1) a) Accounting standard 17(Segment reporting) is not applicable to
the company in the absence of any commercial operations.
b) Related party transactions:-
Nameofthe Nature of
Related person Relations ship
SriJ B Reddy Director
During the year an amount of Rs. 14,86,313/- was obtained as Unsecured
Loan from the above related party. The total amount of Unsecured Loans
obtained from the directors and outstanding as on 31.03.2009 is
c) Accounting standard 19(Leases) is not applicable as there are no
lease transactionsentered into by the company.
Though the company has unabsorbed depreciation.carry forward Losses and
current losses, deferred Tax assets has not been recognized in the
books of account since generation of sufficient taxable income in the
near future is not certain.
2) AUDIT COMMUTE:
As a part of good corporate governance and in.order to-facilitate the
Board of Directors in fulfilling the financial responsibilities an
audit committee has been constituted.
The brief description ofTerms of Reference of the Audit Committee.
a) To review the companys financial reporting process and the
disclosure of its financial information to ensure the financial
statement as correct,sufficient and credible.
b) To reviewfinancialand risk management policies.
c) To review the financial statementaudited by the statutory auditors.
d) The Audit committee has been constituted with the following three
1)JB Reddy Chairman
2) K.Niranjan Reddy Member
3) J. Ravindranath Reddy Member
The Audit committee has met 4 times during the year and all the members
of the committee were presentforthe meetings.
3) Contingent Liabilities: As on As on
a) Excise demands against the 2560989 2560989
company contested and
in appeal b)lncome-Tax demands
against the 670813 670813
company contested and pending
4) There are no dues to the Small Scale Industries as on 31 March 2009.
5) The Term Loan Originally obtained from ICICI Bank Ltd which has
assigned the said loan infavour of the Standard Chartered Bank, which
in turn has assigned the loan in favour of Shri Venkatasesha Reddy K,
is secured by first charge on all movable and immovable properties both
present and future. The said loan is further guaranteed by the personal
guarantees of one of the present DirectorsandanEx-Directorofthecompany.
6) a) No provision has been made for gratuity in the absence of the
eligible employees forthe year.
b) As Per the information and explanations given to us, the provisions
of Employees Provident Fund Act and Employees State Insurance
Actarenotapplicable to thecompanyfortheyearof account.
7) Capital Work-in-progress represents the expenditure on capital
account in respect of development of Land, Ponds formation and
8) Quantitative details of the stocks, production and turnover of the
finished goods are not given since the company did not carry on
commercial operations for the past six years and there are no stocks of
9) Deposits and advances receivable, creditors and advances from the
customers are subject to confirmation from the concerned parties.
10) Since the Company became sick and the negotiations for settlement
of dues to the assignee Bank,The Standared Chartered Bank which has
again assigned the debt in favor of Shri Venkatasesha Reddy K are in
progress. No interest has been provided in the books of account for and
from the Financial Year 2002-03 and the total interest accrued at the
contracted rate on the said loan up to the Financial Year ended on 31st
March,2008 was Rs. 1996.40 Lakhs approximately and the interest for the
year of account accrued on the said Loan at the contracted rate of
interest works out to Rs. 105.00 Lakhs. Had the sa id amount of
interest of Rs. 105.00 Lakhs for the year of account been provided in
the books of account the loss forthe year would have been more by Rs.