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Notes to Accounts of Shree Hari Chemicals Export Ltd.

Mar 31, 2015

Company Overview

Shree Hari Chemical Export Limited (the "Company) is a Public Limited Company domiciled in India and is Listed on the Bombay Stock Exchange (BSE). The Company was established in 1987. The Company is a leading manufacturer of H-Acid. It has its manufacturing facility at Mahad, Raigad District of Maharashtra, India. Through innovation, dedication & customer satisfaction, Company had succeeded in developing customers worldwide.

1. As per the direction of Maharashtra Pollution Control Board (MPCB) by vide letter dated 26.02.2015 Company is currently permitted to operate at 75% of its production capacity of Company.

2. Equity Shares :

i. The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. Details of security provided in respect of the secured Short-term borrowings:

a. Cash Credit From State Bank Of India having debit balance of Rs. 62,63,562/- as on 31st March, 2015. The details of same is as under;

i. Security : The Working Capital loans from State Bank of India is secured by way of hypothecation of Company's entire current assets present and future of Company. This is also secured by way of mortgage of Collateral Security (i) Factory Land, Building, Plant and Machinery and other Fixed Assets of Company situated at Plot Nos. A-8, A-9, A-13, A-15/ 1 and A-15/2, MIDC, Mahad. (ii) Office No. 103 and 104 Unique Tower, Goregaon, Mumbai (iii) Lien of TDR of Rs. 0.13 crore in the name of Company. Further, Directors of Company has also given personal guarantee.

Debit balance of cash credit from State Bank of India is included in cash and cash equivalents under Note no-11 of the Financial Statements.

4. Balances with banks include fixed deposits amounting to Rs. - Nil - (As at March 31st, 2014 Rs. 32,437,410/-) and Bank Guarantee margin monies amounting to Rs. 1,757,000/- (As at March 31st, 2014 Rs. 340,697/-) which have a maturity of more than 12 months.

This amount is kept in separate account maintained by Company with State Bank of India. (Refer Note-11 "Cash and Bank balances")

During the year Company has transferred unpaid dividend for Financial Year 2006-07 of Rs. 524,562/- to the Investor Education and Protection Fund.

5. Depreciation of Rs. 4,71,073/- on account of assets whose useful life is already exhausted on April 01, 2014 has been charged into the Statement of Profit and Loss after retaining residual value which is 5% of original cost. This amount is included in the depreciation of the current year.

6. During the year Company has discarded the Fixed Assets which is retired from the active use having Gross Block of Rs. 29,422,356/-, accumulated depreciation of Rs. 27,494,631/- and WDV of Rs. 19,27,725/-. Remaining W.D.V. of Rs. 19,27,725/- has been adjusted in Statement of Profit and Loss.

7. The balance of Sundry Debtors, Creditors, Loans & Advances are subject to their confirmation and reconciliation, if any. Bank balance is subject to cheques on hand realization.

8. Segment Reporting :

As the Company's business activity falls within a single primary business segment "H-Acid Chemical product" the disclosure requirements of Accounting Standard (AS) 17 "Segment Reporting" are not applicable.

9. In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts at which they are stated in the Balance Sheet, if realized in ordinary course of business.

10. Related Party Disclosure :

a. Associates: Shree Hari Finvest Pvt Ltd.

b. Key Managerial Personnel

i. Shri K. L. Ramuka

ii. Shri B. C. Agrawal

iii. Shri H. P. Ramuka iv. Shri S. K. Kedia

v. Smt. P. R. Ajmera

c. Relatives of Directors:

i. Shri Anup Ramuka

ii. Shri Amit Ramuka

iii. Shri Sarthak Agarwal

11. As per Accounting Standard-22, issued by the Institute of Chartered Accountants of India, the Deferred Tax Liability of Rs. 180.44 Lakhs (Rs. 107.10 Lakhs) has been recognized in the Statement of Profit & Loss. The Deferred Tax Liability arises mainly due to the timing difference of depreciation claimed as per the books of account and the depreciation claimed under the Income Tax Act, 1961. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are not recognized because there is no virtual certainty that there will be sufficient future taxable income available to realize such assets.

12. Company has not obtained actuarial valuation report for Post employment or retirement benefits like Gratuity and Leave Encashment etc., hence as required the Company has not followed AS- 15. Hence details are required to be presented in notes to accounts as per Actuarial Report is not given.

Provision for Gratuit has been made as per valuation provided by Life Insurance Corporation of Indai (LIC).


Mar 31, 2014

1. As on the date of signing of this report,on the basis of report submitted by NEERI, the Hon''ble High Court has permitted the company to restart its unit for the purpose of production. However, the permission is only restricted to utilization of 50% of production capacity. In the opinion of the management, the company is in position to comply with all the suggested terms & conditions that are further required by Maharashtra Pollution control Board/Bombay High Court to utilize the remaining capacity, as set out in the judgment.

2. Details of security provided in respect of the secured Short-term borrowings:

a. Cash Credit From State Bank Of India of Rs.2,22,75,504/-(debit balance)

i. Security : The Working Capital loans from State Bank of India is Secured by way of hypothecation of company''s entire stock of raw materials both imported as well as indigenous, stock in process, consumable stores, spares and packing material and finished products, as well as the personal guarantee given by the director of the company.

3. Balances with banks include fixed deposits amounting to Rs.3,24,37,410 (As at 31 March, 2013 Rs.24,37,410) and Bank Guarantee margin monies amounting to Rs.3,40,697 (As at 31 March, 2013Rs.1,27,538) which have a maturity of more than 12 months.

4. The balance of Sundry Debtors, Creditors, Loans &Advances are subject to their confirmation and reconciliation if any. Bank balance subject to cheques on hand realization.

Due to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management. This has been relied upon by the auditor.

5. Segment Reporting :

As the Company''s business activity falls within a single primary business segment "H-Acid Chemicals product" the disclosure requirement of Accounting Standard (AS) 17 "Segment Reporting" are not applicable.

6. In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts at which they are stated in the Balance Sheet, if realized in ordinary course of business.

7. Related Party Disclosure :

a. Associates: Shree HariFinvestPvt Ltd.

b. Key Managerial Persons

i. Shri K. L. Ramuka

ii. Shri B. C. Agrawal

iii. Shri H. P. Ramuka

iv. Shri Anup Ramuka

v. Shri Manoj Agrawal

vi. Shri Amit Ramuka

vii. Shri Sarthak Agrawal

8. As per Accounting Standard -22, issued by the Institute of Chartered Accountants of India, the Deferred Tax Liability of Rs.107.10Lacs (Rs.126.08 Lacs) has been recognized in the Statement of Profit & Loss. The Deferred Tax Liability arises mainly due to the timing difference of depreciation claimed as per the books of account and the depreciation claimed under the Income tax Act, 1961. Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are not recognized because there is no virtual certainty that there will be sufficient future taxable income available to realize such assets.

9. There are no dues payable to the Investor Education and Protection Fund as at 31st March 2014.

10. Contingent Liability:

(Amt. In Rs.)

Contingent liabilities and commitments 2013-14 2012-13 (to the extent not provided for)

(i) Guarantees 2,484,715 900,415

(ii) Demand against Mathadi Board 4,420,536 4,420,536

(iii) Show Cause Notice received by the company from custom/ excise department not acknowledge as debt 5,506,343 5,506,343

(iv) Income Tax Demand (Without adjustment of refund) 29,39,812 29,39,812


Mar 31, 2013

1 The future production of the company''s Mahad unit will depend upon the final outcome of the judgment of the

Hon''ble Bombay High Court on the Public Interest Litigation (PIL) filed. As on the date of signing of the report the matter is still pending before Hon''ble Bombay High Court. The Hon''ble Bombay High Court has directed to NEERI to submit a report indicating whether the company should permited to restart its unit for the purpose of production. In the opinion of the management the company is in position to comply with all the suggested terms & conditions that are further required by Maharashtra Pollution control Board/Bombay High Court as set out in the judgment.

2 Details of security provided in respect of the secured Short-term borrowings:

a. Cash Credit From State Bank of India of Rs. 3,23,12,929/-

I. Security : The Working Capital loans from State Bank of India is Secured by way of hypothecation of company''s entire stock of raw materials both imported as well as indigenous, stock in process, consumable stores, spares and packing material and finished products, as well as the personal guarantee given by the director of the company. (Refer Note No. 3 "Short Term Borrowings")

3. Balances with banks including fixed deposits amounting to Rs. 24,37,410 (As at 31 March, 2012

Rs. 24,37,410 ) and Bank Guarantee margin monies amounting to Rs. 17,018 (As at 31 March, 2012 Rs. 17,080) which have a maturity of more than 12 months.

4 Sundry debtors include Rs.17,792,620 which is doubtful in nature. One of the debtor of the company filed an insolvency petition in the local court of Frankfurt, Germany. The company has received a notice from administrator of the insolvency proceedings to lodge its claim if any. The company has lodged its claim on 17.02,2010 before the administrator. In view of the above the amount receivable from the debtor of Rs. 17,792,620 is doubtful in the nature. The amount which the company lodged is taken on the basis of exchange rate of 31/03/2010.

5. The balance of Sundry Debtors, Creditors, Loans & Advances are subject to their confirmation and reconciliation if any. Bank balance subject to cheques on hand realization.

Due to Micro and Small Enterprises have been determined to the extend such parties have been identified on the basis of information collected by the management. This has been relied upon by the auditor.

6 Segment Reporting :

As the Company''s business activity falls within a single primary business segment "H-Acid Chemicals product" the disclosure requirement of Accounting Standard (AS) 17 "Segment Reporting" are not applicable.

7 In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts at which they are stated in the Balance Sheet if realized in ordinary course of business.

8 Related Party Disclosure :

a. Associates : Shree Hari Finvest Pvt Ltd.

b. Key Managerial Persons i. Shri K.L.Ramuka ii. Shri B C Agrawal iii. Shri H P Ramuka iv. Shri Anup Ramuka v. Shri Manoj Agrawal

9 As per Accounting standard -22, issued by the Institute of Chartered Accountants of India, the Deferred Tax Liability of Rs. 126.08 Lacs (Rs. 148.80 Lacs) has been recognized in the Statement of Profit & Loss. The Deferred Tax Liability arises mainly due to the timing difference of depreciation claimed as per the books of account and the depreciation claimed under the Income tax Act, 1961. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are not recognized because there is no virtual certainty that there will be sufficient future taxable income available to realize such assets.

10 There are no dues payable to the Investor Education and Protection Fund as at 31st March 2013.

11 Contingent Liability :

Contingent liabilities and commitments

(to the extent not provided for) 2012-13 2011-12

(I) Showcause notices received by the Company from custom/ excise Department not acknowledged as debt 5,506,343 5,506,343

(ii) Guarantees 900,415 4,295,815

(iii) Demand against Mathadi Board 4,420,536 4,420,536

(iv) Income Tax Demand for A.Y. 1998-99 29,39,812 1,428,737

12 The financial statements for the year ended 31st March, 2013 had been prepared as per the then applicable, Pre-Revised Schedule-VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2013 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification.


Mar 31, 2012

1. The future production of the company's Mahad unit will depend upon the final outcome of the judgement of the Hon'ble Bombay High Court on the Public Interest Litigation (PIL) Filled. As on the date of signing of the report the matter is still pending before Hon'ble Bombay High Court. In the opinion of the management the company is in position to comply with all the suggested terms & conditions that are further required by Maharashtra Pollution Control Board / Bombay High Court as set out in the judgement.

2. Details of terms of re-payment for the Secured long-term borrowings and security provided in respect of the secured long-term borrowings:

a. Term Loan From State Bank of India

i. Security : The Term loan from State Bank of India is secured by way of mortgage of immovable property and hypothecation of all plant, machineries, spares, tools and accessories, stores relating to plant and machinery etc. both present and future at its plant at A/8,A/9, A/13, A15/1, A15/2 at MIDC industrial area of MAHAD.

ii. Terms of Repayment: Term Loan from bank are repayable in monthly installments of Rs. 2,200,000/-.

iii. Term Loan was from State Bank of India which was outstanding at Rs. 21,939,770 as on 31.03.2011.The Company has repaid entire outstanding loan of Rs. 21,939,770 during financial year 2011-2012. As amount of Rs. 21,939,770 was repayable within 12 months from date of financial statement as on 31.03.2011 so, same is classified as other current liability. (Refer Note No. 7 "Other Current Liability)

3. Details of security provided in respect of the secured Short-term borrowings: a. Cash Credit From State Bank Of India of Rs. 4,534,182/-

i. Security : The Working Capital loans from State Bank of India is Secured by way of hypothecation of company's entire stock of raw materials both imported as well as indigenous nous, stock in process, consumable stores, spares and packing material and finished products, as well as the personal guarantee given by the director of the company. (Refer Note No. 3 "Short Term Borrowings")

4. Balances with banks include deposits amounting to Rs. 24,37,410 (As at 31 March, 2011 NIL ) and Bank Guarantee margin monies amounting to 'Rs.17,080 (As at 31 March, 2011 ' Rs. 11,17,762) which have an maturity of more than 12 months.

5. Sundry debtors include Rs.17,792,620 which is doubtful in nature. One of the debtor of the company filed an insolvency petition in the local court of Frankfurt, Germany. The company has received a notice from administrator of the insolvency proceedings to lodge its claim if any. The company has lodged its claim on 17.02,2010 before the administrator. In view of the above the amount receivable from the debtor of Rs. 17,792,620 is doubtful in the nature.

6. The balance of sundry debtors, Creditors, Loans & advances are subject to their confirmation and reconciliation if any. Bank balance subject to cheques on hand realization.

Due to Micro and Small Enterprises have been determined to the extend such parties have been identified on the basis of information collected by the management. This has been relied upon by the auditor.

7. Segment Reporting :

As the Company's business activity falls within a single primary business segment "H-Acid Chemicals product" the disclosure requirement of Accounting Standard (AS) 17 "Segment Reporting" are not applicable.

8. In the opinion of the Board, current assets, loans and advances have a value at least equal to the amounts at which they are stated in the Balance Sheet, if realized in ordinary course of business.

9. As per Accounting standard -22, issued by the Institute of Chartered Accountants of India, the Deferred Tax Liability of Rs.148.80 Lacs (Rs.175.62 Lacs) has been recognized in the Statement of Profit & Loss. The Deferred Tax Liability arises mainly due to the timing difference of depreciation claimed as per the books of account and the depreciation claimed under the Income tax Act, 1961. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are not recognized because there is no virtual certainty that there will be sufficient future taxable income available to realize such assets.

10. Contingent Liability :

Contingent liabilities and commitments 2011-12 2010-11

(to the extent not provided for)

(i) Show cause notices received by the Company from 5,506,343 5,657,638 Custom/Excise Department not acknowledged as debt

(ii) Guarantees 4,295,815 4,741,592

(iii) Supply of Capital Goods 1,894,500 1,894,500

(iv) Demand against Mathadi Board 4,420,536 4,420,536

(v) Income Tax Demand for A.Y. 1998-99 1,428,737 1,428,737

11. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, Pre-Revised Schedule-VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.


Mar 31, 2010

1. Contingent liabilities not provided for in respect of :

AS AT AS AT

31/03/2010 31/03/2009

a) Bank Guarantees 4,070,292 3,170,292

b) Income Tax (A.Y.2003-2004) - 392,861

c) Supply of Capital Goods 2,169,500 5,620,500 (Net of Advances )

d) Mathadi Board 4,420,536 -

e) Show Cause Notice from Custom Depatment for Sulphur 1,544,493 -

f) Show Cause Notices received from various authorities, amount which is not accertainable.

2. No provision has been made for the deminution value of the investments held by the Company, as in the opinion of the management this is temporary in nature.

3. Balance of Sundry Debtors, Sundry Creditors, Loans & Advances and Loans and Borrowings are subject to confirmation and reconciliation.

4. Miscellaneous and other expenses included bank charges, office expenses, sundry balances written off, brokerage & commission paid and other miscellaneous expenses.

5. Amount due to S.S.I. and/or ancillary undertaking as sundry creditors as on 31st March, 2010 due to the following parties to, the extent ascertained from the available information

M/s. Shree Laxmi Powder Products

M/s. Newreka Chemicals Pvt. Ltd.

M/s. Laxmi Micro Mettalic Industries

M/s. Dyechem Industries

M/s. Shree Mahalaxmi Enterprise

6. Deferred tax assets/liability on account of timing difference as per Accounting Standard 22 issued by The Institute of Chartered Accountants of India. For the Year deferred tax liability amounting Rs.1,23,46,904/- being credited to the Profit & Loss account and debited to the opening balance of deferred tax liabilities.

7. The deferred tax balance arising principally on account of the timing difference between the depreciation admissible under the Income Tax and depreciation adjusted in the accounts. Though adjustments is being made in terms of Accounting Standard 22 having regard to the normal capital expenditure which the Company is expected to continue to make in future years, the timing difference not effectively reversed and no cash out go likely to be materialised on account thereof.

8. Application money of Rs. 44,40,000 received against 12,00,000 Zero Percent convertible Warrants of Rs. 37/- per warrant convertible into equal number of equity shares of Rs. 10/- each at a premium of Rs. 27/- per share having option to convert into equity shares by the warrant holder within eighteen months from the date of allotment of warrants. However none of the warrant holder exercise the option to convert the warrant into equity shares within eighteen months from the date of allotment and the time for conversion of warrants had lapsed. Hence the aforesaid application money was forfeited and transferred to Share Forfeited A/c.

9. Sundry Debtors includes of Rs. 2,03,60,154/- which is doubtfull in nature. One of the debtor of the Company filed an insolvency petition in the local Court of Frankfurt, Germany . The Company has received a notice from the Administrator of the insolvency proceeding to lodge its claim if any. The Company has lodged a claim on 17.02.2010 before the Administrator. In view of the above the amount receivable from the debtor of Rs. 2,03,60,154/- is doubtful in nature. The Company has not provided the benefits receivable under DEPB Scheme.

10. Related Parties Transactions :

a) Parties where control exists :

i) Shree Hari Finvest Limited

b) Other related parties with whom transactions have taken place during the year in ordinary course of business :

A) Key Management Persons :

i) Shri K. L. Ramuka

ii) Shri B. C. Agrawal

iii) Shri R. R. Agarwal

iv) Shri K. C. Ramuka

v) Shri H. P. Ramuka

vi) Shri Anup Ramuka

vii) Shri Manoj Agrawal

11. The Company is a single segment company engaged in manufacturing of H-Acid. According the disclouser requirements as prescribed in the Accounting Standard-17 (AS-17) on segment reporting issued by the Institute of Chartered Accountants of India is not applicable.

12. Figures of the previous year have been regrouped / rearranged & reclassified wherever necessary for better presentation of financial statement

13. The amounts in the Balance Sheet and Profit & Loss Account are rounded off to the nearest rupees.

14. The basic earning per share (EPS) as disclosed in the profit and loss account has been calculated by dividing the net profit for the year ended on 31.03.2010 attributable to shareholders ( Rs. 85.23 lacs) by its weighted average number of equity shares (4446300) outstanding during the said financial year.

15. Schedule 1 to 13 form an integral part of Balance Sheet as on 31st March, 2010 and Profit & Loss Account for the year ended on that date.

 
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