1.  CONTINGENT LIABILITIES :
 
 (a) Claims against the company towards listing fee for three stock
 exchanges not acknowledged as debt is Rs. 3.11 Lacs (Previous Year Rs.
 2.91 Lacs) as company has sought delisting from these stock exchanges.
 
 (b) The company has filed an appeal before The Custom, Excise & Service
 Tax Appellate Tribunal (CESTAT) in the matter of excise duty involving
 disputed amount of Rs. 2.52 Lacs. The case is in progress and the
 company is likely to succeed. The matter being sub-judice, no provision
 has been made in the books of accounts.
 
 (c) Demand of entry tax amounting to Rs.4.36 Lacs under U P VAT Act
 disputed in Appeal. How ever the same has been deposited with
 department under protest.
 
 (d) Demand of service tax amounting to Rs.5.34 Lacs and demand of
 penalty amounting to Rs.5.34 Lacs under section 76 of Finance Act, 1994
 for service tax disputed in Appeal.
 
 2.  Secured Loan
 
 i) Working capital loan from Punjab National Bank is secured by way of
 hypothecation of inventories and book debts, equitable mortgage of
 factory land and building, first charge on block of assets of the
 company for plant & machinery and Effluent Treatment Plant and all so
 personally guaranteed by the directors of the company.
 
 ii) Loan from Religare Finvest Limited is secured by immovable property
 situated at C-4A and 4B, N-122, Panchsheel Park, New Delhi belonging to
 the relatives of directors of the Company and also guaranteed by the
 Directors of the company and their Associate concern.
 
 iii) Vehicle loans are secured against respective vehicles.
 
 3.  In the opinion of the Board, the Current Assets, Loans and Advances
 including Sundry Debtors are of the value as stated in financial
 statement in the ordinary course of business, although, some of them
 are outstanding for a long period. The provision of all known
 liabilities has been made. The accounts of certain Sundry Debtors,
 Creditors, banks and loans & Advances are subject to confirmation and
 reconciliation.
 
 4.  Balance with taxation departments shown under schedule Loans &
 Advances of the balance sheet includes a sum of Rs. 46,13,849/- for
 which the company filed a claim before the trade tax authorities during
 the F.Y.2009-10 for refund of Trade Tax paid on purchases and stock
 transfer in respect of Molasses for the earlier years in view of the
 decision of the Hon''ble Allahabad High Court in the case of M/s. SAF
 Yeast Company Private Limited vs. State of U.P. and Another. The claim
 of the company before the appropriate authorities is still pending.
 
 5.  In view of the order of Board for Industrial and Financial
 Reconstruction (BIFR) and brought forwarded accumulated
 losses/unabsorbed depreciation, no provision for income tax/ MAT for
 the year has been made in the accounts.
 
 6.  In view of the accumulated business losses & unabsorbed
 depreciation and since there is no reasonable certainty of realization,
 the company has not recognized the deferred tax liability/asset arising
 on account of timing difference as stipulated in Accounting Standard
 (AS-22), Accounting for taxes of Income issued by the Institute of
 Chartered Accoun- tants of India by way of prudence.
 
 7.  The Company has not received any information from suppliers or
 service providers, whether they are covered under the Micro, Small and
 Medium Enterprises (Development) Act, 2006. Therefore, it is not
 possible to give the information required under the Act.
 
 8.  Managerial Remuneration under Section 198 of the Companies Act,
 1956:
 
 i) Remuneration to Mr. M L Kothari (Managing Director): Rs.2,70,000/-
 (Previous year Rs. 2,15,000/-) ii) Remuneration to Mr. Pramod Kothari
 (Managing Director): Rs.3,30,000/- (Previous year Rs. 2,25,000/-)
 
 9. The arbitration cases relating to supply of rice to Govt. of
 Bangladesh during 1995-96 pending in Bangladesh have been awarded in
 favour of company allowing our claims of USD 427,021.89 against Govt.
 of Bangladesh. The arbitration awards have been filed with the
 appropriate court in Bangladesh and the Court has made the award as
 rule of law.  However, the Govt. of Bangladesh filed an appeal against
 the same before the Hon''ble High Court at Bangladesh, which is pending
 yet.
 
 10.  RELATED PARTY DISCLOSURE (AS- 18) (a) Key Personnel & Relatives
 
 (i) Mr. Moti Lal Kothari Chairman & Managing Director
 
 (ii) Mr. Pramod Kothari Managing Director
 
 Note: Mr. Pramod Kothari is the son of Mr. Moti Lal Kothari.
 
 (c) There is no amount written off or written back in respect of debts
 due from or to related parties.
 
 Note:
 
 (i) The amount of loan/advances received and given have been paid and
 received back in full during the year itself.  
 
 (ii) Related party relationship is as identified by the management and
 relied upon by the Auditors.
 
 11.  Previous year''s figures have been re-grouped/reclassified wherever
 necessary, to make them comparable.
 
 12.  Schedule A to M form integral part of the Balance Sheet and Profit
 & Loss Account.