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Notes to Accounts of Kiri Industries Ltd.

Mar 31, 2015

1. Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

2. Contingent Liabilities (Rs. In Lakhs)

Particulars 2014-2015 2013-2014

Guarantees given by Banks on behalf of the Company for various purposes. 182.96 188.29

Corporate Guarantees given by the Company on behalf of the Joint Venture Nil 8,900.00 Company.

Disputed Income Tax / Excise matters for various assessment years for which 1915.95 1,798.13 appeals are pending with Appellate authorities

3. Zero Coupon Foreign Currency Convertible Bonds

On January 16, 2013, the Company has made an issue of zero percent convertible bonds aggregating to USD 15 Million (approximately Rs. 82.17 crores) comprising of 10 (aggregating to US$ 10,00,000) zero percent convertible bonds due 2018 ('Series A FCCBs"), 10 (aggregating to US$ 10,00,000) zero percent convertible bonds due 2018 ('Seres B FCCBs"), 25 (aggregating to US$ 25,00,000) zero percent convertible bonds due 2018 ('Series C FCCBs"), 35 (aggregating to US$ 35,00,000) zero percent convertible bonds due 2018 ('Series D FCCBs"), 35 (aggregating to US$ 35,00,000) zero percent convertible bonds due 2018 ('Series E FCCBs"), 35 (aggregating to US$ 35,00,000) zero percent convertible bonds due 2018 ('Series F FCCBs").

a. Each fully paid up series A, B, C, D, E and F (unless previously redeemed or purchased and cancelled) will be converted by the Bondholder at any time on or after February 16, 2013 but prior to close of business on January 18, 2018. Each bond will be converted into fully paid up equity shares of Rs. 10 each at a premium of Rs. 2.03 per share, at a price of Rs. 12.03 per share at a fixed exchange rate conversion of Rs. 54.7773 per US Dollar.

c. Where there is a default by any Series A, B, C, D, E and F FCCB Bondholder, in paying the balance of the issue amount due in respect of such Bonds, the Company has right to convert each partly paid bonds to the extent amount paid up on the relevant Series A, B, C, D, E and F FCCBs i.e, three percent (3%), and the balance ninety seven percent (97%) shall stand cancelled and each respective Series A, B, C, D, E and F FCCB (on which default has been committed) shall each be convertible into fully paid-up Equity Shares of face value of Rs.10 each at a share price premium of Rs 2.03 per Equity Share, at a price of Rs.12.03 per share.

d. Ninety Seven percent (97%) of the three bonds from Seres A paid on November 8, 2013. Remaining seven bonds of the Series A stand cancelled due to default of the payment by the subscriber of the bonds. The Company has allotted 14,75,126 equity shares at an issue price of Rs. 12.03 per share upon conversion of 3 fully paid up bonds and 7 partly paid up of Series A bonds to the FCCBs Holder.

e. FCCBs holder has paid balance 97% subscription money for 8 bonds of Series B bonds in Escrow Account of Lead Manager and defaulted for payment of balance 97% subscription money for 2 bonds.

f. As per the terms of issue of bonds the subscribers has to pay balance 97% subscription money for 25 bonds of Series C bonds, on 30th March, 2015 and has not paid the said amount.

g. The expenses incurred on issue of zero percent convertibles have been set off against securities premium account.

38 During the Year, the Company has issued and allotted 22,49,947 Equity Shares and issued 37,50,000 warrants convertible into Equity Shares on preferential basis as per SEBI (ICDR) Regulations, 2009. The Company has also allotted 14,75,126 Equity Shares upon conversion of Foreign currency convertible bonds.

4. Related Party Disclosure -

A) Related Party and their Relationship

Name of the Party Relationship

Kiri International (Mauritius) Wholly Owned Subsidiary Private Limited

Synthesis International Limited Wholly Owned Subsidiary

SMS Chemicals Co. Limited Wholly Owned Subsidiary

Chemhub Trading DMCC Wholly Owned Subsidiary

Kiri Investment and Trading Wholly Owned Subsidiary Singapore Private Limited

Kiri Laboratories Pvt. Ltd. Directors Relative of Key Managerial Personnel

Indochin Development Pvt. Ltd. Directors Relative of Key Managerial Personnel

Lonsen Kiri Chemical Industries Ltd. Joint Venture

Dystar Global Holdings Associate Company (Singapore) Pte. Ltd

Kiri Infrastructure Pvt. Ltd. Associate Company

Mr. Pravinbhai Kiri Key Managerial Personnel

Mr. Manishbhai Kiri Key Managerial Personnel

Mrs Arunaben Kiri Relative of Key Managerial Personnel

Mrs Anupama Kiri Relative of Key Managerial Personnel

Pravinbhai Kiri - HUF HUF of Key Managerial Personnel

5. The company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

6. Social Welfare Expenditure related to Corporate Social Responsibility as per section 135 of the Companies Act, 2013 read with Schedule VII thereof: Rs.33.89 Lakhs, though not mandatory.

7. Figures have been rounded off to the nearest rupee and figures of previous year have been regrouped, reclassified and readjusted wherever found necessary.


Mar 31, 2014

1. The Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision f or all known liabilities is adequate and not in excess of the amount reasonably necessary.

2. Extra ordinary items include derivative losses of Rs.2,563.10 lacs (P.Y. 8,118.26 lacs).

3. Contingent Liabilities (Rs. In Lacs)

Particulars 2013-2014 2012-2013

Outstanding Letter of Credits issued by Banks - 555.88

Guarantees given by Banks on behalf of the Company for various purposes. 188.29 168.06

Corporate Guarantees given by the Company on behalf of the Joint Venture Company. 8,900.00 8,900.00

Disputed Income Tax / Excise matters for various assessment years for which appeals are pending with Appellate authorities. 1,798.13 1,930.18

* In addition to the above, various lenders have filed suits or have obtained orders from various legal authorities for which the company has filed appeals / counter litigations. At this stage it is not possible to quantify the liability and being contingent in nature, no provision has been made in accounts.

4. In view of the exemption granted vide notification number S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the information required vide para 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d) of part II of Schedule VI of the Companies Act, 1956 has not been given.

5. Zero Coupon Foreign Currency Convertible Bonds

On January 16, 2013, the Company has made an issue o f zero coupon convertible bonds aggregating to US$ 15 Million (approximately Rs. 82.17 crores) comprising of 10 (aggregating to US$ 10,00,000) zero coupon convertible bonds due 2018 ("Series A FCCBs"), 10 (aggregating to US$ 10,00,000) zero coupon convertible bonds due 2018 ("Series B FCCBs"), 25 (aggregating to US$ 25,00,000) zero coupon convertible bonds due 2018 ("Series C FCCBs"), 35 (aggregating to US$ 35,00,000) zero coupon convertible bonds due 2018 ("Series D FCCBs"), 35 (aggregating to US$ 35,00,000) zer o coupon convertible bonds due 2018 ("Series E FCCBs"), 35 (aggregating to US$ 35,00,000) zero coupon convertible bonds due 2018 ("Series F FCCBs").

a. Each fully paid up series A, B, C, D, E and F, (unless previously redeemed or purchased and cancelled) will be converted by the Bondholder at any time on or after February 16, 2013 but prior to close of business on January 18, 2018. Each bond will be converted into fully paid up equity shares of Rs. 10 each at a premium of Rs. 1.92 per share, at a price of Rs. 11.92 per share at a fixed exchange rate conversion of Rs. 54.7773 per US Dollar.

b. Three percent (3%) of the offer price payable on each of the Series A,B, C, D, E and F FCCBs is paid by the holder of bonds on January 16, 2013. The remaining ninety seven percent (97%) of the payment of the offer price payable on each of the Series A,B, C, D, E and F FCCBs shall be payable.

c. Where there is a default by any Series A, B, C, D, E an d F FCCB Bondholder, in paying the balance of the issue amount due in respect of such Bonds, the Company has right to convert each partly paid bonds to the extent amount paid up on the relevant Series A, B, C, D, E and F FCCBs i.e, three percent (3%), and the balance ninety seven per cent (97%) shall stand cancelled and each respective Series A, B, C, D, E and F FCCB (on which default has been committed) shall each be convertible to fully paid-up Equity Shares of face value of Rs.10 each at a premium of Rs . 1.92 per Equity Share, at a price of Rs.11.92 per share.

d. Ninety Seven per cent (97%) o f the three bonds from Series A paid on November 8, 2013. Remaining seven bonds of the Series A stand cancelled due to default of the payment from the subscriber of the bonds.

e. As per the terms, the company was required to allot equity shares on cancellation of bonds due to default of the payment from the subscriber of the bonds. The company has yet to allot shares for such default of bonds.

f. The expenses in curred on issue of zero coupon convertibles have been set off against securities premium account.

6. Related Party Disclosure –

A) Related Party and their Relationship

Name of the Party Relationship

Kiri International (Mauritius) Wholly Owned Subsidiary Private Limited

Synthesis International Limited Wholly Owned Subsidiary

SMS Chemicals Co. Limited Wholly Owned Subsidiary

Chemhub Trading DMCC Wholly Owned Subsidiary

Kiri Investment and Trading Wholly Owned Subsidiary Singapore Private Limited

Lonsen Kiri Chemical Industries Joint Venture Ltd.

Dystar Global Holdings Associate Company (Singapore) Pte. Ltd

Kiri Infrastru cture Pvt. Ltd. Associate Company

Mr. Pravin A Kiri Key Managerial Personnel

Mr. Manish P Kiri Key Managerial Personnel

Mrs. Arunaben P Kiri Relative of Key Managerial Personnel

Mrs. Anupama M. Kiri Relative of Key Managerial Personnel

Pravin A. Kiri - HUF HUF of Key Managerial Personnel

7. Segment Reporting

The Company operates mainly in manufacturing of Dyes, Dyes intermediates and Basic Chemicals. All other activities are incidental thereto, which have similar risk and return, accordingly, there are no separate reportable Segment as far as primary Segment is concerned.

8. Employee Benefits:

The present value of gratuity and leave encashment obligations is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

9. The company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with inter est paid or payable as per the requirement under the said Act, have not been made.

10. Derivative Instruments:

The company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such forward contracts are banks. Consequent to the announcement issued by the Institute of Chartered Accountants of India on Accounting of Derivatives, details of derivatives contracts outstanding as on March 31, 2014.


Mar 31, 2013

1. The Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

2. Extra ordinary items include derivative losses of Rs. 8,118.26 lacs & loss on conversion of foreign currency loans to Indian currency following restructuring of loans by the banks of Rs. 3,040.93 lacs.

3 Contingent Liabilities (Rs. In Lacs)



Particulars 2012-2013 2011-2012

Outstanding Letter of Credits issued by Banks 555.88 2,298.22

Guarantees given by Banks on behalf of the Company for various purposes. 168.06 25,286.23

Corporate Guarantees given by the Company on behalf of the 8,900.00 8,900.00

Joint Venture Company.

Corporate Guarantees given by the Company on behalf of - 8,865.27 wholly owned Subsidiary Company.

Disputed Income Tax / Excise matters for various assessment years for 1930.18 1,886.44 which appeals are pending with Appellate authorities.

In addition to the above, various lenders have filed suits or have obtained orders from various legal authorities for which the company has filed appeals / counter litigations. At this stage it is not possible to quantify the liability and being contingent in nature, no provision has been made in accounts. Further, no provision has been made in accounts in respect of import duty which may become payable on failure to comply with necessary export obligations.

4 During the year under review, at the express request by the company, the consortium bankers agreed to restructure their loans and accordingly, all the foreign currency loans were converted into local currency loans, part of working capital loans were converted into term loans, derivative losses were funded and other concessions were also given by the banks on stipulated terms and conditions. Similarly, non consortium bankers have also sanctioned certain concessions to the company on stipulated terms and conditions.

5 In view of the exemption granted vide notification number S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the information required vide para 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d) of part II of Schedule VI of the Companies Act, 1956 has not been given.

6. Zero Coupon Foreign Currency Convertible Bonds

On January 16, 2013, the Company has made an issue of zero coupon convertible bonds aggregating to USD 15 Million (approximately Rs. 82.17 crores) comprising of 10 (aggregating to US$ 10,00,000) zero coupon convertible bonds due 2018 ("˜Series A FCCBs" ), 10 (aggregating to US$ 10,00,000) zero coupon convertible bonds due 2018 ("˜Series B FCCBs" ), 25 (aggregating to US$ 25,00,000) zero coupon convertible bonds due 2018 ("˜Series C FCCBs" ), 35 (aggregating to US$ 35,00,000) zero coupon convertible bonds due 2018 ("˜Series D FCCBs" ), 35 (aggregating to US$ 35,00,000) zero coupon convertible bonds due 2018 ("˜Series E FCCBs" ), 35 (aggregating to US$ 35,00,000) zero coupon convertible bonds due 2018 ("˜Series F FCCBs" )

a. Each fully paid up series A, B, C, D, E and F, (unless previously redeemed or purchased and cancelled) will be converted by the Bondholder at any time on or after February 16, 2013 but prior to close of business on January 18, 2018. Each bond will be converted into fully paid up equity shares of Rs. 10 each at a premium of Rs. 1.92 per share, at a price of Rs. 11.92 per share at a fixed exchange rate conversion of Rs. 54.7773 per US Dollar.

b. Three percent (3%) of the offer price payable on each of the Series A,B, C, D, E and F FCCBs is paid by the holder of bonds on January 16, 2013. The remaining ninety seven percent (97%) of the payment of the offer price payable on each of the Series A,B, C, D, E and F FCCBs shall be payable on the earlier of the Conversion Date or the due date specified in the table below :

c. Where there is a default by any Series A, B, C, D, E and F FCCB Bondholder, in paying the balance of the issue amount due in respect of such Bonds, the Company has right to convert each partly paid bonds to the extent amount paid up on the relevant Series A, B, C, D, E and F FCCBs i.e, three percent (3%) and the balance ninety seven percent (97%) shall stand cancelled and each respective Series A, B, C, D, E and F FCCB (on which default has been committed) shall each be convertible to fully paid-up Equity Shares of face value of Rs.10 each at a premium of Rs. 1.92 per Equity Share, at a price of Rs.11.92 per share.

d. The expenses incurred on issue of zero coupon convertibles have been set off against securities premium account.

7. The Company had acquired DyStar Group in February, 2010 jointly with its Chinese Partner, Well Prospering Limited (WPL) which had invested Euro 22 Million in DyStar Group in form of Zero Coupon Convertible Bond with an option of conversion of same in equity shares any time within five years of the date of issue of Bond. On July 14 2012, Well Prospering Limited has transferred zero coupon convertible bond of Euro 22 million to Senda International Capital Limited. On 26th December, 2012 Senda International Capital Limited has exercised its right and converted the same into Equity. As a result, the company''s stake has reduced to 37.15 % in DyStar Global Holdings (Singapore) Pte Ltd.

8 Segment Reporting

The Company operates mainly in manufacturing of Dyes, Dyes intermediates and Basic Chemicals. All other activities are incidental thereto, which have similar risk and return, accordingly, there are no separate reportable Segment as far as primary Segment is concerned :

9 The company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

10 Derivative Instruments:

The company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such forward contracts are banks.

Consequent to the announcement issued by the Institute of Chartered Accountants of India on Accounting of Derivatives, details of derivatives contracts outstanding as on 31st March, 2013 are as under:

11 Figures have been rounded off to the nearest rupee and figures of previous year have been regrouped, reclassified and readjusted wherever found necessary.


Mar 31, 2012

1 DEFERRED TAX

The Company estimates deferred tax liabilities using the applicable rate of taxation based on the impact of timing difference between financial statements and estimated taxable income for the current year. The net deferred tax liabilities as at March 31, 2012 is given as below:

2 The Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

3 Exceptional items include derivative losses of Rs. 2,184.12 lacs.

4 Contingent Liabilities (Rs. In Lacs)

Particulars 2011-2012 2010-2011

Outstanding Letter of Credits issued by Banks. 2,298.22 3,391.67

Guarantees given by Banks on behalf of the Company for various purposes. * 25,286.23 33,865.38

Corporate Guarantees given by the Company on behalf of the 8,900.00 8,900.00

Joint Venture Company.

Corporate Guarantees given by the Company on behalf of wholly owned Subsidiary Company. * 8,865.27 10,000.00

Disputed Income Tax / Excise matters for various assessment years for 1,886.44 1,443.52

which appeals are pending with Appellate authorities.

* Out of the above, the loans availed for Dystar Acquisition have been paid after 31st March, 2012 in full for which the Company had given corporate guarantees amounting to Rs. 33936.44 lacs.

5 In order to reduce the impact of existing debt and to ensure smoother cash flow, the Company has requested its consortium bankers to provide relaxation to its debts to which the consortium bankers have agreed in principle. The final approval from some banks has been received whereas that from the remaining banks is awaited. Further, due to heavy recession and sluggish market, the Company has decided to shelve some of the projects under construction. The losses which are likely to occur on sale or disposal are unascertainable at this stage and therefore no provision has been made in accounts for the same. The Company is under negotiation with banks for funding of these losses.

6 In view of the exemption granted vide notification number S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the information required vide para 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d) of part II of Schedule VI of the Companies Act, 1956 has not been given.

7 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges:

(a) Loans and advances in the nature of Loans given to subsidiaries and associates in which Directors are interested.

Note: The figures of SMS Chemicals Co. Limited subsidiaries have been compiled from 29th October 2011 to 31st March 2012, as the entities become related party from 29th October 2011.

As there is no commission paid to any of the Directors, the computation of profit u/s 198 and 350 of the Companies Act, 1956 has not been given.

8 Segment Reporting

The Company operates mainly in manufacturing of Dyes, Dyes intermediates and Basic Chemicals. All other activities are incidental thereto, which have similar risk and return, accordingly, there are no separate reportable Segment as far as primary Segment is concerned :

9 Employees Benefits:

The present value of gratuity and leave encashment obligations is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

10 The Company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the Balance Sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

11 Derivative Instruments:

The Company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such forward contracts are banks.

Consequent to the announcement issued by the Institute of Chartered Accountants of India on Accounting of Derivatives, details of derivatives contracts outstanding as on March 31, 2012 are as under:

In respect of the outstanding derivatives and forward contracts, the Company has booked losses of Rs. 6135.27 lacs after 31st March, 2012 following the termination for unexpired leg of contracts. The Company has requested the relevant bankers for funding of this loss which is under consideration by the bank. Upon such termination, the hedge of export receivable now stands cancelled implying the exchange rate risk on the export is now open to market fluctuation. The contracts with other banks are under negotiation for funding.

12 Figures have been rounded off to the nearest rupee and figures of previous year have been regrouped, reclassified and readjusted wherever found necessary.


Mar 31, 2011

1. Figures have been rounded off to the nearest rupee and figures of previous year have been regrouped, reclassified and readjusted wherever found necessary.

2. The Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

3. Exceptional items include derivative losses of Rs. 388.45 Lacs, one time appraisal fees Rs. 400.00 Lacs, legal expenses on dispute settlement on Acquisition of Rs. 307.01 Lacs and reversal of provision of income on settlement Rs. 188.42 Lacs.

(Rs. In Lacs)

2010-11 2009-10

4 Contingent Liabilities

Outstanding Letter of Credits issued by Banks 3391.67 2,196.58

Guarantees given by Banks on behalf of the Company for various purposes 33,865.38 33,667.73

Corporate Guarantees given by the Company on behalf of the Joint Venture Company. 8,900.00 8,900.00

Corporate Guarantees given by the Company on behalf of wholly owned Subsidiary Company. 10,000.00 10,000.00

Disputed Income Tax / Excise matters for various assessment years for which 1,443.52 1,386.00 appeals are pending with Appellate authorities.

5 Secured Loans

Term loans/Corporate Loan from State Bank of India, Bank of India and Oriental Bank of Commerce are secured by (1) first pari passu charge on specified Fixed Assets of the Company located at Vatva and Padra factory premises (2) second pari passu charge on Fixed Assets of intermediates expansion project of the Company and entire movable plant and machinery & current assets of the Company and (3) the personal guarantee of the promoters/directors of the Company. Term loan from Bank of India for Sulphuric Acid Project is secured by (1) first and exclusive charge on specified Plant & Machinery (2) first pari passu charge on specified Fixed Assets of the Company located at Vatva and Padra factory premises (3) second pari passu charge on Fixed Assets of intermediates expansion project of the Company and entire movable plant and machinery & current assets of the Company and (4) the personal guarantee of the promoters/ directors of the Company. Working Capital loans from State Bank of India, Bank of India, Oriental Bank of Commerce, Export Import Bank of India, Punjab National Bank and Standard Chartered Bank are secured by (1) hypothecation of Raw Materials, Stock in Process, Finished Goods, Stores, Spares, Consumables, Receivables and all others present and future chargeable current assets by way of first charge ranking pari passu (2) second pari passu charge by way of extension of charge over entire Fixed Assets of the Company situated at Vatva and Padra factory premises, including Fixed Assets of intermediates expansion project of the Company and (2) the personal guarantee of the promoters/ directors of the Company. Term Loans from State Bank of India and Punjab National Bank for Intermediate expansion project are secured by (1) First pari passu charge on Fixed Assets of intermediates expansion project of the Company located at padra, Vadodara (2) second charge on entire Fixed Assets of the on specified Fixed Assets of the Company and located at Vatva and Padra factory premises and entire movable plant and machinery & current assets of the Company and (3) the personal guarantee of the promoters/directors of the Company. Corporate Loan of State Bank of India further secured by Pledge of Shares of the Company held by Promoter of the Company and pledge of Key man insurance policy of Managing Director of the Company. Term Loan of Bank of India for sulfuric acid project further secured by Pledge of shares of the Company held by promoter of the Company. Factoring facilities from SBI Global Factors Limited are secured by hypothecation of stock, book debts and receivables of specific customers/suppliers of the Company. Both term loans and working capital facilities are collaterally secured on pari passu basis by equitable mortgage of immovable properties belonging to the promoters of the Company and assignment of key man insurance policy of the Managing Director of the Company.

6. In view of the exemption granted vide notification number S.O. 301(E) dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the information required vide para 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d) of part II of Schedule VI of the Companies Act, 1956 has not been given.

7. Related Party Disclosure

A) Related Party And Their Relationship

Name of the Party Relationship

Kiri International (Mauritius) Private Limited Wholly Owned Subsidiary

Kiri Holding Singapore Private Limited Wholly Owned Subsidiary

Synthesis International Limited Wholly Owned Subsidiary

Kiri Investment and Trading Singapore Private Limited Step down subsidiary

DyStar Colours Deutschland GmbH Step down subsidiary

DyStar Colours Distribution GmbH Step down subsidiary

DyStar Nanjing Colours Co., Ltd. Step down subsidiary

DyStar Pakistan (Pvt) Ltd. Step down subsidiary

DyStar (Singapore) Pte. Ltd. Step down subsidiary

DyStar South Africa (PTY) Ltd. Step down subsidiary

DyStar Taiwan Ltd. Step down subsidiary

DyStar Tekstil Boya ve Teknol Sanayi Ticaret Limited Sirketi Step down subsidiary

DyStar Textile Services (Shanghai) Co Ltd. Step down subsidiary

DyStar Thai Ltd. Step down subsidiary

DyStar UK Ltd. Step down subsidiary

DyStar Wuxi Colours Co. Ltd. Step down subsidiary

PT DyStar Colours Indonesia Step down subsidiary

Boehme Asia Limited Step down subsidiary

Dr. TH. Boehme Chem. Fabrik GmbH Step down subsidiary

DyStar Anilinas Texteis Lda. Step down subsidiary

DyStar (Shanghai) Trading Co. Ltd Step down subsidiary

DyStar Auxiliaries Qingdao Co. Ltd. Step down subsidiary

DyStar Benelux S.P.R.L. Step down subsidiary

DyStar Chemicals Israel Ltd. Step down subsidiary

DyStar China Ltd. Step down subsidiary

DyStar de Mexico, S. de R.L. de C.V. Step down subsidiary

DyStar France S.A.R.L. Step down subsidiary

DyStar Hispania, S.L. Step down subsidiary

DyStar India Private Limited Step down subsidiary

DyStar Industria e Comercio de Produtos Quimicos Ltda. Step down subsidiary

DyStar Italia S.r.l Step down subsidiary

DyStar Japan Ltd. Step down subsidiary

DyStar Kimya Sanayi ve Ticaret Ltd. Step down subsidiary

DyStar Korea Ltd. Step down subsidiary

DyStar Boehme Africa (Pty) Ltd. Step down subsidiary

Boehme South America Industrial Ltda. Step down subsidiary

Texanlab Laboratories Private Limited Step down subsidiary

Boehme (Hangzhou) Chemical Auxiliary Co. Ltd. Step down subsidiary

DyStar Denim GmbH Step down subsidiary

Boehme Argentina S.R.L. Step down subsidiary

Amichem Chemicals Ltd. Step down subsidiary

DyStar Acquisition Corporation Step down subsidiary

DyStar Americas Holding Corp. Step down subsidiary

DyStar LP Step down subsidiary

Boehme Filatex Canada Inc. Step down subsidiary

DyStar Auxiliaries GmbH Step down subsidiary

Lonsen Kiri Chemical Industries Ltd. Joint Venture

Mr. Pravin A. Kiri Key Managerial Personnel

Mr. Manish P. Kiri Key Managerial Personnel

Mrs. Aruna P. Kiri Key Managerial Personnel

Mr. Shanker R. Patel Key Managerial Personnel

Kiri Infrastructure Pvt. Ltd. Associate Company

Unique Dyechem Entity Controlled by Key Managerial Personnel

8. Employees Benefits:

The present value of gratuity and leave encashment obligations is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

9 The Company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

10. Derivative Instruments:

The Company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such forward contracts are banks.


Mar 31, 2010

1. Figures have been rounded off to the nearest rupee and figures of previous year have been regrouped, reclassified and readjusted wherever found necessary.

2. The Debit and Credit balances of debtors, creditors, loans and advances are subject to confirmation and reconciliation, if any and they are stated in the Balance Sheet if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.

3. During the year under review, a survey u/s. 133A of the Income Tax Act, 1961 was conducted by the Income Tax Department. The company disclosed a sum of Rs. 2489 Lacs towards land and stock of goods. Appropriate entries have been passed in the books of accounts by the Company. The company carries the inventory disclosed. The disclosed income has been shown under the head Exceptional items.

4. Exceptional items include the amount net of the disclosed income in the Income Tax Survey and Derivative Losses.

5. During the year, the company, through its wholly owned subsidiary Kiri Holding Singapore Private Limited, has acquired assets of DyStar Textilfarben GmbH and DyStar Textilfarben GmbH & Co. Deutschland KG. (DyStar) along with its 36 subsidiaries to strengthen its forward integration growth drive.

6. During the year the company commenced commercial production of its another backward integration plant for manufacturing of basic chemicals i.e. Sulphuric Acid, Oleum and Chloro Sulphonic Acid with a combined capacity of 500 MT/day. The company also commenced 3.5 MW co-generation steam based power plant at village Dudhwada, Taluka Padra, District Vadodara.

During the year the company commenced commercial production of Acetanilide, with the installed capacity of 12000 MTPA at Village Dudhwada, Taluka Padra, District Vadodara, which is used in the manufacturing of Vinyl Sulphone.

(Rs. in Lacs) 2009-10 2008-09

7 Estimated amount of contracts remaining to be executed on capital 444.14 770.07 account and not provided for

8 Contingent Liabilities

Outstanding Letter of Credits issued by Banks 2,196.58 2,124.39

Guarantees given by Banks on behalf of the Company for various purposes 33,667.73 93.00

Corporate Guarantees given by the Company on behalf of the Joint Venture Company. 8,900.00 0.00

Corporate Guarantees given by the Company on behalf of the Subsidiary Company. 10,000.00 0.00

Disputed Income Tax/Excises matters for various assessment years for which 607.26 327.69 appeals are pending with Appellate authorities.

9. Secured Loans

Term loan from State Bank of India, Bank of India and Oriental Bank of Commerce are secured against first charge ranking pari passu on specified fixed assets of the company created / to be created out of the said loan and located at Vatva and Padra factory premises, extension of charge over chargeable current assets of the company ranking pari passu and by the personal guarantee of the promoters/directors of the company.

Term loan from Bank of India for Sulphuric Acid Project is secured by the first and exclusive charge on specified plant & Machinery.

Working Capital loans from State Bank of India, Bank of India, Oriental Bank of Commerce and EXIM Bank are secured against hypothecation of Raw Materials, Stock in Process, Finished Goods, Stores, Spares, Consumables, Receivables and all other present and future chargeable current assets by way of first charge ranking pari passu and second Pari passu charge by way of extension of charge over Fixed Assets of the company situated at Vatva and Padra factory premises and by the personal guarantee of the promoters/ directors of the company.

Both term loans and working capital facilities are collaterally secured on pari passu basis by equitable mortgage of immovable properties belonging to the chairman and one director of the company and assignment of key man insurance policy of the managing director of the company.

10. Related Party Disclosure

A) Related Party and their Relationship

Name of the Party Relationship

Kiri International (Mauritius) Private Limited Wholly Owned Subsidiary

Kiri International Hong Kong Limted Wholly Owned Subsidiary

Kiri Holding Singapore Private Limited Wholly Owned Subsidiary

Kiri Investment and Trading Singapore Private Limited Step down subsidiary

DyStar Colours Deutschland GmbH Frankfurt Step down subsidiary

DyStar Colours Distribution GmbH Frankfurt Step down subsidiary

DyStar Nanjing Colours Co., Ltd. Step down subsidiary

DyStar Pakistan (Pvt) Ltd. Step down subsidiary

DyStar Singapore Private Ltd. Step down subsidiary

DyStar South Africa (PTY) Ltd.Step down subsidiary

DyStar Taiwan Ltd. Step down subsidiary

DyStar Tekstil Boya ve Teknolojisi Sanayi Ticaret Limited Sirketi Step down subsidiary

DyStar Textile Services (Shanghai) Co Ltd. Step down subsidiary

DyStar Thai Ltd. Step down subsidiary

DyStar UK Ltd. Step down subsidiary

DyStar Wuxi Colours Co., Ltd. Step down subsidiary

PT DyStar Colours Indonesia Step down subsidiary

Boehme Asia Limited Step down subsidiary

Dr. TH. Boehme Chem. Fabrik Gesellschaft m.b.H Step down subsidiary

DyStar - Anilinas Texteis Lda. Step down subsidiary

DyStar (Shanghai) Trading Co., Ltd Step down subsidiary

DyStar Auxiliaries Qingdao Co., Ltd. Step down subsidiary

DyStar Benelux S.P.R.L. Step down subsidiary

DyStar Chemicals Israel Ltd. Step down subsidiary

DyStar China Ltd. Step down subsidiary

DyStar de Mexico, S. de R.L. de C.V. Step down subsidiary DyStar France S.A.R.L. Step down subsidiary

DyStar Hispania, S.L. Step down subsidiary

Name of the Party Relationship

DyStar India Private Limited Step down subsidiary

DyStar Industria e Comercio de Produtos Quimicos Ltda. Step down subsidiary

DyStar Italia S.r.l Step down subsidiary

DyStar Japan Ltd. Step down subsidiary

DyStar Kimya Sanayi ve Ticaret Ltd. Step down subsidiary

DyStar Korea Ltd. Step down subsidiary

DyStar Boehme Africa (Pty) Ltd. Step down subsidiary

Boehme South America Industrial Ltda. Step down subsidiary

Texanlab Laboratories Private Limited Step down subsidiary

Boehme (Hangzhou) Chemical Auxiliary Co. Ltd. Step down subsidiary

DyStar Denim GmbH Step down subsidiary

Boehme Argentina S.R.L. Step down subsidiary

DyStar Tekstil Boyalari Ticaret Ltd. Step down subsidiary

Amichem Chemicals Ltd. Step down subsidiary

Lonsen Kiri Chemicals Industries Ltd. Joint Venture

Mr. Pravinbhai A Kiri Key Managerial Personnel

Mr. Manishbhai P Kiri Key Managerial Personnel

Mrs. Arunaben P Kiri Key Managerial Personnel

Kiri Infrastructure Pvt. Ltd. Entity Controlled by Key Managerial Personnel

Unique Dyechem Entity Controlled by Key Managerial Personnel

11 Segment Reporting

The Company operates mainly in manufacturing of Dyes and intermediates. All other activities are incidental thereto, which have similar risk and return, accordingly, there are no separate reportable Segment as far as primary Segment is concerned

12. Employees Benefits:

The present value of gratuity and leave encashment obligations is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

13 The company has not received information from the suppliers regarding their status under The Micro, Small & Medium Enterprises Development Act, 2006. Hence, disclosures, if any relating to amounts unpaid as at the balance sheet date together with interest paid or payable as per the requirement under the said Act, have not been made.

14 Derivative Instruments:

The company has entered into forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such forward contracts are banks.

 
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