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Directors Report of Punjab Alkalies & Chemicals Ltd.

Mar 31, 2015

The Directors submit their 40,h Annual Report together with the Audited Accounts for the financial year ended 31st March, 2015.

Financial Results

The financial results of the Company for the financial year ended 31st March, 2015 are summarized below :-

(Rs.in crores)

2014-15 2013-14

Sales Turnovers Other Income 303.49 301.68

Total Expenditure excluding 307.77 300.15

Finance Costs and Depreciation, etc.

Finance Costs 0.91 0.80

Cash Profit /(Loss) (5.19) 0.73

Depreciation, etc. 7.74 10.30

Net Loss before tax 12.93 9.57

Provision for taxation

Net Loss after tax 12.93 9.57

Your Directors report that the Company's operations continued to be under severe pressure during the financial year 2014-15 owing to uncontrollable factors of excess capacity in the Chlor-Alkali Industry, escalating manufacturing costs, import of Caustic Soda at cheaper rates and lesser sales realization. Despite the same, the Company achieved higher Sales Turnover of Rs.303.49 crores and better capacity utilization of 93% in the financial year under review as compared to Rs.301.68 crores and 90%, respectively during the preceding financial year 2013-14. The Company also achieved a savingofaboutRs.4.22croresduringthefinancialyear2014-15as a result of purchase of part of power at cheaper rates through Indian Energy Exchange under Open Access System. However, even with these favorable developments, the Company's profitability in the financial year 2014-15, was severely impacted due to the said earlier indicated uncontrollable adverse factors resulting in a lower combined average realization per Electro-Chemical Unit (ECU) at Rs.34,075 and Net Loss (after-tax) of Rs. 12.93 crores as against the ECU of Rs. 34,680 and Net Loss (after-tax) of Rs. 9.57 crores in the financial year 2013-14.

In view of the accumulated losses of the Company, the Directors regret their inability to recommend any dividend for the financial year 2014-15.

Finance and Corporate Debt Restructuring

The Corporate Debt Restructuring (CDR) Empowered Group had restructured the debt liabilities of the Company in January, 2003 and had thereafter revised, reworked and modified the same from time to time. The CDR Empowered Group had approved for the Company a proposal for One Time Settlement (O.T.S.) of the outstanding Term Loans and Non-Convertible Debentures and Sanctioned Working Capital Facilities as on 1st April, 2012 on 100% principal basis with a cut-off date of 15,h November, 2012.

In terms of the same, the Company had already made the payment of the first and second tranches of the O.T.S. Amount and the interest payable up to the stipulated date by due dates. The last tranche of O.T.S. Amount had fallen due on 1 * April, 2015. The Company was not in a position to meet its obligation for the payment of last tranche on its due date. The Company had informed the IDBI Bank Limited, the lead Financial Institution that the Board of Directors of PSIDC. the promoters of the Company, is agreeable for the conversion of entire balance debt of about Rs.43 crores of the Lenders into Equity Shares at a share price to be determined as per SEBI formula applicable on the date of freezing/accepting the proposal. At the request of the Company, the IDBI Bank Limited granted additional time till 30,h September, 2015 for making the payment of last tranche of O.T.S. Amount. Subsequently, the Company has submitted a modified proposal to IDBI Bank Limited for conversion of part of balance outstanding Debt of the Lenders into Equity Shares at a share price to be determined as per SEBI formula and the balance outstanding Debt into Secured Fully Convertible Debentures and Secured Redeemable Non-Convertible Debentures. The IDBI Bank Limited will be placing the same before the CDR Empowered Group for approval.

During the financial year under review, the Company did not raise funds by way of fixed deposits. The Company has become a Sick Industrial Company within the meaning of Section 3 (1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and a reference will be made to the Board for Industrial and Financial Reconstruction (BIFR)under Section 15 of the SICA. Current Operations and Outlook

The operations of the Company in the first Four Months ended 31st July, 2015 of the financial year 2015-16, continued to reel under severe pressure resulting in lower capacity utilization at 83% as against 101% in the corresponding period of the preceding financial year. Although the Company has done marginally well during first two months of the first quarter of the financial year 2015-16 due to purchase of some part of its power requirements at cheaper rates under Open Access System, but, due to imposition of some restrictions by the Punjab State Power Corporation Limited, the Company's savings on account of Power purchase under Open Access, have got unfavourably impacted to a significant extent, thus adversely affecting the profitability of the Company in the remaining period of Two Months of

Four Months ended 31st July, 2015 . The situation has been further aggravated due to levy of 5% Infrastructure Development Fee on Power by the Government of Punjab w.e.f. 15,h June, 2015. All these resulted into a Net Loss (before tax) of Rs.3.78 crores in the Four Months ended 31 * July, 2015 on a Sales Turnover of Rs.90.41 crores against a Net Profit (before tax) of Rs.1.21 crores on a Sales Turnover of Rs.114.15 crores in the corresponding period of the preceding financial year

The Company is continuing its efforts to reduce its costs and increase its revenues. The major input cost i.e. Power cost constitutes about 60% of the total production cost. The Company continues its Endeavour to purchase maximum possible portion of its power requirements at cheaper rates through Indian Energy Exchange under Open Access System. The Company endeavors for recoating of the Anodes and Cathodes and replacement of the Membranes in the Electrolyses of its Plant Unit-I in a phased manner, for reduction in power consumption per unit of Caustic Soda Lye.

The Chlorinated Paraffin Wax (CPW) Plant set up by M/s. Flow Tech Chemicals Pvt. Limited on B.O.O. basis in the Company's Plant Complex is likely to be commissioned shortly. The same will lead to increased capacity utilization and reduced requirement for additional Chlorine Tonners.

Environmental Energy Conservation

The Company's endeavor has always been to accord high priority to carry out its operations in an environment-friendly fashion and the Company has been taking appropriate pollution control and safety measures. A Safety Audit of the Plant was got conducted during the financial year 2014-15 from the National Safety Council and its recommendations are being implemented.

The Company continues to place a great emphasis on energy conservation. The Company is getting the Energy Audit conducted on regular basis. The information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2015-16has been paid to the Bombay Stock Exchange Limited.

Human Resources

Your Company continues to develop and upgrade the skills of its human resources. Industrial relations continued to be cordial. The Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended 31 * March, 2015, there was no employee of the Company whose particulars need to be included in this report under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2014-15 required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited is annexed herewith as Annexure II forming a part of this report. The Corporate Governance Report for the financial year 2014-15 and Auditors' Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Liting Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors & Key Managerial Personnel

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri Anirudh Tewari, IAS as Director and Chairman of the Company vice Shri D.P. Reddy, IAS w.e.f. 18,h May, 2015. Consequently, Shri D.P. Reddy, IAS resigned as a Director of the Company w.e.f. 18* May, 2015. The Board of Directors of the Company has appointed Shri Anirudh Tewari, IAS, as Additional Director of the Company w.e.f. 18,h May, 2015. The Directors place on record their appreciation of the valuable guidance provided by Shri D.P. Reddy, IAS.

The PSIDC had withdrawn the nomination of Shri S.S. Bains, IAS as its Nominee Director on the Board of Directors of the Company w.e.f. 16th July, 2015. Shri S.S. Bains, IAS resigned as a Director as well as Managing Director of the Company we.f.16,h July, 2015. The Directors place on record their appreciation of the valuable services rendered by Shri S.S. Bains, IAS, during his tenure with the Company.

The PSIDC nominated Shri Amit Dhaka, IAS as its Nominee Director on the Board of Directors of the Company we.f. 14th August, 2015. The Board of Directors of the Company has appointed Shri Amit Dhaka, IAS, as Additional Director of the Company w.e.f. 14th August, 2015 and has also appointed him as the Managing Director of the Company for a period of five years w.e.f. 17th August, 2015.

Shri J.S. Saraon ceased to be the Director of the Company w.e.f. 17* April, 2015 consequent upon his demise.

The PSIDC had withdrawn the nomination of Shri Yogesh Goel as its Nominee Director on the Board of Directors of the Company w.e.f. 28,h May, 2015. Shri Yogesh Goel resigned as a Director of the Company w.e.f. 28,h May, 2015.

The PSIDC nominated Shri S.R. Ladhar, IAS as its Nominee Director on the Board of Directors of the Company w.e.f. 5th August, 2015. The Board of Directors of the Company has appointed Shri S.R. Ladhar, IAS, as Additional Director of the Company w.e.f. 5th August, 2015.

Shri Anirudh Tewari, IAS, Shri S.R. Ladhar, IAS and Shri Amit Dhaka, IAS hold office as Directors till the date of the ensuing Annual General Meeting. Notices in writing have been received from a member under Section 160 of the Companies Act, 2013, signifying his intention to propose at the ensuing Annual General Meeting the appointment of ShriAnirudh Tewari, IAS, Shri S.R. Ladhar, IAS and Shri Amit Dhaka, IAS as Directors of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation.

The Board of Directors of the Company had appointed Smt. Gurneet Tej, IAS, as Additional Director of the Company on 11* February, 2015. Smt. Gurneet Tej, IAS (Woman Director) holds office till the date of the ensuing Annual General Meeting. Pursuant to the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, the Board of Directors is seeking appointment of Smt. Gurneet Tej, IAS (Woman Director) as an Independent Director of the Company for a term of five consecutive years w.e.f. 29* September, 2015. Notice in writing has been received from a member under Section 160 of the Companies Act, 2013, signifying his intention to propose at the ensuing Annual General Meeting the appointment of Smt. Gurneet Tej, IAS as an Independent Director of the Company.

The IDBI Bank Limited has withdrawn the nomination of Shri Ravi Kumar as its Nominee Director and nominated Shri Rajesh Malhotra as its Nominee Director on the Board of Directors of the Companyw.e.f.8,hSeptember,2014. The IFCI Limited had withdrawn the nomination of Shri S. Sengupta as its Nominee on the Board of Directors of the Company and nominated Shri Jagdish Garwal as its Nominee Director w.e.f. 13th November, 2014 and had advised the Company to co-opt him on the Board of Directors. Consequently, Shri S. Sengupta resigned as a Director of the Company w.e.f. 13th November, 2014. Accordingly, the Board of Directors of the Company had appointed Shri Jagdish Garwal, as Additional Director of the Company on 13th November, 2014. The IFCI Limited had subsequently withdrawn the nomination of Shri Jagdish Garwal as its Nominee on the Board of Directors of the Companyw.e.f. 11,h August, 2015. Consequently, Shri Jagdish Garwal resigned as a Director of the Company w.e.f. 11,h August, 2015.

The Directors place on record their appreciation of the valuable contribution made by Shri J.S. Saraon, Shri Yogesh Goel, Shri Ravi Kumar, Shri S. Sengupta and Shri Jagdish Garwal.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Shri Ajay Pal Singh, General Manager (Finance) has been designated as Chief Financial Officer.

Audit Committee

The Audit Committee of the Board comprised of Shri J.S. Saraon, Shri D.C. Mehandru, Shri J.S. Mann and Shri Jagdish Garwal with Shri J.S. Saraon as its Chairman. Subsequently, Shri J.S. Saraon ceased to be a Member and Chairman of the Committee w.e.f. 17th April, 2015 consequent upon his demise. The Board had appointed Shri D.C. Mehandru as the Chairman of the Audit Committee w.e.f. 26th May, 2015. Shri Jagdish Garwal subsequently ceased to be the Member of the Committee consequent upon withdrawal of his nomination by IFCI Limited and his resignation as a Director of the Company w.e.f. 11th August, 2015.

Risk Management Committee

As required under Clause 49 (VI) of the Listing Agreement, the Board of Directors of the Company has constituted a Risk Management Committee to monitor and review the Risk Management Plan of the Company.

Directors 'Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the period under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts for the financial year ended 31 * March, 2015 on a 'going concern' basis;

(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration of Independent Directors

All the Independent Directors have met requirements specified under Section 149(6) of the Companies Act, 2013 regarding holding the position of 'Independent Director' and necessary Declaration from each Independent Director under Section 149(7) of the Act has been received. The Independent Directors have held a separate meeting during the year under review. Related Party Transactions Policy

As required under Clause 49 (VII) of the Listing Agreement, the Board of Directors of the Company in its meeting held on 11th February, 2015 had approved the Related Party Transactions Policy of the Company. The same has also been placed on the Company's Website www.punjabalkalies.com. During the year under review, the Company has not entered into any arrangement or contract or transactions with related parties except the remuneration paid to the Key Managerial Personnel. Vigil Mechanism and Whistle Blower Policy

As required under Section 177 (9) of the Companies Act, 2013 and Clause 49 (II) (F) of the Listing Agreement, the Board of Directors of the Company in its meeting held on 11* February, 2015 had approved the Vigil Mechanism and Whistle Blower Policy of the Company. The same has also been placed on the Company's Website www.punjabalkalies.com. Auditors

The appointment of M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, as Auditors of the Company from the conclusion of the ensuing Annual General Meeting until the conclusion of 41st Annual General Meeting to be held in the year 2016 is subject to ratification by the Members. The Auditors being eligible, have indicated their willingness to the same.

Cost Auditors

The Board has, subject to the approval of the Shareholders, appointed M/s. J.K. Kabra &Co., Cost Accountants as Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company in respect of the financial year 2015-16.

Secretarial Audit

M/s. A. Arora & Co., Practicing Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2014-15. Their Secretarial Audit Report of the Company for the financial year ended 31 * March, 2015 is annexed as Annexure-lll to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practicing Company Secretaries were reappointed as Secretarial Auditors of the Company for the financial year 2015-16.

Extract of Annual Return

Pursuant to Section 134 (3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Extract of Annual Return in Form MGT-9 is annexed as Annexure-IV to this Report.

Acknowledgements

Your Directors place on record their appreciation of the cooperation and support extended by the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company's Bankers and esteemed customers.

Your Directors also acknowledge the valuable contribution made by the members of management team, staff and work- force.

For and on behalf of the Board

Sd/-

Place : Chandigarh (ANIRUDH TEWARI)

Date: August 17, 2015 Chairman


Mar 31, 2014

Dear Members,

The Directors submit their 39th Annual Report together with the Audited Accounts for the financial year ended 31st Mai 2014.

Financial Results

The financial results of the Company forthe financial year ended 31st March, 2014 are summarised below:- (Rs. in crores) 2013-14 2012-13

Sales Turnover & Other Income 301.68 326.97 Total Expenditure excluding 300.15 302.14 Finance Costs and Depreciation, etc. Finance Costs 0.80 7.75 Cash Profit 0.73 17.08 Depreciation, etc. 10.30 12.99 NetProfit/(Loss)beforetax (9.57) 4.09 Provision for taxation - 1.28 Net Profit/(Loss)after tax (9.57) 2.81

Your Directors report that after doing fairly well during the years 2011-12 and 2012-13, the Company''s operations came under intense pressure during the financial year 2013-14 due to uncontrollable factors of (a) upward revision in basic power tariff by about 13% w.e.f. 1st April, 2013 by the Punjab State Electricity Regulatory Commission (PSERC) which had an overall impact of about Rs.9.30 crores on the Company, (b) excess capacity and surplus supply position in Chlor Alkali Industry and (c) escalating cost of other inputs, etc. The Capacity Utlisation at 90% during the year under review was lower against 96% in the preceding year 2012-13. All these resulted in a lower combined average realisation per Electro-Chemical Unit (ECU) at Rs.34,680 and Net Loss (aftertax) of Rs. 9.57 crores as against the ECU of Rs.35,390and Net Profit (aftertax) of Rs.2.81 crores in the financial year ended 31st March, 2013. The scenario in the second half of the financial year 2013-14 was better as compared to the situation prevailing in the first half of the said financial year, due to better sales realisation and Time of Day (TOD) Power Tariff Rebate allowed by the Punjab State Power Corporation Limited.

In view of the Loss incurred by the Company, the Directors express their inability to recommend any dividend for the financial year 2013-14.

Finance and Corporate Debt Restructuring

The Corporate Debt Restructuring (CDR) Empowered Group had approved the Proposal of the Company for One Time Settlement (O.T.S.) of the outstanding Term Loans and Non-Convertible Debentures and Sanctioned Working Capital Facilities as on 1st April, 2012 on 100% principal basis with a cut-off date of 15th November, 2012. In terms of the same, the Company had to make payment of (a) Upfront Payment of 35% of the O.T.S. Amount as first tranche, 10% of the balance 65% of O.T.S. Amount as second tranche by 30th September, 2014 and the remaining 90% of the balance 65% of O.T.S. Amount as third tranche by 1st April, 2015 and (b) Interest from 1st July, 2012 to 30th September, 2012 on the entire outstanding amount and interest from 1st October, 2012 to the date of payment of first tranche on 35% of O.T.S. Amount alongwith the payment of first tranche and interest from 1st October, 2012 to the date of payment of first tranche on balance 65% of O.T.S. Amount by 31st October, 2013. In addition, the Company has to create a reserve of Rs.17.43 crores by 30th November, 2014. In terms of the said O.T.S., the Company is not required to pay interest on the balance 65% of O.T.S. Amount from the date of payment of first tranche.

The Company had already made the payment of the first tranche of the O.T.S. Amount and the entire interest payable as aforesaid by due dates. The Company would be making the payment of the second tranche of the O.T.S. Amount by due date i.e. 30th September, 2014.

Due to the current unfavourable market scenario and resultant tight liquidity position, it may be difficult for the Company to meet its obligations forthe payment of last tranche on its due date i.e. 1st April, 2015 and creation of said reserve by 30th November, 2014. The Company is exploring possibility of arranging funds from other Banks, Financial Institutions and Private Financers. The Company is also approaching IDBI Bank Limited for extension of time period for making payment of said last tranche and for waiver of the condition of creation of said reserve by 30th November, 2014.

During the financial year under review, the Company did not raise funds by way of fixed deposits.

Current Operations and Outlook

After doing fairly well during the first quarter ended 30th June, 2014 of the financial year 2014-15, with the withdrawal of Time of Day (TOD) Power Tariff Rebate by the Punjab State Power Corporation Limited w.e.f. 1st June, 2014 and low ECU realisation, the financial position of the Company has again come under strain. Despite the same, the overall performance during first Four Months ended 31st July, 2014 was fair in comparison to that of the corresponding period in the preceding year 2013-14. During the first Four Months of the current financial year, the average capacity utilisation of the Plant was 101% as compared to 90% in the corresponding period of the preceding financial year. The combined average realisation in this period increased to Rs.35,840 per ECU over the combined average realisation of Rs.32,860

per ECU during the corresponding period in the financial year 2013-14. The Net Profit (before tax) has been Rs.1.21 crores on a Sales Turnover of Rs.114.15 crores against a Net Loss (before tax) of Rs.9.67 crores on a Sales Turnover of Rs.92.84 crores in the corresponding period of the preceding financial year.

The Company''s endeavor to reduce costs continued. The major cost is on account of Power, which accounts for about 60% of the total cost of production. The Company is replacing the Membranes of its Plant Unit-I and Plant Unit-II and getting the Anodes recoated in Electrolysers of its Plant Unit-II, in a phased manner. These will result in reduction in power consumption per unit of Caustic Soda Lye and also lead to increase in capacity utilisation. To save on energy cost, the Company''s endeavor to purchase power under Open Access System through Indian Energy Exchange continued. The Company is also making efforts for making Bi-lateral Arrangement with Power Generators for purchasing power.

The setting up of a Chlorinated Paraffin Wax (CPW) Plant by M/s. Flow Tech Chemicals Pvt. Limited on B.O.O. basis in the Company''s Plant Complex, with whom the Company had signed a Memorandum of Understanding, is in progress. With the implementation of the same, the Company expects to increase its capacity utilisation and to reduce its requirement for additional Chlorine Tonners.

Your Directors are optimistic about improved performance in the days to come.

Environment and Energy Conservation

The Company is committed to run its operations in an environment-friendly manner. The Company''s endeavor is to take all possible measures towards maintaining safety and good house keeping in its Plants. The Environmental Audit of the Company''s Plants for the year 2013-14 has been completed by M/s. Mantec Consultants Pvt. Limited and their final Report is awaited.

The Company strives to make its Plant energy efficient. The Company had got an Energy Audit of its Plants conducted from North India Technical Consultancy Organisation Limited (NITCON) in the financial year 2013-14. The major recommendations of NITCON are being implemented. The information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2014-15 has been paid to the Bombay Stock Exchange Limited.

Human Resources

The Company continues to place great value on its human resources. The process of training and development of human resources continued. The industrial relations remained cordial during the financial year under review.

During the financial year ended 31st March, 2014, there was no employee of the Company whose particulars need to be included in this report under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2013-14 required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited is annexed herewith as Annexure - II forming a part of this report. The Corporate Governance Report for the financial year 2013-14 and Auditors'' Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri D.P. Reddy, IAS as Director and Chairman of the Company vice Shri Karan Avtar Singh, IAS w.e.f. 22nd July, 2014. The Directors place on record their appreciation of the valuable guidance provided by Shri Karan Avtar Singh, IAS.

The PSIDC had vide its letter dated 9th April, 2014 requested the Company to appoint Shri D.K. Tiwari, IAS, as an Additional Director on the Board of Directors of the Company and also take necessary steps to appoint him as Managing Director of the Company for the period of absence of Shri S.S. Bains, IAS, Managing Director from Headquarters on account of his Election Duty for Lok Sabha Elections-2014. Accordingly, the Board of Directors of the Company had appointed Shri D.K. Tiwari, IAS, as an Additional Director of the Company on 9th April, 2014. The Board of Directors of the Company also appointed Shri D.K. Tiwari, IAS, as the Managing Director of the Company for the period from 9th April, 2014 to 19th May, 2014 for acting as the Managing Director of the Company during the absence of Shri S.S. Bains, IAS, Managing Director from Headquarters on account of his Election Duty for Lok Sabha Elections-2014. Shri D.K. Tiwari, IAS resigned as a Director of the Company w.e.f. 19th May, 2014. Shri D.K. Tiwari, IAS also ceased to be the Managing Director of the Company w.e.f. 19th May, 2014. The Directors place on record their appreciation of the valuable contribution made by Shri D.K. Tiwari, IAS.

The IFCI Limited has nominated Shri S. Sengupta as its Nominee on the Board of Directors of the Company in place of Shri Gautam Meour and had advised the Company to co-opt him on the Board of Directors. Shri Gautam Meour resigned as a Director of the Company w.e.f. 19th December, 2013. Accordingly, the Board has appointed Shri S. Sengupta, as Additional Director of the Company on 12th February, 2014. Shri S. Sengupta holds office till the date of the ensuing Annual General Meeting. Notice in writing has been received from a member under Section 160 of the Companies Act, 2013, signifying his intention to propose at the ensuing Annual General Meeting the appointment of Shri S. Sengupta as

Director of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation. The Directors place on record their appreciation of the valuable contribution made byShri Gautam Meour.

Pursuant to the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, the Board of Directors is seeking appointment of Shri J.S. Saraon, Shri D.C. Mehandru, Dr. A.K. Kundra, IAS (Retd.) and Shri J.S. Mann as Independent Directors of the Company for a term of five consecutive years w.e.f. 29th September, 2014. Notice in writing have been received from some members under Section160 of the Companies Act, 2013. signifying their intention to propose at the ensuring Annual General Meeting the appointment of Shri J.S. Saraon, Shri D.C. Mehandru, Dr. A.K. Kundra, IAS (Retd.) and Shri J.S. Mann as Independent Directors of the Company.

Pursuant to the provisions of Sections 149 and 152 and other applicable provisions of the Companies Act, 2013, the Board of Directors is seeking appointment of Shri D.P. Reddy, IAS, Shri Yogesh Goel and Shri S.S. Bains, IAS as Directors of the Company, liable to retire by rotation. Notice in writing have been received from some members under Section 160 of the Companies Act, 2013. signifying their intention to propose at the ensuring Annual General Meeting the appointment of Shri D.P. Reddy, IAS, Shri Yogesh Goel and Shri S.S. Bains, IAS as Directors of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation.

Audit Committee

The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon as its Chairman.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis;

(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors

M/s. S.Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, Auditors of the Company retire on the conclusion of the ensuing Annual General Meeting and being eligible they have indicated their willingness to be re-appointed.

Cost Auditors

M/s. J.K. Kabra &Co., Cost Accountants were re-appointed as Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company in respect of the financial year 2013-14.

The Board has, subject to the approval of the Shareholders, appointed M/s. J.K. Kabra & Co., Cost Accountants as Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company in respect of the financial year 2014-15.

Acknowledgements

The Directors wish to thank the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company''s Bankers and Business Constituents for their continued cooperation and support to the Company.

The Directors also wish to express their appreciation of the valuable services rendered by the employees of the Company at all levels.

For and on behalf of the Board Sd/- Place : Chandigarh (DP REDDY) Date : August 12, 2014 Chairman


Mar 31, 2013

The Directors submit their 38th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2013.

Financial Results

The financial resultsofthe Company for the financial year ended 31st March, 2013 are summarised below :-

(Rs. in crores)

2012-13 2011-12

Sales Turnover& Other Income 326.97 264.49

TotalExpenditure excluding 302.14 234.39

Finance Costs and Depreciation, etc.

Finance Costs 7.75 10.76

Cash Profit 17.08 19.34

Depreciation, etc. 12.99 12.80

Net Profit before tax 4.09 6.54

Provision for taxation 1.28 2.15

Net Profit after tax 2.81 4.39

Your Directors report that the financial year 2012-13 has not been a smooth year for the Company. The Company achieved higher Sales Turnover of Rs.326.97 crores, increased combined average realisation per Electro-Chemical Unit (ECU) of Rs.35,390 and better capacity utilisation of 96% in the financial year under review as compared to Rs.264.49 crores, Rs.30,950 and 89%, respectively during the preceding financial year 2011-12. The Company also made a saving of about Rs.11.70 crores during the financial year 2012-13 on account of purchase of part of power requirements at cheaper rates through Energy Exchanges under Open Access System. Despite all these favourable factors, the Company''s profitabilityin the financial year 2012-13, was severely impacted due to (a)importofCaustic Sodaat cheaper prices, (b) increase in cost of inputs such as Salt and other chemicals and (c) exorbitant hike by the Punjab State Electricity Regulatory Commission (PSERC) in the basic power tariff by about 13% w.e.f. 1st April, 2012 and steep increase in the Power Wheeling Charges of the Punjab State Power Corporation Limited under Open Access System w.e.f. 1st April, 2012. Consequently, the Net Profit (before tax) and Net Profit (after tax) have been Rs.4.09 crores and Rs.2.81 crores, respectively in the said financial year.

In view of the accumulated losses of the Company, the Directors regret their inability to recommend any dividend for the financial year 2012-13.

Finance and CorporateDebt Restructuring

The Corporate Debt Restructuring (CDR) Empowered Group had restructured the debt liabilities of the Company in January, 2003 and had thereafter revised, reworked and modified the same from time to time. The CDR Empowered Group has approved the Proposal of the Company for One Time Settlement (O.T.S.) of the outstanding Term Loans and Non-Convertible Debentures and Sanctioned Working Capital Facilities ason 1st April, 2012 on 100% principal basis with a cut-off date of 15th November, 2012. In terms of the same, the Company had to make payment of (a) Upfront Payment of 35% of the O.T.S. Amount as first tranche, 10% of the balance 65% of O.T.S. Amount as second tranche by 30th September, 2014 and the remaining 90% of the balance 65% of O.T.S. Amount as third tranche by 1st April, 2015 and (b) Interest from 1st July, 2012 to 30th September, 2012 on the entire outstanding amount and interest from 1st October, 2012 to the date of payment of first tranche on 35% of O.T.S. Amount alongwith the payment of first tranche and interest from 1st October, 2012 to the date of payment of first tranche on balance 65% of O.T.S. Amount by 31st October, 2013. The Company has made the payment of the first tranche of the O.T.S. Amount by 29th December, 2012 and the interest payable therewith by 31st December, 2012. In terms of the said O.T.S., the Company is not required to pay interest on the balance 65%of O.T.S. Amount from the dateofpaymentof first tranche. During the financial year under review, the Company did not raise fundsby wayof fixed deposits.

Current Operations and Outlook

The operations of the Company in the first Four Months ended 31st July, 2013 of the financial year 2013-14, came under severe pressure. During the said period, the capacity utilisation of the plant was 90%. The combined average realisation per ECU and the Sales Turnover in this period were Rs.32,860 and Rs.92.84 crores, respectively. The upward revision in the basic power tariff by about 13% w.e.f. 1st April, 2013 by the Punjab State Electricity Regulatory Commission (PSERC), having an overall annual impact to the tune of approx. Rs.14.00 crores per annum on the Company on 100% production basis, further adversely affected the operations during the said period. The Company has incurred a Net Loss (before tax)of Rs.9.67 croresinthe Four Months ended 31st July, 2013.

The Company is continuing its efforts to reduce its costs and increase its revenues. The major input cost i.e. Power cost constitutes about 60% of the total production cost. The Company endeavours to purchase a maximum portion of its power requirements at cheaper rates through Energy Exchanges under Open Access System. The Company also continues with the replacement of the Membranes in the Electrolysers of its Plant Unit-I and recoating of the Anodes and replacementofthe Membranesin the Electrolysersof its Plant Unit-IIinaphased manner, for reductioninpower consumption per unit of Caustic Soda Lye. The Company has signed a Memorandum of Understanding with M/s. SEL Ecochem Private Limited for setting up a Hydrogen Peroxide Plant on Build, Own and Operate (B.O.O.) basis in the Company''s Plant Complex for purchase of 30,000 NM3 Hydrogen Gas per day from the Company and supply of Saturated Steam to the Company for better realisation for Hydrogen Gas. Your Directors are hopeful of better performance inthe days to come.

Environment and Energy Conservation

The Company continues to accord high priority to carry out its operations in an environment-friendly fashion and has been taking appropriate pollution control and safety measures. The Company has achieved Zero Discharge of Effluents from its Plant by getting its effluents treated in a Reverse Osmosis based Effluent Treatment Plant set up by M/s. J.B.R. Technologies Private Limited on Build, Own and Operate (B.O.O.) basis in the Company''s Plant Complex. A Safety Audit of the Plant was got conducted during the financial year 2012-13 from the National Safety Council and its recommendations are being implemented.

The Company continues to place a great emphasis on energy conservation. The information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2013-14 has been paidtotheBombay Stock Exchange Limited.

HumanResources

Your Company continues to develop and upgrade the skills of its human resources. Industrial relations continued to be cordial. The management entered into a wage agreement with the workmen in September, 2012, valid from 1st January, 2012to31st December, 2014.

During the financial year ended 31st March, 2013, there was no employee of the Company whose particulars need to be included in this report under Section 217(2A) of the Companies Act, 1956.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2012-13 required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited is annexed herewith as Annexure-II forming a part of this report. The Corporate Governance Report for the financial year 2012-13 and Auditors'' Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri Karan Avtar Singh, IAS as Director and Chairman of the Company vice Shri A.R. Talwar, IAS w.e.f. 22nd January, 2013. The Directors place on record their appreciation of the valuable guidance provided by Shri A.R. Talwar, IAS.

The PSIDC had withdrawn the nomination of Shri Jivandeep Singh Kahlon, IRS as its Nominee Director on the Board of

Directors of the Company w.e.f. 26th July, 2013. Consequently, Shri Jivandeep Singh Kahlon, IRS ceased to be the

Managing Director of the Company w.e.f. 26th July, 2013. The Directors place on record their appreciation of the valuable services rendered by Shri Jivandeep Singh Kahlon, IRS, during his tenure with the Company.

The PSIDC nominated Shri S.S. Bains, IAS as its Nominee Director on the Board of Directors of the Company w.e.f. 5th

August, 2013. The Board of Directors of the Company appointed Shri S.S. Bains, IAS as the Managing Director of the Company w.e.f. 7th August, 2013. The Directors feel that the Company will benefit tremendously from his rich and varied experience.

Shri J.S. Saraon and Shri D.C. Mehandru retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

AuditCommittee

The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon as its Chairman.

Directors''ResponsibilityStatement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a ‘going concern'' basis.

Auditors

M/s. S.Tandon & Associates, Chartered Accountants andM/s. A.K. Sood & Associates, Chartered Accountants, Auditors of the Company retire on the conclusion of the ensuing Annual General Meeting and being eligible they have indicated their willingness to be re-appointed.

Cost Auditors

M/s. J.K. Kabra & Co., Cost Accountants were re-appointed as Cost Auditors of the Company for conducting a cost audit of the cost recordsofthe Companyinrespect ofthe financial year 2012-13.

Acknowledgements

Your Directors place on record their appreciation of the cooperation and support extended by the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company''s Bankers and esteemed customers.

Your Directors also acknowledge the valuable contribution made by the members of management team, staff and work- force .

For andonbehalf of the Board

Sd/-

Place : Chandigarh (KARAN AVTAR SINGH)

Date : August 13, 2013 Chairman


Mar 31, 2012

The Directors submit their 37th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2012.

Financial Results

Your Directors report that the Company has shown encouraging performance during the financial year ended 3111 March, 2012. The financial results of the Company for the financial year ended 31st March, 2012 are summarised below :-

(Rs. in crores)

2011-12 2010-11

Sales Turnover & Other Income 264.49 194.43

Total Expenditure excluding 234.39 196.58

Finance Costs and Depreciation, etc.

Finance Costs 10.76 9.64

Cash Profit / (Loss) 19.34 (11.79)

Depreciation, etc. 12.80 12.49

Net Profit / (Loss) before tax 6.54 (24.28)

Provision for taxation 2.15 -

Net Profit / (Loss) after tax 4.39 (24.28)

Members would be happy to note that your Company has posted a Net Profit (before tax) of Rs.6.54 crores in the financial year 2011-12 as against preceding financial year's Net Loss (before tax) of Rs.24.28 crores, due to increase in the combined average realisation from Rs.25,600 per Electro-Chemical Unit (ECU) during the financial year 2010-11 to Rs.30,950 per ECU in the financial year 2011-12, better capacity utilisation and savings of about Rs.11.00 crores on account of procurement of part of power requirements at cheaper rates under Open Access System. The Turnover of your Company during the financial year under review at Rs.264,49 crores was higher by 36% as compared to Rs.194.43 crores in the preceding financial year. The Company earned a Cash Profit of Rs.19.34 crores in the financial year 2011-12 as against a Cash Loss of Rs.11.79 crores during the preceding financial year. During the financial year under review, the Net Profit (after tax) was Rs.4.39 crores as compared to Net Loss (after tax) of Rs,24,28 crores in the financial year 2010-11.

Your Directors believe that the results would have been better but for increase in cost of raw materials and cost of power supplied by the Punjab State Power Corporation Limited,

In view of the accumulated losses of the Company, the Directors express their inability to recommend any dividend for the financial year 2011-12.

Finance and Corporate Debt Restructuring

The Corporate Debt Restructuring (CDR) Empowered Group had, in September, 2011, acceded to the request of the Company for further deferment of repayment of principal long term dues and Funded Interest Term Loans of the Financial Institutions and Banks, falling due between 1s" April, 2011 and 111 January, 2012, so as to be repayable from 1st April, 2012 without changing the terminal date, with a marginal increase in the rate of interest. The CDR Empowered Group had, in June, 2012, approved the further deferment of repayment of principal long term dues and Funded Interest Term Loans falling due on 1st April, 2012 by one Quarter, with a marginal increase in the rate of interest. The Company has submitted a proposal to the Financial Institutions and Banks for making a One Time Settlement (OTS) in respect of the dues of the Company towards them.

During the financial year under review, the Company did not raise funds by way of fixed deposits.

Current Operations and Outlook

Your Company has done well in the first Four Months ended 31st July, 2012 of the financial year 2012-13. The average capacity utilisation of the Plant during the said period was 95% as compared to 80% in the corresponding period of the preceding financial year. The combined average realisation in this period increased to Rs.35,950 per ECU - an increase of Rs.5,650 per ECU over the combined average realisation of Rs.30,300 per ECU during the corresponding period in the financial year 2011-12. The Net Profit (before tax) has been Rs,4.37 crores on a Sales Turnover of Rs.107.77 crores against a Net Profit (before tax) of Rs.4.75 crores on a Sales Turnover of Rs.73.27 crores in the corresponding period of the preceding financial year. The results would have been still better but for the exorbitant hike in Power Wheeling Charges of the Punjab State Power Corporation Limited (PSPCL) w.e.f. 1s' April, 2012, which restrained the Company from purchasing power under Open Access System to a great extent and the upward revision in the power tariff of PSPCL w.e.f. 1st April, 2012,

The Company's endeavor to reduce costs continued. The major cost is on account of Power, which accounts tor about 60% of the cost of production. The Company is replacing the Membranes and getting the Anodes recoated in Electrolysers of its Plant Unit-ll in a phased manner, at a cost of about Rs.9.50 crores. These will result in reduction in power consumption per unit of Caustic Soda Lye and also lead to increase in capacity utilisation. The Company has signed a Memorandum of Understanding (M.O.U.) with M/s. Purab Infrastructure Projects Limited for setting up 45 MW Power Plants on Build, Own and Operate (B.O.O.) basis in the Company's Plant Complex for supply of 35 MW power to the Company. This will result in saving in power cost, after the same commences operations.

The Company has signed a M.O.U, with M/s. Flow Tech Chemicals Pvt. Limited for setting up a Chlorinated Paraffin Wax (CPW) Plant on B.O.O. basis in the Company's Plant Complex. As a result of this arrangement, the Company expects to increase its capacity utilisation and to reduce its requirement for additional Chlorine Tonners.

The Company is in the process of making arrangements with another Party for setting up a Hydrogen Per-oxide Plant on B.O.O. basis in the Company's Works Complex.

With these measures, your Directors are optimistic about improved performance in the days to come. Environment and Energy Conservation

The Company's endeavor has always been to run its operations in an environment-friendly manner. The Company is fully committed to take all possible measures towards maintaining safety and good house keeping in its Plants, The Company had got a Reverse Osmosis based Effluent Treatment Plant set up on B.O.O. basis in the Company's Plant Complex by M/s. J.B.R. Technologies Private Limited for treatment of effluents of the Company for achieving Zero Discharge of Effluents from its Plant.

The Company strives to make its Plant energy efficient. The information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited, The Annual listing fee for the year 2012-13 has been paid to the Bombay Stock Exchange Limited.

Human Resources

The Company continues to place great value on its human resources. The process of training and development of human resources continued. The industrial relations remained cordial during the financial year under review.

During the financial year ended 31st March, 2012, there was no employee of the Company whose particulars need to be included in this report under Section 217(2A) of the Companies Act, 1956.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2011-12 required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited is annexed herewith as Annexure - II forming a part of this report. The Corporate Governance Report for the financial year 2011-12 and Auditors' Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri A.R. Talwar, IAS as Director and Chairman of the Company vice Dr. S,S, Channy, IAS w.e.f. 12th April, 2012. The Directors place on record their appreciation of the valuable guidance provided by Dr. S.S. Channy, IAS.

The PSIDC nominated Shri Jivandeep Singh Kahion, IRS as its Nominee Director on the Board of Directors of the Company in place of Shri S.S. Bains, IAS w.e.f. 23d July, 2012. Consequently, Shri S.S. Bains, IAS ceased to be the Managing Director of the Company w.e.f. 23,rd July, 2012. The Directors place on record their appreciation of the valuable services rendered by Shri S.S. Bains, IAS, during his tenure with the Company. The Board of Directors of the Company appointed Shri Jivandeep Singh Kahion, IRS as the Managing Director of the Company w.e.f. 21st July, 2012. The Directors feel that the Company will benefit tremendously from his rich experience.

The IFCI Limited has nominated Shri Gautam Meour as its Nominee on the Board of Directors of the Company in place of Shri OP. Yadav and had advised the Company to co-opt him on the Board of Directors. Shri O.P. Yadav resigned as a Director ot the Company w.e.f. 13th February, 2012 Accordingly, the Board has appointed Shri Gautam Meour as Additional Director of the Company on 13!h February, 2012. Shri Gautam Meour holds office till the date of the ensuing Annual General Meeting. Notices in writing have been received from some members under Section 257 of the Companies Act, 1956, signifying their intention to propose at the ensuing Annual General Meeting the appointment of Shri Gautam Meour as Di'rector of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation. The Directors place on record their appreciation of the valuable contribution made by Shri O.P. Yadav.

Dr. A. K Kundra, IAS (Retd.) and Shri J.S. Mann retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Audit Committee

The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon as its Chairman.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

(lii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a 'going concern' basis.

Auditors

M/s, S, Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, Auditors of the Company retire on the conclusion of the ensuing Annual General Meeting and being eligible they have indicated their willingness to be re-appointed.

Cost Auditors

M/s. J.K. Kabra & Co., Cost Accountants were re-appointed as Cost Auditors of the Company for conducting a cost audit of the cost records of the Company in respect of the financial year 2011-12,

Acknowledgements

The Directors wish to thank the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company's Bankers and Business Constituents for their continued cooperation and support to the Company.

The Directors also wish to express their appreciation of the valuable services rendered by the employees of the Company at all levels.

For and on behalf of the Board

Sd/- Place: Chandigarh (A.R.TALWAR)

Date : August 13, 2012 Chairman


Mar 31, 2011

Dear Members,

The Directors submit their 36th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2011.

Financial Results

The financial results of the Company for the financial year ended 31st March, 2011 are summarised below :-

(Rs. in crores) 2010-11 2009-10 Sales Turnover & Other Income 194.43 169.02

Total Expenditure excluding 196.58 173.97 Finance Charges and Depreciation

Finance Charges 9.64 8.08

Cash Loss 11.79 13.04

Depreciation, etc. 12.49 11.94

Net Loss before tax 24.28 24.98

Provision for taxation - (2.56)

Net Loss after tax 24.28 22.41

Your Directors report that the Company's operations continued to be under intense pressure during the financial year 2010-11 owing to uncontrollable factors of excess capacity and surplus supply position in the Chlor-Alkali Industry and escalating production costs. Although, the combined average realisation per Electro-Chemical Unit (ECU) increased from Rs.23,600 in the financial year 2009-10 to Rs.25,600 during the financial year under review and the Company achieved a saving of about Rs.3.95 crores during December, 2010 to March, 2011 on account of purchase of power at cheaper rates through Indian Energy Exchange (IEX) under Open Access System, the technical disruptions in the Plant operations coupled with the high input costs, aggravated by the escalation in the basic power tariff by 5.77% w.e.f. 1st April, 2010 by the Punjab State Electricity Regulatory Commission (PSERC), discontinuation of H.T. rebate by the PSERC and increase in the rate of electricity duty from 10% to 13% w.e.f. 1st April, 2010 by the Government of Punjab, the burden of all of which could not be absorbed by the market, led to a Net Loss (after tax) of Rs.24.28 crores on a Turnover of Rs.194.43 crores in the financial year under review.

In view of the Loss incurred by the Company, the Directors regret their inability to recommend any dividend for the financial year 2010-11.

Finance and Corporate Debt Restructuring

The liquidity remained tight during the financial year under review.

The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had in June, 2010, approved modification in the Rework Proposal of the CDR approved Revised Restructuring Package for the Company for further deferment of repayment of outstanding principal long term dues of the Financial Institutions and Banks (two Quarters deferment), which shall be repayable within the CDR approved terminal date and funding of 90% of interest fallen/falling due on 1st April, 2010 and 1st July, 2010, with a marginal increase in the rate of interest. The CDR Empowered Group of CDR Cell had in December, 2010, approved the funding of 90% of interest which had fallen due on 1st October, 2010 and 1st January, 2011 with a marginal increase in the rate of interest.

During the financial year under review, the Company did not raise funds by way of fixed deposits.

Current Operations and Outlook

The performance of the Company in the first Four Months ended 31st July, 2011 of the current financial year 2011-12 has been encouraging with the combined average realisation going up from Rs.25,600 per ECU in the financial year 2010-11 to Rs.30,300 per ECU during the said Four Months Period, savings to the tune of about Rs.5.75 crores due to purchase of power at cheaper rates through Indian Energy Exchange (IEX) under Open Access System and the release of an amount of about Rs.2.46 crores by the Punjab State Power Corporation Limited on account of the disallowed H.T. rebate in respect of the financial year 2010-11. As a result of these favourable developments, the Company has achieved a Cash Profit of Rs.8.90 crores and a Net Profit of Rs.4.75 crores in the said Four Months Period ended 31st July, 2011 as against a Cash Loss of Rs.3.70 crores and a Net Loss of Rs.7.92 crores during the Four Months Period ended 31st July, 2010 and a Cash Loss of Rs.11.79 crores and a Net Loss (after tax) of Rs.24.28 crores in the preceding financial year 2010-11. The performance would have been still better but for the hike in power tariff w.e.f. 1st April, 2011 by the Punjab State Electricity Regulatory Commission and increase in the Open Access Charges w.e.f. 1st July, 2011 by the Punjab State Power Corporation Limited.

The Company is making continuous efforts to reduce costs. The major input cost i.e. Power cost constitutes about 60% of the total production cost. The Company endeavours to purchase a maximum portion of its power requirements at cheaper rates through Indian Energy Exchange (IEX) under Open Access System

Your Directors are hopeful of better performance in the financial year 2011-12.

Environment and Energy Conservation

The Company continues to accord high priority to carry out its operations in an environment-friendly fashion and has been taking appropriate pollution control and safety measures. The Company has In March, 2011, awarded the work of setting up a Reverse Osmosis based Effluent Treatment Plant on Build, Own and Operate (BOO) Basis in the Company's Plant Complex to M/s. J.B.R. Technologies Private Limited for enabling the Company to achieve Zero Discharge of Effluents from its Plant.

The Company continues to place a great emphasis on energy conservation. The Company has been getting an Energy Audit of Its Plants conducted at regular intervals. The Information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2011-12 has been paid to the Bombay Stock Exchange Limited.

Human Resources

Your Company continues to develop and upgrade the skills of its human resources, industrial relations continued to be cordial.

During the financial year ended 31st March, 2011, there was no employee of the Company whose particulars need to be included in this report under Section 217(2A) of the Companies Act, 1956.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2010-11 required In terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited Is annexed herewith as Annexure - II forming a part of this report. The Corporate Governance Report for the financial year 2010-11 and Auditors' Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri Yogesh Goel as its Nominee Director on the Board of Directors of the Company in place of Shri Anurag Agarwal, IAS w.e.f. 16th August, 2010.

The PSIDC nominated Shri S.S. Bains, IAS as its Nominee Director on the Board of Directors of the Company In place of Shri Ajay Kumar Mahajan w.e.f. 29th November, 2010. Consequently, Shri Ajay Kumar Mahajan ceased to be the Managing Director of the Company w.e.f. 29th November, 2010. The Board of Directors of the Company appointed Shri S.S. Bains, IAS as the Managing Director of the Company w.e.f. 30th November, 2010. The Directors feel that the Company will benefit tremendously from his rich and varied experience.

IDBI Bank Limited has withdrawn the nomination of Shri Rajlnder Kumar as Its Nominee Director and nominated Shri Ravi Kumar as a Director of the Company w.e.f. 10th August, 2011.

The Directors place on record their appreciation of the valuable contribution made by Shri Anurag Agarwal, IAS, Shri Ajay Kumar Mahajan and Shri Rajlnder Kumar.

Shri J.S. Saraon and Shri D.C. Mehandru retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appolntment.

Audit Committee

The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon as Its Chairman.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made Judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the Toss of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records In accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other Irregularities; (Iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

Auditors

M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, Auditors of the Company retire on the conclusion of the ensuing Annual General Meeting and being eligible they have Indicated their willingness to be re-appointed.

Acknowledgements

Your Directors place on record their appreciation of the cooperation and support extended by the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company's Bankers and esteemed customers.

Your Directors also acknowledge the valuable contribution made by the members of management team, staff and work-force.

For and on behalf of the Board

Sd/- (DR. S.S. CHANNY) Chairman

Place Chandigarh Date August 12, 2011


Mar 31, 2010

The Directors submit their 35th Annual Report together with the Audited Accounts for the financial year ended 31st March, 2010.

Financial Results

The financial results of the Company for the financial year ended 31st March, 2010 are summarised below :-

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

Sales Turnover & Other Income 169.02 233.78

Total Expenditure excluding 173.97 198.92

Finance Charges and Depreciation

Finance Charges 8.08 9.78

Cash Profit / (Loss) (13.04) 25.08

Depreciation, etc. 11.94 11.87

Net Profit / (Loss) before tax (24.98) 13.21

Provision for taxation (2.56) 6.09

Net Profit / (Loss) after tax (22.41) 7.12



Your Directors report that the fiscal year 2009-10 has been a tough year as the Companys operations came under tremendous pressure due to factors over which the Company had virtually no control. The imbalance in demand and supply in the Chlor-Alkali Industry due to excess capacity and cheaper imports, adversely affected the operations of the Company. This kept the combined realisation of Caustic Soda and related products under strain during the financial year under review. The combined average realisation went down from Rs.29,000 per Electro-Chemical Unit (ECU) in the financial year 2008-09 to Rs.23,600 per ECU during the financial year 2009-

10. Lesser production - because of the power restrictions imposed by the Punjab State Electricity Board (PSEB) during the period June - October, 2009 and technical disruptions in the Plant operations, coupled with escalation in the cost of power by 5.79%, further aggravated the situation. These factors, inter-alia, combined to cause a Cash Loss of Rs.13.04 Crores and a Net Loss (after tax) of Rs.22.41 Crores on a Turnover of Rs.169.02

. Crores in the financial year under review. In view of the Loss incurred by the Company, the Directors regret their inability to recommend any dividend for the financial year 2009-10.

Finance and Corporate Debt Restructuring

The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had approved a Rework Package of the CDR approved Revised Restructuring Package for the Company, in May and June, 2009, for deferment of repayment of principal long term dues of the Financial Institutions and Banks for enabling the Company to meet the ftind requirements for the essential capital and other expenditure in the Plant of the Company. The CDR Empowered Group has further modified the said Revised Restructuring Package in June and July, 2010, for further deferment of repayment of outstanding principal long term dues of the Financial Institutions and Banks (two Quarters deferment), which shall be repayable within the CDR approved terminal date and funding of 90% of interest which had fallen due on 1" April, 2010 and 1" July, 2010, with a marginal increase in the rate of interest. During the financial year under review, despite the Rework Package approved by the CDR Empowered Group of CDR Cell, the liquidity remained under strain due to the Net Loss (after tax) of Rs.22.41 Crores in the said financial year.

During the financial year under review, the Company did not raise funds by way of fixed deposits.

Current Operations and Outlook The operations of the Company during the first Four Months ended 31" July, 2010 of the financial year 2010-

11, continued to reel under the pressure of the preceding years conditions. During the said period the capacity utilisation of the plant was 77.70%. The combined average realisation in this period was Rs.25,300 per ECU as against Rs.25,600 per ECU during the corresponding period in the financial year 2009-10. The upward revision in the basic power tariff by 5.77% w.e.f. 1" April, 2010 by the Punjab State Electricity Regulatory Commission (PSERC), discontinuation of H.T. rebate by the PSERC and increase in the rate of electricity duty from 10% to 13% w.e.f. i" April, 2010 by the Government of Punjab, with these increases having an aggregate overall annual impact to the tune of approx. Rs. 15 crores per annum on the Company on 100% production basis, further adversely affected the operations in the said period. The Company has incurred a Cash Loss of Rs.3.70 Crores and a Net Loss of Rs.7.92 crores during the Four Months ended 31" July, 2010.

The Companys endeavor to reduce costs continued. The major cost is on account of Power, which accounts for about 60% of the cost of production. In this regard, the Company is exploring the possibility of purchase of cheaper Power on Energy Exchanges in India.The Company has replaced the Membranes in two Electrolysers . of its Plant Unit-I and one Electrolyser of its Plant Unit-It and got the Anodes and Cathodes recoated in one Electrolyser of its Plant Unit-I I, at a cost of about Rs.4.13 Crores. The Company is also getting the Anodes and Cathodes recoated in one Electrolyser of its Plant Unit-ll at a cost of about Rs.1.36 Crores. These will result in reduction in power consumption per unit of Caustic Soda Lye and increase in capacity utilisation.

The Chlor-Alkali Industry is passing through a crucial phase and the Companys performance in the current year will depend upon the actual market scenario. Your Directors are optimistic of improvement in the performance of the Company in the days to come.

Environment and Energy Conservation

The Companys endeavor has always been to run its operations in an environment-friendly manner. The Company is fully committed to take all possible measures towards maintaining safety and good house keeping in itsPlants. • A Safety Audit of the Plant was got conducted during the financial year 2009-10 from the National Safety Council and its recommendations are being implemented. An Environmental Audit of the Plant was also got conducted during the financial year 2009-10 from M/s. Mantec Consultants Private Limited and their recommendations are being implemented. The Punjab Pollution Control Board has directed many industrial units in Punjab including the Company to implement Zero Discharge of Effluents and the Company has initiated necessary steps in this regard.

The Company strives to make its Plant energy efficient. The Company has, in December, 2009, been awarded a Trophy, a Certificate of Merit and an Award of Rs. 1.00 lac by the Punjab Energy Development Agency for securing the First Position in the category of Energy Intensive Industries in the State Level Energy Conservation Award Competition, for the Companys efforts in the field of Energy Conservation during the year 2008. The information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is given in Annexure-I forming a part of this report.

Listing

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2010-11 has been paid to the Bombay Stock Exchange Limited.

Human Resources

The Company continues to place great value on its human resources. The process of training and development of human resources continued.

The industrial relations remained cordial during the financial year under review.

During the financial year ended 31" March, 2010, there was no employee of the Company whose particulars need to be included in this report under Section 217(2A) of the Companies Act, 1956.

Corporate Governance

The Management Discussion and Analysis Report for the financial year 2009-10 required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited is annexed herewith as Annexure - II forming a part of this report. The Corporate Governance Report for the financial year 2009-10 and Auditors Certificate regarding compliance of conditions of Corporate Governance, required in terms of Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited are also annexed.

Directors

The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Shri S.S. Rajput, IAS as its Nominee Director on the Board of Directors of the Company in place of Shri Karan Avtar Singh, IAS w.e.f. 21" August, 2009 and thereafter Shri Anurag Agarwal, IAS as its Nominee Director on the Board of Directors of the Company in place of Shri S.S. Rajput, IAS w.e.f. 8m March, 2010.

The IFCI Limited has nominated Shri O.P. Yadav as its Nominee on the Board of Directors of the Company in place of Shri Rattan Singh and had advised the Company to co-opt him on the Board of Directors. Shri Rattan Singh resigned as a Director of the Company w.e.f. 26* September, 2009. Accordingly, the Board has appointed Shri O.P. Yadav as Additional Director of the Company on 26" September, 2009. Shri O.P. Yadav holds office till the date of the ensuing Annual General Meeting. Notices in writing have been received from some members under Section 257 of the Companies Act, 1956, signifying their intention to propose at the ensuing Annual General Meeting the appointment of Shri O.P. Yadav as Director of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation.

The Board has appointed Shri Jagtar Singh Mann as Additional Director of the Company on 12th August, 2010. Shri Jagtar Singh Mann holds office till the.date of the ensuing Annual General Meeting. Notices in writing have been received from some members under Section 257 of the Companies Act, 1956, signifying their intention to propose at the ensuing Annual General Meeting the appointment of Shri Jagtar Singh Mann as Director

of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation. Dr. A.K. Kundra, IAS (Retd.) and Shri S.K. Sharma retire by rotation at the ensuing Annual General Meeting. Dr. A.K. Kundra being eligible offers himself for re-appointment. Shri S.K. Sharma has indicated his unwillingness to offer himself for re-appointment in view of his other pre-occupations. The Directors place on record their appreciation of the valuable contribution made by Shri Karan Avtar Singh, IAS, Shri S.S. Rajput, IAS, Shri Rattan Singh and Shri S.K. Sharma.

Audit Committee

The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri DC. Mehandru, Shri S.K. Sharma and Shri Rajinder Kumar with Shri J.S. Saraon as its Chairman.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31 * March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the annual accounts for the financial year ended 31" March.

2010 on a going concern basis. Auditors

M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, Auditors of the Company retire on the conclusion of the ensuing Annual General Meeting and being eligible they have indicated their willingness to be re-appointed.

Acknowledgements

The Directors wish to thank the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, erstwhile Punjab State Electricity Board, Punjab State Power Corporation Limited, Companys Bankers and Business Constituents for their continued cooperation and support to the Company.

The Directors also-wish to express their appreciation of the valuable services rendered by the employees of the Company at all levels.

For and on behalf of the Board

Sd/- (DR. S.S. CHANNY) Chairman

Place: Chandigarh Date : August 12, 2010

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