1. CONTINGENT LIABILITIES
a. In respect of matters under dispute:
(Rs. in lakhs)
(i) Income tax 932.17 952.47
(ii) Sales tax 329.27 88.68
(iii) Other matters 789.21 818.98
b. Counter guarantees given to Bankers Rs. 465.45 lakhs (Previous year
Rs. 254.90 lakhs) include Rs. 136.27 lakhs (Previous year Rs. 114.00
lakhs) in favour of Railways for credit note facility.
c. Land: Liability for additional compensation payable in respect of
land purchased from M/s. Nagarjuna Fertilizers and Chemicals Limited
has not been provided for, pending court orders and determination of
the amount payable.
2. CAPITAL COMMITMENTS
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for (net of advance) Rs. 83.33 lakhs (previous
year Rs. 1513.62 lakhs).
3. SECURED LOANS (i) Term Loans
i) Term loan of Rs.2000 lakhs from IDBI Bank Ltd., is secured by first
charge by way of pledge / assignment of 13.40 lakhs shares of Andhra
Pradesh Gas Power Corporation Ltd. and second charge on the current
assets of the company.
ii) Other term loan from IDBI Bank Ltd., is secured by first charge on
current assets of the company ranking pari-passu with other working
capital lending banks and second charge on fixed assets of the company.
iii) Corporate loan of Rs. 7500 lakhs from State Bank of India is
secured by way of first charge on fixed assets and current assets
ranking pari-passu with other lending institutions and banks holding
first and second charge on the assets of the company.
iv) Term loan of Rs. 1500 lakhs from State Bank of Mysore is secured by
charge on movable machineries and current assets, both present and
future, ranking pari-passu with existing term lenders in case of
movable machineries and working capital lenders in case of current
(i) Loan from Indian Renewable Energy Development Agency Ltd.(IREDA) is
secured by hypothecation of the properties pertaining to 120000 LPD
Solar Water Heating System with exclusive first charge.
(ii) Loan from HDFC Bank Limited of Rs. 3200 lakhs is secured by
hypothecation by way of first pari-passu charge on all stock in trade
both present and future, all book debts, outstanding monies receivable,
claims and bills now due or in future and by hypothecation by way of
second pari-passu charge on all the movable Plant and Machinery both
present and future.
(ii) Working Capital Loans:
Demand loans/ Cash Credit / Buyers Credit are secured by way of
hypothecation of stocks of raw materials, finished and semi-finished
goods, consumable stores, book debts and other receivables both present
and future in favour of banks and short-term lenders ranking pari-passu
among the working capital lenders. Working capital facilities are
further secured by second mortgage charge of the companys immovable
and movable properties, both present and future, ranking pari-passu
among financing banks and institutions except short-term lender.
Company entered into a supplemental lease agreement with State Bank of
India. Consequently, future rentals are paid in advance at discounted
value and charged to revenue on pro-rata basis.
5. The Government of India grants price concession on sale of DAP and
other Phosphatic Fertilisers. Pending announcement of final rates of
concession for DAP and other Phosphatic Fertilisers for certain
quarters of year ended 31st March, 2007, additional subsidy income of
Rs.5503.79 lakhs has been recognized taking into consideration various
aspects of existing concession scheme and management estimates of final
6. The Company in the current year has adopted the Accounting
Standard 15 (Revised) Employee Benefits (AS-15) issued by the Institute
of Chartered Accountants of India and consequently revised the
provision for retirement and other benefits as at 31st March, 2006. An
additional liability (including unrecognized past service cost) of
Rs.71.98 lakhs arising out of such revision has been adjusted from the
opening revenue reserves as at 1st April, 2006 in accordance with the
transitional provisions of AS-15.
The employee benefits are as under: i. Provident Fund
Eligible employees of the Company receive benefits under the Provident
Fund which are defined contribution plans wherein both the employees
and the Company make monthly contributions equal to a specified
percentage of the covered employee salary. The contributions are made
to the Companys Employees Provident Fund Trust and are charged to the
Profit and Loss Account in the period they are incurred. The Company is
of the view that as Provident Fund obligation is defined contribution
no adjustment arising out of AS-15 need be done in the accounts,
however, the Company is in the process of ascertaining the fair
valuation of the assets of the Trust as on 31st March, 2007.
ii. Superannuation/Pension Fund
The Company has a defined contribution pension scheme to provide
pension to the eligible employees. Company makes contributions equal to
a specified percentage of the covered employees salary. These
contributions in case of certain employees are administered by a Trust
which has subscribed to a Group Pension Scheme of Life Insurance
Corporation of India. In addition to above, the Company has funded for
its employees in the workmen category, contributions to the Regional
Provident Fund Commissioner. In the above cases contributions are
charged to the Profit and Loss Account in the period they are incurred.
In accordance with the Payment of Gratuity Act, 1972 the Company
provides for gratuity, a defined benefit plan (the Gratuity Plan)
covering eligible employees.
Liabilities with regard to such gratuity plan are determined by
actuarial valuation and are charged to Profit and Loss Account in the
period determined. The Gratuity Plan is a funded Plan administered by
Companys own Trust which has subscribed to Group Gratuity Scheme of
Life Insurance Corporation of India.
a (i) Sales are net of discounts other than usual trade discounts of
Rs. 406.09 lakhs (previous year Rs. 398.22 lakhs).
(ii) Income from Government subsidy and Government Subsidy receivable
are net of unrealized subsidy relating to earlier years amounting to
Rs. 62.68 lakhs (previous year Rs. 169.02 lakhs).
b. Income from Current Investments (Schedule-1 3-Other Income)
represents income earned on investments of temporary cash surpluses in
units of mutual funds -growth and dividend schemes.
c. Sundry Creditors (Schedule 11 - Current liabilities and provision)
includes dues to Small Scale Industrial Undertaking Rs.0.14 lakhs
(previous year Rs. 1.09 lakhs). The identification of suppliers as
Small Scale Industrial Undertakings (SSIs) has been done on the basis
of information to the extent provided by the suppliers to the company.
On this basis, following are the names of Small Scale Industrial
Undertakings which have as on March 31, 2007 dues for more than 30
days: Sri Aditya Venkateshwara Engg. Works.
d. The company has called for confirmations from suppliers under the
Micro, Small and Medium Enterprise Development Act, 2006. As the
has not received any confirmations, information under the said Act has
not been compiled.
e. (i) The net difference in foreign exchange variance
credited to Profit and Loss Account is Rs.374.84 lakhs (previous year
debit to Profit and loss account Rs. 1022.35 lakhs).
(ii) Exchange difference in respect of forward exchange contracts to be
recognized in the Profit and Loss account in the subsequent accounting
period is Rs. 110.97 lakhs (previous year Rs.Nil lakhs).
f. Land - Lease deed in respect of land admeasuring 9.80 acres taken
on lease from Visakhapatnam Port Trust is pending execution.
8. Figures of the previous year have been regrouped wherever necessary
to compare with current years classification.