Belapur Industries Ltd Management Discussions.

BELAPUR INDUSTRIES LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS DIFFERENTIAL LEVY SUGAR PRICES The Members may be aware that the Company had already received from the Ministry of Food differential amount in the year 1996-97 towards differential Levy Sugar Price for the seasons 1974-75 to 1979-80 as per revised price notification issued by Government as per the Order of the Supreme Court dated 22nd September 1993. While fixing the revised prices the Government ignored to include the element of additional cane prices payable by the sugar producers under Clause 5A of the Sugar Cane (Control) Order 1966. The Industry therefore filed a Civil Application in the Supreme Court for an appropriate direction to the Union Government to amend the notifications of refixation of levy sugar prices taking into account the liability of the sugar producers under Clause 5A of the Sugar Cane (Control) Order 1966. The Supreme Court by its judgement dated 28th January 1997 vindicated the stand and directed the Union Government to issue an additional revised prices for the seasons 1974-75 to 1979-80 as per its Order dated 1st July 1998. However the claims for difference in prices is yet to be settled by the Government. The Company is vigorously following up the matter to get the differential amount including differential amount in respect of supplies made for Army Purchase and Exports. WINDING UP PETITIONS AGAINST THE COMPANY The Members were informed about Winding up Petition filed by Maharashtra State Farming Corporation Limited (MSFC Ltd.,) and the Counter Claim filed by the Company in the High Court, Mumbai. The High Court, Mumbai after noting the withdrawal of Rs. 65.00 lacs deposited by the Company along with interest by MSFC Ltd., have finally disposed off the Petition, and have asked to claim the rental amount by a separate fresh Suit. The matter is under process with Pune High Court.