Notes to Accounts of Citurgia Biochemicals Ltd.

Mar 31, 2014

1. GENERAL

The Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the company.

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Mar 31, 2013

Contingent liabilities and commitments |to the extent not As at 31 March 2013 As at 31st March 2012

provided for)

(i) Contingent liabilities

{a) Claims against the company not acknowledged as debt

(b) Guarantees

(c) Other money for which the company is contingently liable

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on. capital account and not provided for

(b) Uncalled liability on shares and other investments partly paid

(c) Other commitments (specify nature)

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Mar 31, 2012

Not Available

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Mar 31, 2011

1 The Company being a Sick Industrial Company since 2003. Under the provisions of Sick industries Companies Act, 1985, the Board for Industrial and Financial Reconstruction has passed Scheme for rehabilitation of the Company on January 12, 2007.

(a) Althrough company coult substantially comply with the provisions of sanctioned rehabilitation scheme by Hon''ble BIFR as amended from time to time and the net worth of the company became positive last year. However on a public interest litigation. Hon''ble High Court of Uttarakhand asked the BIFR to amend the sanctioned scheme to the extent of change of land use for redevelopment and company was allowed to carry on the activity at Rishikesh land for the purpose for which it was originally allotted to company i.e. for manufacturing of calcium carbonate. BIFR also amended the sanctioned scheme as per High Court Order. However State Government of Uttarakhand cancelled the order of change of land use and also ceased the complete premises including factory at Rishikesh. Company has moved an appeal before the Hon''ble Supreme Court of India whihc is under hearining next date of hearing is on 13th September. Company is hopeful of getting justice from Apex Court.

(b) All the secured lenders including IIBI, Oriental Bank of commerce/ARCIL and Union Bank of India, operating agency have been paid in full and there are no outstanding of any of the secured lenders on the company as at 31/03/2011.

(c) All the workers and staff have been paid full compensation and their dues as per the agreement entered into with workers union and as directed by Honble BIFR.

(d) Substantial renovation of the plant has been done at the calcium carbonate factory of the company at Rishikesh.

(f) Land use was changed by the Government of Uttarakhand as per the sanctioned scheme and company got the approval of building. Drawings from the Haridwar Development Authority for constructions of housing projects at surplus land. Construction work has also started at site. But after abovesaid order of Hon''ble High Court. Haridwar Development Authority has cancelled its permission on technical grounds and Land use change by Government of Uttarakhand.

As the New Worth of company has become positive and directors believe that company shall be able to get justice from the Hon''ble supreme Court, the Company has prepared the accounts on a going concern basis.

2. The ESIC dues of workmen at the Calcium Carbonate division, Rishikesh had not been deducted/ deposited by the Company due to the stay order from the Honble High Court, at Allahabad. Despite this order, Employees State Insurance Corporation (ESIC), Dehradun served various recovery notices to the Company covering the period from February 1994 to September 2003. The Company has paid off the Employers contribution for the period from May 1998 to March 2003 with interest due under protest as legally advised, without acceptance of the said liability. Dues as demanded prior to May 1998, being barred by limitation, has not been paid by the Company nor provided in the books of account. The Company has already submitted its objections to the concerned authorities for a sum aggregating to about Rs.97 lacs.

3. Manufacturing operations continued to be temporarily suspended since March, 2003 and the whole premises are under the lock and seal of State Government of Uttarakhand.

4. In anticipation of getting relief from Apex Court, inventory of real estate division has been shown at cost and no provision for loss has been made on this account.

2010-11 2009-10 Rupees Rupees In''000 In''000

5. Contingent Liabilities not provided for in respect of:

(a) Disputed Income-tax matters 6,181 6,181

This relates to penalty levied by Income Tax Department u/s 271(1)(c ) for 8 years. The company has filed appeal with Income Tax Appellate Tribunal.

(b) Disputed Sales-tax and Excise matters 1,700 Nil

The Company has already taken into accounts the Sales Tax Liability, but interest on this liability is still in dispute and company has requested for waiver of it. The amount is still not quantifiable. The Company is hopeful to obtain favourable appellate orders.

(c) Disputed ESIC matters 9,672 9,672 Recovery notices received from ESIC, Dehradun for non-payment of Employees-Employers contribution for past years, which is under dispute and not paid. Net of Rs.74 lacs paid under protest.

6. Sundry Creditors includes Rs.11.38 lacs (previous year Rs.22.75 lacs) due to Small Scale Industries of which, amounts outstanding for a period over one month as per terms of contract are to Shriram Carbon Sales Pvt. Ltd.,Shree Jagadamba Lime Chemicals and Unique Carbon & Chemicals. The above information has been compiled in respect of parties to the extent to which they could be identified as small scale and ancillary undertakings on the basis of information available with the company.

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Apr 20, 2010

1 The Company being a Sick Industrial Company since 2003. Under the provisions of Sick industries Companies Act, 1985, the Board for Industrial and Financial Reconstruction has passed Scheme for rehabilitation of the Company on January 12, 2007.

(a) During the last financial year, company could substantially comply with the provisions of sanctioned rehabilitation scheme by Honble BIFR as amended from time to time and your directors are pleased to inform the members that despite huge carried forward losses, the net worth of the company became positive as at 31/3/2010.

(b) Pursuant to sanctioned scheme the co-promoters brought in equity capital of Rs 625 lacs earlier and additional equity capital (to be allotted) of Rs. 2000 lacs (including unsecured loans of Rs 77 lacs to be converted into equity) into the company. Apart from it Rs. 250 lacs 10% of Rs. 2500 lacs have been brought in towards share warrant convertible into equity capital balance 90% amount is to be brought in within 18 months.

(c) All the secured lenders including IIBI, Oriental Bank of commerce/ARCIL and Union Bank of India, operating agency have been paid in full and there are no outstanding of any of the secured lenders on the company as at 31/03/2010.

(d) All the workers and staff have been paid full compensation and their dues as per the agreement entered into with workers union and as directed by Honble BIFR.

(e) Complete renovation of the plant has been done at the calcium carbonate factory of the company at Rishikesh.

(f) Land use was changed by the Government of Uttarakhand as per the sanctioned scheme and company has already got the approval of building Drawings from the Haridwar Development Authority for constructions of housing projects at surplus land. Construction work has also started at site.

(g) As substantial Compliance of the sanctioned rehabilitation scheme has already been done by the company and its networth turning positive the company is filing petition with Honble BIFR to discharge it from the provisions of Sick Industries Companies Act, 1985

In consequence of the above rehabilitation Scheme and Net worth being positive, the Company has prepared the accounts on a going concern basis.

2 The ESIC dues of workmen at the Calcium Carbonate division, Rishikesh had not been deducted/ deposited by the Company due to the stay order from the Honble High Court, at Allahabad. Despite this order, Employees State Insurance Corporation (ESIC), Dehradun served various recovery notices to the Company covering the period from February 1994 to September 2003. The Company has paid off the Employers contribution for the period from May 1998 to March 2003 with interest due under protest as legally advised, without acceptance of the said liability. Dues as demanded prior to May 1998, being barred by limitation, has not been paid by the Company nor provided in the books of account. The Company has already submitted its objections to the concerned authorities for a sum aggregating to about Rs.97 lacs.

3 Manufacturing operations continued to be temporarily suspended since March, 2003 and the lock-out declared at Rishikesh Plant effective from 29th September, 2003 continues to subsist till date. The renovation of the plant is already completed. However plant for manufacturing of calcium carbonate is yet to start for the want of working capital which will be raised by developing/selling the surplus land and approval from state pollution board which is stHI awaited.

Rupees Rupees

In000 In000

4. Contingent Liabilities not provided for in respect of:

(a) Disputed Income-tax matters 6,181 3,543 This relates to penalty levied by Income Tax Department u/s

271(1)(c ) for 8 years. The company has filed appeal with Income Tax Appellate Tribunal.

(b) Disputed Sales-tax and Excise matters Nil 2,655 The Company has already taken into accounts the Sales Tax

Liability, but interest on this liability is still in dispute and company has requested for waiver of it. The amount is still not quantifiable. The Company is hopeful to obtain favourable appellate orders.

(c) Disputed ESIC matters 9,672 8,672 Recovery notices received from ESIC, Dehradun for non-payment of Employees-Employers contribution for past years, which is under dispute and not paid. Net of Rs.74 lacs paid under protest.

5. Sundry Creditors includes Rs.11.38 lacs (previous year Rs.22.75 lacs) due to Small Scale Industries of which, amounts outstanding for a period over one month as per terms of contract are to Shriram Carbon Sales Pvt. Ltd.,Shree Jagadamba Lime Chemicals and Unique Carbon & Chemicals. The above information has been compiled in respect of parties to the extent to which they could be identified as small scale and ancillary undertakings on the basis of information available with the company.