Uttam Sugar Mills

1.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) amounting to Rs.798879
 thousands (Previous year P.s.710582 thousands)
 
 2.  Contingent Liabilities not provided for:
 
 a) Bank guarantee in favour of Uttarakhand Environment Protection &
 Pollution Control Board Rs.Nil thousands (Previous year Rs.1100
 thousands) and U.P.Pollution Control Board Rs. 100 thousands (Previous
 year Nil).
 
 b) Bank Guarantee in favour of Chief Director (Sugar) Department of
 Food and Public Distribution, Ministry of Consumer affairs, New Delhi
 Rs.20000 thousands(Previous year Rs.20000 thousands).
 
 c) Letter of credit in favour of suppliers Rs.163424 thousands
 (Previous year Rs.202543 thousands).
 
 d) Excise duty / Sales Tax / Income Tax demands and show cause notices
 aggregating to Rs.77027 thousands (Previous year Rs.83687 thousands)
 against which company / Department has preferred appeals/filed replies.
 However, in respect of certain notices since there is no present and
 possible obligation of any kind and based on the legal opinion, the
 same has not been considered as liability of any kind.
 
 e) Corporate Guarantee of Rs.250000 thousands (Previous Year Rs. Nil)
 given by the Company to banks on behalf of farmers.
 
 f) In respect of pending court cases by/against ex-employees amount not
 ascertainable at this stage.
 
 g) Cane Price payable, if any, for the season 2007-08, presently not
 ascertainable, (Refer Note no. 9 ii).
 
 3.  Amount of borrowing cost capitalized to fixed assets during the
 period is Rs. 128251 thousands (Previous Year Rs.  15605 thousands).
 
 4.  All the Current Assets, Loans and Advances, in the opinion of the
 Board, have a value on realization which in the ordinary course of
 business shall at least be equal to the amount, at which it is stated
 in the Balance Sheet.
 
 5.  Advances recoverable in cash or in kind as appearing in schedule
 no. 11 include Rs. 420 thousands (Previous Year Rs.  420 thousands)
 paid as share application money and Rs. 893 thousands (Previous Year
 Rs. 1174 thousands)as other advances and also capital advances as
 appearing in schedule no. 5 of Balance Sheet includes a sum of Rs.
 150391 thousands (Previous Year Rs. 156872 thousands) given against
 purchase of capital goods in ordinary course of business to companies
 in which some directors of the company are interested as its
 directors/shareholders.
 
 6.  Balances of Certain Debtors, Creditors and Loans & Advances are
 subject to reconciliation and adjustments, if any.
 
 7.  Based upon the information received from vendors regarding their
 status under the Micro, Small and Medium Enterprises Development Act,
 2006, the principal amount due in accordance with the said Act is
 Rs.2791 thousands and interest due/remaining unpaid thereon is Rs.664
 thousands as at the end of the period.
 
 8.  Since during the year the company has operated in a single primary
 business segment i.e. manufacturing & sale of sugar in the domestic
 market only, the disclosure requirement of Accounting Standard (AS) -17
 Segment Reporting issued by the Institute of Chartered Accountants of
 India is not applicable.
 
 9.  i) Exceptional Items appearing in Profit & Loss account represent
 the balance Cane liability for the season 2006-07 paid during the
 period at State Advised Price (SAP) as per the directions of Honble
 Supreme Court of India.
 
 ii) Consequent to the interim order of the Honble Supreme Court,
 Company has accounted for the Sugar Cane purchases liability for the
 season 2007-08 at Rs.110/- per quintal or at amount already paid to the
 farmers which is in excess of Rs.110/- per quintal, instead of SAP of
 Rs.125/127 per quintal fixed by the State Governments.  Necessary
 adjustment, if any, will be given effect by the Company in accordance
 with the final order of Honble Supreme Court in this matter.
 
 iii) The cane purchase liability for season 2008-09 has been accounted
 for at SAP fixed by the State of Uttar Pradesh and Uttarakhand.
 
 10.  The Company has made an investment of the requisite amount for
 setting up New Projects in the state of Uttar Pradesh in accordance
 with the UP Sugar Industry Promotion Policy,2004 and has accordingly
 filed application for eligibility under the above policy, which is
 still pending. However, the new State Government has terminated the
 Policy with effect from June 4,2007 and has expressed its intention to
 introduce another policy. Company has been legally advised that it is
 eligible for the benefits under the said policy.
 
 11.  Sundry Creditors others includes short term loan of Rs.231500
 thousands (Previous Year Rs. Nil) by Punjab National Bank to the
 farmers, wherein the Company is acting as Business Facilitator and
 the same is backed by indemnity/ guarantee of the Company. Sundry
 Creditors others also includes Rs.250000 thousands( Previous Year Rs.
 Nil) from Punjab National Bank under scheme for loan to farmers against
 Sugar Cane Receivables wherein the Company is acting as Managing
 Agent/Facilitator and the amount Rs. 250000 thousands is lying in the
 Escrow Account as on 31st December 2008.
 
 12.  In accordance with Accounting Standard (AS)-28 Impairment of
 Assets issued by the Institute of Chartered Accountants of India, the
 Company has carried out an exercise to ascertain the impairment, if
 any, in the carrying value of its fixed assets. However no such case
 was found.
 
 13.  During the period, Company has availed a term loan of Rs.336500
 thousands for payment of cane dues for the season 2006-07 and 2007-08
 as per scheme for Extending Financial Assistance to Sugar Undertakings
 2007 issued by Government of India. A sum of Rs.38718 thousands has
 been charged / recovered by the Bank from the Company to be reimbursed
 as per scheme. Pending reimbursement of the said amount from the Bank
 in accordance with the scheme, the same has been included in Advance
 Recoverable in cash or Kind in Schedule 1V.
 
 14. In view of present liquidity situation, the Company has approached
 its bankers for rescheduling and restructuring of its loans, wherein
 cutoff date has been considered as January 1st, 2009 (except principal
 installment due for term loans for the project under implementation as
 on December 31st, 2008). The same is pending for approval.
 
 NOTES:
 
 i) Sales appearing in the Profit & Loss Account also include sale of
 Bagasse Rs. 83732 thousands (Previous Year Rs.59937 thousands), sale of
 Bio Fertilizer Rs. 10175 thousands (Previous Year Rs.2304 thousands)
 and other sale Rs.5186 thousands(Previous Year Rs.695 thousands). Sales
 quantity of Molasses includes wastage of 68564 quintal.
 
 ii) Production and stock of Sugar includes Brown Sugar.(BISS)
 
 iii) Value has been Rounded-Off to the nearest thousands rupee and the
 quantities have been Rounded-off to the nearest Qtl.
 
 iv) Closing Stock of By Products as appearing in Balance Sheet and
 Profit & Loss Account include stock of Bagasse Rs.11682 thousands
 (Previous Year Rs.2922 thousands) and stock of Bio-Fertilizer Rs.
 Rs.31966 thousands (Previous Year Rs.5114 thousands).
 
 15.  The figures for the current period comprises fifteen months from
 1st October 2007 to 31st December 2008 whereas the corresponding
 previous year figures are for a period of twelve months, as such not
 comparable. The previous year figures have been re-arranged, regrouped
 and reclassified wherever necessary.
 
 16.  The Other information as required under Paragraphs 3,4 and 4-D of
 Part-Ill of Schedule VI of the Companies Act, 1956 not given being
 either Nil or Not Applicable.