SRF

1.  Capital Commitments
 
 the estimated amount of contracts remaining to be executed on capital
 account and not provided for (net of advances) amounts to Rs 16,608.87
 lakhs (previous Year – Rs 3,791.41 lakhs).
 
 Further, the Company is to make investments in the joint venture Jingde
 Yangtze – Ganga Fluorine Chemical Co Limited up to USD 2.65 million
 (previous Year – USD 2.65 million).
 
 the Company is to make investments in the following companies:
 
 i) SRF Fluorochemicals Limited – Rs 5 lakhs (previous Year – Rs 5
 lakhs)
 
 ii) SRF energy Limited – Rs 5 lakhs (previous Year – Rs 5 lakhs)
 
 2.  Contingent Liabilities not provided for
 
 a.  Claims against the Company not acknowledged as debts:
 
 
                         As at 31 March 2009 
                                    Rs Lakhs   As At 31 March 
                                               2008 Rs Lakhs
 
             excise Duty* @         5713.25       3884.53
              Sales tax** @          231.57         43.74
                 income tax	    749.00	  171.00
             Stamp Duty****	   2881.55	 2881.55
                  Others***	     94.43	   44.17
 
 All the above matters are subject to legal proceedings in the ordinary
 course of business. in the opinion of the management, the legal
 proceedings, when ultimately concluded, will not have a material effect
 on the results of the operations or financial position of the Company.
 
 b.  Bills discounted – Rs nil (previous Year – Rs 4,167.35 lakhs)
 
 c.  Liability on account of bank guarantees Rs 625.75 lakhs (previous
 Year – Rs 77.03 lakhs)
 
 d.  Guarantee given to a bank for repayment of financial facilities
 availed by a wholly-owned subsidiary USD 45.00 million (previous Year –
 USD 0.60 million)
 
 e.  (i) the Company has received a notice from Officer on Special Duty,
 Diversion tax, Bhind, imposing Diversion tax of Rs 197.00 lakhs
 (previous Year – Rs 197.00 lakhs) for converting the agricultural land
 into industrial land. the Company has been advised that the above
 notice will not be sustained since the land has been acquired from a
 Government Authority and no Diversion tax is payable on Government
 land.
 
 (ii) the Company has been served with show cause notices regarding
 certain transactions as to why additional customs/excise duty amounting
 to Rs 297.59 lakhs (previous Year – Rs 19.62 lakhs) should not be
 levied. the Company has been advised that the contention of the
 department is not tenable and hence, the show cause notice may not be
 sustainable.
 
 the Company has acquired the engineering plastics Business and
 industrial Yarn Business from SRF polymers Limited on a going concern
 basis with effect from 1 January 2009 under a Business transfer
 Agreement (BtA) at a consideration of Rs 15,031.26 lakhs.
 
 the consideration has been allocated as given below:
 
 i) Fixed assets are taken at fair market value on the basis of
 valuation reports of a registered valuer.
 
 ii) trademarks/technical knowhow acquired has been valued on the basis
 of valuation report of a registered valuer.
 
 iii) net current assets are taken at their respective book values less
 adjustments for allowances/write downs, etc. arising out of due
 diligence carried out.
 
 iv) the excess of the consideration over the value of the total assets
 acquired as aforesaid amounting to Rs 368.94 lakhs has been accounted
 for as ‘Goodwill’ in Schedule 5.
 
 3.  Dues to Micro, Small and Medium enterprises
 
 Sundry creditors include Rs 57.87 lakhs (previous Year – Rs 176.62
 lakhs) due to micro and small enterprises covered under ‘the Micro,
 Small and Medium enterprises Development Act, 2006’ to the extent such
 parties have been identified from the available information. the
 Company has not received any claim for interest from any party covered
 under the said Act.
 
 4.  employee Benefits
 
 the Company has classified various benefits provided to employees as
 under: i) Defined Contribution Plans
 
 a) Superannuation fund
 
 b) provident fund
 
 c) employees’ State insurance Corporation
 
 the expenses incurred on account of the above benefits have been
 included in Schedule 12 ‘Manufacturing and other expenses’ under the
 head ‘Contribution to provident fund, superannuation, employees’ state
 insurance, gratuity and other funds’
 
 Apart from being covered under the Gratuity plan described above, the
 employees of the Company also participate in a defined contribution
 superannuation plan maintained by the Company. the Company has no
 further obligations under the plan except making annual contributions
 based on a specified percentage of each covered employee’s salary. From
 1 november 2006, the Company provided an option to the employees to
 receive the said benefit as cash compensation along with salary in lieu
 of the superannuation benefit, thus, no contribution is required to be
 made for the category of employees who opted to receive the benefit in
 cash.
 
 Provident Fund - Defined Contribution Plan
 
 in addition to the above benefits, all employees are entitled to
 provident Fund benefits as per the law. For certain category of
 employees, the Company administers the benefits through a recognised
 provident fund trust. For other employees, contributions are made to
 the regional provident Fund Commissioners as per law.  the Government
 mandates the annual yield to be provided to the employees on their
 corpus. For the first category of employees (covered by the trust), the
 Company has an obligation to make good the shortfall, if any, between
 the yield on the investments of the trust and the yield mandated by the
 Government.
 
 5.  Segment Reporting
 
 A Business Segments
 
 Based on the guiding principles laid down in Accounting Standard
 (AS)-17 ‘Segment Reporting’, the Company’s business segments include:
 
 * technical textiles Business: includes nylon tyre cord fabric, belting
 fabric, coated fabric and industrial yarns and its research and
 development
 
 * Chemicals and polymers Business: includes refrigerant gases,
 chloromethanes, pharmaceuticals, Certified emissions Reductions and
 Allied products, engineering plastics Business and its research and
 development
 
 * packaging Films Business includes polyester Films
 
 Segment revenue, results and capital employed include the respective
 amounts identifiable to each of the segments. Other unallocable
 expenditure includes expenses incurred on common services provided to
 the segments, which are not directly identifiable.
 
 in addition to the significant accounting policies applicable to the
 business segments as set out in note 1 above, the accounting policies
 in relation to segment accounting are as under:
 
 a) Segment Revenue and Expenses
 
 Joint revenue and expenses of segments are allocated amongst them on a
 reasonable basis. All other segment revenue and expenses are directly
 attributable to the segments.
 
 b) Segment Assets and Liabilities
 
 Segment assets include all operating assets used by a segment and
 consist principally of operating cash, debtors, inventories and fixed
 assets, net of allowances and provisions, which are reported as direct
 offsets in the balance sheet. Segment liabilities include all operating
 liabilities and consist principally of creditors and accrued
 liabilities and do not include deferred income taxes. While most of the
 assets/liabilities can be directly attributed to individual segments,
 the carrying amount of certain assets/liabilities pertaining to two or
 more segments are allocated to the segments on a reasonable basis.
 
 Previous year figures have been re-grouped/re-cast/re-arranged,
 wherever necessary, to confirm to current year classifications. the
 figures for the current year are inclusive of the engineering plastics
 Business and industrial Yarn Business for the period from 1 January
 2009 to 31 March 2009 acquired from SRF polymers Limited, whereas the
 previous year figures do not include the same. therefore, the
 corresponding figures of the previous year are not comparable with
 those of the current year