Notes to Accounts of Punjab Chemicals and Crop Protection Ltd.

Mar 31, 2022

a. Plant and equipment includes '' 44 (previous year: '' 44) worth of equipment acquired under United Nations Industrial Development Organization grant scheme.

b. Plant and equipment includes '' 145 (previous year: '' 24) of capitalization towards research and development.

c. Refer note 18 for information on property, plant and equipment pledged as security by the Company.

d. Refer note 41 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

e. The Company has capitalized the following expenses to the cost of property, plant and equipment / capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

a. The Company has also taken or leases certain office premises with contract terms of one year. These leases were short-term in nature and the Company had elected not to recognise right-of-use assets and lease liabilities for those leases. The Company incurred '' 46 (previous year '' 21) towards expenses relating to shortterm leases for which the recognition exemption has been applied.

b. The total cash outflow for leases, including cash outflow for short term and low value leases, is '' 302 (previous year '' 108).

Note 17: Other equity

(i) Capital reserve

Capital reserve represents the forfeited share application money of '' 185 received for preferential convertible warrants in 2008-2009 and '' 124 received for equity convertible warrant in 2009-2010.

(iii) Rights, preference and restriction attached to shares

The Company has only one class of equity shares having a par value of '' 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets on winding up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders (except for interim dividend) in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Securities premium

Securities premium represents the excess consideration received by the Company over the face value of the shares issued to shareholders. This will be utilized in accordance with the applicable provisions of the Companies Act, 2013.

(iii) Capital redemption reserve

Capital redemption reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(iv) Capital reduction reserve

Capital reduction reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(v) Amalgamation reserve

Amalgamation reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(vi) Retained earnings

Retained earnings represents the profits that the Company has earned till date less any transfer to general reserve, less any dividends, or other distributions paid to shareholders.

(vii) Equity instruments through Other Comprehensive Income

The Company has elected to recognize changes in the fair value of certain investments in equity securities of other comprehensive income. These changes are accumulated within the equity instrument through OCI within equity. The company transfers amounts there from to retained earnings when the relevant equity securities are derecognised.

Notes:

(a) Term loan from RBL Bank amounting to '' 496 (31 March 2021: '' 991) carrying interest rate of 11.25% p.a. (31 March 2021: 11.25%) is secured by exclusive charge by way of hypothecation on all current assets of the company, both present and future. It is further secured by exclusive charge by way of registered mortgage on factory land and building situated at Lalru, Punjab and exclusive charge by way of hypothecation on all movable property, including plant and machinery, situated at Lalru, Punjab. The loan is repayable in 9 equal quarterly installments as per the repayment schedule from March 2021. However, during the previous year, the Company had availed the moratorium extension announced by Reserve Bank of India. Accordingly, the loan was repayable in 12 equal quarterly installments of '' 125 beginning from 30 June 2020. The terms of the loan also contain certain restrictive covenants primarily requiring the Company to maintain certain financial ratios.

(b) Term loan from SVC Co-operative Bank Ltd. amounting to '' 4,458 (31 March 2021: '' 4,966) carrying interest rate of 9.70% p.a. (31 March 2021: 9.70%) is secured by exclusive charge by way of hypothecation on all movable property including Plant & Machinery situated at Company''s unit at Derabassi, Punjab both present and future. It is further secured by way of equitable mortgage on factory land and building situated at Company''s unit at Derabassi, Punjab. The loan is repayable in 70 (31 March 2021: 78) equal monthly installments.

(c) Loan from Indostar Capital Finance Limited under vehicle finance scheme amounting to '' 7 (31 March 2021: '' 49) carrying interest rate of 11.03% (31 March 2021: 11.03%) is secured by exclusive charge by way of hypothecation of vehicles purchased under said scheme. The loan is repayable in 5 (31 March 2021: 17) equal monthly installments.

Loan from SVC Co-operative Bank Limited under vehicle finance scheme amounting to '' 151 (31 March 2021: Nil) carrying interest rate of 7.75% (31 March 2021: Nil) is secured by exclusive charge by way of hypothecation of vehicles purchased under said scheme. The loan is repayable in 60 (31 March 2021: Nil) equal monthly installments.

(d) Loan from Hewlett Packard Financial Services (India) Private Limited under hire purchase scheme amounting to '' Nil (31 March 2021: '' 5) carrying interest rate of 13.86% (31 March 2021: 13.86%) for purchase of computer hardware. The loan is repayable in Nil (31 March 2021: 3) equal quarterly instalments.

(e) Inter-corporate deposits amounting to '' 1,585 (31 March 2021: INR 1,585) is carrying interest rate of 12.75% to 16.50% p.a (31 March 2021: 12.75% to 16.50% p.a).

(a) Cash credit amounting to '' 2,031 (31 March 2021: Nil) carrying interest rate of 8.75% p.a. (31 March 2021: Nil) is secured by exclusive charge by way of hypothecation on all current assets of the Company, both present and future. It is further secured by exclusive charge by way of registered mortgage on factory land and building situated at Derabassi, Punjab and exclusive charge by way of hypothecation on all movable property, including plant and machinery, situated at Derabassi, Punjab.

(b) Packing credit amounting to '' Nil (31 March 2021: '' 545) availed in foreign currency carrying interest rate of Nil. (31 March 2021: 6%) is secured by exclusive charge by way of hypothecation on all current assets of the Company, both present and future. It was further secured by exclusive charge by way of registered mortgage on factory land and building situated at Lalru, Punjab and exclusive charge by way of hypothecation on all movable property, including plant and machinery, situated at Lalru, Punjab.

(a) For quoted investments, market value is taken as fair value. The fair value in respect of the unquoted equity investments cannot be reliably estimated. The Company has currently measured them at net book value as per the latest audited financial statements available.

(b) As per paragraph D 15 of Ind AS 101, the Company has elected to measure its investment in SD Agchem (Europe) (Subsidiary of the Company), at its fair value on transition date which will be regarded as it deemed cost.

(c) Fair value of non-current financial assets and financial liabilities has not been disclosed as there is no significant differences between carrying value and fair value.

(d) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(e) The Company''s non-current borrowings have been contracted at market rates of interest. Accordingly, the carrying value of such non-current borrowings approximates fair value. Further, fair value measurement of lease liabilities is not required.

There are no transfers between level 1, level 2 and level 3 during the current year and previous year

Note 38(b): Financial risk management

(i) Risk management framework

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk management policies are established to identify and analyze the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to effect changes in market conditions and Company''s activities. The Company, through its training and management standards and procedures, aims to maintain discipline and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the result of which are reported to audit committee.

Trade receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, financial statements, credit agency information, industry information and business intelligence. Sale limits are established for each customer and reviewed annually. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, whether they are a institutional, dealers or end-user customer, their geographic location, industry, trade history with the Company and existence of previous financial difficulties.

The loans primarily represents security deposits and advances recoverable. The management believes these to be high quality assets with negligible credit risk. The management believes the parties to which these deposits and loans have been given have strong capacity to meet the obligations and where the risk of default is negligible or nil and accordingly no provision for excepted credit loss has been provided on these financial assets. Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies.

Cash and cash equivalents

The Company holds cash and cash equivalents of '' 692 at 31 March 2022 (31 March 2021: ''1140). The cash and cash equivalents are held with scheduled banks.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Company''s approach to manage liquidity is to have sufficient liquidity to meet it''s liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Company''s reputation.

Management manages the liquidity risk by monitoring cash flow forecasts on a periodic basis and maturity profiles of financial assets and liabilities. This monitoring takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities. The Company will continue to consider various borrowings or leasing options to maximize liquidity and supplement cash requirements as necessary.

The Company based on internal assessment which is driven by the historical experience/ current facts available in relation to default and delays in collection thereof, the credit risk for trade receivables is considered low. The Company estimates its allowance for trade receivable using lifetime expected credit loss. Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

(iv) Market risk

Market risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk namely: currency risk and interest rate risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(a) Commodity price risk

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The Company manages fluctuations in raw material price through hedging in the form of advance procurement when the prices are perceived to be low and also enters into advance buying contracts as strategic sourcing initiative in order to keep raw material prices under check to the extent possible.

(b) Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s borrowings with floating interest rates. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The exposure of the Company''s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

c) Foreign currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company''s operating, investing and financing activities.

Note 39: Capital management

(i) Risk management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Company monitors capital using a ratio of ''total debt'' to ''total equity''. For this purpose, total debt is defined as total borrowings. Equity comprises all components of equity (as shown in the Balance Sheet).

B. Defined contribution plan

a. Provident fund and employee’s state insurance

The Company''s provident fund scheme and employee''s state insurance (ESI) fund scheme are defined contribution plans. Under the scheme, the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the scheme, to these defined contribution schemes. The contributions to the scheme are charged to the statement of profit and loss in the period when the contributions are due.

b. Superannuation Fund

Superannuation Fund is a defined contribution scheme and contributions to the scheme are charged to the statement of profit and loss in the period when the contributions are due. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

C. Defined benefit plan - Gratuity

The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company made annual contributions to the LIC of India of an amount advised by the LIC.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. The funds are managed by specialised team of Life Insurance Corporation of India.

(a) Funding

Gratuity is a funded benefit plan for qualifying employees. 100% of the plan assets are managed by LIC. The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same methods (present value of defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(i) The Company is contesting the demands and the management, including its tax advisors, believe that its position will be likely be upheld in appellate process. During the previous year, Income tax Assessing officer had passed the order dated 27 March 2021 and 28 March 2021 for assessment year 2008-2009 and 20092010 respectively and has raised the demand to '' 4,384 and '' 3,281 respectively. Subsequently, the Company had filed the rectification request and during the year the Assessing officer issued rectification order under section 154 by reducing the demand to '' 556 and '' 419 respectively. During the year, the Company has filed an appeal with Income Tax Appellate Tribunal (ITAT) to contest the demand. No tax expense has been accrued in financial statements for the tax demand raised. The management believes that the ultimate outcome of the proceeding will not have a material adverse effect on the company''s financial position and results of operations.

(ii) A. In earlier years, the Directorate of Revenue Intelligence - Ahmadabad had asked the Company to reascertain the benefits claimed under the Merchandise Exports from India Scheme from 1 April 2015 onwards. Consequently, the Company basis expert view, had assessed a liability for the differential amount to be refunded for the period from 1 April 2015 till 31 December 2019 amounting to '' 907 lakhs (including interest 130 lakhs) which was also paid in the previous year.

During previous year, the Company had also received a show cause notice (SCN) from DRI Ahmadabad on 28 December 2020 under the Custom Act, 1962 who also appointed common adjudicating authority for the purpose of adjudication in respect all imports covered in the SCN. However, in view of the Hon''ble Supreme Court''s judgement dated 9 March 2021 in civil appeal no. 1827, DRI issued letter DRI/HQR/24 A/ADJN/ 3-2021/ 3245, dated 7/4/2021 intimating that the said SCN is transferred to the call book under provision of section 28(9A)(c) of the Custom act, 1962.

Further, the Company has also received notice from Additional Director General of Foreign Trade (DGFT) dated 20 October 2020 and has filed the reply dated 26 October 2020 as well as attended the hearing on 04 November 2020. Thereafter, there has been no updated in the case.

B. In earlier years, the Directorate of Revenue Intelligence - Kolkata had initiated an inquiry in relation to the manner in which the Company was claiming refund of IGST on input material at the time of export. During the current year, the Company received summons from the office of Central goods and Service tax commissioner, Ludhiana seeking further documents in relation to the above. While we have not received any show cause or Notice of demand, in the interim, we have also preferred to file a write petition in the High court of Punjab and Haryana requesting the court to give suitable directions on the above matter.

(iii) The Company had received a notice of eviction in relation to the Pune facility which was under a lease arrangement. We have filed an appeal Court of district judge Pune in relation to the aforesaid and have received a stay order in relation to the above.

(iv) Pursuant to judgement by the hon''ble supreme court dated 28 February 2019 on wages for the purposes of provident fund, the Company has ascertained the impact of the same from post 28 February 2019 and recognised in the financial statement. The impact has also been deposited with the authority.

The Executive Management Committee (Board of Director and key managerial personnel) monitors the operating results of this segment for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. For management purpose, the Company has identified "Performance Chemicals" as single operating segment.

B) Information about major customers

Revenue from 2 customer of the Company amounting to '' 50,371 (previous year: '' 28,832) and '' 7,583 (previous year: '' 5,843) respectively, constitute more than 10% of the total revenue of Company.

Note 46

During the previous year, the Company had applied to authorized dealer for write off its certain old export receivables as per the provision / laws available. Accordingly, the Company had written off its debtors amounting to '' 959 and also written back '' 959 provision created in earlier years.

During the year the company has applied to authorised dealer for write back its old overseas payables as per the provision / laws available. Accordingly, the company has written back its vendor amounting to '' 135.

Further, as at 31 March 2022, the Company has certain advances recoverable from its wholly owned subsidiary, located outside India, amounting to '' 1,934 (previous year '' 1,948) against expenses incurred on its behalf and certain dues towards it amounting to '' 1,422 (previous year '' 1,447)

Note 49:

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company continuously updates its documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under law. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of income tax expense and that of provision for taxation.

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

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Mar 31, 2018

Note 1. Corporate Information

Punjab Chemicals and Crop Protection Limited (“the Company”) is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its shares are listed on BSE Limited and National Stock Exchange of India Limited. The registered office of the Company is situated at Milestone 18, Ambala Kalka Road, Village & P.O. Bhankharpur, Derabassi, Distt. SAS Nagar, Mohali (Punjab)-140201

The Company is engaged in business of manufacturing of agro chemicals, speciality chemicals and bulk drugs and its intermediates.

Note

a. Plant and equipment includes INR 44 (previous year: INR 44) worth of equipment acquired under United Nations Industrial Development Organization grant scheme.

b. Plant and equipment includes INR 55 (previous year: INR Nil) of capitalization towards research and development.

c. Refer note 19 for information on property, plant and equipment pledged as security by the Company.

d. Refer note 42 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

e. Refer note 38 for reconciliation of deemed cost as considered by the Company pursuant to transition provision under Ind AS 101.

f. Amounts capitalized in the respective project costs and excluded from:

g. The Company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

Notes

(a) During the year ended 31 March 2016, the company had decided to sell off one of its office premises for INR 1,200 having a net book value of INR 1,267. The Company had recognized a loss of INR 67 in the year ended 31 March 2016 and the asset was shown under Other current assets as Assets held-for-sale. In the year ended 31 March 2017, the Company had entered into sale agreement of the office premise for a consideration of INR 1,115. Accordingly, the Company has recognized additional loss of INR 85 in the Statement of Profit and Loss for year ended 31 March 2017.

(b) During the financial year 2015-16, the Company had carried out physical verification and technical evaluation for usability of property, plant and equipment and intangible assets at Tarapur unit. On such evaluation the management had identified property, plant and equipment and intangible assets aggregating to INR 1,163 of no use by the Company. Accordingly, the management had decided to discarded / scrapped the assets. The Company had recognized the losses of INR 1,131 in the Statement of Profit and Loss and INR 32 categorized as assets held for sale from Property, Plant and Equipment as at 31 March 2016. During the year 31 March 2017, assets held for sale has been reduced to INR 28 on account of assets sold worth INR 4.

(iii) Rights, preference and restriction attached to shares

The Company has only one class of equity shares having a par value of INR 10 per share. Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets on winding up. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders (except for interim dividend) in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(v) Bonus shares, shares buyback and issue of shares for consideration other than in cash during five years immediately preceding 31 March 2018

During the five years immediately preceding 31 March 2018, neither any bonus shares have been issued nor any shares have been bought back. Further, no shares have been issued for consideration other than cash except for 69,293 equity shares allotted as fully paid up pursuant to scheme of amalgamation in year ended 31 March 2012.

Note 2: Other equity

(i) Capital reserve

Capital reserve represents the forfeited share application money of INR 185 received for preferential convertible warrants in 2008-2009 and INR 124 received for equity convertible warrant in 2009-2010.

(ii) Capital redemption reserve

Capital redemption reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(iii) Capital reduction reserve

Capital reduction reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(iv) Securities premium

Securities premium represents the excess consideration received by the Company over the face value of the shares issued to shareholders. This will be utilized in accordance with the applicable provisions of the Companies Act, 2013.

(v) Amalgamation reserve

Amalgamation reserve is carried forward in the balance sheet of the Company post merger of Parul Chemical Limited into the Company during the year 2010-2011.

(vi) Retained earnings

Retained earnings represents the profits that the Company has earned till date less any transfer to general reserve, less any dividends, or other distributions paid to shareholders.

(vii) Equity instruments through Other Comprehensive Income

The Company has elected to recognize changes in the fair value of certain investments in equity securities of other comprehensive income. These changes are accumulated within the equity instrument through OCI within equity. The company transfers amounts there from to retained earning when the relevant equity securities are derecognized.

* Current and non-current classification of borrowings is based on contractual maturities.

a. In accordance with the Corporate Debt Restructuring Scheme (CDR) approved by the Corporate Debt Restructuring Empowered Group, SBICAP Trustee Company Limited was appointed as the Security Trustee for the benefit of the Lenders of the Company and acting as an agent for SBI Antwerp, Belgium for the loan taken by one of the subsidiary of the Company. In pursuance of master restructuring agreement signed as per CDR scheme and the SBI Antwerp document, the term loan amounting to INR 6,272 (31 March 2017: INR 9,187 ; 1 April 2016: INR 10,915) and working capital demand loan amounting to INR 51 (31 March 2017: INR 51 ; 1 April 2016: INR 177) is secured by way of first pari passu charge on movable assets including current assets and immovable assets of Derabassi and Lalru unit, pledge of unencumbered shares of one of the promoter and the personal guarantee of promoter of the Company. These comprise:

i. Term loans amounting to INR 3,070 (31 March 2017: INR 4,970 ; 1 April 2016: INR 6,020) is carrying interest rate of 10.75% p.a. (31 March 2017: 10.75% ; 1April 2016:10.75%). Principal amount of INR 191 (31 March 2017: INR 347 ; 1 April 2016: INR 269) is overdue for a period of 1 day (31 March 2017: 1-91 days; 1April 2016 1 day) as on the reporting date.

ii. Working capital term loans amounting to INR 1,633 (31 March 2017: INR 2,005 ; 1 April 2016: INR 2,352) is carrying interest rate of 8% p.a. (31 March 2017: 8% p.a; 1 April 2016:8%.). Principal amount of INR 43 (31 March 2017: INR 38 ; 1 April 2016: INR 14) is overdue for a period of 1 day (31 March 2017: 1day; 1 April 2016 1 day) as on the reporting date.

iii. Funded interest term loan amounting to INR 1,569 (31 March 2017: INR 2,206 ; 1 April 2016: INR 2,543) is carrying interest rate of 8% p.a. (31 March 2017: 8% p.a. ; 1 April 2016 : 8% p.a.). Principal amount of INR 54 (31 March 2017: 87 ; 1 April 2016: 54) is overdue for a period of 91 days (31 March 2017: 1 day; 1 April 2016: 1 day) as on the reporting date.

iv. Working capital demand loans amounting to INR 51 (31 March 2017: INR 51 ; 1 April 2016: INR 177) is carrying interest rate of 10.75% p.a. (31 March 2017: 10.75% ; 1 April 2016: 10.75% p.a.). Principal amount INR 51 (31 March 2017: INR 51 ; 1 April 2016 : INR 177) is overdue for 2009 days (31 March 2017: 1644 days ; 1 April 2016: 1279 days) as on the reporting date. (Refer note 19(j)(ii) for further details).

b. Loan from Axis Bank Limited under vehicle finance scheme amounting to INR 10 (31 March 2017: 16 ; 1 April 2016: Nil) is secured by exclusive charge by way of hypothecation of vehicles purchased under said Scheme and carrying interest rate of 9.41% and is repayable in 20 EMIs.

c. Loan from Housing Development Finance Corporation Limited for INR 10 (31 March 2017: INR 11 ; 1 April 2016: INR 14) is secured by equitable mortgage by way of the deposit of the title deeds of the properties of respective employees who have availed the loan under said Schemes and is carrying interest rate of 11% p.a. (31 March 2017: 12%-16% p.a.; 1 April 2016: 12%-16%) and is repayable in 24 EMIs.

d. Loan from Kotak Mahindra Prime Limited under vehicle finance scheme amounting to INR 4 (31 March 2017: 7 ; 1 April 2016: Nil) is secured by exclusive charge by way of hypothecation of vehicles purchased under said Scheme and carrying interest rate of 9.4% and is repayable in 20 EMIs.

e. Loan from Mahindra & Mahindra Finance Services Limited under vehicle finance scheme amounting to INR 58 (31 March 2017: 8 ; 1 April 2016: Nil) is secured by exclusive charge by way of hypothecation of vehicles purchased under said Scheme and carrying interest rate of 11.02% and is repayable in 24-32 EMIs.

f. One time settlement

i. One Time Settlement (OTS) with Central Bank of India

During the year, the Company has paid balance amount of INR 1,208 towards One Time Settlement (OTS) from Central bank of India and obtained No Dues Certificate. Accordingly, net write back of INR 326 has been recognized and disclosed as exceptional items.

ii. Corporate Debt Restructuring

In the earlier periods, the Company had obtained an approval for Debt Restructuring (referred to as ‘CDR’) from the Corporate Debt Restructuring Empowered Group (‘CDR EG’). As per the CDR Scheme, the Company was liable to pay working capital demand loan amounting to INR 5,000 till September 2012, out of which the Company has repaid INR 4,949 (31 March 2107: INR 4,949 ; 1 April 2016: INR 4,823) as of 31 March 2018. The balance amount of INR 51 represents excess interest charged by one of the member of the CDR Scheme which will be adjusted/refunded.

Notes

g. In accordance with the Corporate Debt Restructuring Scheme (CDR) approved by the Corporate Debt Restructuring Empowered Group, SBICAP Trustee Company Limited was appointed as the Security Trustee for the benefit of the Lenders of the Company and acting as an agent for SBI Antwerp, Belgium for the loan taken by one of the subsidiary of the Company. In pursuance of master restructuring agreement signed as per CDR scheme and the SBI Antwerp document, the cash credit amounting to INR 4,665 (31 March 2107: INR 4,669 ; 1 April 2016: INR 4,619) is secured by way of first pari passu charge on movable assets including current assets and immovable assets of Derabassi and Lalru unit, pledge of unencumbered shares of one of the promoter and the personal guarantee of promoter of the Company.

h. Cash credit amounting to INR 4,665 (31 March 2017: INR 4,669 ; 1 April 2016: INR 4,619) is carrying interest rate of 10.75% p.a. (31 March 2017: 10.75% p.a.; 1 April 2016: 10.75% p.a.).

i. Inter-corporate deposits amounting to INR 485 (31 March 2017: INR 314 ; 1 April 2016: 344) is carrying interest rate of 11% to 12.75% p.a (31 March 2017: 12.75% p.a; 1 April 2016:12.75% p.a.).

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondences with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of amounts payable to such enterprises as at the year end has been made in the financial statements based on information available with the Company as under :

Note 3: First-time adoption of Ind AS

As stated in note 2 (a)(i), these are the Company’s first financial statements prepared in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2014 notified under section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in Note 2 have been applied in preparing these standalone Ind AS financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening Ind AS balance sheet on the date of transition i.e. 01 April 2016.

In preparing its Ind AS balance sheet as at 01 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has impacted the Company’s financial position, financial performance and cash flows.

A. Optional exemptions availed

(i) Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has adopted to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value. Information relating to gross carrying amount of assets and accumulated depreciation as on the transition date as per previous GAAP is as follows:

(ii) Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement). The Company has adopted to avail of the above exemption.

(iii) Investments in Subsidiaries and Joint ventures

Ind AS 101 permits a first time adopter to measure its each investment in subsidiaries and joint ventures, at the date of transition, at cost determined in accordance with Ind AS 27 “Separate Financial Statements”, or deemed cost. The deemed cost of such investment can be it’s fair value at date of transition to Ind AS of the Company, or Previous GAAP carrying amount at that date. Paragraph D15 of Ind AS 101 allows the choice between fair value and IGAAP carrying amount for each of its investments in subsidiaries and joint ventures that it elects to measure using deemed cost. The Company has elected to measure its investment in SD Agchem (Europe), subsidiary of the Company, at its fair value on transition date which will be regarded as it’s deemed cost. The rest of the investments in subsidiaries and joint ventures are carried at their Previous GAAP carrying values as its deemed cost on the transition date.

B. Mandatory exceptions

(i) Estimates

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS (i.e. 1 April 2016) or at the end of the comparative information period presented in the entity’s first Ind AS financial statements (i.e. 31 March 2017), shall be consistent with estimates made for the same date in accordance with previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any difference in accounting policies. An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates the were not required under previous GAAP, those estimates should be made to reflect conditions that exist at the transition date or at the end of the comparative period.

The Company’s estimates under Ind AS are consistent with the above requirement. The key estimates considered in preparation of financial statements that was not required under previous GAAP are listed below:

- Fair valuation of financial instruments carried at FVTPL

- Determination of the discounted value for financial instruments carried at amortized cost

- Impairment of financial assets based on expected credit loss model

(ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortized cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortized cost has been done retrospectively except where the same is impracticable.

(iii) De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transaction to Ind AS. However, Ind AS 101 allows a first time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from the date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financials assets and liabilities derecognized as a result of past transaction was obtained at the time of initially accounting for those transactions.

As permitted by Ind AS 101, the Company has adopted to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

Footnotes to the reconciliation of equity as at 1 April 2016 and 31 March 2017 and profit or loss for the year ended 31 March 2017:

i Fair valuation of Financial Investments

a) Investment in equity (other than subsidiary and JV) (quoted and unquoted):For investments in equity (other than subsidiary and JV), Company has elected to follow fair value through OCI option and accordingly all fair value fluctuation shall be recognized directly in OCI. Accordingly, investments in other equity are carried at fair value with resulting gain of INR 0.09 on 1 April 2016 and loss of INR 0.47 as on 31 March 31 2017.

Investments in Mutual Fund (quoted):Under Ind AS 109, Mutual funds are classified and measured at fair value through profit and loss (FVTPL). Accordingly, investments in mutual mutual funds are carried at fair value with resulting loss of INR 0.11 on 1 April 2016 and gain of INR 0.20 as on 31 March 2017.

b) Investment in equity (other than subsidiary and JV) (unquoted):In case of investment in unquoted equity shares fair value cannot be reliably estimated. The Company has currently measured them at net book value as per the latest audited financial statements available. Accordingly, investment in unquoted equity share have resulted in gain of INR 95 on 1 April 2016 and gain of INR 12 for year ended 31 March 2017.

c) Investment in subsidiary and JV) (unquoted):

Ind AS 101 permits a first time adopter to measure its each investment in subsidiaries and joint ventures, at the date of transition, at cost determined in accordance with Ind AS 27 “Separate Financial Statements”, or deemed cost. The deemed cost of such investment can be it’s fair value at date of transition to Ind AS of the Company, or Previous GAAP carrying amount at that date. Paragraph D15 of Ind AS 101 allows the choice between fair value and IGAAP carrying amount for each of its investments in subsidiaries and joint ventures that it elects to measure using deemed cost.The Company has elected to measure its investment in SD Agchem (Europe), subsidiary of the Company, at its fair value on transition date which will be regarded as it’s deemed cost. The rest of the investments in subsidiaries and joint ventures are carried at their Previous GAAP carrying values as its deemed cost on the transition date.

ii Fair valuation of Loans under Corporate Debt restructuring (CDR)

As per Ind AS 109, a substantial modification of the terms of an existing financial liability shall be accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability at fair value. Accordingly Company has recognized the borrowings under CDR at fair value on initial recognition and subsequently at amortized cost. Difference between the CDR rate and fair value rate of borrowing of INR 899 is recognized in retained earrings on transition date and subsequent interest as per effective interest rate method as charged to profit and loss for the period ended on 31 March 2017 INR 367.

iii Government grant

As per Ind AS 20, Grant received will be recognized separately as deferred income and recognized in income statement over the period of useful life of Plant setup for availing grant. Since condition attached to capital subsidy recognized under IGAAP are fulfilled, entire amount capital subsidy of INR 35 is transferred to retained earnings and unamortized UNIDO grant of INR 20 and government grant of INR 15 as of the date of transition to Ind AS is reclassified to liability from other equity.

iv Reversal of rent equalization reserve

Under Ind AS, operating lease is recognized as an expense on a straight-line basis over the lease term except where the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases. Accordingly, rent equalization reserve of INR 25 on rent is reversed in the previous year.

v Excise duty on sales

Under previous GAAP, revenue form sale of goods was presented net of excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty.

The impact arising from the change is as follows:

vi Employee benefit expense

Under Ind AS, re-measurements i.e. actuarial gains and losses and the return on plan assets on the net defined benefit obligation are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, actuarial gain amounting to INR 8.07 has been recognized in other comprehensive income instead of profit or loss. There is no impact on the total equity as at 01 April 2016 and 31 March 2017.

vii Deferred Tax

Under Ind AS, deferred tax is calculated using balance sheet approach on various transitional adjustments which lead to temporary differences between the carrying amount of an asset or liability and its tax base. On transition date, Deferred tax asset of INR 1,037 is created due to transition adjustment. Further, following the definition of Deferred tax asset as per Ind AS 12, MAT credit has been reclassified from Loans and advances under IGAAP to Deferred tax assets under Ind AS. During the year ended 31 March 2017, net decrease in deferred tax asset is INR 80.

(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(b) Fair value of non-current financial assets has not been disclosed as there is no significant differences between carrying value and fair value.

(c) The fair value of borrowings is based upon a discounted cash flow analysis that used the aggregate cash flows from principal and finance costs over the life of the debt and current market interest rates. Management have used external valuation report for the fair value rate of borrowings under CDR arrangement. Fair value of non-current financial liabilities has not been disclosed as there is no significant difference between carrying value and fair value.

(d) As per paragraph D 15 of Ind AS 101, the Company has elected to measure its investment in SD Agchem (Europe) (Subsidiary of the Company), at its fair value on transition date which will be regarded as it deemed cost. The rest of investment in subsidiaries are carried at their previous GAAP value as its deemed cost on transition date.

(e) For quoted investments, market value is taken as fair value. The fair value in respect of the unquoted equity investments cannot be reliably estimated. The Company has currently measured them at net book value as per the latest audited financial statements available.

Note 3(b): Financial risk management

(i) Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to effect changes in market conditions and Company’s activities. The Company, through its training and management standards and procedures, aims to maintain discipline and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the result of which are reported to audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk (see (ii));

- Liquidity risk (see (iii));and

- Market risk (see (iv))

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The carrying amount of financial assets represents the maximum credit risk exposure and arises principally from the Company’s receivable from customers and loans. The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the Balance Sheet:

Trade receivables

The Company has established a credit policy under which each new customer is analyzed individually for credit worthiness before the payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and business intelligence. The Company evaluates the customer credentials carefully from trade sources before appointment of any distributor and only financially sound parties are appointed as distributors. The Company secures adequate deposits from its distributor and hence risk of bad debt is limited. The credit outstanding is sought to be limited to the sum of advances/deposits and credit limit determined by the company.

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables.

The loans primarily represents security deposits, advances recoverable and loans to related parties. The management believes these to be high quality assets with negligible credit risk. The management believes the parties to which these deposits and loans have been given have strong capacity to meet the obligations and where the risk of default is negligible or nil and accordingly no provision for excepted credit loss has been provided on these financial assets. Credit risk on cash and cash equivalents and bank deposits is limited as the Company generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies.

Cash and cash equivalents

The Company holds cash and cash equivalents of INR 375 at 31 March 2018 (31 March 2017: INR 167; 1 April 2016 INR 113). The cash and cash equivalents are held with scheduled banks.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Company’s approach to manage liquidity is to have sufficient liquidity to meet it’s liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to the Company’s reputation.Management manages the liquidity risk by monitoring cash flow forecasts on a periodic basis and maturity profiles of financial assets and liabilities. This monitoring takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities. The Company will continue to consider various borrowings or leasing options to maximize liquidity and supplement cash requirements as necessary.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments.

(iv) Market risk

(a) Commodity price risk

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The Company manages fluctuations in raw material price through hedging in the form of advance procurement when the prices are perceived to be low and also enters into advance buying contracts as strategic sourcing initiative in order to keep raw material and prices under check cost of material hedged to the extent possible.

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings. However Company’s borrowings are fixed rate of interest. Hence, the Company is not significantly exposed to interest rate risk.

Exposure to interest rate risk

The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings. The exposure of the Company’s borrowing to interest rate changes as reported to the management at the end of the reporting period are as follows:

(b) Foreign currency risk

The Company is exposed to currency risk to the extent that there is mismatch between the currencies in which purchases are denominated and the functional currency of the Company. The currencies in the which the Company is exposed to risk are GBP, USD, EUR. The Company evaluates this risk on a regular basis and appropriate risk mitigating steps are taken, including but not limited, entering into forward contracts.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against below currencies at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in foreign currency and affected Statement of Profit and Loss by the amounts shown below. This analysis is performed on foreign currency denominated monetary financial assets and financial liabilities outstanding as at the year end. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Fair value hierarchy

The fair value of investment property has been determined by external property valuers, having appropriate recognized professional qualifications and recent experience in the location and category of the property being valued.

The fair value measurement for the investment property has been categorized as a Level 3 fair value based on the inputs to the valuation technique used.

Valuation technique

The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs not paid by tenants. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms.

Investment property comprise of a commercial property that is leased to third party. Subsequent renewals are negotiated with the lessee. No contingent rents are charged.

Note 4(a): Capital management

Risk management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The management monitors the return on capital. The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘total equity’. For this purpose, adjusted net debt is defined as total borrowings net of cash and cash equivalents and other bank balances. Equity comprises all components of equity (as shown in the Balance Sheet).

II. Defined contribution plan

a. Provident Fund

The Company’s provident fund scheme and employee’s state insurance (ESI) fund scheme are defined contribution plans. The Company has no obligation other than to make the specified contributions.

b. Superannuation Fund

Superannuation Fund is a defined contribution scheme and contributions to the scheme are charged to the statement of profit and loss in the period when the contributions are due. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

III. Defined benefit plan - Gratuity

The employees’ gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The Company made annual contributions to the LIC of India of an amount advised by the LIC.

The above defined benefit plan exposes the Company to following risks:

Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods. The funds are managed by specialised team of Life Insurance Corporation of India.

a) Funding

Gratuity is a funded benefit plan for qualifying employees. 100% of the plan assets are managed by LIC.. The assets managed are highly liquid in nature and the Company does not expect any significant liquidity risks.

The expected contribution to defined benefit plan in 2018-2019 is insignificant.

The following table sets out the status of the defined benefit plan as required under Ind-AS 19 - Employee Benefits:

h) Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same methods (present value of defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Notes:

1. The Company is contesting the demands and the management, including its tax advisors, believe that its position will be likely be upheld in appellate process. No tax expense has been accrued in financial statements for the tax demand raised. The management believes that the ultimate outcome of the proceeding will not have a material adverse effect on the company’s financial position and results of operations.

2. The Company shall indemnify the damages to the Managing Director/Directors in case their personal guarantees are invoked in respect of loans, backed by their personal guarantees.

V. Terms and conditions of transactions with related parties

a. The transaction with related parties are made on terms equivalent to those that prevail in arm’s length transactions and within ordinary course of business. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. b. In accordance with the Corporate Debt Restructuring Scheme (CDR) approved by the Corporate Debt Restructuring Empowered Group, borrowing are also secured by personal guarantees of Mr. Shalil Shroff for term loans, working capital demand loan and cash credit facility from banks. The aggregate balance of borrowing from banks in respect of which personal guarantees have been given stands at INR 10,988 (31 March 2017: INR 13,901, 1 April 2016: INR. 15,711)

Note 5: Segment Information

The Executive Management Committee monitors the operating results of this segment for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. For management purpose, the Company has identified “Performance Chemicals” as single operating segment.

C] Information about major customers

Revenue from 2 customer of the company amounting INR 22,959 and INR 6,079 during the year 2017-18 (2 customers amounting INR 15,179 and INR 5,314 in the previous year 2016-17) constitutes more than 10% of the total revenue of Company.

Note 6: Sale of Joint Venture

During the previous year, the Company has sold its 45% ownership interest in Stellar Marine Paints Limited, a jointly controlled entity on 11 November 2016.

Note 7: Apporval from Reserve Bank of India (RBI) for conversion of Debtors into Investment

In respect of overdue export receivables from its wholly owned subsidiary i.e. S D Agchem (Europe) NV, the company had received approval on March 31, 2016 from Reserve Bank of India (RBI) under Regulation 11 of Notification No. of FEMA 120/ RB -2004 towards utilisation of said overdue export receivable into further investment. During the current year, the Company has received necessary regulatory and other approvals. Accordingly, the overdue export trade receivable from S D Agchem (Europe) NV of INR 2.594 has been converted into investment in equity share capital of the same Company. This has consequential impact on provisions for diminution in value of investments and trade receivable written back. S D Agchem (Europe) has issued new shares with par value of Euro 615 per share resulting into issue of 5,789 equity shares. and capitalised its overdue Trade Receivable (Export) of INR 2.594 of S D Agchem Europe NV.

Note 8: Write-off Investment upto 25%

Based on the Regulation 16A and 17 of Foreign Exchange Management (Transfer or Issue of any foreign securities) Regulation, 2004 and RBI/FED/2015-16 FED Mater Direction No. 15/2015-16 the Company has written off INR Nil (previous year INR 81) upto 25% of investment (net of INR 956 (previous year INR 875) write back of provision created for diminution in the value of Investment).

Note 9: Disposal of Sintesis Quimica, S.A.I.C Argentina

During the current year, STS Chemicals (‘UK’) Limited (‘STS’) and SD Agchem (Europe) NV, Belgium, (SD Agchem), wholly owned subsidiaries of the Company have on 28 September 2017 sold their entire stake in Sintesis Quimica, S.A.I.C, Argentina, a step down subsidiary of the Company to a unrelated third party after completion of necessary legal formalities in India and Argentina.

Note 10:

The specified bank notes (SBN) as defined under the notification issued by the Ministry of Finance, Department of Economic dated 08 November, 2016 are no longer in existence. Hence the Company has not provided the corresponding disclosures as prescribed in Schedule III to the Companies Act, 2013. The disclosure of SBN made in the financial statements for 31 March 2017 is as follows:

Note 11: Operating lease disclosure

The Company has entered into agreements for leasing office premises on lease and license basis. The lease have life of 5 years and no restriction places upon the Company by entering into said lease. The specified disclosure in respect of lease agreements is given below.

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Mar 31, 2016

1. Disclosure required under Sec 186(4) of the Companies Act, 2013

Incuded in loans and advances are certain advances to subsidiaries the particulars of which are disclosed below as required by section 186(4) of the Companies Act, 2013.

Investments

Details required u/s 186 have been disclosed in note 11 of the financial statements.

Guarantees given and utilized for business operations

Details required u/s 186 have been disclosed in note 33 of the financial statements.

2. Details of dues to micro, small & medium enterprises development as defined under the MSMED Act, 2006

Based on the information available with company as at period end there are no dues outstanding to the suppliers who are registered as micro and small enterprises registered under "The Micro, Small and Medium Enterprises Development Act, 2006"

3. Asset held for sale

a. During the year, the company has decided to sell off its one of its office premises for Rs.1200 lacs having a net book value of Rs.1267 lacs. The Company has recognize the losses of Rs.67 lacs in the Statement of Profit and Loss and Rs.1200 lacs is transferred to Other Current Assets -Assets held for Sale from Fixed Assets

b. During the year the Company has carried out physical verification and technical evaluation for usability of tangible and intangible assets at Tarapur unit. On such evaluation the management has identified tangible and intangible assets aggregating to Rs. 1163 lacs of no use by the Company. Accordingly, the management has decided to discarded / scrapped the assets. The Company has recognized the losses of Rs.1,131 lacs in the Statement of Profit and Loss and Rs. 32 lacs is transferred to Other Current Assets - Assets held for lSale from Fixed Assets

4. a. One Time Settlement (OTS) with State Bank of India

As per the terms of One Time Settlement (OTS) with State Bank of India (SBI), the Company has paid Rs. 4,550 lacs and Rs. 358 lacs from sale of 150,000 shares of the Company, pledged exclusively with SBI by one of the promoters against total outstanding dues of Rs. 9,485 lacs (including interest). The balance amount Rs. 4,577 lacs has been written back during the year.

b. Corporate Debt Restructuring

In the earlier periods, the Company had obtained an approval for Debt Restructuring (referred to as ''CDR'') from the Corporate Debt Restructuring Empowered Group (''CDR EG''). As per the CDR Scheme, the Company was liable to pay working capital demand loan amounting to Rs. 5,000 lacs till September 2012, out of which the Company has repaid Rs. 4,823 lacs (Previous year: Rs. 3,508 lacs) as of March 31, 2016 and further there are other borrowings outstanding as of the balance sheet date for which the Company is in the process of selling non-core assets for repayment of the aforesaid dues.

5. Voluntary Retirement Scheme

During the previous year, the Company had announced voluntary retirement scheme for employees of one of its unit which have been accepted by some of the employees of that unit.

6. Approval from Reserve Bank of India (RBI) for conversion of Debtors into Investment

In respect of overdue export receivables from its wholly owned subsidiary, the company has received approval on March 31, 2016 from Reserve Bank of India (RBI) under Regulation 11 of Notification No. FEMA 120/ RB -2004 towards utilization of said overdue export receivables into further investments. The company is in the process of obtaining necessary regulatory and other approvals. Pending such approvals, no accounting adjustments have been made in the books of accounts effecting such conversion.

7. Previous year''s figures

The company has reclassified previous year''s figures to confirm to current year''s classification.

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Mar 31, 2015

1. Corporate information

Punjab Chemicals and Crop Protection Limited (hereinafter referred to as "the Company") is engaged in business of manufacturing of agro chemicals, speciality chemicals and bulk drugs and its intermediates. The Company has presence in both the domestic and international markets.

2. Basis of preparation

A) The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of land and building for which revaluation is carried out. The accounting policies adopted in preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

B) The accumulated losses of the Company as at the close of the financial year exceeded 50% of the Shareholder's Funds (excluding accumulated losses) as at March 31, 2015 and the current liabilities have exceeded current assets by Rs. 12,176 lacs. Based on the strategic long term supply contracts with its customers with minimum commitment of supply of products and the future business plans the management is confident that the Company will be able to generate profits in future years and meet its financial obligation as they arise accordingly, the accompanying financial statements have been prepared on a going concern basis.

3. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4. Employee benefits

A. Defined contribution plan - provident fund and superannuation fund

Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the period when the contributions to the funds are due.

Superannuation Fund is a defined contribution scheme and contributions to the scheme are charged to the statement of profit and loss in the period when the contributions are due. The scheme is funded with an insurance company in the form of a qualifying insurance policy. (Rs. in lacs)

B. Defined benefit plans - gratuity

The Company has a defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on post employment at 15 days salary (last drawn salary) for each completed year of service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial valuation made at the end of the financial year. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The Company is organized into two Business Segment namely:

a) Chemicals - Comprising of Industrial, Agro Chemicals and their Intermediates, Speciality Chemicals etc.

b) Bulk Drug - Comprising of Bulk Drug and Intermediates.

The Company produces and sells its products in India and also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS-17 regarding Segment Reporting, secondary segment information on geographical segment is considered on the basis of revenue generated from India and Outside India.

5. Related party transactions

Name of the related party and related party relationships Related party where control exists

Subsidiaries

1. STS Chemicals (UK) Limited

2. S D Agchem (Europe) NV

3. Sintesis Quimica. S.A.I.C., Argentina

Other related parties with whom transactions have taken during the year

Joint venture company

1. Stellar Marine Paints Limited

Key management personnel

1. Mr. Shalil Shroff — Managing Director

2. Mr. Avtar Singh — Whole Time Director

3. Mr. S.S. Tiwari — Whole Time Director

4. Capt. S S Chopra (Retd.) — Director

5. Mr. Vipul Joshi — Chief Financial Officer (w.e.f 01.04.2014)

6. Mr. Punit K Abrol — Sr. Vice President (Finance) & Company Secretary (w.e.f. 01.04.2014)

Relatives of key management personnel

1. Mrs. Shaila Shroff

2. Mrs. Bhupinder Kaur

3. Mrs. Ravinder Kaur

4. Mr. Jaskaran Singh

5. Mrs. Mahinder S. Chopra

Enterprises over which key management personnel & their relatives have significant influence :

1. Hemsil Trading & Manufacturing Private Limited

2. M/s Salil Meta Chem

3. L & L Products Shroff Private Limited

4. Shalil Shroff (HUF)

6. Contingent liabilities (Rs. In lacs)

31 March 2015 31 March 2014

Claims against the company not acknowledged as debts

Excise duty matters in dispute or under appeal 572 599

Income Tax matters in dispute or under appeal 830 837

Demand raised by Sales Tax Authorities 11 11

Labour laws matters in dispute or under appeal 13 13

Demand raised by previous land owners 574 499

Corporate guarantee given on behalf of the subsidiary companies 1,791 1,855 (revalued at closing exchange rates)

[Includes Corporate Guarantee given to State Bank of India of Rs. 1,791 lacs (Previous year: Rs. 1,855 lacs) which is also secured by way of charge on the current assets of the Company and charge on the fixed assets of Agro and Pharmaceutical division.]

The Company is contesting the demands and the management, including its tax advisors, believe that its position will be likely be upheld in appellate process. No tax expense has been accured in financial statements for the tax demand raised. The management believes that the ultimate outcome of the proceeding will not have a material adverse effect on the company's financial position and results of operations.

The Company shall indemnify the damages to the Managing Director/Directors in case their personal guarantees are invoked in respect of loans, backed by their personal guarantees.

7. Disclosure required under Sec 186(4) of the Companies Act, 2013

Incuded in loans and advances are certain advances to subsidiaries the particulars of which are disclosed below as required by section 186(4) of the Companies Act, 2013.

Investments

Details required u/s 186 have been disclosed in note 11 of the financial statements.

Guarantees given and utilised for business operations

Details required u/s 186 have been disclosed in note 33 of the financial statements.

38. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information available with company as at period end there are no dues outstanding to the suppliers who are registered as micro and small enterprises registered under "The Micro, Small and Medium Enterprises Development Act, 2006".

8. Sale of Agro Formulation Division

During the previous year, the Company had entered into business transfer agreement ('the Agreement') for sale of agro formulation division of the Company. As per the terms of the Agreement, the Company has settled its working capital items with the buyer and necessary adjustment has been made in the books of accounts as at closing date.

9. a. One Time Settlement (OTS) with State Bank of India

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 the 150,000 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.

b. Corporate Debt Restructuring

In the earlier periods, the Company had obtained an approval for Debt Restructuring (referred to as 'CDR') from the Corporate Debt Restructuting Empowered Group ('CDR EG'). As per the CDR Scheme, the Company was liable to pay working capital demand loan amounting to Rs. 5,000 lacs till September 2012, out of which the Company has repaid Rs. 3,508 lacs (Previous year: Rs. 2,110 lacs) as of March 31,2015 and further there are other borrowings outstanding as of the balance sheet date for which the Company is in the process of selling non-core assets for repayment of the aforesaid dues.

10. Previous year's figures

The company has reclassified previous year's figures to confirm to current year's classification.

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Mar 31, 2014

* Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of the equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. In accordance with the Corporate Debt Restructuring Scheme (CDR) approved by the Corporate Debt Restructuring Empowered Group, SBICAP Trustee Company Limited was appointed as the Security Trustee for the benefit of the Lenders of the Company and acting as an agent for SBI Antwerp, Belgium (for the loan taken by one of the subsidiary of the Company.) In pursuance of master restructuring agreement signed as per CDR scheme and the SBI Antwerp document, the term loan amounting to Rs. 18,919 lacs and working capital demand loan amounting to Rs. 2,890 lacs is secured by way of first pari passu charge on movable assets including current assets and immovable assets of Agro and Pharma Division, pledge of unencumbered shares of one of the promoter and the personal guarantee of promoter of the Company.

Further, Working Capital Term loan amounting to Rs.106 lacs (Previous period: Rs 128 lacs) from Indian Overseas Bank is secured by exclusive charge by hypothecation of plant and machineries, stock and book debts and pledge of factory building and office premises at Vadodara.

As regard to the previous period, the charge were as follows:

i. Term Loan from Allahabad Bank amounting to Rs. 4,945 lacs is secured by way of first pari passu charge on the fixed assets (Except Pharmaceutical division) and second pari passu charge on the current assets of the company.

ii. Term Loan from Export - Import Bank of India amounting to Rs. 1,561 lacs is secured by first pari passu charge on the entire fixed assets of the Company both present and future, second pari passu charge on current assets of the company both current and future, personal guarantees by two directors, and by pledge of Managing Director''s shares held in the Company which is in the process of execution.

iii. Term Loan from Central Bank of India amounting to Rs. 2,473 lacs is secured by way of collateral first pari passu charge on fixed assets of the company and second pari passu charge on the current assets of the Company and also by personal guarantees of one of the director.

iv. The company had entered into a consortium agreement with State Bank of India (SBI) as lead bank, EXIM Bank, Bank of Baroda and Union Bank of India for cash credit and working capital demand loan. Under consortium agreement, cash credit and working capital facilities are secured by way of Hypothecation of entire Current Assets present & future on a pari passu basis with other members of the Consortium and collateral second charge on the movable fixed assets situated at Derabassi and Lalru in the state of Punjab, MIDC- Tarapur, Pimpari-Pune, Lote Parshuram-Chiplun in the state of Maharashtra.

v. Term loan of Rs. 41 lacs from SBI is secured under above consortium agreement. Principal amount of Rs. 0.2 lacs is overdue for a period of 90 to 183 days as on the reporting date.

vi. Working Capital Term loan of Rs. 4,154 lacs from SBI is secured under above consortium agreement. Principal of Rs. 1,990 lacs is overdue for a period of 90 to 183 days as on the reporting date.

vii. Working Capital Term loan of Rs. 1,462 lacs from Union Bank of India is secured by security provided under consortium agreement as mentioned above in addition to specific charge for working capital demand loan on Pharmaceutical division located in Lalru. Principal of Rs. 674 lacs is overdue for a period of 183 day as on the reporting date.

viii. Working Capital Term loan of Rs. 857 lacs from Export Import Bank of India is secured by personal guarantees of two directors, and by pledge of promoter''s share in the name of Managing Director''s shares held in the Company which is in the process of execution, in addition to security provided under consortium agreement as mentioned above. Principal of Rs. 393 lacs is overdue for a period of 183 days as on the reporting date.

ix. Working Capital Term loan of Rs. 128 lacs from Indian Overseas Bank is secured by Hypothecation of plant and machineries, stock and book debts and pledge of factory building and office premises of Parul Division in Vadodara.

x. Working Capital Term loan of Rs. 2,362 lacs from Bank of Baroda is secured by way of first charge on Pharmaceutical division located in Lalru and second charge on stock, book debts and fixed assets of the company in addition to security given under consortium agreement.

xi. Funded Interest Term loan of Rs. 4,296 lacs from various banks created from conversion of accrued interest on term loans is secured by the securities created in accordance with the Corporate Debt Restructuring Scheme which the Company is in the process of execution.

b. Term Loans amounting to Rs. 8,474 lacs (Previous period: Rs. 9,020 lacs) is carrying interest rate of 10.75% p.a. (Previous period 10.75% p.a.). Principal amount of Rs. 185 lacs (Previous period: Rs. 0.20 lacs) is overdue for a period of 1 to 456 days (Previous period 91 days) as on the reporting date.

c. Working Capital Term Loans amounting to Rs. 5,729 lacs (Previous period: Rs. 6,019 lacs) is carrying interest rate of 8% p.a. (Previous period 8% p.a.). Principal amount of Rs. 227 lacs (Previous period: Rs. 11 lacs) is overdue for a period of 1 to 456 days (Previous period 91 days) as on the reporting date.

d. Funded Interest Term Loan amounting to Rs. 4,822 lacs (Previous period: Rs. 4,296 lacs) is carrying interest rate of 8% p.a. (Previous period 8% p.a.). Principal amount of Rs. 71 lacs (Previous period Nil) is overdue for a period of 1 to 183 days (Previous period Nil) as on the reporting date.

e. Working Capital Demand Loans amounting to Rs. 2,890 lacs (Previous period: Rs. 2,944 lacs) is carrying interest rate of 10.75% p.a. (Previous period 10.75% p.a.). Principal amount of Rs. 2,890 lacs (Previous period Rs. 2,944) is overdue for 548 days (Previous period 183 days) as on the reporting date. (Refer note 34 for further details)

f. Housing Loan from ICICI Bank Ltd amounting to Rs. 25 lacs (Previous period: Rs. 49 lacs) is secured by a first charge by way of mortgage of residential flat situated at Mumbai and is carrying interest rate ranging from 12% - 16% p.a. (Previou period 12%-16% p.a.) and is repayable in 143 EMIs.

g. Loan from Housing Development Finance Corporation Limited for Rs. 22 lacs (Previous period: Rs. 28 lacs) is secured by equitable mortgage by way of the deposit of the title deeds of the properties of respective employees who have availed the loan under said Schemes and is carrying interest rate of 12% - 16% p.a. (Previous period 12%-16% p.a.) and is repayable in 144 EMIs.

h. The finance lease obligation of Rs. Nil (Previous period: Rs. 19 lacs) is secured by the plant and machinery taken under said lease and is carrying interest rate of 16% (Previous period 16% p.a.) and is repayable in 60 EMIs.

i. Deposits from public and shareholders are unsecured and are carrying interest rate ranging from 11% - 15% p.a. (Previous period 11%-15% p.a.) and are repayable in 1 - 3 years from the respective date of deposits.

j. In accordance with the Corporate Debt Restructuring Scheme (CDR) approved by the Corporate Debt Restructuring Empowered Group, SBICAP Trustee Company Limited was appointed as the Security Trustee for the benefit of the Lenders of the Company and acting as an agent for SBI Antwerp, Belgium for the loan taken by the subsidiary of the Company. In pursuance of master restructuring agreement signed as per CDR scheme and the SBI Antwerp document, the cash credit amounting to Rs. 7,378 lacs and working capital demand loan amounting to Rs. 2,000 lacs is secured by way of first pari passu charge on movable assets including current assets and immovable assets of Agro and Pharma Division, pledge of unencumbered shares of Shri Shalil Shroff one of the Promoters and the personal guarantee of Shri Shalil Shroff, Managing Director of the Company.

Further, Cash Credit amounting to Rs.165 lacs (Previous period: Rs 164 lacs) from Indian Overseas Bank is secured by exclusive charge by hypothecation of plant and machineries, stock and book debts and pledge of factory building and office premises at Vadodara.

As regard to the previous period, the charge is as follows:

i. The company had entered into a consortium agreement with State Bank of India (SBI) as lead bank, EXIM Bank, Bank of Baroda and Union Bank of India for cash credit and working capital demand loan. Under consortium agreement, cash credit and working capital facilities are secured by way of Hypothecation of entire Current assets present & future on a pari passu basis with other members of the Consortium and collateral second charge on the movable fixed assets situated at Derabassi and Lalru in the state of Punjab, MIDC- Tarapur, Pimpari-Pune, Lote Parshuram-Chiplun in the state of Maharashtra.

ii. Cash credit from State Bank of India of Rs. 2,846 lacs is secured under above consortium agreement.

iii. Cash credit from Union Bank of India of Rs. 914 lacs is secured by security provided under consortium agreement as mentioned above in addition to specific charge for working capital demand loan on Pharmaceutical division located in Lalru.

iv. Cash credit from Export Import Bank of India of Rs. 588 lacs is secured by personal guarantees of two directors, and by pledge of Managing Director''s shares held in the Company which is in the process of execution, in addition to security provided under consortium agreement as mentioned above.

v. Cash credit from Bank of Baroda of Rs. 3,091 lacs is secured by security given under consortium agreement.

vi. Cash credit from Indian Overseas Bank of Rs. 164 lacs is secured by Hypothecation of plant and machineries, stock and book debts and pledge of factory building and office premises of Parul Division in Vadodara.

vii. The Company has obtained approval of Corporate Debt Restructuring Empowered Group (CDR EG) for restructuring of its debts effective 1 July 2011. The loans and borrowings in books have been restructured and disclosed accordingly. The Company is in the process of creating securities required as per the CDR Scheme. The securities referred above are as per the pre-CDR arrangement with banks and shall prevail until securitization as per the CDR Scheme is effected.

viii. Cash Credit amounting to Rs. 7,543 lacs (Previous period: Rs. 7,603 lacs) is carrying interest rate of 10.75% p.a. (Previous period 10.75% p.a.).

xi. Working Capital Term Loans amounting to Rs. 2,000 lacs (Previous period: Rs. Nil) is carrying interest rate of 10.25% p.a.(Previous period Nil).

k. Revaluations

In 2010-11, the company has revalued all its land and buildings as on 1 April 2009 at the fair values as at 1 April 2009 determined by an independent external valuer. The valuer determined the fair value by reference to market-based evidence. The valuations performed by the valuer were based on active market prices, adjusted for any difference in the nature, location or condition of the specific property.

The historical cost of freehold land, leasehold land and building fair valued by the company was Rs. 130 lacs, Rs. 19 lacs and Rs. 3,542 lacs respectively and their fair value were Rs. 5,395 lacs, Rs. 614 lacs and Rs. 8,355 lacs respectively. The revaluation resulted in an increase in the value of freehold land, leasehold land and building by Rs. 5,265 lacs, Rs. 595 lacs and Rs. 4,813 lacs respectively.

l. Contingent liabilities (Rs. in lacs)

31 March 2014 31 March 2013

Claims against the company not acknowledged as debts

Excise duty matters in dispute or under appeal 599 252

Income Tax matters in dispute or under appeal 837 1,550

Demand raised by Sales Tax Authorities 11 11

Labour laws matters in dispute or under appeal 13 8

Demand raised by previous land owners 499 434

Corporate guarantee given on behalf of the subsidiary companies 4,794 4,344 (revalued at closing exchange rates)

[Includes Corporate Guarantee given to State Bank of India of Rs. 1,863 lacs (Previous period: Rs. 509 lacs) which is also secured by way of charge on the current assets of the Company and charge on the fixed assets of Agro and Pharmaceutical division.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will be likely be upheld in appellate process. No tax expense has been accured in financial statements for the tax demand raised. The management believes that the ultimate outcome of the proceeding will not have a material adverse effect on the company''s financial position and results of operations.

The Company shall indemnify the damages to the Managing Director/Directors in case their personal guarantees are invoked in respect of loans, backed by their personal guarantees.

m. Remuneration to Key Managerial Personnel

The Company has paid and provided remuneration amounting to Rs. 48.48 lacs during the period from November 14, 2012 to March 31, 2014 to one of its director. As the Company is in default in repayment of debts and interest thereon for continuous period of thirty days in the preceding financial period, it requires prior approval of the Central Government, as specified in Schedule XIII of the Companies Act, 1956, for such remuneration. The Company has made applications in this regard to the Central Government for regularization of conditions specified in Schedule XIII and currently awaiting the approval.

n. Corporate Debt Restructuring

In the earlier periods, the Company had obtained an approval for Debt Restructuring (referred to as ''CDR'') from the Corporate Debt Restructuting Empowered Group (''CDR EG''). As per the CDR Scheme, the Company was liable to pay working capital demand loan amounting to Rs. 5,000 lacs till September 2012, out of which the Company has repaid Rs. 2,110 lacs. During the current year the Company has received approval from CDR EG / Shareholders to allow company to sell other non-core assets and repay the balance dues for which the Company is in the process of selling the non-core assets.

o. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006 Based on the information available with company as at period end there are no dues outstanding to the suppliers who are registered as micro and small enterprises registered under "The Micro, Small and Medium Enterprises Development Act, 2006".

p. Sale of Agro Formulation Division

During the current year, the Company has entered into business transfer agreement (''the Agreement'') for sale of agro formulation division of the Company. As per the terms of the Agreement, the tangible fixed assets will be transferred at fixed price and working capital will be taken over at a value to be determined on closing date i.e. 30 April 2014. Accordingly, the tangible fixed assets of this units are considered as assets held for sale at lower of net book value or realizable agreed price as per the business transfer agreement. The Company is under discussion with the customer to agree the closing price for working capital items for which the Company is confident of recovering the amount as per the books of accounts as at closing date.

q. Previous period figures

a) In the previous period, the company had changed it''s accounting year from period ended 30 September to period ended 31 March. Accordingly previous period''s figures are for a period of six months from 1 October 2012 to 31 March 2013 and financial year for current year is for 12 months from 1 April 2013 to 31 March 2014. Hence, the figures for current accounting year are not comparable with those of the previous accounting period.

b) The company has reclassified previous period figures to confirm to current year''s classification.

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Mar 31, 2013

1. Corporate information

Punjab Chemicals and Crop Protection Limited (hereinafter referred to as "the Company") is engaged in business of agro chemicals and is manufacturing technical grade and formulating pesticides, herbicides, fungicides and biocides. The Company has presence in both the domestic and international markets.

2. Basis of preparations

A) The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except in case of land and building for which revaluation is carried out. The accounting policies have been consistently applied by the Company.

B) The Company has recorded a net loss of Rs. 207 lacs for the six months (''period'') and has incurred losses in the current and previous years resulting in substantial erosion of the net worth. The accumulated losses of the Company as at the close of the financial period exceeded 50%of the Shareholder''s Funds (excluding accumulated losses) as at March 31, 2013 and the current liabilities have exceeded current assets by Rs. 7,432 lacs. The Management is confident that the Company will be able to generate profits in future years and meet its financial obligation as they arise. The accompanying Financial Statements have been prepared on a going concern basis based on cumulative impact of following mitigating factors:

a) The Company has obtained approval for restructuring of its debts from Corporate Debt Restructuring Empowered Group (''CDR EG'') resulting in savings in cash flows of interest payments as discussed in detail in note 36.

b) The Company has entered into strategic long term supply contracts with its customers with minimum commitment of supply of products.

c) The promoters have provided liquidity support of Rs. 2,000 lacs to the Company as per CDR Scheme and also Company have arranged Rs. 3,000 lacs through strategic investment by an investor in the immediately previous financial period.

3. Employee benefits

A. Defined contribution plan - provident fund and superannuation fund

Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the statement of profit and loss in the period when the contributions to the funds are due.

Superannuation Fund is a defined contribution scheme and contributions to the scheme are charged to the statement of profit and loss in the period when the contributions are due. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

4. Related party transactions

Name of the related party and related party relationships Related party where control exists

Subsidiaries 1. STS Chemicals (UK) Limited

2. S D Agchem (Europe) NV

3. Sintesis Quimica.S.A.I.C, Argentina

4. Agrichem B.V. (till June 30, 2012)

5. S D Agchem (Netherlands) B.V. (till June 30, 2012)

6. Agrichem Polska SP. Z.O.O., Poland (till June 30, 2012)

7. N.V. Agricultural Chemicals, Belgium (till June 30, 2012)

8. Agrichem Helvetia GmbH, Switzerland (till June 30, 2012)

Other related parties with whom transactions have taken during the period

Joint venture company 1. Stellar Marine Paints Limited

Key management personnel Directors

1. Mr. G.Narayana - Chairman

2. Mr. Shalil Shroff - Managing Director

3. Mrs. Rupam Shroff - Whole time Director (till June 30, 2011)

4. Mr. Avtar Singh - Whole time Director

5. Mr. S.S.Tiwari - Whole time Director

6. Capt. S S Chopra (Retd.) - Director

Relatives of key management personnel 1. Mrs. Shaila Shroff

2. Mrs. Mahinder S. Chopra

3. Mrs. Bhupinder Kaur

4. Mrs. Ravinder Kaur

5. Mr. Jaswant Singh

Enterprises over which key management personnel & 1. Eftec Shroff (India) Limited (till September 30, 2012) their relatives have significant influence : 2. Hemsil Trading & Manufacturing Private Limited

3. M/s Salil Meta Chem

4. L & L Products Shroff Private Limited

5. Shalil Shroff (HUF)

[Includes Corporate Guarantee given to State Bank of India of Rs. 509 lacs (Previous period: Rs. 509 lacs) which is also secured by a first charge on the entire fixed assets (including immovable property) of the company].

The Company is contesting the demands and the management, including its tax advisors, believe that its position will be likely to be upheld in appellate process. No tax expense has been accured in financial statements for the tax demand raised. The management believes that the ultimate outcome of the V proceeding will not have a material adverse effect on the company''s financial position and results of operations.

The Company shall indemnify the damages to the Managing Director/Directors in case their personal guarantees are invoked in respect of loans, backed by their personal guarantees.

5. Financial restructuring of the Company (during the year ended 31 March, 2011)

a) The Company had also formulated a scheme of financial restructuring to deal with various costs associated with its organic and inorganic growth plan including debt finance cost, impairment of product registration. Accordingly, upon the Scheme becoming effective, certain fixed assets of the Company were reinstated at their respective fair values on the basis of the report of valuer appointed by the Company. Consequently, such reinstatement adjustment was credited to Business Reconstruction Reserve Account ("BRR") of the Company.

b) The Scheme further provided that the aggregate amount under the BRR created by way of revaluation of fixed assets would be utilised, to the extent considered necessary and appropriate by the Board of Directors of the Company from time to time, to adjust certain expenses and project cost as mentioned in the Scheme until the balance is available in the BRR account.

c) Accordingly in terms of the Scheme, the Company had revalued its assets comprising of Land and Building and the resultant surplus aggregating Rs. 10,673 lacs was credited to BRR. The BRR has been utilized towards the following expenses as per the aforesaid scheme :

The BRR has been utilized towards the following expenses incurred till period ended 30 September 2012 :-

1. Incremental depreciation aggregating Rs. 499 lacs for the year ended 31 March 2010 and 31 March 2011 on land and building on account of revaluation;

2. Other finance & professional charges related to loan restructuring amounting to Rs. 343 lacs;

3. Fixed assets and capital projects written off aggregating to Rs. 2,224 lacs;

4. Provision of non-recoverable account receivable and obsolete inventory of Rs. 184 lacs related to Parul Chemicals Limited;

5. Expenses as deemed appropriate by the Board of Directors on account of unabsorbed production overheads due to under utilization of production capacity and interest & finance expense. These expenses comprise of Payroll expenses Rs. 1,804 lacs, depreciation Rs. 463 lacs, power & fuel Rs. 1,529 lacs, Repair & Maintenance Rs. 201 lacs and interest & finance expenses amounting to Rs. 2,268 lacs;

6. Expenses incurred in connection with the Scheme implementation or purposes mentioned there in aggregating to Rs. 19 lacs; and

7. Provision for diminution other than temporary in value of investments in S D Agchem (Europe) N V amounting to Rs. 1,139 lacs on account of sale of its step down subsidiary Agrichem BV during the period 30 September 2012. (also refer note 34)

d) The generally accepted Indian Accounting Standards and principles do not provide for such adjustment of expenses against BRR. Had the Scheme not prescribed aforesaid treatment, the impact would have been as under:

6. Sale of Subsidiary

During the previous financial period, the wholly owned subsidiary of the Company, S. D. Agchem Europe N.V. sold its entire investments in equity shares in its step down subsidiary S. D. Agchem Netherlands B.V. Further, significant operational losses had been incurred in another step down subsidiary Sintesis Qimica SAIC. This stepdown subsidiary has also filed request of reorganisation before the court in Argentina to renegotiate its contracted debts/creditors. Such significant operational losses of Sintesis Quimica SAIC coupled with losses arising from sale of S. D. Agchem Netherlands B.V. resulted in substantial erosion of the networth of S. D. Agchem Europe N.V. and accordingly the Company has made a provision of Rs. 3,501 lacs for diminution other than temporary in value of investments in S. D. Agchem Europe N.V. This provision to the extent of Rs. 1,139 lacs had been adjusted against Business Reconstruction Reserve in accordance with scheme of arrangement (the scheme) for restructuring and amalgamation of erstwhile Parul Chemicals Limited sanctioned by Hon''ble high courts of Punjab and Haryana and High court of Gujarat vide orders dated 11 March 2011 and 23 March 2011 respectively. The balance amount of Rs. 2,362 lacs has been charged to statement of profit and loss and considered as exceptional item. Had the aforesaid treatment of the scheme not been given, the net loss before and after tax for the previous financial period would have been higher by Rs. 1,139 lacs.

7. Remuneration to Key Managerial Personnel

The Company has paid and provided remuneration amounting to Rs. 13.29 lacs to directors appointed during the current financial period. As the Company is in default in repayment of debts and interest thereon for continuous period of thirty days in the preceding financial period, it requires prior approval of the Central Government, as specified in Schedule XIII of the Companies Act, 1956, for such remuneration. The Company has made applications in this regard to the Central Government for regularization of conditions specified in Schedule XIII.

8. Corporate Debt Restructuring

The Company had in the previous period obtained an approval for the Debt Restructuring from the Corporate Debt Restructuring Empowered Group (''CDR EG''). The Company has obtained formal Letter of Approval dated 3 August 2012 from the CDR EG incorporating attendant terms and conditions and the Master Restructuring Agreement has been executed on 28 September 2012. The effective date for restructuring is 1 July 2011. The salient features of CDR are as follows :

(a) Repayment of Term Loans has been restructured over 40 quarterly installments, commencing 30 September 2011. The interest rates has been restructured @ 10.75% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate;

(b) Working Capital Demand Loan has been converted to Working Capital Term Loan (WCTL) with following terms :-

- Rs. 5,000 lacs carrying interest @ 8% p.a. and to be repaid in full till 30 September 2012 ,out of which the company has paid Rs. 2,044 lacs to the bankers. The company is under discussion with the lender to renegotiate the terms of repayment by offering certain alternative assets for disposal to repay all in lieu of disposal of Pharmaceutical division as per CDR scheme. The Company is awaiting for such approval based on which the Company will repay balance amount of Rs. 2,956 lacs of WCTL to the lenders as per the CDR scheme. Pending the approval from lenders to disposal of alternate assets, the Company has executed "Power of Attorney" in favour of lenders to dispose off the Pharmaceutical Division of the company to repay the WCTL as per the CDR scheme.

- Repayment of remaining amount has been restructured over 40 quarterly installments, commencing 30 September 2011. The interest rates have been restructured @ 8% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate;

(c) Cash Credit Facility has been converted to Working Capital Term Loan carved to the extent of Rs. 4,495 lacs and the balance amount has been carved out as fund based working capital facility with following terms :-

- Repayment of Rs. 3,315 lacs has been restructured over 40 quarterly installments, commencing 30 September 2011. The interest rates have been restructured @ 8% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate,

- Repayment of Rs. 1,180 lacs has been restructured over 37 quarterly installments, commencing 30 June 2012. The interest rates have been restructured @ 8% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate, and

- Remaining amount has been carved out as fund based working capital facility based on the drawing power of the Company as at 31 March 2012 carrying interest @ 10.75% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate; and

(d) Conversion of accrued interest upto June, 2013, into a Funded Interest Term Loan (FITL) repayable in 32 quarterly installments commencing 30 September 2013. The interest rates have been restructured @ 8% p.a. for the period ended 30 September 2012 and thereafter at varying rates linked to Monitoring Institutions'' base rate.

The effect of above Scheme has been considered in the accompanying financial statements as follows :-

(a) Interest Cost has been considered at 8% - 10.75% p.a. for the Working Capital Term Loans, Term Loans and Fund-based Working Capital Facility, and

(b) Reclassification of Working Capital Term Loans carved out from Cash Credit and Working Capital Demand Loans to Term Loans as per the aforesaid Scheme.

In addition to above as per the Scheme promoters had contributed Rs. 2,000 lacs from their own sources. The Company in the process of creating security for securing restructured debt as per the Scheme as follows :-

(a) First pari passu charge on the fixed assets and current assets of the Company.

(b) First pari passu charge on additional securities like premises at Secundarabad and Ahmedabad and Industrial land at Tarapur and Chiplun by the Company.

(c) Personal guarantee of Managing Director.

(d) Pledge of entire promoter''s shareholding (excluding 150,000 shares exclusively charged to SBI) or 51% of the paid up capital of the Company whichever is lower with the CDR lenders.

(e) Subservient charge on the assets of Parul Division in addition to the exclusive charge of Indian Overseas Bank.

(f) Security provided to State Bank of India, Antwerp for credit facilities extended to Company''s subsidiary S D Agchem (Europe) NV, viz., by way of charge on the fixed assets of the Company to be appropriately incorporated in the security documents, and

(g) 150,000 shares of the Company exclusively pledged to State Bank of India.

9. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006

Based on the information available with company as at period end there are no dues outstanding to the suppliers who are registered as micro and small enterprises registered under "The Micro, Small and Medium Enterprises Development Act, 2006".

10. Amounts capitalized in the respective project costs and excluded from :

During the period, the company has capitalized the following expenses of revenue nature to the cost of fixed asset/capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

11. Previous period figures

a) With effect from current financial period, the Company has changed its accounting year from period ended 30 September to period ended 31 March. Accordingly, these financial statements are prepared for a period of six months from 1 October 2012 to 31 March 2013. Hence, the figures for current accounting period are not comparable with those of the previous accounting period. Further in previous period, the company has changed it''s accounting year from year ended 31 March to period ended 30 September. Accordingly previous period''s figures are for a period of eighteen months from April 1, 2011 to September 30, 2012.

b) The company has reclassified previous period figures to confirm to current period''s classification.

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Mar 31, 2011

1. Nature of Business Operations

Punjab Chemicals and Crop Protection Limited (hereinafter referred to as "the Company") is engaged in business of agro chemical and is manufacturing in technical grade and formulating pesticides, herbicides, fungicides and biocides. The Company has presence in both the domestic and international markets.

2. During the previous year, there was a fire at one of the plants of Agro Chemicals Division, Derabassi, for which the company has during the year received insurance claim of Rs. 619 lacs towards the same which has been disclosed under the head "Exceptional Income".

(Rs.in lacs)

Current Previous Year Year

3. a) Contingent Liabilities not provided for:

i) Bills of Exchange discounted 324 266

ii) Claims against the Company not acknowledged as debts :

- Excise duty matters in dispute or under appeal 149 9

- Income Tax matters in dispute or under appeal 61 3

- Demand raised by Sales Tax Authorities 11 11

- Labour laws matters in dispute or under appeal 9 9

- Demand raised by previous land owners 327 284

- Other Claims 6 -

iii) Counter Guarantees given to Banks 328 347

iv) Corporate Guarantee given on behalf of Subsidiary Companies 8,324 8,516

(Guarantee given in foreign currency are revalued at closing exchange rates)

[Includes Corporate Guarantee given to State Bank of India of Rs. 446 lacs which is also secured by a first charge on the entire fixed assets (including immovable property) of the company]

Note : Further cash outflow in respect of 2(ii) above are determinable only on receipt of judgments / decisions pending with various forums / authorities.

b) Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for 217 812

4. Gross Block of Building in Schedule 'E' includes Rs. 3,030 lacs [revalued] (Previous Year Rs. 761 lacs) pertaining to the purchase of office premises for which the Company holds right of occupancy and possession. The same is pending conveyance in favor of the Company.

5. The Company shall indemnify the damages to the Managing Director / Directors in case their personal guarantees are invoked in respect of loans, backed by their personal guarantees.

6. Earning Per Share:

*69293 equity shares to be alloted as per the scheme of arrangement as mentioned in the note 19 (A) (f) have been considered in computation of basic & diluted earning share from begining of the reporting period. Since the issue of equity shares would decrease the loss per share from continuing ordinary activities, hence, the Potential Equity Shares are considered as "Anti-Dilutive" and the effect of anti - dilutive Potential Equity Shares is ignored in calculating Diluted Earning Per Share.

** Since the conversion of warrants to equity shares during the previous year would decrease the loss per share from continuing ordinary activities, hence, the Potential Equity Shares were considered as "Anti-Dilutive" and the effect of anti - dilutive Potential Equity Shares were ignored in calculating Diluted Earning Per Share.

7. Scheme of Arrangement

A) Amalgamation of Parul Chemicals Limited with the Company

a) The scheme of arrangement ("the Scheme") pursuant to section 391 to 394 read with section 78 and 100 to 103 of the Companies Act, 1956, for financial restructuring of the Company and amalgamation of the erstwhile Parul Chemicals Limited (PCL) (hereinafter referred to as Transferor Company') with Punjab Chemicals and Crop Protection Limited (PCCPL) (hereinafter referred to as Transferee Company'), approved by the members at a court convened meeting of PCCPL and as approved by the members of PCL, was subsequently sanctioned by the Hon'ble High Courts of Punjab & Haryana at Chandigarh and High Courts of Gujarat at Ahmedabad vide orders dated 11th March, 2011 and 23rd March, 2011 respectively. Consequently upon the aforesaid approval, the assets and liabilities of PCL have been transferred to and vested in the Company with retrospective effect from April 01, 2009 (the Appointed date). The Scheme has accordingly been given effect to in these accounts.

b) Parul Chemicals Limited (PCL), (the amalgamating company) is engaged in Pesticides formulation having plant at Vadodara.

c) The arrangement has been accounted for under the "pooling of interest" method referred to in Accounting Standard 14- Accounting for Amalgamation, as prescribed by the Scheme. Accordingly the assets, liabilities and other reserve of PCL as on April 1, 2009 have been aggregated at their book value as specified in the Scheme. The investment in the equity share capital of the PCL as appearing in the books of the Company has been cancelled and consequently a similar amount has been reduced from the General Reserve Account of the Company.

d) Pending approval of the Scheme, the accounts of PCL for the year ended March 31, 2010 were finalized as a separate entity. The loss after tax of Rs. 28 lacs incurred by PCL for the period from April 1, 2009 to March 31, 2010 has been adjusted in the profit and loss account of the Company for the year.

e) The difference between the amount recorded as share capital to be issued by the Company as consideration for the merger and the amount of share capital (excluding the share capital held by the Company) of the PCL has been adjusted in the General Reserve Account of the Company in accordance with the scheme.

f) 69,293 Equity Shares of Rs 10/- each fully paid up are to be issued to the equity share holders of the erstwhile PCL whose names are registered in the register of members on record date, without payment being received in cash. Pending allotment, the face value of such shares has been shown as "Equity Share Suspense Account". The company has since allotted the shares on May 11, 2011.

g) From the effective date the authorized share capital will stand increased to Rs. 1,800 lacs consisting of 17,800,000 Equity shares of Rs 10/- each and 20,000 9.8% Redeemable Cumulative Preference Shares of Rs. 100/- each.

h) All the employees of PCL in service on the effective date shall become the employees of the Company with effect from the Appointed Date without any break, discontinuance or interruption in their service and on the basis of continuity of service. The terms and conditions of their employment shall not be less favourable than those subsisting with reference to PCL as at the effective date. For the purpose of payment of any compensation, gratuity and other terminal benefits, the past service of such employees with PCL shall also be taken into account and the Company shall pay the same to such employees as and when due and payable.

B) Financial Restructuring

i) Further as per the Scheme, the company has also formulated a scheme of financial restructuring to deal with various costs associated with its organic and inorganic growth plan including debt finance cost, impairment of product registration. Accordingly, upon the Scheme becoming effective, certain fixed assets of the Company have been reinstated at their respective fair values on the basis of the report of valuer appointed by the Company. Consequently, such reinstatement adjustment has been credited to Business Reconstruction Reserve Account ("BRR") of the Company.

j) The Scheme further provides that the aggregate amount under the BRR created by way of revaluation of fixed assets would be utilised, to the extent considered necessary and appropriate by the Board of Directors of the Company from time to time, to adjust certain expenses and project cost as mentioned in the Scheme until the balance is available in the BRR account.

k) Accordingly in terms of the Scheme, the Company has revalued its assets comprising of Land and Building and the resultant surplus aggregating Rs. 10,673 lacs has been credited to BRR. The balance of BRR has been utilized towards the following expenses as per the aforesaid scheme:

1. Incremental depreciation aggregating Rs. 499 lacs for the year ended March 31, 2010 and March 31, 2011 on land and building on account of revaluation;

2. Other finance & professional charges related to loan restructuring amounting to Rs. 343 lacs;

3. Fixed assets and capital projects written off aggregating to Rs. 2,224 lacs;

4. Provision of non-recoverable account receivable and obsolete inventory of Rs. 184 lacs related to PCL;

5. Expenses as deemed appropriate by the Board of Directors on account of unabsorbed production overheads due to under utilization of production capacity and interest & finance expense. These expenses comprise of Payroll expenses Rs. 1,804 lacs, depreciation Rs. 463 lacs, power & fuel Rs. 1,529 lacs, Repair & Maintenance Rs. 201 lacs and interest & finance expenses amounting to Rs. 2,268 lacs; and

6. Expenses incurred in connection with the Scheme implementation or purposes mentioned there in aggregating to Rs. 19 lacs.

8. Employee Benefits

(A) Defined Contribution Plan - Provident Fund & Superannuation Fund

Provident Fund is a defined contribution scheme established under a State Plan. The contributions to the scheme are charged to the profit and loss account in the year when the contributions to the funds are due.

Superannuation Fund is a defined contribution scheme and contributions to the scheme are charged to the profit and loss account in the year when the contributions are due. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(B) Defined Benefit Plans - Gratuity

The Company has a defined gratuity plan. Every employee who has completed five years or more of service gets a gratuity on post employment at 15 days salary (last drawn salary) for each completed year of service as per the rules of the Company. The aforesaid liability is provided for on the basis of an actuarial valuation made at the end of the financial year. The scheme is funded with an insurance company in the form of qualifying insurance policy.

9. Related Party Transactions

a) Relationships :

Subsidiaries of the Company : 1. STS Chemicals (UK) Limited

2. S D Agchem (Europe) NV

3. Sintesis Quimica.S.A.I.C, Argentina

4. Agrichem B.V.

5. S D Agchem (Netherlands) B.V.

6. Parul Chemicals Limited #

7. Agrichem Polska SP. Z.O.O., Poland

8. N.V. Agricultural Chemicals, Belgium

9. Agrichem Helvetia GmbH, Switzerland

Other related parties with whom transactions have taken place during the year: -

Enterprises over which key management personnel & their : 1. Eftec Shroff (India) Limited relatives have significant influence : 2. Hemsil Trading & Manufacturing Private Limited

3. M/s Chinmaya Metachem

4. M/s Shalil Meta Chem

Joint Venture Company : 1. Stellar Marine Paints Limited

Key Management Personnel and their Relatives :

Directors Relative of Directors

1. Mr. G.Narayana - Chairman 1. Mrs. Shaila Shroff

2. Mr. Shalil Shroff - Managing 2. Mrs.Mahinder S.Chopra Director

3. Mrs.Rupam Shroff - Whole time 3. Mrs. Bhupinder Kaur Director

4. Mr. Avtar Singh - Whole time 4. Mr. Rajinder Singh Director

5. Mr.S.S.Tiwari - Whole time 5. Mrs. Ravinder Kaur Director

6. Capt.S S Chopra - Director 6. Mrs. Rajni S Tiwari

7. Ms. Sonal Tiwari

8. Ms. Shakshi Tiwari

9. Mr.Ramanjor S Tiwari

10. Mr. Mahadev Suvarna

11. Mr. Jaswant Singh

12. Mrs. Manjeet Kaur

13. Ms. Shivani S. Tiwari

14. Ms. Kusum Tiwari

10. Excise duty on sales amounting to Rs. 1,969 lacs (Previous Year: Rs.1,415 lacs) has been reduced from sales in profit & loss account and excise duty on increase/(decrease) in stock amounting to (Rs. 17 lacs) (Previous Year : 177 lacs) has been considered as (income)/expense in Schedule "P".

11. Segment Reporting

1. Information about Secondary Business Segment

The Company produces and sells its products in India and also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS-17 regarding Segment Reporting , secondary segment information on geographical segment is considered on the basis of revenue generated from Domestic and Export market.

12. The Company has availed the Exemption as per notification dated 8th February, 2011 issued by Ministry of Corporate Affairs and accordingly, the additional information pursuant to the provisions of paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b) and 3(ii)(d) of Part II of Schedule VI to the Companies Act, 1956 has not been disclosed in the financial statements.

13. Particulars Relating to Licensed, Installed Capacity, Production, Purchases, Stock and Sales

Notes:

1. Installed Capacity is as certified by the Management on which the auditors have relied.

2. Production includes 12,918 MT (Previous Year: 6,644 MT) quantities produced for internal consumption.

3. *Licensed Capacity is not applicable.

4. Closing Stock are after adjustments for in-transit, damages, shortages and sample issues.

5. Figures in Bracket represent previous year.

14 Previous Year Comparatives

The figure for the current year includes figures of Parul Chemicals Limited (PCL) which is amalgamated with the Company with effect from April 1, 2009 and are, therefore to that extent, not comparable with those of previous year. Previous year's figures have been regrouped / rearranged where necessary to conform to this year's classification.

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Mar 31, 2010

1. Nature of Business Operations

Punjab Chemicals and Crop Protection Limited is engaged in business of agro chemical and is manufacturing in technical grade and formulating pesticides, herbicides, fungicides and biocides. The Company has presence in both the domestic and international markets.

Segment Reporting Policies

Identification of segments

The Companys operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

Allocation of common costs

Common allocable costs are allocated to each segment according to the relative contribution of each segmentto the total common costs.

Unallocated items

Includes general corporate income and expense items which are not allocated to any business segment.

Segment Policies

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss fortheperiod attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted forthe effects of all dilutive potential equity shares.

Cash and Cash equivalents

Cash and cash equivalents in the balance sheet for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

Derivative Instruments

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the income statement. Net gains are ignored.

3. a) On 18th April, 2009, there was a fire at one of the plants of Agro Chemicals Division, Derabassi, which resulted in damage of stocks, plant and

machinery, buildings and disruption of the production. The operation of the said plant was restored in the month of December, 2009. The Company has filed the insurance claim for all these damages.

These damages (viz. loss of stocks, building and plant and machinery) and further expenses of repairs and restoration have been accounted for as receivables from the insurance company. The newly acquired assets have been capitalized on the date of put to use. Accordingly, above said damages (except loss of profit) does riot have any impact on the profit and loss account for the year ended 31 st March, 2010. The final impact will be accounted for in the books of account as and when settled by the insurance company.

In the meantime, the Insurance Company has released an adhoc amount of Rs. 400 lacs against these damages.

b) The Board of Directors have decided to amalgamate its subsidiary Parul Chemicals Limited, Vadodara, an Agro formulation Company with the Company subject to the approval of Honble High Courts of Gujarat, Ahmedabad and Punjab & Haryana at Chandigarh. The appointed date of this amalgamation is 1st April, 2009 and the effective date is the date on which the orders of the Honble High Courts are filed with Registrar of the Companies. The petitions are pending for approval with both the Honble courts. Accordingly, no affect of the amalgamation has been given.

c) In Jan 2008, Company issued Equity Convertible Warrants under Chapter XIII of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. The Preferential offer for issue of warrants was made to promoters of the company and others for 1,510,000 shares of Rs.10/- each. The proposed warrants was to be converted into equity shares of the Company within a maximum period of 18 months from the date of issue of the warrants, at the option of warrant holders, at a price of Rs.136/- per share (including premium of Rs. 126/-). Company had received 10% of the total allotment consideration as Application against such Warrants within 15 days from the date of Issue of Preferential Warrants amounting to Rs. 205 Lacs. These were classified as Equity Convertible Warrants.

In August, 2009 the company converted 600,000 warrants into equity shares and remaining warrant holders decline to invest further, consequently their application money amounting to Rs 124 lacs were forfeited and transferred to Capital Reserve.

d) Proportion of inventory of Sintesis Quimica S.A.I.C valued at replacement cost to the total inventory value is 10.87% (Previous Year: 10.93%).

(Rs. in lacs)

Current Year Previous Year

4. a) Contingent Liabilities not provided for: 2i) Bills of Exchange discounted 266 * 235 ii) Claims against the Company not acknowledged as debts:

- Excise duty matters in dispute or under appeal 10 1

- Income Tax matters in dispute or under appeal 15 3

- Demand raised by Punjab Sales Tax Authorities * 42 11

- Labour laws matters in dispute or under appeal 9 8

- Demand raised by previous land owners 284 247

- Other Matters

iii) Counter Guarantees given to Banks 347 552

iv) Letter of Credits for imports 51 1,946 Note: Further cash outflow in respect of 2(H) above are determinable only on receipt of judgments / decisions pending with various forums / authorities.

Accordingly u i a ot ks. t ,9Zb lacs (Previous Year: ks. Nil) nas Deen recognisea to me extent ot ueterrea lax Liaomties.

3. Excise duty on sales amounting to Rs. 1,573 lacs (Previous Year: Rs. 2,168 lacs) has been reduced from sales in profit & loss account and excise duty on increase/(decrease) in stock amounting to Rs. 180 lacs (Previous Year: Rs.63 lacs) has been considered as (income)/expense in Schedule "P".