Notes to Accounts of Vegepro Foods and Feeds Ltd.

Mar 31, 2014

Note 1 Contingent Liabilities represent

a. Arrears of fixed cumulative dividend and tax thereon Rs.1254.63 lacs (Previous year Rs. 1180.92 lacs) on 14% Cumulative Convertible Preference Shares the amount of dividend are in arrear since the Accounting period 1995-97, the period of allotment of Preference Shares.

b. Liability which may arise due to appeals pending with Income Tax Authorities - amount unascertainable.

Note 2 The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned Ministry and Departments. The Company was also referred to the Board for Industrial and Financial Reconstruction, New Delhi (B.I.F.R.) under Section 15(1) of the Sick Industrial Companies (Special provisions) Act, 1985(SICA) vide Company''s letter dated 4th September 2000 for its revival and pending finalization, the Accounts of the Company have been prepared on a going concern basis. B.I.F.R. vide its order dated 19th August 2010 has recommended for winding up of the Company through the Hon''ble Allahabad High Court. However, the Company has already filed an appeal on 12.10.2010 before the Appellate Authority for Industrial and Financial Reconstruction (A.A.I.F.R.) against the said Impugned Order dated 19.08.2010 of the B.I.F.R. Pending outcome of the Appellate proceedings, which the Company expects to be on its favour, the Accounts of the Company for the Financial Year ended 31st March 2014 have been prepared on the basis that the Company is a going concern.

Note 3 Income Tax assessment has been completed up to the Assessment Year 2013-2014 and no demand is outstanding for payment. Appeals filed by the Company in respect of several Assessment Years are still pending. No provision has been made for tax liability, if any, that may arise on disposal of such appeals as the amount is not ascertainable.

Note 4 In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2014 but the same has not been recognized in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31st March, 2014.

Note 5 There is no separate reportable segment as per Accounting Standard - 17

Note 6 As per Accounting Standard 15 "Employee Benefits" the disclosure of Employee benefits as defined in the Accounting Standard are given below:

a) Defined Contribution Plan : 2013-14 2012-13

Employer''s Contribution of PF Fund 8 8

b) Defined Benefit Plan:

i) Leave encashment : The Company has not provided leave encashment as all the employees have availed off their leaves during the year and there was no dues in this account at the end of year.

ii) Gratuity : During the year the company has made a provision of Rs. NIL (Nil in previous year) for gratuity as per the provisions of the Payment of Gratuity Act i.e. half month''s salary for every completed year of service. Since there are only few employees in the company, the management does not see any need for actuarial valuation of the defined benefit plan.

Note 7 Previous year figures have been regrouped/recast wherever necessary to confirm to this year''s presentation

Note 8 Details of licensed capacity, installed capacity and actual production.

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Mar 31, 2013

Note 1.1 Contingent Liabilities represent

a. Arrears of fixed cumulative dividend and tax thereon Rs.1180.92 lacs (Previous year Rs. 1107.21 lacs) on 14% Cumulative Convertible Preference Shares the amount of dividend are in arrear since the Accounting period 1995-97, the period of allotment of Preference Shares.

b. Liability which may arise due to appeals pending with Income Tax Authorities - amount unascertainable.

Note 1.2 The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned Ministry and Departments. The Company was also referred to the Board for Industrial and Financial Reconstruction, New Delhi (B.I.F.R.) under Section 15(1) of the Sick Industrial Companies (Special provisions) Act, 1985(SICA) vide Company''s letter dated 4th September 2000 for its revival and pending finalization, the Accounts of the Company have been prepared on a going concern basis. B.I.F.R. vide its order dated 19th August 2010 has recommended for winding up of the Company through the Hon''ble Allahabad High Court. However, the Company has already filed an appeal on 12.10.2010 before the Appellate Authority for Industrial and Financial Reconstruction (A.A.I.F.R.) against the said Impugned Order dated 19.08.2010 of the B.I.F.R. Pending outcome of the Appellate proceedings, which the Company expects to be on its favour, the Accounts of the Company for the Financial Year ended 31st March''2013 have been prepared on the basis that the Company is a going concern.

Note 1.3 Income Tax assessment has been completed up to the Assessment Year 2011-2012 and no demand is outstanding for payment. Appeals filed by the Company in respect of several Assessment Years are still pending. No provision has been made for tax liability, if any, that may arise on disposal of such appeals as the amount is not ascertainable.

Note 1.4 In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2012 but the same has not been recognized in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31st March, 2013.

Note 1.5 Previous year figures have been regrouped/recast wherever necessary to confirm to this year''s presentation

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Mar 31, 2012

Disclosure pursuant to Note no. 6(A)(f) of Part I of Schedule VI to the Companies Act, 1956

NIL Equity Shares (Previous year) are held by NIL the holding company.

Above disclosure is required for each class of Shares held by its holding company or its ultimate holding company .

Additional Information:

As per the agreement dated 24.09.97 entered by the Company with ICICI (operating agency) it was agreed to redeem the entire amount of Non Convertible Debentures (NCD's) of Rs. 521.17 lacs up to 15.03.1998. Company redeemed the entire amount of NCD's within stipulated time except in case of NCD's of Rs. 35.65 lacs to UTI. The UTI expressed their disagreement on the aforesaid amount as their account was unreconciled at the time of conversion of term loan into NCD's in the year 1995-97 accounts. Further as the reconciliation with UTI is still pending, Company has not made any provision for liabilities that may arise on reconciliation of the account with UTI and the amount of interest on NCD's since 15.03.1998.

Additional Information:

(a) The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of information and on account of closure of the factory since 2000, disclosure relating to amounts unpaid at the year-end together with interest payable thereon as required under the said Act, has not been made

(b) Balances of Trade Payables are subject to Confirmation.

Additional Information:

[Other liabilities includes Provision for Gratuity Rs. 1.25 lacs (Previous year Rs. 1.25 lacs) Investor Education and Protection Fund on account of unpaid Share Application Money Rs. 2.25 lacs (Previous year Rs. 2.25 lacs) and T.D.S deducted but not deposited Rs. 1.07 lacs (Previous year Rs. 0.54 lacs)]

The Company's production facilities were installed and it began commercial production in phases and the primary operating unit, namely the Solvent Extraction Plant, started operating with effect from 1st April, 1989. Due to acute shortage of raw materials since commencement of commercial production, the various production units of the Plant could not be made fully operational. Upon such insignificant use of the Plant, the Board considered it appropriate to capitalize, interest on Term Loans availed of for the purpose of acquisition/installation of relevant fixed assets and expensed in the accounts after commencement of commercial production aggregating Nil for the current year and Rs. 974.12 up to 31st March, 2011.Palnt & Machinery has been fully depriciated during the year and carrys nil value in the Books of Accounts.

Additional Information:

Year-end Loans and Advances considered good include an aggregate amount of Rs. 36.33 lacs (Previous Year Rs. 54.01 lacs) in respect of which appropriate steps have been taken by the Company for recovery. Pending outcome of the Company's actions, the amount which may not be ultimately realisable is not ascertainable at this stage and hence, no provisions have been made therefore.

Additional Information:

The rent from the premises are directly deposited to Allahabad court by the tenant as per court's order,hence not accounted for in the books from August, 2011.

During the year Trade Payables amounting to Rs. 65.58 lacs (previous year Rs. NIL)has been written back as other income treated as not payable by the Company, however balance confirmation has not been recived from the parties, hence cannot be verified.

Note: 1.1 Contingent Liabilities represent

a. Claims against the Company not acknowledged as debts in respect of court cases - amount unascertainable.

b. Arrears of fixed cumulative dividend and tax thereon Rs.1033.50 lacs (Previous year Rs. 959.79 lacs) on 14% Cumulative Convertible Preference Shares the amount of dividend are in arrear since the Accounting period 1995-97, the period of allotment of Preference Shares.

c. Liability which may arise due to appeals pending with Income Tax and Trade Tax Authorities - amount unascertainable.

Note: 1.2 The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned Ministry and Departments. The Company was also referred to the Board for Industrial and Financial Reconstruction, New Delhi (B.I.F.R.) under Section 15(1) of the Sick Industrial Companies (Special provisions) Act, 1985(SICA) vide Company's letter dated 4th September 2000 for its revival and pending finalization, the Accounts of the Company have been prepared on a going concern basis. B.I.F.R. vide its order dated 19th August 2010 has recommended for winding up of the Company through the Hon'ble Allahabad High Court. However, the Company has already filed an appeal on 12.10.2010 before the Appellate Authority for Industrial and Financial Reconstruction (A.A.I.F.R.) against the said Impugned Order dated 19.08.2010 of the B.I.F.R. Pending outcome of the Appellate proceedings, which the Company expects to be on its favour, the Accounts of the Company for the Financial Year ended 31st March'2012 have been prepared on the basis that the Company is a going concern.

Note: 1.3 Income Tax assessment has been completed up to the Assessment Year 2011-2012 and no demand is outstanding for payment.

Appeals filed by the Company in respect of several Assessment Years are still pending. No provision has been made for tax liability, if any, that may arise on disposal of such appeals as the amount is not ascertainable.No provision has been made for appeals pending before Trade Tax Authorities as the amount is not ascertainable.

Note: 1.4 In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2012 but the same has not been recognized in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31stMarch,2012.

Note: 1.5 There is no separate reportable segment as per Accounting Standard-17.

Note: 1.6 Impairment losses, if any, as per Accounting Standard (AS) 28 issued by the Institute of Chartered Accountants of India could not be computed as the Company has closed its factory with effect from 11.10.2000.

Potential equity shares are anti-dilutive as their conversion to equity shares would either increase profit per share or decrease loss per share from continuing ordinary activities. The effects of anti-dilutive potential equity have been ignored in calculating diluted earnings per share. Consequently, the basic and diluted earning per share of the company remain the same.

b) Defined Benefit Plan:

i) Leave encashment: The Company has not provided leave encashment as all the employees have availed off their leaves during the year and there was no dues in this account at the end of year.

ii) Gratuity: During the year the company has made a provision of Rs. NIL lacs (0.07 lacs in- previous year) for gratuity as per the provisions of the Payment of Gratuity Act i.e. half month's salary for every completed year of service. Since there are only few employees in the company, the management does not see any need for actuarial valuation of the defined benefit plan.

Note: 1.7 Previous year figures have been regrouped/recast wherever necessary to confirm to this year's presentation

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Mar 31, 2011

1. Contingent Liabilities represent

a. Claims against the Company not acknowledged as debts in respect of court cases - amount unascertainable.

b. Arrears of fixed cumulative dividend and tax thereon Rs.1033.50 lacs (Previous year Rs. 959.79 lacs) on 14% Cumulative Convertible Preference Shares --- the amount of dividend are in arrear since the Accounting Period 1995-1997 the period of allotment of Preference Shares.

c. Liability which may arise due to appeals pending with Income Tax and Trade Tax Authorities - amount unascertainable.

2. The Company's production facilities were installed and it began commercial production in phases and the primary operating unit, namely the Solvent Extraction Plant, started operating with effect from 1st April, 1989. Due to acute shortage of raw materials since commencement of commercial production, the various production units of the Plant could not be made fully operational. Upon such insignificant use of the Plant, the Board considered it appropriate to capitalize, interest on Term Loans availed of for the purpose of acquisition/installation of relevant Fixed Assets and expensed in the accounts after commencement of commercial production aggregating Nil for the current year and Rs. 974.12 up to 31st March, 2011.

As a result, Year-end Fixed Assets (Net Block) are higher by Rs. 180.64 lacs with a corresponding favorable effect on the net worth of the Company. The current year's Loss is higher by Rs. 43.42 lacs arising out of depreciation charged during the year on the total Term Loans interest capitalized.

3. Year-end Loans and Advances considered good include an aggregate amount of Rs. 54.01 lacs (Previous Year Rs. 81.56 lacs) in respect of which appropriate steps have been taken by the Company for recovery. Pending outcome of the Company's actions, the amount which may not be ultimately realisable is not ascertainable at this stage and hence, no provisions have been made therefore.

4. The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned Ministry and departments. The Company was also referred to the Board for Industrial and Financial Reconstruction, New Delhi (B.I.F.R.) under Section 15(1) of the Sick Industrial Companies (Special provisions) Act, 1985(SICA) vide Company's letter dated 4th September 2000 for its revival and pending finalization, the Accounts of the Company have been prepared on a going concern basis. B.I.F.R. vide its order dated 19th August 2010 has recommended for winding up of the Company through the Hon'ble Allahabad High Court. However, the Company has already filed an appeal on12th October, 2010 before the Appellate Authority for Industrial and Financial Reconstruction (A.A.I.F.R.) on against the said Impugned Order dated 19.08.2010 of the B.I.F.R. Pending outcome of the Appellate proceedings, which the Company expects to be on its favour, the Accounts of the Company for the Financial Year ended 31st March, 2011 have been prepared on the basis that the Company is a going concern.

5. As per the agreement dated 24.09.97 entered by the Company with ICICI (operating agency) it was agreed to redeem the entire amount of Non Convertible Debentures (NCD's) of Rs. 521.17 lacs up to 15.03.1998. Company redeemed the entire amount of NCD's within stipulated time except in case of NCD's of Rs. 35.65 lacs to UTI. The UTI expressed their disagreement on the aforesaid amount as their account was unreconciled at the time of conversion of term loan into NCD's in the year 1995-97 accounts. Further as the reconciliation with UTI is still pending, Company has not made any provision for liabilities that may arise on reconciliation of the account with UTI and the amount of interest on NCD's since 15.03.1998.

6. Balances of Sundry Creditors and Loans and Advances are subject to confirmation.

7. Due to closure of the factory since 11.10.2000, the Company could not undertake proper care for the maintenance / upkeepment of the entire Raw materials, Packing materials, Stores and Spare Parts resulting in severe damage / value erosion and consequently these are no more useable / realizable. Hence the Management has decided to write off the entire Inventories consisting of various items of Stores and Spare Parts of Rs.43.84 lacs and Raw materials and Packing materials of Rs.24.20 lacs in the year 2010-11.

8. Income Tax assessment has been completed up to the Assessment Year 2008-2009 and no demand is outstanding for payment. Appeals filed by the Company in respect of several Assessment Years are still pending. No provision has been made for tax liability, if any, that may arise on disposal of such appeals as the amount is not ascertainable.

9. No provision has been made for appeals pending before Trade Tax Authorities as the amount is not ascertainable.

10. The Instruments of Investments (NSC) and Fixed Deposit receipts are no more traceable and the same are also not realizable, now the Board has decided to write it off in the current year 2010- 11. The claim/liability against these pledged instruments are also non-existent. Consequent to that, Other Current Assets consisted of Accrued Interest accumulated up to the previous year are also not realizable and hence written off in the year 2010-11.

11. In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2011 but the same has not been recognized in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31st March, 2011.

12. There is no separate reportable segment as per Accounting Standard-17.

13. The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of information and on account of closure of the factory since 2000, disclosure relating to amounts unpaid at the year-end together with interest payable thereon as required under the said Act, has not been made.

14. Impairment losses, if any, as per Accounting Standard (AS) 28 issued by the Institute of Chartered Accountants of India could not be computed as the Company has closed its factory with effect from 11.10.2000.

15. As per Accounting Standard 15 "Employee Benefits" the disclosure of Employee benefits as defined in the Accounting Standard are given below:

b) Defined Benefit Plan :

i) Leave encashment: The Company has not provided leave encashment as all the employees have availed off their leaves during the year and there was no dues in this account at the end of year.

ii) Gratuity: During the year the company has made a provision of Rs. 0.07 lacs (0.08 lacs in- previous year) for gratuity as per the provisions of the Payment of Gratuity Act i.e. half month's salary for every completed year of service. Since there are only few employees in the company, the management does not see any need for actuarial valuation of the defined benefit plan.

16. Previous year figures have been regrouped/ recast wherever necessary to confirm to this year's presentation.

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Mar 31, 2010

1. Contingent Liabilities represent

a. Claims against the Company not acknowledged as debts in respect of court cases - amount unascertainable.

b. Arrears of fixed cumulative dividend and tax thereon Rs.959.79 lacs (Previous year Rs. 886.08 lacs) on 14% Cumulative Convertible Preference Shares, amount of dividend is arrear since financial year 1996-97, the date of allotment of Preference Shares.

c. Liability which may arise due to appeals pending with Income Tax and Trade Tax department and with CEGAT (for Excise duty) -amount unascertainable.

2. The Companys production facilities were installed and it began commercial production in phases and the primary operating unit, namely the Solvent Extraction Plant, started operating with effect from 1st April, 1989. Due to acute shortage of raw materials since commencement of commercial production, the various production units of the Plant could not be made fully operational. Upon such insignificant use of the Plant, the Board considered it appropriate to capitalise, interest on Term Loans availed of for the purpose of acquisition/installation of relevant fixed assets and expensed in the accounts after commencement of commercial production aggregating Nil for the current year and Rs. 974.12 upto 31st March, 2010.

As a result, Year-end Fixed Assets (Net Block) are higher by Rs. 224.06 lacs with a corresponding favorable effect on the net worth of the Company. The current years Loss is higher by Rs. 43.72 lacs arising out of depreciation charged during the year on the total Term Loans interest capitalised.

3. Year- end Sundry Debtors, Loan, Advances and Deposits considered good include an aggregate amount of Rs. 81.56 lacs (Previous Year Rs. 30.27 lacs) in respect ot which appropriate steps have been taken by the Company for recovery. Pending outcome of the Companys actions, the amount which may not be ultimately realisable is not ascertainable at this stage and hence, no provisions have been made therefore.

4. The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned ministry and departments. The account for the year have been prepared on the basis that the Company is a going concern.

5. As per the agreement dated 24.09.97 entered by the Company with ICICI (operating agency) it was agreed to redeem the entire amount of Non Convertible Debentures (NCDs) of Rs. 521.17 lacs up to 15.03.1998. Company redeemed the entire amount of NCDs within stipulated time except in case of NCDs of Rs. 35.65 lacs to UTI. The UTI expressed their dis- agreement on the aforesaid amount as their account was unreconciled at the time of conversion of term loan into NCDs. Further as the reconciliation with UTI is still pending, Company has not made any provision for liabilities that may arise on reconciliation of the account with UTI and the amount of interest on NCDs since 15.03.1998.

6. The Company had paid Excise Duty demand of Rs. 3.30 lacs imposed by Excise Authorities relating to the period July, 1988 to June, 1989 for in-house fabrication of steel structures of Plant & Machinery through Contractors. Being aggrieved, Company has filed an appeal before CEGAT, New Delhi against the said demand and accordingly decided to include the aforesaid amount in Other Deposits, till disposal of appeal.

7. Balances of, Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.

8. Physical verification of stock of finished goods, raw material, packing material and stores and spare parts could not be made due to closure of factory. The value of the Stock of raw material, packing material and stores and spare parts have been taken at the same rate as were in previous year. Due to closure of the factory the condition of stock of raw material, packing material and stores and spares may have deteriorated but no provision has been made for possible losses which may arise on this account as the same are not ascertainable. Finished goods are valued at nil cost as the same is not in saleable condition.

9. Income Tax assessment have been completed upto assessment year 2008-2009 and no demand, is outstanding for payment. Appeals filed by the Company in respect of several assessment years are still pending. No provision has been made for tax liability, if any, that may accrue on disposal of such appeals as the amount is not ascertainable.

10. No provision has been made for appeals pending before Trade Tax authorities as the amount is not ascertained.

11. The instruments of investments and fixed deposit receipts are not traceable but the interest on the fixed deposits has been provided in accordance with the rates of the last year.

12. In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2010 but the same has not been recognized in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31st March, 2010.

13. There is no separate reportable segment as per Accounting Standard-17.

Potential equity shares are anti-dilutive as their conversion to equity shares would either increase profit per share or decrease loss per share from continuing ordinary activities. The effects of anti-dilutive potential equity have been ignored in calculating diluted earnings per share. Consequently, the basic and diluted earning per share of the company remain the same.

14. In view of insufficient information from the suppliers regarding their status as SSI Units, amount overdue to such undertakings could not be ascertained.

15. The Company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of information and on account of closure of the factory since 2000, disclosure, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act has not been made.

16. During the year after considering the fact that provision for doubtful debts has been made in the books of Company for all the debtors. Now the board considered the advance security deposit from customers amounting to Rs 414.90 lacs as not payable and decided to write back the same as other income. Provision for Gratuity of Rs.2.82 lacs has been reversed during the year, excess provision of Rs 1.12 lacs for Staff Advance and loan has been written off and the same are treated as other income for the year. Also excess provisions for other expenses of Rs. 55.31 lacs has been written off by the Company and accounted for the same as other income.

17. Impairment losses, if any, as per Accounting Standard (AS) 28 issued by the Institute of Chartered Accountants of India could not be computed as the Company has closed its factory with effect from 11.10.2000.

18. As per Accounting Standard 15 "Employee Benefits" the disclosure of Employee benefits as defined in the Accounting Standard are given below:

a) Defined Contribution Plan :

(Rs. 000) 2009-10 2008-09

Employers Contribution of PF Funds 21 21

b) Defined Benefit Plan :

i) Leave encashment: The Company has not provided leave encashment as all the employees have availed off their leaves during the year and there was no dues in this account at the end of year.

ii) Gratuity : During the year the Company has made a provision of Rs. 0.07 lacs (0.08 lacs in previous year) for gratuity as per the provisions of the Payment of Gratuity Act i.e. half months salary for every completed year of service. Since there are only few employees in the company, the management does not see any need for actuarial valuation of the defined benefit plan. However Company has reversed the earlier provisions of Rs. 2.83 lacs as the same is no longer required.

19. Previous year figures have been regrouped/ recast wherever necessary to confirm to this years presentation.

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Mar 31, 2009

1. Contingent Liabilities represent

a. Claims against the Company not acknowledged as debts in respect of court cases - amount unascertainable.

b. Arrears of fixed cumulative dividend and tax thereon Rs. 886.08 lacs (Previous year Rs. 812.37 lacs) on 14% Cumulative Convertible Preference Shares, amount of dividend is arrear since financial year 1996-97, the date of allotment of preference shares.

c. Liability which may arise due to appeals pending with Income Tax and Trade Tax department and with CEGAT (for Excise duty) - amount unascertainable. .

2. The Companys production facilities were installed and it began commercial production in phases and the primary operating unit, namely the Solvent Extraction Plant, started operating with effect from 1st April, 1989. Due to acute shortage of raw materials since commencement of commercial production, the various production units of the Plant could not be made fully operational. Upon such insignificant use of the Plant, the Board considered it appropriate to capitalise, interest on Term Loans availed of for the purpose of acquisition/installation of related fixed assets and expensed in the accounts after commencement of commercial production aggregating Nil for the current year and Rs. 974.12 upto 31st March, 2009.

As a result , Year-end Fixed Assets (Ne) Block) are higher by Rs. 237.45 lacs with a corresponding favorable effect on the net worth of the Company. The current years Loss is higher by Rs. 44.28 lacs arising out of depreciation charged during the year on the total Term Loans interest capitalised.

3. Year- end Sundry Debtors, Loan, Advances and Deposits considered good include an aggregate amount of Rs. 30.27 lacs (Previous Year Rs. 19.50 lacs) in respect of which appropriate steps have been taken by the Company for recovery. Pending outcome of the Companys actions, the amount which may not be ultimately realisable is not ascertainable at this stage and hence, no provisions have been made therefore.

4. The Company has closed its factory with effect from 11.10.2000 due to heavy accumulated losses vide its notice for closure dated 08.10.2000 and the information for closure has also been given to concerned ministry and departments. The account for the year have been prepared on the basis that the Company is a going concern.

5. As per the agreement dated 24.09.97 entered by the Company with ICICI (operating agency) it was agreed to redeem the entire amount of Non Convertible Debentures (NCDs) of Rs. 521.17 lacs up to 15.03.1998. Company redeemed the entire amount of NCDs within stipulated time except in case of NCDs of Rs. 35.65 lacs to UTI. The UTI expressed their dis- agreement on the aforesaid amount as their account was unreconciled at the time of conversion of term loan into NCDs. Further as the reconciliation with UTI is still pending, Company has not made any provision for liabilities that may arise on reconciliation of the account with UTI and the amount of interest on NCDs since 15.03.1998.

6. The Company had paid Excise Duty demand of Rs. 3.30 lacs imposed by Excise Authorities relating to the period July, 1988 to June, 1989 for in-house Fabrication of Steel structures of Plant & Machinery through Contractors. Being aggrieved, Company has filed an appeal before CEGAT, New Delhi against the said demand and accordingly decided to include the aforesaid amount in Other Deposits, till disposal of appeal.

7. Balances of, sundry debtors, sundry creditors, and loans and advances are subject to confirmation. Few bank account could not be reconciled for want of information from banks.

8. Physical verification of stock of Finished goods, raw material, Packing material and stores and spare parts could not be made due to closure of factory. The value of the Stock of raw material, packing material and stores and spare parts have been taken at the same rate as were in previous year. Due to closure of the factory the condition of stock of raw material, packing material and stores and spares may have deteriorated but no provision has been made for possible losses which may arise on this account as the same are not ascertainable. Finished goods are valued at nil cost as the same is not in saleable condition.

9. Income Tax assessment have been completed upto assessment year 2007-2008 and no demand is outstanding for payment. Appeals filed by the Company in respect of several assessment years are still pending. No provision has been made for tax liability, if any, that may accrue on disposal of such appeals as the amount is not ascertainable.

10. No provision has been made for appeals pending before Trade Tax authorities as the amount is not ascertained.

11. The instruments of investments and fixed deposit receipts are not traceable but the interest on the fixed deposits has been provided in accordance with the rates of the last year.

12. In terms of Accounting Standard (AS-22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has determined the deferred tax assets as on 31.03.2009 but the same has not been recognised in view of uncertainty of future taxable income. In view of the brought forward losses no provision for taxation is required to be made as on 31st March, 2009.

13. There are no separate reportable segment as per Accounting Standard-17.

Potential equity shares are anti-dilutive as their conversion to equity shares would either increase profit per share or decrease loss per share from continuing ordinary activities. The effects of anti- dilutive potential equity has been ignored in calculating diluted earnings per share. Consequently, the basic and diluted earning per share of the Company remain the same.

14. In view of insufficient information from the suppliers regarding their status as SSI Units, amount overdue to such undertakings could not be ascertained.

15. The Company has not received the required information from suppliers regarding their status under the Micro Small and Medium Enterprises Development Act, 2006. In the absence of information and on account of closure of the factory since 2000, disclosure, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been made.

16. The Company had taken interest free unsecured loan from Kitply Industries Limited, the outstanding balance of the same was Rs. 500 lacs. During the financial year 2008-09 Kitply Industries Limited, has written off the entire amount of Vegepro Foods & Feeds Limited. Therefore the liability of unsecured loan of Rs. 500 lacs no longer exist and the Company has written off and accounted for the same as Income.

17. During the year a sum of Rs. 23.84 lacs has been paid to Vegepro employee union as per settlement order of Allahabad High Court relating to compensation of salary etc. for the period from 20.11.1995 to 30.09.2000. The same amount has been debited by the Company in the expenses of current year under head staff cost.

18. During the year after considering the fact that provision for doubtful debts has been made in the books of Company for all the debtors except debt of One party which is considered by the board as recoverable, now the board considered the security deposit from the customer amounting to Rs. 8.16 lacs as not payable and hence decided to written off and accounted for the same as other income. Likewise interest payable on security deposit from customer of Rs. 17.06 lacs and excess provision of other expenses of Rs. 12.18 lacs has been written off by the Company and accounted for the same as other income.

19. Impairment losses, if any, as per Accounting Standard (AS) 28 issued by the Institute of Chartered Accountants of India could not be computed as the Company has closed its factory with effect from 11.10.2000.

b) Defined Benefit Plan :

i) Leave encashment: The Company has not provided leave encashment as all the employees have availed off their leaves during the year and there was no dues in this account at the end of year.

ii) Gratuity: During the year the company has made a provision of Rs. 0.08 lacs (0.08 lacs in- previous year) for gratuity as per the provisions of the Payment of Gratuity Act i.e. half months salary for every completed year of service. Since there are only few employees in the company, the management does not see any need for actuarial valuation of the defined benefit plan.

20. Previous year figures have been regrouped/recast wherever necessary to confirm to this years presentation.