1.1 Rights, preferences and restrictions
The company has only one class of share capital being Equity Shares
having a face value of Rs. 10/- per share. Each share holder is
entitled to one vote per share. The company declares and pays dividend
in indian rupees. The dividend payable on equity shares is subjected to
recommendations of Board of Directors and share holders in Annual
General Meeting, except in the case of interim dividend. In the event
of liquidation, the equity shareholders are eligible to receive the
remaining assets of the company in proportionate to their share
1.2 The Company has no Subsidaries or Holding Company.
1.3 Of the above, 1,01,34,633 Shares alloted as fully paid shares in
2006 in pursuance to the Scheme of Arrangement without payment in cash
1.4 During the year, 5,47,370 Equity shares of Rs. 10/- each were
issued under preferential allotment for cash at a premium of Rs. 33.95
1.5 During the year two companies namely SRHHL Industries Limited and
TGV Pharma Private Limited (transferor companies) were amalgamated in
to the company under a Scheme of Arrangement duly approved by Hon''ble
High Court of Andhra Pradesh by its Order dated 31st Aug 2012. The
appointed date is 1st Apr, 2011 and effective date is 20th Sept, 2012.
In pursuance to the Order of the Hon''ble High Court approving Scheme
of Arrangement, following effects are given in the share capital
i) The Authorised capital is increased by clubbing of authorised
capitals of transferor companies
ii) Towards discharge of purchase Consideration, the company is under
obligation to allot 13,69,955 and 11,16,073 equity shares of Rs. 10/-
each fully paid to the equity share holders of transferor companies.
The shares stand issued and are to be alloted to the members, whose
names are to be determined on a record date to be fixed in consultation
with Stock Exchanges. Pending allotment, these 24,86,028 equity shares
of Rs. 10/- each fully paidup issued as per terms of the Scheme of
Arrangement are disclosed as share capital suspense under issued
(i) In pursuance to Order of Hon''ble High Cour of Andhra Pradesh,
approving the Scheme of Arrangement, the surplus over assets and
liabilities taken over are treated as general reserve under
amalgamation. This treatment is keeping in view the uniformity in
accounting treatment and consistency.
(ii) This treatment is in deviation from treatment suggested from
AS-14, Accounting for Amalgamation.
(iii)There is no financial impact on profitability due to the above
treatment except that Capital Reserve whould have increased by
Rs.1073.74 lakhs and corresponding amount decreased in General Reserve.
(a) The term loan from banks are secured by exclusive charge on
specific fixed assets.
(b) The loans repayable on demand from banks are cash credits, bills
purchases, discountings, letter of credits limits and bank guarantees
are secured by Hypothecation of Raw-material, Stock in process,
Finished goods, consumable Spares, Book debts and receivables.
(c) The working capital and Term loans from banks are also secured by
first charge on some of the fixed assets of the company.
(d) The working capital and Term loans from banks are further secured
by guarantee from Managing Director and a promoter in their individual
There are no defaults/continuing defaults as on 31st Mar,2012 in
payment of interest and repayment of loans.
2 Contingent liabilities and Commitments
a) Claims against company not
acknowledged as debts 15,32,72,000 13,47,00,000
b) Guarantees outstanding 4,77,00,000 6,49,51,000
c) Other money for which company is
1) Consumers cheques / bills
discounted with Banks 3,71,89,000 6,81,67,000
2) Unexpired Bank Guarantees
provided by the Company 92,12,000 2,37,01,000
3) Unexpired Letters of Credit
established by the Company 14,46,49,000 15,06,75,000
4) Income Tax Appeal pending against
Assessment Order 3,04,719 -
a) Estimated amount of contracts
remaining to be executed
on capital account and not
provided for 7,73,32,000 1,40,28,000
b) Uncalled liability on shares and
other investments partly paid 500 -
3. Notes forming part of accounts:
3.1 Basis of preparation
i) The accounts are maintained under Historical cost Convention and are
prepared on accrual basis (except income and expenditure below Rs.5000/
per transactions and impairment or revaluation if any) as a ‘going
concern'' by complying with generally accepted accounting principles and
applicable Accounting Standards.
ii) The Accounting policies have been consistently followed and
financial statements are prepared to comply in all material aspects in
respect with Accounting Standards notified by the Companies Accounting
Standards Rules, 2006 and relevant provisions of the Companies Act,
3.2 Use of estimates
The preparation of financial statements is in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of such assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the result of operations during the end of
reporting period. Although these estimates are based upon management''s
best knowledge of current events and actions, actual results could
differ from estimates.
3.3 Micro, Small and medium enterprises
The Company identified Micro, Small and Medium Enterprises on the basis
of information made available to the company by the suppliers. The
Company is regular in making payments to Micro,Small and Medium
Enterprises. The principal amounts outstanding as on 31-03-2012 and
remaining unpaid to any Micro, Small and Medium Enterprises is Rs.1,
83, 24,561/- and the said amounts are due for less than 45 days as on
31-03-2012.Hence,excepting above, there is no reportable information
under Sec 22 (i) to (v) of Micro, Small and Medium Enterprises Act,2006
read with part I of Schedule VI to the Companies Act,1956.
3.4 Disclosure under AS-14 Accounting for Amalgamation
1. During the year SRHHL Industries Ltd (Transferor company 1)
(engaged in power generation and real estate leasing) and TGV Pharma
Ltd (Transferor company 2) (engaged in manufacturing of industrial
chemical) have been amalgamated with the company on 20.09.2012 with
retrospective effects from 01.04.2012 (appointed date), in terms of the
scheme of amalgamation duly sanctioned by the Hon''ble High Court of
Andhra Pradesh vide its Order dated 31st August, 2012. Pursuant to the
terms of Order of the Hon''ble High Court of Andhra Pradesh, SRHHL
Industries Limited and TGV Pharma Limited stood dissolved without
winding up and accordingly the entire assets, liabilities, licenses,
limits of SRHHL Industries Limited and TGV Pharma with the banks,
permissions, pending cases, employees has been transferred to and vest
in the company.
2. The Amalgamation is in the nature of ‘Pooling of interest''
method as defined in AS-14, Accounting for Amalgamation issued by the
Central Government under section 211 (3C) of the Companies Act, 1956
and is accounted accordingly, This results in the transfer of assets
and liabilities and issue of shares towards payment of consideration at
the following summarised scheme.
B. Defined benefit plan:
The company has employees group gratuity fund through a policy with LIC
and contributes to the fund through annual renewal premium determined
based on actuarial valuation using projected unit credit method as at
31-03-2012.The company has funded current service cost obligations and
contributions made are recognized as expenses. The unfunded past
service cost is provided as per actuarial valuation as on
31-03-2012.The disclosures in respected of funded and unfunded defined
benefit obligations as required by AS 15 are as below.
3.5 Disclosure under AS-16 Barrowing cost
During the financial year the company has two qualifying assets i.e.
expansion of calcium hypo chloride project and captive thermal project
at the end of the year and these are under implementation. The
Barrowing cost that are directly relate to these qualifying assets are
determined, identified and capitalised during the financial year amount
to Rs. 1,65,57,218 (previous year : Rs. Nil )
3.6 Disclosure under AS-17 Segment reporting
The Company has disclosed Business segment as the primary segment with
geographical segment being secondary segment based on geographical
location of customers. Segment have been identified taking into account
the nature of the products differing risks and returns, The
organization structure and internal reporting system.
The Company operations predominantly relate to manufacture of
chemicals. Other business segments reported are Wind energy
Segment revenue, Segment Results, Segment Assets and Segment
liabilities include the respective amounts identifiable to each of the
segments as also amounts allocated on a reasonable basis.
The expenses, which are not directly attributed to the business
segment, are shown as unallocable corporate cost.
Assets and liabilities that cannot be allocated between the segments
are shown as a part of unallocable corporate assets and liabilities
3.7 Confirmation of balances.
Confirmation of balances from certain parties for amounts due to them
or due from them is yet to be received. Confirmation letters were
received from some of the parties. No material discrepancies are
3.8 Regrouped/ Rearranged/ Reclassified.
From the current financial year the provisions of Revised Schedule VI
is applicable and disclosures for the financial year are in compliance
of the revised schedule. Previous year figures have been
regrouped/rearranged/ reclassified wherever necessary to make them
comparable with current year''s disclosures.
3.9 Rounding off
Figures shown in the accounts have been rounded off to the nearest