Notes to Accounts of Venus Sugar Ltd.

Jun 30, 2010

1. The outstanding balance of Creditors / Debtors & Advances are subject to confirmation.

2. In the opinion of the Board of Directors and the best of their knowledge and belief, the value of the realisation of Current Assets, Inventories, Loans & Advances in the ordinary course of business would not be less than the amount to which they are stated in the Balance Sheet.

3. Estimated amount of contracts remaining to be executed on Capital account and not provided for Nil Lacs (net of advances) (previous year Nil).

4. The levy sugar obligation has been increased from 10% to 20% from the year 2009-10. Further vide notification No GSR.527.E/ Ess. Comm./Sugar dated 21.062010 the Central Govt, has revised the Levy Sugar prices from the production of 2009-10 onwards.

5. Excise Duty & Cess on Stock : The amount of Excise Duty & Cess on Stock shown in Schedule-L represents differential Excise Duty & Cess on opening & closing stock of finished goods/by products.

6. Salary to Managing Director, Sh. M. P. Singh during the year is Rs. 15,00,000 (Last year Rs. 15,00,000).

7. Payment of Audit Fee to Statutory Auditors for the year 2009-2010 is Rs 44160/-, Rs 22160/-, Rs 22160/- as Statutory.Audit, Tax Audit and Review audit fees respectively, (previous year Rs. 39326/-, Rs. 22472/-, Rs. 22202/- respectively). This includes Service Tax & Education Cess as applicable.

8. Term Deposits of Rs 28.13 Lacs (previous year Rs. 27.18 lacs) are earmarked for construction / repair of Molasses tanks and repayment of Staff security.

9. a) Amount due to Small Scale Industrial Undertaking: Rs. 18.24 lacs (previous year Rs. 26.93 lacs)

(Based on information furnished by the creditors)

b) List of Small Scale Industrial Undertakings to whom outstanding is over 30 days (as per the terms & conditions of the orders):

M/s Aishwarya Chemicals, M/s Ajendra Printers, M/s Durex Rubber Industries, M/s Geeta Flow Pumps (I) P. Ltd., M/s Guru Mehar Industries, M/s Heavy Chemicals, M/s Hydro Chem Chemicals Pvt. Ltd., M/s Industrial Insulations, M/s Jai Sugtech (India), M/s Jyoti Divya Fab. P. Ltd, M/s K. Engineering, M/s Krishi Udyog Shala, M/s Nikumbh Engineering Works Pvt. Ltd., M/s Pansy Industries, M/s R. K. D Weighing Systems Pvt. Ltd., M/s Radhey Packagings, M/s Raiukesh Industries, Ms Ropman Engg. Corporation, M/s Sartak Lime & Chemicals, M/s Sondh Engg. Works, M/s Special Lime Stone Pvt. Ltd., M/s Subhash Rubber Works, M/s Superior Engineering & Mfg. Works, M/s Techno Fabricatorslndia P Ltd, M/s Thermosil Engineers GZB, M/s Uttara Khand Rubber Works, M/s Turbo Tech Engineers.

c). The Company has invited balance confirmation from the Creditors for the compliance of Small, Medium and Micro Enterprises Development Act, 2006 but reply from them is still awaited.

10. The Honble Supreme Court vide their order dated 08.01.2010 has dismissed the Contempt petition filed by the State Government. The Company had since paid all the amount as per their records.

11. Pursuant to AS -15 (Revised) liability in respect of present or future payment of Gratuity & Leave encashment has been ascertained and has been provided for in the accounts as per the law and valued by Actuary. Summary of the results and calculation is as under:

a) The table below shows a summary of the key results for period ending 30.06.2009.

A. Present value of obligation as per Actuary Rs. 4079489/-

B. Fair Value of plan Asset 0

C. Net assest/(liability)recognized in balance sheet Rs. (4079489/-)

b) The Company has not funded the liability

c) The key assumptions used in the calculations are as under:

The principal assumptions are the (1) discount rate & (2) Salary increase

The financial assumptions employed for the calculations are as follows:

Discount Rate: The discount rate has been chosen by reference to market yields on government gilt bonds as at the same date.

Salary Increases: Salary increase rate has been assumed keeping in view the inflation rate & other increases on long term basis.

Demographic assumptions by Actuary:

Moratality: We have assumed that active members of the Scheme will experience in service mortality in accordance with the standard table

LIC (1994-96) ultimate.

Withdrawal: Plan Members are assumed to withdraw in accordance with the following table:

Age Withdrawal Ratel (%)

Up to 30 years 3.0

Up to 44 years 2.0

Above 44 Years 1.0

Disability: No explicit allowance

d) The methodology used in the calculations is set out below:

We have used the Projected Unit Credit (PUC) actuarial method to asses the Plans liabilities.including those related to death-in-service and incapacity benefits.

Under.the PUC method a "projected accrued benefit" is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the plan. The projected accrued benefit is based on the plan s accrual formula and upon service

as of the beginning or end .of the year, but using a members final compensatipn,proiected to the age at which the employee is assumed, to leave active%ervide. The plan Liability is the actuarial present value of the projected accrued benefits as of the beginging of the year active members. e) We have made full actuarial valuations as at the start and end of the accounting period, based on member data and plan information provided to us at these dates. 12. The Company has only one business segment i. e Sugar, hence AS-17 is not applicable to the Company.

12. Pursuant to AS- 22, it is reported that in view of accumulated.carry forward losses under tax. laws and there is no virtual certainty of future taxable income against which sucn deferred tax assets can be realized, hence no deterred tax liability / assets has been recognized as a matter or prudence.

13. (a) Pursuant to AS-28, the company has ascertained recoverable values of Cash Generating Units, applying value in use method, which are higher than the corresponding book values of assets of CGUs and signifies absence of any impairment during the year.

(b) CGUs comprise Moradabad plant of the Company.

(c) Annual discount rate considered for arriving at value in use of assets of CGU is 9%, which is total of interest rate for borrowings plus risk factor at 2% per annum.

14. Since the Contingent Liabilities and Contingent Assets could not be ascertained, hence no provisions has been made in the books as per AS-29

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Jun 30, 2009

1. The outstanding balance of Creditors / Debtors & Advances are subject to confirmation.

2. In the opinion of the Board of Directors and the best of their knowledge and belief, the value of the realisation of Current Assets, Inventories, Loans & Advances in the ordinary course of business would not be less than the amount to which they are stated in the Balance Sheet.

3. Estimated amount of contracts remaininq to be executed on Capital account and not provided for Nil Lacs (net of advances) (previous year Rs. 3.00 lacs).

4. The levy sugar price for the seasons 2004-05 to 2007-08 is yet to be announced by the Government of India. Pending such announcement, the sale of levy sugar has been accounted tor at the 2003-04 seasons levy price.

5. The Company have moved the proposal for the resechedulement of the existing Outstanding Principal & Interest of the Fls. The formal sanction of SCB in this regard is still awaited.

6. Excise Duty & Cess on Stock : The amount of Excise Duty & Cess on Stock shown in Schedule -L represents differential Excise Duty & Cess on opening & closing stock of finished goods/by products.

7. Salary to Managing Director, Sh. M. P. Singh during the year is Rs. 15.00,000 ( Last year Rs. 15,00,000 ).

8. Payment of Audit Fee to Statutory Auditors for the year 2008-2009 is Rs 39326/. Rs 22472/, Rs 22202/ as Statutory Audit, Tax Audit and Review audit fees respectively, (previous year . Rs. 28090, Rs. 22472, Rs. 14888 respectively ) This includes Service Tax & Education Cess as applicable.

9 Term Deposits of Rs 27.18 Lacs (previous year Rs. 26.33 lacs) are earmarked for construction / repair of Molasses tanks and repayment of Staff security.

10. a) Amount due to Small Scale industrial Undertaking: Rs. 26.93 lacs (previous year Rs. 18.51 lacs) (Based on information furnished by the creditors)

b) List of Small Scale Industrial Undertakings to whom outstanding is over 30 days (as per the terms & conditions of the orders): M/s Aishwarya Chemicals, M/s Ajendra Printers, M/s Durex Rubber Industries, M/s Geeta Flow Pumps (I) P. Ltd., M/s Guru Mehar Industries, M/s Heavy Chemicals, M/s Hydro Chem Chemicals Pvt. Ltd., M/s Industrial Insulations, M/s Jai Sugtech (India), M/s Jyoti Divya Fab. P. Ltd, M/s k. Engineering, M/s Krishi Udyog Shala, M/s Nikumbh Engineering Works Pvt. Ltd., M/ s Pansy Industries, M/s R. K. D Weighing Systems Pvt. Ltd., M/s Radhey Packagings, M/s Rajukesh Industries, M/s Ropman Engg. Corporation, M/s Sartak Lime & Chemicals, M/s Sondh Engq. Works, M/s Special Lime Stone Pvt. Ltd., M/s Subhash Rubber Works, M/s Superior Engineering & Mfg. Works, M/r. Techno Fabricators India P Ltd, M/s Thermosil Engineers GZB, M/ s Uttara Khand Rubber Works, M/s Turbo Tech Engineers.

c) The Company has invited balance confirmation from the creditors for the compliance of Small, Medium and Micro Enterprises Development Act, 2006 but reply from their is still awaited.

11. The Honble Supreme Court in May 2004 overruled the interim Judgement of Honble Allahabad High Court and declared that the State Govt, has the power to fix the SAP over & above the SMP pursuant to which the Company has received the demands for the differential cane price for the sugar season 2002-03. The Company had since paid all the amount as per their records.

12. Pursuant to AS - 15(Revised) liability in respect of present or future payment of Gratuity & Leave encashment has been ascertained and has been provided for in the accounts as per the law and valued by Actuary. Summary of the results and calculation is as under:

a) The table below shows a summary of the key results for period ending 30.06.2009.

A. Present value of obligation as per Actuary 3360072/-

B. Fair Value of plan Asset 0

C. Not assest/(liability)recogr,ized in balance sheet . (3360072)

b) The Company has not funded the liability

c) The key assumptions used in the calculations are as under:

The principal assumptions are the (1) discount rate & (2) Salary increase

The financial assumptions employed for the calculations are as follows:

Discount Rate: The discount rate has been chosen by reference to market yields on government gilt bonds as a! the same date.

Salary Increases: Salary increase rate has been assumed Keeping in view the inflation rate & other increases on long term basis.

Demographic assumptions:

Moratality: We have assumed that active members of the Scheme will experience in service mortality in accordance with the standard table LIC (1994-96) ultimate.

Withdrawal: Plan Members are assumed to withdraw in accordance with the following table:

Age Withdrawal Rate (%)

Up to 30 year: 3.0

Up to 44 years 2.0

Above 44 Years 1.0

Disability: No. explicit allowance

d) The methodology used in the calculations is set out below:

We have used the Projected Unit Credit (PUC) actuarial method to asses the Plans liabities, including those related to death- in-service and incapacity benefits.

Under the PUC method a "projected accrued benefit" is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the plan. The "projected accrued Benefit" is based on the plans accrual formula and upon service as of the beginning or endof the year, but using a members final compensation, projected to the age at which the employee is assumed to leave active service. The plan Liability is the actuarial present value of the "projected accrued benefits as of the beginging of the year active members.

e) We have made full actuarial valuations as at the start and end of the accounting period, based on member data and plan information provided to us at these dates.

13. The Company has only one business segment i. e Sugar, hence AS-17 is not applicable to the Company.

14. Pursuant to the disclosure under AS -18 , Sh. M. P. Singh Managing Director is the key personnel of the company and during the year he was paid Rs. 15,00,000 as remuneration and relatives of Sh. M. P. Singh are Smt Shashi Rani. Sh. Atul Kumar, Smt. Shubhara Singh, Smt. Suveta Singh, Smt. Akanksha Singh, Ms. Pooja Singh, Sh. Harpal Singh, Smt. Kamlesh Singh, Smt. Leelawati and Smt. Rajbala.

Further M/s Venus Cements Limited is the related party / enterprise in which key managerial personnel and / or their relative hold the office of key management personnel. It is further reported that during the year no transactions have been executed with relatives or related party / enterprise.

15. Pursuant to AS- 22, it is reported that in view of accumulated carry forward losses under tax aws and there is no virtual certainty of future taxable income against which such deferred tax assets can be realized, hence no deferred tax liability / assets has been recognized as a matter of prudence.

16 (a) Pursuant to AS-28, the company has ascertained recoverable values of Cash Generating Units, applying value in use method, which are higher than the corresponding book values of assets of CGUs and signifies absence of any impairment during the year.

(b) CGUs comprise Moradabad plant of the Company.

(c) Annual discount rate considered for arriving at value in use of assets of CGU is 9%, when is total of interest rate for borrowings plus risk factor at 2% per annum.

17. Since the Contingent Liabilities and Contingent Assets could not be ascertained, hence no provisions has been made in the accounts as per AS-29

18 None of the remaining para of part II of schedule VI are applicable to the company.

19 Figures of the previous year have Been regrouped rearranged recast wherever necessary to conform to figures of this year.