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Notes to Accounts of PI Industries Ltd.

Mar 31, 2015

A. The difference between the issued and subscribed capital is on account of less number of shares allotted in right issue in earlier years.

b. Terms/ rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs.1 per share (Previous Year Rs. 1 per share). Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except interim dividend. In the event of liquidation, the Equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

During the year ended March 31, 2015, the Company has declared 130% Final dividend and 120% Interim dividend on Equity Shares of face value of Rs.1 each to the Equity Shareholders, which is recognised as distribution to the Equity Shareholders. (Previous Year Final dividend of 100% and Interim dividend of 100% on face value of Rs.1 per share).

c. Issue of Shares under ESOP Scheme

During the year ended March 31, 2015, the Company has issued 467,102 Equity Shares of Rs. 1 each (Previous Year 649,930 Equity Shares of Rs. 1 each), as per exercise price to PII ESOP Trust (Trust), set up to administer Employee Stock Option Plan. Out of total Equity Shares issued to the Trust 423,458 Equity Shares of face value of Rs. 1 each (Previous Year 521,961 Equity Shares of face value of Rs. 1 each) have been allocated by the Trust to respective employees upon exercise of Stock Option from time to time. As on March 31, 2015, 278,458 Equity Shares of face value of Rs. 1 per share (Previous Year 234,814 of face value of Rs. 1 each) are pending to be allocated to employees upon exercise of Stock option. (Refer Note 33).

d. Split of Shares

Pursuant to the approval of the shareholders through postal ballot dated April 03, 2013, the Company has sub-divided the existing Equity Shares of Rs. 5 each fully paid up into 5 Equity Shares of Rs. 1 each.

e. Pursuant to the approval by the Honourable High Court of Jodhpur to the scheme of amalgamation vide its formal order dtd. March 27, 2015, the Company has taken following actions:- i) Authorised Share Capital stands increased to Rs. 7,230 lacs divided into 223,000,000 Equity Shares of Rs. 1 each; 5,000,000 Preference Shares of Rs. 100 each.

ii) Investment held by Parteek Finance & Investment Co. Ltd. (Transferor Company) in PI Industries Ltd. representing 73,851,390 Equity Shares have been cancelled and fresh Equity Shares of 73,851,390 Equity Shares have been issued to the shareholders of the Transferor Company.

1. NOTE ON AS 30 ADOPTION

The Company has adopted Accounting Standard 30 (AS 30) " Financial Instruments: Recognition and Measurement" during the Financial year 2011-12. Based on the Recognition and Measurement principles set out in AS 30, changes in the fair values of derivative financial instruments, the net foreign exchange exposure over a period of one year against the committed order in hand hedged through forward contracts, are designated as effective cash flow hedges and marked to market loss/gain arising on said foreign currency instruments are transferred to "Cash Flow Hedge Reserve" directly in the Balance Sheet under Reserves & Surplus and later the same is reclassified in the Statement of Profit & Loss upon the occurrence of the hedging transaction. Accordingly marked to market gain of Rs. 188.30 lacs (Previous Year gain of Rs. 411.31 lacs) arising on foreign currency instruments qualifying for hedge accounting as on March 31, 2015 has been transferred to Cash Flow Hedge Reserve Account.

2. GRATUITY & OTHER LONG TERM COMPENSATED ABSENCES

As per Accounting Standard (AS)- 15 "Employee Benefits", the disclosure of employee benefits as defined in the accounting standard is given below:

a) Defined Contribution Plans

The Company has recognised an expense of Rs. 579.92 lacs (Previous Year Rs. 449.10 lacs) towards the defined contribution plan.

3. AMALGAMATION

Pursuant to the sanction of the Honourable High Court of Jodhpur to the Scheme of Amalgamation, the assets and liabilities of Parteek Finance & Investment Co. Ltd. (Holding Company of PI Industries Ltd. whose principal business is core investment) (Transferor Company) have been merged with PI Industries Ltd. (Transferee Company) with effect from the appointed date of April 01, 2014 in accordance with the Scheme so sanctioned. The amalgamation has been accounted for under the "Purchase Method" as prescribed by Accounting Standard 14 (AS-14) notified by the Government of India. Accordingly, as on the appointed date the excess of net asset value of Transferor Company over the merger consideration amounting to Rs. 1.37 lacs has been recognised as Capital Reserve (see table below) in the books of Transferee Company. Further as per the requirement of relevant statute the statutory balances in the books of Transferor Company is recorded at their carrying value in the books of Transferee Company.

4. EMPLOYEE STOCK OPTION PLANS

The Company provides share-based payment schemes to its employees. The relevant details of the scheme are as follows:

In December 2010, the Board of Directors approved the PII ESOP 2010 Scheme in order to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the Company (including subsidiary companies) with an intent to attract and retain talent in the organization. The aforesaid scheme was duly approved by shareholders in its EGM held on January 21, 2011 and is administered through independent trust. During the year, Compensation Committee of the Board granted following options under PII ESOP 2010 Scheme to certain category of employees as per criteria laid down by Compensation Committee of the Board.

5. SEGMENT INFORMATION

The Company is engaged in the business of chemical which is a single business segment and constitutes the primary segment. Accordingly, no separate disclosure is required to be given as per Accounting Standard AS-17.

6. CONTINGENT LIABILITIES (Rs. in Lacs)

Particulars March 31, 2015 March 31, 2014

Disputed Taxation demands not acknowledged as debts:

- Sales Tax 124.42 119.06

- Excise Duty 310.50 509.17

- Income Tax 935.59 689.47

- ESI 6.09 6.09

Anti Dumping Duty - 230.44

Counter Guarantee to GIDC 32.85 32.85

Bill Discounted - 2,382.45

7. DEFERRAL/ CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification dated March 31, 2009 and December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Company decided to exercise the option of accounting for Exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in the previous financial statements in so far as they relate to the acquisition of depreciable capital assets by addition to/ deduction from the cost of the asset and depreciate the same over the balance life of the asset. Accordingly, the current year exchange losses amounting to Rs. 290.37 lacs (Previous Year Rs. 1,120.50 lacs) have been adjusted to the cost of fixed assets/CWIP.

8. In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans, advances and other current assets, in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet and provisions has been made for all known liabilities.

9. Figures of previous year have been regrouped and/ or rearranged wherever necessary to make them comparable with those of the current year.


Mar 31, 2014

1. SHARE CAPITAL

a. The difference between the issued and subscribed capital is on account of less number of shares allotted in right issue in earlier years.

b. Terms/ rights attached to Equity Shares The Company has only one class of Equity Shares having a par value of Rs.1 per share (Previous Year Rs.5 per share). Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting except interim dividend.

During the year ended 31st March 2014, the Company has declared 100% final dividend and 100% interim dividend on Equity Shares of face value of Rs.1 each to the equity shareholders, which is recognised as distribution to the equity shareholders. (Previous Year Final dividend of 100% on face value of Rs.1 per share post split)

c. Issue of Shares through Qualified Institutional Placement (QIP) During the previous year ending 31st March 2013, the Company has raised an amount of Rs.11,732.70 lacs through Qualified Institutional Placement (QIP) route: accordingly 1,924,656 Equity Shares @ Rs.609.60 per share have been allotted on 31st January 2013. The Company has received the listing/ trading approvals from Stock Exchange for aforementioned allotment.

d. Issue of Shares under ESOP Scheme During the year ended 31st March 2014, the Company has issued 649,930 Equity Shares of Rs.1 each (Previous Year 118,796 Equity Shares of Rs.5 each), as per exercise price to PII ESOP Trust (Trust), set up to administer Employee Stock Option Plan. Out of total Equity Shares issued to the Trust 521,961 Equity Shares of face value of Rs.1 each (Previous Year 97,427 Equity Shares of face value of Rs.5 each) have been allocated by the Trust to respective employees upon exercise of Stock Option from time to time. As on 31st March 2014, 234,814 Equity Shares of face value of Rs.1 per share (Previous Year 106,845 of face value of Rs.1 each post split) are pending to be allocated to employees upon exercise of Stock option. (Refer Note 32)

e. Split of Shares Pursuant to the approval of the shareholders through postal ballot dated 3rd April 2013, the Company has sub-divided the existing Equity Shares of Rs.5 each fully paid up into 5 Equity Shares of Rs.1 each.

f. Shareholdings of the Holding Company Pursuant to Delhi High Court Order, some of the promoter companies have merged w.e.f 1st January 2013, resulting in making PI Industries Ltd. subsidiary of Parteek Finance & Investment Co. Ltd. The said Promoter Company holds 73,851,390 Equity Shares which is 54.26% of the total shareholding of the Company.

g. Reconciliation of Shares outstanding at the beginning and at the end of the reporting period Issued Share Capital

i. Shares reserved for issue under option

Shares reserved for issue under ESOP - Refer Note 32

l. The Board has approved the draft scheme of amalgamation between Parteek Finance & Investment Co. Ltd. (which is holding Company of PI Industries Ltd.) and PI Industries Ltd. subject to requisite regulatory approvals. Under this scheme there would be no change in the promoters share holding of the Company.

3. LONG-TERM BORROWINGS

a. Foreign Currency Loan includes:

ECB from Standard Chartered Bank amounting to USD 133.33 lacs carrying interest rate of 90 days LIBOR plus 2.75% is outstanding as on 31st March, 2014 and is repayable in balance 10 Quarterly instalments of USD 13.33 lacs each. The loan is secured by first exclusive charge on movable fixed assets of the Company situated at Jambusar and first pari passu charge on the movable fixed assets of the Company, situated at 237, GIDC, Panoli and second pari passu charge on all the currents assets of the Company.

b. Deposits from Directors, shareholders and others carries interest ranging from 9% to 11% per annum depending upon the amount of deposit. Non- cumulative deposits have a maturity period of two years and are paid interest at the interval of every six months. Cumulative deposits have maturity period of three years and the interest is compounded six monthly.

c. As on the Balance sheet date there is no default in repayment of loans and interest.

4. OTHER ASSETS

*Deposits includes Rs.184.84 lacs (Previous Year Rs.170.42 lacs) towards security deposit lodged with the Rajasthan excise department and Rs.4.23 lacs (Previous Year Rs.3.91 lacs) lodged with Commercial Taxes Kottayam, Rs.1.31 lacs (Previous Year Rs.1.21 lacs) lodged with Assistant Excise & Taxation Commissioner, Solan, Rs.0.57 lacs (Previous Year Rs.0.53 lacs) lodged with Superintendent, Prohibition & Excise Account, Jambusar and Rs.0.55 lacs (Previous Year Rs.0.51 lacs) lodged with UKAI right Bank Canal Division.

* Includes Fixed deposits with more than twelve months maturity from date of acquisition: Rs.191.51 lacs (Previous Year Rs.176.58 lacs); and Fixed deposits upto 3 months maturity from date of acquisition: Rs. Nil (Previous Year Rs. Nil)

5. NOTE ON AS 30 ADOPTION

The Company has adopted Accounting Standard 30 (AS 30) "Financial Instruments: Recognition and Measurement" during the Financial year 2011-12. Based on the Recognition and Measurement principles set out in AS 30, changes in the fair values of derivative financial instruments, the net foreign exchange exposure over a period of one year against the committed order in hand hedged through forward contracts, are designated as effective cash flow hedges and marked to market loss/gain arising on said foreign currency instruments are transferred to "Cash Flow Hedge Reserve" directly in the Balance Sheet under Reserves & Surplus and later the same is reclassified in the Statement of Profit & Loss upon the occurrence of the hedging transaction. Accordingly marked to market gain of Rs.411.31 lacs (Previous Year gain of Rs.132.80 lacs) arising on foreign currency instruments qualifying for hedge accounting as on 31st March 2014 has been transferred to Cash Flow Hedge Reserve Account.

6. GRATUITY & OTHER LONG TERM COMPENSATED ABSENCES

As per Accounting Standard (AS)- 15 "Employee Benefits", the disclosure of employee benefits as defined in the accounting standard is given below:

a) Defined Contribution Plans

The Company has recognised an expense of Rs.449.10 lacs (Previous Year Rs.400.02 lacs) towards the defined contribution plan.

7. EMPLOYEE STOCK OPTION PLANS

The Company provides share-based payment schemes to its employees. The relevant details of the scheme are as follows:

In December 2010, the Board of Directors approved the PII ESOP 2010 Scheme in order to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the Company (including subsidiary companies) with an intent to attract and retain talent in the organization. The aforesaid scheme was duly approved by shareholders in its EGM held on 21st January, 2011 and is administered through independent trust. During the year, Compensation Committee of the Board granted following options under PII ESOP 2010 Scheme to certain category of employees as per criteria laid down by Compensation Committee of the Board.

The stock based compensation cost calculated as per the intrinsic value method for the financial year 2013-14 is Rs.59.93 lacs (Previous Year Rs.54.93 lacs). If the stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the financial statements for the year 2013-14 would be Rs.378.63 lacs (Previous Year Rs.241.02 lacs). The effect of adopting the fair value method on the net income and earnings per share is presented below:

8. SEGMENT INFORMATION

The Company is engaged in the business of chemical which is a single business segment and constitutes the primary segment. Accordingly, no separate disclosure is required to be given as per Accounting Standard AS-17.

Secondary Segment information (Geographical Segments)

The Company is organised into two key geographical segment based upon the location of its customer within India (domestic) and outside

India (export)

9. RELATED PARTY DISCLOSURES

Related party disclosures, as required by Accounting Standard-18, is as below:

a) List of Related Parties

i Enterprises which control the entity

Parteek Finance & Investment Co. Ltd. (Holding Company w.e.f 01.01.2013)

ii Where control exists during the year

Subsidiaries - (a) PILL Finance and Investments Ltd., (b) PI Life Science Research Ltd. and (c) PI Japan Co. Ltd.

iii Enterprises in respect of which reporting enterprise is an associate

(a) Lucrative Leasing Finance and Investment Company Ltd. (Upto 31.12.2012)

(b) Parteek Finance and Investment Company Ltd. (Upto 31.12.2012)

iv Key Managerial Personnel & their relatives (KMP) (a) Key Managerial Personnel (KMP)

Mr. Salil Singhal Chairman & Managing Director

Mr. Mayank Singhal Managing Director & CEO

Mr. Anurag Surana Whole-time Director (Till 15th September 2012)

Mr. Rajnish Sarna Whole-time Director (From 07th November 2012)

v Enterprises over which KMP and their relatives are able to exercise significant influence

(a) Samaya Investment and Trading Pvt. Ltd (Upto 31.12.2012)

(b) Wolkem India Ltd.

(c) Secure Meters Ltd.

(d) Salil Singhal (HUF)

(e) Singhal Foundation

(f) PI Foundation

(g) PII ESOP Trust (Trust)

38. CONTINGENT LIABILITIES

(Rs. in Lacs)

March 31, 2014 March 31, 2013

Disputed Taxation demands not acknowledged as debts:

- Sales Tax 119.06 128.13

- Excise Duty 509.17 84.99

- Income Tax 689.47 536.42

- Custom Duty – 71.08

- ESI 6.09 5.08

Anti Dumping Duty 230.44 230.44

Counter Guarantee to GIDC 32.85 32.85

Bill Discounted 2,382.45 3,171.14

10. DERIVATIVES INSTRUMENTS AND HEDGED/ UNHEDGED FOREIGN CURRENCY EXPOSURE i) All financial and derivative contracts entered into by the Company are for hedging purposes

11. DEFERRAL/ CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification dated March 31, 2009 and December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Company decided to exercise the option of accounting for Exchange differences arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in the previous financial statements in so far as they relate to the acquisition of depreciable capital assets by addition to/ deduction from the cost of the asset and depreciate the same over the balance life of the asset. Accordingly, the current year exchange losses amounting to Rs.1,120.50 lacs (Previous Year Rs.640 lacs) have been adjusted to the cost of fixed assets/CWIP.

12. In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans, advances and other current assets, in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet and provisions has been made for all known liabilities.

13. Figures of previous year have been regrouped and/ or rearranged wherever necessary to make them comparable with those of the current year.


Mar 31, 2013

1. COMMENCEMENT OF COMMERCIAL PRODUCTION AT SEZ UNIT

The Company has commenced commercial production at its newly commissioned unit located at SEZ, Jambusar in the State of Gujarat starting from January 2013.

2. NOTE ON AS 30 ADOPTION

The Company has adopted Accounting Standard 30 (AS 30) "Financial Instruments: Recognition and Measurement" during the Financial year 2011-12. Based on the Recognition and Measurement principles set out in AS 30, changes in the fair values of derivative financial instruments, the net foreign exchange exposure over a period of one year against the committed order in hand hedged through forward contracts, are designated as effective cash flow hedges and marked to market loss/gain arising on said foreign currency instruments are transferred to "Cash Flow Hedge Reserve" directly in the Balance Sheet under Reserves & Surplus and later the same is reclassified in the Statement of Profit & Loss upon the occurrence of the hedging transaction. Accordingly marked to market gain of Rs. 132.80 lacs (Previous Year loss of Rs. 492.60 lacs) arising on foreign currency instruments qualifying for hedge accounting as on March 31, 2013 has been transferred to Cash Flow Hedge Reserve Account.

3 NOTE ON ADOPTION OF REVISED SCHEDULE VI

These financial statements comprising the Balance Sheet and Statement of Profit & Loss and Notes have been prepared in accordance with Revised Schedule VI which has been made applicable for financial year commencing on or after April 1, 2011, vide MCA''s notification no. S.O. 653(E) dated March 30, 2011.

4. GRATUITY & LEAVE ENCASHMENT

As per Accounting Standard (AS) - 15 "Employee Benefits", the disclosure of employee benefits as defined in the accounting standard is given below:

a) Defined Contribution Plans

The Company has recognised an expense of Rs. 400.02 Lacs (Previous Year Rs. 356.83 lacs) towards the defined contribution plan.

5. EMPLOYEE STOCK OPTION PLANS

The Company provides share-based payment schemes to its employees. The relevant details of the scheme are as follows:

In December 2010, the Board of Directors approved the PII ESOP 2010 Scheme in order to reward the employees for their past association & performance as well as to motivate them to contribute to the growth & profitability of the Company (including subsidiary companies) with an intent to attract & retain talent in the organization. The aforesaid scheme was duly approved by shareholders in their EGM held on January 21, 2011 and is administered through independent trust. During the year, Compensation Committee of the Board granted following options under PII ESOP 2010 Scheme to certain category of employees as per criteria laid down by Compensation Committee of the Board.

6. RELATED PARTY DISCLOSURES

Related party disclosures, as required by Accounting Standard-18, is as below: a) List of Related Parties

i Enterprises which control the entity

Parteek Finance & Investment Co. (Holding Company w.e.f. January 1, 2013)

ii Where control exists during the year

Subsidiaries - (a) PILL Finance and Investments Ltd., (b) PI Life Science Research Ltd. and (C) PI Japan Co. Ltd.

iii Enterprises in respect of which reporting enterprise is an associate

(a) Lucrative Leasing Finance and Investment Company Ltd., (b) Parteek Finance and Investment Company Ltd. (Upto December 31, 2012)

iv Key Managerial Personnel & their relatives (KMP)

(a) Key Managerial Personnel (KMP)

Mr. Salil Singhal Chairman & Managing Director

Mr. Mayank Singhal Managing Director & CEO

Mr. Anurag Surana Whole-time Director (till September 15, 2012)

Mr. Rajnish Sarna Whole-time Director (from November 7, 2012)

7. CONTINGENT LIABILITIES (Rs. in Lacs)

March 31, 2013 March 31, 2012

Disputed Taxation demands not acknowledged as debts:

- Sales Tax 128.13 176.41

- Excise Duty 84.99 84.99

- Income Tax 536.42 243.06

- Custom Duty 71.08 71.08

- ESI 5.08 -

Anti Dumping Duty 230.44 230.44

Counter Guarantee to GIDC 32.85 32.85

Bill Discounted 3,171.14 -

8. DEFERRAL/ CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification dated March 31, 2009 and December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Company decided to exercise the option of accounting for Exchange differences arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in the previous financial statements in so far as they relate to the acquisition of depreciable Capital Assets by addition to/ deduction from the cost of the asset and depreciate the same over the balance life of the asset. Accordingly, the current year exchange losses amounting to Rs. 640 lacs (Previous Year Rs. 124.32 lacs) have been adjusted to the cost of fixed assets/CWIP.

9. EVENT OCURRING AFTER THE BALANCE SHEET DATE

Subsequent to the Balance Sheet date, the Company has sub-divided its existing Equity Shares of Rs. 5 each fully paid up into 5 Equity Shares of Rs. 1 each, pursuant to the approval of the shareholders through postal ballot results declared on April 3, 2013.

10. In the opinion of the Management and to the best of their knowledge and belief, the value on realisation of loans, advances and other current assets, in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet and provisions has been made for all known liabilities.

11. Figures of previous year have been regrouped and/ or rearranged wherever necessary to make them comparable with those of the current year.


Mar 31, 2012

A. The issued share capital of previous year includes fractional coupons of Rs. 5/- each fully paid, allotted as bonus shares in earlier years.

b. The difference between the issued and subscribed capital is on account of less number of shares allotted in right issue in earlier years.

c. Terms/ rights attached to Equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share (Previous Year Rs. 10 per share). Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting except interim dividend.

During the year ended 31st March 2012, the Company had declared interim dividend of Rs. 2 per share of face value of Rs. 5/- each to the equity shareholders and final dividend of Rs. 3 per share is recognised as distribution to the equity shareholders at the year end (Previous year Rs. 4 per share of face value of Rs. 10/- each).

d Terms/ rights attached to Preference shares

As per the terms of the issue, the holder of CCPS had option to convert its preference shares into equity within 18 months of the date of issue i.e. 24th October 2009. The CCPS carried a coupon rate of 0.01% p.a. and had lock in period of one year.

e Terms of securities convertible into equity

Compulsorily Convertible Preference Shares (CCPS)

Refer Note 1(d)

As per the terms of issue

(i) 1250000 CCPS were converted into 370826 equity shares of Rs. 10 each at a premium of Rs. 327.085 per share during the previous year, and

(ii) the balance 810000 preference shares have been converted into 311658 equity shares of Rs. 10/- each, allotted to both Standard Chartered Private Equity (Mauritius) Limited and Standard Chartered Private Equity (Mauritius) II Limited equally, at a premium of Rs. 249 .9003 per share.

Optionally Convertible Debentures (OCDs)

Refer Note 3 (a)

During the year 1025030 equity shares were issued and allotted by the Company to Standard Chartered Investments and Loans (India) Limited at a premium of Rs. 249.9003 per equity share of face value on conversion of 2664053 OCDs and the balance 275947 OCDs were redeemed.

f Fractional Shares

During the year 18 fractional shares were sold off in the market on 15th October 2011 at prevailing market price and the proceeds were reimbursed to the beneficiaries.

g Split of Shares

Pursuant to the approval of the shareholders in their meeting held on 16th July 2011, the Company has sub-divided the existing equity shares of Rs. 10/- each fully paid up into 2 equity shares of Rs. 5/- each.

a. On 24th October 2009, the Company had issued 29,40,000 Optionally Convertible Debentures (OCD) of Rs. 100/- each to Standard Chartered Invest- ments and Loans (India) Ltd., on preferential basis. The OCD had lock in period of one year from the date of allotment. The OCD were optionally con- vertible into equity shares within the period of 18 months from the date of allotment as per the terms of issue. The uncovered portion of OCD, if any, shall be redeemed at the end of 18 months or may be further extended by another 18 months, if mutually agreed.

b. Indian Rupee Loan from Banks includes:

- Loan amounting to Rs. 248.99 lacs outstanding as on 31st March 2012 from State Bank of Bikaner & Jaipur Bank carrying interest rate of BPLR minus 1.25% repayable in balance 4 Quarterly installments of Rs. 62.50 lacs each which would be repaid by March 2013. The loan is secured by first pari passu charge on the fixed assets and second charge on the current assets of the Company. Further, the entire loan sanctioned amounting to Rs. 1750 lacs is guaranteed by personal guarantee of the Chairman and Managing Director (CMD) and Managing Director (MD) of the Company.

- Loan amount of Rs. 111.10 lacs outstanding as on 31st March 2012 from Axis Bank carrying interest rate of BPLR minus 3.25% would be repaid in June 2012. The loan is secured by first pari passu charge on the existing and future fixed assets and second charge on the current assets of the Company. The loan amount sanctioned amounting to Rs. 2000 lacs is guaranteed by personal guarantee by the Managing Director (MD) of the Company.

- Loan from HDFC Bank outstanding amounting to Rs. 328.12 lacs carrying interest rate @ HDFC -CPLR plus 0.25 basis points and is repayable in balance 3 Quarterly installments of Rs. 109.37 lacs each. The same would be repaid by December 2012. The loan is secured by first pari passu charge on the fixed assets of the Company. The loan sanctioned amounting to Rs. 1750 lacs is guaranteed by personal guarantee of the Chairman and Managing Director (CMD) and Managing Director (MD) of the Company.

- Loan from IDBI Bank outstanding amounting to Rs. 225 lacs carrying interest rate of BPLR minus 1.5% and is repayable in 9 Quarterly installments of Rs. 25 lacs which would be repaid by June 2014. The loan is secured by first mortgage and charge on all movable and immovable properties, both present and future of the Company and second charge on the current assets of the Company . Further, the entire loan amount sanctioned amounting to Rs. 500 lacs is guaranteed by irrevocable and unconditional guarantee of Managing Director (MD) of the Company.

- Loan amounting to Rs. 825 lacs is outstanding from IDBI Bank as on 31st March 2012 which carries interest rate of BPLR minus 1%. This amount is repayable in 11 Quarterly installments of Rs. 75.00 lacs each and the same would be repaid by December 2014.The loan is secured by first pari passu charge on all movable and immovable assets and second charge on the current assets of the Company. Further, the loan sanctioned amounting to Rs. 1500 lacs is guaranteed by personal guarantee of the Managing Director (MD) of the Company.

c. Foreign Currency Loans includes:

- ECB from Standard Chartered Bank amounting to USD 200 lacs carrying interest rate of 90 days LIBOR plus 2.75% and is repayable in 15 Quarterly installments of USD 13.33 lacs each beginning from April 2013. The loan is secured by first exclusive charge on movable and immovable fixed assets of the Company situated at Jambusar, Gujarat.

d. Loans from Financial Institutions includes:

Term Loan from Financial Institutions includes loan amounting to Rs. 1000 lacs from EXIM bank at interest on PLR rate, repayable in 8 quarterly installment of Rs. 125 lacs and would be repaid by 31st March 2014. The loan is secured by Pari passu first charge over the entire fixed assets including immovable properties of the Company both present and future (excluding assets, which are exclusively charged to other lenders) and Pari passu second charge over the entire current assets of the Company, pari passu with all the existing lenders, excluding assets exclusively charged to other lenders.

e. Deferred Tax Sales Tax Loan is Interest Free which was payable in 5 yearly installments of Rs. 23.50 lacs each beginning from 30th May 2006. The last installment was paid on 13th April 2011.

f. Deposits from Directors, shareholders and others carries interest ranging from 9% to 11% depending upon the amount of deposit. Non- cummulative deposits have a maturity period of two years and are paid interest at the interval of every six months. Cummulative deposits have maturity period of three years and the interest is compounded six monthly.

g. As on the Balance sheet date there is no default in repayment of loans and interest.

a. Working capital loans are secured by way of first charge on pari passu basis by hypothecation of stocks of raw materials, finished and semi finished goods, stores and spares not related to plant and machinery, bills receivable, book debts and all other movable properties and additionally secured by way of second charge on all the immovable properties of the Company in favour of the consortium bankers.

b. The working capital loans were secured by personal guarantee of the directors of the Company till 31st March 2011. The same does not carry any guarantee as on the reporting date.

* Deposit account includes Rs. 366.55 Lacs (Previous Year Rs.277.75 lacs ) towards margin money pledged with banks for Bank Guarantees and Letter of Credit.

* Includes Fixed deposits with more than twelve months maturity from date of acquisition: Rs.366.55 lacs (Previous Year Rs. 277.75 lacs); and Fixed deposits upto 3 months maturity from date of acquisition: Rs. NIL (Previous Year Rs. NIL)

** Not available for use by the Company as they represent corresponding unclaimed dividend liabilities.

1 In the opinion of the management and to the best of their knowledge and belief, the value on realisation of loans, advances and other current assets, in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet and provisions has been made for all known liabilities.

2 DISCONTINUED OPERATIONS

The Company has entered into a Business Transfer Agreement on 20th December, 2010 for selling its polymer division as a going concern on slump sale basis for net sale consideration of Rs. 6,659.63 lacs This transaction was concluded on 11th April 2011. The Company recognised profit of Rs. 2,279.18 lacs (Net of taxes) on account of sale of the business.

*Pursuant to the approval of the shareholders in their meeting held on 16th July 2011, the Company has sub-divided the existing equity shares of Rs. 10/- each fully paid up into 2 equity shares of Rs. 5/- each. Further, in accordance with Accounting Standard (AS-20), the earning per share for the current and comparative period has been recomputed after adjusting for the sub-division of the shares.

3 NOTE ON AS 30 ADOPTION

The Company has adopted Accounting Standard 30 (AS 30) " Financial Instruments: Recognition and Measurement". Based on the Recognition and Measurement principles set out in AS 30, changes in the fair values of derivative financial instruments, the net foreign exchange exposure over a period of one year against the committed order in hand hedged through forward contracts, are designated as effective cash flow hedges and marked to market loss/gain arising on said foreign currency instruments are transferred to "Cash Flow Hedge Reserve" directly in the Balance Sheet under Reserves & Surplus and later the same is reclassified into Profit & Loss account upon the occurrence of the hedging transaction. Accordingly marked to market loss of Rs. 492.60 lacs arising on foreign currency instruments qualifying for hedge accounting as on 31st March 2012 has been transferred to Cash Flow Hedge Reserve Account.

4 NOTE ON ADOPTION OF REVISED SCHEDULE VI

These financial Statements comprising the balance sheet and statement of profit and loss and notes have been prepared in accordance with Revised Schedule VI which has been made applicable for financial year commencing on or after 1st April, 2011, vide MCA's notification no. S.O. 653(E) dated 30th March, 2011.

5 EMPLOYEES STOCK OPTION PLANS

The Company provides share-based payment schemes to its employees. The relevant details of the scheme are as follows:

In December 2010, the Board of Directors approved the PII ESOP 2010 Scheme in order to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the Company (including subsidiary companies) with an intent to attract and retain talent in the organization, The aforesaid scheme was duly approved by shareholders in its EGM held on 21st January, 2011 and is administered through independent trust. During the year, Compensation Committee of the Board granted following options under PII ESOP 2010 Scheme to certain category of employees as per criteria laid down by Compensation Committee of the Board.

The stock based compensation cost calculated as per the intrinsic value method for the financial year 2011-12 is Rs. 108.95 lacs. If the stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the financial statements for the year 2011-12 would be Rs 369.93 lacs. The effect of adopting the fair value method on the net income and earnings per share is presented below:

6 RELATED PARTY DISCLOSURES

Related party disclosure, as required by Accounting Standard-18, is as below:

a) List of Related Parties

i Where control exists during the year:

Subsidiaries - (a) PILL Finance and Investments Ltd, (b) PI Life Science Research Ltd. and (c ) PI Japan Co.Ltd.

ii Enterprises in respect of which reporting enterprise is an associate:

(a) Lucrative Leasing Finance and Investment Company Ltd; (b) Parteek Finance and Investment Company Ltd;

iii Key Managerial Personnel & their relatives (KMP):

(a) Key Managerial Personnel (KMP):

Mr. Salil Singhal Chairman & Managing Director

Mr. Mayank Singhal Managing Director & CEO

Mr. Anurag Surana Whole time Director

7 CONTINGENT LIABILITIES (Rs.in Lacs)

31st March 31st March 2012 2011

Disputed Taxation demands not acknowledged as debts

- Sales Tax 176.41 162.81

- Excise Duty 84.99 84.99

- Income Tax 243.06 -

- Custom Duty 71.08 -

Anti Dumping Duty 230.44 230.44

Counter Guarantee to GIDC 32.85 32.85

8 DEFERRAL / CAPITALISATION OF EXCHANGE DIFFERENCE

Pursuant to notification dated March 31, 2009 and December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Company decided to exercise the option of accounting for Exchange differences arising on reporting of long term foreign currency monetary items at rates dif- ferent from those at which they were initially recorded during the period or reported in the previous financial statements in so far as they relate to the acquisition of depreciable capital assets by addition to/ deduction from the cost of the asset and depreciate the same over the balance life of the asset. Accordingly, the current year exchange losses amounting to Rs. 124.32 lacs have been adjusted to the cost of fixed assets/CWIP.

The unamortised amount of exchange fluctuation as on the reporting date is Rs. 164.11 lacs (Previous Year Rs. 43. 29 lacs)

9 Figures of previous year have been regrouped and/ or rearranged wherever necessary to make them comparable with those of the current year.


Mar 31, 2010

Particulars Amount (Rs in Lacs) 31.03.2010 31.03.2009 1 Contingent Liabilities in raspect of

Bills discouted - 241.59

Disputed Taxation demands not acknowledged as debts

- Sales Tax 140.01 12S.83

-Excise Duty 84.99 84.99

Counter Guarantee to GlDC 32.85 32.85

2 Donation includes an amount of Rs. 5 lacs (Previous Year Rs. Nil] paid to Rajasthan Pradesh, Congress Committee, a recognised political party.

3 Soles include export incentives of Rs. 134,35 lacs (Previous Year Rs. 61,31 lacs} and insurance claims of Rs. 9.75 Iocs (Previous Year Rs.9.81 lacs)

4 In the opinion of the management and to the besl of their knowledge and belief, the value on realisation of loons, advances and other current assets in the Ordinary course of business will not the less then the amount al which they are stated in the Balance Sheet and provision has been made for all known liabilities.

5 During the currenl year, the Company has recognised MAT credit entitlement pf Rs. 76-54 lacs (Previous Year Rsr1 30-62 lacs) related to earlier year, Current tax is net of this MAT credit entitlement

6 Consequent to the announcement issued by the lnstitute of Chartered Accountants; of India in March, 2008 on Accounting (or Derivatives, the Company, as a matter of prudence, has not recognized marked to markei foreign currency gain of Rs. 58.71 lacs on the outstanding forward contract as at 31st March, 2010.

7 As per Accounting Standard (As)- 15 Employee Benefits", the disclosure of employee benefits as defined in the accounting standard is given below:

8) Defined Contribution PIans:-

The Company has recognised an expense of Rs. 289.44 Lacs {Previous Year Rs. 325.39 Iacs) towards the defined contribution.

9 Derivative Instruments and Hedged/ Unhedged Foreign Currency Exposure

i) All financial and derivative contracts entered into by the Company are for hedging purposes,

ii) Forward Contract outstanding as at Balance Sheet date

10 Related party disclosure; as required by Accounting Standard-18, is as below: (a) List of Related Parties

I. Where control exists during the year:

Subsidiaries PILL Finance and investments Ltd, PI Life Science Research Ltd. and PI Japan Co. Ltd, Partnership Firm- J & K Pesticides and Chemicals Corporation (Previous Year).

ii. Enterprises in respect of which reporting enterprise is on associate; Lucrative Leasing Finance and Investment Company Ltd;

Porteek Finance and Investment Company Ltd.

iii. Key Managerial Personnel (KMP):

Mr. Salil Singhal Chairman & Managing Director

Mr. Mayank Singhal Managing Director & CEO

Mr. Anurag Surono Whole time Director

Mr. Junichi Nakano Whole time Director

Relatives of Key Managerial Personnel:-

Relation with Key Managerial

Personnel Mr.Salil Singhal Mr. Mayank Singhal

Father Salil Singhal

Mother Saraswati Singhal Madhu Singhal

Wife Madhu Singhal

Sister Pooja Singhal Shefali Khushlani Son Mayank SinghaI

Daughter Pooja Singhal

Shefali Khushlani

iv. Enter-prises over which KMP and their relatives are able to exercise significant influence :-

Samaya Investment and Tradirig Pvt. Ltd Hycron Electronics; PI Apparels Pvt. Ltd, Wolkem India Ltd,; Secure Meters Ltd.; Salil Singhal (HJF) and Singhal Foundation.

The Following transaction. were corned out with related parties in the ordinary course of business:

 
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