Notes to Accounts of Shree Hari Chemicals Export Ltd.

Mar 31, 2024

o) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

p) Earnings Per Share:

Basic Earnings Per Share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

"The company''s financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include trade receivables, loans, security deposits, cash and cash equivalents and other financial assets that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s management oversees the management of these risks based on approved policies. The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The Company does not enter into or trade financial instruments, including derivative financial instruments, for a speculative purposes. The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below:"

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. The financial instruments affected by market risk are investments and foreign currency transactions and exposures."

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The company is of the view that they dont have any major foreign currency exposure and no hedging is been done.

Commodity Price Risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going purchase or continuous supply of chemicals. Therefore the Company monitors its purchases closely to optimise the price.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including loans, security deposits, deposits with banks and other financial instruments.

Trade Receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis for major clients."

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s management. Investments of surplus funds are made only with approved authorities. Credit limits of all authorities are reviewed by the Management on regular basis.

c) Liquidity Risk

The Company continuously monitors its risk of a shortage of funds. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, Letter of Credit and working capital limits.

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The funding requirement is met through a mixture of equity, internal accruals and short term borrowings. In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

The management assessed that the fair value of cash and cash equivalents, other bank balances, trade receivables, trade payables, other payables and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

Security Deposits - The above deposits are given to government authorities and others where refundable time period is not defined/ not available. Therefore the carrying value and the fair value is considered same.

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

"All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is

- Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Specific valuation techniques used to value financial instruments include:

(I) the use of quoted market prices or dealer quotes for similar instruments

(ii) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

(a) The Company does not have any transaction or relationships with any companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of the Companies Act, 1956.

(b) The Company has not revalued its Intangible assets during the year. Also, there are no Intangible asset under development in the Company during the current reporting period.

(c ) No Loans or Advances are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013) either severally or jointly with any other person.

(d) The Company has not been declared as a wilful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by Reserve Bank of India.

(e ) There are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 which have not been recorded in the books of accounts.

(f) There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the statutory period.

(g) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(h) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or,

ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries,"

(I) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or ,

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,"

NOTE NO. 29.27 RE-GROUPED PREVIOUS YEAR BALANCES

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

As per our report of even date attached , ,

For Kailash Chand Jain & Company ^{For and on behalf of the Board}

Chartered Accountants

Firm Registration No.: 112318W

B. C. AGRAWAL SARTHAK AGARWAL

Chairman & Managing Director Whole Time Director

, . , , [DIN : 00121080] [DIN : 03613314]

Yash Singhal

Partner

^Membershi^{p N}°.^{: 159392} S. K. KEDIA URVASHI PANDYA

Whole Time Director & Chief Financial Officer Company Secretary Place: Mumbai [DIN No. 08556924] Membership No. F11797

Dated : May 27, 2024

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Mar 31, 2016

II. NOTES TO THE ACCOUNTS :

1. Equity Shares:

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.

(Refer Note No. 1 Share Capital )

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

a. Cash Credit From State Bank Of India having credit balance of Rs. 34,30,188.47/- as on 31st March, 2016. The detail of same is as under:

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-15/2,MIDC, Mahad. (ii) Office No. 103and 104 Unique Tower, Goregoan, Mumbai (iii) Lien of TDR of Rs. 0.13 crore in the name of Company. Further, Directors of Company have also given personal guarantee.

Credit Balance of cash credit from State Bank of India is included in Short Term Borrowings under Note no-3 of the financial statements.

3. 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.

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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).

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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

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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.

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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.

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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.