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Notes to Accounts of Kanoria Chemicals & Industries Ltd.

Mar 31, 2015

(A) The Company has only one class of issued shares i.e. Equity Share having par value of Rs.5 pershare. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of 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 payment of all preferential amounts, in proportion to theirshareholding.

(B) Vardhan Limited, the holding company, holds 26,133,872 Equity Shares of 5 each in the company.

(C) Details of shareholders holding more than 5 percent equity shares.

(D) No Shares have been reserved for issue under options and contracts/commitmentsforthe sale of shares/disinvestmentas at the Balance Sheetdate.

(E) The Company, during the year 2012-13, had bought back 12,603,167 Equity Shares of Rs. 5 each.

(F) None of the securities are convertible into shares at the end of the reporting period.

(G) No calls are unpaid by any Director or Officer of the Company during the year.

2. Managing Director''s appointmentand remuneration of Rs. 2.91 million for the period from 10th January, 2015 to 31st March, 2015 is subject to the approval of Shareholders.

3. For the year ended 31 st March, 2015, the Board of Directors of the Company have recommended dividend of Rs. 1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous yearRs. 65.54 million). Together with the Corporate Dividend Distribution Tax of Rs. 13.10 million (Previous yearRs. 11.14 million), the total payout will be Rs. 78.64 million (Previous yearRs. 76.68 million).

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information is required to be disclosed under the Micro, Small & Medium enterprises DevelopmentAct, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. Income from Investments represent the income earned on the temporary investments made out of sale proceeds of a business undertaking for deployment in businesses in due course.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde & Hexamine etc. and Solar Power business includes Power generation from Solar energy.

6. Details of Loans given, Investment made, Guarantees given and Security provided under Section 186 (4) of the Companies Act, 2013.

Investments made are disclosed in Note No. 12 to the Financial Statements.

Corporate Guarantees given are disclosed in Note No. 29 to the Financial Statements

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified numberof days of lastdrawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation oron exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 7.48 million (previous yearRs. 6.92 million).


Mar 31, 2014

1. Share Capital

a) There has been no change/movements in number of shares outstanding at the beginning and at the end of the reporting period.

b) The Company has only one class of issued shares i.e. Equity Shares having par value of Rs.10 per share. Each holder of Equity Shares is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

c) R.V. Investment & Dealers Limited is the Holding Company of this Company.

d) No Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date.

e) No shares have been allotted or has been bought back by the Company during the period of 5 years preceding the date as at which the Balance Sheet is prepared.

f) No securities which are convertible into Equity/Preference shares have been issued by the Company during the year.

g) No calls are unpaid by any directors or officers of the company during the year.

2. Long-Term Borrowings

a) Rupee Term Loan from Bank is repayable in 10 semi-annual installment for Rs.14600/- between March, 2012 to March, 2016, for Rs. 14821/- between January 2013 to March 2018 and for Rs. 15000/- between September 2013 to March 2018. The primary security against such asset is hypothecation of machineries purchased under the Term Loan. For the Term Loan of Rs. 28779/-received during the year, terms of repayments have not been finalised till date.

3. Short-Term Borrowings

a) Working Capital Borrowings in Rupee is secured against hypothecation of entire stocks together with bank''s pari passu 1st charge on entire assets both present and future of the company.

b) Export Packing Credit is secured against hypothecation of Stock of materials, semi-finished and finished goods.

4. Fixed Assets

Note :

Fixed Assets of the Company excluding minor items,were revalued by an external Independent Valuer on 31st March,1992 which resulted in increase of Fixed Assets Value by Rs. 300,476 on Net Current Replacement Basis. This increase had been transfered to Revaluation Reserve Account. After adjustment in respect of Fixed Assets sold/discarded and Depreciation Provided,the Revaluation Reserve now stands at Rs. 6,971 as on 31.03.2014.(PY Rs. 15,190)

5. Investments

* BIFR Companies

@ Shares in Reliance Jute Mills (Int.) Ltd. has been aquired as per scheme of Arrangement of Reliance Jute Ltd. with Reliance International Ltd.

# In absence of availability of unquoted rates,market value of such shares have been considered at Rs. (1)/-.

6. OTHER ASSETS

* The above Insurance Claim is outstanding for the last three years. On 06-12-2013 the company has filed a legal suit at National Consumer Dispute Redressal Commission (NCRDC ), New Delhi. The Management is hopeful of gettng a favourable verdict in this regard. Hence creating provision against it has not been considered necessary by the management.

7. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

As at March 31, As at March 31, 2014 2013

a) Bills Discounted with Banks 53,892 46,168

a) Other Disputed Claims (ESI)(Gross) (Adv. paid Rs. 1,873, PY Rs. 1,873)

c) Excise Duty Demand disputed 5,691 5,691

(i) Excise Authority raised the 43 43 demand on transit loss of Jute Batching Oil from 1964 to 1969. Writ Petition pending before High Court at Kolkata

(ii)Excise Authority raised the 1,780 1,780 demand on Jute Webbing as differential duty between specific rate as per classification list and advalorem rate. Matter is pending before Appeallate Authority for the year 1986-87 to 1991-92. (Advance paid Rs. 300 PY Rs. 300)

d) i) Disputed demand against Sales 4,498 4,708 Tax for the year 1999-00 and 2004 -05 for which the Company has preferred appeal and it is pending before W.B.C.T. (A & R) Board (Adv. paid Rs. 1,120, PY. Rs.1,120)(Gross)

ii) Disputed demand against Sales 1,35,960 1,03,282 Tax for the year 2005-06 to 2010- 2011 for which Appeal is pending before SR. and AD. Joint commissioner (CD) and WBCT (A&R) Board.

e) Land Revenue (Rent) raised by the 11,546 10,392 office of the B.L. & L.R. Officer Uluberia- II, Howrah due to retrospective changes in W.B.Land Reform Act. Matter is pending before W.B.Land Reform Tribunal since 2002-03.

f) a) Outstanding Bank Guarantees 37,021 36,889

b) Outstanding Letter of Credit 59,064 75,481

8. In respect of Defined Benefits Plans, necessary disclosures are as under :

i) Benefits are of the following types :

- Every employee who has completed continuous five years or more of service is entitled to gratuity on terms not less favourable than the provisions of the Payment of Gratuity Act, 1972.

- Provident Fund (other than government administered) as per the provisions of Employees Provident Funds and Miscellaneous Provisions Act, 1952.

ii) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

iii) In respect of provident funds for eligible employees maintained by a trust, in the nature of defined benefits plan, upto date shortfall, if any, as per actuarial valuation, in respect of contribution towards such fund is yet to be identified. However, contribution to those provident fund amounting to Rs. 8,844 (previous year Rs. 8,803)is recognized as expense and included in "Employees Benefit Expenses".

9. Raw materials, Stores & Spares Parts consumed include profit and/or loss on sale and excess/short found on physical verification.

10. The amount of borrowing cost capitalized during the year is Rs. Nil (previous year Nil).

11. a) Outstanding forward exchange contracts booked for the purpose of hedging Receivables/firm commitment are USD 115, EURO 41 & Sterling Pound Nil(Previous year USD 383,EURO 58 and Sterling Pound 23)

b) Unhedged foreign currency receivables USD 127, EURO 22 and Sterling Pound 21 (Previous Year USD 77, EURO Nil and Sterling Pound Nil) and payables are USD 249 (Previous Year USD 282).

c) The marked to market loss amounting to Rs. NIL(Previous Year - 4) has been accounted for. However, marked to market gain amounting to Rs. 329(Previous Year - Rs. 608) on Forward Exchange Contracts for firm commitments and highly probable forecast transaction has not been accounted for.

11. The Company has not received any memorandum as required to be filed by the suppliers with the notified authority under Micro, Small and Medium enterprises development Act,2006 for claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to such parties during the year is Rs. Nil. (Previous Year Rs. Nil).

12. As Company''s business activities fall within a single primary business segment viz. Jute Goods, the disclosure requirements of Accounting Standard - AS-17'' Segment Reporting issued by The Institute of Chartered Accountants of India are not applicable in respect of business segment. However, the geographical segments considered for disclosures on the basis of sales.


Mar 31, 2013

1. For the year ended 31st March, 2013, the Board of Directors of the Company have recommended dividend of Rs. 1.50 per share (Previous year Rs. 1.50 per share) to equity shareholders aggregating to Rs. 65.54 million (Previous year Rs. 84.44 million). Together with the Corporate Dividend Distribution Tax of Rs. 11.14 million (Previous year Rs. 13.70 million), the total payout will be Rs. 76.68 million (Previous year Rs. 98.14 million).

2. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2013. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

3. Due to inadequacy of profits as per Section 349 of the Companies Act, 1956 (the Act), the remuneration of Rs. 13.53 million (including Rs. 2.53 million paid in previous year) to Managing Director for the period from 10th January, 2012 to 31st March, 2013, which includes an amount of Rs. 6.94 million in excess of limit specified under section 309 (3) read with schedule XIII of the Act., is subject to the approval of the Central Government which is awaited.

(B) Secondary Segment information

Not applicable, as all the plants of the Company are located in India and Exports does not constitute 10% or more of total Segment Revenue.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic

Acid & Ethyl Acetate etc. and Solar Power business includes Power generation from Solar energy. 36. As per Business Transfer Agreement dated 16th April, 2011 the Company has divested its Chloro Chemicals Division at the close of business hours on 23rd May, 2011 for a Cash consideration of Rs. 8.3 billion. In line with the requirement of Accounting Standard 24 on Discontinued Operations, the following statement shows the revenue and expenses of this division which are included in the Statement of Profit & Loss :

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company''s actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 6.44 million (previous year Rs. 8.58 million).

4. Figures for the previous year have been regrouped/rearranged, wherever found necessary.


Mar 31, 2012

(a) The Company has only one class of issued shares i.e. Equity Share having par value of Rs.5 per share. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of 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 payment of all preferential amounts, in proportion to their shareholding.

(b) The company does not have a holding company.

(c) No Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

(d) 18,765,500 Equity Shares of Rs. 5 each as fully paid up Bonus Shares were allotted on 11th January, 2008 by Capitalisation of Capital Redemption Reserve.

(e) None of the securities are convertible into shares at the end of the reporting period.

(f) No calls are unpaid by any Director or Officer of the Company during the year.

1. EXCEPTIONAL ITEMS CONSIST OF

i) The gain/(loss) arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/(loss) on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirement of Accounting Standard (AS) 11 Rs. (9.25) million (Previous Year Rs. (1.56) million).

ii) Profit on Sale of Chloro Chemicals Division of the Company Rs. 3,579.62 million (Previous Year Rs. Nil).

2. CONTINGENT LIABILITIES AND COMMITMENTS

(to the extent not provided for)

(i) Contingent Liabilities

(a) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt.

Excise Department Commissioner of Central Excise - 1.20

Demand notices issued by Central The matter is pending with Allahabad

Excise Department High Court - 0.95

Demand notices issued by Central The matter is pending with Commissioner

Excise Department (Appeal) 4.52 8.67

Demand notices issued by Central The matter is pending with CESTAT - 9.99

Excise Department

Demand notice issued by Custom The matter is pending with Asstt.

Department Commissioner of Custom - 0.43

Entry tax demand issued by The matter is pending with Allahabad

assessing authority High Court - 9.06

Sales tax/VAT demands issued by The matter is pending with Allahabad

assessing authority High Court - 4.51

Sales tax/VAT demands issued by The matter is pending with Trade Tax

assessing authority Tribunal (paid Rs. 0.43 million) 0.43 0.43

Income tax demands issued by The matter is pending with CIT (Appeal) 128.13 175.99

DCIT

(b) Outstanding Bank Guarantees 16.86 73.59

(c) Corporate Guarantee given to Gujarat Industrial Development Corporation for securing loan by Bharuch Eco -Aqua Infrastructure Limited. 11.63 11.63

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 102.10 27.07

Advances paid 4.57 4.67

3. For the year ended 31st March, 2012, the Board of Directors of the Company have recommended dividend of Rs.1.50 per share (Previous year Rs. 5 per share) to equity shareholders aggregating to Rs. 84.44 million (Previous year Rs. 281.48 million). Together with the Corporate Dividend Distribution Tax of Rs.13.70 million (Previous year Rs. 45.21 million), the total payout will be Rs.98.14 million (Previous year Rs. 326.69 million).

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2012. This information required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the company.

5. Due to inadequacy of profits as per Section 349 of the Companies Act, 1956 (the Act), the remuneration paid to Managing Director during the period from 1st April, 2011 to 9th January, 2012, exceeds the limit prescribed under Section 309 read with the Schedule XIII of the Act, by Rs. 3.52 million. The Company has initiated steps to obtain the approvals for the same from the shareholders in the ensuing Annual General Meeting and the Central Government, as required.

The remuneration of Rs. 2.53 million paid to Managing Director for the period from 10th January, 2012 to 31st March, 2012 (on his re- appointment), is subject to the approval of the shareholders in the ensuing Annual General Meeting, and further the same is subject to the approval of the Central Government.

(C) Other Disclosures

Basis of pricing inter/Intra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Chloro Chemicals business includes Caustic Soda, Liquid Chlorine, Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid & Ethyl Acetate etc.

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 8.58 million (previous year Rs. 20.81 million).

6. The financial statements for the year ended 31st March, 2011 had been prepared as per the applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March,2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements except for accounting for dividend on investments in subsidiaries.


Mar 31, 2011

(Rs. in million)

2010-2011 2009-2010

1. Contingent Liabilities not provided for in respect of:

(a) Outstanding Bank Guarantees 73.59 78.16

(b) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt. Excise Department Commissioner of Central Excise 1.20 1.20

Demand notices issued by Central The matter is pending with Allahabad Excise Department High Court (Paid Rs. 0.43 million) 0.95 1.05

Demand notices issued by Central The matter is pending with Commissioner Excise Department (Appeal) (Paid Rs. 2.50 million) 8.67 0.77

Demand notices issued by Central The matter is pending with CESTAT Excise Department (Paid Rs. 0.20 million) 69.99 42.27

Demand notice issued by Custom The matter is pending with Asstt. Department Commissioner of Custom (Paid Rs. 0.31 million) 0.43 0.43

Entry tax demand issued by The matter is pending with Allahabad assessing authority High Court (Paid Rs. 2.53 million) 9.06 16.02

Sales tax demands issued by The matter is pending with Joint - 8.39 assessing authority Commissioner (Appeal)

Sales tax demands issued by The matter is pending with Allahabad 4.51 - assessing authority High Court (Paid Rs. 0.16 million)

VAT demands issued by The matter is pending with Value Added Tax assessing authority Tribunal (paid Rs. 0.43 million) 0.43 1.56

Income tax demands issued by The matter is pending with CIT (Appeal) DCIT (Disallowance u/s 80IA Rs.163.36 million) 175.99 29.38

2. The Company had issued 200 0% Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on May 31, 2006. These Bonds are convertible into Equity Shares of Rs.5/- each fully paid, till May 27, 2011 at the option of the bondholder. Unless converted, these Bonds are redeemable on June 07, 2011 at 144.715 percent of their principal amount. The premium up to 31st March, 2011 amounting to Rs. 382.40 million has been accounted for under Provisions.

The Company has utilised the FCCBs issue proceeds towards funding of capital expenditure and related issue expenses.

3. The gain/loss arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/loss on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirement of Accounting Standard (AS) 11 are shown as exceptional items.

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. The Company has exited from Joint Venture with Soluciones Extractivas Alimentarias S.L.A, Spain (Solutex) by an agreement dated 1st March, 2011. As per the terms of agreement the entire investment in Minerva Flavours & Fragrance Private Limited, the Joint Venture Company, will be transferred at face value (at cost) to a wholly owned subsidiary of Solutex by 24th September, 2011. During the year under review Equity Shares of the face value of Rs. 5.30 million has already been transferred leaving a balance investment of Rs. 10.99 million.

6. As per Business Transfer Agreement dated 16th April, 2011 the Company has divested its Chloro Chemicals Division to Aditya Birla Chemicals (India) Ltd. on a slump sale basis at the close of business hours on 23th May, 2011 for a Cash consideration of Rs. 8.30 billion.

7. Disclosure as required by Accounting Standard 15 (Revised) on Employee Benefits: -

In respect of Leave Encashment & Gratuity, a defined benefit scheme (based on Actuarial Valuation)-

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The company has made provision for interest shortfall of Rs.0.42 million for the year. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 20.81 million (previous year Rs. 19.06 million).

8. Related Party Disclosures:

(i) List of related parties over which control exists and relationship:

Name of the Related Parties Relationship

1. Pipri Limited Wholly Owned Subsidiary

2. Minerva Flavours and Fragrance Private Limited* Joint Venture

3. Mr. R. V. Kanoria - Chairman & Managing Director Key Management Personnel

4. Mr. J. R Sonthalia - Managing Director (Designate)- Chloro Chemicals

5. Mr. T. D. Bahety - Whole Time Director

6. Mr. S. V. Kanoria Relative of Key Management Personnel

7. Mrs. V. Kanoria

8. KPL International Limited Enterprises over which Key Management Personnel

9. KCI Alco Chem Limited exercises significant influence

* Exited from Joint Venture vide an agreement dated 1st March, 2011

9. Segment Reporting:

(C) Other Disclosures

Basis of pricing inter/lntra segment transfer and any change therein:

At prevailing market-rate at the time of transfers.

Segment Accounting Policies

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

Type of products included in each reported business segment:

Chloro Chemicals business includes Caustic Soda, Liquid Chlorine, Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffins, Poly Aluminium Chloride, Captive Power, Aluminium Chloride, Salt etc. and Alco Chemicals business includes Pentaerythritol, Sodium Formate, Acetaldehyde, Formaldehyde, Hexamine, Industrial Alcohol, Acetic Acid & Ethyl Acetate etc.

10. Figures for the previous year have been regrouped/rearranged, wherever found necessary.






Mar 31, 2010

(Rs. in million) 2009-2010 2008-2009

1. Contingent Liabilities not provided for in respect of:

(a) Outstanding Bank Guarantees 78.16 69.34

(b) Claims/Disputed liabilities not acknowledged as debt

Nature of Contingent Liability Status Indicating Uncertainties

Demand notice issued by Central The matter is pending with Asstt.

Excise Department Commissioner of Central Excise 1.20 1.90

Demand notices issued by Central The matter is pending with Allahabad

Excise Department High Court (Paid Rs. 0.43 million) 1.05 1.05

Demand notices issued by Central The matter is pending with Commissioner

Excise Department (Appeal) 0.77 1.78

Demand notices issued by Central The matter is pending with CESTAT

Excise Department (Paid Rs. 0.52 million) 42.27 20.00

Demand notice issued by Custom The matter is pending with Asstt.

Department Commissioner of Custom

(Paid Rs. 0.31 million) 0.43 0.43

Entry tax demand issued by The matter is pending with Allahabad

assessing authority High Court (Paid Rs. 2.53 million) 16.02 13.49

Sales tax demands issued by The matter is pending with Joint assessing authority Commissioner (Appeal) 8.39 -

Sales tax/VAT demands issued by The matter is pending with Trade Tax

assessing authority Tribunal (paid Rs. 0.60 million) 1.56 1.68

Income tax demands issued by The matter is pending with CIT (Appeal)

DCIT (Paid Rs. 3.00 million) 29.38 1.42



2. The Company had issued 200 0% Foreign Currency Convertible Bonds (FCCB) of USD 100,000 each aggregating to USD 20 million, at par, on May 31,2006. These Bonds are convertible into Equity Shares of Rs.5 each fully paid, at the conversion price of Rs. 44.67 per share, subject to the terms of issue and price adjustment on the happening of certain events and price reset at the end of 3rd year of issue with a fixed rate of exchange of Rs. 46.19 equal to USD 1. The conversion is at the option of bond-holders at any time on or after June 05,2006 and prior to the close of business on May 27,2011. As at the end of the year the entire FCCBs issued were outstanding.

Based on the current applicable conversion price, the Share Capital of the Company will increase by 20,682,090 Equity Shares of Rs.5 each on conversion of these Bonds.

Unless previously converted, the Bonds are redeemable on June 07, 2011 at 144.715 percent of their principal amount. The premium up to 31st March, 2010 amounting to Rs.295.07 million has been accounted for under Provisions.

The Company has utilised the FCCBs issue proceeds towards funding of capital expenditure and related issue expenses.

3. The gain/loss arising from the effect of change in the foreign exchange rates on revaluation of the outstanding Foreign Currency Convertible Bonds (FCCB) & premium thereon, together with gain/loss on remittance/reinstatement of FCCB bank balances which existed during previous year, as calculated pursuant to the requirment of Accounting Standard (AS) 11 are shown as exceptional items.

4. There are no Micro, Small & Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. This information is required to be disclosed under the Micro, Small & Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

5. The Company has entered into a Joint Venture Agreement with Soluciones Extractivas Alimentarias S.L.A., Spain (Solutex) for manufacturing and marketing, world wide, products such as ingredients and extracts obtained by using the SFE technology with carbon di-oxide including for the flavour and fragrances market or any other market as may be determined by Minerva Flavours and Fragrance Private Limited, the JV Company. The Company together with its wholly owned subsidiary holds 26% stake in joint venture and 74% is held by Solutex. The Company has invested a total amount of Rs.16.29 million (including Rs.3.95 million for share application money pending allotment) till 31st March, 2010

The Company has unfunded scheme for payment of gratuity to all eligible employees calculated at specified number of days of last drawn salary depending upon tenure of service for each year of completed service subject to minimum five years of service payable at the time of separation upon superannuation or on exit otherwise.

In respect of Defined contribution schemes -

The guidance notes on implementation of AS-15 (revised) issued by the ICAI states that provident fund set up by the employers, which require interest shortfall to be met by the employers, needs to be treated as defined benefit plan. The fund set up by the Company does not have existing deficit of interest shortfall. With regard to future obligation arising due to interest shortfall, pending issuance of the guidance notes from Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the provident fund liability. The Company contributes 12% of salary for all eligible employees towards Provident Fund managed either by approved trusts or by the Central Government. The amount debited to Profit and Loss account during the year was Rs. 19.06 million (previous year Rs. 17.97 million).

6. Related Party Disclosures:

(i) List of related parties over which control exists and relationship:

Name of the Related Parties Relationship

1. Pipri Limited Wholly Owned Subsidiary

2. Minerva Flavours and Fragrance Private Limited Joint Venture

3. Mr. R. V. Kanoria - Chairman & Managing Director Key Management Personnel

4. Mr. J. R Sonthalia - Managing Director (Designate)-Chloro Chemicals

5. Mr. T. D. Bahety - Wholetime Director

6. Mr. S. V. Kanoria Relative of Key Management Personnel

7. KPL International Limited Enterprises over which Key Management Personnel

8. Prajapati Chemicals & Alfreds Limited exercises significant influence

9. KCI Alco Chem Limited

7. Figures for the previous year have been regrouped/rearranged, wherever found necessary.







 
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