Annual Report 2004 - Nagarjuna Fertilizers

NFCL
charge on the current assets of the company.
The interest rates stand revised to 10.50% w.e.f. 01.04.2003 in respect of Long Term Loans stated above as per
CDR package sanctioned on 20th February 2004.
In respect of Micro irrigation business Term Loan from IDBI of Rs. 330 lakhs is secured by way of first mortgage of
immovable properties and further by a first charge by way of hypothecation of movables including movable machinery,
machinery spares, tools and accessories, subject to prior charge created/to be created on the stocks of raw
materials, semi-finished and finished goods, consumable stores and such other movables, of erstwhile Nagarjuna
Palma India Ltd. The Term Loan was restructured effective 30.03.2001.
The Company is taking steps to modify the mortgages and other charges in respect of borrowings of Micro irrigation
business with the lenders of the Company.
C – MEDIUM TERM LOANS :
The medium term loans from banks and others, aggregating to Rs.14241.07 lakhs together-with interest accrued
thereon, are secured by way of a first charge on the fixed assets of the company ranking pari-passu with the financial
institutions, and a second charge (sub-ordinate to the financial institutions) on the monthly subsidy. These charges
are subject to the approval of respective Banks and Institutions, holders of first charge, which are still awaited.
The interest rates stand revised to 7% w.e.f. 01.04.2003 in respect of Medium Term Loans stated above as per CDR
package sanctioned on 20th February 2004.
The mortgage and charges in favour of the trustees for Debenture holders, Institutions & Banks, referred to above
rank pari-passu first charge inter se and further secured by a second charge on current assets of the company,
except in the case of 0% Secured Redeemable Non-Convertible Debentures.
D – WORKING CAPITAL :
Working Capital Demand loan, Cash Credit and Non Fund based limits of LCs and BGs from banks are secured by
hypothecation of stock in trade, book debts and stores & spares, present and future and second charge on the fixed
assets of the company.
The interest rates stand revised to 8.50% w.e.f. 01.04.2003 in respect of Working Capital loans stated above as per
CDR package sanctioned on 20th February 2004.
All the secured loans are additionally secured by the pledge of shares held by the Company in Jaiprakash Engineering
and Steel Company Ltd, Nagarjuna Power Corporation Limited, except the loan availed by erstwhile NPIL from IDBI
(Rs. 330 lakhs).
All the Term Loans and Debentures from Institutions and Banks, counter guarantees, working capital demand loan / cash
credit from banks are personally guaranteed by Shri K.S.Raju, Vice Chairman and Managing Director of the Company.
7. Unsecured Loans:
a) Fixed Deposits:
There are no matured deposits which are claimed but unpaid as on the date of the Balance Sheet. The balance
outstanding as on 31.03.2005 is Rs.60.13 lakhs (previous year Rs. 189.90 lakhs) out of which Rs.59.98 lakhs
remain unclaimed (previous year Rs.139.05 lakhs).
b) Sales Tax Deferral:
The Govt. of Andhra Pradesh has extended to the Company, the incentive of sales tax deferral scheme pursuant
to which the sales tax attributable to the sales effected out of production from Plant I and Plant II is deferred
(interest-free) for a period of 5 years from 04.07.1994 in the case of Plant I and 14 years from 19.03.1998 in the
case of Plant II. The deferred sales tax of each year is repayable after the expiry of the period deferred. The
deferred Sales Tax in respect of Plant I was fully repaid by 10.09.2003. In respect of Plant II the sales tax so
deferred aggregates to Rs. 4362.68 lakhs, based on the Sales Tax Returns (previous year Rs. 3687.83 lakhs) in
respect of which payments commence after 19.03.2012.
8. Revaluation of Fixed Assets:
The Company has re-valued the manufacturing facilities located at Kakinada as on 31 st March 2005 on the basis of
report of an independent approved valuer. The Valuation has been done on the basis of Depreciated Replacement
Cost Method. Accordingly, Rs. 243350.02 lakhs being the revalued amount stands substituted for the historical cost
in the block of fixed assets.
The aforesaid revaluation is also envisaged in the Scheme of amalgamation approved by the High Court of AP as
detailed in Note No.4 above.
The Company had earlier revalued its freehold land as on 31.03.2003 admeasuring 1040.28 acres, situated at
Kakinada (plant site), on the basis of reports of an approved independent valuer on the present market value basis
(Standard Indices). Accordingly, Rs.8842.38 lakhs, being revalued amount stand substituted for the historical cost
in the gross block of fixed assets.
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