Home  »  Company  »  Punjab Chemicals and  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Punjab Chemicals and Crop Protection Ltd.

Mar 31, 2015

Dear Members,

1. The Directors have pleasure in presenting the Thirty Ninth (39th) Annual Report, on the business and operations of the Company. The Annual Report includes Audited standalone and consolidated financial statements for the financial year ended on March 31,2015.

2. FINANCIAL HIGHLIGHTS :

The summarized financial statement for the year under review is given below:

(Rupees in Lacs)

Consolidated* Particulars 2014-15 2013-14

Sale of Products & Other Income (Net) 58804 53232

Profit / (Loss) before Interest, Depreciation & Tax & Exceptional item 7053 5851

Less: Depreciation/ Amortisation 1917 1616

Less: Finance Cost 3472 3465

Profit / (Loss) before Tax & Exceptional item 1664 770

Less : Exceptional item 217 338

Profit / (Loss) before Tax 1447 432

Less: Provision for Taxation

Current tax 63 -

Deferred Tax - -

Profit / (Loss) after Tax 1384 432

Share of profits in associate for current year 36 110

Share of losses of associate for earlier years - (446)

Net Profit / (Loss) 1420 96

Carried Forward to next year 1420 96

Standalone Particulars 2014-15 2013-14

Sale of Products & Other Income (Net) 42028 43314

Profit / (Loss) before Interest, Depreciation & Tax & Exceptional item 5501 5188

Less: Depreciation/ Amortisation 1758 1484

Less: Finance Cost 3170 3248

Profit / (Loss) before Tax & Exceptional item 573 456

Less : Exceptional item 217 338

Profit / (Loss) before Tax 356 118

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 356 118

Share of profits in associate for current year - -

Share of losses of associate for earlier years - -

Net Profit / (Loss) 356 118

Carried Forward to next year 356 118

* Consolidated accounts consist of standalone and overseas subsidiary Companies.

Notes:

a) Previous year figures under different heads have been regrouped to the extent necessary.

3. DIVIDEND:

In view of accumulated losses, the Directors regret their inability to recommend any dividend.

4. TRANSFER TO RESERVES:

The profit in the standalone results have been carried over to next year in view of accumulated losses of the earlier years. Therefore, no amount could be transferred to General Reserve Account.

5. STANDALONE OPERATIONS:

The operational results for the year under review have improved. The efforts of the company to correct the situation, proved meaningful but because of the losses which have to be absorbed due to the correction, the difference was marginal.

The disposal of non-profitable businesses and non-core assets reduced the operational and fixed expenses, reduced the debt burden and made the working capital more relevant to the remaining businesses. The Company is now focused on its core business of manufacturing technical agrochemicals.

Better operations due to improved raw material efficiencies, implementation of cost saving measures and better working capital management in the Agro Chemicals Division have nurtured the Company back to a positive cash flow situation.

The outcome of the efforts of the Management is evident from the results of the financial year 2014-15. The total income on standalone basis during period under review increased to Rs. 420.28 crores against the total income of Rs. 391.89crores (excluding income of sold out business and leased unit) in the previous year. The net profit has risen to Rs. 3.56 crores from a marginal profit of Rs. 1.18 crores in the previous year.

It may be noted that to restructure the manpower in the Agrochemicals unit at Derabassi, the company offered "Voluntary Retirement Scheme" (VRS) to the employees. 36 employees voluntarily opted for retirement and this reduced the operation costs. The expense on this account has been booked under exceptional item and the result of this onetime cost will be evident in the savings in the years to come.

6. OPERATIONS OF OVERSEAS SUBSIDIARIES:

Your Company has three overseas subsidiaries namely-SD AgChem (Europe) NV, Sintesis Quimica, S.A.I.C, Argentina, and STS Chemicals (UK) Ltd. During the year under review, the operations of the overseas subsidiaries were as follows:

(i) The performance of SD Agchem (Europe) NV has improved due to the improved business environment. The total income of this subsidiary was Rs. 25.93 crores with net profit of Rs. 6.52 crores, in the period under review.

SD Agchem (Europe) NV, the wholly owned subsidiary of the Company in Belgium disposed off its 20% shareholding in Source Dynamics, LLC to Yongnong Biosciences Co. Ltd., China to reduce part of its long term liability.

(ii) Sintesis Quimica, S.A.I.C, Argentina (SQ) have shown slightly improved performance due to initiation of the job work of various multinational companies. This arrangement has reduced working capital requirement. The matters of concern in this subsidiary Company is old debt and challenge to meet the requirement of funds to pay installment under the debt restructuring arrangement of Chapter XI.

In the period under review, the total revenue of this subsidiary stands at Rs. 148.02 crores with a net profit of Rs. 1.73 crores.

(iii) STS Chemicals (UK) Limited does not have any operations, hence not considered for the purpose of preparation of the Consolidated Financial Statements. The non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the group.

The salient features of financial statements of subsidiaries/ associates/ joint ventures as per Section 129 of the Companies Act, 2013 forms part of the Annual Report.

The Company will make available separate audited financial statements of the subsidiaries to any Member upon request. These financials are however, posted on the website of the Company and will also be available for inspection by any Member at the Registered Office.

The Company has also formulated a policy for determining material subsidiaries as approved by the Board of Directors and may be accessed on the Company's weblink http:// punjabchemicals.com/companypolicy.html

7. CONSOLIDATED RESULTS:

The consolidated accounts during the period under review show that the total income has increased to Rs. 588.04 crores with a net profit of Rs. 14.20 crores as against the total income of Rs. 532.32 crores and net profit of Rs. 0.96 crores in the previous period.

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report on Company's performance, industry trend and other material changes with respect to the Company and subsidiaries have been given separately in the Annual Report.

9. STATE OF AFFAIRS OF THE COMPANY:

The State of Affairs of the Company is presented as part of Management Discussion and Analysis Report forming part of this Annual Report.

10. OUTLOOK:

The global economic environment in recent years has been challenging with uncertainty. It is believed that the growth engine for the global economy would be shifted from west to China and India, the emerging manufacturing and consumption hubs. However, any significant change will be a long drawn process.

Therefore, in the given scenario, barring the uncertainties that loom over the industry, the Company expects a good business performance in the agrochemicals sector in the next year. The steps being taken by the government to give more impetus to agriculture sector and promoting the manufacturing sector through "Make in India" programme should further help the Company.

The new opportunities of toll manufacturing of Pharma intermediates and other specialized and general chemicals are being explored for both the divisions in Punjab.

The Management of the Company is optimistic about the current business prospects and will take requisite steps as and when required.

11. FINANCE:

As explained earlier, the Company has taken several measures to prune the overall debt burden by entering into Corporate Debt Restructuring Scheme, disposing off the non-profitable business and non-core assets and putting back the cash from the inflows into making the operations of the Company more viable.

The Company, during the period under review has paid the installments and interest which was due to the Banks, except Working Capital Demand Loan, which is partially paid from the sale of few non-core assets. The Company has not raised any additional borrowing during the year.

The Company's proposal for One Time Settlement (OTS) with State Bank of India (SBI) has been accepted by the bank. As per the terms of OTS, the Company has to pay Rs. 4,550 lacs and sale proceeds from 1,50,000 shares of the Company, pledged exclusively with SBI by one of the promoters against total outstanding dues of Rs. 9,485 lacs (including interest). Out of the said amount, Rs. 1,138 lacs has been paid by the Company before March 31, 2015. The said OTS is subject to fulfilment of conditions. The necessary adjustment in the books of account will be carried out after compliance of all conditions as specified in said OTS.

12. PUBLIC DEPOSITS:

The Company has not accepted or renewed any fixed deposits from the public since the last two financial years.

As per the provisions of the new Companies Act, 2013, the Company has repaid all the public deposits in time. Accordingly, there are no outstanding deposits as on March 31,2015.

The management would like to sincerely thank all the depositors of the Company for their faith and confidence in the Company for many years.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Changes in the composition of the Board of Directors and other Key Managerial Personnel:

i) During the year, Export Import Bank of India withdrew the nomination of Shri Sheo Prasad Singh (DIN: 06493455) as a Director from the Board of Directors of the Company and accordingly, he ceased to be the Nominee Director of Export-Import Bank of India on the Board of the Company w.e.f. December 1, 2014. The Board of Directors while taking note of this withdrawal placed on record its deep sense of appreciation for the services rendered by him during his tenure in the Company.

ii) Shri Ghattu Ramanna Narayan (DIN: 00020575) stepped down as the Chairman during the meeting and as Director after the conclusion of the Board Meeting held on May 28, 2015 due to his age and to spend time to serve the people and society. The Board respected his decision. The Board of Directors placed on record its deep sense of gratitude for his vision, leadership and guidance during the long association of around 18 years with the Company. The Board acknowledged that his professional guidance and insight on critical corporate strategies to manage the Company was very valuable. The Board also appreciated his contribution in the growth of the Company with his versatile experience, knowledge, management leadership, advising the Board and the Managing Director during the difficult time in the Company.

The Board of Directors took note of the recommendation of the Nomination and Remuneration

Committee to seek his expert advice on a regular basis and appointed him as "Chairman Emeritus".

All the Directors appreciated this recommendation and felt that he will be an excellent guide to the PCCPL Family. Accordingly, the Directors unanimously approved the said proposal.

iii) Acknowledging the contribution of Shri Mukesh Dahyabhai Patel (DIN:00009605), Independent Director, in the working of the Board, Committees and in the Company, his suggestions on various strategic matters and active participation, the Board of Directors, at its Meeting held on February 11, 2015 appointed him as the Vice Chairman of the Company. The Board unanimously appointed Shri Mukesh Dahyabhai Patel as the Chairman of the Board in its meeting held on May 28, 2015 after Shri Ghattu Ramanna Narayan stepped down as the Chairman of the Board. All the Directors assured him full cooperation and congratulated him on this elevation and wished him all the success during his tenure as the Chairman in the Company. He thanked the Board Members for this recognition and assured to fulfill his duties and discharge responsibilities sincerely as the Chairman of the Company.

iv) Shri Shivshankar Shripal Tiwari (DIN: 00019058) resigned as a Whole Time Director w.e.f. April 6, 2015 upon completing the term for which his remuneration was approved by the Central Government and resigned as a Director of the Company w.e.f. May 28, 2015 due to personal engagements. The Board after consideration accepted his resignation in its meeting held on May 28, 2015. The Board placed on record its deep sense of appreciation and gratitude for the services and contribution rendered by him during his tenure as a Whole Time Director and Director since 2006 in the Company. The Board appreciated his extraordinary contribution for the expansion of various businesses in the Company during his long association with the Company.

v) The Nomination and Remuneration Committee keeping in view the versatile experience and expertise in the banking matters, recommended to the Board to appoint Shri Sheo Prasad Singh as an Additional Director w.e.f. February 11, 2015. The Directors unanimously resolved to appoint him as an additional Director on the Board of the Company. Pursuant to Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, he shall hold office up to the date of the ensuing Annual General Meeting. The Nomination and Remuneration Committee and the Board of Directors also decided to recommend him as Independent Director in place of Shri Ghattu Ramanna Narayan, who resigned in the said meeting. Shri Sheo Prasad Singh fulfills the criteria of Independence as prescribed in the Companies Act, 2013 and the Listing Agreement. A requisite notice in writing alongwith deposit from a member proposing him as a Non-Executive Independent Director has been received and his appointment is being placed before the Members in the ensuing Annual General Meeting. Your Board of Directors feel that his specialized knowledge and experience will add value to the Company. Therefore, recommended his appointment as an Independent Director for a period (5) consecutive years upto the conclusion of the 44th Annual General Meeting of the Company to be held in the calendar year 2020.

vi) The Nomination and Remuneration Committee recommended to the Board to appoint Shri Shiv Shankar Shripal Tiwari as an Additional Director w.e.f. May 28, 2015. The Board appreciated his services in the Company and unanimously resolved to appoint him as an Additional Director in the Company. Pursuant to Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, he shall hold office up to the date of the ensuing Annual General Meeting. A requisite notice in writing alongwith deposit from a member proposing him to appoint as a Non-Executive Director has been received and his appointment is being placed before the Members in the ensuing Annual General Meeting. Your Board of Directors feels that his experience and versatile knowledge in the business of the Company will be helpful to the Company, therefore, recommends his appointment as Director liable to retire by rotation.

There was no other appointment or cessation of Key Managerial Personnel during the financial year.

b) Independent Directors:

The Companies Act, 2013, provides for the appointment of Independent Directors. Sub Section (10) of Section 149 provides that Independent Directors shall hold office for a term of upto five (5) consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Accordingly, three Independent Directors namely Shri Ghattu Ramanna Narayan, Shri Mukesh Dahyabhai Patel and Shri Vijay Dilbagh Rai were appointed by the shareholders in the last Annual General Meeting. Further, Shri Ghattu Ramanna Narayan has resigned as the Chairman and Director of the Company. Therefore, the Board of Directors have decided to recommend at the Annual General Meeting to appoint Shri Sheo Prasad Singh who meets with the criteria of Independent Director to be appointed as the Independent Director of the Company for a period of five years.

None of the Independent Directors will retire at the ensuing Annual General Meeting.

c) Retirement by rotation:

In terms of Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company, Shri Avtar Singh (DIN: 00063569), Whole Time Director would retire by rotation at the forthcoming Annual General Meeting. Shri Avtar Singh, being eligible, has offered himself for re-appointment.

It may be noted that as per clause 173 (b) of the Articles of Association of the Company, a Whole Time Director immediately on retirement by rotation, shall continue to hold his office of Whole Time Director and such reappointment as such Director shall not be deemed to constitute a break in his appointment as Whole Time Director, therefore, the Board recommends his appointment.

The Board of Directors recommends the appointment/ reappointment of above mentioned Directors.

The brief resume and other details relating to the directors, who are to be appointed/re-appointed, as stipulated under Clause 49 (VIII) (E) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report.

Other details of all the Directors have been given in the Corporate Governance Report attached to this Report.

d) Re-appointments / Approvals for Managing Director and Whole Time Directors:

i) The Central Government vide its letter dated May 14, 2015 has approved the re-appointment of Shri Shalil Shashi Kumar Shroff (DIN: 00015621) as the Managing Director for a period of three (3) years w.e.f January 15, 2015 at a remuneration as approved by the shareholders of the Company in their meeting held on September 23, 2014.

ii) The shareholders of the Company, on April 8, 2015 by means of special resolution passed through Postal Ballot, have given their approval for (a) increase in remuneration of Shri Avtar Singh, Whole Time Director w.e.f. April 1,2015 to November 13, 2015 and (b) to fix remuneration for the remaining period of his reappointment i.e. from November 14, 2015 to November 13, 2017. The Company is in the process of making an application to the Central government for its approval in this regard.

e) Committees of the Board:

The Company's Board has constituted the required Committees prescribed under the Companies Act and the Listing Agreement.

The composition of the Audit and Corporate Social Responsibility Committees and Attendance in the meetings (wherever required) have been provided in the Corporate Governance Report forming part of this Annual Report.

14. LISTING WITH STOCK EXCHANGES:

The Company's shares continue to be listed at the National Stock Exchange of India Limited and BSE Limited.

The Annual Listing fee for the financial year 2015-16 has been paid to these Exchanges.

15. ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

In pursuit of ensuring "No Pollution", the pollution control measures remain the top priority in all units of the Company. The requisite measures to adopt environmentally clean and for safe operations are taken.

The local management of the factories continuously monitor operational efficiencies, minimize consumption of natural resources and reduce consumption of water. The initiatives to reduce waste and emissions remain the main focus of the Production team. The employees are made to aware about the need to sustain the environment on continuous basis. Environment, Health and Safety (EHS) measures, as always, have been given special emphasis.

16. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY :

i) Welfare Activities :

The Company through SDS Memorial Trust has helped needy students and donated to several charitable Institutions. These activities will be increased with the improvement in the financial position of the Company.

The Company continues to organize a 'Blood Donation Camp' in the memory of Late Shri S.D. Shroff on 18th December every year. Around 51 employees donated blood this year.

ii) Corporate Social Responsibility :

The Board of Directors of the Company has on May 28, 2015 formulated and approved a policy on "Corporate Social Responsibility" in compliance with the provisions of Section 135 of the Companies Act , 2013 and Schedule VII thereunder. The same is posted on the website of the Company under weblink http://punjabchemicals.com/ companypolicy.html. This policy broadly defines the activities to be undertaken by the Company to contribute to harmonious and suitable development of the local areas near manufacturing sites and society at large. The Committee comprises of Shri Shalil ShashiKumar Shroff, Shri Mukesh Dahyabhai Patel, Capt. Surjit Singh Chopra (Retd.) and Smt. Sindhu Seth. During the year under review, the Company has undertaken certain activities as per the local requirement. As per one of the interpretation on Rule 2 (f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the amount calculated to spend on CSR activities amounts to Rs. 66,000/-. The Company will spend the said amount in the current fiscal year as per the CSR Policy of the Company.

17. RESEARCH & DEVELOPMENT / QUALITY CONTROL:

Despite the shortage of funds, your Company continues to make need based investment in R&D and quality control, to ensure its competitive advantage.

The regular R&D activities continue in the laboratories of Agro Chemicals and Pharma Division. The activities are undertaken to improve upon the existing processes, decrease effluent load and to develop new products and by-products.

18. INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

19. EMPLOYEES AND INDUSTRIAL RELATIONS:

The Directors wish to place on record their appreciation for the sincere and devoted efforts of the employees and the Management staff during the difficult period in the Company. The Company maintained healthy, cordial and harmonious industrial relations at all levels through out the year.

20. DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

21. INFORMATION PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013.

i) Extract of the Annual Return:

The information required under Section 134 (3) (a) of the Companies Act, 2013 (the Act) read together with Section 92 (3) of the Act regarding extract of the Annual Return is appended hereto as Annexure 1 and forms part of this Report.

ii) Number of Meetings of the Board:

The Board met five (5) times during the Financial Year 201415, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

iii) Directors' responsibility statement:

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any;

b) 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 as at March 31, 2015 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a 'going concern' basis;

e) the Directors has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

iv) Declaration from Independent Directors:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. The same has been received upon by the Company and placed before the Board in its meeting held on May 28, 2015.

v) Policy on Directors' Appointment and Remuneration:

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its function of governance and management. As on March 31,2015, the Board consists of 9 Members, 3 of whom are Executive Directors and 3 are Independent Directors. The Board periodically evaluated the need for change in its composition and size.

The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel. The same is appended as Annexure2 and can be assessed at the weblink http://punjabchemicals.com/ companypolicy.html.

vi) Auditors' Remarks:

a. Statutory Auditors:

The Company's Auditors have made the following qualifications in their report on Consolidated

Financial Statements for the Financial Year ended March 31,2015;

- STS Chemicals (UK) Limited, 100% subsidiary of the Company has not been considered for the purpose of preparation of the Consolidated Financial Statements.

The Board of Directors are of the opinion that the aforesaid subsidiary does not have any operations. Accordingly, the non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the Group.

There are few remarks given in the Annexure to the Auditors' Report which are self-explanatory. Necessary actions are being taken on those remarks and points wherever required.

b. Secretarial Auditor:

The Secretarial Audit Report for the financial year 2014-15 is annexed to this Report as Annexure 3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

vii) Particulars of loans, guarantees or investments under section 186:

Particulars relating to loans and guarantees or investments under section 186 of the Companies Act, 2013 is provided in the Note 34 to the standalone financial statement.

viii) Related Party Transactions:

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at weblink http://punjabchemicals.com/companypolicy. html.

Your Directors draw attention of the Members to Note no. 32 to the standalone financial statements which sets out related party disclosure.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

Form AOC-2 pursuant to clause (h) of sub-section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure 4.

ix) Material changes and commitments, if any:

No event occurred between the end of the financial year and the date of the Report which has the affect on the Financial Statements. However, One Time Settlement (OTS) with State Bank of India (SBI) may affect the Financial Statements upon fulfillment of conditions. Necessary adjustment in the books of account will be carried out after compliance of all conditions as specified in OTS.

x) Particulars regarding conservation of energy, etc.:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 5 and forms part of this Report.

xi) Risk Management:

Pursuant to Clause 49 of the Listing Agreement, the Company has constituted a Risk Assessment Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board's Report.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has formulated Risk Management Policy which is posted at the website of the Company under weblink http:// punjabchemicals.com/companypolicy.html.

xii) Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of the directors individually, of the Chairman and of the Board as a whole. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

22. PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there is no employee of the Company who draws remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 6.

23. WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company and can be assessed at weblink http://punjabchemicals.com/companypolicy.html. No such case has been reported during the year under review.

24. INTERNAL FINANCIAL CONTROLS

The Company has built a mechanism to prevent frauds and a robust internal controls with reference to the financial statements. These controls were got tested from an Independent Agency in addition to the Internal Auditor and no material weakness in the design of the system or operations were observed. As a practice, the robust Internal Financial Control environment will be maintained in the Company.

25. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has set in place an Anti harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 named as Policy on 'Prevention of Sexual Harassment at Workplace. Under this policy, an appropriate complaint mechanism in the form of "Complaint Redressal Committee" has been created in the Company for time-bound redressal of the sexual harassment complaint made by the victim.

26. CEO/CFOCERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shashikumar Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on March 31,2015, at its meeting held on May 28, 2015. The said Certificate is also annexed to the Corporate Governance Report.

27. AUDITORS:

At the Annual General Meeting (AGM) held on September 23, 2014, M/s S R B C & Co. LLP., Chartered Accountants, Mumbai, (Membership No.: 49365) were appointed as the Statutory Auditor of the Company to hold office till the conclusion of the AGM to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at the AGM of coming year. Accordingly, the appointment of M/s S R B C & Co. LLP., Chartered Accountants, Mumbai, (Membership No.: 49365), as Statutory Auditors of the Company, is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Members are requested to consider their appointment on a remuneration to be decided by the Board for the ensuing Financial Year i.e. 2015-16.

28. SECRETARIAL AUDITORS:

On the recommendation of the Audit Committee, the Board of Directors of the Company had appointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934) as the Secretarial Auditor of the Company for the financial year 2014-2015, in terms of Section 204 of the Companies Act, 2013 and Rules thereunder.

The Board upon recommendation of the Audit Committee has reappointed M/s. P.S. Dua& Associates, Company Secretaries (CP No. 3934), as the Secretarial Auditor of the Company for the financial year 2015-16.

29. COST AUDITORS:

The Board of Directors upon recommendation of the Audit Committee appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for the financial year 2015-16. They have submitted a certificate of eligibility for the appointment.

The Audit Committee has nominated Mrs. Pushpa Khanna, Cost Accountant, Chandigarh as the Lead Auditor of the Company.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought in the ensuing Annual General Meeting.

For the year 2014-15, the due date for filing the Cost Audit Report is September 27, 2015 and the same will be filed in due course. The Cost Audit Report for the year 2013-14 was filed on September 24, 2014.

30. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 125 of the Companies Act, 2013, relevant amount which remained unclaimed and unpaid for a period of seven years from the date it became due for payment, has to be transferred to the Investor Education and Protection Fund (IEPF) by the Company. No claim shall lie against the IEPF or the Company for the amount so transferred prior to March 31, 2014, nor shall any payment to be made in respect of such claims.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amount lying with the Company as on September 23, 2014 (date of last Annual General Meeting) on the Company's website of the Company at weblink http:// punjabchemicals.com/ unclaimedunpaidamount.html, as also on the Ministry of Corporate Affairs' website.

31. CORPORATE GOVERNANCE:

The Company strives to maintain the required standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with the stock exchanges. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance

32. GENERAL:

Your Directors state that:

a) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

b) There is no change in the nature of business of the Company.

33. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the efficient and loyal services rendered by each and every employee of the Company. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, and all other business associates for their faith reposed in the Company even at the difficult times.

For and on behalf of the Board of Directors

MUKESH D PATEL SHALIL S SHROFF Place: Mumbai Vice Chairman Managing Director Date: May 28, 2015 DIN : 00009605 DIN : 00015621




Mar 31, 2014

Dear Members,

The Directors are pleased to present to you, the Thirty Eighth (38th) Annual Report, on the business and operations of the Company along with the Audited standalone and the consolidated financial statements for the financial year ended on 31st March, 2014.

FINANCIAL HIGHLIGHTS:

The performance of the Company for the financial year under review is summarized below:

(Rupees in Lacs)

Consolidated*

Particulars 2013-14 2012-13

Sale of Products & Other Income (Net) 53232 24915

Profit / (Loss)before Interest, Depreciation & Tax & Exceptional item 5851 733

Less: Depreciation/Amortisation 1616 804

Less: Finance Cost 3465 1929

Profit / (Loss) before Tax & Exceptional item 770 (2000)

Less: Exceptional income/ (expense) (338) 737

Profit / (Loss) before Tax 432 (1263)

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 432 (1263)

Share of profits in associate for current year 110 -

Share of losses of associate for earlier years (446) -

Net Profit / (Loss) 96 (1263)

Carried forward to next year 96 (1263)

(Rupees in Lacs)

Standalone

Particulars 2013-14 2012-13

Sale of Products & Other Income (Net) 43314 20441

Profit / (Loss)before Interest, Depreciation & Tax & Exceptional item 5188 1509

Less: Depreciation/Amortisation 1484 717

Less: Finance Cost 3248 1736

Profit / (Loss) before Tax & Exceptional item 456 (944)

Less: Exceptional income/ (expense) (338) 737

Profit / (Loss) before Tax 118 (207)

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 118 (207)

Share of profits in associate for current year - -

Share of losses of associate for earlier years - -

Net Profit / (Loss) 118 (207)

Carried forward to next year 118 (207)

* Consolidated financial statements for the financial year ended 31st March, 2014 form part of the Annual Report and Accounts of its Subsidiary Companies.

Notes:

a) Current period figures are not comparable with the previous year, as the current period is for 12 months as against the previous period of 6 months.

b) Previous period figures under different heads have been regrouped to the extent necessary.

OPERATIONS:

The year under review was very eventful for the Company. The Management took several steps to stop the losses and nurture back the operations to a positive cash flow situation. This was achieved largely by selling of losing businesses. The focus during the year was on the Agro Chemicals Division at Derabassi. The new strategic alliances with elite customers and successful commissioning of fungicide plant has boosted the morale of the Company and vastly improved the added value. Further, the results were possible by better efficiencies, cost saving measures taken, improved supply chain and working capital management in the Agro Chemicals Division. The allocation of working capital to Pharma and Industrial Chemicals Division was limited, which had an impact on the overall performance of the Company.

The Corporate Debt Restructuring (CDR) scheme approved by the Corporate Debt Restructuring Empowered Group has been implemented and security/charge has been created over all the assets, immovable as well as movable, of the Company in the interest of the Lenders in accordance with the CDR scheme. Also as informed earlier, the Management was reviewing its entire business portfolio and exploring to dispose off non-core assets or less performing assets and businesses to focus on the core business of manufacturing of agrochemicals technical and channelize the funds for producing profitable products. These steps will increase the viability of the Company in the long term and help to retire part of its debt obligations under the CDR Mechanism.

In this endeavor, during the year, the Company sold its Agro Formulation Division alongwith all its assets situated at Ratnagiri and Baroda, which was facing challenges of limited expansion opportunities and growth prospects due to severe competition and shortage of working capital. The Company leased out its Tarapur Unit of Industrial Chemicals Division which was operating below breakeven level due to working capital shortage and slack in demand for its finished products. The Management has also accelerated negotiations with Potential Buyers of Pune Unit of Industrial Chemicals Division and Office building situated at Mumbai. The approvals of the shareholders and CDR Cell have already been obtained for these transactions.

In view of the above scenario, the total income of the Indian Operations during period under review was at Rs. 433.14 crores with a meagre net profit of Rs. 1.18 crores as against the total income of Rs. 204.41crores and a net loss of Rs. 2.07 crores in the corresponding previous year of six months. The Management of the Company expects that the disinvestment of non-profitable businesses and non-core assets will help the Company to reduce its operational fixed expenses, prune its debt burden and plough back the additional cash flow into the main operations of the Company. The impact of the same should be visible in the current financial year.

The Company has offered Voluntary Retirement Scheme (VRS) to the employees of its Tarapur Unit, which has been given on lease to UPL Limited. All the employees have voluntary opted to seek the retirement. The total expense of compensation of Rs. 388 Lacs has been provided in the accounts as an exceptional item.

OVERSEAS BUSINESS AND CONSOLIDATED RESULTS:

The working of the overseas subsidiaries of the Company did not improve as envisaged by the Management. Sintesis Quimica, Argentina (SQ) continued to make losses in the period under review due to shortage of working capital and local environment. As informed earlier that this Company filed an application of Reorganization of Debt with the Argentinean authority. We are now informed that the Argentinean Court has approved the scheme of reorganization of debt. The Management feels that SQ will now work smoothly after these orders subject to the availability of the required Working capital.

In the period under review, the total revenue of this subsidiary stood at Rs. 92.25 crores with a net loss of Rs. 7.63 crores.

During the period under review, SD Agchem (Europe) NV also approached its local Banks for approval of the Debt Restructuring Scheme. The Company has remitted Rs. 39 lacs to SD Agchem (Europe) as Promoters'' contribution for debt restructuring as per the requirement of local Banks. The total income of this subsidiary stood at Rs. 15.86 crores with net loss of Rs. 0.48 crores.

The Management of the Company is exploring ways to reduce losses in these subsidiaries and preparing a strategy for their revival.

The total income of the Company in the consolidated accounts during the period under review was Rs. 532.32 crores with net profit of Rs. 0.96 crores as against the income of Rs. 249.15 crores and net loss of Rs. 12.63 crores in the previous period of 6 months.

DIVIDEND:

In view of accumulated losses of the previous years, the Directors regret their inability to recommend any dividend.

OUTLOOK:

Your Company has a specialized product portfolio of agrochemicals which are covered by strategic alliances with a few elite customers. Barring the uncertainties that loom over the Agrochemical industry, the Company expects strong business performance in this sector.

In addition, new opportunities in Pharma, Industrial Chemicals and specialized bio-products businesses will improve the prospects of the Company.

The Management is optimistic about the business prospects and taking requisite steps as and when the situation arises.

SUBSIDIARY COMPANIES:

As on 31st March, 2014, your Company has only three subsidiaries namely- STS Chemicals (UK) Ltd.; Sintesis Quimica, Argentina, S.A.I.C and SD AgChem (Europe) NV.

The consolidated financial results of the Company include the financial results of the Subsidiary Companies as mentioned in the Notes to Accounts of the Consolidated Financial Statements.

Pursuant to the provision of Section 212 (8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated 8th February, 2011, has granted general exemption from attaching the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors in its meeting held on 29th May, 2014 has given its consent for not attaching the Annual Accounts of its subsidiaries with the accounts of the Company. The statement containing brief financial details of the Company''s subsidiaries for the financial year ended 31st March, 2014 is included in the Annual Report. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiary Companies during business hours.

The consolidated Financial Statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report includes the financial information of the Subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is also included in this Annual Report.

FINANCE:

Inadequacy of working capital continued to be a great concern for the Management of the Company. The Management has taken various steps, as detailed in the foregoing paragraphs and also in the Management Analysis Report to improve the liquidity position of the Company by way of disposing of non-core assets and non profitable businesses.

As informed in the last year Annual Report that the Company had restructured its secured term loans and working capital loans under the scheme of CDR. However, no additional funds were sanctioned to the Company for operational purposes or to fund the working capital required to run the operations. Therefore, during the period under review, the Company continued to plough back its cash inflows generated from the operations into the working of the Company.

The payment of interest & instalments under the CDR scheme has also been started from June, 2013. This has posed additional stress on the financials of the Company. The Management expects that this situation should improve in the next financial year.

FIXED DEPOSITS:

The Company has not accepted or renewed any fixed deposits from the public since the last financial year. The Company has repaid all the fixed deposits matured and due during the period in time. The total outstanding deposits as on 31st March, 2014 amounts to Rs. 27.95 lacs.

As on 31st March, 2014, the deposits amounting to Rs. 1.00 lacs remained unclaimed by 2 depositors (previous year Rs. 3.16 lacs by 4 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

The management would like to thank all the depositors for their faith and confidence reposed in the Company.

LISTING WITH STOCK EXCHANGES:

The Company''s shares continue to be listed at the National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

The Annual Listing fee for the financial year 2014-15 has been paid to these Exchanges.

INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

The environment management and pollution control are the foremost priority in all the units of the Company. Due importance is also given on adopting environmentally clean and safe operations.

The Management of the Company is very conscious and takes adequate steps to reduce waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES AND INDUSTRIAL RELATIONS:

Directors wish to place on record their appreciation for the sincere and devoted efforts of the employees and the Management staff at all levels.

The industrial relations at all sites of the Company remained cordial throughout the year.

CORPORATE SOCIAL RESPONSIBILITY:

The Company continues to organize a ''Blood Donation Camp'' in the memory of Late Shri S.D. Shroff on 18th December every year. Around 62 employees donated blood this year. SDS Memorial Trust has also helped few of the needy students, gave donations for religious places and other Charitable Institutes. These activities will be increased upon improvement in the financial position of the Company.

RESEARCH & DEVELOPMENT/QUALITY CONTROL:

Inspite of shortage of funds, your Company continues to make need base investment in R&D considering it as a source of competitive advantage.

The regular R&D activities are carried out in the laboratories of Agro Chemicals Division and Pharma Division. The activities are taken to improve upon the existing processes, decrease effluent load and to develop new products and by-products. Environment, Health and Safety (EHS) considerations have been given special emphasis in the process improvement activities.

DIRECTORS:

Section 161(1) read with section 149 of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Sindhu Seth was appointed as an Additional Director designated as a Woman Director w.e.f. 29th May, 2014 and she shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Smt. Sindhu Seth for appointment as a Woman Director, liable to retire by rotation, at the ensuing Annual General Meeting of the Company.

In terms of the Articles of Association of the Company, Capt. S.S Chopra (Retd.) Director will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-appointment.

The Board of Directors recommends the appointment/re- appointment of above mentioned Directors.

Further, in compliance with the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges and the Companies Act, 1956, Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai were designated as Independent Directors of the Company. Now, pursuant to the new provisions of Section 149 of the Companies Act, 2013, which came into effect from 1st April, 2014, every listed public Company is required to have atleast one-third of the total number of Directors as Independent Directors, who are not liable to retire by rotation and shall hold office for a term upto five (5) consecutive years on the Board of a Company and shall be eligible for re-appointment for another term of upto five (5) consecutive years on passing of a special resolution by the Company. Therefore in view of the new provisions, the Board recommends the appointment of Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai as Independent Directors of the Company at the ensuing Annual General Meeting for a term of five (5) consecutive years effective from the date of the ensuing Annual General Meeting till 43rd Annual General Meeting to be held in the calender year 2019. The Company has received notices from members in writing pursuant to Section 160 of the Companies Act, 2013 signifying their intention to propose the candidature of Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai.

The Company has received declarations from these Directors confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. In the opinion of the Board, each of these Directors fulfil the conditions specified in the Act and the Rules framed thereunder for appointment as Independent Director.

The brief resume and other details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report.

DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to energy conservation is appended hereto and forms part of this Report.

ii) PARTICULARS OF EMPLOYEES

The information under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 is not required to be attached with this report, as none of the employees is covered under these rules.

iii) RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) 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 as at March 31, 2014 and of the profit of the Company for the year ended on that date;

c) 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; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis

iv) CEO/CFO CERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2014, at its meeting held on 29th May, 2014. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT:

The Board of Directors upon recommendation of the Audit Committee appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co., Cost Accountant, Jalandhar as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for the financial year 2014-15. They have submitted a certificate of eligibility for the appointment.

The Audit Committee has nominated Mrs. Pushpa Khanna, Cost Accountant, Chandigarh as the Lead Auditor of the Company.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at in the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2015.

For the year 2013-14, the due date for filing the Cost Audit Report is 30th September, 2014 and the same will be filed in due course. The Cost Audit Report for the year 2012-13 was filed on 28th September, 2013.

AUDITORS'' REPORT:

The Company''s Auditors have made the following qualifications in their report on Consolidated Financial Statements for the Financial Year ended March 31, 2014;

i) STS Chemicals (UK) Limited, 100% subsidiary of the Company, has not been considered for the purpose of preparation of the Consolidated Financial Statements.

ii) Effect of investment in associate company on the financial position and operating results of the group, as required by Accounting Standard (AS) 23, ''Accounting for Investment in Associates in Consolidated Financial Statements'' has been considered in the Consolidated Financial Statements based on the unaudited management certified financial statements.

The Board of Directors are of the opinion that the aforesaid subsidiary does not have any significant operations. Accordingly, the non- inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the Group. The management believes that there would not be any material impact on the consolidated financial statements based on management certified accounts of the associate concern.

The Auditors have also given ''emphasis of matter'', and not qualification, in their report in Standalone and Consolidated financial statements. The Company is taking required steps in this regard.

There are few remarks given in the Annexure to the Auditors'' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required.

AUDITORS:

The term of M/s S.R. Batliboi & Company LLP, Chartered Accountants, as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company. However, due to certain internal restructuring in their LLP, M/s S.R. Batliboi & Company LLP, Chartered Accountants have given a notice in writing of their un-willingness to continue as the Statutory Auditors upon the conclusion of the ensuing Annual General Meeting.

Therefore, upon recommendation from the Audit Committee, the Board has proposed the appointment of S R B C & Co. LLP as Statutory Auditors of the Company for a period of three (3) years. Accordingly, the appointment of Statutory Auditors is proposed to the Members in the Notice of the forthcoming AGM for a period of three (3) years commencing from the conclusion of the forthcoming AGM till the conclusion of 41st AGM, subject to ratification of their appointment at every AGM by the Members.

The Company has received letter from S R B C & Co. LLP, Chartered Accountants, confirming their eligibility to be appointed as Auditors under the relevant provisions of Chapter X of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. Further the proposed appointment will be within the limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.

Members are requested to consider their appointment on a remuneration to be decided by the Board for the ensuing Financial Year i.e. 2014-15.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund (IEPF). No claim shall lie against the IEPF or the Company for the amounts so transferred prior to 31st March, 2014, nor shall any payment to be made in respect of such claims.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amount lying with the Company as on 4th September, 2013 (date of last Annual General Meeting) on the Company''s website (www.punjabchemicals.com).

CORPORATE GOVERNANCE:

The Company strives to maintain the required standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has complied with the Corporate Governance code as stipulated under the Listing Agreement with the stock exchanges. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance The Management Discussion and Analysis Report as required under the Listing agreements with the Stock Exchange is annexed and forms an integral part of the Director''s Report.

ACKNOWLEDGEMENT:

The Directors wish to convey their appreciation to all of the Company''s employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, and all the other business associates for their continuous support given to the Company and their confidence in its management.

For and on behalf of the Bord of Directors

G.NARAYANA Chairman

Place:Mumbai Date:May 29,2014


Mar 31, 2013

Dear Members,

The Board of Directors hereby presents the 37th Annual Report on the business and operations of your Company along with the standalone and consolidated financial statements for the financial year ended on 31st March, 2013 (comprising of 6 months period from 1st October, 2012 to 31st March, 2013).

FINANCIAL HIGHLIGHTS :

The performance of the Company for the financial year under review is summarized below:

(Rupees in Lacs) Consolidated* Standalone Particulars 2012-13 2011-12 2012-13 2011-12

Sale of Products & Other Income (Net) 24915 101524 20441 54894

Profit / (Loss) before Depreciation & Tax & Exceptional item (1196) 460 (227) (4618)

Depreciation / Amortisation 804 8460 717 1991

Profit / (Loss) before Tax & Exceptional item (2000) (8000) (944) (6609)

Exceptional income/ (expense) 737 (1956) 737 (2362)

Profit / (Loss) before Tax (1263) (9956) (207) (8971)

Less: Provision for Taxation

Current tax 757

Deferred Tax

Profit / (Loss) after Tax (1263) (10713) (207) (8971)

Adjustment of tax relating to earlier years (1) 16

Net Profit / (Loss) (1263) (10712) (207) (8987)

Profit available for Appropriation (1263) (10712) (207) (8987)

Carried forward to next year (1263) (10712) (207) (8987)

* Consolidated financial statements for the financial year ended 31st March, 2013 form part of the Annual Report and Accounts of its subsidiary Companies.

Notes:

a) Current period figures are not comparable with the previous year, as the current period is for 6 months as against the previous year of 18 months.

b) Previous period figures under different heads have been regrouped to the extent necessary.

OPERATIONS:

It may be noted that various initiatives taken by the management, detailed in the previous Annual Report, have produced results. The Company during the year continued to focus on better efficiencies, cost saving measures, improved supply chain and working capital management. The management also brought the focus back on Agro-chemicals technical manufacture, the backbone of the Company''s business. The Company was able to increase revenues by new strategic alliances with elite customers and optimum utilization of the production capacity of Agro Chemicals Division. However, the working capital constraints still continued to cast its shadow in the year under review.

Amid various constraints, the Company has successfully commissioned another ''Fungicide plant'' in Agro Chemicals Division of the Company with the technical support and buy back arrangement from one of the renowned Multinational Company in the month of March, 2013. The first lot of the finished product from this plant has been dispatched in May, 2013. The Company has projected a business of around Rs. 180 crores from this contract in the next three years. The successful implementation of this plant is a major morale booster for the Company.

The total income of the Indian Operations in the six months period under review was at Rs. 204.41crores with a net loss of Rs. 2.07 crores as against the total income of Rs. 548.94 crores and a net loss of Rs. 89.87 crores in the previous year of eighteen months (this is after booking exceptional expenses and other provisions). The management of the Company has been endeavouring to run all the plants situated at different locations with more focus on Agro Chemicals Division. The new fungicide and other profitable existing products in this division are expected to strengthen the working of the Company and will add more value to its business.

The Management is also looking for an opportunity to dispose off some of the non-core assets or less performing assets or businesses in order to reduce the debt of the Company. This will strengthen the revival of the Company. l The Members will recall that in view of the poor financial results of the previous year, the Company had filed a report with the Board for Industrial and

Financial Restructuring (BIFR) under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 informing about the erosion of net worth and potential sickness of the Company. The Company has also filed with BIFR a statement of causes of erosion of net worth and remedial measures taken / to be taken for revival after seeking the approval of the Members in the Extra-Ordinary General Meeting held on 29th December, 2012. As already mentioned, the Management of the Company with all its diligence and resources is trying to streamline the working of the Company.

OVERSEAS BUSINESS AND CONSOLIDATED RESULTS :

The operations of the overseas subsidiary companies were adversely affected during the period. This was mainly due to financial constraints and the geographical environment of the countries of operations.

As the members were briefed in the last Annual Report that the operations of Sintesis Quimica, Argentina (SQ), one of the overseas subsidiary Company, had been seriously affected by unfavourable government policies. The scenario has not changed in the six months under review. In this period, the total revenue of this subsidiary stood at Rs. 49.07 crores with a net loss of Rs. 9.77 crores.

During the period under review, the total revenue of SD Agchem (Europe) NV stood at Rs. 2.07 crores with net loss of Rs. 1.18 crores.

The Company is weighing some of the strategic proposals to streamline the working in these subsidiary Companies.

The total income of the Company in the consolidated accounts during the period under review was Rs. 249.15 crores with net loss of Rs. 12.63 crores as against the income of Rs. 1015.24 crores and net loss of Rs. 107.12 crores in the previous 18 months period.

DIVIDEND :

In view of loss during the period under review and accumulated losses of previous years, the Directors regret their inability to recommend a dividend.

OUTLOOK :

The Company has the facilities of manufacturing technical and branded formulations of agro chemicals business. In addition, Pharma, Industrial

Chemicals and specialized bio-products add to its business prospects. Further, the Company has a comprehensive portfolio with strong brand and a wide distribution network.

As per one of the reports of ASSOCHAM, the agrochemicals sector in India is likely to grow at 15 percent annually and cross Rs 25,000 crores mark by 2015. Therefore, India''s Agro-chemical industry has huge potential and immense growth opportunities. Hence, we expect improved performance in the local market in the coming year.

However, due to the subdued European market, exchange rate fluctuation in Rupee vis-à-vis Euro and USD, increased prices of major raw materials, adverse operating and financial position (shortage of working capital) full recovery continues to be a matter of concern for the Company. The Management however, is optimistic about the business prospects and taking steps to capitalize the available opportunities.

CHANGE IN THE REGISTERED OFFICE :

The Registered Office of the Company has been shifted to S.C.O : 183, First Floor, Sector - 26 (East), Madhya Marg, Chandigarh 160 019 we.f 1st April, 2013, as approved by the Board of Directors of the Company in their meeting held on 11th February, 2013.

SUBSIDIARY COMPANIES :

The Company has only three subsidiaries as on 31st March, 2013 namely- STS Chemicals (UK) Ltd.; Sintesis Quimica, Argentina, S.A.I.C and SD

AgChem (Europe) NV.

The consolidated financial results of the Company include the financial results of the Subsidiary Companies as mentioned in the Notes to Accounts of the

Consolidated Financial Statements.

Pursuant to the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, general exemption has been granted to the Companies for not attaching the Balance sheet, Profit & Loss Account and other documents of subsidiary Companies, with the Company''s accounts.

The Board of Directors in its meeting held on 29th May, 2013 has given its consent for not attaching the Annual Accounts of its subsidiaries with the accounts of the Company. Accordingly, Members of the Company who are interested in obtaining annual accounts of the subsidiary companies may write to the Company Secretary at the Registered Office of the Company. This document will also be available for inspection by the Members of the Company at the Company''s Registered Office and also at the Registered Offices of the concerned subsidiary Companies during business hours. The Consolidated Financial Statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report includes the financial information of the subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary Companies is also included in this Annual Report.

FINANCE:

The debt recast of Secured Term Loans amounting to Rs. 123.33 crores and Working Capital loans amounting to Rs. 201.30 crores, under the Corporate Debt Restructuring route during the last year, saved interest and gave some relief to cashflow due to the extended repayment obligations on Term Loans along with two years moratorium on interest. However, non availability of the required additional working capital restricted Company''s operational activities.

The execution of the legal documents with respect to the revised limits under the Corporate Debt Restructuring mechanism is at an advance stage.

FIXED DEPOSITS :

The Company has not accepted or renewed any fixed deposits from the public during the period under review. However, the Company has repaid all the fixed deposits matured and due during the period, and hence, the amount of Fixed Deposits as on 31st March, 2013 was reduced to Rs. 144.52 lacs (previous year Rs. 275 lacs). The Company will continue to repay the matured deposits on timely basis to all the depositors. The deposits amounting to Rs. 3.16 lacs remained unclaimed by 4 depositors as on 31st March, 2013 (previous year Rs. 17.28 lacs by 25 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment. The management would like to thank all the depositors for their faith and confidence reposed in the Company.

LISTING WITH STOCK EXCHANGES :

The Company''s shares continue to be listed at the National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Annual Listing fee for the financial year 2013-14 has been paid to these Exchanges.

INSURANCE:

The Company continues to carry adequate insurance cover for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

Your Company is conscious of the importance of environmentally clean and safe operations. The environment management and pollution control are the foremost priority in all the units of the Company. Accordingly, the efforts are made for the reduction of the waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES AND INDUSTRIAL RELATIONS:

Your Company would like to acknowledge the contributions of each and every employee in helping the Company to attain its business goals. The industrial relations at all sites of the Company remained cordial throughout the year.

CORPORATE SOCIAL RESPONSIBILITY:

The Company continues to organize a ''Blood Donation Camp'' in the memory of Late Shri S.D. Shroff on 18th December every year. This year around 61 people donated blood. SDS Memorial Trust has also helped few of the needy students. The management and employees of the Company always give due importance to Corporate Social Responsibility activities. These activities will be increased upon improvement in the financial position of the Company.

RESEARCH & DEVELOPMENT / QUALITY CONTROL:

Inspite of shortage of funds, your Company continues to make need based investment in R&D considering it as a source of competitive advantage. The regular R&D activities are carried out in the laboratories of Agro Chemicals Division and Pharma Division. The activities are taken to improve upon the existing processes, decrease effluent load and to develop new products and by-products. Environment, Health and Safety (EHS) considerations have been given special emphasis in the process improvement activities.

DIRECTORS:

Shri Jagdish R Naik, Non Executive Director has resigned from the Board we.f 30.04.2013 owing to his other pressing professional engagements. The Board of Directors acknowledged his outstanding services and placed on record his contribution in advancement of the Company, guidance on critical financial and corporate matters and role played in formulating financial restructuring strategies.

During the year under review, the Export- Import Bank of India withdrew the nomination of Shri R.W. Khanna and nominated Shri S.P. Singh, Advisor, EXIM Bank in his place on the Board of the Company we.f 11.02.2013. The Board of Directors expressed their deep sense of appreciation and gratitude for the services rendered by Shri R. W. Khanna during his tenure as a Nominee Director in the Company.

In accordance with Article 146 of the Articles of Association of the Company, read with Section 255 and 256 of the Companies Act, 1956, Shri Vijay Rai and Shri M.D. Patel will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. The Board of Directors recommends their re-appointment.

The brief resume and other details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report. l The applications for approval to the re-appointment and payment of remuneration to Shri Avtar Singh, Director (Operations & Business Development) under Section 269 of the Companies Act, 1956 has already been filed with the Central Government. The same is pending for approval with the Central Government.

DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956. i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to energy conservation is appended hereto and forms part of this Report.

ii) PARTICULARS OF EMPLOYEES

The information under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 is not required to be attached with this report, as none of the employees is covered under these rules.

iii) RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors state that:

a) In the preparation of the Annual Accounts for the year ended 31st March, 2013, the Company has followed the applicable Accounting Standards along with proper explanations relating to material departures, if any;

b) Appropriate Accounting Policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the losses of the Company for that year;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the applicable provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Annual Accounts have been prepared on a going concern basis.

iv) CEO / CFO CERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2013, at its meeting held on 29th May, 2013. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT:

The Cost Audit Report and Compliance Report for the Financial year 2011-12 duly certified by the Lead Cost Auditor, Mrs. Pushpa Khanna, Cost Accountant, Chandigarh, have been submitted to the Central Government on 29th March, 2013, which was due to be filed on 29th March, 2013.

Further, the Company has re-appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors for the Financial Year 2013-14, subject to the approval of the Central Government. It may be noted that Mrs. Pushpa Khanna, Cost Accountant, Chandigarh has been nominated as the Lead Cost Auditor of the Company.

AUDITORS'' REPORT:

In the Audit Report on the Consolidated Financial Statements for the Financial Year ended 31st March, 2013, the Auditors'' have qualified as under:

i) STS Chemicals (UK) Limited, 100% subsidiary of the Company, has not been considered for the purpose of preparation of the Consolidated

Financial Statements. ii) Effect of investment in associate company viz Source Dynamic LLC, on the financial position and the operating results of the group, as required by

Accounting Standard (AS) 23, ''Accounting for Investment in Associates in Consolidated Financial Statements'' have not been considered in the

Consolidated Financial Statements. The Board of Directors are of the opinion that the aforesaid subsidiary and the associate company do not have any significant operations. Accordingly, the non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and operating results of the Company.

There are few remarks given in the Annexure to the Auditors'' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation of the Fixed Assets register.

AUDITORS:

L M/s S.R. Batliboi & Company LLP Chartered Accountants (formerly known as S.R Batliboi & Co., Chartered Accountants), whose term of office as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given a notice in writing to the Company expressing their willingness for re-appointment. S.R Batliboi & Co. have intimated the Company vide letter dated 1st April, 2013 about the change in the name of the firm to ‘S.R. Batliboi & Co. LLP'' pursuant to its conversion as a Limited Liability Partnership firm. The change in the name of the auditor firm would not have any effect on the letters, agreements, instruments, deeds, documents and writings executed by and between the Company and the audit firm and the same would continue to be in full force and effect in accordance with their terms, as if S.R Batliboi & Co. LLP were a party to it instead of S.R Batliboi & Co.

They have also given a letter to the Company certifying that their proposed appointment as Auditors would be within the limits prescribed under section 224(1B) of the Companies Act, 1956. The Directors of the Company have recommended their appointment.

CORPORATE GOVERNANCE:

The Company strives to maintain high standards of corporate governance in interactions with all the stakeholders. The Company has complied with the Corporate Governance code as stipulated under the listing agreement with the stock exchanges. A separate section on corporate governance along with a certificate from the Practicing Company Secretary confirming the level of compliance is attached and forms a part of this report. The Management Discussion and Analysis Report as required under the Listing agreements with the Stock Exchange is annexed and forms an integral part of the Directors'' Report.

ACKNOWLEDGEMENT:

The Directors also take this opportunity to thank all the financial institutions, banks, customers, vendors and members for their support and co- operation during the financial year.

For and on behalf of the Board of Directors

G. NARAYANA

Place: Mumbai Chairman

Date : May 29, 2013


Mar 31, 2011

TO THE MEMBERS,

The Directors are pleased to present the 35th Annual Report of the Company, together with the Audited Statement of Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

The performance of the Company during the year as compared to the previous year is summarized below:

(Rs. in Lacs)

Consolidated* Standalone

2010-11 2009-10 2010-11 2009-10

Sale of Products & Other Income (Net) 68054 58302 36856 32473

Profit / (Loss)before Depreci -ation & Tax & Exceptional item 2202 (4015) (1279) (4441)

Less: Depreciation/Amortisation 3159 3419 694 1059

Profit/(Loss) before Tax & Exceptional item (957) (7434) (1973) (5500)

Less: Exceptional item 619 619 - -

Profit / (Loss) before Tax (338) (7434) (1354) (5500)

Less: Provision for Taxation

Current year 435 175 - -

Deferred Tax Asset/ (Liability) (141) (1813) - (1457)

Profit/(Loss) after Tax (632) (5796) (1354) (4043)

Minority Interest - 1 - -

(632) (5795) (1354) (4043)

Add/(Less):

Excess/(Short) Provision for Taxes of earlier years. 1 (84) 1 (69)

Net Profit/(Loss) (631) (5879) (1353) (4112)

Post Merger loss of Parul Chemicals Limited for the year ended 31st March, 2011 - - (28) -

Profit brought forward from previous year - 216 - 1226

Profit/ (Loss) available for Appropriation (631) (5663) (1381) (2886)

Carried forward to next year (631) (5663) (1381) (2886)

* Consolidated financial statements for the year ended 31st March, 2011 form part of the Annual Report and Accounts of its Subsidiary Companies. Figures for the previous year have been regrouped, wherever necessary to make them comparable with figures of the current year.

DIVIDEND

Your Directors have not recommended any dividend for the year 2010-11 keeping in view the loss in the working of the Company.

SCHEME OF ARRANGEMENT

The amalgamation of the erstwhile Parul Chemicals Limited (PCL), Vadodara with the Company (PCCPL), has been sanctioned by the Hon'ble High Court of Punjab & Haryana at Chandigarh and by the Hon'ble High Court of Gujarat at Ahmedabad vide their orders dated 11th March, 2011 and 23rd March, 2011 respectively. Consequent upon the aforesaid approvals, the assets and liabilities of PCL have been transferred to and vested in the Company with retrospective effect from 1st April, 2009 ('the Appointed Date'). In view of this, the financial results of the Company for the year 2010-11 have been prepared after taking effect of the approved scheme. The Authorized Capital of the Company has accordingly been increased to Rs. 18 crores from Rs. 15 crores as shown in Schedule 'A of the Balance Sheet, with effect from 26th March, 2011 (the 'Effective Date'). Further, the Board of Directors of the Company in their meeting held on 11th May, 2011, have allotted 69,293 Equity shares of Rs. 10/- each fully paid-up to the shareholders of the erstwhile PCL without payment being received in cash and in the exchange ratio approved by the Hon'ble High Courts. The Company has also initiated the process of listing of these shares on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, where the Company's shares are already listed.

Further, in accordance to the aforesaid sanctioned scheme of arrangement, the fixed assets of the Company have been reinstated at their respective fair value on the basis of the report of a competent Valuer appointed by the Company. The re-instatement adjustment was accordingly credited to Business Reconstruction Reserve (BRR) account. The Company has utilized the BRR by adjusting certain expenses as detailed in the Notes to Accounts.

The Board of Directors feel that the amalgamation of PCL with the Company will provide benefit to the Company by way of business integration and further strengthen its presence in the domestic and export markets.

OPERATIONS

The total income of the Indian operations of the Company increased to Rs. 368 crores with a net loss of Rs. 13 crores in the year under review against the total income of Rs. 325 crores and a net loss of Rs. 41 crores in the previous year. The exports increased by 36% and were recorded at Rs. 146 crores against Rs. 107 crores in the previous year. It may be observed that operations of the Company had improved marginally in the year but not upto the level it should have been. The after effects of the global meltdown, disruption of operations in the Agro Chemicals Division due to fire and gestation period after repair of the plant caused shortage of working capital. The high interest cost of the existing debts further affected the working. There could be no infusion of capital from the market as envisaged due to various reasons.

The operations of the overseas subsidiary companies have improved and accordingly, the consolidated income of the Company during the year was at Rs. 680 crores against Rs. 583 crores in the previous year with 17% increase. Accordingly, the overall loss of the Company on consolidated basis reduced to Rs. 6 crores against loss of Rs. 59 crores in the previous year.

The working of Agrichem B.V., a subsidiary Company, has improved with new product mix resulting to a higher gross margin. The Company added new customers for its products and obtained few new registrations in the European countries. The Company is now able to compete in the Crop Protection industry with its efforts, knowledge of clients and leading products. During the year, the sales of this subsidiary Company was Rs. 178 crores against Rs. 145 crores and PAT of Rs. 6 crores against the loss of Rs. 13 crores in the previous year, after providing amortization of Registration expenses.

In Sintesis Quimica, Argentina, another subsidiary Company, the income has increased to Rs. 169 crores from Rs. 121 crores in the year under review with a PAT of Rs. 3.18 crores against Rs. 3.73 crores in the previous year. However, the profit did not increase in proportion to increase in sales due to enormous increase in the cost of labour and high inflation in that country.

OUTLOOK

The Company has the facilities of manufacturing technicals and branded formulations of agro chemicals business. In addition, Pharma, Industrial Chemicals and specialized bio-products add to the business prospects.

Your Company has the potentials, zeal to grow, employees' dedication and market of the products. The only constraint is high debt and less capacity utilization due to working capital shortage. The efforts are continued for infusion of Capital in the system to reduce pressure of the debts. The synergy of utilization of product registrations in India and Overseas, mixed product portfolio and efficiency in the manufacturing processes are the key factors to bring turnaround in the Company. The integration of products manufacturing in Indian units with the overseas registrations will add value, once the production capacity is fully utilized.

Therefore, the outlook of the Company in the medium to long term is growth oriented barring unforeseen circumstances.

SUBSIDIARY COMPANIES

The consolidated result of the Company includes the results of the subsidiary companies as mentioned in the Notes to Accounts of the Consolidated Financial Statements.

Your Board of Directors of the Company have resolved for not attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with this Annual Report, in view of the general exemption granted by the Ministry of Corporate Affairs, Government of India under section 212(8) of the Companies Act, 1956 vide General Circular No. 2/2011 dated 8th February, 2011. It is also stated that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to the shareholders of the Company and its Subsidiaries, upon receipt of request from them and shall be available for inspection at the registered office of the Company and also at the registered office of the concerned Subsidiary Companies. The Consolidated Financial Statement prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report include the financial information of the subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is also included in this Annual Report.

FINANCE

During the year under review, the Company tried to infuse equity into the Company by way of issuing Preferential Convertible Warrants to one of the Promoter of the Company, but the proposal could not get matured, due to the inability of the Company to comply with the new proviso to sub-regulation (2) of Regulation 72 of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

Further, the Company had requested the banks to restructure all the credit facilities for harmonization of the terms and conditions as per the available cash flow. The Banks have agreed to the proposal and the Company is in the process of executing documents. The harmonization of terms will help the Company to have more moratorium, longer period of repayment with reduced interest.

FIXED DEPOSITS

The amount of Fixed Deposits as on 31st March, 2011 was Rs. 590 lacs (previous year Rs. 481 lacs). The deposit amounting to Rs. 0.52 lacs were unclaimed by 2 depositors as on 31st March, 2011 (previous year Rs. 0.52 lacs by 2 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

In terms of the provisions of the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, Rs. 44,425 of Unclaimed Deposits pertaining to the financial year 2004-05 was transferred to the Investor Education and Protection Fund on the due date.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company remains listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited having nation wide terminals. The requisite annual listing fees to these Stock Exchanges have been paid.

INSURANCE

The Company has taken the required insurance coverage for its assets against the possible risks like fire, flood, public liability, marine, etc.

The Company has received Rs. 13.67 crores (including Rs. 6.19 crores for 'Loss of Profit') from the Insurance Company against the claim filed for loss due to fire in one of the plants in Punjab in April, 2009.

ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

The environment management and pollution control are the foremost priorities in all the units of the Company. Accordingly, all efforts are made for the reduction of the waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES & INDUSTRIAL RELATIONS

Your Board of Directors sincerely appreciate the working and contribution of all categories of employees in this difficult time. Their suggestions to improve the productivity are seriously considered.

SOCIAL RESPONSIBILITY

In the Corporate Social Responsibility endeavour, medical camps and scholarships to the needy students are arranged by the company, as per the local requirement. The medical and other required facilities are also provided to the surrounding villages. The trust created in the memory of Late Shri S.D. Shroff, organizes the Blood Donation camp every year.

RESEARCH & DEVELOPMENT / QUALITY CONTROL

The regular R&D activities are carried out in the laboratories of Agro and Pharma manufacturing units to improve upon the existing processes, decrease effluent load and to develop new products and by-products.

DIRECTORS

Shri A.G. Shroff, Non-Executive Director of the Company, has resigned from the Board of Directors w.e.f 11th February, 2011. The Board of Directors expressed their deep sense of appreciation and gratitude for his outstanding services and contribution during his tenure as a Director of the Company since 1986.

Further, in accordance with Article 146 of the Articles of Association of the Company, read with Section 255 and 256 of the Companies Act, 1956,the office of Shri Jai Prakash Bhambhani is liable to retire by rotation at this Annual General Meeting but he has not offered himself for re-appointment. Accordingly, Shri Ajit R Sanghvi and Shri M.D. Patel , Directors of the Company, are liable to retire by rotation at this ensuing Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

The Board recommends their re-appointment for the approval of the members.

The brief details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the

Corporate Governance Report forming part of the Annual Report.

The Export-Import Bank of India (EXIM), banker of the Company, has appointed Shri R.W Khanna, Chief General Manager of EXIM Bank, as its Nominee Director on the Board of the Company. The Board of Directors welcome him on the Board of the Company and are confident that knowledge, expertise and vision of Shri R.W Khanna will be an invaluable contribution to the organization.

DEPOSITORY SYSTEM

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

(i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

Particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, are given in the Annexure to this Report.

(ii) PARTICULARS OF EMPLOYEES

The information under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011, is not required to be attached with this report, as none of the employee is covered under these Rules.

(iii) RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies (Amendment) Act, 2000, your Directors state that:

(a) in the preparation of the Annual Accounts for the year ended 31st March, 2011, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

(b) they 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 at 31st March, 2011 and of the loss of the Company for the year ended on that date;

(c) they 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;

(d) they have prepared the Annual Accounts on a going concern basis.

(iv) CEO/CFO CERTIFICATION

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2011, at its meeting held on 30th May, 2011. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT

The audit reports from Mrs. Pushpa Khanna, Cost Accountant and M/s Khushwinder Kumar & Co., Cost Accountant, in respect of the audit of cost accounts relating to "Insecticides" and "Bulk Drugs" respectively, for the Financial year 2009-2010 have been submitted to the Central Government directly on 25th September, 2010 and 20th September, 2010 respectively, which was due to be filed on September 27, 2010.

Further, the Company has received the approval of the Central Government for the appointment of Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors for the Financial Year 2011-12.

AUDITORS' REMARKS

In the Audit Report on the Consolidated financial statements for the Financial Year ended 31st March, 2011, the Auditors' have qualified as under:

i) 100 % subsidiaries viz Agrichem Polska, N.V Agricultural Chemicals and Agrichem Helvetia GmbH, have not been considered for the purpose of preparation of the Consolidated Financial Statements.

ii) Effect of investment in associate companies on the financial position and operating results of the Group, as required by Accounting Standard (AS)- 23, 'Accounting for investment in Associates in Consolidated Financial Statement' have not been considered in the Consolidated Financial Statements.

The Board of Directors are of the opinion and record that the aforesaid subsidiaries and the associate companies do not have any significant operations, therefore, the non-inclusion of the same in the Consolidated Financial Statements have no significant impact on the financial position and operating results.

There are few remarks given in the Annexure to the Auditors' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation of the Fixed Assets Register.

AUDITORS

M/s S.R. Batliboi & Company, Chartered Accountants, whose term of office as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given to the Company a notice in writing of their willingness for re-appointment. They have also given a letter to the Company certifying that their proposed appointment as Auditors would be in accordance within the limits prescribed under section 224(1B) of the Companies Act, 1956. The Directors of the Company have recommended their appointment.

CORPORATE GOVERNANCE

Your Company continues to practice the principles of 'Good Corporate Governance' during the year and the Board of Directors lay strong emphasis on accountability, integrity and responsibilities in dealings with employees, shareholders, consumers and community at large.

Report on Management Discussion and Analysis and Corporate Governance Report along with a Certificate from S.K Sharma & Associates, Practising Company Secretary, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges, form part of the Annual Report.

ACKNOWLEDGEMENT

The Board of Directors appreciate the continued commitment and dedication of employees at all levels. The support of various Banks and other lenders to the Company is appreciated and acknowledged.

For and on behalf of the Board of Directors

G. NARAYANA Chairman Place : Mumbai Date : May 30, 2011


Mar 31, 2010

The Directors are pleased to present the 34th Annual Report and the Audited Statement of Accounts of the Company for the year ended 31 st March,2010.

WORKING RESULTS (Rs. in Lacs)

Consolidated* Standalone

2009-10 2008-09 2009-10 2008-09

Sale of Products & Other Income (Net) 58302 74339 32473 49693

Profit / (Loss) before Depreciation & Tax (4015) 3929 (4441) 2081 Less: Depreciation/Amortisation 3419 3121 1069 919

Profit/(Loss) before Tax (7434) 808 (5500) 1162

Provision for Taxation

Current year including FBT (175) (603) - (418)

Deferred Tax Asset/(Liability) 1813 63 1457 (68)

Profit/(Loss) after Tax (5798) 268 (4043) 676

Minority Interest 1 3 - -

(5795) 271 (4843) 676

Add/(Less):

Prior Period Adjustments - (238) - (27)

Excess/(Short): Provision for Taxes of earlier years. (84) (125) (89) (126)

Net Profit/(Loss) (5879) (92) (4112) 523

Profit brought forward from previous year 216 624 1226 1019

Profit available for Appropriation (5663) 532 (2886) 1542

Out of this, the Directors have made the following appropriations :

Proposed Dividend - 99 - 99 Tax on Dividend - 17 - 17

Transfer to General Reserve - 200 - - 200

Carried forward to next year (5663) 216 (2886) 1226

* Consolidated financial statements for the year ended 31 st March, 2010 form part of the Annual Report and Accounts of its Subsidiary Companies. Figures forthe previous year have been regrouped, wherever necessary to make them comparable with figures of the current year.

DIVIDEND

Your Directors have not recommended any dividend forthe year 2009-10 keeping in view the loss in the working of the Company.

OPERATIONS

During the year, the total income on standalone basis of the Indian operations was Rs. 325 crores against Rs. 497crores in the previous year, down by 35%. The decrease in turnover and contribution posted a net loss of Rs. 41.12 crores against the net profit of Rs 5.23 crores in the previous year. The export sales were less at Rs. 107 crores against Rs. 148 crores of last year, also less by 28%.

The year under review was a difficult one. The recession, sluggish export recovery and a slowdown in the financial flow into the economy in the year 2008-09 following the financial crisis remained in the first half of the year under review.

Inspite of the beginning of recovery trend in the second half of 2009-10, the Company could not take advantage of the same because of the major fire in one of the agro chemicals plant at Derabassi in April, 2009 (as reported in the last Annual Report). The products affected in the fire were the key products. Rehabilitation work of the said plant could only be completed in December, 2009. The delay in disbursement of claim from the insurance company and non operation of the plant for large part of the year resulted into the liquidity crisis in the Company. The procurement of raw materials and other inputs to achieve full production was not possible in the circumstances. The service of the debts taken for overseas and Indian acquisition put further pressure on the cash flow. Moreover, the Companys efforts to raise equity could not materialize in the year under review. The short term borrowings, therefore, remained the only source to run the day to day business, which further increased the interest burden. The adverse foreign exchange fluctuation added to the loss and serious impact on the working results.

The formulated agro chemicals business has spread its wings and have the potential to grow in wide area. The operations have been expanded in the cotton belt of Maharashtra and Chattisgarh states for the insecticides, herbicides and fungicides business. This Division is maturing and expected to give fillip to the revenue and profitability of the Company in future. However, in the year under review, late rains created uncertainty in the initial sowing period and then flood in the Southern States affected the sales.

As stated in the last Annual Report, the Company has acquired Parul Chemicals Limited, Baroda (Parul) as 70% subsidiary Company to strengthen the formulation business. The Board of Directors of the Company have now.decided to amalgamate this Company to integrate Paruls manufacturing capability and other business with the Companys formulation business. The application for approval of amalgamation of Parul with the Company had been filed with the Honble High Court of Gujarat at Ahmedabad and Punjab & Haryana at Chandigarh.

Pharma unit in Punjab has started the production of new API and obtained additional job work.

In Industrial Chemicals Division at Tarapur, the production of new product was commenced to partially utilize the surplus capacity of the plant. Accordingly, the said plant should add to the revenue in near future. Pune unit could not meet its target because of unavailability of raw material including erratic supply of Phosphorous and reduced demand of the products in the domestic market. However, the current year projection looks better in view of improvement in the domestic demand.

The operations of the Trading Division was severely affected duetothe working capital deterioration.

The operations of the overseas subsidiary companies have grown. The better results are envisaged in the coming years after proper utilization of the available registrations, products and extensive market. Sintesis Quimica SAIC (SO.) has increased its presence in the local and international Biological Market and have introduced new insecticides in Soyabean cultivation. In part of the year due to international crisis, the export of inoculants to US was significantly less. The drought in Argentina reduced the cultivated area of wheat, corn and sunflower, thereby affecting the sales. However, partially it was compensated with larger sales in formulations. The Company has come up with profit due to international alliances and involvement of other marketing companies to reach new customers and capture value.

Agrichem B.V., another subsidiary Company has a wide spread product range in insecticides, herbicides and fungicides with number of registrations in various countries and is expected to perform better in the coming years. However, in the year under review, sluggish European market had an impact on the performance and amortization of product registration expenses put pressure on the margins of this overseas subsidiary.

The consolidated results of the Company includes the results of the subsidiary companies namely (i) STS Chemicals (UK) Ltd., (ii) SD AgChem (Europe) NV, (iii) Sintesis Quimica, S.A.I.C., Argentina (iv)Agrichem B.V., Netherlands, (v)N.V. Agricultural Chemicals, (vi) Agrichem Helvetia GmbH, (vii) PG Crop Protection Ltd., (viii) SD Agchem Netherlands 1 B.V. and ix) Parul Chemicals Limited, Vadodara.

The Consolidated income of the Company during the year 2009-10 was Rs. 583 crores against Rs. 743 crores of previous year down by 22%. This resulted into a loss of Rs. 59 crores againstthe loss of Rs. 92 lacs in 2008-09.

OUTLOOK

The Board of Directors of your Company are confident that situation should normalize in the current year., The Company has the full export orders of its key products, therefore, utilization of full capacity, particularly in the Agro Division will remain the prime focus. The long term borrowings, equity generation and expected release of Insurance Claims in the near future should bring turnaround in the Company. Moreover, the strategy adopted in the past few years, viz. obtaining product registrations in India and overseas, mixed product portfolio and efficiency in the manufacturing processes should help the Company to recover fast. The product registrations in one of the subsidiary company in European Unions have been fully integrated in line with the products manufacturing in Indian units. The Consolidation of these activities should enable the Company to face market turbulence more effectively.

The Company is therefore, with facilities of manufacturing technicals, branded formulations possesses the entire value chain of agro chemicals business. In addition, Pharma, Industrial Chemicals and specialized bio-products adds to the business prospects.

Therefore, the outlook of the Company in the medium to long term is growth oriented barring unforeseen circumstances.

SUBSIDIARY COMPANIES

In terms of the approval granted by the Central Government under section 212(8) of the Companies Act, 1956, the audited accounts of the subsidiary Companies are not attached to this Annual Report. However, the consolidated financial statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report include the financial information of the subsidiary Companies. The Accounts of the subsidiary Companies will be made available to the members upon receipt of request from them and shall be available for inspection at the registered office of the Company and also at the registered office of the concerned subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary Companies is included in this Annual Report.

FINANCE

During the year under review, 6,00,000 Preferential Convertible Warrants (PCW), were converted into Equity shares on 11th August, 2009, at a price of Rs. 136/-per share having face value of Rs. 10/-each. Ten percent amount received from the remaining subscribers of 9,10,000 PCW were forfeited as per the SEBI guidelines as they did not opt for conversion. The Paid Up Share Capital, thereafter, increased to Rs. 7,19,28,920 consisting of 71,92,892 equity shares of Rs. 10/- each. These shares have been listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

As stated earlier, the Company was facing huge liquidity problem and in absence of infusion of sufficient equity through various means, the Company had to resort to the additional borrowings to meet its day to day working capital requirement and fund the interest cost. This has increased the cost of borrowing and affected the bottom line of the Company. During the year under review, Company had taken additional borrowings from Central Bank of India (Rs. 25 crores), Union Bank of India (Rs. 25 crores), Allahabad Bank (Rs. 50 crores) and Bank of Baroda (Rs. 50 crores).

The Company had repaid part of the term loan to AXIS Bank (Rs. 666 lacs), EXIM Bank (Rs. 500 lacs), Bank of Rajasthan (Rs. 500 lacs) and Cash Credit limit of Rs. 1800 lacs to AXIS Bank, Rs. 1300 lacs to EXIM Bank. However, the overall borrowings have increased due to the operational reasons as stated above.

FIXED DEPOSITS

The amount of Fixed Deposits as on 31 st March, 2010 was Rs. 481 lacs (previous year Rs. 431 lacs). The deposit amounting to Rs. 0.52 lacs were unclaimed by 2 depositors as on 31 st March, 2010 (previous year Rs.0.72 lacs by 4 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company remains listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited having nation wide terminals. The requisite annual listing fees to these Stock Exchanges have been paid.

INSURANCE

The Company has taken the required insurance coverage for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

The Company is conscious of its environment management and pollution control. In all the units efforts are taken for reduction of the waste generation and re- processing of the waste material, wherever possible. Multi effect evaporators installed in both units in Punjab are helping in managing the environment.

EMPLOYEES & INDUSTRIAL RELATIONS

The relations of the management and all categories of employees are cordial. The patience and belongingness of the Companys employees are enormous. Their suggestions to improve the productivity are seriously considered.

SOCIAL RESPONSIBILITY

The Company continues to meet its social responsibility by arranging medical camps, donation of medicine and giving scholarships to the needy students. The trust created in the memory of late Shri S.D. Shroff, organizes the Blood Donation camp every year and serve the nearby villages with required medical help.

RESEARCH & DEVELOPMENT/QUALITY CONTROL

The R&D laboratories of Agro Chemicals and Pharma Division are recognized and approved by the Department of Scientific & Industrial Research, Government of India, New Delhi. The regular R&D activities are carried out in these laboratories to improve upon the existing processes and to develop new products and by-products. All the incoming Raw Materials and Finished Goods are regularly checked as per the ISO 9001 and IS014001 guidelines to keep the strict quality control of the Raw Materials, Finished Goods and new products. It helps in maintaining and improving the Raw Material efficiency of the existing products.

DIRECTORS

In accordance with Article 146 of the Articles of Association of the Company and with the provisions of the Companies Act, 1956, Shri Jagdish R Naik, Shri Vijay Rai and Shri Atul G Shroff, Directors of the Company retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offerthemselves for reappointment.

Your Board recommends theirre-appointmentforthe approval of the members.

DEPOSITORY SYSTEM

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

(i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

Particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, are given in the Annexure to this Report.

(ii) PARTICULARS OF EMPLOYEES

The information as required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is v attached with this report.

(iii) RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies (Amendment) Act, 2000, your Directors state:

(a) that in the preparation of the Annual Accounts for the year ended 31st March,2010, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures, if any;

(b) that they have selected such Accounting Policies and applied them consistently and made judgements 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 at 31 st March, 2010 and of the loss of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken 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;

(d) that the Annual Accounts have been prepared on agoing concern basis.

(iv) CEO/CFO CERTIFICATION

The CEO (Managing Director) and the CFO of the Company have certified to the Board in the manner required under Corporate Governance Code, concerning the annual financial statement.

COST AUDIT

The reports of Mrs. Pushpa Khanna, Cost Accountant in respect of the audit of cost accounts of the "Insecticides" and of M/s Khushwinder Kumar & Co., Cost Accountant in respect of the audit of cost accounts of the "Bulk Drugs" for the year 2008-09 have been submitted by them directly to the Central Government.

AUDITORSREMARKS

The Companys Auditors have made qualifications in the Auditors Report on the Standalone and Consolidated financial statements for the Financial Year ended 31st March, 2010, which have been replied/explained as given below:-

i) that the Company has not made a provision for diminution other than temporary in the value of long term investment amounting to Rs.98 lacs.

The Board is of the opinion that the diminution in the value of long term investment is not of a permanent nature and accordingly no provision is considered necessary.

ii) PG Crop Protection Limited, N.V. Agricultural Chemicals and Agrichem Helvetia GmbH, 100% subsidiaries of the Company have not been considered forthe purpose of preparation of the consolidated financial statements.

iii) Effect of investment in associate companies on the financial position and operating results of the Group, as required by Accounting Standard (AS) 23, Accounting for Investment in Associates in Consolidated Financial Statements have not been considered in the consolidated financial statements.

The Board of Directors are of the opinion that the aforesaid subsidiaries and the associate Companies do not have any significant operations, therefore, the non-inclusion of the same in the Consolidated Financial Statements have no significant impact on the financial position and operating results.

There are few remarks given in the Annexure to the Auditors Report which are self explanatory. However, necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation in the Fixed Assets Register.

AUDITORS

M/s S.R. Batliboi & Company, Chartered Accountants, whose term of office as the Statutory Auditors will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given to the Company a notice in writing of their willingness for reappointment. They have also given a letter to the Company certifying that their proposed appointment as Auditors would be in accordance within the limits prescribed under section 224(1 B) of the Companies Act, 1956. The Directors of the Company recommend their appointment.

CORPORATE GOVERNANCE

As per the Listing Agreement, a separate statement on Management Discussion and Analysis, Corporate Governance Report and a Certificate from the Practising Company Secretary regarding compliance form part of this Annual Report.

ACKNOWLEDGEMENT

The Board of Directors deeply acknowledge the contribution of all the stakeholders of the Company and value their support and suggestions. The support of various Banks and other lenders to the Company at the difficult time is worth praising and deserve heartfelt thanks. We, assure all the stakeholders that the team PCCPL is fully dedicated and assure that with the continuous support, we will overcome the turbulence in this year.

For and on behalf of the Board of Directors G.NARAYANA Place:Mumbai Chairman Date:June 18,2010

 
Subscribe now to get personal finance updates in your inbox!