to possession notice dated 05.07.2005 from Secured Lenders u/s 13(4) of the SARFAESI Act, 2002, the said secured lenders have sold all the mortgaged assets for aggregate consideration of Rs.19 crores after obtaining consent of the Company, for which the Company had no alternative but to agree. Subsequently, the secured lenders have informed the Company that an amount of Rs.83.50 cr. was still recoverable from it, after adjusting the said sale proceeds. Whereas, the total dues to the secured lenders as per the books of the Company was Rs.48.88 crores, inclusive of Principal amount outstanding, before the sale of assets.

(b) . Consequent to the recovery notice received from the secured lenders for an amount which is more than the amount shown in the books of the Company, the Company has decided to appropriate the total sale proceeds of Rs.19 crores against outstanding interest on the loans due to the secured lenders. The interest amount of Rs.7.61crores upto 31.08.2004 was already provided in the books of account and balance interest of Rs.11.39 crores has been provided in the current year.

The balance un-provided liability of Rs.64.50 crores is not acknowledged by the Company and hence, it is not provided in the books of account.

(c) The bifurcation of sale proceeds of Rs.19 crores has not been provided by the secured lenders. However, the gain has been shown as profit on sale of assets. Moreover, in absence of such bifurcation, Capital Gain under the Income Tax Act, 1961 could not be ascertained. In the opinion of the Board, the Company does not expect any income tax liability on such capital gain in view of allowances & carried forward deductions. Accordingly, no provision for taxation is required to be made on sale of said assets.

(d) All the motor vehicles, having gross value of Rs.49.20 lacs and net value of Rs.0.49 lacs, were lying in the premises sold by the Secured Lenders. The Company has subsequently sold the vehicles to the buyer of the assets and recovered the amount.

5. The Company does not remain a going concern since the secured lenders have sold all the fixed assets mortgaged to them and there is no definite source of income. However, the accounts have been prepared in the best possible manner on the basis of available information.

6. Attention is invited to Note No. 8 forming part of the notes annexed to the accounts for the year ended March 31, 2001. The said note referred to the adjustments made in the accounts for that year, as a result of which an amount of Rs.24.63 crores then due to Global Trust Bank Limited (GTBL) and now merged and known as Oriental Bank of Commerce (OBC), (hereinafter referred to as "the said bank") in respect of unsecured debentures and the amount of Rs.24.63 crores due by Sashak Nobel Metals Limited (SNML) were transferred to Killick Financial Services Limited (KFSL). The said note also specifically stated that the said transfers were made in pursuance of Memorandum of Understanding entered into between the Company, the said bank and KFSL and the other Memorandum of Understanding between the Company, KFSL and SNM. The said MO Us have not been revoked so far. Further, in month of June 2001, Global Trust Bank Ltd. has credited Company's account by Rs.5.65 Crores. In terms of the said MOUs KFSL had agreed to allow the aforesaid amount due by Snowcem India Limited to the said bank to be adjusted against the security deposit of Rs.74.00 crores agreed to be paid by the bank to KFSL in consideration of the latter company agreeing to execute sub-lease of the land in favour of the bank. We are informed by the KFSL that they have filed a suit against the bank for specific performance and damages

The said bank has called upon the Company to pay to it the aforesaid amount of Rs.24.25 Crores after adjusting a credit of Rs.5.65 Crores towards the amount received by them for which the bank provided no details to the company. The said bank has also initiated proceedings against the Company in Debt Recovery Tribunal. The Company is contesting the proceedings and has been legally advised not to make any changes in the accounts till the final outcome of the proceedings is known. The said transfers were made in pursuance of the MOUs agreed to by the Board of the said bank and the Boards of respective companies. In terms of the said MOUs, the liability to the said bank has to be met by KFSL and the Company stands fully discharged of its liability. This stand of the Company finds support in the judgment of the Bombay High Court and Supreme Court in another similar matter. The Debts Recovery Tribunal has stayed proceedings against the Company as the Company is also registered with Board of Industrial and Financial Reconstruction (BIFR). The company also maintains that under various MOUs as referred to above the amount was to be appropriated against Company's liabilities from the consideration of the land sold and purchased by them.

7. Provision has not been made in the accounts:

(a) For disputed income tax liability in respect of various Assessment orders aggregating to Rs.23.43 crores (Previous year Rs.23.43 crores). The appeals filed by the Company against relevant orders are pending before various authorities. Liability in respect of interest/penalty under Income Tax Act, 1961 will be accounted for as and when the orders are passed. However during the year, the income tax assessment in respect of AY 2008-09 was completed and income tax refund of Rs.0.12 crores was adjusted against the earlier years' liability by the Income Tax department and accordingly, the same has been provided in the accounts.

Moreover, an amount of Rs.50.50 lacs shown as Tax Deducted at Source, under the head 'Advances recoverable in Cash/Kind or value to be received', may be adjusted by the Income tax authorities towards old liabilities as done in the past. Therefore, the possibility of recovering the same is remote and accordingly, shall not be considered as good and recoverable.

(b) For disputed Sales tax liability in respect of various Assessment Years aggregating to Rs.95.46 Lacs relating to West Bengal Territory. The company has preferred appeals, which are pending before the competent authorities.

8. The Company has not provided the following, in the books of accounts.

(i) Interest on overdue fixed deposit of Rs.1270 Lacs due from time to time, amount unascertained.

(ii) Interest on loan from MPSIDC of Rs.2800Lacs and ADCB of Rs.250Lacs. However, MPSIDC has made an aggregate claim of Rs.21642 Lacs as on 31st March 2011, which is not acknowledged by the Company. Further there are no details available regarding the same.

9. a) In view of the liquidity crunch, the Company could not pay the matured FDs of Rs.12.70 crores and interest due up to maturity of Rs.2.48 crores. Some of the FD holders have taken legal action and obtained orders from CLB regarding payment in installments. The Company has made all attempts to comply with the orders. However, due to acute cash crunch, the Company could not fully comply with the orders of CLB as required under Section 58A (9) of the Companies Act, 1956. Accordingly, the CLB has directed the ROC of Maharashtra to take appropriate action in the matter, and the Company has submitted a scheme with Principal Bench of CLB at New Delhi, which is pending for its consideration. The total number of cases pending before various authorities are 6 aggregating to Rs.1.55 lacs (previous year 23 aggregating to Rs.5.29 lacs)

(b) During the year, some of the Fixed Deposit holders approached the Company expressing their willingness to accept partial payment in full and final settlement of their dues. The Company has settled such claims for gross amount of Rs 5.95Lacs during the current year, which has resulted in reduction of Company's liability to the extent of Rs.5.40Lacs towards principal and Rs.O.SSLacs towards interest, which were earlier provided to the accounts. The Company has been legally advised that after the settlement the Company's liability towards those deposit holders is fully extinguished and no claim thereafter is tenable and the same can be reversed in the books. Accordingly, Rs.0.28Lacs, being the writing back of interest has been credited to profit and loss account and Rs.2.55Lacs, being the reduction in liability of unsecured loan has been credited to FD Settlement account grouped under the Reserves and Surplus

10. Expenses debited to various heads of the accounts amounting to Rs.10.50Lacs (previous year Rs.18.51Lacs) for which requisite evidences/documents are not available on the records. The Board has approved the said expenses and confirmed that these have been incurred in the normal course of business and out of business expediency.

11. Some of the Sundry debtors, creditors, loans and advances and unsecured loans are subject to confirmation and re-conciliation.

10. The company has not received any intimation from its suppliers regarding their status under the Small and Medium Enterprise Development Act, 2006. Hence, disclosure, if any, relating to the amounts unpaid as at the year end together with interest paid or payable as required under the said Act have not been given.

12. The Company has fulfilled all the conditions referred to in the clarification No. 3/5/84 CLX dated 5-Dec.1984 given by the Department of Company Affairs to the Institute of Chartered Accountants of India with regard to treatment of subsidy received from the Government as "Free Reserve" as defined in the Rule 2(d) of the Companies (Acceptance of Deposits) Rules. In view of the said clarification, the amount of subsidy received by the Company is deemed to be part of Free Reserves.

13. The Company does not have any Managing Director as required under section 269 of the Companies Act, 1956 because the Company cannot pay remuneration as per the Schedule XIII of the Act. Hence, the Company is being managed by various Committees of the Directors for looking after day to day working. Total Directors Fees and Committees Fees paid during the year amounted to Rs.3.36lacs, In addition to the above, the Company has also reimbursed Non-Executive Chairman office expenses of Rs.1.14Lacs (previous year Rs.7.94Lacs) pursuant to the Board Resolution dated 30th March 2011 and other expenses of the directors amounting to Rs.NIL(Previous year Rs.5.11Lacs) In the opinion of the Board, the aforesaid payment is legitimate and out of business expediency and does not amount to managerial remuneration.

14. Net worth of Snowcem Products Lanka Pvt. Limited is negative as per latest financials available with Company. Hence, value of the Investment in the said Company has diminished. However, no provision has been made in the accounts in view of losses. In the current year Snowcem Products Lanka Pvt. Ltd. has agreed to buy back its shares at the face value. All the formalities have been completed and refund has since been received.

15. During the year, the Company has sold its property at Chennai for a consideration of Rs.135.55Lacs and earned a profit of Rs.130.86Lacs. However, the deed of Conveyance executed between the buyer and the Company is not readily available. The Board confirms the transaction.

16. During the year Board has decided to write off certain current and scheduled bank accounts, which were non-operative, from a very long time and whose confirmations were also not available, amount aggregating to Rs.12.04Lacs.

17. National Saving Certificate is deposited with the government authorities from a long year of time and the same are not traceable.

18. The Company was declared a sick unit under section 3(1) (O) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA) on July 5, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). However, Fixed Assets have been sold by the secured lenders under the Securitisation and Reconstruction of the Financial Assets & Enforcement of Security Interest Act, 2002 (SARFESAI) and forwarded the intimation to BIFR. Appropriate order from Honorable BIFR is awaited.

19. As a prudent accounting policy, the Company has decided not to recognise Deferred Tax Assets on accumulated losses.

20. Previous year figures have been regrouped and/or rearranged wherever necessary.

21. Additional Information pursuant to the provisions of PART IV of SCHEDULE VI to the COMPANIES ACT, 1956.

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Mar 31, 2010

1 Contingent Liabilities not provided for:

a) Liability if any, in respect of various cess, taxes and statutory dues including liability on account of delay in payments to Government, Semi-Government and suppliers.

b) Guarantees given by Bank to Excise Department on the Companys counter guarantee Rs. 50000/- (Previous period Rs. 50,000/-) against which the Company has provided margin for the full amount.

2 In view of the proposed financial restructuring of the company pending with BIFR, provision has not been made in the accounts in respect of the liabilities for:

(i) Interest of Rs. 43.37 Lacs including Rs. 3.15 lacs for current year (Previous Period Rs. 40.22 Lacs) on inter corporate deposit.

(ii) Interest on overdue Fixed deposit of Rs. 12.75 Crores due from time to time, amount unascertained.

(iii) Interest on Loan from MPSIDC of Rs. 28 crores and ADCB of Rs. 2.50 crores from 31.08.2004 onwards, amount unascertained. However, MPSIDC has made an aggregate claim of Rs. 176.78 crores as on 31st March 2010, which is not acknowledged by the Company.

3. a) The Company has not been able to procure -

i) Confirmation for outstanding balances as on March 31, 2010 in respect of various current accounts amounting to Rs. 10.89 lacs and fixed deposit of Rs. 8.74 lacs and credit facilities from the banks and financial institutions.

ii) Confirmation of outstanding as on March 31, 2010 in respect of L/Cs, Guarantees, other non-funded facilities. The Company did not obtained confirmations, as the Companys accounts became Non Performing Assets (NPA). However, there are no significant transactions in the accounts.

b) In view of possession notice dated July 05, 2005 received from the secured lenders under section 13 (4) of the Securitisation and Reconstruction of Financial Asset & Enforcement of Security Interest Act, 2002, for recovery of Rs. 68 crores as of 31/08/2004 against a liability of Rs. 55 crores shown in accounts as on that date. No provision has been made for the differential interest amount upto 31/08/2004 and interest thereafter up to the date of balance sheet. Amount unascertained.

c) In view of the financial difficulty, the Company could not pay regularly installments to Kotak Mahindra Bank Ltd. in respect of term loan and liability towards Co Accepted bill as per the Consent terms which expired on 31st March 2009. The Company however has not provided for consequential liability, which could arise for non-compliance of Consent terms. In the absence of confirmation on the record as on date, the exact liability could not be ascertained. Moreover, the Company has made certain adhoc payments, which have been adjusted against both the liabilities in proportion of the outstanding amount.

4 The Companys account are prepared on going concern basis although the Company has received the notice for taking over the possession dated 5th July, 2005 of all secured assets from the secured lender under section 13(4) of the Securitisation and Reconstruction of the Financial Assets & Enforcement of Security Interest Act, 2002 (SARFESAI) and possession of some of the aforesaid assets have technically been taken by them in November 2005. Moreover, the Company has also given consent under private treaty agreement pursuant to the provisions of SARFESAI as per Board approval dated 30 March 2010. Presently the Company has given the Plants on lease with the reimbursement of certain manufacturing expenses to cover the standing charges and maintain the plants.

5. Attention is invited to Note No. 8 forming part of the notes annexed to the accounts for the year ended March 31, 2001. The said note referred to the adjustments made in the accounts for that year, as a result of which an amount of Rs. 24i63 crores then due to Global Trust Bank Limited (GTBL) and now merged and known as Oriental Bank of Commerce (OBC), (hereinafter referred to as "the said bank") in respect of unsecured debentures and the amount of Rs. 24.63 crores due by Sashak Nobel Metals Limited (SNML) were transferred to Killick Financial Services Limited (KFSL). The said note also specifically stated that the said transfers were made in pursuance of Memorandum of Understanding entered into between the Company, the said bank and KFSL and the other Memorandum of Understanding between the Company, KFSL and SNM. The said MOUs have not been revoked so far. Further, in month of June 2001, Global Trust Bank Ltd. has. credited Companys account by Rs. 5;65 Crores. In terms of the said MOUs KFSL had agreed to allow the aforesaid amount due by Snowcem India Limited to the said bank to be adjusted against the security deposit of Rs. 74.00 crores agreed to be paid by the bank to KFSL in consideration of the latter company agreeing to execute sub-lease of the land in favour of the bank. We are informed by the KFSL that they have filed a suit against the bank for specific performance and damages

The said bank has called upon the Company to pay to it the aforesaid amount of Rs. 24.25 Crores after adjusting a credit of Rs. 5.65 Crores towards the amount received by them for which the bank provided no details to the company. The said bank has also initiated proceedings against the Company in Debt Recovery Tribunal. The Company is contesting the proceedings and has been legally advised not to make any changes in the accounts till the final outcome of the proceedings is known. The said transfers were made in pursuance of the MOUs agreed to by the Board of the said bank and the Boards of respective companies. In terms of the said MOUs, the liability to the said bank has to be met by KFSL and the Company stands fully discharged of its liability. This stand of the Company finds support in the judgment of the Bombay High Court and Supreme Court in another similar matter. The Debts Recovery Tribunal has stayed proceedings against the Company as the Company is also registered with Board of Industrial and Financial Reconstruction (BIFR). The company also maintains that under various MOUs as referred to above the amount was to be appropriated against Companys liabilities from the consideration of the land sold and purchased by them

6 (a). In respect of export debtors of Rs. 133.55 crores, after relentlessly pursuing for the recovery of thereof, which did not yield any result, the Company had applied for the permission of the Reserve Bank of India to write off the same in the books of accounts. The Company has since received permission to write off the debt from authorized dealers as per the instructions from Reserve Bank of India. Accordingly the above export debts are written off, and the provision made as doubtful debts in earlier years has been now written back.

(b) In addition to the above the Board has also decided to write off Rs. 10 Crores in respect of debt due from M/s Killick Nixon Ltd. (Erstwhile distributor of the Company) which was outstanding for more than five years against unsettled claims. The said amount has been adjusted against the provision which were made in the earlier years. After the above write off there remains the balance of Rs. 23,72,495/- as on 31st March, 2010. In the opinion of the Board the said amount would be recovered in reasonable time as per the confirmation received from them.

7. Provision has not been made in the accounts:

a) For disputed income tax liability in respect of various Assessment orders aggregating to Rs. 23.43 crores (Previous period Rs. 25.18 crores). The appeals filed by the Company against relevant orders are pending before various authorities. Liability in respect of interest/penalty under Income Tax Aet, 1961 will be accounted for as and when the orders are passed

b) For disputed Sales tax liability in respect of various Assessment Years aggregating to Rs. 95.46 Lacs relating to West Bengal Territory. The company has preferred appeals, which are pending before the competent authorities.

8. a) In view of the liquidity crunch, the Company could not pay the matured FDs of Rs. 12.75 crores and interest due up to maturity of Rs. 2.49 crores. Some of the FD holders have taken legal action and obtained orders from CLB regarding payment in installments. The Company has made all attempts to comply with the orders. However, due to acute cash crunch, the Company could not fully comply with the orders of CLB as required under Section 58A (9) of the Companies Act, 1956. Accordingly, the CLB has directed the ROC of Maharashtra to take appropriate action in the matter, and the Company has submitted a scheme with Principal bench of CLB at Delhi, which is pending for its consideration. The total numbers of cases pending before the various authorities are 23 aggregating to Rs. 5.29 Lacs (Previous period 489 aggregating to Rs. 38.40 Lacs).

b) During the year, some of the Fixed Deposit holders approached the Company expressing their willingness to accept partial payment in full and final settlement of their dues. The Company has settled such claims for gross amount of Rs. 56.94 lacs during the current year, which has resulted in reduction of Companys liability to the extent of Rs. 47.32 lacs towards principal and Rs. 9.62 lacs towards interest, which were earlier provided to the accounts. The Company has been legally advised that after the settlement the Companys liability towards those deposit holders is fully extinguished and no claim thereafter is tenable and the same can be reversed in the books. Accordingly, Rs. 2.69 Lacs, being the writing back of interest has been credited to profit and loss account and Rs. 14.44 Lacs, being the reduction in liability of unsecured loan has been credited to FD Settlement account grouped under the Reserves and Surplus.

9. a) Expenses debited to various heads of the accounts amounting to Rs. 18.51 Lacs (previous period Rs. 54.38 Lacs) for which requisite evidences/documents are not available on the records. The Board has approved the said expenses and confirmed that these have been incurred in the normal course of business and out of business expediency.

b) The Company has closed a Bank account during the year and amount received on such closure is short by Rs. 1.37 lacs(Previous period Rs. 5.37 Lacs) for which no details are available. The same has been charged to Profit & Loss account and duly approved by the Board

10. No provision has been made in accounts in respect of Impairment of Assets, as the Company has not obtained any report in the matter in this year.

11. Some of the Sundry debtors, creditors, loans and advances and unsecured loans are subject to confirmation and re-conciliation.

12. The company has not received any intimation from its suppliers regarding their status under the Small and Medium Enterprise Development Act, 2006. Hence, disclosure, if any, relating to the amounts unpaid as at the year end together with interest paid or payable as required under the said Act have not been given.

13. The Company has fulfilled all the conditions referred to in the clarification No. 3/5/84 CLX dated 5-Dec.l984 given by the Department of Company Affairs to the Institute of Chartered Accountants of India with regard to treatment of subsidy received from the Government as "Free Reserve" as defined in the Rule 2(d) of the Companies (Acceptance of Deposits) Rules. In view of the said clarification, the amount of subsidy received by the Company is deemed to be part of Free Reserves.

14. The Company does not have any Managing Director as required under section 269 of the Companies Act, 1956 because the Company cannot pay remuneration as per the Schedule XIII of the Act. Hence, the Company is being managed by various Committees of the Directors for looking after day to day working. Total Directors Fees and Committees Fees paid during the year amounted to Rs. 14.60 lacs, In addition to the above, the Company has also reimbursed Non-Executive Chairman office expenses of Rs. 7.94 lacs (previous period Rs. 8.93 Lacs) pursuant to the Board Resolution dated 30th March 2010 and other expenses of the directors amounting to Rs. 5.ll Lacs (Previous period Rs. 9.01 Lacs) In the opinion of the Board, the aforesaid payment is legitimate and out of business expediency and does not amount to managerial remuneration.

15. The Company has agreed to give lump sum discount of 12% (Previous period 15%) on total job work income amounting to Rs. 78.26 Lacs (previous period Rs. 109 lacs).

16. The company has sent one windmill for repairs to RRB Vestas Ltd. and has given an estimate for repairing charges of Rs. 45 lacs. In addition to above, they have raised certain bills of Rs. 6.78 lacs which are not acknowledged by the Company. Since the matter is in dispute, said Company is holding the windmill having the book value of Rs. 210 lacs as on 31st March 2010. The Company is negotiating the matter with the party and the necessary effect will be given as and when it is settled.

17. Advances recoverable in cash or kind or for value to be received includes Rs. 10.30 Lacs (previous period Rs.8.74 Lacs) being service tax cenvatable. The recovery of this would depend upon manufacturing excisable goods in Companys own name in future.

18. Net worth of Snowcem Products Lanka Pvt. Limited is negative as per latest financials available with Company. Hence, value of the Investment in the said Company has diminished. However, no provision has been made in the accounts in view of losses. In the current year Snowcem Products Lanka Pvt. Ltd. has agreed to buy back its shares at the face value. AH the formalities have been completed and refund is expected shortly.

19. The Company has been declared a sick unit under section 3(1) (O) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA) on July 5, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). An Operating Agency has been appointed to prepare viability study report and revival scheme. Draft Rehabilitation Scheme has been prepared and submitted to Operating Agency and BIFR for their approval.

20. As a prudent accounting policy, the Company has decided not to recognise Deferred Tax Assets on accumulated losses.

21. Pursuance to compliance of AS-18 on Related Party disclosures, the relevant information for the year ended March 31, 2010.

(1) Related party Disclosures List of related Parties and relationships Key Managerial Personnel

Mr. T. B. Ruia Chairman

(2) Disclosures required for related parties transactions

22. Previous period figures have been regrouped and/or rearranged wherever necessary and are not comparable with the figures of current year as they are of 12 months where as figures of previous period are of 18 months.

23. Additional Information pursuant to the provisions of PART IV of SCHEDULE VI to the COMPANIES ACT, 1956

II. Capital Raised during the year ended 31 March 2010 (Amount Rs. In Lacs)

Public Issue NIL Right Issue NIL

Bonus Issue NIL Private Placement NIL

V. Generic Names of Three Principal Products of Company (As per monetary terms)

NIL

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Mar 31, 2009

1.1 Contingent Liabilities not provided for:

a) Liability if any, in respect of various cess, taxes and statutory dues including liability on account of delay in payments to Government, Semi-Government and suppliers.

b) Guarantees given by Bank to Excise Department on> the Companys counter guarantee Rs.50000/- (Previous year Rs.50,000/-) against which the Company has provided margin for the full amount.

c) Claims against the Company not acknowledged as debt Rs. 56,492/-.

1.2 In view of the proposed financial restructuring of the company pending with BIFR, provision has not been made* in the accounts in respect of the liabilities for:

(i) Interest of Rs. 40.22 Lacs including Rs. 8.45 lacs for current period (Previous Year Rs 31.77 Lacs) on inter corporate deposit.

(ii) Interest on overdue Fixed deposit of Rs. 13.23 Crores due from time to time, amount unascertained.

2. a) The Company has not been able to procure-

i) Confirmation for outstanding balances as on March 31, 2009 in respect of various current accounts amounting to Rs. 16.98 lacs and credit facilities from the banks and financial institutions.

ii) Confirmation of outstandings as on March 31, 2009 in respect of L/Cs, Guarantees, other non-funded facilities and fixed deposits of margin money of Rs.8.74 lacs. The banks and financial institutions have not responded to the Companys request for confirmations, as the Companys accounts became Non Performing Assets (NPA). In the case of some banks even the statements of accounts have not been furnished to the Company. However, while preparing the accounts, the Company has taken into account all transactions with the banks and financial institutions on the basis of available records. The Company does not expect any discrepancy on this amount.

b) In view of possession notice dated July 05, 2005 received from the secured lenders under section 13 (4) of the Securitisation and Reconstruction of Financial Asset & Enforcement of Security Interest Act, 2002, for recovery of Rs. 68 crores as of 31/08/2004 against a liability of Rs. 55 crores shown in accounts, no provision has been made for the differential interest amount upto 31/08/2004 and interest thereafter up to the date of balance sheet. Amount unascertained.

c) In view of the financial difficulty, the Company could not pay regularly installments to Kotak Mahindra Bank Ltd. in respect of term loan and liability towards Co Accepted bill which were due upto 31st March 2009 as per the Consent terms. The Company however has not provided for consequential liability, which may arise for non-compliance of Consent terms. In the absence of confirmation from the Bank as on date, the exact liability could not be ascertained. Moreover, the Company has made certain adhoc payments, which have been adjusted against both the liabilities in proportion of the outstanding amount.

3. The Companys account are prepared on going concern basis although the Company has received the notice for taking over the possession dated 5 ,h July, 2005 of all secured assets from the secured lender under section 13(4) of the Securitisation and Reconstruction of the Financial Assets & Enforcement of Security Interest Act, 2002 and possession of some of the aforesaid assets have technically been taken by them in November 2005. Presently the Company has given the Plants on lease with the reimbursement of expenses.

4. Attention is invited to Note No. 8 forming part of the notes annexed to the accounts for the year ended March 31, 2001. The said note referred to the adjustments made in the accounts for that year, as.a result of which an amount of Rs. 24.63 crores then due to Global Trust Bank Limited (GTBL) and now merged and known as Oriental Bank of Commerce (OBC), (hereinafter referred to as "the said bank") in respect of unsecured . debentures and the amount of Rs.24.63 crores due by Sashak Nobal Metals Limited (SNML) were transferred to Killick Financial Services Limited (KFSL). The said.note also specifically stated that the said transfers were made in pursuance of Memorandum of Understanding entered into between the Company, the said bank and KFSL and the other Memorandum of Understanding between the Company, KFSL and SNM. The said MOUs have not been revoked so far. Further, in month of June .2001, Global Trust Bank Ltd. has credited Companys account by Rs. 5.65 Crores. In terms of the said MOUs KFSL had agreed to allow the aforesaid amount due by Snowcem India Limited to the said bank to be adjusted against the security deposit of Rs.74.00 crores agreed to be paid by the bank to KFSL in consideration of the latter company agreeing to execute sub-lease of the land in favour of the bank. We are informed by the KFSL that they have filed a suit against the bank for specific performance and damages

The said bank has called upon the Company to pay to it the aforesaid amount of Rs.24.25 Crores after adjusting a credit of Rs.5.65 Crores towards the amount received by them for which the bank provided no details to the company. The said bank has also initiated proceedings against the Company in Debt Recovery Tribunal. The Company is contesting the proceedings and has been legally advised not to make any changes in the accounts till the final outcome of the proceedings is known. The said transfers were made in pursuance of the MOUs agreed to by the Board of the said bank and the Boards of respective companies. In terms of the said MOUs, the liability to the said bank has to be met by KFSL and the Company stands fully discharged of its liability. This stand of the Company finds support in the judgment of the Bombay High Court and Supreme Court in another similar matter. The Debts Recovery Tribunal has stayed proceedings against the Company as the Company is also registered with Board of Industrial and Financial Reconstruction (BIFR). The company also, maintains that under various MOUs as referred to above the amount was to be appropriated against Companys liabilities from the consideration of the land sold and purchased by them.

5. In respect of export debtors of Rs. 133.55 crores, after, relentlessly pursuing for the recovery of thereof, which did not yield any result, the Company had applied for the permission of the Reserve Bank of India to write off the same in the books of accounts, though fully provided for in the earlier years. The said permission has been given by the RBI to the Authorized Dealers with instructions to permit the Company to write off the Debt as referred above. However, till date the Company has received such approval from one of the Authorised dealers and remaining two are still awaited. Necessary adjustment will be made in the accounts in the subsequent year on receipt of the same from all the authorized dealers.

6. Sundry debtors of Rs. 10,55,50,627/- (Previous year Rs .28,45,37,611/-) due from M/s Killick Nixon Ltd. (erstwhile distributor of the Company), which are due for more than five years. KNL has informed the Company that these amounts include unsettled claims from their customers, which were not acknowledged by them. Consequently KNL was not able to recover substantial amounts from its customers. In addition to that, financial position of KNL has further deteriorated and declared Sick by BIFR. Accordingly, in the previous year ending on September 30, 2007, the Board had provided Rs. 10 Crores in the Accounts. However, the Board, after considering the present situation of the aforesaid Company, has decided to write off Rs. 2.50 crores in each quarter commencing from 1st October 2007. Accordingly, Rs. 15 crores has been.written off as Bad Debts in the Accounts,

7. Provision has not been made in the accounts:

a) For disputed income tax liability in respect of various Assessment orders aggregating to Rs. 25,18,43,153 (Previous Year Rs. 25,18,43,153). The appeals filed by the Company against relevant orders are pending before IT AT / CIT. Liability in respect of interest/penalty under Income Tax Act, 1961 will be accounted for as and when the orders are passed.- However the Department has withhold refunds amounting to Rs.90,58,443/- against the same.

b) For disputed Sales tax liability in respect of various Assessment Years aggregating to Rs. 95.46 Lacs relating to West Bengal Territory: The company has preferred appeals, which are pending before the competent authorities.

8. a) In view of the liquidity crunch, the Company could not pay the matured FDs of Rs. 13.23 crores and interest due up to maturity of Rs2.58 crores. Some of the FD holders had taken legal action and obtained orders from CLB regarding payment in "installments. The Company had made all attempts to comply with the orders. However, due to acute cash crunch, the Company could not fully comply with the orders of CLB as required under Section 58A (9) of the Companys Act, 1956. Accordingly, the CLB has directed the ROC of Maharashtra to take appropriate action in the matter, and the Company has submitted a scheme with Principal bench of CLB at Delhi, which is pending for its consideration. Total number of cases pending before the various authorities are 489 aggregating to Rs.38.40 Lacs.

b) During the period, some of the Fixed Deposit holders approached the Company expressing their willingness to accept partial payment in full andfinal settlement of their dues. The Company has settled such claims for gross amount of Rs. 122.43 lacs during the period under review, which has resulted in reduction of Companys liability to the extent of Rs.89.78 lacs towards principal and Rs 32.65 lacs towards interest, which were earlier provided to the accounts. The Company has been legally advised that after the settlement the Companys liability towards those deposit holders is fully extinguished and no claim thereafter is tenable and the same can be reversed in the books. Accordingly, Rs. 22.26 Lacs , being the writing back of interest has been credited to profit and loss account and Rs. 43.07 Lacs , being the reduction in liability of Unsecured loan has been credited to FD Settlement account grouped under the Reserves and Surplus.

9. Pursuant to the acceptance letter dated 10th March 2008, the Company has settled the loan of Greater Bombay Cooperative Bank Ltd., for aggregate liability of Rs. 402.52 lacs as against the aggregate liability of Rs. 253.30 lacs in the Books, on the condition that 25% of the settlement amount should be paid before March 31st 2008 and the balance 75% before March 31, 2009. The difference-of Rs. 188.21 lacs being the unprovided interest inclusive of earlier years has been charged to Profit & Loss Account. The Beard has ratified the same at the Board Meeting held on 30* April 2008. This loan has now been fully settled with the funds arranged by Killick Nixon Limited and accordingly necessary credits have been given in their accounts.

10. a) Expenses debited to various heads of the accounts amounting to Rs 54.38 Lacs for which requisite evidences/documents are not available on the records.The Board has approved the said expenses and confirmed that these have been incurred in the normal course of business and out of business expediency.

b) The Company has closed a Bank account during the period and amount received on such closure is short by Rs.5.37 lacs for which no details and requisite evidences are available. The same has been charged to Profit & Loss account and duly approved by the Board.

11. No provision has been made in accounts in respect of Impairment of Assets as the company has not obtained any report in the matter in this year.

12. Some of the Sundry debtors, creditors, loans and advances and unsecured loans are subject to confirmation and re-conciliation.

13. The Company has fulfilled all the conditions referred to in the clarification No. 3/5/84 CLX dated 5-Dec.l984 given by the Department of Company Affairs to the Institute of Chartered Accountants of India-with regard to treatment of subsidy received from the Government as "Free Reserve" as defined in the Rule 2(d) of the Companies (Acceptance of Deposits) Rules. In view of the said clarification, the amount of subsidy received by the Company is deemed to be part of Free Reserves.

14. The Company does not have any Managing Director as required under section 269 of the Companies Act, 1956 because the Company cannot pay remuneration as per the Schedule XIII of the Act. Hence, the Company is being managed by various Committees of the Directors for looking after day to day working. Total Directors Fees and Committees Fees paid during the period amounted to Rs: 25.60 lacs, In addition to the above, the Company has also reimbursed Non-Executive Chairman office expenses of Rs.8.93 lacs pursuant to the Board Resolution dated 20th Sept.2007 and other expenses of the directors amounting to Rs.9.01 Lacs. In the opinion of the Board, the aforesaid payments are legitimate and out of business expediency and does not amount to managerial remuneration.

15. Advance recoverable in cash or kind includes Rs. 9.99 lacs being the amount paid to MSEDL under protest towards their claim for RKVA Charges for non fulfillment of certain conditions. The Company has since complied with the conditions and expecting the refund shortly.

16. Job charges has been net off credit note of Rs. 1.09 crores being the rebate allowed due to downturn in the economy and the same has been duly approved by the Board.

17. Net worth of Snowcem Products Lanka Pvt. Limited is negative as per latest financials available with Company. Hence, value of the Investment in the said Company has diminished. However, no provision has been made in the accounts in view of losses.

18. Loan to an erstwhile subsidiary of the Company of Rs.1.52 crores could not be recovered even after rigorous follow up and the Company not being in operation. The provision for the same had already been made earlier and now the Board has decided to write off the same during the current period.

19. The Company has been declared a sick unit under section 3(1) (O) of the Sick Industrial Companies (Special Provision) Act 1985 (SICA) on July 5, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). An Operating Agency has been appointed to prepare viability study report and revival scheme. Draft Rehabilitation Scheme has been prepared and submitted to Operating Agency and BIFR for their approval.

20. As a prudent accounting policy, the Company has decided not to recognise Deferred Tax Assets on accumulated losses.

21. Pursuance to compliance of AS-18 on Related Party disclosures, the relevant information for the period ended March 31, 2008.

(1) Related party Disclosures

List of related Parties and relationships

Key Managerial Personnel Mr. T. B. Ruia Chairman

22. Previous period figures have been regrouped and/or rearranged wherever necessary . and are not comparable with the figures of current period as they are of for 18 months, commencing from October 01, 2007 to March 31, 2009.