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Notes to Accounts of Sree Rayalaseema Alkalies & Allied Chemicals Ltd.

Mar 31, 2015

1.1 EXCEPTIONAL ITEM:

The company has opted to exit from CDR Scheme and also paid recompense amount in the previous year of Rs. 1345.71- lakhs as per CDR Scheme terms and conditions and the exit certificate received from CDR forum during the current year.

1.2 DISCONTINUEING OPERATIONS OF POWER PLANT AT BELLARY: Disclosures under Accounting Standard (AS24)

The Power Purchase Agreement with Karnataka Electricity Board (Power Distribution Companies) was expired on 31.08.2012 and the agreement was not renewed and generation of power was stopped from September, 2012. The company has discontinued the operations of this segment from the year 2013-14 and exploring the possibilities for disposal of its Plant.

1.3 a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year resulting in Profit amounting toRs.3.98 lakhs(previous year Loss Rs.66.58 lakhs) and exchange difference on outstanding loans as on 31.3.2015 valued at applicable Foreign Currency Exchange Rates on 31st March, 2015 resulting in Loss amounting to Rs. 19.10 lakhs debited to statement of profit and loss as per AS-11 (previous year Loss Rs.128.95 lakhs).

b) The Exchange difference in respect of imports and exports during the year resulting in Profit amounting to Rs.81.51 lakhs credited to Statement of Profit and Loss. (Previous Year Loss Rs. 186.30 lakhs)

1.4 Lease Payments: The total future minimum lease payments under non-cancelable operating leases are as under:

1.5 Employee Benefits:

A) Defined Contribution Plans

The Company makes Provident Fund and superannuation Fund contributions which are defined contribution plans, for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.80,90,186 (Previous year Rs.78,69,008)for Provident Fund contributions and Rs.6,13,785 (Previous year Rs.23,94,257) for Superannuation Fund contributions in the Statement of Profit and Loss.The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

B) Defined Benefit Plan

The Company's obligation towards the Gratuity Fund is a defined benefit plan and is funded with Life Insurance Corporation of India. The disclosures in respect of actuarial valuation of gratuity as required under Accounting Standard 15 are given below.

1.6 Under the Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined in the said Act.The company is in the process of compiling the relevant information from its suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2015:

A] SMALL ENTERPRISES-Rs.2211.82Lakhs (Previous Year Rs.2274.18Lakhs);

B] MICRO ENTERPRISES -Rs. 18.06Lakhs(Previous Year Rs.317.45Lakhs); and

C] MEDIUM ENTERPRISES- Rs.545.08Lakhs(Previous Year Rs.817.99Lakhs);

1.7 Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company and the company has sent confirmation letters to the parties and the confirmations are awaited.

1.8. Earnings per Share:

Basic and diluted earnings per share calculated in compliance with the provisions of Accounting standard (AS20) for the year ending 31.03.15 comes to Rs. 2.82 p.a (Previous year Rs.0.64 p.a.) and Rs.2.80 p.a (previous year Rs.0.638 p.a.) respectively.

The denominator for Basic EPS is 7.86,66,928 (previous year 7,45,18,447) equity shares and the numerator is net profit after tax as per Profit and Loss account and after adjusting preference dividend for the year and tax thereon, amounting to Rs. 22,14,93,029 (previous year Rs.4,76,95,806 )

The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e 7,90,83,643 (previous year7,51,48,862) and the numerator for this calculation is the net profit after tax as per Statement of Profit and Loss and after adjusting preference dividend and the interest at 5 % on OFCDs and the tax liability thereon, amounting to Rs. 22,16,57,714 (previous year Rs.4,79,08,744)

1.9. Figures have been rounded off to the nearest decimal of lakhs as required under revised Schedule VI.

1.10 Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2014

The Company has no Subsidaries/ Associates and has no Holding Company.

1. Out of Equity shares issued, subscribed and fully paid up 2,86,10,955 No. of equity shares of Rs.10/- each alloted on preferential allotment to Financial Institutions IDBI/IFCI by convertion of 15% Rupee/F.C loans and Debentures on 08.03.2005.The company has alloted 1,45,80,000 No.of equity shares of Rs.10/- each on 08.03.2005 and 54,20,0000 on 25.04.2006 to promotors group on preferential allotment by conversion of 2,00,00,000 fully paid share warrants issued on 08.3.2005. During the year, 37,39,240 No. of equity shares of Rs.10/- each alloted on 27.04.2013 and 35,52,278 No. of Equity Share of Rs.10/- each alloted on 10.12.2012 to promotors group on preferential allotment by conversion out of 1,12,27,560 Share Warrants alloted on 19.11.2012.

2. Cumulative Redeemable Preference shares issued, subscribed and fully paid up 1,88,82,332 of Rs.10/- each having a coupon rate of 0.01% from April, 2002 were alloted on sub-division and consolidation of 50% holding of equity shares and are redeemable after 15 year in 4 quarterly instalments commencing from 01.04.2018.

3. Redeemable Optionally Fully Convertible Debentures of 5% Series "B" 2,05,177 of Rs.100/- each issued to IFCI Ltd as per restructuring package are redeemable in 96 monthly instalments from April, 2008. In case of default in redemption of debentures, option can be exercised by IFCI Ltd to the extent of outstanding balance as on 31.3.2014 of Rs.55.56 lakhs (as on 31.3.2013 Rs.76.93 lakhs) and no fixed date of conversion.

4. There were no Long Term Deposits, Deferred Payments liabilities and Finance Lease obligations.

5. There is no continuing default as on 31.3.2014 (31.03.2013) in repayment of loans and interest payments on Debtentures and Term Loans, except two monthly instalments of Rs. 480.27 Lakhs. Deferred payment of Sales Tax of Rs.289.83 Lakhs was over due as per instalments granted by the Department. The above amounts were clasified as other current liablities.

6. Redeemable Optionally Fully Convertible Debentures of 5% Series "B" 2,05,177 of Rs.100/- each issued to IFCI Ltd as per restructuring package are redeemable in 96 monthly instalments from April, 2008. In case of default in redemption of debentures, option can be exercised by IFCI Ltd to the extent of outstanding balance as on 31.3.14 of Rs.55.56 lakhs (as on 31.3.13 Rs.76.93 lakhs) and no fixed date of conversion.

7. SECURITY:

A) DEBENTURES:

1) The above Debentures issued to IDBI are secured by first charge of all the Company''s immovable properties both present and future ranking paripassu with the mortgages and charges created / to be created with other loans and further secured by first charge by way of mortgage of Company''s properties (save and except book debts and assets exclusively charged / to be charged in favour of IDBI) including movable machinery, machinery spares, tools and accessories present and future subject to prior charge created and /or to be created in favour of Company''s Bankers on the Company''s stock of raw materials as well as to Banks on semi- finished and finished goods, consumable stores and such other movables as may be agreed to by the Trustees for securing the borrowings for working capital requirements in the ordinary course of business and further secured by pledge of 804000 Nos. of APGPCL Equity shares of Rs.10/- each and guaranteed by the Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

2) The above series "A" debentures issued to IFCI are secured in favour of theirTrustees by way of first charge on all immovable properties situated at Bellary both present and future and further secured by way of first charge on company''s movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories; present and future, subject to prior charge created and/or to be created in favour of company''s bankers on the stock of raw materials, semi finished foods, consumable stores and such other movable, as may be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

3) The above series "B&C" debentures issued to IFCI are secured in favour of theirTrustees by way of first charge on all immovable both present and future and further secured by way of first charge on company''s movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories; present and future, subject to prior charges created and / or to be created in favour of company''s bankers on the stock of raw materials, semi finished goods, consumable stores and such other movable, as may be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

B) TERM LOANS

1) The above Term Loans and Deferred loans from Institutions [except the Term Loan amount of Rs.2448 lakhs from M/s. IFCI Ltd. secured by first exclusive charge on the building, plant and machinery acquired under project schemes of Fatty Acid, Pottassium Hydroxide / and power plant at Bellary are secured by first charge on all the immovable properties both present and future and further secured by first charge by way of hypothecation of all movables (save and except book debts and inventories including movable machineries, spares, tools, accessories both at present and future, subject to prior charges created/ to be created in favour of the company''s bankers as specified movables for working capital requirements) and further Guaranteed by the Ex-Chairman & Managing Director, Sri T.G. Venkatesh.

IFCI''s Additional Margin money for working capital loan outstanding of Rs.230.21 Lakhs is further secured by pledge of 536000 Nos. of APGPCL Equity shares of Rs.10/- each and corporate guarantee provided by Sree Rayalaseema Hi-strength Hypo Ltd.

2) The above Term loans from Banks are secured by first pari passu charge on fixed assets of chloromethanes Project, and 2nd pari-passu charge on other existing fixed assets, 2nd pari passu charge on the current assets and personal guaranteed by Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

8. SECURITY

a) Short Term Loans from Banks:

The above Working Capital Demand Loans,Cash Credits and Bills discounted by Banks are secured by 1st pari passu charge by way of hypothecation of inventories and receivable of the company and further secured by 2nd pari passu charge on land, building and Plant and machinery and guaranteed by the Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

b) Letters of Credit from Banks:

The above Letter of credit facility availed from Banks were secured by 1st pari passu by way of hypothecation of inventories and receivable of the company and further secured by 2nd pari passu charge on land, building and Plant and machinery and guaranteed by the Ex-Chairman and Managing Director, Sri T.G. Venkatesh.

c) Bills discounted with Can Bank Factors Ltd:

The above Sale Bill discounting facility from Can Bank Factors Ltd is secured by second charge on respective fixed assets of the company ranking pari passu with charges already created/ to be created by the Company and further guaranteed by the Ex-Chairman and Managing Director, Sri T.G. Venkatesh and purchase bill discounting facility sanctioned by Can Bank Factors Ltd are secured by 2nd pari passu charge on fixed assets of the company.

9. Contingent Liabilities not provided in respect of : (Rs. in Lakhs)

Particulars Current Year Previous Year 2013-2014 2012-2013

a) Cheques/ Bills Discounted with Banks. 171.72 513.67

b) Unexpired Letter of Credits/Bank 804.11 786.63 guarantees (net of margin money paid)

c) Estimated amount of Contracts remaining to be executed on Capital Account. (Net of advances). 2824.88 4603.15

d) Arrears of dividend on cumulative redeemable preference shares of Rs.1888.23 lakhs 2.27 2.08 at a coupon rate of 0.01 % issued and allotted as per Debt Restructuring package and scheme of arrangement sanctioned by High Court of A.P. for the period from 01.04.2002 to 31.03.2014. (Payable after 15 years) i.e., from 01.04.2018.

e) Claims against the company not acknowledged as debts, being disputed and pending in appeals/ Assessments in respect of

i) Central excise matters regarding Cenvat credit availed on input consumables and on service tax payments on input services like freight, telephone, and courier etc., 370.78 368.62

ii) 1. Customs matters regarding dispute on classification of goods pending before High Court 9.90 9.90

2. Imposition of Anti Dumping Duty on in puts during December, 2010 pending 32.69 32.69 before ADC, Customs

3. Disputed duty levied on import of material during the year 2006-07 pending in appeal before the Commissioner Appeals. 16.06 16.06

iii) Sales tax matters regarding Input tax credit availed on fuels used for steam generation disallowed by the 53.91 53.91 Department and levied penalty and (53.91) (53.91) interest; Case is pending before Hon'' ble High Court of AP (Paid under Protest )

iv) Claims of Vat regarding dispute of Turnover, input tax credit on sales returns and stock transfer value 44.24 44.24 treated as sale on account of non (6.94) (5.13) acceptance of form F are pending in appeal before Appellate Asst. Commissioner (CT) Palakkad and Sales Tax Tribunal, Ernakulam (Paid under protest)

v) Claim of entry tax & interest on Entry Tax payable on Machinery items is pending before Assessing Officer DC 4.20 4.20 (CT), Bellary (50% Paid ) (2.10) (2.10)

vi) Sales tax matters regarding 132.11 132.11 liability of interest on delay in (44.04) - payment of deferred sales tax liability for the years 2005-06 and 2006-07. Stay petition filed and stay granted by Hon''ble High Court of AP. (Paid under protest)

vii) Liability of differential tax for non submission of C forms for the year 2009-10 Case is pending before Appellate 16.43 16.43 Deputy Commissioner ( Paid under (2.05) (2.05) protest)

vi) Levy of delay charges on late payment of Provident Fund by Regional 15.34 15.34 Provident Fund Commissioner.

vii) 1) Wheeling Charges levied by APCPDCL pending in Supreme Court 24.21 24.21

2) Wheeling charges levied on APGAS power supplies covered by Bank NIL NIL guarantee Rs.69.30lakhs

x) The Fuel Surcharge Adjustment (FSA) charges for the year 2008-09, 2009-10 and for the 1st quarter of 2010-11 payable to 1567.27 1567.27 APCPDCL was contested by the Industrial units including the company before Hon''ble High Court of A.P. and obtained favourable order for 2008-09 and the matter was referred to Supreme Court and the same is pending. Hon''ble High Court granted stay for the year 2009-10 and first quarter of 2010-11.

f) Differential duty on procurement of raw material as per show cause notices issued by the Customs Authorities is contested and for which no provision is considered as there will be on the 1161.14 1161.14 no liability company as per legal (125.00) (125.00) opinion obtained (paid under Protest)

g) Demand raised by Power Distribution Companies (DISCOMS) for the differential tax on account of change in Income Tax rates / tax holiday as per terms of PPA was contested by the Company before the Electricity Regulatory Commission and 500.00 500.00 the liability has been reduced to (500.00) (500.00) Rs. 500 lakhs. The DISCOMS have recovered the same from monthly bills. The company contested before the Supreme Court for refund of the recovered amount and it is pending. (Recovered amount is shown under loans and advances)

10. EXCEPTIONAL ITEM:

The company has opted to exit from CDR Scheme and the CDR Lenders (FIs and Banks) have agreed and claimed the recompense amount of Rs.1345.71 lakhs as per CDR Scheme terms and conditions. The Company has considered the recompense amount as an exceptional item of expenditure in the accounts for the year 2013-14.

11. a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year resulting in Loss amounting to Rs.66.58 lakhs (previous year Loss Rs. 27.08 lakhs) and exchange difference on outstanding loans as on 31.3.2014 valued at applicable Foreign Currency Exchange Rates on 31st March, 2014 resulting in Loss amounting to Rs.128.95 lakhs debited to statement of profit and loss as per AS-11 (previous year Loss Rs.67.35 lakhs).

b) The Exchange difference in respect of imports and exports during the year resulting in Loss amounting to Rs.186.30 lakhs charged to Statement of Profit and Loss. (Previous Year Loss Rs. 23.91 lakhs)

12. Employee Benefits:

A) Defined Contribution Plans

The Company makes Provident Fund and superannuation Fund contributions which are defined contribution plans, for qualify- ing employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.78,60,153/- (Previous year Rs. 80,47,727/-) for Provident Fund contributions and Rs.23,74,629/- (Previous year Rs.23,98,472/-) for Superannuation Fund contributions in the Statement of Profit and Loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

13. Under the Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined in the said Act. The company is in the process of compiling the relevant information from its suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2014:

A] SMALL ENTERPRISES - Rs.2274.18 Lakhs (Previous Year Rs.2315.44 Lakhs)

B] MICRO ENTERPRISES - Rs.317.45 Lakhs (Previous Year Rs. 41.29 Lakhs); and

C] MEDIUM ENTERPRISES - Rs.817.99 Lakhs (Previous Year Rs. 252.39 Lakhs);

14. Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company and the company has sent confirmation letters to the parties and the confirmations are awaited.

15. Earnings per Share:

Basic and diluted earnings per share calculated in compliance with the provisions of Accounting standard (AS-20) for the year ending 31.03.14 comes to Rs. 0.64 p.a (Previous year Rs.5.50 p.a.) and Rs 0.638 p.a (previous year Rs.5.44 p.a.) respectively.

The denominator for Basic EPS is 7,45,18,447 (previous year 6,85,73,568 ) equity shares and the numerator is net profit after tax as per Profit and Loss account and after adjusting preference dividend for the year and tax thereon, amounting to Rs.4,76,95,806 (previous year Rs. 37,72,56,038).

The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e 7,51,48,862 (previous year 6,94,60,423) and the numerator for this calculation is the net profit after tax as per Statement of Profit and Loss and after adjusting preference dividend and the interest at 5 % on OFCDs and the tax liability thereon, amounting to Rs.4,79,08,744 (previous year Rs. 37,75,55,595).

16. Figures have been rounded off to the nearest decimal of lakhs as required under revised Schedule VI.

17. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1.1 There were no Long Term Deposits, Deferred Payments liabilities and Finance Lease obligations.

1.2 There is no continuing default as on 31.03.2013 (31.03.2012) in repayment of loans and interest payments on Debtentures, Term Loans and Letter of Credit and sales tax deferment as per instalments granted by the Department.

1.3 Redeemable Optionally Fully Convertible Debentures of 5% Series "B" 2,05,177 of Rs.100/- each issued to IFCI Ltd. as per restructuring package are redeemable in 96 monthly instalments from April, 2008. In case of default in redemption of debentures, option can be exercised by IFCI Ltd. to the extent of outstanding balance as on 31.3.13 of Rs.76.93 lakhs (as on 31.3.12 Rs.102.58 lakhs) and no fixed date of conversion.

1.4 SECURITY:

A) DEBENTURES:

1) The above Debentures issued to IDBI are secured by first charge of all the Company''s immovable properties both present and future ranking paripassu with the mortgages and charges created / to be created with other loans and further secured by first charge by way of mortgage of Company''s properties (save and except book debts .and assets exclusively charged / to be charged in favour of IDBI) including movable machinery, machinery spares, tools and accessories present and future subject to prior charge created and /or to be created in favour of Company''s Bankers on the Company''s stock of raw materials as well as to Banks on semi-finished and finished goods, consumable stores and such other movables as may be agreed to by the Trustees for securing the borrowings for working capital requirements in the ordinary course of business and further secured by pledge of 8,04,000 Nos. of APGPCL Equity shares of Rs.10/- each and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh.

2) The above series "A" debentures issued to IFCI are secured in favour of theirTrustees by way of first charge on all immovable properties situated at Bellary both present and future and further secured by way of first charge on company''s movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories; present and future, subject to prior charge created and/or to be created in favour of company''s bankers on the stock of raw materials, semi finished foods, consumable stores and such other movable, asjnay be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex-Managing Director, Sri T.G.Venkatesh.

3) The above series "B&C" debentures issued to IFCI are secured in favour of their Trustees by way of first charge on all immovable both present and future and further secured by way of first charge on company''s movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories; present and future, subject to prior charges created and / or to be created in favour of company''s bankers on the stock of raw materials, semi finished goods, consumabler stores and such other movable, as may be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex-Managing Director, Sri T.G.Venkatesh.

B) TERM LOANS

1) The above Term Loans and Deferred loans from Institutions [except the Term Loan amount of Rs.2448 lakhs from M/s. IFCI Ltd., secured by first exclusive charge on the building, plant and machinery acquired under project schemes of Fatty Acid, Pottassium Hydroxide / and power plant at Bellary are secured by first.charge on all the immovable properties both present and future and further secured by first charge by way of hypothecation of all movables (save and except book debts and inventories including movable

¦ macnineries.spares.tools, accessories both at present and future,subject to prior charges created/ to be created in favour of the company''s bankers as specified movables for working capital requirements) and further.Guaranteed by the Ex-Managing Director, Sri''T.G.Venkatesh: IFCI s Additional Margin money fpr working capital loan outstanding of Rs.318.75 Lakhs is further secured by pledge of 5,36,000 Nos. of APGPCL Equity shares of Rs.10/- each.and corporate guarantee provided by Sree Rayalaseema Hi-strength Hypo Ltd.

2) The above Term loans from Banks are secured by first pari passu charge on fixed assets of chloromethanes Project, and 2"" pari-passu charge on other existing fixed assets, 2"a pari passu charge on the current assets and personal guarantee by Ex-Managing Director, Sri T.G.Venkatesh.

C) Specific Letter of Credit

'' The above Letter of credit is secured by specific charge on import of capital goods out of this LC and Lien on fixed deposits of build-up margin every month.

2.1 There were no loans repayable on demand and short term Deposits/loans and advances from related parties.

2.2 There is no default as on 31.3.2013 (31.03.2012) in repayment of loans and interest payments on Working capital Loans, Letters of Credit issued and Bills discounted by Banks and others.

2.3 SECURITY

a) Short Term Loans from Banks

The above Working Capital Demand Loans.Cash Credits and Bills discounted by Banks are secured by 1* pari passu charge by way of hypothecation of inventories and receivable of the company and further secured by'' 2nd pari passu charge on land, building and Plant and machinery and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh.

b) Letters of Credit from Banks:

The above Letter of credit facility availed from Banks were secured by 1s" pari passu by way of hypothecation of inventories and receivable of the company and further secured by 2"" pari passu charge on land, building artfj Plant and machinery and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh

c) Bills discounted with Can Bank Factors Ltd

The above Sale Bill discounting facility from Can Bank Factors ltd is secured by second charge on respective fixed assets of the company ranking pari passu with charges already created/ to be created by the Company and further guaranteed by the Ex-Managing Director. Sri T.G.Venkatesh and purchase bill discounting facSfty sanctioned by Can Bank Factors Ltd. are secured by 2nd pari passu charge on fixed assets of the Company.

3.1 During the year, the company has opted to exit from CDR Scheme and the CDR Lenders (FIs and Banks) have agreed and the company has to pay the recompense amount as per the terms and conditions. The CDR lenders have calculated the ROR amounting to Rs. 1366 lakhs. The matter was referred to CDR Empowered Group for necessary directions and the recompense amount Will be considered in the accounts on receiving the decision of CDR-EG.

3.2 BELLARY PLANT OPERATIONS:

The Power Purchase Agreement with Karnataka Electricity Board (Power Distribution Companies) was expired on 31.08.2012 and hence there was no generation of power from September, 2012. The company is intending to continue the operations of the plant and exploring the possibility of alternative avenues.

3.3 a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year amounting to Rs.27.08 lakhs (previous year loss Rs.27.94 lakhs) and exchange difference on outstanding loans as on 31.3.2013 valued at applicable Foreign Currency Exchange Rates on 31s'' March, 2013 and exchange difference amounting to Rs.67.35 lakhs debited to statement of profit and loss as per AS-11 (previous year Rs.205.10 lakhs).

b) The Exchange difference in respect of imports and exports during the year amounting to Rs.23.91 lakhs charged to»Statement of Profit and Loss. (Previous Year Rs.215.40 lakhs).

3.4 Employee Benefits:

A) Defined Contribution Plans

The Company makes Provident Fund and superannuation Fund contributions which are defined contribution plans, for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs.80,47,727/- (Previous year Rs.77,96,169/-) for Provident Fund contributions and Rs.23,98,472/- (Previous year Rs.23,26,265/-) for Superannuation Fund contributions in the Statement of Profit and Loss. The contribution payable to these plans by the Company is at rates specified in the rules of the schemes.

B) Defined Benefit Plan

The Company''s obligation towards the Gratuity Fund is a defined benefit plan and is funded with Life Insurance Corporation of India. The disclosures in respect of actuarial valuation of gratuity as required under Accounting Standard 15 are given below.

3.5 Under the Micro, Small and Medium Enterprises Development Act 2006 and in accordance with the notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined in the said Act. The company is in the process of compiling the relevant information from its suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2013:

A] SMALL ENTERPRISES - Rs.2315.44 Lakhs (Previous Year Rs.961.50 Lakhs);

B] MICRO ENTERPRISES - Rs.41.29 Lakhs (Previous Year Rs.85.82 Lakhs); and

C] MEDIUM ENTERPRISES - Rs.252.39 Lakhs (Previous Year Rs.492.86 Lakhs);

3.6 Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company anc the company has sent confirmation letters to the parties and the confirmations are awaited.

3.7 Earnings per Share:

Basic and diluted earnings per share calculated in compliance with the provisions of Accounting standard (AS-20) for the year ending 31.03.13 comes to Rs.5.50 p.a (Previous year Rs.2.06 p.a.) and Rs 5.44 p.a (previous yeai Rs.2.03 p.a.) respectively.

The denominator for Basic EPS is 685,73,568 (previous year 6,74,93,286) equity shares and the numerator is net profit after tax as per statement of Profit and Loss and after adjusting preference dividend for the year and tax thereon, amounting to Rs.37,72,56,038 (previous year Rs.13,88,23,770).

The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e (6,85,73,568 8,86,855) = 6,94,60,423 (previous year 6,86,36,581) and the numerator for this calculation is the net profit after tax as per Statement of Profit and Loss and after adjusting preference dividend and the interest al 5% on OFCDs and the tax liability thereon, amounting to Rs.37,75,55,595 (previous year Rs.13,92,09,946).

3.8 Figures have been rounded off to the nearest decimal of lakhs as required under revised Schedule-VI.

3.9 Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the currenl year''s classification / disclosure.


Mar 31, 2012

1.1 The Company has no Subsidaries/ Associates and has no Holding Company.

1.2 Out of Equity shares issued, subscribed and fully paid up 2,86,10,955 No. of equity shares of Rs.10/- each alloted on preferential allotment to Financial Institutions IDBI/IFCI by convertion of 15% Rupee/F.C loans and Debentures on 08.03.2005. And 2,00,00,000 No.of equity shares of Rs.10/- each alloted on preferential allotment to promotors group by conversion of fully paid share warrants of 1,45,80,000 on 08.03.2005 and 54,20,000 on 25.04.2006.

1.3 Cumulative Redeemable Preference shares issued, subscribed and fully paid up 1,88,82,332 of Rs.10/- each having a coupon rate of 0.01% from April, 2002 were alloted on sub-division and consolidation of 50% holding of equity shares and are redeemable after 15 year in 4 quarterly instalments commencing from 01.04.2018.

1.4 Redeemable Optionally Fully Convertible Debentures of 5% Series "B" 2,05,177 of Rs.100/- each issued to IFCI Ltd as per restructuring package are redeemable in 96 monthly instalments from April,2008.ln case of default in redemption of debentures, option can be exercised by IFCI Ltd to the extent of outstanding balance as on 31.3.12 of Rs.102.58 lakhs (as on 31.3.11 Rs.128.22 lakhs) and no fixed date of conversion.

2.1 There were no Long Term Deposits, Deferred Payments liabilities and Finance Lease obligations.

2.2 There is no continuing default as on 31.3.2012 (31.03.2011) in repayment of loans and interest payments on Debtentures, Term Loans and Letter of Credit and sales tax deferment as per instalments granted by the Department.

2.3 Redeemable Optionally Fully Convertible Debentures of 5% Series "B" 2,05,177 of Rs.100/- each issued to IFCI Ltd as per restructuring package are redeemable in 96 monthly instalments from April, 2008. In case of default in redemption of debentures, option can be exercised by IFCI Ltd to the extent of outstanding balance as on 31.3.12 of Rs.102.58 lakhs (as on 31.3.11 Rs.128.22 lakhs) and no fixed date of conversion. .

2.4 SECURITY

A) DEBENTURES

1) The above Debentures issued to IDBI are secured by first charge of all the Company's immovable properties both present and future ranking paripassu with the mortgages and charges created / to be created with other loans and further secured by first charge by way of mortgage of Company's properties (save and except book debts and assets exclusively charged / to be charged in favour of IDBI) including movable machinery, machinery spares, tools and accessories present and future subject to prior charge created and /or to be created in favour of Company's Bankers on the Company's stock of raw materials as well as to Banks on semi- finished and finished goods, consumable stores and such other movables as may be agreed to by the Trustees for securing the borrowings for working capital requirements in the ordinary course of business and further secured by pledge of 8,04,000 Nos. of APGPCL Equity shares of Rs.10/- each and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh. ,

2) The above series "A" debentures issued to IFCI are secured in favour of their Trustees by way of first charge on all immovable properties situated at Bellary both present and future and further secured by way of first charge on company's movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories, present and future, subject to prior charge created and/or to be created in favour of company's bankers on the stock of raw materials, semi finished foods, consumable stores and such other movable, as may be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex-Managing Director, Sri T.G.Venkatesh.

3) The above series "B & C" debentures issued to IFCI are secured in favour of their Trustees by way of first charge on all immovable both present and future and further secured by way of firs charge on company's movable (save and except book-debts), including movable machinery, machinery spares, tools and accessories; present and future, subject to prior charges created and / or to be created in favour of company's bankers on the stock of raw materials, semi finished goods, consumabler stores and such other movable, as may be agreed to by the trustees, for securing the borrowings for working capital requirements in the ordinary course of business and further guaranteed by Ex- Managing Director,Sri T.G.Venkatesh.

B) TERM LOANS .

1) The above Term Loans and Deferred loans from Institutions [except the Term Loan amount of Rs.3234.21 lakhs from M/s IFCI Ltd. secured by first exclusive charge on the building, plant and machinery acquired under project schemes of Fatty Acid, Pottassium Hydroxide / and power plant at Bellary are secured by first charge on all the immovable properties both present and future and further secured by first charge by way of hypothecation of all movables (save and except book debts and inventories including movable machineries, spares, tools, accessories both at present and future,subject to prior charges created/ to be created in favour of the company's bankers as specified movables for working capital requirements) and further Guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh.

IFCI's Additional Margin money for working capital loan outstanding of Rs.531.25 Lakhs is further secured by pledge of 5,36,000 Nos. of APGPCL Equity shares of Rs.10/- each.

2) The above Term loans from Banks are secured by first pari passu charge on fixed assets of Chloromethanes Project, and 2M pari - passu charge on other existing fixed assets, 2n0 pari passu charge on the current assets and personal guarantee by Ex-Managing Director Sri T.G.Venkatesh.

C) Specific Letter of Credit

The above Letter of credit s secured by specific charge on import of capital goods out of this LC and Lien on fixed deposits of build-up margin every month.

3.1 There were no loans repayable on demand and short term Deposits/loans and advances from related parties.

3.2 There is no default as on 31.03.2012 (31.03.2011) in repayment of loans and interest payments on Working Capital Loans, Letters of Credit issued and Bills discounted by Banks and others.

3.3 SECURITY

a) Short Term Loans from Banks

The above Working Capital Demand Loans,Cash Credits and Bills discounted by Banks are secured by 1st pari passu charge by way of hypothecation of inventories and receivable of the company and further secured by 2nd pari passu charge on land, building and Plant and machinery and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh.

b) Letters of Credit from Banks

The above Letter of credit facility availed from Banks were secured by 1 st pari passu by way of hypothecation of inventories and receivable of the company and further secured by 2nd pari passu charge on land, building and Plant and machinery and guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh.

c) Bills discounted with Can Bank Factors Ltd

The above Sale Bill discounting facility from Can Bank Factors Ltd is secured by second charge on respective fixed assets of the company ranking pari passu with charges already created/ to be created by the Company and further guaranteed by the Ex-Managing Director, Sri T.G.Venkatesh and purchase bill discounting facility sanctioned by Can Bank Factors Ltd are secured by 2nd pari passu charge on fixed assets of the Company.

4.1 There were no investments in Subsidiaries, Associates, Joint Ventures and controlled special purpose Entities and in Preference Shares, Bonds, Debentures, Mutual Funds and in Partnership Firms.

5.1 Contingent Liabilities not provided in respect of

Current Year Previous Year Particulars 2011-2012 2010-2011 (Rs. in Lakhs) (Rs. in Lakhs)

a) Cheques / Bills Discounted with Banks. 168.54 226.67

b) Unexpired Bank guarantees / letters of Credit (net of margin money paid) 665.03 523.34

c) Estimated amount of Contracts remaining to be executed on Capital Account 4760.67 2705.05 (Net of advances). -

d) Arrears of dividend on cumulative redeemable preference shares of Rs. 1888.23 - 1.70 lacs at a coupon rate of 0.01 %, issued and 1.89 allotted as per Debt Restructuring package and scheme of arrangement sanctioned by High Court of A. P. for the . period from 01,04,2002 to 31.03.2012. (payable after 15 years) i.e., from 01.04.2018.

e) Claims against the company not acknowledged as debts being disputed and pending in appeals and for which no provision is considered as the company is hopeful of success in the appeals.

i) Central excise matters regarding Cenvat credit availed on input 358.87 322.76 consumables and on service tax payments on input services like freight, telephone, and courier etc.,

ii) 1. Customs matters regarding dispute on classification of goods pending 9.90 9-90 before High Court.

2. Imposition of Anti dumping duty on imports during December 2010 32.69 - " pending before ADC, Customs

3. Differential duty leved on import of materials during the year 16.06 - 2006-07, pending before the Commissioner of Appeals .

iii) Sales tax matters regarding Input tax credit availed on fuels used for steam 91.47 74.42 generation disallowed by the Department and levied penalty and interest; (59.03) (59.03) and tax on disputed turn over of Palakkad Branch which is pending in appeal before DC (Appeals) (Paid under Protest)

iv) Levy of delay charges on late payment of Provident Fund by Regional 15.34 15.34 Provident Fund Commissioner.

v) 1) Wheeling Charges levied by APCPDCL pending in Supreme Court. 24.21 24.21

2) Wheeling charges levied on APGAS power supplies covered by Bank NiL NIL

guarantee Rs.69.30 lakhs.

f) Differential duty on procurement of raw material as per show cause notices 1161.14 1161,14 issued by the Customs Authorities is contested and for which no provision is (125.00) (125.00) considered as there will be no liability on the company as per legal opinion

obtained (paid under Protest)

g) Refund sought by M/s.Karnataka Power Transmission Corporation Ltd., (KPTCL) ; 1609.00 1609.00 /DISCOMS of the differential tax on account of Incbme Tax rates / tax holiday as per terms of PPA is contested by the Company before the Karnataka Electricity Regulatory Commission ,

5.2 INSURANCE CLAIM:

Insurance claim for Loss of Profits on account of turnover Loss due to Floods during October, 2009 was considered by company at Rs. 1755.36 lakhs. The insurance underwriter has settled the claim during the year for Rs. 1255.10 lakhs and the short fall in the claim settlement of Rs 500.26 lakhs was charged to statement of Profit and Loss for the year ended 31.3.2012.

5.3 a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year amounting to Rs. 27.94 lacs (previous year loss Rs. 6.31 lakhs) and exchange difference on outstanding loans as on 31.3.2012 valued at applicable Foreign Currency Exchange Rates on 31st March, 2012 and exchange difference amounting to Rs. 205.10 lacs debited to profit and loss account as per AS-11 (previous year Rs.15.56 lacs).

b) Foreign Currency receivables on exports made and outstanding as on 31.03.12 are valued at applicable exchange nte and the exchange difference of Rs. 20.42 lacs was credited to profit and loss account (Previous year Rs. 1.70 lacs debited to profit and loss account).

5.4 Under The Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small arid Medium Enterprises as defined in the said Act. The company is in the process of compiling the relevant information fromlts suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2012:

A] SMALL ENTERPRISES-Rs. 951.50 Lacs ( Previous Year Rs.584.25 Lacs);

B] MICRO ENTERPRISES Rs. 85.82 Lacs ( Previous Year Rs. 1.62 Lacs); and

C] MEDIUM ENTERPRISES Rs. 492.86 Lacs ( Previous Year Rs.434.08 Lacs);

5.5 Lease1 Payments:

The Company has not taken any assets under non cancelable operating lease agreements and hence no future lease payments. -

5.6 Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company and the company has sent confirmation letters to the parties and the confirmations are awaited.

5.7 Earnings per Share:

Basic and diluted earnings per share calculated incompliance with the provisions of Accounting standard (AS20) for the year ending 31.03.12 comes to Rs. 2.06 p.a (Previous year Rs.2.02 p.a.) and Rs.2.03 p.a (previous year Rs.1.99 p.a.) respectively.

The denominator for Basic EPS is 6,74,93,286 ( previous year 6,74,93,286) equity shares and the numerator is net profit after tax as per Statement of Profit and Loss and after adjusting preference dividend for the year and tax thereon, amounting to Rs. 13,88,23,770 (previous year Rs. 13,64,70,638)

The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e (6,74,93,286 11,43,295) = 6,86,36,581 (previous year 6,88,93,021) and the numerator for this calculation is the net profit after tax as per statement of Profit and Loss and after adjusting preference dividend and the interest at 5% on OFCDs and the tax liability thereon, amounting to Rs.13,92,09,946 (previous year Rs.13,69,38,027).

5.8 Figures have been rounded off to the nearest decimal of Lacs as required under Revised Schedule VI.

5.9 The Revised Schedule VI has become effective from 1st April, 2011 for preparation of financial statements for the year 2011-12. This has significantly impacted the disclosure and presentation in financial statements. Consequently previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure as required under Revised Schedule VI.


Mar 31, 2011

1. Contingent Liabilities not provided in respect of

Particulars Current Year Previous Year 2010-11 2009-10 (Rs. in (Rs. in Lakhs) Lakhs)

a) Cheques / Bills Discounted with Banks. 226.67 217.94

b) Unexpired Bank guarantees / letters of Credit (net of margin money paid) 523.34 193.06

c) Estimated amount of Contracts remaining to be executed on Capital Account 2705.05 3517.19 (Net of advances).

d) Arrears of dividend on cumul 1.70 1.51 ative redeemable preference shares of Rs. 1888.23 lacs at a coupon rate of 0.01 %, issued and allotted as per Debt Restructuring package and scheme of arrangement sanctioned by High Court of A.P. for the period from 01.04.2002 to 31.03.2011 (payable after 15 years) i.e from 01.04.2018.

e) Claims against the company not acknowledged as debts', being disputed and pending in appeals/ Assessments in respect of

i) Central excise matters regarding Cenvat credit availed on input 322.76 302.06 consumables and on service tax payments on input services like freight, telephone, and courier etc.,

ii) Customs matters regarding dispute on classification of goods 9.90 9.90

iii) Sales tax matters regarding Input tax credit availed on fuels used for steam 74.42 53.91 generation disallowed by the (59.03) (53.91) Department and levied penalty and interest (Paid under protest)

iv) Levy of delay charges on late 15.34 15.34 payment of Provident Fund by Regional Provident Fund Commissioner

v) 1) Wheeling Charges levied by 24.21 24.21 APCPDCL pending in Supreme Court

2) Wheeling charges levied on NIL NIL APGAS power supplies covered by Bank guarantee Rs.69.30 lacs

f) Differential duty on procurement 1161.14 1161.14 of raw material as per show cause (125.00) (125.00) notices issued by the Customs Authorities is contested and for which no provision is considered as there will be no liability on the company as per legal opinion obtained (paid under Protest)

g) Refund sought by M/s.Karnataka 1609.00 NIL Power Transmission Corporation Ltd., (KPTCL)/ DISCOMS of the differential tax on account of Income Tax rates / tax holiday as per terms of PPA is contested by the Company before The Hon'ble High Court ' of Karnataka and the Court has directed to file a petition before the Electricity Regulatory Commission and further directed not to take any precipitate action against the Company

2. Customs Duty on goods in Bonded Ware house/at Port as at the year end has not been provided in accounts and not included in the valuation of inventory. The same is accounted at the time of clearance of goods and the duty is estimated at Rs. 108.26 lacs (Previous Year Rs. Nil lacs) and this has no impact on profit for the year.

3. INSURANCE CLAIM:

Claims receivable under Loans and Advances (Schedule 'G') includes an amount of Rs. 1755.36 lacs (Previous Year Rs. 3239.26 lacs) towards Insurance claim for loss of / damage to Inventories, Vehicles, Plant and Machinery and Loss of Profits on account of unprecedented floods at factories located at Kurnool and Bellary during October, 2009. The Insurance Claim for Loss of Profits on account of production loss during October, 2009 was considered by the company at Rs.1755.36 lacs on prudential basis and the claim is subject to final settlement by the Insurer.

4. a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year amounting to Rs. 6.31 lacs ( previous year loss Rs.14.54 lacs) and exchange difference on outstanding loans as on 31.03.2011 valued at applicable foreign Currency Exchange Rates on 31s" March, 2011 and exchange difference amounting to Rs. 15.56 lacs debited to profit and loss account as per AS-11 (previous year gain Rs.307.02 lacs credited to profit and loss account).

b) Foreign Currency receivables on exports made and outstanding as on 31.03.2011 are valued at applicable exchange rate and the exchange difference of Rs. 1.70 lacs was debited to profit and loss account (Previous year Rs. 4.53 lacs debited to profit and loss account).

5. Under The Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the notification issued by the Ministry of Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined in the said Act. The company is in the process of compiling the relevant information from its suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2011:

A] SMALL ENTERPRISES - Rs.584.25 Lacs (Previous Year Rs.42.29 Lacs)

B] MICRO ENTERPRISES - Rs.1.62 Lacs (Previous Year Rs.1.78 Lacs) and

C] MEDIUM ENTERPRISES - Rs.434.08 Lacs (Previous Year Rs. Nil Lacs)

6. Related Parties Disclosures :

1. The names of transacting related party and description of relationship are given below :

A. Particulars of Associate Companies: SI. Name of the transacting Nature of Relationship No. related party

1. Sree Rayalaseema Hi-Strength Hypo Ltd. Associate

2. TGV Projects and Investments Pvt. Ltd. Associate

3. Brilliant Bio Pharma Ltd. Associate

4. Sree Maruthi Marine Industries Ltd. Associate

5. Sree Maurthi Agro Tech Ltd. Associate

6. Gowri Gopal Hospitals Pvt. Ltd. Associate

7. Sree Rayalaseema Galaxy Projects Pvt. Ltd. Associate

8. SRHHL Industries Ltd. Associate

9. Roopa Industries Ltd. Associate

10. S.K.Salts Pvt. Ltd. Associate

11. JSM International Ltd. Associate

12. TGV Securities Pvt. Ltd. Associate

13. TGV Pharma Pvt. Ltd. Associate

Note: Associate companies by virtue of shareholding by key management personnel and relatives.

B. Key Management Personnel: T.G.Venkatesh, Chairman and Managing Director and Executive Directors (Finance & Technical) and Directors of the company.

C. Relatives to Key Management Personnel: Sri TG.Bharath, Smt T.G.Rajyalakshmi.

7. Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company and the company has sent confirmation letters to the parties and the confirmations are awaited.

8. Earnings per Share:

Basic and diluted earnings per share calculated in compliance with the provisions of Accounting standard (AS-20) for the year ending 31.03.11 comes to Rs.2.02 p.a (Previous year Rs.2.08 p.a.) and Rs.1.99 p.a (previous year Rs.2.03 p.a.) respectively.

The denominator for Basic EPS is 6,74,93,286 (previous year 6,74,93,286) equity shares and the numerator is net profit after tax as per Profit and Loss account and after adjusting preference dividend for the year and tax thereon, amounting to Rs.13,64,70,638 (previous year Rs. 14,00,70,692)

The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e., (6,74,93,286 13,99,735) = 6,88,93,021 (previous year 6,91,49,461) and the numerator for this calculation is the net profit after tax as per Profit and Loss account and after adjusting preference dividend and the interest at 5% on OFCDs and the tax liability thereon, amounting to Rs.13,69,38,027 (previous year Rs.14,06,19,225).

9. Figures have been rounded off to the nearest to thousand and expressed in decimals of lacs.

10. Previous year figures have been regrouped/ rearranged wherever necessary to make them comparable with the current year figures.

11. Additional Information pursuant to paragraphs 3, 4C and 4D of Schedules - VI of Companies Act, 1956.

B. Actual Production, Turnover and Stocks: (Quantity in MTs and Rs. in lakhs)

a) Production shown is net of internal consumption.

b) Figures in brackets relate to previous year..

c) Opening and closing stocks includes sales returns, branch and consignment stock transfers.

d) Above production figures are exclusive of production made under processing agreements Refined Glycerine 1603 MTs (Previous Year 2419 MT).

e) Previous year turnover Quantities includes Stocks Lost in Floods - namely

(1) Caustic Soda Flakes - 231 MTs.

(2) Hydrogenated Castor Oil - 41 MTs.

(3) 12 Hydroxy Stearic Acid - 55 MTs.

(4) Caustic Potash Flakes - 182 MTs.

(5) Stearic Acid - 98 MTs.

(6) Risinolic Acid - 2 MTs.

f) Power generation at Bellary includes deemed generation value of Rs.623.50 lacs (previous year Rs.358.45 lacs).

g) Wind power generation was totally used for captive consumption through grid.


Mar 31, 2010

1. Contigent Liabilities not provided in respect of

Current Year Previous Year

Particulars 2009-10 2008-09

Rs. in Lakhs, Rs. in Lakhs

a) Cheques / Bills Discounted with Banks. 217.94 249.24

b) Unexpired Bank guarantees / letters of Credit (net of margin money paid) 193.06 236.89

c) Estimated amount of Contracts remaining to be executed on Capital Account.(Net of advances 3517.19 2363.65

d), Arrears of dividend on cumulative redeemable preference shares of Rs.1888.23 lacs at a coupon rate of 0.01 %, issued and allotted as per Debt Restructuring package and scheme of arrangement sanctioned by High Court of A.P. for the period from 01.04.2002 to 31.03.2010. (payable after 15 years) i.e from 01.04.2018. 1.51 1.32

e) Claims against the company not acknowledged as debts, being disputed and pending in appeals/ Assessments in respect of

i) Central excise matters regarding Cenvat credit availed on input consumables and on service tax payments on input services like freight, telephone, and courier etc., 302.06 253.30

ii) Customs matters regarding dispute on classification of goods pending before High Court 9.90 9.90

iii) Sales tax matters regarding Input tax credit availed on fuels used for steam generation disallowed by the Department and 53.91 53.91 levied penalty and interest (Paid under protest) (53.91) (53.91)

iv) Levy of delay charges on late payment of Provident Fund by

Regional Provident Fund Commissioner 15.34

v) 1) Wheeling Charges levied by APCPDCL pending in Supreme Court 24.21 24.21

2) Wheeling charges levied, on APGAS power supplies covered by Bank guarantee Rs.69.30 lacs NIL NIL

f) Differential duty on procurement of raw material as per show cause notices issued by the Customs Authorities is contested 1161.14 1161.14 and for which no provision is considered as there will be no (125.00) (125.00) liability on the company as per legal opinion obtained (paid under Protest)

2. Customs Duty on goods in Bonded Ware house/at Port as at the year end has not been provided in accounts and not included in the valuation of inventory. The same is accounted at the time of clearance of goods and the duty is estimated at Rs. Nil (Previous Year Rs.352.40 lacs) and this has no impact on profit for the year.

3. INSURANCE CLAIM:

Claims receivable under Loans and Advances ( Schedule G) includes an amount of Rs. 3239.26 lakhs towards Insurance claim for loss of / damage to Inventories, Vehicles, Plant and Machinery and Loss o Profits on account of unprecedented floods at factories located at Kurnool and Bellary during October 2009. The Insurance Claim for Loss of Profits on account of production loss during October, 2009 was considered by the company at Rs. 1755.36 lakhs on prudential basis and the claims are subject to fina settlement by the Insurer.

4. a) Exchange differences on Foreign Currency Term Loans from financial institutions in respect of installments paid during the year amounting to Rs. 14.54 lakhs ( previous year loss Rs. 79.50 lacs ) and exchange difference on outstanding loans as on 31.3.2010 valued at applicable Foreign Currency Exchange Rates on 31s1 March, 2010 and exchange difference amounting to Rs. 307.02 lakhs credited to profit and loss account as per AS-11 (previous year Loss Rs.538.53 lakhs debited to profit and loss account).

b) Foreign Currency receivables on exports made and outstanding as on 31.03.10 are valued at applicable exchange rate and the exchange difference of Rs. 4.53 lakhs was debited to profit and loss account (Previous year Rs. 13.32 lakhs credited to profit and loss account).

5. Under The Micro, Small and Medium Enterprises Development Act, 2006 and in accordance with the notification issued by the Ministry of. Corporate Affairs, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises as defined in the said Act. The company is in the process of compiling the relevant information from its suppliers about their coverage under the said Act and hence required disclosures made to the extent available. The following are outstanding balances as at 31.03.2010:

A] SMALL ENTERPRISES:

1) Arun & Company Rs. 5.17 lakhs; 2) B.D.K. Engineering Industrials Ltd., Rs. 0.49 lakhs; 3) Chemical Process Equipments Pvt. Ltd., Rs. 14.67 lakhs; 4) Colour Shade Quality Printers Rs. 2.77 lakhs; 5) Dolf Industries Rs. 0.62 lakhs; 6) Rapid Valves India Private Limited Rs. 0.03 lakhs; 7) Kamakshi Lamipack Pvt. Ltd., Rs. 9.65 lakhs; 8) Vikas Rubber Industries Rs. 0.19 lakhs; 9) Vijaya Krishna Enterprises Rs. 0.10 lakhs; 10) VBM Cable Corporation Rs. 8.60 lakh.

B] MICRO ENTERPRISES:

1) T.I.A. Technologies (I) Pvt. Ltd., Rs. 1.40 lakhs; 2) Southern Cogen Systems Pvt. Limited Rs. 0.38 lakhs

12. Balances of Sundry Creditors and Debtors are shown as appearing in the books of account of the company and the company has sent confirmation letters to the parties and the confirmations are awaited.

6. Earnings Per Share:

Basic and diluted earnings per share calculated in compliance with the provisions of Accounting standard (AS20) for the year ending 31.03.10 comes to Rs.2.08 p.a (Previous year Rs.4.05 p.a.) and Rs2.03 p.a (previous year Rs.3.94 p.a.) respectively.

The denominator for Basic EPS is 6,74,93,286 (previous year 6;74,93,286) equity shares and the numerator is net profit after tax as per Profit and Loss account and after adjusting preference dividend for the year and tax thereon, amounting to Rs. 14,00,70,692 (previous year Rs. 27,30,35,358). The denominator for diluted EPS is increased by potential equity deemed to be issued for OFCD i.e (6,74,93,286+16,56,175) = 6,91,49,461 (previous year 6,94,05,901) and the numerator for this calculation is the net profit after tax as per Profit and Loss account and after adjusting preference dividend and the interest at 5 % on OFCDs and the tax liability thereon, amounting to Rs.14,06,19,225 (previous year Rs. 27,36,69,744).

7. Figures have been rounded off to the nearest to thousand and expressed in decimals of lakhs.

8. Previous year figures have been regrouped/ rearranged wherever necessary to make them comparable with the current year figures.