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Notes to Accounts of Transpek Industry Ltd.

Mar 31, 2015

1. Nature of Operations

Transpek Industry Limited ('TIL', 'the Company') is into the manufacturing and export of a range of chemicals servicing the requirements of customers from a diverse range of industries - Textiles, Pharmaceuticals, Agrochemicals, advanced Polymers, etc.

Note no 2 (A) : The rights, preferences and restrictions attaching to each class of shares :

Equity shares with voting rights :

Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive any remaining assets of the company, after distribution of all preferential amounts and repayment towards Preference share holders, if any.

Note no 3 (B) : Details of Shares held by each Share Holder Holding more than 5% Shares.

(i) Nature of security:

The above Term loans/capex loans are secured by first charge by way of hypothecation of all the movable machinery financed or to be financed under the said term/capex loans by the respective banks. The above loans are further secured by first charge by way of an equitable mortgage on the whole of the immovable assets of the Company, both present and future, on pari passu basis. They are further secured by second charge by way of hypothecation over entire current assets including stock and book debts with current charge holders on pari passu basis. The Corporate Working capital Term loans are secured by way of pari passu first hypothecation charge over entire current assets of the company, present and future, ranking pari passu with other term lenders.

(iii) Deposits aggregating to Rs. 1361.87 Lacs are accepted from members and are repayable within a period of next 2 to 3 years. The interest rate for the same ranges from 10.00% to 10.50 %

(iv) Public deposits includes deposits from related parties amounting to Rs. 4.50 Lacs /- (PY Rs. 2.21 Lacs)

(v) As required u/s 73(5) of the companies Act 2013 and the rules made thereunder, the company has deposited on 4 May, 2015 an amount of Rs. 80 Lacs to the Deposit Repayment Reserve Account with the scheduled bank.

(vi) Inter Corporate Deposits and unsecured Loan from Related Parties aggregating to Rs. 225.00 Lacs are repayable after three years. The company has accepted the above loans as per stipulation of banks. The rate of interest is 12.00 %.

Note:

(i) The above cash/Export credit facilities, short term loan and Buyers credit from Consortium bankers i.e. State Bank of India, Axis Bank Limited, Bank of Baroda and IDBI Bank Limited are secured by first charge by way of hypothecation of stocks of raw materials, packing materials, consumable stores, finished goods, semi-finished goods and book debts of the company, on pari passu basis. The aforesaid credit facilities are further secured by way of charge on the whole of the fixed assets of the company ranking second and subservient for the charges created in respect of borrowings obtained from them. The interest rate for the same ranges from 10.25 % to 13.50 %.

(ii) The Interest rate for short term unsecured public deposits is 10.00%.

(iii) Public deposits includes deposits from related parties amounting to Rs. Nil (PY Rs. 0.61 Lacs).

(*) Notes :

(a) Includes Fixed deposits with Banks of Rs. Nil/- (PY Rs. 76.50 Lacs) having maturity of more than 12 months.

(b) Fixed Deposits pledged with government authorities Rs. 1.05 Lacs ( Previous year Rs. 0.89 Lacs)

Note No. : 4 Additional information to the financial statements

(A) Contingent Liabilities and Commitments (to the extent not provided for)

Particulars Year ended Year ended 31st March, 2015 31st March, 2014 Rs in Lacs Rs in Lacs

(a) Contingent Liabilities

(i) Claims against the company not acknowledged as debts (on account of outstanding law suits) 264.25 264.25

(ii) Guarantees given by Banks to third parties on behalf of the company 26.15 40.83

(b) No provision has been made for following demands raised by the authorities since the company has reason to believe that it would getrelief at the appellate stage as the said demand are excessive and erroneous

(i) Disputed Income tax Liability 165.78 205.55

- Against Which amount already paid Rs. 154.05 Lacs (PY Rs. 193.82 Lacs)

(ii) Disputed Sales tax Liability 39.51 39.51

(iii) Disputed Excise & Service Tax Liability 589.52 372.53

- Against Which amount already paid Rs. 12.02 lacs (PY Rs. Nil Lacs)

Total 1085.21 922.67

(c) Commitments

(i) Estimated amount of contracts remaining to be executed on capital account & not provided for

- Tangible Assets 189.67 79.87

(ii) other Commitments - -

Total 189.67 79.87

*The above figures have been ascertained on the basis of opening stock plus purchases less closing stock and therefore include the adjustments of excesses and shortages ascertained on physical count, write off of unserviceable items etc.

Above values of Raw Material consumed includes cost of Raw material sold Rs. 3.31 lacs (Previous Year : Rs. 51.51 Lacs).

Note no. : 5 Disclosures under Accounting Standards as notified under section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014

(A) Disclosure as per Accounting Standard -13(Accounting for Investments)

(a) The Company has an investment in equity shares of Excel Industries Limited amounting to Rs. 226.76 lacs. In respect of this investment, the Company had, in the earlier years, recognized a diminution in the value of investment amounting to Rs. 88.63 lacs. The market value of this investment at March 31,2015 is Rs. 445.20 lacs (Previous Year Rs.108.08 lacs). In view of substantial increase in market value of equity shares of Excel Industries Limited, the company has reversed the entire provision for diminution in the value of investment made in the earlier year.

(b) As detailed in note 30(F), the company had provided for diminution in shares of Sam Fine O Chem Limited in June 2014.

(B) Disclosure as per Accounting Standard -15 (Employee Benefits)

(a) Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded. The following tables summaries the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

The Company expects to contribute Rs. 202.51 lacs (FI Y 71.35 lacs) to gratuity in 2015-16

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

*In the absence of availability of relevant information, experience adjustments on plan assets and liabilities have not been furnished above.

(b) Other long term Benefit:

The Company's Long Term benefits included Leave Encashment payable at the time of retirement subject policy of maximum leave accumulation of company. The scheme is not Funded.

(C) Disclosure as per Accounting Standard - 17 (Segment Reporting)

Segment Information

As per para 4 of AS-17 "Segment Reporting", Segment information has been disclosed in Consolidated Financial Statements.

(D) Disclosure as per Accounting Standard - 18 (Related Party Disclosures)

(a) Names of related parties and description of relationship with whom transactions have taken place:

Subsidiary Companies Transpek Industry (Europe) Limited Sam Fine O Chem Limited ( Upto 3rd January 2015 )

Enterprises owned or significantly Excel Industries Limited

influenced by Key Managerial Excel Crop Care Limited

Personnel or their relatives TML Industries Limited

Shroffs Engineering Limited Anshul Specialty Molecules Limited Anshul Life Science Madison Investments Private Limited Agrocel Industries Limited Transchem Agritech Limited Hyderabad Chemical Products Limited Kamaljyot Investments Limited Shroffs Foundation Trust C.C. Shroff Research Institute

Key Managerial Personnel

Atul G. Shroff (Managing Director) Bimal V. Mehta (Executive Director)

Relatives of Key Managerial Personnel

Ashwin C. Shroff

Dipesh K. Shroff

Vishwa A. Shroff

Shruti A. Shroff

Chaitanya D. Shroff

Ravi A. Shroff

Kumud V. Mehta

(b) Transactions with related parties for the year ended March 31, 2015 are as follows: (Previous Year's figures are shown in brackets)

(E) Disclosures under Accounting Standard 19 (Leases)

The Company has cancelable operating leasing arrangements relate to office premises and equipments which are renewable by mutual consent and lease rentals payable are accordingly charged as rent. During the period, the Company has taken office premises under cancelable operating lease; the rentals for which are charged to the Profit and Loss statements for the period. The lease term is for 11 months for office premises and lease term for equipments range from one to three years and there are no sub-leases.

Note No. 6 Other Disclosures :

(A) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The amount of trade payables includes Rs. 191.76 lacs(PY Rs. 139.30 Lacs) outstanding to Micro, Small and Medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 based on the information available with the company. The amount of interest payable to such parties is not significant and the company is of the opinion that such Interest will be provided as and when it is demanded by the respective parties.

(B) Research and Development costs ( as certified by the management) debited to the profit and loss account are as under:

(a) Capital Expenditure incurred during the year on Research and Development Rs.50.38 Lacs (Previous Year Rs. 81.99 Lacs).

(b) The Company has been granted approval upto 31st March, 2016 for claiming deduction u/s 35 (2AB) of the Income Tax Act,1961. Thus, the company has considered weighted deduction u/s 35 (2AB) while computing the tax liability under the Income Tax Act, 1961.

(C) Details of foreign currency exposures as at balance sheet date:

(i) Derivative Instruments and hedged foreign currency exposures.

Note: Figures in bracket relate to the previous year.

(E) In the past the Company was eligible for a Sales tax incentive scheme amounting to Rs. 1084.03 lacs (Previous Year Rs. 1084.03 lacs). Post completion of such incentive scheme, the Company has re-paid the amount of Sales tax deferred during the period the scheme was in force, and has applied to the Sales tax Department for a No dues certificate. Pending reconciliation of the amount with sales tax department, the balance of Rs. 49.61 lacs (Previous Year Rs. 49.61 lacs) has been included in other current liabilities.

(F) The company had made total investment of Rs. 876.57 lacs in Equity Shares of Sam Fine O Chem Limited (earlier called Sam Fine Chem Ltd) (hereinafter referred to as "Sam") in the year 2010-11. The company had in the year 2012-13 also invested Rs. 334.00 lacs in Preference shares of Sam. Pursuant to the above agreement, the said preference shares held in Sam were also divested and the entire investment of Rs. 334 lacs recovered there against. Since the performance of Sam was not as expected, in respect of this investment, the company had in the previous years, recognized a diminution in value of Investment amounting to Rs. 705.00 lacs. A further diminution of Rs. 168.65 lacs was provided on 30th June 2014 on the said investment. In the current year, Pursuant to the agreement dated 2nd September, 2014, the Company divested its entire holding of 2,92,919 Equity shares of Rs. 10/- each in Sam Fine O Chem Limited to the other shareholders at a nominal consideration of Rs. 1/- per share i.e at Rs. 2,92,919/-. A diminution, loss of Rs. 168.65 lacs was already provided in June 2014. The ensuing loss has been charged to the statement of profit and loss.

"In addition to above, the Company has also recovered consideration of Rs. 525.29 lacs as against total receivables of Rs. 744.02 lacs from Sam Fine O Chem Ltd. As a result, the difference of Rs. 218.73 lacs is charged as bad debts to the statement of profit & loss for the year ended 31st March, 2015."

(G) "As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the company. The areas for CSR activities are promoting education, art and culture, healthcare, destitute care and rehabilitation and rural development projects as specified in Schedule VII of the Companies Act, 2013.As against an obligation to spend Rs. 4.98 lacs for CSR Activities, the company has spent Rs.7.18 Lacs towards CSR activities for Promoting health care, Education and ensuring environmental sustainability."

(H) Provision for Taxation includes provision for Wealth Tax amounting to Rs. 1.55 lacs (Previous Year Rs. 1.33 lacs)

(I) Donation includes Donation made to Bhartiya Janata Party (Political Party) Rs.20.00Lacs (Previous Year Rs. NIL)

(J) "Disclosure as per section 186 (4) of Companies Act, 2013

The Company has made advances of Rs. 2.85 lacs to its wholly own foreign subsidiary Transpek industry (Europe) Limited. The said advances is utilized by Transpek industry (Europe) Limited to meet out its overall expenditure. "

(K) Remuneration of Rs.25.83 Lacs to the managing director is subject to approval of the Central Government.

(L) "As on 31st March 2015, the company had one subsidiary viz. Transpek Industry (Europe) Limited which is incorporated outside India. In view of the 4th proviso to section 129(3) of the Companies Act, 2013, the company is not required to prepare and present Consolidated Financial Statements for the financial year 2014-15. However, as required by clause 41 of the Listing agreement, the company has prepared Consolidated Financial Statements."

Note No.: 7 Previous Year's Figures

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


Mar 31, 2014

1. Nature of Operations

Transpek Industry Limited (''TIL'', ''the Company'') is into the manufacturing and export of a range of chemicals servicing the requirements of customers from a diverse range of industries - Textiles, Pharmaceuticals, Agrochemicals, advanced Polymers, etc.

Note No. : 2 Additional information to the financial statements

(A) Contingent Liabilities and Commitments (to the extent not provided for).

Rs. in Lacs

Particulars Year Year ended 31st ended 31st March, 2014 March, 2013

(a) Contingent Liabilities

(i) Claims against the company not acknowledged as debts (mainly on account of outstanding law suits) 264.25 264.25

(ii) Guarantees given by Banks to third parties on behalf of the company 40.83 17.97

(b) No provision has been made for following demands raised by the authorities since the company has reason to believe that it would get relief at the appellate stage as the said demand are excessive and erroneous

(i) Disputed Income tax Liability 205.55 213.22

- Against Which amount already paid Rs. 193.82 Lacs ( P.Y Rs. 189.57 Lacs )

(ii) Disputed Sales tax Liability 39.51 34.11

(iii) Disputed Excise & Service Tax Liability 372.53 0.00

Total 922.67 529.55

*The above figures have been ascertained on the basis of opening stock plus purchases less closing stock and therefore include the adjustments of excesses and shortages ascertained on physical count, write off of unserviceable items etc.

Above values of Raw Material consumed includes cost of Raw material sold Rs.51.51 lacs (Previous Year : Rs.149.12 Lacs).

Note No. : 3 Disclosures under Accounting Standards as notified under the Companies (Accounting Standard) Rules, 2006

(A) Disclosure as per Accounting Standard -13(Accounting for Investments)

(a) The Company has an investment in equity shares of Excel Industries Limited amounting to Rs. 226.76 lacs. In respect of this investment, the Company had, in the earlier years, recognized a diminution in the value of investment amounting to Rs. 88.63 lacs. The market value of this investment at March 31, 2014 is Rs. 108.08 lacs.(Previous Year Rs.93.99 lacs) In view of the long-term nature of this investment and having regard to the book value of the equity shares, the management does not consider provision for any further diminution in the carrying value of this investment, as at March 31, 2014.

(b) The Company has an investment in equity shares of Sam Fine O Chem limited amounting to Rs. 621.58 Lacs (net of diminution of Rs. 255.00 lacs provided for in earlier year). The net worth of Sam Fine O Chem Limited is completely eroded as on 31st March 2014 and accordingly, the company has recognized further diminution in the value of investment amounting to Rs. 450.00 Lacs during the year ended 31st March 2014. The evaluation of the diminution involves usage of assumptions and significant judgements based on valuation methodologies. (Refer note no. 30(F))

(B) Disclosure as per Accounting Standard - 15 (Employee Benefits)

(a) Gratuity plan :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded. The following tables summaries the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity plan.

(C) Disclosure as per Accounting Standard - 17 (Segment Reporting)

Segment Information

As per para 4 of AS-17 "Segment Reporting", Segment information has been disclosed in Consolidated Financial Accounts.

(D) Disclosure as per Accounting Standard - 18 (Related Party Disclosures)

(a) Names of related parties and description of relationship:

Subsidiary Companies Transpek Industry (Europe) Limited

Sam Fine Chem Limited

Enterprises owned or significantly Excel Industries Limited influenced by key management Excel Crop Care Limited personnel or their relatives TML Industries Limited

Shroffs Engineering Limited Anshul Specialty Molecules Limited Anshul Life Sciences

Madison Investments Private Limited Agrocel Industries Limited Transchem Agritech Limited Hyderabad Chemical Products Limited Kamaljyot Investments Limited Shroffs Foundation Trust C.C. Shroff Research Institute

Key Management Personnel Atul G. Shroff (Managing Director)

Bimal V. Mehta (Executive Director)

Relatives of key management Ashwin C. Shroff

personnel Dipesh K. Shroff

Vishwa A. Shroff Shruti A. Shroff Chaitanya D. Shroff Ravi A. Shroff

Note No. 4 Other Disclosures :

(A) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The amount of trade payables includes Rs. 139.30 lacs(P.Y. Rs. 105.63 Lacs) outstanding to Micro, Small and Medium enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006 based on the information available with the company. The amount of interest payable to such parties is not significant and the company is of the opinion that such Interest will be provided as and when it is demanded by the respective parties.

(a) Capital Expenditure incurred during the year on Research and Development Rs. 81.99 Lacs (Previous Year Rs. 24.68 Lacs).

(b) The Company has been granted approval for claiming deduction u/s 35 (2AB) of the Income Tax Act,1961. Thus, the company has considered weighted deduction u/s 35 (2AB) of the Income Tax Act, 1961.

(E) In the past the Company was eligible for a Sales tax incentive scheme amounting to Rs. 1084.03 lacs (Previous Year Rs. 1084.03 lacs). Post completion of such incentive scheme, the Company has re-paid the amount of Sales tax deferred during the period the scheme was in force, and has applied to the Sales tax Department for a No dues Certificate. Pending reconciliation of the amount with sales tax department, the balance of Rs. 49.61 lacs (Previous Year Rs. 49.61 lacs) has been included in other current liabilities.

(F) Pursuant to Memorandum of Understanding (MOU), dated 16.03.2010 and the Shareholders'' Agreement and Share Purchase-cum-Subscription Agreement, both dated 20.11.2010, entered into between the company and Sam Fine O Chem Limited., the company has acquired 2,92,919 number of equity shares representing 50% of the total equity share capital of Sam Fine Chem Limited (now known as Sam Fine O Chem Limited).

In terms of the aforesaid Agreements, the company also has an irrevocable Call Option for a period of 5 years commencing from 20.11.2010 to increase its shareholding in the Sam Fine O Chem Limited by purchasing from the Promoters such number of additional Equity Shares so as to increase the shareholding percentage of the company by additional 26% (twenty six per cent) of the Paid-up Capital of Sam Fine O Chem Limited at a price to be determined in terms of the said agreements.

Also, in terms of the aforesaid Agreements, the Promoters of the Sam Fine Chem Ltd. have an irrevocable Put Option for a period of 5 (five) years commencing from the date of exercise by the Company of its Call Option to sell to the company all the Equity Shares then held by them and their Affiliates in Sam Fine O Chem Limited at a price to be determined in terms of the said Agreements.

(G) Provision for Taxation includes provision for Wealth Tax amounting to Rs. 1.33 lacs (Previous Year Rs. 1.05 lacs).

(H) Donation includes Donation made to Bhartiya Janata Party (Political Party) Rs. Nil (Previous Year Rs. 1.50 Lacs)

(I) The Ministry of Corporate Affairs, Govt. of India, vide General Circular No. 2 & 3 dated 8th February, 2011 & 21st February, 2011, respectively has granted a general exemption from compliances with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circulars. The Company has satisfied the conditions stipulated in the circulars and hence it is entitled to the exemptions. Necessary information relating to the subsidiaries has been included in the consolidated Financial Statements.

Note No.: 5 Previous Year''s Figures

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


Mar 31, 2013

NOTE NO. 1: CORPORATE INFORMATION

The Company was Incorporated on 11.02.1991 and Fresh Certificate of Registration from Reserve Bank of India on 20.05.2004 as Non Banking Finance Company (Not Accepting Public Deposits ).

At present the Company is engaged in the following activities.

(a) Non Banking Finance activities consisting of Investment activities and funding activities.

2-A Contingent Liabilities & Commitments Particulars

(i) Contigent Liabilities

(a) Demand made by Income Tax Authority as follow, against which company has preferred appeals.

Note No : 3 Disclosures under Accounting Standards as notified under the Companies (Accounting Standards) Rules, 2006

(A) Disclosures under Accounting Standard - 15 (Employee Benefits)

Accounting Standard 15 on ''Employee Benefits'' as notified by Companies (Accounting Standard) Rules 2006 has been adopted by the company effective from April 1, 2007.

(a) Defined Contribution Plans:

The Company makes Provident Fund andcontributions to defined contribution plans for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The company has recognized the following amounts in the Profit and Loss Account for the year.

(b) Defined Benefit Plans:

The Company has policy of giving gratuity to its employees who complete period of qualifying service which is 5 years.

This amount is payable at time of death / retirement or at the time of employee leaving the job after completion of qualifying period of service. The company has formed a Gratuity Trust and taken policy from Life Insurance Corporation of India (LIC) for managing their group gratuity scheme. The company makes contribution to Life Insurance Corporation of India at end of every year based on actuarial valuation carried by them for which data is given by the company. Major Assumptions made for determination of Defined Benefit Liability are as under:

Note No. : 4 Other Disclosures

(a) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The Company has made payments of dues to Micro, Small and Medium enterprises generally within stipulated period of 45 days as prescribed under Micro, small and Medium Enterprises Development Act. The Company has not made any payment of interest nor provided interest payable if any on dues to any supplier.

(b) Earning and expenditure in forein corrency - Rs. NIL.

(c) The Company is not to have afull time Company Secretary during the year as required by Section 383A of the Companies Act, 1956, as per notification dated 15.03.2009 of the Department of Company affairs. The Compliance Report of the Practicing Company Secretary is obtained.

Note No. : 5 Previous year''s figures

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


Mar 31, 2012

NOTE NO. 1: CORPORATE INFORMATION

The Company was Incorporated on 11.02.1991 and Fresh Certificate of Registration from Reserve Bank of India on 20.05.2004 as Non Banking Finance Company (Not Accepting Public Deposits). .

At present the Company is engaged in the following activities.

(a) Non Banking Finance activities consisting of Investment activities and funding activities.

Note No.: 2 Other Disclosures as per Revised Schedule-VI Contingent Liabilities & Commitments

Particulars

(i) Contingent Liabilities

(a) Demand made by Income Tax Authority as follow, against which company has preferred appeals.

Assessment Year Demand

AY: 1997-98 (Interest Tax) 3,424,442 3,424,442 Advance paid against the demand 2,507,504 2,507,504

(A) Disclosures under Accounting Standard -15 (Employee Benefits)

Accounting Standard 15 on' Employee Benefits' as notified by Companies (Accounting Standard) Rules 2006 has been adopted by the company effective from April 1,2007.

(a) Defined Contribution Plans:

The Company makes Provident Fund and contributions to defined contribution plans for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes. The company has recognized the following amounts in the Profit and Loss Account for the year.

Return on plan Assets are not recorded since no information made available.

The company does not have any further information about fair value of plan assets under the plan, accordingly disclosures related to Planned assets and underlying assumptions has not been disclosed.

Note No.: 3 Other Disclosures

(a) Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The Company has made payments of dues to Micro, Small and Medium enterprises generally within stipulated period of 45 days as prescribed under Micro, small and Medium Enterprises Development Act. The Company has not made any payment of interest nor provided interest payable if any on dues to any supplier.

(b) Earning and expenditure in fore in currency - Rs. NIL.

(c) The Company is not to have a full time Company Secretary during the year as required by Section 383A of the Companies Act, 1956, as per notification dated 15.03.2009 of the Department of Company affairs. The Compliance Report of the Practicing Company Secretary is obtained.

Note No.: 4 Previous year's figures

(a) The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

(1) CONTINGENT LIABILITIES :

I. Disputed Interest Tax Demand in Appeal Rs.34.24 Lacs {Previous Year 25.08 Lacs) for which company is in appeal.

(2) In view of inadequate profits in current year, no commission is payable to Directors. Hence, the computation u/s.349 read with Section 309 (5) and Section 198 of the Companies Act, 1956 is not given. The fixed remuneration paid to the Managing Director & Executive Director is, however, shown as per note no.3 above.

(3) There are no dues outstanding to Micro, Small and Medium Enterprises as per the Micro, Small and Medium Enterprises Development Act, 2006, for more than 45 days at the Balance Sheet date.The Micro, Small and Medium Enterprises, if any, have been identified on the basis of information available with the company.This has been relied upon by the auditor.

(4) In accordance with "Accounting Standards 22""Accounting Taxes on Income "issued by the Institute of Chartered Accountants of India, the Company has unabsorbed losses and depreciation which gives rise to Deferred Tax Asset (DTA). In the year in which the Deferred tax liability would arise, the benefit of unabsorbed losses and depreciation would be available to the Company.

(5) RELATED PARTY OISCLOUSERS

Disclosures of relationship and transactions with the related parties as required by Accounting Standard 18 issued by the Institute of Chartered Accountants of India are given below.

1. Relationships:

(a) Subsidiary of the Company:

Nil

(b) Associate:

Universal Esters Ltd.

Infinity Consultants Ltd.

Oneiro Chemicals Ltd.

(c) Related parties where control exist:

Torrential Investments Private Limited

(d) Key Management Personnel:

Mr.M.D.Patel

Mr. D. D. Patel

(e) Relatives of key management personnel and their enterprises where transactions have taken place:

Nil

Note: Related party relationship is as identified by the company and relied upon by the Auditors.

(6) Disclosure regarding Earnings per share (EPS)

The basic EPS is calculated as under:

Loss attributed to Equity Shareholders (Rs7,47,418/-)

No. of Equity shares (of Rs.10 each) 3572300

Earning per share Rs. (0.21)

(7) The appeal preferred by the company against the order of CIT (A), Baroda before the Hon ITAT,Ahmedabad have been restored to the files of A.O.The disputed liability of Interest Tax of Rs.25,07,504/- is fully deposited. However,on fresh assessment demand of Rs.9,16,938 has been raised against which an application u/s 154 of the Income Tax Act has been preferred, which is pending.

In case of the Department Appeals for penalty for A.Y 1996-97 Rs.49,35,948/- the same has been decided in favour of the company by Hon.lTAT, Ahmedabad.

(8) Information as required by accounting Standard 15 on "Employee Benefit "as notified by Companies (Accounting Standard) Rules, 2006 is as under.

b) Defined Benefit Plans:

The Company has policy of gratuity of its employees who complete period of qualifying service which is 5 years. This amount is payable at the time of death / retirement or at the time of employee leaving the job after completion of qualifying period of service. The company has formed a Gratuity Trust and taken policy from Life Insurance Corporation of India for managing their group gratuity scheme. The company makes contribution to Life Corporation of India at end of every year based on actuarial valuation carried by them for which data is given by the company. Accordingly, contribution made by the company of Rs. 22020/- is charged to Profit and Loss account.

The company does not have any further information about fair value of plan assets under the plan, accordingly disclosures related to planned assets and underlying assumptions has not been disclosed.

c) As per the requirement of AS -15 "Employee Benefit", the Company has made provision of Leave Encashment of its employees during the year for the leave up to last year and of the current year. The Total provision includes Rs.2,96,400/- up to the year ended 31.03.2010and Rs.1,48,200/- for the current year.

(9) The Company is not required to have a full time Company Secretary during the year as required by Section 383A of The Companies Act, 1956, as per notification dated 15.03.2009 of the Department of Company Affairs. The Compliance Report of the Practicing Company Secretary is obtained.

(10) IN THE OPINION OF DIRECTORS

(I) All current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business.

(ii) The Provision for all known liabilities have been made except contingent liabilities stated as such.

(11) The Company is engaged primarily in the business of finance and accordingly there are no separate reportable segments as per Accounting Standard - 17 dealing with Segment Reporting.

(12) Earning and expenditure in foreign currency:- NIL.

(13) Previous years figures have been regrouped/rearranged wherever necessary.


Mar 31, 2010

1. Loans on Cash Credit Accounts from State Bank of India, Bank of Baroda and Axis Bank Limited (hereafter collectively referred to as "Consortium of Banks") are secured by first charge by way of hypothecation of stocks of raw materials, packing materials, consumable stores, finished goods, semi- finished goods and book-debts.The aforesaid cash credit facilities are further secured by way of charge on the whole of the fixed assets of the Company ranking second and subservient for the charges created in respect of borrowings obtained from them.

2. Term Loan from Axis Bank Limited amounting to Rs. 87.61 Lacs (Previous Year: Rs. 296.68 Lacs) or equivalent in foreign currency is secured by first charge by way of hypothecation of all machinery financed or to be financed under the said term loan. It is further secured by second charge by way of hypothecation over entire current assets including stock and book-debts with the current charge holders on pari passu basis. The said loan is also further secured by first charge by way of an equitable mortgage on the whole of the fixed assets of the Company, both present and future, on pari passu basis with existing second and subservient charge holders.

3. Term loan from Bank of Baroda amounting to Rs.351.08 Lacs (Previous Year : Rs. 662.08 Lacs) is secured by first charge by way of hypothecation of all movable machinery financed or to be financed under the said term loan. The Bank of Baroda has agreed and ceded second pari passu charge in favour of State Bank of India and Axis Bank Limited, on the said movable machinery financed / to be financed out of the said term loan, for their respective working capital limits sanctioned to the Company. The said loan is also further secured by first charge by way of an equitable mortgage on the whole of the immovable assets of the Company, both present and future, on pari passu basis with existing first charge holders viz. State Bank of India and Axis Bank Limited.

4. Term loan from State Bank of India amounting to Rs. 620.80 Lacs (Previous Year: Rs. 933.29 Lacs) is secured by first charge by way of hypothecation of all movable machinery financed or to be financed under the said term loan. The State Bank of India has agreed and ceded second pari passu charge in favour of Bank of Baroda and Axis Bank Ltd. on the said movable machinery financed/to be financed out of ths said term loan, for their respective working capital limits sanctioned to the Company. The said loan is also further secured by first charge by way of an equitable mortgage on the whole of the immovable assets of the Company, both present and future, on pari passu basis with existing first charge holders viz. Bank of Baroda and Axis Bank Limited.

5. Term loan from Axis bank Ltd. amounting to Rs 562.50 lacs (Previous Year: Rs 459.55 lacs) is secured by first charge by way of hypothecation of all movable machinery financed or to be financed under the said term loan and also yet to be secured by first charge by way of an equitable mortgage on the whole of the immovable assets of the Company, both present and future , on pari passu basis with existing first charge holders viz. State Bank of India and Bank of Baroda.

1. Nature of Operation

Transpek Industry Limited (TIL, the Company) is into the manufacture and export of a range of chemicals servicing the requirements of customers from a diverse range of industries - Textiles, Pharmaceuticals, Agrochemicals, advanced Polymers, etc.

2. In the past the Company was eligible for a Sales tax incentive scheme amounting to Rs. 1084.03 lacs (Previous Year: Rs. 1084.03 lacs). Post completion of such incentive scheme, the Company has re-paid the amount of Sales tax deferred during the period the scheme was in force, and has applied to the Sales tax Department for a No Dues certificate. Pending reconciliation of the amount with sales tax department, the balance of Rs. 49.61 lacs (Previous Year: Rs. 49.61 lacs) has been disclosed as Deferred Payment Liabilities.

3. (a) The Company has prepared its fixed asset register during the year. On completion of th*e same it was observed that excess depreciation amounting to Rs. 9.93 lacs had been charged in earlier years, which now have been credited to the Profit and Loss account.

(b) Moreover, on physical verification of part of the Plant & Machinery during the year, differences were observed between the assets physically available and as per books amounting to Rs.151.37 lacs (gross block) and Rs. 94.97 lacs (net block), which have been written off during the year.

The net amount of Rs. 85.04 lacs arising out of (a) and (b) above, has been charged off to the Profit and Loss account as an exceptional item.

(Rs. in Lacs)

4. (a) Contingent Liabilities (to the extent not provided for)

Sr. Particulars As on As on No March 31, 2010 March 31, 2009

(a) Disputed Income Tax Liability 848.09 843.85

(b) Disputed Sales Tax Liability 259.06 261.07

(c) Guarantees given by Banks to third parties on 23.05 26.88 behalf of the Company

(d) Claims against the Company not acknowledged 134.25 376.50 as debts (mainly on account of outstanding law suits )

(e) Counter Guarantees given to The Housing Development - 0.49 Finance Corporation Limited in respect of housing loans taken by employees.

(b) The Company has undertaken export obligation of eight times of the CIF value of machineries imported, to be fulfilled over a period of eight years. The obligation outstanding on the date of Balance Sheet amounts to Rs. Nil (Previous Year: Rs. 103.45 lacs).

5. Capital Commitment

The estimated amount of contracts, net of advances remaining to be executed on capital account at March 31, 2010 is Rs.111.83 lacs (Previous Year: Rs. 61.93 lacs).

6. Excise duty on sales amounting to Rs. 432.23 lacs (Previous Year: Rs. 810.10 lacs) has been reduced from sales in profit & loss account and excise duty on increase/(decrease) in stock amounting to Rs. 6.95 lacs (Previous Year: Rs. 14.65 lacs) has been considered as income in Schedule 19 of financial statements.

7. The Company had issued 7,99,000 share warrants to promoters and others on preferential allotment basis at a price of Rs. 65 per share on 5th February, 2008 which were convertible into equal number of equity shares of Rs.10 each. Of the above 519,984 share warrants had been converted into equity shares of Rs. 10 each fully paid-up till 31st March, 2009. The balance 279,016 share warrants have been converted into equity shares in the current year. The said equity shares shall rank pari-passu with the other equity shares.

8. The Company has an investment in equity shares of Excel Industries Limited amounting to Rs. 226.76 lacs. In respect of this investment, the Company had, in the previous year, recognized a diminution in the value of investment amounting to Rs.88.63 lacs. The market value of this investment at March 31,2010 is Rs. 91.85 lacs (Previous Year: Rs. 41.43 lacs). In view of the long-term nature of this investment and having regard to the book value of the equity shares, management does not consider any further diminution in the carrying value of this investment, as at March 31,2010.

9. Provision for Taxation includes provision for Wealth Tax amounting to Rs. 0.79 lacs (Previous Year: Rs. 1.02 lacs).

10. Gratuity plan:

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with insurance companies in the form of a qualifying insurance policy. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

11. Related Party Disclosure

a) Names of related parties and description of relationship:

Subsidiary Company Transpek Industry (Europe) Limited

Enterprises owned or significantly influenced by key Excel Industries Limited

management personnel or their relatives Excel Crop Care Limited

TML Industries Limited Shroffs Engineering Limited Anshul Speciality Molecules Limited Anshul Agencies Agrocel Industries Limited Shroffs Foundation Trust Transchem Agritech Limited Hyderabad Chemical Products Limited C.C. Shroff Research Institute

Key Managemment Personnel Atul G. Shroff

Relatives of key management personnel

Ashwin C. Shroff Dipesh K. Shroff Vishwa A. Shroff Shruti A. Shroff

Chaitanya D. Shroff

12. Lease Commitments

The Company has cancelable operating leasing arrangements relate to office premises which are renewable by mutual consent and lease rentals payable are accordingly charged as rent under Schedule 19. During the period, the Company has taken office premises under cancelable operating lease; the rentals for which amounting to Rs. 2.58 lacs (Previous Year: Rs.12.24 lacs)are charged to the Profit and Loss Account for the period. The lease term is for 11 months and there are no sub-leases.

13. Segment Information

Identification of Segments

I. Primary Segment-Business Segment

The Companys operations predominantly comprise of only one segment i.e. chemicals. In view of the same, separate segmental information is not required to be disclosed as per the requirements of Accounting Standard 17.

ii. Secondary Segment-Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows:

Sales within India include sales to customers located within India.

Sales outside India include sales to customers located outside India.

14. Previous period figures have been regrouped/rearranged wherever necessary.

 
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