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Notes to Accounts of Thirumalai Chemicals Ltd.

Mar 31, 2014

1. Commitments and contingent liabilities

2013-2014 2012-2013

Rs. Rs.

(A) Commitments/contingent liabilities

(i) Estimated amount of contracts to be executed on capital account and not provided for 12,502,130 13,780,702

Against which advances paid 691,075 3,599,769

(ii) Guarantees issued by Banks on behalf of Company 95,229 212,000

(iii) Bond in favor of excise authorities 160,000 160,000

(iv) Corporate Guarantee issued to a bank on behalf of subsidiary 587,047,000 -

(B) Claims against the Company not acknowledged as debts in respect of following items:

(i) The Sales Tax authorities have issued notices to the Company whereby the authorities have disputed the method of availment of deferral sales tax on monthly pro-rata basis for the period April 2000 to April 2006 amounting to Rs.7,537,505 (Previous year Rs. 7,537,505). The Company has fled a writ petition against these notices in the High Court. The Company does not expect any liability to crystallize on this account.

(ii) The company had received a demand of Rs. 99,363,453 (Previous Year Rs. 99,363,453) from enforcement directorate toward alleged non-submission of bill of entries for imports in earlier years. However, the Company has received letters from the concerned banks as well as Reserve Bank of India accepting that the said omission was not on the part of the Company. The appeal fled by the Company before the appellate tribunal was dismissed on limitation grounds.

The Company thereafter, fled an appeal against the said order of the appellate tribunal as well as a writ petition to quash the proceedings, before the Hon''ble High Court at Bombay. The Hon''ble High Court was of the opinion that the appeal was not maintainable and rejected the same as well as the Writ petition.

Aggrieved by this order, the Company fled a Special Leave Petition before the Hon''ble Supreme Court of India on 15th September, 2008. The said matter was fnally heard by the Hon''ble Supreme Court of India on 7th May, 2010 & the order pronounced on 11th April, 2011.

The Hon''ble Supreme Court of India has vide its order dated 11th April,2011 set aside the order passed by the Foreign Exchange Appellate Tribunal on 25th October,2007 and the order dated 24th July, 2008 passed by the Hon'' ble High Court of Bombay and remitted the appeals back to the Foreign Exchange Appellate Tribunal for fresh consideration in accordance with the law on the basis of findings recorded by them. The Company does not expect any liability to crystalise on this account.

(iii) No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of Rs.39,668, 926 (Previous Year Rs. 82,106,136) since the Company has reasons to believe that it would get relief at the appellate stage as the said demands are excessive and erroneous. Against the above, the company has already paid Rs. 29,102,479 (Previous Year Rs. 95,436,546).

(C) Other Committeemen’s:

The company had entered into an agreement with Gujarat Industrial Development Corporation for allotment of land for setting up chemical unit. As per the said agreement , the company within a period of six months from the date of agreement and within a period of two years from the said date build and completely fnish it for occupation building to be used as industrial factory.

D. Disclosure in accordance with Accounting Standards as notifed by the Companies (Accounting Standards) Rules, 2006.

2. Accounting Standard (AS) - 2 on Valuation of inventories:

During the financial year 2012-13, the Company had changed its policy on valuation of inventory (except stores and spares) from weighted average cost method to first-in first-out method.

The effect of this change in the methodology of valuation of inventory resulted in higher valuation of inventories for the financial year 2012-13 by Rs.69,425,741 and profit for the financial year 2012-13 was higher by Rs.46,925,741 (net of tax).

3. Accounting Standard (AS) – 15 on "Employee Benefits" :

i. Defined Contribution Plans :

The Company has recognized the following amounts in the statement of profit and loss account for the year :

4. Accounting Standard (AS-17) "Segment Reporting" :

As permitted by paragraph 4 of Accounting Standard 17, "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, the company has disclosed Segment results on the basis of Consolidated Financial Statements. The same are therefore not disclosed for standalone financial statements.

5. Accounting Standard (AS-18) "Related party disclosures :

Subsidiary Companies:

Tarderiv International Pte Ltd (subsidiary company) (TIPL) Cheminvest Pte Ltd (Step down subsidiary) (CPL) Optimistic organic Sdn Bhd (Step down subsidiary)(OOSB)

Entity in which the company has significant influence (i.e. more than 20% in voting power directly or indirectly)

Thirumalai Charity Trust (TCT)

Others

Ultramarine and Pigments Ltd. (UPL)

Managing Director

R.Parthasarathy

Key Management Personnel

Dhanpat Raj Dhariwal ( as CEO upto 31.10.2013 and as advisor from 01.11.2013 ) C G Sethuram (CEO) ( from 01.11.2013 )

Relatives of Directors

Ramya Bharathram S.Varadharajan S. Narayan

6. Accounting Standard (AS-19) "Accounting for Leases" :

a) During the year the company has taken office premises/residential premises under cancelable lease. Lease rent accounted in profit and loss account Rs.3,473,473(Previous Year Rs. 1,246,892). The said lease is cancelable at the option of the lessee at three months notice. The deposit paid in respect of the same is Rs. 1,749,255 (Rs.473,255).

b) The Company has given office premises on lease to a Company under the same management under cancelable lease arrangement for a period of five years. The lease arrangement can be cancelled at the option of lesser or lessee either giving two months notice. The Company has taken interest free security deposit of Rs. 1,400,000 (Previous Year Rs. 1,400,000) Lease rent received during the year and accounted as income is Rs.3,617,294 (Previous Year Rs. 3,696,784).

c) The company has entered into an agreement with Gujarat Industrial Development Corporation for allotment of land (leasehold). After complying with conditions related to erection of factory building and works, a lease agreement will be entered for a term of 99 years.

7. Accounting Standard (AS-20) "Earnings per share" :

The Basic and Diluted EPS is calculated as under:

8. Long Term loans and advances

Loans and advances (to subsidiary companies) includes an amount of Rs.287,329,017/- (US$ 4,812,881) {Previous year Rs.411,879,337/- (US$ 7,616,112)} recoverable from Optimistic Organic Sdn.Bhd. (OOSB) .This amount represents amount recoverable by the company from erstwhile TCL Industries (Malaysia) Sdn. Bhd. (TCL(M)). The liability was stake over by OOSB on winding up of TCL (M).

OOSB has reported improved performance in 2013-14 and has made part repayment of Rs.186,580,069/- ( ( US$ 3,050,000 ) (Previous Year Rs.40,308,113/- (US$ 750,000). From 2012-13, the company is also charging simple interest @ 6% per annum on the outstanding dues, which is also recovered for 2013-14. The company believes that in view of the above, the entire amount due from OOSB will be ultimately recovered.

9. Loans and Advances

Other loans and advances include Rs.6,20,000 (previous year Nil) recoverable from director towards excess contribution made to superannuation fund The same has since been recovered

10. Previous Year''s Figures

Previous years figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

A. CORPORATE INFORMATION

Thirumalai Chemicals Limited is a public limited company domiciled in India incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The company is engaged in manufacturing and selling chemicals. The company caters to both domestic and international markets.

I. In respect of term loans from banks and financilal institutions, terms of repayments and nature of security are given below:

a. Term loan from Bank of India, is repayble in equal 30 monthly instalments starting from July 2012 up to December 2014.The loan is secured by way of second charge (on pari passu basis) over the immovable properties of the Company.

b. Export Import Bank of India Overseas Investment Finance loan is repayable in 16 equal quarterly instalments starting from July 2012 up to April 2016. The loan is secured by First Pari Passu charge on Movable fixed assets and immovable assets at Ranipet, Tamilnadu.

c. Export Import Bank of India Working Capital Demand Loan is repayable in 16 equal quarterly instalments starting from July 2012 up to April 2016. The loan is secured by First Pari Passu charge on Movable fixed assets and immovable assets at Ranipet, Tamilnadu.

d. Export Import Bank of India EOU Loan is repayable in 21 equal quarterly instalments starting from March 2009 upto March 2014. The loan is secured by First Pari Passu charge on Movable fixed assets and immovable assets at Ranipet, Tamilnadu.

e. The interest rates in case of loans vary as below

a. for foreign currency loans

-Export Import Bank of India Overseas Investment Finance Loan : LIBOR 450 basis points

b. for rupee term loans : 11.23% to 14.5% per annum.

II. Deferred payment liabilities

a. Amounts due to Gujarat Industrial Develoment Corporation represents amount payable for acquiring lease hold land for industrial project. This loan is repayable in 12 equal quarterly instalments commencing from June 2011 to March 2014.

b. Deferral of sales tax liabilities represent interest free deferred sales tax loan received from Government of Tamilnadu. Repayable up to 2016-17 based on the deferment availed in the respective years. An amount of Rs. Nil (Previous Year Rs. 379,047) only has been guaranteed by Shri R.Parthasarathy, Managing Director of the company. For the Deferred Sales Tax liabilities In case of default in repayment of ''Deferred sales tax liabilities'' the movable and immovable properties of the company are liable to be attached / proceed towards the realization of outstanding Government loan under Revenue Recovery Act.

(B) Claims against the Company not acknowledged as debts in respect of following items:

(i) The Excise authorities have in their show cause notices questioned the company''s claim for Modvat on certain items amounting to Rs. 99,945 (Previous year Rs. 99,945). The company has paid Rs. NIL (Previous Year Rs. NIL) against the same which are shown under the head Advances. The Company does not expect any liability to crystallize on this account.

(ii) The Sales Tax authorities have issued notices to the Company whereby the authorities have disputed the method of availment of deferral sales tax on monthly pro-rata basis for the period April 2000 to April 2006 amounting to Rs. 7,537,505 (Previous year Rs. 7,537,505). The Company has filed a writ petition against these notices in the High Court. The Company does not expect any liability to crystallize on this account.

(iii) The company had received a demand of Rs. 99,363,453 (Previous Year Rs. 99,363,453) from enforcement directorate toward alleged non-submission of bill of entries for imports in earlier years. However, the Company has received letters from the concerned banks as well as Reserve Bank of India accepting that the said omission was not on the part of the Company. The appeal filed by the Company before the appellate tribunal was dismissed on limitation grounds.The Company thereafter, filed an appeal against the said order of the appellate tribunal as well as a writ petition to quash the proceedings, before the Hon''ble High Court at Bombay. The Hon''ble High Court was of the opinion that the appeal was not maintainable and rejected the same as well as the Writ petition.

Aggrieved by this order, the Company filed a Special Leave Petition before the Hon''ble Supreme Court of India on September 15, 2008. The said matter was finally heard by the Hon''ble Supreme Court of India on May 7, 2010 & the order pronounced on April 11, 2011.The Hon''ble Supreme Court of India has vide its order dated April 11, 2011 set aside the order passed by the Foreign Exchange Appellate Tribunal on October 25, 2007 and the order dated July 24, 2008 passed by the Hon''ble High Court of Bombay and remitted the appeals back to the Foreign Exchange Appellate Tribunal for fresh consideration in accordance with the law on the basis of findings recorded by them. The Company does not expect any liability to crystalise on this account.

(iv) No provision has been made in respect of disputed demands from Income-tax Authorities to the extent of Rs. 82,106,136 (Previous Year Rs. 134,345,983) since the Company has reasons to believe that it would get relief at the appellate stage as the said demands are excessive and erroneous. Against the above, the company has already paid Rs. 95,436,546 (Previous Year Rs. 122,191,555).

(B) Other Commitments:

The company had entered into an agreement with Gujarat Industrial Development Corportation for allotment of land for setting up chemical unit. As per the said agreement, the company within a period of six months from the date of agreement and within a period of two years from the said date build and completely finish it for occupation building to be used as industrial factory.

C. Disclosure in accordance with Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006.

C.1 Accounting Standard (AS) - 2 on Valuation of inventories:

Effective as of April 01, 2012, the Company has changed its policy on valuation of inventory (except stores and spares) from weighted average cost method to first-in first-out method.

Under the prior policy, the cost of all categories of inventories had been based on their weighted average cost method. Effective as of April 01, 2012, the cost of all categories of inventories (except stores and spares), is based on first-in first-out (FIFO) method.

The management believes that using the first-in first out method will produce more accurate, reasonable and relevant information on the amounts of inventory reported in the balance sheet and in turn, more accurate material consumption reported in the statement of profit and loss.

The effect of this change in the methodology of valuation of inventory is resulting in higher valuation of inventories as on year end by Rs. 69,425,741 and profit for the year higher by Rs. 46,925,741 (net of tax).

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

C.3 Accounting Standard (AS-17) "Segment Reporting" :

As permitted by paragraph 4 of Accounting Standard 17, "Segment Reporting" notified by the Companies (Accounting Standards) Rules, 2006, the company has disclosed Segment results on the basis of Consolidated Financial Statements. The same are therefore not disclosed for standalone financial statements.

C.4 Accounting Accounting Standard (AS-18) "Related Party Disclosures" :

Subsidiary Companies:

- Tarderiv International Pte Ltd (subsidiary company) (TIPL) (w.e.f 28th December 2010)

- Cheminvest Pte Ltd (Step down subsidiary) (CPL) (w.e.f 28th December, 2010)

- Optimistic Organic Sdn Bhd (Step down subsidiary)(OOSB) (w.e.f 28th December, 2010)

Entity in which the company has substantial interest (i.e. more than 20% in voting power directly or indirectly)

Thirumalai Charity Trust (TCT)

Others

Ultramarine and Pigments Ltd. (UPL)

Managing Director Mr. R. Parthasarathy Key Management Personnel Mr. Dhanpat Raj Dhariwal (CEO)

Relatives of Directors Ms. V. Jaya

Ms. Ramya Bharathram Mr. S. Varadharajan Mr. S. Narayan

C.5 Accounting Standard (AS-19) "Accounting for Leases" :

a) During the year the company has taken office premises/residential premises under cancelable lease. Lease rent accounted in profit and loss account Rs. 1,246,892 (Previous Year Rs. 1,200,969). The said lease is cancelable at the option of the lessee at three months notice. The deposit paid in respect of the same is Rs. 4,73,255 (Rs. 419,255).

b) The Company has given office premises on lease to a Company under the same management under cancelable lease arrangement for a period of five years. The lease arrangement can be cancelled at the option of lesser or lessee either giving two months notice. The Company has taken interest free security deposit of Rs. 1,400,000 (Previous Year Rs. 1,400,000) Lease rent received during the year and accounted as income is Rs. 3,696,784 (Previous Year Rs. 3,369,470).

c) The company has entered into a agreement with Gujarat Industrial Development Corportation for allotment of land (leasehold). After complying with conditions related to erection of factory building and works, a lease agreement will be entered for a term of 99 years.

D.1 Long Term loans and advances

Loans and advances (to subsidiary companies) includes an amount of Rs. 411,879,337/- (US$ 7,616,112) (Previous year Rs. 425,500,435/- (US$ 8,366,112)) recoverable from Optimistic Organic Sdn.Bhd. (OOSB). This amount represents amount recoverable by the company from estwhile TCL Industries (Malaysia) Sdn. Bhd. (TCL(M)). The liability was staken over by OOSB on winding up of TCL (M).

OOSB has reported improved performance in 2012-13 and has made part repayment of Rs. 40,308,113/- (US$ 750,000) in 2012-13. From 2012-13, the company is also charging simple interest @ 6% per annum on the outstanding dues, which is also recovered for 2012-13. The company believes that in view of the above, the entire amount due from OOSB will be ultimately recovered.

''Forward contracts outstanding at year end for hedging accounts payables Rs. 13,775,000 (Previous Year: NIL)

D.2 Commission payable to non executive directors

The Board of directors has approved commission to non-executive directors for Rs. 5,302,414 (Previous year NIL) which is subject to the approval of shareholders in accordance with the Companies Act, 1956.

D.3 Previous Year''s Figures

Previous year''s figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2010

As at As at 2009-2010 2008-2009 Rs. Rs.

1.Contingent Liability in respect of:

a Estimated amount of contracts to be executed on capital account NIL 2,815,845 and not provided for

Against which advances paid NIL 2,815,845

b Guarantees issued by Banks on behalf of Company 396,241,200 51,472,000

c Bond in favor of excise authorities 160,000 501,200

2. Claims against the Company not acknowledged as debts and not provided for NIL NIL

3. a) The Excise authorities have in their show cause notices questioned the companys claim for Modvat on certain items acquired for the expansion project amounting to Rs. 1,799,945 (Previous year Rs. 1,799,945). The company has paid Rs. 1,350,000 (Previous Year Rs. 1,350,000) against the same which are shown under the head Advances. The Company does not expect any liability to crystallize on this account.

b) The Sales Tax authorities have issued notices to the Company whereby the authorities have disputed the method of availment of deferral sales tax on monthly pro-rata basis for the period April 2000 to April 2006 amounting to Rs. 7,537,505 (Previous year Rs. 7,537,505). The Company has filed a writ petition against these notices in the High Court. The Company does not expect any liability to crystallize on this account.

4. The company has received a demand of Rs. 99,363,453 (Previous Year Rs.99,363,453) from enforcement directorate toward alleged non submission of bill of entries for imports in earlier years. However, the Company has received letters from the concerned banks as well as Reserve Bank of India accepting that the said omission was not on the part of the Company. The appeal filed by the Company before the appellate tribunal was dismissed on limitation grounds.

The Company had filed an appeal against the said order of the appellate tribunal as well as a writ petition to quash the proceedings before the Honble High Court at Bombay. The Honble High Court was of the opinion that the appeal was not maintainable and rejected the same as well as the Writ petition.

Aggrieved by this order, the Company filed a Special Leave Petition before the Honble Supreme Court of India. The said matter has been heard by the Honble Supreme Court of India and a decision on the same is awaited. The Company does not expect any liability to crystalise on this account.

5. No provision has been made in respect of disputed demands from Income-fax Authorities to the extent of Rs. 74,065,933 (Previous Year Rs. 105,252,611) since the Company has reasons to believe that it would get relief at the appellate stage as the said demands are excessive and erroneous. Against the above, the company has already paid Rs. NIL (Previous Year Rs. 25,886,270)

6. Loans and advances includes amount recoverable from directors Rs.3.168,000 (Previous Year Rs.NIL) towards recovery of excess remuneration paid.

7. Interest paid on fixed Loans include interest paid on Loans from Managing Directors Rs.329.325 and (Previous Year Rs. 578)

8. Unpaid dividend, unpaid matured deposits, unpaid matured debentures and interest accrued thereon (Included in Current Liabilities - Schedule 11) represent amounts to be credited to the Investor Education and Protection Fund as and when they become due.

9. Interest Free Sales Tax Loan comprise of follows

Product - Maleic Anhydride Rs. 8,618,448

Product - Food Acids Rs. 2,407,778

Product - Phthalic Anhydride Rs. 196,822,694

In case of default in repayment of the first loan, the movable and immovable properties of the company and that of the Directors shall be liable to be attached / proceeded towards the realization of defaulted tax installments.

In case of default in repayment of the second and third loans the movable and immovable properties of the company shall be liable to be attached / proceeded towards the realization of outstanding Government loan under Revenue Recovery Act.

10. Disclosure requirement of accounting Standard 17 "Segment Reporting" issued under Companies (Accounting Standard) Rules notified u/s. 211.

a) Primary Segment

The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risk and returns, the organization structure and internal reporting system. The Companys operation predominantly relate to manufacture of Chemical Products and its Intermediaries.

b) Secondary Segment

The business segment has been considered as the primary segment and the geographical segment has been considered as the secondary segment. "Chemicals" and "power generation" are the business segments and necessary information is given hereunder.

c) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not attributable to the business segment, are shown as unallocated corporate cost

11. A. Related Party Disclosures as required by Accounting Standard 18 is as follows :

a) Entities in which the Company has substantial interest (i.e. more than 20% in voting power directly or indirectly)

Ultramarine and Pigments Ltd. (UPL), TCL Industries (Malaysia) Sdn. Bhd. (TCLM) (under liquidation) and Thirumalai Charity Trust (TCT)

b) Managing Directors Mr. S.Sridhar

Mr. R.Parthasarathy

c) Key Management Personnel

Mr. S.V.S.Ramaraju - Chief Operation .Officer

d) Relatives of Directors Ms. V.Jaya

D. Disclosure in respect of material related party transactions during the year

i) Purchase of Goods from UPL Rs. 276.401 (Rs. 11.085,413). TCLM Rs. NIL (Rs. 512,156,843) ii) Sale of Goods to TCLM Rs. 18,555.283 (Rs. 19.395,570), UPL Rs. NIL (Rs. 5,355) iii) Expenses Recharged from UPL Rs. 40.040 (Rs. 1.896.902)

iv) Expenses Recharged by UPL Rs. 143,576 ( Rs. 55,505)

v) On rendering of services from Mr. R. Parthasarathy Rs. 12,000 (Rs. 12.000) UPL Rs. 1,915,854 (Rs. 106,063)

vi) Outstanding payables to UPL Rs. 143.576 (Rs. 89,498) TCLM Rs. 4,463,023 (Rs. 5.047,534)

vil) Outstanding receivable from TCLM Rs. 337,062.448 (Rs. 419,677,651), from UPL Rs. 877,307 (Rs. 247,284)

viii) Deposits Taken from UPL Rs. 106,796,775 (Rs. 102,532,188), Mr. Dilip Thakkar Rs.5,500,000 (Rs. NIL)

ix) Interest expenses on deposits taken from UPL Rs. 4,113,418 (Rs. 981,197), from Ms. Indira Dilip Thakkar Rs. 334,881 (Rs. 313,993), from Ms. Mitali Rohit Lakhanpal Rs. 333,620 (Rs. 332,195),

x) Interest income from TCLM Rs. NIL (Rs. 14,976,073), UPL Rs. NIL (Rs. 35,599)

xi) Outstanding deposits receivable from TCLM Rs. 46,265,609 (Rs. 52,274,242)

xii) Outstanding deposits payable to Dilip Thakkar Rs. 6,700,000 (Rs.NIL)

xiii) Remuneration paid to Key Management Personnel Mr.S.V.S.Ramaraju Rs. 2,678,916 (Rs. 2,201,201),

xiv) Remuneration paid to relative of Directors Ms.V.Jaya Rs. 399,421 (Rs. 418,247)

xv) Receiving of services includes amount paid to Thirumalai Charity Trust Rs.211,200 (Rs.NIL)

26. Disclosures as required by AS 27 Financial Reporting of Interest in Joint Venture The Company has investments in a jointly controlled entity as per the following details:

a) Name and Country of Incorporation: TCL Industries (Malaysia) SDN BHD, Malaysia

b) Proportion of ownership interest: 39.93%

c) As per details given in Note No.26, since TCLM has gone for creditors voluntary winding up, other details are not available

12. The Company has an investment of Rs. 182,769,550 in ordinary share of TCL Industries (Malaysia) Sdn Bhd (TCLM). TCLM has been making losses on the manufacture of Maleic Anhydride (MAN) due to the high prices of Benzene feedstock and as on 31" December 2007 its net worth had been eroded. In January 2008, TCLM successfully commissioned its plant for the manufacture of MAN from Butane instead of Benzene, which was expected to make TCLM competitive with other MAN manufacturers. However, with the global meltdown in Sep - Dec 2008 TCLM had to close operations as its operations became unviable. As a result, one of the unsecured creditors of TCLM appointed a provisional liquidator on 2nd January 2009. At the meeting of creditors and shareholders of TCLM on 3rd February 2009, the appointment of the provisional liquidator was confirmed. In view of the above developments, the realisability of the investment in TCLM is highly uncertain. The Board of Directors of the Company therefore in their meeting dated 28.01.2009 decided to write down the said investment of Rs. 182,769,550 against the Securities Premium and other capital reserves of the Company.

After obtaining approval of Shareholders in the Extraordinary General Meeting held on I2h March, 2009 for the same, the Company filed a petition u/s 78, 100 to 104 of the Companies Act, 1956 before the Honble High Court of Bombay to adjust the said amount against the Reserves of the Company. The Honble High Court of Bombay approved the above adjustment vide its order dated 5" August 2009. The said scheme of adjustment became effective after the order of the Honble High Court of Bombay was filed with the Registrar of Companies, Mumbai.

In terms of the said order of the Honble High Court of Bombay, the investment of Rs. 182,769,550 in TCLM was adjusted as under:

Amalgamation Reserve: Rs. 1.870,920

Capital Reserve: Rs.2,500,000

Securities Premium: Rs. 178,398,630

Had the Company followed the provisions of AS 13 "Accounting for Investments as prescribed by the Companies (Accounting Standards) Rules, 2006, the write-down in the value of the investment in TCLM would have to be charged to the Profit and Loss A/c with corresponding reduction in the profit for the year.

14. Other Long Term benefits

The Companys Long Term benefit includes Leave encashment payable at the time of retirement in full, otherwise it is encashable during the year in which services are rendered subject to in excess of 30 days. Present value of obligation as at the beginning of the year is Rs. 10.597.285 (Rs. 9,235,544) and the actuarial gain and losses are recognised in full in the Profit and Loss account for Rs. 21,063 (Gain) (Previous year Rs. 1,361,741-Loss). The Present value of obligation as at March 31. 2010 is Rs. 10.576,222 (Previous Year Rs. 10.597.285)

15. A) During the year the Company has taken office premises under cancelable lease. Lease rent accounted in profit and loss account Rs. 312,750 (Previous Year Rs. 259,000). The said lease is cancelable at the option of the lessee at three months notice.

B) The Company has given office premises on lease to a Company under the same management under cancelable lease arrangement for a period of five years. The lease arrangement can be cancelled at the option of lessor or lessee either giving two months notice. The Company has taken interest free security deposit of Rs. 1,400,000 (Previous Year Rs. 1,400,000) Lease rent received during the year and accounted as income is Rs. 1,852,455 (Previous Year Rs. 1,838,055)

 
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