| 1 In accordance with Accounting Standards(AS - 28), during the period,
the company has reassessed its fixed assets and is of the view that no
further impairment/reversal is considered to be necessary in view of
its expected realizable value.
2 The company is engaged in manufacture of ENA (Extra Neutral Alcohol)
and blending and bottling of IMFL. During the year, the distillery unit
has not functioned and hence the results of the company relates to one
segment only viz. Blending & Bottling.
3 Note on Turnover Tax
The company has a turnover tax liability of Rs 3,69,82,841/- which has
been fully provided for in the books of accounts as on 31-03-2014. The
company has included a prayer to settle the Turnover Tax (TOT) dues in
its Draft Rehabilitation Scheme (DRS) which was submitted by the
Operating Agency (OA), M/s State Bank of Travancore to the Honourable
Board for Industrial and Financial Reconstruction (BIFR). As per the
DRS, the concessional rate of interest on TOT dues will be started from
the date of sanctioning of the DRS. The company is waiting for a final
verdict from the Honourable BIFR. In view of the above the management
feels that no provision for interest on turnover tax liability is
required to be made in the books of accounts at this stage.
4 Contingent liabilities
(a) Claims against the Company not acknowledge as Debt
i) ESI Liability against which the
Company has preferred appeals 46,35480 46,35480
(ii) Turnover Tax relating to bottling
parties(Refer Note 26.1) 1,00,54196 1,00,54,196
(iii)Employees dues in litigation 46,043 46,043
(iv) IMFL old stock Excise duty
in appeals 41,92,087 41,92,087
(v) Import fee on Grape &
Malt Spirit 131840 1,31,840
(b) Guarantees Nil Nil
5. The Turnover Tax liability of Rs. 1,00,54,196 represents amount
remaining unpaid by bottling parties. This amount is contingent in
nature and pertains to earlier years'. The Company has taken steps to
collect the same from bottling parties. The Operating Agency M/s State
Bank of Travancore has submitted the Draft Rehabilitation Scheme,
including the same as Turnover Tax payable and receivable from bottling
parties, before the Hon'ble Board for Industrial and Financial
Reconstruction (BIFR) for the company's reconstruction on 21.11.2013.
As the company is still awaiting the verdict from Hon'ble Board for
Industrial and Financial Reconstruction , the company is of the opinion
that no provision is required for the said amounts at this stage.
6. Note on Deferred Tax Asset (Net) The Company has recognized
deferred tax asset to the extent of deferred tax liability arising
during the year. The balance of deferred tax asset on timing
differences arising on account of depreciation and carried forward
losses has not been recognised as the management believes that there
exists no certainity in matter to its realisations.
7. As the company is a sick industrial company under subsection (1) of
section 17 of the Sick Industrial Companies (Special Provisions) Act
1985 (1 of 1986), registered with BIFR and company has sufficient carry
forward losses, hence there is no tax liability under Minimum Alternate
Tax (MAT) or under normal provision of the Act during the year.
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