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Notes to Accounts of Bodal Chemicals Ltd.

Mar 31, 2015

1.1 Rights, preferences and restrictions attached to shares Equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share. 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 of their shareholding.

Preference shares

The Company has only one class of non-convertible, non-cumulative redeemable preference shares having a par value of Rs. 10/- per share. Each shareholder shall have a right to attend general meeting of the company and vote on resolutions directly affecting their interest. In the event of liquidation, the preference shareholders shall be entitled to a preferential right of return of the amount paid up on the shares, but shall not have any further right or claim over the surplus asset of the company. The holder of these shares shall be entitled to receive dividend at fixed rate i.e. @ 9% on paid up value of shares subject to declaration of dividend by the company but do not have right to participate in surplus profit.

*Amount disclosed under other current liabilities (Refer Note 9)

2.1 Nature of Security and terms of repayment for Long Term secured borrowings

2.1.1 Term loan from banks balance outstanding amounting to Rs.1200.00 lacs (P.Y.:Rs.1455.00 lacs) is secured by 1st charge on immovable properties of the company situated at Plot No. 252,253,254 GIDC, Vatva and Plot No. 804 of Padra Unit and Hyp. of entire P&M and other equipment acquired through the term loan and repayable in 40 quarterly installments starting from April 2012. Last installment is due in March, 2022. Rate of interest 12.75%. (P.Y.16.50%) p.a. at year end.

2.1.2 Term loan from banks balance outstanding amounting to Rs.3704.00 lacs (P.Y.:Rs.4491.10 lacs) is secured by 1st charge on immovable properties of the company situated at Plot No. 804 & Block No. 800, 803/1, 797, 796, 795, 532, 555, 556, 560, 561/1 and 525, Village Dudhavada, Taluka Padra, Vadodara and Hyp. of entire P&M and other equipment acquired through the term loan and repayable in 40 quarterly installments starting from April, 2012. Last installment is due in March, 2022. Rate of interest 12.75 % (P.Y. 15.50%) p.a. at year end.

2.1.3. Term loan from banks balance outstanding amounting to Rs.2300.00 lacs (P.Y.:Rs.4243.75 lacs) is secured by 1st charge on immovable properties of the company situated at Plot No. 804 & Block No. 800, 803/1, 797, 796, 795, 532, 555, 556, 560, 561/1 and 525, Village Dudhavada, Taluka Padra, Vadodara and Hyp. of entire P&M and other equipment acquired through the term loan and repayable in 40 quarterly installments starting from April, 2012. Last installment is due in March, 2022. Rate of interest 15.25%. (P.Y. 15.00 %) p.a. at year end.

2.1.4 Working Capital Term loan from banks balance outstanding amounting to Rs.NIL (P.Y.:Rs.374.42 lacs) is secured by 1st pari pasu charge on entire current assets of the company. Loan is fully paid in August 2014. Rate of interest 15.75% (P.Y. 15.75%) p.a.

2.1.5. Working Capital Term loan from banks balance outstanding amounting to Rs.1349.50 lacs (P.Y.:Rs.2037.00 lacs) is secured by 1st pari pasu charge on entire current assets of the company and repayable in 120 monthly installments starting from April, 2012. Last installment is due in March, 2022. Rate of interest 12.75% (P.Y. 16.00%) p.a. at year end.

2.1.6 Working Capital Term loan from banks balance outstanding amounting to Rs.NIL (P.Y.:Rs.3488.00 lacs) is secured by 1st pari pasu charge on entire current assets of the company. loan is fully paid in July 2014. Rate of interest 10.25% (P.Y.: 10.25% )p.a.

2.1.7 Working Capital Term loan from banks balance outstanding amounting to Rs.NIL (P.Y.:Rs.5735.61 lacs) is secured by 1st pari pasu charge on entire current assets of the company. Loan is fully paid in July 2014. Rate of interest 10.25% (P.Y.: 10.25%) p.a.

2.1.8 Funded Interest Term loan from banks balance outstanding amounting to Rs.NIL (P.Y.:Rs.1000.47 lacs) is secured by 1st pari pasu charge on entire current assets of the company. Loan is fully paid in June 2014. Rate of interest 10.25% (P.Y.: 10.25% ) p.a.

2.1.9 Funded Interest Term loan from banks balance outstanding amounting to Rs.NIL (P.Y.:Rs.1476.90 lacs) is secured by 1st pari pasu charge on entire current assets of the company. Loan is fully paid in June 2014. Rate of interest 10.25% (P.Y.: 10.25%) p.a.

2.1.10 Vehicle loan ,balance outstanding amounting to Rs.8.05 lacs (P.Y.:Rs.27.53 lacs) is secured by Hire Purchase agreement for Vehicles and repayable in monthly installments. Interest rate from 9% to 10%.

3.1 Term Loans are collaterally further secured by equitable mortgage on Immovable property and Hyp. Of P&M of the company. It is further secured by personal guarantees of the Chairman and Managing Director and Executive directors.

It is further secured by pledge of equity shares of the company held by the promoters and promoter group(excluding 3 NRIs and 2 resident indians from promoter groups).

4.1 Working Capital Loans from Banks are secured by Hyp. Of Inventories, Book Debts and bills drawn under letter of credit and collaterally secured by equitable mortgage on Immovable property and Hyp. Of P&M of the company and personal guarantees of the Chairman and Managing Director and Executive directors. It is further secured by pledge of equity shares of the company held by the promoters and promoter group(excluding 3 NRIs and 2 resident indians from promoter groups).

5.1 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amount unpaid as at year end together with interest paid payable under this Act have not been given.

5.2 Trade Payables include Rs. 0.93 lacs (P.Y. Nil) to related parties (refer note 35)

6.1 There are no amounts due for payment to the Investor Education and Protection Fund Under Section 205C of the Companies Act, 1956 as at the year end. Section 125 of the Companies Act, 2013 which corresponds to Section 205C of the Companies Act, 1956 has not yet been enforced.

6.2 Statutory liabilities represent amounts payable towards VAT, CST, Excise duty and TDS etc.

6.3 Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof : Rs.31.29 lakhs included in other administrative & general expenses.

7 Contingent Liabilities and Commitments (to the extent not provided for) (Rs. in Lacs)

As at As at 31st March, 2015 31st March, 2014

(a) Contingent Liabilities

1) Disputed matters in appeals/contested in respectof:

i. Income Tax 268.31 405.06

ii. Excise 193.45 183.75

iii. Service Tax 3.86 3.86

iv. Customs Department 11.71 11.71

Future cash outflows in respect of the above are determinable only on receipt of Judgments /decisions pending with various forums/ authorities. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the additional demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

2) Letter of Credit 669.19 812.58

3) Bank Guarantee 471.78 432.29

(b) Commitments

i. Estimated amount of Contracts remaining to be executed on 82.85 683.51 capital account and not provided for, net of advances

8 Derivative Instruments and Unhedged Foreign Currency Exposure

The company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The company does not enter into any derivative instruments for trading or speculative purposes.

9 Grant from World Bank

Government grants related to depreciable fixed assets was treated as deferred income which was recognised in the statement of profit and loss over the useful life of the asset. During the year the Company has changed the method of recognizing the government grant. Grants related to specific fixed assets are presented in balance sheet by showing the opening balance of deferred grant as a deduction from the gross value of the assets concerned in arriving at their book value. Thus grant is recognised in the statement of profit and loss over the useful life of a depreciable asset by way of a reduced depreciation charge. This change results in more appropriate preparation and presentation of financial statements of the Company.

10 Employees' Benefits Defined Benefit Plan Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India and Star Union Dai-ichi Life insurance company in the form of qualifying insurance policy.

The following table sets out the funded status of the gratuity plan and the amounts recognised in the company's financial statements based on actuarial valuations being carried out as at 31st March 2015.

11 Related Party Disclosure

a) Names of related parties and nature of relationship

I. Key Management Personnel (KMP)

1. Shri Suresh J. Patel Chairman& Managing Director

2. Shri Bhavin S. Patel Executive Director

3. Shri Ankit S. Patel Executive Director

4. Shri Mayur B. Padhya Chief Financial Officer

5. Shri Ashutosh B. Bhatt Company Secretary

II. Enterprise under significant influence of key management personnel (Enterprise)

(i) Shanti Inorgo Chem (Guj.) Pvt. Ltd.

(ii) Siskaa Chemicals Ltd.(Associate concern till 01/ 04 /2013)

(iii) Rudraksh Caterers Pvt. Ltd.

III. Wholly-owned Subsidiary Company (WOS)

(i) Bodal Agrotech Ltd.

IV. Associates

(i) Sun Agrigenetics Pvt. Ltd.

(Associate Concern Till 24/02/2015 and Fellow Subsidiary Company (FS) till 07/03/2014)

Notes:-

(i) Loan to subsidiary has been given for acquisition of assets and other business purposes and has been utilized for the same.

(ii) No amounts pertaining to related parties have been provided for as doubtful debts. Also no amounts have been written off or written back during the year.

12 Segment Reporting:

The Company's primary segment is identified as business segment based on nature of products, risks, returns and the internal business reporting system and secondary segment is identified based on the geographical location of the customers as per Accounting Standard 17. The Company is principally engaged in a single business segment viz., "Dyes, Dyes Intermediates and Basic Chemicals".

The geographical segment has been considered for disclosure as secondary segment.

Two secondary segments have been identified based on the geographical locations of customers i.e. domestic and export.

a) Revenue from external operations comprises of income from sale of products, and other operating revenues.

b) Carrying amount of segment assets comprises of non-current assets and current assets identified to the respective segments. However Segments assets in India also includes certain common assets used to generate revenue in both segments but not feasible of allocation.

c) Capital expenditure during the year represents net additions to Tangible and Intangible assets and movement in Capital work in progress.

13 Previous year's figures have been rearranged and reclassified wherever necessary to correspond with the current year.


Mar 31, 2014

1 Contingent Liabilities and Commitments (to the extent not provided for) (Rs. in Lacs)

As at As at 31st March 31st March 2014 2013

(a) Contingent Liabilities

Disputed matters in appeals/ contested in respectof:

i. Income Tax 405.06 248.05

ii. Excise 183.75 112.47

iii. Service Tax 3.86 1.35

iv. Customs Department 11.71 11.71

(b) Commitments

i. Letter of credit 812.58 780.94

ii. Bank Guarantee 432.29 367.01

iii. Estimated amount of Contracts remaining to be executed on Capital account and not 683.51 0.41 provided for, net of advances

(c) During the year the company has received Income Tax Assessment orders u/s 143(3) r.w.s. 153A dated 21.03.2014 for the F.Y. 2005-06 to F.Y. 2010-11 and Income Tax Assessment order u/s 143(3) r.w.s. 153B (1)(b) for the F.Y. 2011-12 dated 21.03.2014.The disputed demand including interest for all seven Assessment Years is Rs. 405.06 lacs. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

2 Derivative Instruments and Unhedged Foreign Currency Exposure

The company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The company does not enter into any derivative instruments for trading or speculative purposes.

3 Grant from World Bank

Grant from World Bank has been treated as deferred income which is recognized in the Statement of Profit & Loss for the period in the proportions in which depreciation on related assets is charged. During the year the company had retrospectively changed its method of providing deprecation on its tangible fixed assets as discussed in Note No.1.1(d)and accordingly income of Rs.13.63 lacs related to earlier years is transferred to prior period income accounts and income of Rs.1.34 lacs recognised during the current year.

4 Employees’ Benefits

Defined Benefit Plan

Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with LIC and Star Union Dai-ichi in the form of qualifying insurance policy.

The following table sets out the funded status of the gratuity plan and the amounts recognised in the company’s financial statements based on actuarial valuations being carried out as at 31st March 2014.

The estimated future salary increases take account of inflation, seniority, promotion and other retirement factors such as supply and demand in the employment markets.

The expected contributions for Defined Benefit Plan for the next financial year will be in line with F.Y. 2013-14

Defined Contribution Plan

The company has recognized the following amount in statement of profit and loss which is included under contribution to funds.

5 Related Party Disclosure

a) Names of related parties and nature of relationship

I. Key Management Personnel (KMP)

1. Shri Suresh J. Patel Chairman& Managing Director

2. Shri Bhavin S. Patel Executive Director

3. Shri Ankit S. Patel Executive Director

4. Shri Ramesh P. Patel Key Managerial Personnel - Executive Director (till 01/10/2012)

II. Enterprise under significant influence of key management personnel (Enterprise)

(i) Shanti Inorgo Chem (Guj.) Pvt. Ltd.

(ii) Siskaa Chemicals Ltd.(Associate concern till 01/ 04 /2013)

III. Wholly-owned Subsidiary Company (WOS)

(i) Bodal Agrotech Ltd.

IV. Associates

(i) Sun Agrigenetics Pvt. Ltd. (Fellow Subsidiary Company (FS) till 07/03/2014)

Notes:-

(i) No amounts pertaining to related parties have been provided for as doubtful debts. Also no amounts have been written off or written back during the year.

6 Segment Reporting:

a) Primary Segment

The company primarily deals in only one business segment i.e., “Dyes, Dyes Intermediates and Basic Chemicals”.

b) Secondary Segment (By Geographical segment)

Two secondary segments have been identified based on the geographical locations of customers : domestic and export. Information about geographical segments are as below.


Mar 31, 2013

1 Company Information:

Bodal Chemicals Limited (the ''Company'') is a public limited company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The company is engaged in manufacturing of Dyes, Dyes Intermediates and Basic Chemicals.

The Company has a wholly owned subsidiary Bodal Agrotech Ltd., which is in the business of trading of vegetables, fruits and food grains.

2. Contingent Liabilities not provided in respect of:

(Rs. In lacs)

Nature of Liabilities 2012-13 2011-12

a. Disputed matters in appeals/contested in respect of:

I) Income Tax 248.05 248.05

II) Excise 17.38 20.21

III) Service Tax 96.44 96.67

IV) Customs Department 11.71 10.11

b. Letter of credit 780.94 264.15

c. Estimated amount of Contracts, remaining to be executed 0.41 3.54 on capital account (net of advances)

d. Bank Guarantee 367.01 423.63

3 The Company has exercised the option of implementing the Provisions of Paragraph 46 of Accounting Standard 11 " Accounting for the Effects of changes in Foreign Exchange Rates” prescribed by Companies (Accounting Standards) Amendment Rules , 2009 in the F.Y. 2008-09 and accordingly the company has capitalized foreign exchange loss of Rs. 81.08 lacs in the current year in respect of foreign currency loans, consequently, loss for the year is lower by the equivalent amount. Company had capitalised the foreign exchange loss of Rs. 1488.03 lacs in respect of foreign currency loans in the fixed assets upto the previous year.

4. Grant from World Bank

Grant from World Bank has been treated as deferred income which is recognized in Profit & Loss Account for the period in the proportions in which depreciation on related assets is charged.

5. Related Party Disclosure

a) Names of related parties and nature of relationship

I. Key Management Personnel (KMP)

1. Shri Suresh J. Patel Chairman & Managing Director

2. Shri Bhavin S. Patel Executive Director

3. Shri Ankit S. Patel Executive Director

4. Shri Ramesh P. Patel Executive Director(till 01/10/2012)

II. Enterprise under significant influence of key management personnel (Enterprise)

(i) Shanti Inorgo Chem (Guj.) Pvt. Ltd. (ii) Siskaa Chemicals Ltd.

III. Wholly-owned Subsidiary Company (WOS)

(i) Bodal Agrotech Ltd.

IV. Fellow Subsidiary Company (FS)

(i) Sun Agri genetics Pvt. Ltd.

6. Employees'' Benefits

a) Defined Benefit Plan

Gratuity:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with LIC and Star Union Dai-ichi in the form of qualifying insurance policy.

The following table summaries the components of net benefit expenses recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity benefit.

7. Earnings per Equity Share

Basic and Diluted Earnings per equity share are recorded in accordance with Accounting Standard -20 "Earnings per Share”. Earnings per Share is calculated by dividing the (loss) / profit attributable to the Equity shareholders (after adjustment for deferred taxes) by the average number of equity shares outstanding during the period. The numbers used in calculating basic earnings per Equity Shares are stated below.

8 On February 9 & 10, 2012 the Company, along with promoters and other related parties, were subject to Search, Survey and seizure operation by the income Tax department under section 132/133 of Income Tax Act 1961 ("the Act”) The Company had during the year received notice u/s153A for filing return of income for six financial years preceding to financial year 2011-12 the year of search. The company had already filed return of income for the respective 6 years in response to notice u/s 153A.

The company has till date made disclosure of Rs.1081.23 lacs under section 132(4) of the Act of which Rs. 505 Lacs has been accepted by the company and said income were shown as "Exceptional Items” in statement of profit and loss for year ended 31-03-2012. Balance Rs. 576.23 lacs though covered under disclosure have not been accepted by the company. However the same has been shown as additional income in return of income filed for respective years to buy peace & to avoid litigation. There hasn''t been any monetary tax implication of such income due to availability of additional unabsorbed deprecation arising out of order giving appeal effect of "Income Tax Appellate Tribunal” in favour of erstwhile amalgamated company "Milestone Organic Limited”.

Due to above, necessary adjustments have also been made in the calculation of deferred tax. The deferred tax calculation has been made as on 31-03-2013 keeping in view the additional income offered by the company & additional unabsorbed deprecation available as mentioned above.

9 Previous year''s figures have been rearranged and reclassified wherever necessary.


Mar 31, 2012

1. Company Information:

Bodal Chemicals Limited (the 'Company') is a public limited company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The company is a market leader in the Dyes, Dyes Intermediates and Basic Chemicals.

The Company has a wholly owned subsidiary Bodal Agrotech Ltd., which is in the business of trading of vegetables, fruits and food grains.

2.1 Equity shares of Rs. 10 each have been sub-divided into five equity shares of Rs. 2 each pursuant to the resolution passed by the shareholders at the Extra Ordinary Meeting on 28/04/2010

2.2 Out of total shares outstanding 3,38,060 Equity shares had been alloted as fully paid on amalgamation of Milestone Organics Ltd. with the company as per High Court Order.

2.3 The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share. 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 of their shareholding.

3.1 Term Loans are collateraly further secured by equitable mortgage on Immovable property and Hyp. Of P&M of the company. It is further secured by personal guarantees of the Chairman and Managing Director and Executive directors. It is further secured by pledge of equity shares of the company held by the directors.

3.2 Installments falling due in respect of all the above Loans upto 31/03/2013 have been grouped under "Current maturities of long-term debt".

3.4 Company had moved proposal, for restructuring of its various bank loans, to Corporate Debt Restructure Cell through Union Bank of India, the Monitoring Institution (MI). The same has been admitted by the Cell in their meeting dtd. 25/ 06/2012 with cut off date as 01/04/2012. The MI need to submit final restructure report by 22/09/2012. On approval of the same by CDR Cell, various bank limits will get restructured including repayment schedule for the same. That proposed changes have not been considered while preparing this accounts.

3.5 Cash Credit Facility and Packing Credit Facility are primarily secured by Hyp. Of Stock of Raw material, Work in Process, Finished Goods and Book Debts of the company.

3.6 Bills discounting facility is primarily secured by hyp. of bills drawn under letter of credit.

3.7 Buyers' Credit facility is primarily secured by hyp. Of stocks received under letter of credit.

4.1 Cash Credit, Packing Credit, Bill Discounting and Buyers Credit facility are collateraly further secured by equitable mortgage on Immovable property and Hyp. Of P&M of the company and personal guarantees of the Chairman and Managing Director and Executive directors. It is further secured by pledge of equity shares of the company held by the directors.

5.1 Other Trade payables represents amount payable to various parties for packing material, consumables and expenses.

5.2 The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amount unpaid as at year end together with interest paid payable under this Act have not been given.

* There are no amounts due for payment to the Investor Education and Protection Fund Under Section 205C of the Companies Act, 1956 as at the year end.

# Statutory liabilities represent amounts payable towards VAT, CST, Excise duty and TDS etc.

6. Contingent Liabilities not provided in respect of:



(Rs. In lacs)

Nature of Liabilities 2011-12 2010-11

a.Disputed matters in appeals/ contested in respect of:

I) Income Tax 248.05 92.84

II) Excise 20.21 1.18

III) Service Tax 96.67 96.08

IV) Customs Department 10.11 10.11

b. Letter of credit 264.15 690.85

c. Estimated amount of Contracts, remaining to be executed on 3.54 42.89 capital account (net of advances)

d. Bank Guarantee 423.63 260.74

7. The Company has exercised the option of implementing the Provisions of Paragraph 46 of Accounting Standard 11 " Accounting for the Effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting Standards) Amendment Rules , 2009 in the F.Y. 2008-09 and accordingly the company has capitalized foreign exchange loss of Rs. 392.66 lacs in the current year in respect of foreign currency loans, consequently, loss for the year is lower by the equivalent amount. Company had capitalised the foreign exchange loss of Rs. 1095.37 lacs in respect of foreign currency loans in the fixed assets upto the previous year.

8. Grant from World Bank

Grant from World Bank has been treated as deferred income which is recognized in Profit & Loss Account for the period in the proportions in which depreciation on related assets is charged.

Notes:-

(i) No amounts pertaining to related parties have been provided for as doubtful debts. Also no amounts have been written off or written back during the year.

8. On February 9 & 10, 2012 the Company, along with promoters and other related parties, were subjected to Search, Survey and seizure operation by the Income Tax department under section 132 / 133 of the Income Tax Act, 1961 ("the Act"). The company has till date made disclosure of Rs. 1081.23 lacs under Section 132 (4) of the Act of which Rs. 505 lacs has been accepted by the company and the said income has been shown as "Exceptional Items". Utilisation thereof of Rs. 500 lacs towards land development cost and Rs. 5 lacs for reversal of business development expenses have been duly accounted for. Balance Rs. 576.23 lacs though covered under disclosure have not been accepted by the company. The above disclosure has been considered for calculation of the tax expenses.

9. Employees' Benefits

a) Defined Benefit Plan

Gratuity:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following table summaries the components of net benefit expenses recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity benefit.

10. Earnings per Equity Share

Basic and Diluted Earnings per equity share are recorded in accordance with Accounting Standard -20 "Earnings per Share". Earnings per Share is calculated by dividing the (loss) / profit attributable to the Equity shareholders (after adjustment for deferred taxes) by the average number of equity shares outstanding during the period. The numbers used in calculating basic and diluted earnings per Equity Shares are stated below.


Mar 31, 2009

1) Contingent Liabilities not provided in respect of:

(Rs. In Lacs)

Nature of Liabilities 2008-09 2007-08

a. Disputed matters in appeals/ contested in respect of:

I) Income Tax 19.28 6.24

II) Excise Department 9.07 10.91

III) Custom Department 10.11 10.07

b. Bonds/Undertakings given by the Company under Concessional duty/ exemption to Customs/Excise Authorities(Net of redemption applied for) 12.60 53.60

c. Letter of credit 622.12 562.27

d. Estimated amount of Contracts, remaining to be executed on capital account 1950.30 165.79



2) In the opinion of the Board of Directors, Current assets, loans and advances have a value on realisation in the ordinary course of business equal to the amount at which they are stated in the Balance Sheet.

3) The company, in terms of Notification issued by Ministry of Corporate Affairs on 31st March, 2009, has exercised the option of implementing the provisions of newly inserted Paragraph 46 of Accounting Standard 11, Accounting for the Effects of Changes in Foreign Exchange Rates, prescribed by Companies (Accounting Standards) Amendment Rules, 2009. The company has outstanding long term foreign currency loans which are categorized as Long Term Foreign Currency Monetary Item as referred in the said notification. Accordingly company has adjusted the exchange difference gain of Rs.40.17 lacs pertaining to prior years through general reserves and corresponding deduction in Fixed Assets and capitalized Exchange Difference Loss of Rs. 761.38 lacs pertaining to current financial year in respect of Foreign Currency Loans, consequently profit for the year is higher by equivalent amount.

4) Rights Issue and Detachable Warrants to the equity shareholders of the Company.

During the year Company completed Rights Issue of 52,01,352 Equity Shares along with Detachable Warrants at a price of Rs. 20/- each (Face Value of Rs.10/- and Premium of Rs. 10/- per share) aggregating to Rs. 1040.27 lacs. Detachable Warrants holder can exercise their right to apply for the Equity Shares at the Exercise Price of Rs.20/- per share at any time during the Warrant Exercise Period i.e. 1st to 28th February, 2009. Consequently on exercise of the right 42,30,634 shares were allotted at the price of Rs.20/- each (Rs.10A Face Value and Rs.10/- Premium per share). Consequently the share capital of the Company increased from Rs.10.40 Crores to Rs.19.83 Crores on allotment of 94,31,986 Equity Shares.

5) Micro, Small, Medium Enterprises Development Act, 2006

There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6) Sundry debtors include Rs. 64.35 lacs. The recovery of wherein are doubtful. However, in the opinion of the management considering the recovery procedures the same are receivable and hence not considered doubtful and accordingly not provided for.

7) Balance of Unsecured Joans, debtors and creditors, ioans and advances are subject to confirmation.

8) Debenture

As per written consent by the unsecured Debenture holder, it has been agreed not to claim any interest upto 31/03/ 2009. Hence, no provision has been made for interest for the year 2008-09.

9) Employees Retirement Benefits

a) Defined Benefit Plan

Gratuity:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an issuance company in the form of qualifying insurance policy.

The following table summaries the components of net benefit expenses recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity benefit.

10) Previous year figures have been rearranged and reclassified wherever necessary.

 
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