Explanation by Tilaknagar Industries Ltd., regarding the allegation of evasion of taxes!

Tilaknagar Industries Ltd., Chief Vigilance Officer Dr. Keshab Nandy, Chief Finance Officer Mr. Collin Pal, Company Secretary Mr. Gaurav Thakur, Regional Sales Manager Mr. P. Meenakshi Sundaram and others met Mr. G. Sugumaran, Secretary, Federation for People’s Rights (FPR) on 23.02.2010 at Puducherry and given the following explanation in writing regarding the allegation of evasion of taxes to the tune of Rs Five crore by TI:

We introduce ourselves as one of the leading players in the Indian alcoholic beverage industry and manufactures of Indian Made Foreign Liquor (IMFL), with over 20 brands across a diverse range of price and product segments, and an ever growing, loyal customer base. TI markets its products across a large number of states in India, and is gradually assuming a pan-national presence. It also exports to Western Africa, the Middle East, the Far East and Caribbean countries.

Established in 1933 as The Maharashtra Sugar Mills Ltd. (MSM), TI was named after the revered freedom fighter Sri Bal Gangadhar Tilak and was one of Maharashtra’s first private sugar factories, which served the nation for over five decades. A change in government stance effected the transition of TI to the alcoholic beverage business. Today TI has established its distinct identity in IMFL business with steady growth and production of high quality liquor brands.

Tilaknagar Industries Ltd. (TI) has a strong basket of brands like Courrier Napoleon Brandy, Mansion House Brandy & Whisky, Senate Royale Whisky, Classic Whisky, Savoy Club range of products, etc, and the same are being sold all over India & abroad. TI also has a sizable sale in CSD having enlisted four of its brands. Mansion House French Brandy is the second fastest growing brand in the Indian liquor industry.

We would like to bring to your notice about the reports published in few newspapers, wherein you have been quoted as alleging that TI has manipulated its accounts and thereby caused a loss of about Rs. Five crores to the Government exchequer.

We would have appreciated it far better had you sought some/any clarification from us (TI) before being a part of such reports. Our CFO and the undersigned as Chief Vigilance Officer could have been more than willing and able to duly address all of your concerns and genuine queries.

Our Company (TI) has an impeccable record for over the past 75 years and has made remarkable contributions to industrial and social development of Maharashtra. Our former Chairman, Mr. D.M. Dahanukar was also awarded the Padma Shri in recognition of his outstanding contribution to society.

We have always been a law abiding Company and our business has been growing by leaps and bounds in the past few years. Our sales in Puducherry have grown to 202600 c/s in April 09 – Jan 10 from 178000 c/s in April 08 – Jan 09. Correspondingly our duty contribution to the state of Puducherry has also increased from Rs.1753 lac to Rs.1994 lac a growth of 14%.

We would like to express our willingness and eagerness in exploring this new facet, which you have alleged too.

We feel obliged to make the effort to at least try and give an explanation to such and other rumors being floated about.

Yours faithfully,

For Tilaknagar Industries Ltd.

Dr. Keshab Nandy,
Chief Vigilance Officer.

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