As at As at
September 30, 2006 September 30, 2005
Rs. Millions Rs. Millions
1. Capital commitments (net of advances) 1,314.48 24.19
2. Contingent liabilities :
(a) Claims against the Company not
acknowledged as debts *
- Income Tax 75.90 -
- Excise 9.58 26.62
- Sales Tax 7.49 3.05
- Labour 3.96 1.83
- Service Tax 1.44 -
- Others 38.59 33.88
* All the above matters are subject to legal proceedings in the
ordinary course of business. The legal proceedings, when ultimately
concluded will not, in the opinion of the management, have a material
effect on the results of the operations or financial position of the
(b) On partly paid shares # # (# Rs.20)
4. An additional amount of Rs. 143.61 millions was due to farmers for
the cane crushing season 2002-03 due to fixation of higher prices by
U.P. Government vide Notification No 8045/CD/46-3-04-58 (122)/97 dated
October 05, 2004. The Company has charged and paid the differential
cane price for the sugar season 2002-03 during the previous year ended
September 30, 2005 and that has been considered as an exceptional item
in the profit and loss account.
5. Research and development expenses amounting to Rs.3.02 Millions
(previous year Rs.2.50 Millions) have been charged to the respective
6. Sales are net of commission of Rs.20.15 Millions (previous year
7. a) Sundry Creditors include Rs.1.73 Millions (previous year Rs.1.58
Millions) due to suppliers covered under the
Interest on Delayed Payment to Small Scale and Ancillary Undertakings
Act, 1993. The Company has not received any claim for interest from
any supplier covered under the Interest on Delayed Payments to Small
Scale and Ancillary Industrial Undertakings Act, 1993 to the extent
such parties have been identified from the available information.
(b) The names of small scale industrial undertakings to whom the
Company owes amount outstanding for more than 30 days as at September
30, 2006 are as under :-
M/s Avirag Engineers, M/s Chemical System Technologies, M/s Central
Agencies, M/s Deepak Ceramic and Allied Products, M/s Hi-Tech
Equipments, Jagat Machinery Mfg.Pvt Ltd., Mangla Rubber Industries, M/s
Oil Seal Mfg. Co. Pvt. Ltd., M/s Pradip Engineering Corporation, M/s
Quest Computer Forms & Papers Pvt. Ltd. M/s Risansi Industries Ltd.,
M/s R.C. Engineering Works Pvt. Ltd., R.S. Package Industries, M/s
Spray Engineering Devices, M/s Subhash Rubber Works Pvt. Ltd., M/s
Shreeji Engineering Works, M/s Techno Fabricator India Pvt. Ltd., M/s
Three Star Engg. Works, Uttar Pradesh and Engines and Machines, Uttam
Welds, Varun Pumps (India), Vishwakarma Con. Belt Reparing Works,
Vishwakarma Engg. Works, Welwin Industry Ltd.
c) 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.
8. (i) Pursuant to the Scheme of Amalgamation (the Scheme) under
Section 391 and 394 of the Companies Act, 1956 of erstwhile Nanglamal
Sugar Limited (NSL), with the Company approved by the Honble High
Court of Delhi vide its Order dated December 6, 2005, which became
effective on December 16, 2005 on filing of the certified copy of the
Order of the High Court of Delhi with the Registrar of Companies, NCT
of Delhi and Haryana, all the properties, assets, liabilities and
reserves of the erstwhile NSL have without further act or deed, been
transferred to and vested in the Company, at their respective book
values, as a going concern with effect from the appointed date i.e.
October 1, 2004.
For giving effect to the amalgamation in the nature of merger, the
Pooling of interest method has been followed in these accounts
wherein, the assets and liabilities as at October 1, 2004 and the
transactions including income and expenses for the year from October 1,
2004 to September 30, 2005 of the erstwhile NSL (being the period when
pending effectuation of the Scheme, the business and activities of the
erstwhile NSL were being run and managed in trust for the Company) have
been incorporated in the accounts. Consequently, prof it of erstwhile
NSL as at September 30, 2005 amounting to Rs. 1.69 millions is shown in
the profit and loss account. Pursuant to the above amalgamation, the
investments of the Company in the erstwhile NSL stand cancelled.
(ii) Consequent to the effectuation of the Scheme, the reversal of
profit on sale of fixed assets included in `other income aggregating
to Rs. 26.25 millions and ensuing current tax/deferred tax liability
thereon amounting to Rs. 9.79 millions accounted for in the year ended
September 30, 2005 has been adjusted against the surplus in profit and
loss account carried forward from earlier year.
9. The Company has set up a sugar plant with an installed capacity of
3000 TCD at Nanglamal, district Meerut, U.P. which commenced
commercial production on January 9, 2006.
10. (a) The provision for taxation for the year comprises of the tax
liability for Assessment year 2006-07 to the extent relevant for the
period from October 1, 2005 to March 31, 2006 and the tax liability
estimated based on the profits for the period from April 1, 2006 to
September 30, 2006.
(b) The provision for income tax has been computed after considering
the benefits in respect of brought forward losses and unabsorbed
depreciation, allocated to the Company under section 72A(4)(b) of the
Income Tax Act, 1961, from erstwhile undivided Siel Limited.
11. Segment reporting
As the Companys business activity falls within a single primary
business segment viz `Manufacturing and Sale of Sugar, the disclosure
requirements of Accounting Standard (AS)-17 `Segment Reporting issued
by the Institute of Chartered Accountants of India are not applicable.
13. Earnings per share:
Year ended 18 Months ended
September 30. 2006 September 30, 2005
Profit aftertax 141.49 503.27
number of equity shares
after adjusting bonus
element of right issue. Nos. 42485315 41366788
Basic and diluted earnings per share in
rupees(face value-Rs. 10 per share) Rs. 3.33 12.17
14. Directors Remuneration *
Salaries and allowances 5.40 4.80
Commission 2.21 5.62
Contribution to provident and other funds 0.72 0.72
Value of perquisites 0.13 0.18
Directors sitting fees 0.32 0.32
*Do not include contribution to gratuity fund and provision for leave
encashment since the same are determined for the Company as a whole.
Computation of net profit in accordance with section 198 of the
Companies Act, 1956 and commission payable to Chairman and Managing
Year ended Year ended
September 30, 2006 September 30, 2005
Profit before tax,
per profit and loss account 214.02 573.14
Add: Directors remuneration
including commission 8.46 11.32
Directors sitting fees 0.32 0.32
Less: Capital profit on sale of fixed assets - 22.92
Adjustment relating to Scheme - 1.64
Net profit 221.16 561.86
Commission @ 1% of the above profit
to the Chairman and Managing Director 2.21 5.62
16. Consequent to import of 16385.73 metric tonnes of raw sugar during
the previous year, the Company has an obligation to export 15608.32
metric tonnes of white sugar by March 2007. Against this export
obligation, 5250 metric tonnes of white sugar has been exported during
the year ended September 30, 2006.
17. Pursuant to the Scheme of Arrangement (Scheme) under sections 391
and 394 of the Companies Act, 1956 of undivided Siel Limited, approved
by the High Court of Delhi vide its Order dated August 26, 2003 which
became effective on September 05, 2003 on filing of the certified copy
of the Order of the High Court of Delhi with the Registrar of
Companies, Delhi and Haryana, the undertakings of undivided Siel
Limited comprising of Mawana Sugar Works (MSW) and Titawi Sugar Complex
(TSC), together with all properties, assets both movable and immovable
and liabilities including contingent liabilities have been transferred
to and vested in the Company at their respective book values with
effect from the appointed date i.e. October 01, 2002. In terms of the
Scheme certain specified lands of undivided Siel Limited, which was a
part of security to various lenders, were transferred to and vested in
Shivajimarg Properties Limited (SPL), a 100% subsidiary Company of Siel
Limited, a special purpose vehicle incorporated for the purpose of
disposal of lands, at a specified estimated net realisable value. In
consideration the lenders liabilities equivalent to estimated
realisable value were also transferred to SPL. The balance of
liabilities of lenders were allocated/retained between the Company and
Siel Limited (Residual Siel Limited).
The Scheme provides that the surplus, if any, arising from the excess
of the realisation of investments by Siel Limited in SPL, net of
certain specified liabilities shall accrue to the Lenders
proportionately to the extent of only meeting the term debts of Siel
Limited (Residual Siel Limited) and Mawana Sugars Limited, without
recourse to Siel Limited.
In terms of the aforesaid provision, the borrowings aggregating
Rs.991.46 Millions, remaining unpaid, out of the liability of lenders
transferred from Siel Limited under the Scheme and remaining
outstanding as at September 16, 2005 stand extinguished, being already
got discharged, pursuant to the Scheme from surplus arising on the sale
of shares of SPL.
The extinguishment of the borrowings, referred to as above in the
Scheme, is also supported by a legal advice and a confirmation from the
Board of Directors of Siel Limited, that the Company does not owe any
amounts to Siel Limited in respect of the Companys debts so discharged
from surplus arising on the sale of shares of SPL.
The extinguishment of the debt aggregating Rs.991.46 Millions, being an
item of capital nature, has been credited to Capital Reserve account in
Reserves and Surplus schedule during the year ended September 30, 2005.
18. The Company has set up a project for Co-generation of 6 MW of
Power at Mawana Sugar Works, district Meerut in the State of U.P. and
commenced the sale of power to Uttar Pradesh Power Corporation Limited
w.e.f. March 22, 2006.
19. On the basis of managements review in respect of certain matters,
the Company has written back provisions relating to prior years
aggregating Rs. 31 millions under the head `other income during the
year ended September 30, 2006.
21. There are no foreign currency exposures that are hedged by
derivative instruments or otherwise as at 30.09.2006.
22. The current year figures are not comparable with that of previous
year as it includes figures of erstwhile Nanglamal Sugar Limited,
amalgamated with the Company pursuant to the Scheme of Amalgamation
(refer note 8).
23. Previous years figures have been regrouped wherever necessary.