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Notes to Accounts of Punjab Chemicals and Crop Protection Ltd.

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.


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.


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.


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.


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".

 
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