Home  »  Company  »  Punj. Alkalie  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Punjab Alkalies & Chemicals Ltd.

Mar 31, 2015

1. The Term Loans from Punjab National Bank (PNB), Punjab & Sind Bank (PSB), IDBI, IFCI and LIC (except for term loan of Rs.116.65 lacs from PSB, which is secured as per Note No. 4.2 below) and Non-Convertible Debentures are/will be secured by way of mortgage (by way of first charge) of all the immovable properties both present and future and first charge by way of hypothecation of all the movables (save and except book debts) including movable machinery, spares, tools, accessories present and future, subject to prior charges created or to be created in favor of the bankers on stocks etc. for working capital. The above charges will rank pari passu with each other.

2. The Term Loan of Rs.116.65 lacs from PSB is/will be secured by way of mortgage (by way of fourth charge) of all the immovable properties both present and future and fourth charge by way of hypothecation of all the moveable's (save and except current assets).

3. 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 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 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 30,h 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 30,h 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 along with 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 31s' October, 2013. No interest is chargeable on the balance 65% of O.T.S. Amount from the date of payment of first tranche. The CDR Empowered Group has also stipulated some other terms and conditions in respect of the said O.T.S. Accordingly, the Company has made the payment of the first tranche of the O.T.S. Amount by 29,h December, 2012 and the interest payable therewith by 31st December, 2012.

4. The Company has accounted for interest as per the modifications approved by CDR Empowered Group in June, 2012 in the Revised Restructuring Package @ 13.0% p.a. from 1st April, 2012 to 30,h June, 2012 and @ 13.25% p.a. from 1st July, 2012 in case of IDBI Bank Limited, @ 13.0% p.a. from 1st April, 2012 to 30,h September, 2012 and @ 13.25% p.a. from 1st October, 2012 in case of IFCI Limited and Life Insurance Corporation of India, @ 12.5% p.a. from 1st April, 2012 in case of Punjab National Bank and @ 10.75% p.a. from 1st April, 2012 in case of Punjab & Sind Bank and as per the said O.T.S. Accordingly, the Company has not accounted for interest on the balance 65% of O.T.S. Amount from the date of payment of first tranche i.e. 29th December, 2012.

5. As per the terms of the O.T.S., the Company is required to create a Reserve of 40% of the outstanding O.T.S. Amount by 30,h September, 2014 with a grace period of 2 months failing which lenders shall charge interest at the rate of interest existing prior to the O.T.S. retrospectively with effect from the cutoff date.

6. The final installment of OTS amount under the OTS scheme had fallen due on 1st April, 2015. The Company informed the IDBI Bank Limited, the lead bank, that the Board of Directors of PSIDC, the promoters had approved the conversion of entire balance debt of Rs.4286 lacs into equity shares at a share price as per SEBI formula applicable on the date of pricing/accepting the proposal on certain terms and conditions. The matter was also discussed in the Joint Lenders Meeting held on 13,h April, 2015. The lenders agreed to take up the proposal with their respective sanctioning authorities. The Company is optimistic of a favorable decision in the matter.

7. The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognized immediately in the Profit & Loss Statement as income or expense.

8. Cash Credit from the banks is secured by way of hypothecation (by way of first charge) of raw materials, stocks in process, finished goods, stores and spares and book debts of the Company wherever situated and is/ will be secured by way of mortgage (by way of second charge) on all the immovable properties both present and future.

9. The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognized immediately in the Profit & Loss Statement as income or expense.

10. Depreciation for the year 2014-15 includes Rs.328.46 lacs (Previous year Rs.390.94 lacs) as depreciation arising on revaluation of Fixed Assets, which has been adjusted against Revaluation Reserve and has not been charged to the Profit and Loss Statement.

11. Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalized as and when procured. Direct costs are capitalized till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

12.The Company has revised depreciation rates on Fixed Assets as per the useful life specified in Part 'C of Schedule II of the Companies Act, 2013. The carrying amount of assets, where the remaining useful life is nil as at 1st April, 2014, has been recognized in the opening balance of profit & loss statement. The carrying amount of assets amounting to Rs.17.96 lacs , where the remaining useful life is nil as at 1 st April, 2014, has been recognized in the opening balance of profit & loss account. Fixed Assets individually costing up to Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

10.4 The Company had revalued its Fixed Assets (other than the100 TPD Membrane Cell Plant Power Line) as on 31st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27th October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs.6243.16 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

10.5 The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29th October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs.27.78 lacs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve.

10.6 The Company had revalued its Fixed Assets as on 31st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29th January, 2010 and the revalued figures were incorporated in the accounts in the financial year 2009-10. Accordingly a sum of Rs.4819.99 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

18.1 The final adjustment of (a) expenses on common facilities with Punjab National Fertilizers & Chemicals Limited (under liquidation) for Railway Siding, Hostel Building, Power Link Line, Land, Tube well, Staff Housing Colony and Storm Water Drain etc., and (b) other expenses aggregating to Rs.411.55 lacs incurred on behalf of Punjab National Fertilizers & Chemicals Limited shall be made as per the settlement by the Official Liquidator of Punjab National Fertilizers & Chemicals Limited. However, an amount of Rs.30.22 lacs (previous year Rs.34.81 lacs) has been provided as doubtful debt during the current year.

Note No.29. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs.169.47 lacs. Interest on delayed payments amounting to Rs.75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer imposing penal interest. In the meanwhile the Company has paid Rs.75.98 lacs towards penal interest under protest.

Note No.30. House Tax amounting to Rs. Nil lacs (Previous year Rs.20 lacs) has been deposited during the year under protest with Municipal Council, Nangal. The total amount of house tax on Company's industrial building and residential units in housing colony deposited under protest is Rs. 168.85 lacs in respect of the years 1987-88 to 2012-13 and the legal cases in respect thereof are pending before Appellate/ Revision Authorities and High Court.

Note No.31. Debit & Credit balances of parties are subject to their confirmation.

NoteNo.32. Legal action had been instituted against customers from whom a total sum of Rs.613.19 lacs (Previous year Rs.617.19 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs.80.31 lacs (Previous year Rs.80.31 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

Note No.35. A total of 2613 and 53 Chlorine Cylinders of 900 Kg. and 100 Kg. each respectively, were in circulation with various customers as returnable empties, as on 31.3.2015. NoteNo.36. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paid or is payable under the terms of the MSMED Act, 2006. Note No. 37. The Company operates in a single business segment viz. chemicals. Hence segment reporting under AS-17 is not applicable. Note No. 38. a) The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary.

b) The figures have been rounded off to the nearest Rs. Lacs.

vi) PARTICULARS OF PAYMENT MADE TO OR ON BEHALF OF THE DIRECTORS : Nil

vii) EXPENDITURE IN FOREIGN CURRENCY: Nil

viii) REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND: Nil

ix) EARNING IN FOREIGN CURRENCY: Nil


Mar 31, 2014

1.1 The Term Loans from Punjab National Bank (PNB), Punjab & Sind Bank (PSB), IDBI, IFCI and LIC (except for term loan of Rs. 116.65 lacs from PSB, which is secured as per Note No. 4.2 below) and Non-Convertible Debentures are/will be secured by way of mortgage (by way of first charge) of all the immovable properties both present and future and first charge by way of hypothecation of all the movables (save and except book debts) including movable machinery, spares, tools, accessories present and future, subject to prior charges created or to be created in favour of the bankers on stocks etc. for working capital. The above charges will rank pari passu with each other.

1.2 The Term Loan of Rs.116.65 lacs from PSB is/will be secured by way of mortgage (by way of fourth charge) of all the immovable properties both present and future and fourth charge by way of hypothecation of all the moveables (save and except current assets).

1.3 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 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. No interest is chargeable on the balance 65% of O.T.S. Amount from the date of payment of first tranche. The CDR Empowered Group has also stipulated some other terms and conditions in respect of the said O.T.S. Accordingly, 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.

1.4 The Company has accounted for interest as per the modifications approved by CDR Empowered Group in June, 2012 in the Revised Restructuring Package @ 13.0% p.a. from 1st April, 2012 to 30th June, 2012 and @ 13.25% p.a. from 1st July, 2012 in case of IDBI Bank Limited, @13.0% p.a. from 1st April, 2012 to 30th September, 2012 and @ 13.25% p.a. from 1st October, 2012 in case of IFCI Limited and Life Insurance Corporation of India, @ 12.5% p.a. from 1st April, 2012 in case of Punjab National Bank and @ 10.75% p.a. from 1st April, 2012 in case of Punjab & Sind Bank and as per the said O.T.S. Accordingly, the Company has not accounted for interest on the balance 65% of O.T.S. Amount from the date of payment of first tranche i.e. 29th December, 2012.

1.5 As per the terms of the O.T.S., the Company is required to create a Reserve of 40% of the outstanding O.T.S. Amount by 30th September, 2014 with a grace period of 2 months failing which lenders shall charge interest at the rate of interest existing prior to the O.T.S. retrospectively with effect from the cut off date.

2.1 The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC''s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the Profit & Loss Statement as income or expense.

3.1 Cash Credit from the banks is secured by way of hypothecation (by way of first charge) of raw materials, stocks in process, finished goods, stores and spares and book debts of the Company wherever situated and is/ will be secured by way of mortgage (by way of second charge) on all the immovable properties both present and future.

4.1 The Company''s liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC''s actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the Profit&Loss Statement as income or expense.

5.1 Depreciation for the year 2013-14 includes Rs.390.94 lacs (Previous year Rs.396.25 lacs) as depreciation arising on revaluation of Fixed Assets, which has been adjusted against Revaluation Reserve and has not been charged to the Profit and Loss Statement.

5.2 Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit (including capital profit) or loss, if any, is reflected in Profit and Loss Statement.

5.3 Depreciation on Fixed Assets has been provided in the accounts on ''Straight Line Method'' as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs.5,000/- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

5.4 The Company had revalued its Fixed Assets (other than the100 TPD Membrane Cell Plant Power Line) as on 31st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27th October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs.6243.16 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

5.5 The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29th October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs.27.78 lacs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve.

5.6 The Company had revalued its Fixed Assets as on 31st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29th January, 2010 and the revalued figures were incorporated in the accounts in the financial year 2009-10. Accordingly a sum of Rs.4819.99 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

6.1 In view of the loss during the financial year 2013-14, the Company has not recognized the Deferred Tax Assets in respect of the loss during the financial year 2013-14.

7.1 The cost of membranes is being amortised over a period of three years. The cost of recoating of pans of electrolysers is being amortised over a period of eight years.

8.1 The final adjustment of (a) expenses on common facilities with Punjab National Fertilizers & Chemicals Limited (under liquidation) for Railway Siding, Hostel Building, Power Link Line, Land, Tube well, Staff Housing Colony and Storm Water Drain etc., and (b) other expenses aggregating to Rs. 381.33 lacs incurred on behalf of Punjab National Fertilizers & Chemicals Limited shall be made as per the settlement by the Official Liquidator of Punjab National Fertilizers & Chemicals Limited. However, an amount of Rs. 34.81 lacs (previous year Rs. 27.97 lacs) has been provided as doubtful debt during the currentyear.

Note No. 2

CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in Lacs) Particulars Asat Asat 31.3.2014 31.3.2013 a) Letters of Credit Outstanding - US $ 209772.95 - (Rs.113.80)

b) Bank Guarantees given by Company 274.07 126.70

c) Excise/Service Tax Demand/claims under appeal (Including Rs. 74.65lacs deposited under protest) 339.13 183.48

d) Interest/Differential Interest (As per OTS approved by CDR EG)

790.50 165.21 e) House Tax on Industrial Building for the period 1.10.2010 to31.3.2013 for which the Company''s Appeal is pending before theAppel late Authority after payment of a sum of Rs.20 lacs pursuant tothe Order dated 14.03.2014 of the Punjab &Haryana High Court in the Civil Writ Petition filed by the Company. 99.84 99.84

f) Estimated amounts of contracts remaining to be executed on capitalaccount andnot provided for 103.59 604.92

Note No.3. The Rights Offers in respect of 2350 Equity Shares continue to be in abeyance pursuant to Section 206A (b) of the Companies Act, 1956. A sum of Rs.4,500/- had been received as Application Money for 100 Equity Shares out of the same.

NoteNo.4. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs.169.47 lacs. Interest on delayed payments amounting to Rs. 75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer imposing penal interest. In the meanwhile the Company has paid Rs. 75.98 lacs towards penal interest under protest.

Note No.5. House Tax amounting to Rs. 20 lacs (Previous year Rs. 4.51 lacs) has been deposited during the year under protest with Municipal Council, Nangal. The total amount of house tax on Company''s industrial building and residential units in housing colony deposited under protest is Rs. 168.85 lacs in respect of the years 1987-88 to 2012-13 and the legal cases in respect thereof are pending before Appellate/ Revision Authorities and High Court.

Note No. 6. Debit & Credit balances of parties are subject to their confirmation.

Note No. 7. Legal action had been instituted against customers from whom a total sum of Rs. 617.19 lacs (Previous year Rs. 658.93 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs. 80.31 lacs (Previous year Rs. 89.23 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

Note No 8. Related Party Disclosures:

a) Names of related Parties and description of relationships, having transactions during the year

1) Significant Interest Entities:

The Punjab State Industrial Development Corporation Limited holds 90,90,000 Equity Shares of the Company, which constitutes 44.26% of the Subscribed Capital.

2) Key Managerial Personnel

- Shri S.S. Bains, IAS, Managing Director (w.e.f. 7th August 2013) - Shri Jivandeep Singh Kahlon, IRS, Managing Director (till 26th July,2013)

Note No.9. A total of 3069 and 52 Chlorine Cylinders of 900 Kg. and 100 Kg. each respectively, were in circulation with various customers as returnable empties, as on 31.3.2014.

Note No.10. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paid or is payable under the terms of the MSMED Act, 2006.

Note No. 11. The Company operates in a single business segment viz. chemicals. Hence segment reporting under AS-17 is not applicable.

Note No. 12. a) The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary.

b) The figures have been rounded off to the nearest Rs. Lacs.


Mar 31, 2013

Note No.1. The Rights Offers in respect of 2350 Equity Shares continue to be in abeyance pursuant to Section 206A (b) of the Companies Act, 1956. A sum of Rs.4,500/- had been received as Application Money for 100 Equity Shares outofthesame.

Note No.2. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs.169.47 lacs. Interest on delayed payments amounting to Rs. 75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer imposing penal interest. In the meanwhile the Company has paid Rs. 75.98 lacs towards penal interest under protest.

Note No. 3. House Tax amounting to Rs. 4.51 lacs (Previous year Rs. 4.35 lacs) has been deposited during the year under protest with Municipal Council, Nangal. The total amount of house tax on Company''s industrial building and residential units in housing colony deposited under protest is Rs. 148.85 lacs in respect of the years 1987-88 to 2012-13 and the legal cases in respect thereof are pending before Appellate/ Revision Authorities and High Court.

Note No. 4. Debit & Credit balances of parties are subject to their confirmation.

Note No. 5. Legal action had been instituted against customers from whom a total sum of Rs. 658.93 lacs (Previous year Rs. 632.42 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs. 89.23 lacs (Previous year Rs. 76.69 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

Note No.6. Atotal of3212 and58 Chlorine Cylindersof900 Kg. and 100 Kg. each respectively, werein circulation with various customers as returnable empties, as on31.3.2013. Note No.38. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paidor is payable under the terms oftheMSMEDAct, 2006.

Note No. 7. The Company operates in a single business segment viz. chemicals. Hence segment reporting underAS-17isnot applicable. Note No. 40. a) The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary. b)The figures have been rounded offtothe nearest Rs. Lacs.

i) PARTICULARS OF PAYMENT MADE TO OR ON BEHALF OF THE DIRECTORS : Nil

ii) EXPENDITURE IN FOREIGN CURRENCY: Nil

iii) REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND: Nil

iv) EARNING IN FOREIGN CURRENCY: Nil


Mar 31, 2012

1.1 The Term Loans from Punjab National Bank (PNB), Punjab & Sind Bank (PSB), IDBI, IFCI and LIC (except for term loan of Rs.233.30 lacs from PSB, which is secured as per Note No. 4.2 below} and Non-Convertible Debentures are/will be secured by way of mortgage (by way of first charge) of all the immovable properties both present and future and first charge by way of hypothecation of all the movables (save and except book debts) including movable machinery, spares, tools, accessories present and future, subject to prior charges created or to be created in favour of the bankers on stocks etc. for working capital. The above charges will rank pari passu with each other.

1.2 The Term Loan of Rs.233.30 (acs from PSB is/will be secured by way of mortgage (by way of fourth charge) of all the immovable properties both present and future and fourth charge by way of hypothecation of all the moveables (save and except current assets).

1.3 The repayment of Principal had been rescheduled as per the Revised Restructuring Package sanctioned by CDR Empowered Group and the same was repayable in 28 quarterly instalments commencing from 1E1 April, 2006. However, the CDR Empowered Group has approved Rework Proposal for the Company in May-June, 2009 and modifications in the same in June, 2010 and September, 2011 wherein the payment of Principal dues of term loans and funded interest term loans falling due between 1st April, 2011 and 151 January, 2012 was deferred so as to be repayable from 1st April, 2012 without changing the terminal date and after protecting NPV.

1.4 The Corporate Debt Restructuring (CDR) Empowered Group had sanctioned a Restructuring Package for the Company which was communicated vide letter dated 2mJ January, 2003. The Company had filed an Appeal before the CDR Core Group against some of the conditions stipulated in the said Restructuring Package. The CDR Empowered Group had subsequently approved a Revised Restructuring Package which had been communicated to the Company by the

CDR Cell vide its letters dated 15!h June, 2004 and 17,h June, 2004. The Revised Restructuring Package includes inter alia the reduction of interest rates w.e.f. 1st April, 2003 on Term Loans/ NCDs from 13% p.a. to 10.5% p.a. in case of Financial Institutions/Banks opting for the conversion of part of loans info the Equity and Cumulative Redeemable Preference Shares (CRPS) and to 9% p.a. in case of those not opting for the conversion, reduction of interest rate from 13% p.a. to 9% p.a. on the Working Capital Facilities and rescheduling of the payments of Terms Loans, Non-Convertible Debentures and Overdue Interest accrued upto 13' April, 2003. In the case of IDBI Bank Limited and ICICI Bank Limited, the interest rate has been reduced to 5% p.a. and 6% p.a., respectively. The Company had accepted the said Revised Restructuring Package except some of the conditions stipulated therein and had filed an Appeal before CDR Core Group against the said conditions stipulated in the said Revised Restructuring Package. The CDR Cell vide its letter dated 31st August, 2004 had modified the three conditions pertaining to recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor. The Company had subsequently accepted the Revised Restructuring Package subject to the decision of the CDR Empowered Group conveyed vide letter dated 23rd April, 2005 to keep three conditions of the said Package viz. part of recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor in abeyance till 30"' June, 2005 or till disinvestment is completed, whichever is earlier and the Monitoring Committee to re-examine the Company's request with regard to modifications/waiver of these three conditions. Meanwhile, Bank of Punjab Limited submitted a new Proposal for One Time Settlement (OTS) which was approved by the CDR Empowered Group in its meeting held on 9th August, 2005. The Bank of Punjab Limited had also given its individual sanction for the said OTS vide its letter dated 16,h September, 2005. As per the approved OTS, the principal amount was repayable in 24 monthly installments w.e.f. 1st June, 2004 carrying interest at the rate of 5.26% p.a. The Company had also received individual sanctions in consonance with the Revised Restructuring Package from all other lenders. As per the recompense clause stipulated in the Revised Restructuring Package, the Lenders have the right of recompense in respect of the sacrifices undertaken by them on account of reduction in interest rates, waivers etc. The CDR Empowered Group in its meeting held on 29th March, 2006 inter-alia approved keeping in abeyance three conditions viz. (a) conversion of pari of the loan into equity/preference shares and lenders right to sell the converted equity; (b) conversion of sacrifices into equity and (c) pledge of shares, till 30m June, 2006 which had further been extended till 31st December, 2007. The Company had requested CDR Empowered Group to defer the above conditions till 31st March, 2010 and also to defer the repayment of the principal amount for 18 months w.e.f. 1st April, 2009 to enable the Company to meet the fund requirements for the essential expenditure on remembraning and recoating of electrolysers and replacement/repair of some other critical items of plant and machinery The CDR Empowered Group had in its meetings held on 14th May, 2009 and 11rh June, 2009 approved the Company's said proposal. The deadline of 31st March, 2010 had further been extended upto 30,h September, 2010 as per the decision taken by CDR Empowered Group in its meeting held on 14lh May, 2010. The CDR Empowered Group has in its meeting held on 25"1 June, 2010 approved (a) deferment of repayment of outstanding principal (two quarters defer- ment) repayable in 8 quarterly installments commencing from 1st April, 2011 and ending on 1al January, 2013, (b) funding of 90% of interest fallen/falling due on 15t April, 2010 and 1st July, 2010 payable in 4 quarterly installments w.e.f. 1st January, 2011 and (c) increase in the interest rate on the outstanding term loans from 10.5% p.a. to 11% p.a. under option 'A' and from 9% p.a. to 9.25% p.a. under option 'B' in order to protect NPV of future cash flows with interest reset option. The CDR Empowered Group has in its meeting held on 6th December, 2010 approved (a) extension of time till 31st March, 2011 for completing disinvestment process and keeping in abeyance till 31st March, 2011 the compliance of pending conditions and (b) funding of 90% of interest for 2 quarters by protecting NPV of future cash flows. The CDR Empowered Group has in its meeting held on 7,h March, 2011 approved the extension of time till 30,th June, 2011 for completion of disinvestment process and till 15th July, 2011 for compliance of pending CDR conditions. The CDR Empowered Group has in its meeting held on 29th September, 2011 acceded to the request of the Company for deferment of Principal dues of term loans and funded interest term loans falling due between 1st April, 2011 and 1st January, 2012 so as to be repayable from 1st April, 2012 without changing the terminal date and after protecting NPV.

1.4 The Revised Restructuring Package sanctioned by the CDR Empowered Group on 15,h June, 2004 inter-alia provided an option for conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares on at par basis to the lenders who opt for this option. Accordingly, Industrial Development Bank of India Limited (IDBI), IFCI Limited (IFCI), Life Insurance Corporation of India (LIC) and Punjab National Bank (PNB) have opted for this option. The Company has also received notices from IDBI and IFCI for the conversion of part of loans into Equity Shares. The Company has also received notices from PNB and LIC for the conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares. The Board of Directors had, inter-alia, agreed, in principle, to issue subject to the consent of the Sharehold- ers under the relevant provisions of the Companies Act, 1956 and also subject to the outcome of the informal Guidance of the Securities and Exchange Board of India (SEBI) by way of Interpretive Letter under the SEBI (Informal Guidance) Scheme, 2003 sought by the Company vide its tetter dated 10lh April, 2006, regarding applicability of the Guidelines for Preferential Issues (as amended) as per Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000, and also subject to such other approvals, permissions, sanctions and consents as may be necessary, said shares of the Company to IDBI, IFCI, PNB and LIC as per their notices. The Board of Directors had subsequently decided to defer the matter regarding the issue of Equity Shares of the Company to IDBI, IFCI, LIC and PNB upon conversion of part of their loans, for the time being. The Company has received a Notice dated 17"1 May, 2012 from IDBI Bank Limited for self and on behalf of IFCI, LIC and PNB of their intention to convert a part of loan (i.e. Rs. 8 crores) into equity shares of Rs.10A each at par on pro-rata basis.

2.1 Cash Credit from the banks is secured by way of hypothecation (by way of first charge) of raw materials, stocks in process, finished goods, stores and spares and book debts of the Company wherever situated and is/ will be secured by way of mortgage (by way of second charge) on all the immovable properties both present and future.

3.1 The Company's liabilities towards leave encashment and gratuity are determined by an independent actuary and LIC's actuarial valuation respectively, using the Projected Unit Credit Method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds is consistent with the currency and estimated terms of the defined benefit obligations. Actuarial gains and losses are recognised immediately in the Profit & Loss Account as income or expense.

4.1 Depreciation (or the year 2011-12 includes Rs.400,56 tacs {Previous year Rs.403.14 lacs) as depreciation arising on revaluation of Fixed Assets, which has been adjusted against Revaluation Reserve and has not been charged to the Profit and Loss Account,

4.2 Fixed Assets are stated at values determined by the valuer less depreciation. Machinery Spares have been capitalised as and when procured. Direct costs are capitalised till the assets are ready to be put to use. These costs also includes financing cost (including exchange rate fluctuations) relating to specific borrowing attributable to Fixed Assets. When an asset is scrapped or otherwise disposed off, the cost and related depreciation are taken out from books of accounts and resultant profit {including capital profit) or loss, if any, is reflected in Profit and Loss Account.

4.3 Depreciation on Fixed Assets has been provided in the accounts on 'Straight Line Method' as per Schedule XIV to the Companies Act, 1956. Fixed Assets individually costing upto Rs.5,0007- are depreciated 100% in the year of purchase. Depreciation on Foreign Exchange adjustments arising from foreign exchange variations is charged on residual useful life of asset.

4.4 The Company had revalued its Fixed Assets (other than thetOO TPD Membrane Cell Plant Power Line) as on 31st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27ttl October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs.6243.16 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

4.5 The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29"1 October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs.27.78 lacs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve.

4.6 The Company had revalued its Fixed Assets as on 31st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29tl1 January, 2010 and the revalued figures were incorporated in the accounts in the financial year 2009-10. Accordingly a sum of Rs.4819.99 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve.

5.1The final adjustment of (a) expenses on common facilities with Punjab National Fertilizers & Chemicals Limited (under liquidation) for Railway Siding, Hoste! Building, Power Link Line, Land, Tube well, Staff Housing Colony and Storm Water Drain etc., and (b) other expenses aggregating to Rs.319.92 lacs incurred on behalf of Punjab National Fertilizers & Chemicals Limited shall be made as per the settlement by the Official Liquidator of Punjab National Fertilizers & Chemicals Limited. However, an amount of Rs.25.19 lacs (previous year Rs.22.78 lacs) has been provided as doubtful debt during the current year.

Note No. 6

CONTIGENT LIABILITIES AND COMMITMENTS (Rs in Lacs>

Particulars As at As at 31.3.2012 31.3.2011

a) Letters of Credit Outstanding US $ 3650.00 US $ 132126.60

(Rs.2.17) (Rs.60.78)

b) Bank Guarantees given by Company 126.74 258.80

c) Excise/Service Tax demand/claims under appeal (including Rs.1.93 lacs (Previous year Rs.1.93 lacs) deposited under protest) 110.73 128.54

d} Differential Interest (As per recompense clause of CDR Package) 5986.22 5682.92

e) Sales Tax Demand - 5928.81

f) Estimated amounts of contracts remaining to be executed on capital account and not provided for 708.49 55.48

6.1 The Company had claimed Sales Tax Exemption on total production w.e.f. 1st April, 2003 in terms of Exemption Certificate under the Punjab General Sales Tax (Deferment & Exemption) Rules, 1991 granted to the Company by the Assistant Excise and Taxation Commissioner, Hopar. This exemption from the payment of Sales Tax on the total production had been claimed on the basis of Punjab Industrial Incentive Code under the Industrial Policy, 1996. However, the Assessing Authority had passed the Assessment Order for the period 1" April 2003 to 30,h September 2003 disallowing the exemption and had raised Demand of Rs.823.96 lacs by charging Sales Tax on the entire sale proceeds of the Company during the said period. This has not been provided for in the books of account as the Company had filed a Civil Writ Petition in the Punjab & Haryana High Court challenging the said Assessment Order. The High Court had admitted the same and stayed the recovery of the said amount. Further the Assessing Authority had assessed the cases for the years 2003-04 (3rd and 4,h quarter), 2004-05 and 2005-06 during the year 2009-10 after disallowing the exemption on total production and had vide Orders dated 19.11.2009 for the year 2003-04 (3rd and 4th quarter) & 2004-05 and Order dated 30.11.2009 for the year 2005-06 {Orders received by the Company on 03.03.2010) imposed Sales Tax/VAT amounting to Rs.168.57 lacs for the year 2003-04 (3,rd and 4,th quarter), Rs.437.30 lacs for the year 2004-05 and Rs.1000.83 lacs for the year 2005-06.These amounts have not been provided for in the books of accounts as the Company has filed three separate Civil Writ Petitions (in respect of the years 2003-04 (3rd and 4,th quarter), 2004-05 and 2005-06) in the Punjab & Haryana High Court challenging the Orders passed by the Assessing Authority. The Hon'ble Punjab & Haryana High Court had admitted the said Civil Writ Petitions and stayed the recovery of the demands. The Hon'ble High Court adjourned the said Writs till the decision of the SLP before the Hon'ble Supreme Court in the matter of M/s. Indian Acrylics Ltd, The Hon'ble Supreme Court had subsequently decided the SLP against the Department of Excise and Taxation, Punjab and allowed the sales tax exemption on total production. The Company had, accordingly, filed Civil Misc. Applications in all the said four CWPs requesting the Hon'ble High Court to decide the said CWPs. The Hon'ble High Court has vide Orders dated 16.4.2012 allowed the said Civil Writ Petitions and quashed the said demands raised by the Department of Excise and Taxation, Punjab.

Note No. 7. The Rights Offers in respect of 2350 Equity Shares continue to be in abeyance pursuant to Section 206A(b) of the Companies Act, 1956. A sum of Rs.4,500/- had been received as Application Money for 100 Equity Shares out of the same.

Note No. 8. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs. 169.47 lacs. Interest on delayed payments amounting to Rs.75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer imposing penal interest. In the meanwhile the Company has paid Rs.75.98 lacs towards penal interest under protest.

Note No. 9. House Tax amounting to Rs.4.35 lacs (Previous year Rs.11.47 lacs) has been depos- ited during the year under protest with Municipal Council, Nangal. The total amount of house tax on Company's industrial building and residential units in housing colony deposited under protest is Rs. 144.34 lacs in respect of the years 1987-88 to 2011-12 and the legal cases in respect thereof are pending before Appellate/ Revision Authori- ties and High Court.

Note No. 10. Debit & Credit balances of parties are subject to their confirmation.

Note No. 11. Legal action had been instituted against customers from whom a total sum of Rs.632.42 lacs (Previous year Rs.149.95 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs.76.69 lacs (Previous year Rs.73.75 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

a)Names of related Parties and description of relationships, having transactions during the year

1) Significant Interest Entities:

The Punjab State Industrial Development Corporation Limited holds 90,90,000 Equity Shares of the Company, which constitutes 44.26% of the Subscribed Capital.

2) Key Managerial Personnel

Shri S.S. Bains, IAS, Managing Director (w.e.f. 30th November, 2010) b) Volume of transaction of related parties

Note No. 3b. A total ot 3054 and 58 Chlorine Cylinders of 900 Kg. and 100 Kg. each respectively, were in circulation with various customers as returnable empties, as on 31.3.2012.

Note No. 12. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paid or is payable under the terms of the MSMED Act, 2006.

Note No. 13. The Company operates in a single business segment viz. chemicals. Hence segment reporting under AS-17 is not applicable.

Note No. 14. a)The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary.

b)The figures have been rounded off to the nearest Rs. Lacs.

Note No 40 ADDITIONAL INFORMATION AS FAR AS APPLICABLE PURSUANT TO PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956:

vii) PARTICULARS OF PAYMENT MADE TO OR ON BEHALF OF THE DIRECTORS : Nil

viii) EXPENDITURE IN FOREIGN CURRENCY: Nil

ix) REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND: Nil

x) EARNING IN FOREIGN CURRENCY: Nil


Mar 31, 2011

1. Contingent Liabilities As at As at 31.3.2011 31.3.2010 (Rs. in (Rs. in Lacs) Lacs)

a) Letters of Credit Outstanding US$ 132126.60 Euro 28508.40 (Rs.60.78) (Rs. 16.92)

b) Bank Guarantees given by Company 258.80 116.74

c) Excise/Service Tax demand/claims under appeal 128.54 79.98 (including Rs.1.93 lacs (Previous year Rs.1.93 lacs) deposited under protest)

d) Differential Interest (as per Note No. 5) 5682.92 5294.11

e) Under charges and detention charges levied by railways - 25.17 not paid in view of the matter being subjudice.

f) Sales Tax Demand (as per Note No. 16) 5928.81 5345.45

g) Estimated amounts of contracts remaining to be executed 55.48 23.71 on capital account and not provided for

2. The Rights Offers in respect of 2350 Equity Shares continue to be in abeyance pursuant to Section 206A(b) of the Companies Act, 1956. A sum of Rs.4,500/- had been received as Application Money for 100 Equity Shares out of the same.

3. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs.169.47 lacs. Interest on delayed payments amounting to Rs.75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer Imposing penal interest In the meanwhile the Company has paid Rs.75.98 lacs towards penal interest under protest.

4. The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had sanctioned a Restructuring Package for the Company which was communicated vide letter dated 2nd January, 2003. The Company had filed an Appeal before the CDR Core Group against some of the conditions stipulated In the said Restructuring Package. The CDR Empowered Group had subsequently approved a Revised Restructuring Package which had been communicated to the Company by the CDR Cell vide its letters dated 15th June, 2004 and 17th June, 2004. The Revised Restructuring Package includes inter alia the reduction of Interest rates w.e.f. 1st April, 2003 on Term Loans/NCDs from 13% pa. to 10.5% pa. in case of Financial Institutions/ Banks opting for the conversion of part of loans into the Equity and Cumulative Redeemable Preference Shares (CRPS) and to 9% p.a. In case of those not opting for the conversion, reduction of Interest rate From 13% p.a. to 9% p.a. on the Working Capital Facilities and rescheduling of the payments of Terms Loans, Non-Convertible Debentures and Overdue Interest accrued up to 1st April, 2003. In the case of IDBI Bank Limited and ICICI Bank Limited, the Interest rate has been reduced to 5% p.a. and 6% p.a., respectively. The Company had accepted the said Revised Restructuring Package except some of the conditions stipulated therein and had filed an Appeal before CDR Core Group against the said conditions stipulated In the said Revised Restructuring Package. The CDR Cell vide its letter dated 31st August, 2004 had modified the three conditions pertaining to recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor. The Company had subsequently accepted the Revised Restructuring Package subject to the decision of the CDR Empowered Group conveyed vide letter dated 23rd April, 2005 to keep three conditions of the said Package viz. part of recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor in abeyance till 30th June, 2005 or till disinvestment Is completed, whichever is earlier and the Monitoring Committee to re-examine the Company's request with regard to modifications/waiver of these three conditions. Meanwhile, Bank of Punjab Limited submitted a new Proposal for One Time Settlement (OTS) which was approved by the CDR Empowered Group in its meeting held on 9" August, 2005. The Bank of Punjab Limited had also given its individual sanction for the said OTS vide its letter dated 16th September, 2005. As per the approved OTS, the principal amount was repayable in 24 monthly installments w.e.f. 1st June, 2004 carrying interest at the rate of 5.26% p.a. The Company had also received individual sanctions in consonance with the Revised Restructuring Package from all other lenders. As per the recompense clause stipulated in the Revised Restructuring Package, the Lenders have the right of recompense in respect of the sacrifices undertaken by them on account of reduction In interest rates, waivers etc. The CDR Empowered Group in its meeting held on 29th March, 2006 inter-alia approved keeping in abeyance three conditions viz. (a) conversion of part of the loan into equity/preference shares and lenders right to sell the converted equity; (b) conversion of sacrifices into equity and (c) pledge of shares, till 30st June, 2006 which had further been extended till 31tg December, 2007. The Company had requested CDR Empowered Group to defer the above conditions till 31st March, 2010 and also to defer the repayment of the principal amount for 16 months w.e.f. 1st April, 2009 to enable the Company to meet the fund requirements for the essential expenditure on remembraning and recoating of electrolysers and replacement/repair of some other critical items of plant and machinery.The CDR Empowered Group of CDR Cell had in its meetings held on 14th May, 2009 and 11th June, 2009 approved the Company's said proposal. The deadline of 31st March, 2010 had further been extended upto 30th September, 2010 as per the decision taken by CDR Empowered Group of CDR Cell in its meeting held on 14th May, 2010. The CDR Empowered Group of CDR Cell has in its meeting held on 25* June, 2010 approved (a) deferment of repayment of outstanding principal (two quarters deferment) repayable in 8 quarterly installments commencing from 1st April, 2011 and ending on 1st January, 2013, (b) funding of 90% of interest fallen/falling due on 1st April, 2010 and 1st July, 2010 payable In 4 quarterly installments w.e.f. 1st January, 2011 and (c) increase In the interest rate on the outstanding term loans from 10.5% p.a. to 11% p.a. under option 'A' and from 9% p.a. to 9.25% p.a. under option 'B' in order to protect NPV of future cash flows with interest reset option. The CDR Empowered Group of CDR Cell has in its meeting held on 6* December, 2010 approved (a) extension of time till 31st March, 2011 for completing disinvestment process and keeping in abeyance till 31" March, 2011 the compliance of pending conditions and (b) funding of 90% of interest for 2 quarters by protecting NPV of future cash flows. The CDR Empowered Group of CDR Cell has in its meeting held on 7th March, 2011 approved the extension of time till 30th June, 2011 for completion of disinvestment process and till 15th July, 2011 for compliance of pending CDR conditions.

5. The Revised Restructuring Package sanctioned by the CDR Empowered Group on 15th June, 2004 inter- alia provided an option for conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares on at par basis to the lenders who opt for this option. Accordingly, Industrial Development Bank of India Limited (IDBI), IFCI Limited (IFCI), Life Insurance Corporation of India (LIC) and Punjab National Bank (PNB) have opted for this option. The Company has also received notices from IDBI and IFCI for the conversion of part of loans into Equity Shares. The Company has also received notices from PNB and LIC for the conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares. The Board of Directors had, inter-alia, agreed, in principle, to issue subject to the consent of the Shareholders under the relevant provisions of the Companies Act, 1956 and also subject to the outcome of the Informal Guidance of the Securities and Exchange Board of India (SEBI) by way of Interpretive Letter under the SEBI (Informal Guidance) Scheme, 2003 sought by the Company vide its letter dated 10th April, 2006, regarding applicability of the Guidelines for Preferential Issues (as amended) as per Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000, and also subject to such other approvals, permissions, sanctions and consents as may be necessary, said shares of the Company to IDBI, IFCI, PNB and LIC as per their notices. The Board of Directors had subsequently decided to defer the matter regarding the issue of Equity Shares of the Company to IDBI, IFCI, LIC and PNB upon conversion of part of their loans, for the time being.

6. The Company had revalued its Fixed Assets (other than the100 TPD Membrane Cell Plant Power Line) as on 31st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27th October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs.6243.16 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31st March, 2011 charged to Profit and Loss Account does not include the depreciation arising on revaluation of Fixed Assets for the year ended 31st March, 2011, which has been debited to the Revaluation Reserve.

7. The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29th October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs.27.78 lacs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31st March, 2011 charged to Profit and Loss Account does not include the depreciation arising on the revaluation of the said asset for the year ended 31st March, 2011, which has been debited to the Revaluation Reserve.

8. The Company had revalued its Fixed Assets as on 31st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29th January, 2010 and the revalued figures were incorporated in the accounts in the financial year 2009-10. Accordingly a sum of Rs.4819.99 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31st March, 2011 charged to Profit and Loss Account does not include the depreciation arising on revaluation of Fixed Assets for the year ended 31st March, 2011, which has been debited to the Revaluation Reserve.

9. House Tax amounting to Rs.11.47 lacs (Previous year Rs. Nil) has been deposited during the year under protest with Municipal Council, Nangal.

10. The final adjustment of (a) expenses on common facilities with Punjab National Fertilizers & Chemicals Limited (under liquidation) for Railway Siding, Hostel Building, Power Link Line, Land, Tubewell, Staff Housing Colony and Storm Water Drain etc., and (b) other expenses aggregating to Rs.294.73 lacs incurred on behalf of Punjab National Fertilizers & Chemicals Limited shall be made as per the settlement by the Official Liquidator of Punjab National Fertilizers & Chemicals Limited. However, an amount of Rs.22.78 lacs (previous year Rs.24.19 lacs) has been provided as doubtful debt during the current year.

11. Debit & Credit balances of parties are subject to their confirmation.

12. Legal action had been instituted against customers from whom a total sum of Rs. 149.95 lacs (Previous year Rs. 157.43 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs.73.75 lacs (Previous year Rs.75.23 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

13. The cost of membranes Is being amortised over a period of three years. The cost of recoating of pans of electrolysers is being amortised over a period of eight years.

14. The Company had claimed Sales Tax Exemption on total production w.e.f. 1st April, 2003 in terms of Exemption Certificate under the Punjab General Sales Tax (Deferment & Exemption) Rules, 1991 granted to the Company by the Assistant Excise and Taxation Commissioner, Ropar. This exemption from the payment of Sales Tax on the total production had been claimed on the basis of Punjab Industrial Incentive Code under the Industrial Policy, 1996. However, the Assessing Authority has passed the Assessment Order for the period 1st April 2003 to 30th September 2003 disallowing the exemption and has raised Demand of Rs.823.96 lacs by charging Sales Tax on the entire sale proceeds of the Company during the said period. This has not been provided for In the books of account as the Company has filed a Civil Writ Petition in the Punjab & Haryana High Court challenging the said Assessment Order. The High Court has admitted the same and stayed the recovery of the said amount. The Interest on the said demand works out to Rs.1384.25 lacs for the period from 2004-05 to 2010-11. Further the Assessing Authority has assessed the cases for the years 2003-04 (3rd and 4th quarter), 2004-05 and 2005-06 during the year after disallowing the exemption on total production and has vide Orders dated 19.11.2009 for the year 2003-04 (3rd and 4th quarter) & 2004- 05 and Order dated 30.11.2009 for the year 2005-06 (Orders received by the Company on 03.03.2010) imposed Sales Tax/VAT amounting to Rs.168.57 lacs for the year 2003-04 (3rd and 4th quarter), Rs.437.30 lacs for the year 2004-05 and Rs.1000.83 lacs for the year 2005-06.These amounts have not been provided for in the books of accounts as the Company has filed three separate Civil Writ Petitions (in respect of the years 2003-04 (3rd and 4th quarter), 2004-05 and 2005-06) in the Punjab & Haryana High Court challenging the Orders passed by the Assessing Authority. The Hon'ble Punjab & Haryana High Court has admitted the said Civil Writ Petitions and stayed the recovery of the demands. The interest on the said demands worked out to Rs.2113.90 lacs for the period up to 2010-11. The assessment of remaining years is pending for which the additional liability, if any, is unascertainable.

15. Related Party Disclosures:

a) Names of related Parties and description of relationships, having transactions during the year

1) Significant Interest Entities:

The Punjab State Industrial Development Corporation Limited holds 90,90,000 Equity Shares of the Company, which constitutes 44.26% of the Subscribed Capital.

2) Key Managerial Personnel

Shri Ajay Kumar Mahajan, Managing Director (till 29th November, 2010) Shri S.S. Bains, IAS, Managing Director (w.e.f. 30th November, 2010)

16. A total of 2999 and 61 Chlorine Cylinders of 900 Kg. and 100 Kg. each respectively, were in circulation with various customers as returnable empties, as on 31.3.2011.

17. 0.5 Acre of land is on lease with one Down Stream Unit for a period of 30 years.

18. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paid or is payable under the terms of the MSMED Act, 2006.

19. The Company operates in a single business segment viz. chemicals. Hence segment reporting under AS- 17 is not applicable.

20. a) The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary.

b) The figures have been rounded off to the nearest Rs. Lacs.


Mar 31, 2010

1. Contingent Liabilities As at As at 31.3.2010 31.3.2009

(Rs. in Lacs) (Rs. in Lacs)

a) Letters of Credit Outstanding Euro 28508.40 Euro 19387.88

(Rs.16.92) (Rs. 11.50)

b) Bank Guarantees given by Company 116.74 124.65

c) Excise/Service Tax demand/claims under appeal 79.98 63.53 (including Rs.1.93 lacs (Previous year Rs.1.93 lacs) deposited under protest)

d) Differential Interest (as per Note No. 5) 5294.11 4870.63

e) Under charges and detention charges levied by railways 25.17 25.17 not paid in view of the matter being subjudice.

f) Sales Tax Demand (as-per Note No. 17) 5345.45 1812.72

g) Estimated amounts of contracts remaining to be executed 23.71 9.45 on capital account and not provided for

2. The Rights Offers in respect of 2350 Equity Shares continue to be in abeyance pursuant to Section 206A(b) of the Companies Act, 1956. A sum of Rs.4,500/- had been received as Application Money for 100 Equity Shares out of the same.

3. Chandigarh Administration has allotted land to Company for construction of Office Building for Rs.169.47 lacs. Interest on delayed payments amounting to Rs.75.98 lacs has been imposed by the Estate Officer, Chandigarh. The Company is in the process of seeking appropriate legal remedy against the Orders of the Estate Officer imposing penal interest. In the meanwhile the Company has paid Rs.75.98 lacs towards penal interest under protest.

4. The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had sanctioned a Restructuring Package for the Company which was communicated vide letter dated 2nd January, 2003. The Company had filed an Appeal before the CDR Core Group against some of the conditions stipulated in the said Restructuring Package. The CDR Empowered Group had subsequently approved a Revised Restructuring Package which had been communicated to the Company by the CDR Cell vide its letters dated 15* June, 2004 and 17,h June, 2004. The Revised Restructuring Package includes inter alia the reduction of interest. rates w.e.f. 1s April, 2003 on Term Loans/NCDs from 13% p.a. to 10.5% p.a. in case of Financial Institutions/ Banks opting for the conversion of part of loans into the Equity and Cumulative Redeemable Preference Shares (CRPS) and to 9% p.a. in case of those not opting for the conversion, reduction of interest rate from 13% p.a. to 9% p.a. on the Working Capital Facilities and rescheduling of the payments of Terms Loans, Non-Convertible Debentures and Overdue Interest accrued upto 1s1 April, 2003. In the case of IDBI Bank Limited and ICICI Bank Limited, the interest rate has been reduced to 5% p.a. and 6% p.a., respectively. The Company had accepted the said Revised Restructuring Package except some of the conditions stipulated therein and had filed an Appeal before CDR Core Group against the said conditions stipulated in the said Revised Restructuring Package. The CDR Cell vide its letter dated 31 * August, 2004 had modified the three conditions pertaining to recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor. The Company had subsequently accepted the Revised Restructuring Package subject to the decision of the CDR Empowered Group conveyed vide letter dated 23rd April, 2005 to keep three conditions of the said Package viz. part of recompense clause, pledge of shares and sale of converted equity by lenders to the strategic investor in abeyance till 30* June, 2005 or till disinvestment is completed, whichever is earlier and the Monitoring Committee to re-examine the Companys request with regard to modifications/waiver of these three conditions. Meanwhile, Bank of Punjab Limited submitted a new Proposal for One Time Settlement (OTS) which was approved by the CDR Empowered Group in its meeting held on 9* August, 2005. The Bank of Punjab Limited had also given its individual sanction for the said OTS vide its letter dated 16th September, 2005. As per the approved OTS, the principal amount was repayable in 24 monthly installments w.e.f. 1st June, 2004 carrying interest at the rate of 5.26% p.a. The Company had also received individual sanctions in consonance with the Revised Restructuring Package from all other lenders. As per the recompense clause stipulated in the Revised Restructuring Package, the Lenders have the right of recompense in respect of the sacrifices undertaken by them on account of reduction in interest rates, waivers etc. The CDR Empowered Group in its meeting held on 29th March, 2006 inter-alia approved keeping in abeyance three conditions viz. (a) conversion of part of the loan into equity/preference shares and lenders right to sell the converted equity; (b) conversion of sacrifices into equity and (c) pledge of shares, till 30th June, 2006 which had further been extended till 31st December, 2007. The Company has requested CDR Empowered Group to defer the above conditions till 31st March, 2010 and also to defer the repayment of the principal amount for 18 months w.e.f. 1st April, 2009 to enable the Company to meet the fund requirements for the essential expenditure on remembraning and recoating of electrolysers and replacement/repair of some other critical items of plant and machinery. The CDR Empowered Group of CDR Cell had in its meetings held on 14th May, 2009 and 11th June, 2009 approved the Companys said proposal. The deadline of 31st March, 2010 has further been extended upto 30th September, 2010 as per the decision taken by CDR Empowered Group of CDR Cell in its meeting held on 14th May, 2010.

6. The Revised Restructuring Package sanctioned by the CDR Empowered Group on 15th June, 2004 inter- alia provided an option for conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares on at par basis to the lenders who opt for this option. Accordingly, Industrial Development Bank of India Limited (IDBI), IFCI Limited (IFCI), Life Insurance Corporation of India (LIC) and Punjab National Bank (PNB) have opted for this option. The Company has also received notices from IDBI and IFCI for the conversion of part of loans into Equity Shares. The Company has also received notices from PNB and LIC for the conversion of part of loans into Equity Shares and Cumulative Redeemable Preference Shares. The Board of Directors had, inter-alia, agreed, in principle, to issue subject to the consent of the Shareholders under the relevant provisions of the Companies Act, 1956 and also subject to the outcome of the Informal Guidance of the Securities and Exchange Board of India (SEBI) by way of Interpretive Letter under.the SEBI (Informal Guidance) Scheme, 2003 sought by the Company vide its letter dated 10th April, 2006, regarding applicability of the Guidelines for Preferential Issues (as amended) as per Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines, 2000, and also subject to such other approvals, permissions, sanctions and consents as may be necessary, said shares of the Company to IDBI, IFCI, PNB and LIC as per their notices. The Board of Directors had subsequently decided to defer the matter regarding the issue of Equity Shares of the Company to IDBI, IFCI, LIC and PNB upon conversion of part of their loans, for the time being.

7. The Company had revalued its Fixed Assets (otner than the 100 TPD Membrane Cell Plant Power Line) as on 31st March, 2004 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 27th October, 2005 and the revalued figures were incorporated in the accounts in the financial year 2005-06. Accordingly a sum of Rs.6243.16 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31 st March, 2010 charged to Profit and Loss Account does not include the depreciation arising on revaluation of Fixed Assets for the year ended 31st March, 2010, which has been debited to the Revaluation Reserve.

8. The Company had revalued its 100 TPD Membrane Cell Plant Power Line as on 31st March, 2006 on the basis of existing use value by an independent professional valuer. The revaluation of the asset had been approved by the Board of Directors in its meeting held on 29* October, 2007 and the revalued figure was incorporated in the accounts in the financial year 2007-08. Accordingly, a sum of Rs.27.78 lacs being the surplus of the value of the asset over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31st March, 2010 charged to Profit and Loss Account does not include the depreciation arising on the revaluation of the said asset for the year ended 31st March, 2010, which has been debited to the Revaluation Reserve.

9. The Company had revalued its Fixed Assets as on 31st March, 2009 on the basis of existing use value by an independent professional valuer. The revaluation of assets had been approved by the Board of Directors in its meeting held on 29th January, 2010 and the revalued figures were incorporated in the accounts in the financial year 20C9-10. Accordingly a sum of Rs.4819.99 lacs being the surplus of the value of assets over the written down value, had been credited to the Revaluation Reserve. The Depreciation for the year ended 31st March, 2010 charged to Profit and Loss Account does not include the depreciation arising on revaluation of Fixed Assets for the year ended 31st March, 2010, which has been debited to the Revaluation Reserve.

10. House Tax amounting to Rs. Nil (Previous year Rs.43.85 lacs (including arrears of Rs.35.98 lacs for the years 1995-96 to 2007-08)) has been deposited during the year under protest with Municipal Council, Nangal.

11. The final adjustment of (a) expenses on common facilities with Punjab National Fertilizers & Chemicals Limited (under liquidation) for Railway Siding, Hostel Building, Power Link Line, Land, Tubewell, Staff Housing Colony and Storm Water Drain etc., and (b) other expenses aggregating to Rs.271.95 lacs incurred on behalf of Punjab National Fertilizers & Chemicals Limited shall be made as per the settlement by the Official Liquidator of Punjab National Fertilizers & Chemicals Limited. However, an amount of Rs.24.19 lacs (previous year Rs.29.30 lacs) has been provided as doubtful debt during the current year.

12. Debit & Credit balances of parties are subject to their confirmation.

13. Legal action had been instituted against customers from whom a total sum of Rs.157.43 lacs (Previous year Rs.159.87 Lacs) is due as the balance of the principal value of goods supplied. Out of these, some cases have been decided and decrees/awards for a principal sum of Rs.75.23 lacs (Previous year Rs.77.67 lacs) have been passed/ announced in favour of the Company. The remaining cases are pending before various Courts/Arbitrators.

14. The cost of membranes is being amortised over a period of three years. The cost of recoating of pans of electrolysers is being amortised over a period of eight years.

15. In line with the Accounting Policy stated in Note No.1 (i) of Notes on Accounts, the Deferred Tax Assets of Rs.256.32 lacs relating to the year 2009-10 have been recognised and credited to the Profit and Loss Account.

16. The Company had claimed Sales Tax Exemption on total production w.e.f. 1st April, 2003 in terms of Exemption Certificate under the Punjab General Sales Tax (Deferment & Exemption) Rules, 1991 granted to the Company by the Assistant Excise and Taxation Commissioner, Ropar. This exemption from the payment of Sales Tax on the total production had been claimed on the basis of Punjab Industrial Incentive Code under the Industrial Policy, 1996. However, the Assessing Authority has passed the Assessment Order for the period 1st April 2003 to 30th September 2003 disallowing the exemption and has raised Demand of Rs.823.96 lacs by charging Sales Tax on the entire saje proceeds of the Company during the said period. This has not been provided for in the books of account as the Company has filed a Civil Writ Petition in the Punjab & Haryana High Court challenging the said Assessment Order. The High Court has admitted the same and stayed the recovery of the said amount. The interest on the said demand works out to Rs. 1186.50 lacs for the period from 2004-05 to 2009-10. Further the Assessing Authority has assessed the cases for the years 2003-04 (3rd and 4th quarter), 2004-05 and 2005-06 during the year after disallowing the exemption on total production and has vide Orders dated 19.11.2009 for the year 2003-04 (3rd and 4th quarter) & 2004-05 and Order dated 30.11.2009 for the year 2005-06 (Orders received by the Company on 03.03.2010) imposed Sales Tax/VAT amounting to Rs. 168.57 lacs for the year 2003-04 (3rd and 4th quarter), Rs.437.30 lacs for the year 2004-05 and Rs.1000.83 lacs for the year 2005-06.These amounts have not been provided for in the books of accounts as the Company has filed three separate Civil Writ Petitions (in respect of the years 2003-04 (3rt and 4* quarter), 2004-05 and 2005-06) in the Punjab &

Haryana High Court challenging the Orders passed by the Assessing Authority. The Honble Punjab & Haryana High Court has admitted the said Civil Writ Petitions and stayed the recovery of the demands. The interest on the said demands worked out to Rs. 1728.29 lacs for the period.up to 2009-10. The assessment of remaining years is pending for which the additional liability, if any, is unascertainable. 18. Related Party Disclosures.

a) Names of related Parties and description of relationships, having transactions during the year

1) Significant Interest Entities:

The Punjab State Industrial Development Corporation Limited holds 90,90,000 Equity Shares of the Company, which constitutes 44.26% of the Subscribed Capital.

2) Key Managerial Personnel

- Shri Ajay Kumar Mahajan, Managing Director

19. A total of 2752 and 61 Chlorine Cylinders of 900 Kg. and 100 Kg. each respectively, were in circulation with various customers as returnable empties, as on 31.3.2010

20. 6.888 Acres of land had been given on lease to Down Stream Units for a period of 30 years. Out of the sawe 6.338 Acres of land has been got vacated during the year. The lease rent due from the said units has been provided as recoverable in the books of account.

21. Based on the information available with the Company, no balance is due to the micro and small enterprises as defined under the MSMED Act, 2006. Further, no interest during the period has been paid or is payable under the terms of the MSMED Act, 2006.

22. The Company operates in a single business segment viz. chemicals. Hence segment reporting under AS- 17 is not applicable.

23. a) The Corresponding figures of the previous year have been regrouped/reclassified, wherever necessary. b) The figures have been rounded off to the nearest Rs. Lacs

24. ADDITIONAL INFORMATION AS FAR AS APPLICABLE PURSUANT TO PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956:

Notes:- 1) The Sodium Hypochlorite Unit is within the overall licenced capacity (2000 TPA) of Calcium Hypochlorite.

2) Actual production of Calcium Hypochlorite & Sodium Hypochlorite is on liquor basis.

3) Actual production of Hydrochloric Acid is on 30-33% concentration basis.

4) 3224 MT (Previous year 3223 WIT) of Caustic Soda Lye was converted into Caustic Soda Flakes.

5) In case of Hydrogen gas internal consumption and saleable quantity is taken as actual production.

Includes Rs.4,500/- as Application Money lor 100 Equity Shares out of the Rights offers in respect of 2350 Equity Shares in abeyance pursuant to Section 206A(b) of the Companies Act, 1956. Includes Rs.21424 thousands on account of Miscellaneous Income.

 
Subscribe now to get personal finance updates in your inbox!