| 1. Contingent Liabilities not provided for: 31.3.2006 31.3.2005
Rupees Rupees
(a) In respect of Dividend on Cumulative 63.82 Lacs 63.82 Lacs
Preference Shares (unto 31.12.1984)
(b) In respect of the claim by U.P. State
Electricity Board for payment of arrears
including penalty which is subjudice. 4.85 Lacs 4.85 Lacs
(c) In respect of Dividend on 10%
Cumulative Redeemable Preference 143.06 Lacs 1216.46 Lacs
Shares.
(d) The Company had received a Demand Notice No. MP (Demand
3.4.99)/19/2000 dtd. 27/11/2000 from the Commissioner of Central
Excise, Allahabad raising a demand of Rs.14.90 Crores being
differential excise duty on transfer of denatured Ethyl Alcohol from
Distillery Works (Captainganj) to Chemical Works (Barabanki) and
demand of equivalent amount as penalty had also been raised. The
Company had challenged these demands before the Customs, Excise & Gold
Control, Appellate Tribunal (CEGAT) for which stay has been granted
against the deposit of Rs.100 Lacs in its stay order no. 106/01 dated
15/6/2001. Subsequently CEGAT had heard the case on 20.2.2002 and set
aside the order passed by the Commissioner of Central Excise, Allahabad
and companys appeal was allowed. The company has moved an application
for refund of deposit of Rs.100 Lacs including the interest thereon.
Deposit amounting to Rs.100 Lacs has already been refunded and an order
under ref. No.99/100/2003/NB(A)/M/210&338/02A dtd.30.05.2003 has
already been issued for paying interest on the same. Payment of
interest has been stayed by the Honble Supreme Court of India vide
their order dated 27.1.2004. Department has moved a reference
application in the Supreme Court of India against CEGAT order dated
20.2.2002, which is being defended by the company, the case is pending
before the Honble Supreme Court of India.
2. Earning Per Share
As at As at
31st March, 2006 31st March, 2005
Net Profit / ( Loss) for the year before
extraordinary items (Rs.in Lacs) 3.59 (198.65)
Extra Ordinary Item 8.11 339.04
Net Profit / (Loss) for the year after
extraordinary items (Rs.in Lacs) 11.70 140.39
Total No. of Equity Shares 12,40,000 12,40,000
Earnings per share
(Before Extra-ordinary Items)
Basic & Diluted (in Rs.) 0.29 (16.02)
Earnings per share
(After Extra-ordinary Items)
Basic & Diluted (in Rs.) 0.94 11.32
3. The redemption of Preference Shares became due on 13.1.1984. The
Equity Shareholders in the Annual General Meeting held on 29th Sep,
1986 have approved the proposed scheme to issue non-convertible secured
debentures carrying 15% interest in lieu of the Preference Shares
Capital of Rs.55.99 Lacs and the accumulated cumulative dividend (after
deduction of tax) for the period from 1.1.1973 to 31.12.1984 amounting
to Rs.55.24 Lacs and interest on Rs.l 11.23 Lacs (Rs.55.99 Lacs and
Rs.55.24 Lacs) at the rate of 15% from 1.1.1985 till the date of issue
of the debentures subject to the interest upto 30th Sep, 1992 (the
cut-off date as proposed after discussion by major preference
shareholder-Financial Institution/Corporation at the Seniors Executive
Meeting held on 6th Nov, 1992) amounting to Rs.73.87 Lacs (Rs.73.87
Lacs) has not been provided in the Accounts and the same has not been
considered in calculating the arrears of cumulative dividend which is
shown as a contingent liability. The petition was last heard on 10th
September 1993 before the Lucknow Bench of Allahabad High Court and the
Direction/Order is still awaited. Pending completion of the
formalities, a payment on account aggregating to Rs. 129.06 Lacs of the
principal amount payable under the proposed scheme has been made to
preference shareholders and the same has been included in advances
recoverable in cash or kind or for value to be received under Loans and
Advances
4. The U.P. Government had issued a notification on 21.05 1979 levying
License fee w.e.f. 1.6.1979 at 10 Paise per Ltr. on the transfer of
alcohol from its Captainganj Distillery to Barabanki Chemical Plant.
The Company had filed a stay application and a writ petition in the
Allahabad High Court on 12.05.1981 against the said levy. The stay was
granted and as directed by the Lucknow Bench of Allahabad High Court,
the Company had furnished a Bank Guarantee of Rs.13 Lacs and created a
Second Floating Charge on its Current Assets at Barabanki towards
balance amount of License Fee payable by the Company till the writ
petition is expedited. Against the disputed subjudice liability of
Rs.225.63 lacs till FY 1993-94 as estimated by the management, for
which the stay is effective, a sum of R.s.78.12 lacs had been provided
in the books. As per the judgment pronounced by the Honble High Court
on 17.02.2004 in Licence Fee matter, our Writ Petition has been allowed
and the Court quashed the State Governments order dated 10.04.1981 for
levy of Licence Fee on transfer of Special Denatured Spirit since it
was beyond the competence of the State Government. The Court also
ordered that the amount deposited by the petitioner Company i.e.
Somaiya Organics (India) Ltd., in respect of enhanced Licence Fee, i.e.
enhanced from 10 Paise per BL to 15 Paise per BL shall be refunded to
the Petitioner Company with interest @ 9% per annum w.e.f. 25.10.1989.
The Court also ordered that the Security Bonds, if any, already
furnished, the same shall stand discharged. The Registrar of High
Court, therefore, issued certificate dated 02.08.2004 that Bank
Guarantee No. 153/81 dated 19.06.1981 for Rs. 13.0 Lacs stands
discharged.
The State Government has filed Special Leave Petition in the Honble
Supreme Court of India against the judgement pronounced by the
Allahabad High Court, Lucknow Bench on 17.02.2004, wherein it was
stated that the amount deposited by the Petitioner in respect of
enhanced Licence Fee should be refunded to the petitioner alongwith
interest @ 9% per annum with effect from 25th October 1989. As per the
Companys working a sum of Rs.368.87 Lacs, being the amount of Licence
Fee deposited by the Company, is refundable by the State Government.
The case (SLP) was heard by the Honble Supreme Court of India on
16.08.2005 and 3 weeks time is granted to file counter. As per the
order "In the meantime there will be an ad interim / stay of impugned
order. The case has not yet come for hearing subsequent to the last
hearing on 16-08-2005.
It was further ordered to Tag with SLP(C) No. 16505 of 2004. This is an
another SLP pending before the Supreme Court of India in the same
matter filed by the State Government against the Honble Allahabad High
Courts order wherein also refund of Licence Fee deposited by other
Chemicals Units had been pronounced.
The Company has therefore treated Rs.368.87 Lacs as extia ordinary
income in the financial year ended 31st March 2005 as realisable amount
of Licence Fee deposited by the Company.
6. The U.P. Government has imposed Purchase Tax Levy @ 40 Paise per
Bulk Liter vide its order dated 09.10.1979 against which the Company
has filed the writ petition in the Allahabad High Court. Till the
pendency of the writ petition the stay was granted. Though the stay was
granted to the Company, under the pressure from the state government,
Company started making payment towards Purchase Tax w.e.f. 01.04.1994.
On the basis of the decision dated 08.05.1997 of Allahabad High Court
in the case of Vam Organics Chemicals Ltd. exempting the transfer of
Alcohol from the distillery to chemical factory owned by the same
Company from the levy of purchase tax, the Company had applied on
19.03.1998 to U.P. Government for the refund of Purchase Tax deposited
by the Company, State Government vide order No.4709/Tow- 805E/TAX/1998
dated 11.10.1999 exempted the Company also from the levy of Purchase
Tax
on transfer of Alcohol (.SDS) from Captive Distillery unit at
Captainganj to Chemical Plant at Barabanki this being not leviable on
such transfer as both the units are owned by one
Company. Accordingly, Purchase Tax deposited from 01.04.1994 to
10.10.1999 amounting to Rs.433.56 Lacs is recoverable from U.P.
Government.
The Honble Allahabad High Court, Lucknow Bench, has passed order on 01
12.2004 on our Writ Petition No.2046 (MB) of 1992 in the matter of
Purchase Tax quashing the Excise Commissioners order dated 07.05.1992
wherein the Excise Commissioner had mentioned that Purchase Tax is
leviable on the company. Further the Honble Court has mentioned in the
order that the relief for refund of amount so deposited since 1979 is
refused.
Against above order the company has moved a Special Leave Petition
before the Honble Supreme Court of India and who granted Leave vide
its order dated 4lh April 2005. The Company therefore has fairly good
chance in getting success in the matter of refund of Purchase Tax
deposited during the period 01.04.1994 to 10.10.1999 aggregating
Rs.433.56 Lacs.
5. There were no amounts due to Small scale and/or ancillary
industrial suppliers on account of principal and/or interest as at the
close of the year exceeding Rs. 1,00,000/- for more than 30 days.
Disclosure is based on the information available with the Company.
6. Companys deferred tax asset (net) arising on account of brought
forward losses and unabsorbed depreciation under tax laws are not
recognised as there is no reasonable certainty that, sufficient taxable
income will be available in future against which such deferred tax
assets can be realised. The deferred tax liability arising on account
of timing difference due to depreciation for the year as per books and
under income tax is unascertained. Besides that there is no other
deferred assets or liability.
7. No provision for taxation has been made since the Book Profit as
computed u/s. 115 JB of the Income Tax Act, 1961 is NIL.
8. Loans & Advances in schedule 11 of the financial statements
consists of Rs. 267.07 lacs (Rs. 269.20) in respect of income tax
deposited for earlier years. Pending appeal before the appellate
authorities, appeal effects of appeals decided by the appellate
authorities and reconciliation of these accd3nts, no provision/
adjustment towards the same has been made in the Books of Accounts. (Rs
267.07 lacs include Rs. 14.92 lacs as Tax Deducted at Source).
9. Sales Tax Assessment for the year 2004-2005 is pending before
Deputy Commissioner (Assessment), Trade Tax, Barabanki. Sales Tax
Assessment has been made Ex-parte for the assessment year 2002-03. An
application u/s 30 of U.P. Trade Tax Act has been filed for reopening
of the case and the same is accepted and reopened by the Dy.
Commissioner of Trade Tax, Barabanki. Second appeal for the assessment
year 1992-93(Central), 1993-94 (UPTT) and 1994-95 (UPTT) are pending
before the appellate tribunal. Trade Tax Assessment under section 30 of
Trade Tax Act for the year 1990-91 is pending before DC(Assessment),
Barabanki. The disputed tax liability are Rs. 11.57 lacs for assessment
year 1990-91, Rs. 1.26 lacs for the assessment year 1992-93, Rs. 9.03
lacs for 1993-94 and Rs. 15.66 lacs for assessment year 1994-95
respectively. Therefore, no provision has been made for these demands.
10. Other Miscellaneous Income in Schedule 15 of the financial
statements includes balance written back (net) of Rs. 115.56 lacs. The
said amount consists of debit balance of Rs. 0.09 lacs written off and
credit balances of Rs.l 15.48 lacs written back by the company since
the said amounts are, in the opinion of the management, no longer
recoverable/ payable by the company. It also includes Rs. 193.00 lacs
being the amount received from customers on account of non fulfillment
of contracted obligations.
11. The management is of opinion that the value in use of its assets
exceeds the assets carrying amount. As such the assets of the company
are not impaired in terms of the accounting standard 28 issued by the
Institute of Chartered Accountants of India.
12. No provision of interest has been made in the financial year
2005-2006 on inter-corporate loan taken from J R Agro Industries Ltd.
since the may not be payable to J.R. Agro Industries Ltd. being the
holding company.
13. The company has availed the Bills Discounting facilities to meet
its short term requirement of funds.
14. Sundry Debtors and advances include Rs.334.35 lacs and Rs 179.25
lacs respectively, which are overdue for recovery / adjustments.
Pending outcome of the steps taken in this respect, the amounts
outstanding have been considered as good and recoverable.
15. Balances of Sundry Debtors, Creditors, Loans & Advances, Unsecured
Loans including interest thereon and Balances with Punjab National
Bank, Ankaleshwar, Punjab National Bank, Kanpur, State Bank of India,
New Delhi & State Bank of India, Maharajganj and balance with Post
Office Savings a/c are subject to confirmation and necessary
adjustment, if any
16. Depreciation for the year is net of depreciation written back
amounting to Rs. 12.53 lacs, which was wrongly charged in excess of 95%
of value of assets during the previous years.
17. FOB value of Export Sales- (Rs. in Lacs) 77.54 (68.39)
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