Tcc A Report 64j6q

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

CONTENTS Page Board of Directors

03

Ten year Financial Statistics

04

Notice to Shareholders

06

Directors’ Report to Shareholders

08

Annexure to the Directors’ Report

12

Balance Sheet as at 31 st March, 2010

16

Profit and Loss for the year ended 31st March, 2010

17

Schedules to Balance Sheet

18

Schedules to Profit and Loss

24

Notes on s

28

Balance Sheet Abstract

39

Cash Flow Statement

40

Auditors’ Report to Shareholders

41

Comments of C & AG of India

46

Comments of Principal Secretary (Finance), Govt. of Kerala

48

Reply to the Comments of C & AG of India

49

Reply to the Comments of Principal Secretary (Finance)

50

1


MAJOR PRODUCTS Caustic Soda (Rayon Grade) Lye & Flakes Liquid Chlorine Hydrochloric Acid (Mercury Free) Sodium Hypochlorite

2


Bankers State Bank of Travancore

Board of Directors Shri. K. S. Srinivas, I.A.S Chairman

Auditors M/s. Menon & Ayyar Chartered ants Iyyattil Road, Ernakulam Kochi-682 011

Shri. V. Muraleedharan Nair Managing

Director

Shri. M. R. Karmachandran Nominee of KSIDC

Cost Auditors N. P. Gopalakrishnan & Co. Cost ants DD Vyapar Bhavan Kadavanthra P. O. Kochi-682 020

Shri. R. Madhusoodhanan Nair Shri. J. Vijayamohanan Shri. N. I. Paulose C ompany

Legal Advisors M/s. Menon & Pai Advocates, Ernakulam

Secretary

Smt. Susan Abraham

ed Office & Works Udyogamandal - 683 501 Kerala State

3


TEN YEAR FINANCIAL HIGHLIGHTS ` 2009 2010 Sales

2008 2007- 2006- 2005- 2004- 2003- 2002- 20012009 2008 2007 2006 2005 2004 2003 2002

10752 12063 9390 12321 10877

in lakhs 20002001

8869

9123

7421

9031

Other Income

686

313

1674

219

158

450

492

181

553

9253 167

Stock: Increase/Decrease

332

-36

4

199

13

-81

-143

-60

333

-257

Total Income

11770 12340 11068 12739 11048

9238

9472

7542

9917

9163

Material Consumed

1603

2043

1268

1648

1594

1031

1161

990

1231

1501

Power, Fuel, Stores & Repairs

6186

6374

5668

6702

5675

4663

5140

4252

6093

5772

Employee Cost

2455

2333

2634

2369

1678

2288

1556

1566

1609

1585

Selling & istrative Expenses

145

76

71

78

75

59

58

49

60

76

49

38

35

49

12

135

126

31

93

144 9078

Other Expenditure Total Expenditure

10438 10864 9676 10846 9034

8177

8041

6888

9086

Gross Margin

1332

1476

1392

1893

2014

1061

1431

654

831

85

Interest and Bank Charges

660

790

289

964

606

657

687

669

677

816

Depreciation

937

969

1012

920

827

1233

643

603

820

556

Profit/Loss Before Prior Period Items

-265

-283

91

9

581

-831

101

-618

-667

-1284

15

10

-47

53

0

2

0

-74

0

0

-250

-273

44

62

581

-829

101

-692

-667

-1284

Current Tax

0

-1

5

5

48

0

7

0

0

0

Fringe Benefit Tax

-1

9

11

8

10

0

0

0

0

0

0

0

0

0

0

0

0

0

0

-2

Prior Period Items Profit/Loss Before Taxation Provision for Taxation

Income Tax Paid (prior period) Net Profit /Loss

-249

-281

28

49

523

-829

83

-692

-667

-1282

Net Block

7222

7783

8558

9407

7998

6399

7061

7646

7290

7649

Capital Work-in-Progress

230

41

11

1

942

1915

25

14

197

207

Current Assets Loans and Advances

4007

3636

3457

3717

3576

2589

4268

3325

4189

4200

Current Liabilities and Provisions

4898

4701

5474

5583

5859

5064

4889

4498

7847

7232

2

2

2

2

0

0

0

0

0

0

Accumulated Loss

1315

1066

786

813

862

1385

555

639

3324

2658

Total Utilisation

7878

7827

7340

8357

7519

7224

7020

7126

7153

7482

Working Capital (WC) (CA-CL)

-891

-1065 -2017 -1866 -2283 -2475

-621

-1173 -3658

-3032

Investments

4


`

in lakhs

2009 2010

2008 2007- 2006- 2005- 2004- 2003- 2002- 20012009 2008 2007 2006 2005 2004 2003 2002

20002001

Long Term Borrowing

4267

4008

4030

4574

4856

5088

4889

4859

5013

4596

Short Term Borrowing

982

979

807

588

144

0

0

0

0

46

Share Capital (SC)

2131

2131

2131

2131

2131

2131

2131

2131

2131

2131

Interest Accrued

125

338

0

1064

388

5

0

136

9

0

Loan from Govt. of Kerala

372

372

372

0

0

0

0

0

0

0

Reserves & Surplus

0

0

0

0

0

0

0

0

0

0

Deferred Payment Liability

0

0

0

0

0

0

0

0

0

709

Total Sources

7878

7828

7340

8357

7519

7224

7020

7126

7153

7482

Networth (SC+Reserves-Acc.loss)

816

1065

1345

1318

1269

746

1576

1492

-1193

-527

Capital Employed (Net Block+WC)

6330

6718

6541

7541

5715

3924

6440

6473

3632

4617

Finished Goods

590

247

295

308

109

96

177

320

380

47

19

29

17

0

0

0

0

0

0

0

367

535

244

248

280

82

182

196

261

325

Work-in-Progress Raw Materials Materials in Transit

55

90

62

64

161

65

9

16

3

3

Stores and Spares

601

603

400

425

413

396

353

345

520

427

Sundry Debtors

1130

974

1229

1425

1099

955

1176

1218

1067

1398

59

102

115

139

124

165

710

202

416

497

Loans and Advances

1186

1056

1095

1108

1386

824

1046

915

1369

1309

Other Current Assets

0

0

0

0

4

6

84

113

148

163

Stores and Spares in Transit

0

0

0

0

0

0

531

0

25

31

Total

4007

3636

3457

3717

3576

2589

4268

3325

4189

4200

Cash Profit/(Loss)

688

689

1040

969

1350

404

726

(89)

153

(726)

Cash and Bank Balance

Installed Capacity Caustic Soda Lye & Flakes

57750 57750 57750 55520 48370 52250 74250 74250 66000 66000

By-products:Chlorine

51200 51200 51200 49190 42857 46295 65785 65785 58476 58476

Production Caustic Soda Lye &Flakes

48923 47519 42298 57487 51004 47201 55285 47263 54141 58631


43745 42599 36423 50520 45190 41820 48983 41875 47969 51947

Capacity Utilisation (%) Caustic Soda Lye & Flakes

84.72 82.28 73.24 1 0 3 . 5 4 1 0 5 . 4 5 90.34 74.46 63.65 82.03

88.83


85.44

83.2

71.14 1 0 2 . 7 0 1 0 5 . 4 4 90.33 74.46 63.65 82.03

88.83

Excise Duty

872

1477

1466

1927

1706

1333

1318

1070

1353

1342

Sales Tax

370

418

388

459

431

422

405

335

411

400

0

0

5

5

48

0

7

0

0

0

Government Levies

Income Tax Paid

5


NOTICE TO SHAREHOLDERS Notice is hereby given that the Fifty-Eighth Annual General Meeting of the of The Travancore-Cochin Chemicals Limited will be held on Thursday, the 30th September, 2010, at 11.00 AM at the ed Office of the Company at Eloor, Udyogamandal -683 501, Kerala to transact the following:-

Additional Director of the Company and who holds office up to the date of the Fifty-Eighth Annual General Meeting, being eligible for appointment and in respect of whom Notice under Section 257 of the Companies Act has been received by the Company be and is hereby appointed as Director of the Company liable to retirement by rotation”. 5. To consider and if thought fit, to with or without modifications the following resolution as an ORDINARY RESOLUTION: -

ORDINARY BUSINESS 1. To receive, consider and adopt the Directors’ Report, the Audited Balance Sheet as at 31st March, 2010 and the Profit & Loss for the year ended 31 st March, 2010 and Auditors’ Report thereon. 2. To fix the remuneration of Auditors, and in this connection to with or without modifications, the following resolution as an ORDINARY RESOLUTION: “RESOLVED THAT pursuant to the provisions of Section 619 read with Section 224(8)(aa) and other applicable provisions, if any of the Companies Act, 1956, the Board of Directors of the Company be and is hereby authorized to fix the remuneration plus traveling and other outof-pocket expenses incurred by the Statutory Auditors of the Company appointed by the Comptroller and Auditor General of India for the year 2010-11.”

“RESOLVED THAT Shri. R. Madhusoodhanan Nair, who was appointed by the Board of Directors pursuant to the provisions of Section 262 of the Companies Act, 1956 and Article 77 of the Articles of Association of the Company, as a Director to fill the casual vacancy caused by resignation, and who, in of Section 262, was entitled to hold the office until the Fifty-Eighth Annual General Meeting, be and is hereby appointed as Director of the Company liable to retirement by rotation”. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 Item No.4

3. To appoint a director in the place of Shri. J. Vijayamohanan, who retires by rotation and is eligible for re-appointment.

Consequent upon the advice of the Government of Kerala, your Directors appointed Shri. N.I. Paulose as a Director on 7th November, 2009. In accordance with Section 260 of the Companies Act, 1956 and Article 77 of the Articles of Association of the Company, Shri. N.I. Paulose will hold office only up to the date of Fifty-Eighth Annual General Meeting. A notice under Section 257 of the Companies Act, 1956, has been received from a member signifying his intention to propose Shri. N.I. Paulose as Director of the Company.

SPECIAL BUSINESS 4. To consider and if thought fit, to with or without modifications, the following resolution as an ORDINARY RESOLUTION:“RESOLVED THAT Shri. N.I. Paulose, who was appointed by the Board of Directors pursuant to the provisions of Section 260 of the Companies Act, 1956 and Article 77 of the Articles of Association of the Company, as an

6


Your Directors consider it in the interest of the Company to continue to avail of the services of Shri. N. I. Paulose as a Director of the Company and propose the resolution for your approval. None of the Directors of the Company is interested in this resolution except Shri. N. I. Paulose.

Meeting. A notice under Section 257 of the Companies Act, 1956, has been received from a member signifying his intention to propose Shri. R. Madhusoodhanan Nair as Director of the Company. Your Directors consider it in the interest of the Company to continue to avail of the services of Shri. R. Madhusoodhanan Nair as a Director of the Company and propose the resolution for your approval. None of the Directors of the Company is interested in this resolution except Shri. R. Madhusoodhanan Nair.

Item No.5 Consequent upon the advice of the Government of Kerala, your Directors appointed Shri. R. Madhusoodhanan Nair as a Director to fill the casual vacancy caused by resignation, on 26th June, 2010. In accordance with Section 262 of the Companies Act, 1956 and Article 77 of the Articles of Association of the Company, Shri. R. Madhusoodhanan Nair will hold office only up to the date of the Fifty Eighth Annual General

By order of the Board of Directors For The Travancore-Cochin Chemicals Ltd. Sd/Susan Abraham Company Secretary

Udyogamandal 28. 08. 2010

Note: A member entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote instead of himself and a proxy need not be a member. The form of proxy should be deposited at the ed office of the Company not less than 48 hours before the time of holding the meeting.

7


DIRECTORS’ REPORT TO THE SHAREHOLDERS To the Shareholders,

reduction in market and sales realization during the year 2009-2010.

Your Directors present the Fifty-Eighth Annual Report on the business and operations of the Company, together with Audited s for the year ended 31st March 2010.

SUMMARY OF PERFORMANCE (` in lakhs) 2009-2010 2008-2009

The total production of Caustic Soda in the country during the year was around 23.26 lakhs MT ing an increase of approximately 6%. The installed capacity also increased to 32.02 lakhs MT, ing an increase of 10%. Our products have to face more competition on of increase in the installed capacity by 2.79 lakh MT per annum. Due to recession in Caustic Soda demand there is pressure on realization.

Profit/(Loss) before depreciation

687

695

Depreciation

937

969

(250)

(274)

1

7

(249)

(281)

Add: Balance Profit/(Loss) brought forward from previous year (3808)

(3527)

Balance carried to Balance Sheet

(3808)

Profit/(Loss) after depreciation Provision for taxation Net Profit/(Loss) after tax

The Company continues to be a major player in South India with a market share of nearly 13%. The demand for Caustic Soda is expected to grow at a steady rate of 4% to 5% over the next 3 years, especially due to the demand from Aluminium manufactures. Even though the sale price of Caustic Soda is low, the Company is able to dispose of its Hydrochloric Acid and Chlorine to maintain Caustic Soda production at full capacity.

(4057)

MARKETING The ECU realization for the products during 2009-2010 shows declining trend from April 2009. Chlorine and Hydrochloric Acid prices showed slight improvement from March 2010. The average ECU realization for the year was ` 22968 per MT. The Company has sold 44549MT of Caustic Soda (in Lye and flakes forms), 12838MT of Liquid Chlorine, 93068MT of Hydrochloric Acid (Commercial Grade) and achieved a turnover of ` 116.18 crores.

PRODUCTION The Gross Production of Caustic Soda for the year 2009-10 was 48922.535MT out of which 38701.213MT was produced in 125 TPD AGC Plant, 5353.098MT in UHDE-I Plant and 4868.224MT UHDE-II Plant. The Capacity Utilization was 84.71% only, mainly due to

PROJECTS (1) 50 TPD Caustic Soda Capacity Augmentation Project The Company’s proposal for the enhancement of Caustic Soda capacity

8


DIRECTORS’ REPORT (Contd.....) works have already been completed and the project activities are progressing as per schedule.

expansion from 175 TPD to 225 TPD by the addition of another 50 TPD Membrane Cell Caustic Soda Plant is before the Government seeking approval. The project cost envisaged ` 56 crores and is proposed to be financed by external sources like commercial loans, funding from other profit making PSUs etc. The project implementation period is 22 months. Subsequent to the commencement of the 50 TPD Caustic Capacity Expansion Project, TCC will be proceeding with the project of Capacity Augmentation of the existing Caustic Evaporation Plant from 100 TPD to 190 TPD.

(4) Lease Agreement with KSIE The Company has entered into a lease agreement with KSIE for setting up a Container Freight Station on 8.53 Acres of land on a lease based profit sharing arrangement as per Govt. Order G.O (Rt) No.801/2009/ID. SAFETY & POLLUTION CONTROL The Company is committed to achieve excellence in Safety, Health and Environmental protection. The Company has developed a scheme of training on safety equipments and handling of hazardous chemicals. Regular and periodic training is imparted to workers and officers in batches in accordance with a prepared schedule. Appropriate training programs are designed and imparted to suit the requirements of different groups viz, customers, contract workers, drivers and cleaners of trucks and lorries carrying hazardous chemicals from the premises of our company.

(2) Horizontal Saturator & Secondary Brine Purification System The ongoing project of Horizontal Saturator and Secondary Brine Purification system which is aiming at the modification of the existing Brine Plant system is in the final stage of completion. The pre-commissioning and guarantee test run works are going on and the system is expected to be in normal process line soon.

The Company is conducting Mock drill regularly (once in six months) to test and improve the emergency preparedness of all concerned.

(3) 5 TPD Sodium Chlorate Plant A MOU was signed between TCC & VSSC on 25.03.2010 for setting up of a 5 TPD Sodium Chlorate Plant at TCC premises and supply of the Sodium Chlorate produced to the Ammonium Perchlorate Experimental Plant (APEP) of VSSC at Alwaye. The project is fully funded by VSSC. The total gestation period for the project is 21 months from g of MOU and is envisaged to be executed on LSTK basis. Preliminary project

The Company has started the process of implementation of ISO 14001 and OHSAS 18001 Systems in order to obtain certification by December 2010. The Company received the Certificate of Honour for Outstanding Achievement in Pollution Abatement instituted by the Government of Kerala.

9


DIRECTORS’ REPORT (Contd.....) ENERGY CONSERVATION

DIRECTORS

Energy Monitoring Station intended for real time visualizing of energy parameters is being implemented in a phased manner. Energy Audit was conducted in-house and various energy saving measures were identified. Feasible proposals are being planned for implementation in a phased manner.

Shri. M. Thomas, resigned from the Board of Directors w.e.f. 31.03.2010. Shri. M. R. Karmachandran, was nominated by Kerala State Industrial Development Corporation Ltd. as the Nominee Director of KSIDC w. e. f. 16.09.2009 in place of Shri. A. K. Nair. The Board appointed Shri. N. I. Paulose as an Additional Director of the Company w.e.f 07.11.2009 and also Shri. R. Madhusoodhanan Nair as Director in casual vacancy caused by resignation of Shri. M. Thomas, w.e.f 26.06.2010. They hold office up to the date of the ensuing Annual General Meeting. Notice has been received from a member proposing the candidatures of Shri. N. I. Paulose and Shri. R. Madhusoodhanan Nair as Directors.

PERSONNEL RELATIONS Industrial Relations remained cordial and peaceful. The period of the Long Term wage settlement for workmen expired on 31.03.2010. All the existing vacancies up to April 2010 among the worker category were filled up by recruiting suitable candidates from Employment Exchange. A referendum was held among the employees and three unions qualified and got recognised.

The Board places on record its appreciation for the services rendered by Shri. A. K. Nair and Shri. M. Thomas, as Directors of the Company.

EROSION OF 50% OF THE NETWORTH OF THE COMPANY

AUDITORS

As already reported to the shareholders, as per the audited annual s of the Company for the financial year ended 31 st March 2009, the accumulated losses had resulted in the erosion of more than 50% of the peak net worth of the Company. During the year under review the Company, as required under Section 23 of the Sick Industrial Companies (Special Provisions) Act 1985, reported the fact of such erosion to BIFR.

M/s Menon & Ayyar, Chartered ants, 57/ 1059 Iyyattil Road, Iyyattil Junction, Cochin682011, were appointed by the Comptroller and Auditor General of India as Statutory Auditors of the Company for the year 2009-2010. COST AUDITORS The Company re-appointed M/s N.P. Gopalakrishnan & Company, Cost ants, Apartment No.311, 4th Floor, DD Vyapar Bhavan, K.P.Vallon Road, Kadavanthra,P.O., Cochin-682 020 as Cost Auditors for the year 2010-2011 subject to the approval of the Central Government and the approval is awaited.

REPAYMENT OF KIRFB LOAN During the year the Term Loan from Kerala Industrial Revitalisation Fund Board (KIRFB) was repaid with a soft loan of 8.5% interest from Kerala Financial Corporation (KFC).

10


DIRECTORS’ REPORT (Contd.....) assets of the Company and preventing and detecting fraud and other irregularities;

AUDIT COMMITIEE As per the provisions of Section 292A of the Companies Act 1956, the Board of Directors has constituted an Audit Committee. Presently, the Audit Committee comprises of three Directors, namely Shri. M. R Karmachandran, Shri. R. Madhusoodhanan Nair and Shri. J. Vijayamohanan. Shri. M. R Karmachandran is the Chairman of the Audit Committee. Three Audit Committee meetings were held during the year.

iv) The Directors have prepared the annual s on a going concern basis. DISCLOSURE OF PARTICULARS: The details regarding conservation of energy and technology absorption are given in the format prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 as Annexure-A to this report.

DIRECTORS RESPONSIBILITY STATEMENT:

None of the employees of the Company were in receipt of remuneration exceeding the limits prescribed under Section 217 (2A) of the Companies Act, 1956.

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that: i)

ACKNOWLEDGEMENT:

In the preparation of the annual s, the applicable ing Standards have been followed along with proper explanation relating to material departures;

Your Directors wish to place on record their appreciation of the which the company has received from our Customers, Kerala Industrial Revitalisation Fund Board (KlRFB), Kerala Financial Corporation (KFC), Kerala State Electricity Board (KSEB), State Bank of Travancore, Indian Overseas Bank, State Bank of India, suppliers, business associates and most importantly the employees. Your Directors also wish to record their gratitude for the assistance received from the Government of Kerala.

ii) The Directors have selected such ing policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2010 and of the profit of the company for the year ended on that date;

For and on behalf of the Board of Directors Sd/K. S. SRINIVAS, I.A.S Chairman

iii) The Directors have taken proper and sufficient care for the maintenance of adequate ing records in accordance with the provision of the Companies Act, 1956 for safeguarding the


11


ANNEXURE-A TO THE DIRECTORS’ REPORT COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

(a) Energy Conservation measures taken:

tic Soda Plant etc. with a total potential saving of 5.11 lakhs Kwh per annum and 352.174MT of Furnace Oil per annum.

i) 352.174MT Furnace Oil was saved on of using Hydrogen in the Continuous Caustic Soda Concentration and Flaking Unit.

(c) Impact of measures (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods:

(A) CONSERVATION OF ENERGY

ii) Furnace Oil usage was reduced by 1030MT, on of using excess steam from FACT. Steam purchased and consumed from FACT during the year 2009-10 was 14290MT at the rate of ` 1270.22 per MT.

Information furnished in Form “A” (B) TECHNOLOGY ABSORPTION (d) Efforts made in technology absorption as per Form “B” of the Annexure: Information furnished in Form “B”.

iii) Company saved 5.11 lakhs Kwh of electrical energy through various Energy Conservation measures.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

(e) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans:

Twelve identified energy saving proposals were implemented. These identified measures include application of variable frequency drives, downsizing of pumps, replacement of lower efficiency motors with higher efficiency class motors, installation of LT capacitor bank, implementation of Energy Monitoring Systems, increased utilization of Hydrogen in Continuous Caus-

There were no exports during the year. (f) Total foreign exchange used and earned: Foreign Exchange used: ` 186.53 lakhs Foreign Exchange earned : Nil

12


ANNEXURE-A TO THE DIRECTORS’ REPORT (Contd...) FORM A [See Rule 2] FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY (A) POWER AND FUEL CONSUMPTION Current Year 2009-2010

Previous Year 2008-2009

1305.52

1283.63

4529.83

4804.91

Rate/Unit (`.)

3.47

3.74

b) Own Generation

Nil

Nil

NA

NA

2935.86

3504.78

Total Amount (` in Lakhs)

699.44

849.04

Average Rate (`/MT)

23824

24225.00

1. Electricity a) Purchased Units

(Lakhs Kwh)

Total Amount (` in Lakhs)

2. Coal (specify quality and where used) 3. Furnace Oil Quantity

(MT)

(B) CONSUMPTION PER UNIT OF PRODUCTION (Products with details) Electricity

(Kwh)

2669

2701

Furnace Oil

(Litres)

60.01

73.75

46203

44628

Coal

NA

NA

Others

NA

NA

Production (net) (MT)

13


ANNEXURE-A TO THE DIRECTORS’ REPORT (Contd...) FORM B [See Rule 2] FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT (R & D) 1.

3.

Specific areas in which R & D was carried out by the Company

a) Imported Membrane Cell Technology has been adopted for the production of Caustic Soda. 25 TPD Membrane Plant UHDE-II is the third stage of conversion of Mercury Cell Plant to Membrane Cell Plant.

Nil 2.

Benefits derived as a result of above R & D Nil

3.

Future plan of action The Company is on the lookout for new projects in the field of LNG utilization as an LNG Terminal is being proposed at Kochi.

4.

Details of technology imported during the last 5 years reckoned from the beginning of the financial year.

b) Year of import 2005-06 c) The above technology for the production of Caustic Soda has been fully absorbed.

Expenditure on R & D

d) N A

Nil TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION 1.

Efforts in brief made towards technology absorption, adoption and innovation:

For and on behalf of the Board of Directors

Nil 2.

Sd/K. S. SRINIVAS, I.A.S Chairman

Benefits derived as a result of the above efforts – e.g., product improvement, cost reduction, product development, import substitution etc.


Nil

14


ADDENDUM TO DIRECTORS’ REPORT Explanations of Board of Directors with reference to Para 9(b) and 11 of the Annexure to Auditor’s Report dated 1st September 2010: Para 9 (b): These cases will be dealt with appropriately as and when decisions are communicated by the concerned forum. Para 11: Request was made to the Government of Kerala for conversion of Loan to equity and for wavier of interest. The Government has informed that the proposal will be considered as a part of a revival proposal when submitted by the Company.

Sd/K. S. SRINIVAS, I.A.S Chairman

Thiruvananthapuram 1st September 2010

15


BALANCE SHEET AS AT 31st MARCH, 2010

Schedule

As at As at 31st March 2010 31 st March 2009 ` in lakhs ` in lakhs ` in lakhs

SOURCES OF FUNDS Shareholders’ Funds: Share Capital Reserves & Surplus

1 2

2,131.19 0.00

2,131.19

2,131.19 0.00

Loan Funds: Secured Loans Unsecured Loans

3 4

5,248.91 497.45

5,746.36

5,267.23 429.44

7,877.55

7,827.86

TOTAL APPLICATION OF FUNDS Fixed Assets: Gross Block Less: Depreciation Net Block CAPITAL WORK-IN-PROGRESS Investments Current Assets, Loans and Advances Less: Current Liabilities & Provisions Net Current Assets Profit & Loss

5 16,485.75 9,264.12 6 7 8 9

7,827.86

4,006.67 4,898.03

10 21

For and on behalf of the Board of Directors Sd/R. MADHUSOODHANAN NAIR Director

Sd/V. MURALEEDHARAN NAIR Managing Director Sd/JIJU FRANCIS Deputy Financial Controller

7,877.55

7,221.63 229.93 2.30

TOTAL NOTES ON S

(891.36) 1,315.05

16,190.32 8,407.28 7,783.04 41.32 2.30 3,636.45 4,701.13 (1,064.68) 1,065.88

Sd/SUSAN ABRAHAM Company Secretary

Udyogamandal 28 th August, 2010

16

As per our Report of even date For MENON & AYYAR (Chartered ants) (Firm Regn. No. 0020S8S) Sd/MOHANAN KUTTICKAT Partner (hip No. 15842)


PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2010 Current Year ` in lakhs

Previous Year ` in lakhs

11,617.63 869.79 10,747.84 4.61 685.60 11,438.05

13,537.10 1,475.85 12,061.25 1.40 313.46 12,376.11

1,601.53 1.38 6,186.25 2,454.88 144.93 49.28 660.01 936.94 12,035.20 (332.81) 11,702.39 (264.34) 14.61 (249.73)

2,035.24 7.64 6,374.41 2,333.12 76.33 37.72 789.87 969.47 12,623.80 35.62 12,659.42 (283.31) 9.79 (273.52)

0.00 (0.56)

(1.53) 8.56

(249.17) (3,808.32) (4,057.49) (1.17)

(280.55) (3,527.77) (3,808.32) (1.32)

Schedule INCOME Sales (Gross) Less: Excise Duty Net Sales Trading Sales Other Income

11 12 TOTAL

EXPENDITURE Raw Material Consumed Trading Purchase Power, Fuel, Stores and Repairs Employee Cost Selling & istration Expenses Other Expenditure and Losses Interest and Financial Charges Depreciation

13 14 15 16 17 18 –

(Increase)/Decrease in Stocks TOTAL Profit/(Loss) Before Prior Period Items Prior Period Items (Net) Profit/(Loss) Before Taxation Provision for Taxation – Income Tax – Fringe Benefit Tax

19 20

(Includes prior year tax of ` -0.57 lakhs, P.Y. Nil)

Net Profit/(Loss) after Taxation Balance of Loss B/F from Last Year Balance Loss carried to Balance Sheet Earnings per share (in `)

For and on behalf of the Board of Directors Sd/R. MADHUSOODHANAN NAIR Director

Sd/V. MURALEEDHARAN NAIR Managing Director Sd/JIJU FRANCIS Deputy Financial Controller



17



SCHEDULES TO BALANCE SHEET AS AT 31st MARCH, 2010 As at 31 March 2010 ` in lakhs

As at 31 March 2009 ` in lakhs

st

st

SCHEDULE – 1 SHARE CAPITAL Authorised: 3,25,00,000 Equity Shares of ` 10 each

3,250.00

17,50,000 Preference Shares of ` 100 each

1,750.00 5,000.00

5,000.00

2,131.19

2,131.19

2,131.19

2,131.19

2,131.19

2,131.19

General Reserve as per last Balance Sheet

2,742.44

2,742.44

Less: Deducted from Debit Balance of Profit & Loss as per contra

2,742.44

2,742.44

0.00

0.00

Issued: 2,13,11,900 (Previous year 2,13,11,900) Equity Shares of ` 10 each**

Subscribed and Paid up: 2,13,11,900 (Previous year 2,13,11,900) Equity Shares of ` 10 each fully paid up**

TOTAL **(Out of these 65,97,500 shares are allotted as fully paid bonus shares by capitalisation of general reserve during the year 1993-94) SCHEDULE – 2 RESERVES AND SURPLUS

TOTAL

18


SCHEDULES TO BALANCE SHEET (Contd.....) As at 31st March 2010 ` in lakhs

As at 31 st March 2009 ` in lakhs

SCHEDULE – 3 SECURED LOANS 1) Term Loan from Financial Institutions: Foreign Currency Loan from SBT

0.00

20.49

Term Loan – Kerala Industrial Revitalisation Fund Board

0.00

3,987.64

Term Loan-Kerala Financial Corporation

4,266.50

4,266.50

0.00

0.00

279.98

982.41

979.12

5,248.91

5,267.23

Loan from Government of Kerala

372.05

372.05

Interest accrued and due on loans

125.40

57.39

497.45

429.44

Interest accrued and due on loans 2) Working Capital Loan (Cash Credit) Balance with SBT on overdraft (Refer Item No. 11 of Notes on s) TOTAL SCHEDULE – 4 UNSECURED LOANS

19

SCHEDULES TO BALANCE SHEET (Contd.....)

SCHEDULE – 5 FIXED ASSETS ` in lakhs DEPRECIATION

GROSS BLOCK

Freehold Land

Sales Written Written Withdrawn As Total As As on assets & off off on upto on on sold/ Adjust- 31-3-2010 upto during 31-3-2010 31-3-2010 31-3-2009 ments 31-3-2009 the year adjustments

171.32

0.00

7.77

163.55

0.00

0.00

0.00

0.00

163.55

171.32

1,978.29

0.40

30.87

1,947.82

1,121.15

78.74

19.23

1,180.66

767.16

857.14

2.50

0.00

0.00

2.50

2.37

0.00

0.00

2.37

0.13

0.13

13,337.22

328.29

33.02

13,632.49

6,736.39

810.98

33.02

7,514.35

6,118.14

6,600.83

10.14

0.00

0.00

10.14

9.63

0.00

0.00

9.63

0.51

0.51

Service Equipments

518.80

65.39

28.51

555.68

397.22

37.91

27.09

408.04

147.64

121.58

Furniture, Fixtures & Office Equipments

172.05

2.33

0.81

173.57

140.52

9.31

0.76

149.07

24.50

31.53

TOTAL

16,190.32

396.41

100.98

16,485.75

8,407.28

936.94

80.10

9,264.12

7,221.63

7,783.04

Total (Previous year)

16,173.02

233.12

215.82

16,190.32

7,614.92

969.47

177.11

8,407.28

7,783.04 8,558.10

Buildings 20 20

Buildings under SIHS Plant & Machinery Electrical Equipments


PARTICULARS

Additions As during on the 31-3-2009 year

NET BLOCK


SCHEDULES TO BALANCE SHEET (Contd.....) As at 31st March 2010 ` in lakhs

As at 31st March 2009 ` in lakhs

SCHEDULE – 6 CAPITAL

WORK-IN-PROGRESS

Horizontal Saturator

202.69

29.28

27.24

12.04

229.93

41.32

0.05

0.05

250 shares of ` 100/- each fully paid up in TCC Co-operative Society Limited

0.25

0.25

20,000 shares of ` 10/- each fully paid up in Kerala Enviro Infrastructure Limited

2.00

2.00

2.30

2.30

600.67 367.35 54.77 18.94 589.86 1,631.59

633.95 31.02 602.93 535.30 89.99 29.43 246.56 1,504.21

Others TOTAL SCHEDULE – 7 INVESTMENTS Trade-Long Term, Not Quoted 5 shares of ` 1000/- each fully paid up in Capexil Agencies Ltd. Non Trade-Long Term, Not Quoted

TOTAL SCHEDULE – 8 CURRENT ASSETS, LOANS AND ADVANCES A) Inventories (As taken, valued and certified by the Managing Director) Stores and Spares in Stock Less: Provision for Stores Obsolescence

631.69 31.02

Raw Materials in Stock Goods in Transit Work-in-Progress Finished Goods TOTAL

21


SCHEDULES TO BALANCE SHEET (Contd.....) As at 31st March 2010 ` in lakhs B) Sundry Debtors (Unsecured) Outstanding for over six months: Considered Good Considered Doubtful Other debts: Considered Good


61.57 153.57 1,068.22 1,283.36 153.57

Less: Provision for doubtful debts C ) Cash and Bank Balances Cash and stamps on hand Balance with Scheduled Banks: On Current A/C On Margin on L/C On Margin on Bank Guarantee With Treasury Savings Bank A/C [Maximum amount Outstanding ` 0.11] With Post Office Savings Bank A/C [Maximum amount Outstanding ` 0.02]

1,129.79

46.73 149.57 927.38 1,123.68 149.57 974.11

2.23

1.92

5.71 4.28 46.50 0.11

30.84 25.12 44.48 0.11 0.02

0.02 56.62 58.85

D ) Loans and Advances Advance Recoverable in Cash or in kind or for value to be received: Unsecured, Considered Good except to the extent specified: Advance to Staff Advance for Purchase of Goods Claims receivable: Considered Good Considered Doubtful Less: Provision for doubtful Advance and Claims

48.76 24.78

92.63 91.19

479.77 14.77 568.08

165.76 15.42 365.00

14.77

15.42 349.58

553.31

22

100.57 102.49


SCHEDULES TO BALANCE SHEET (Contd.....) As at 31 st March 2010 ` in lakhs Income Tax/Wealth tax advance Sales Tax paid pending appeal Balance with Customs and Central Excise Other Sundry Deposits Pre-paid expenses Deferred TOTAL SCHEDULE – 9 CURRENT LIABILITIES & PROVISIONS A ) Current Liabilities Sundry Creditors Outstanding charges Others Interest accrued but not due on loans B) Provisions Fringe Benefit Tax Leave Encashment Gratuity Production Incentive TOTAL SCHEDULE PROFIT & Profit & Loss Less: General

– 10 LOSS Reserve as per contra

23


221.00 20.47 0.64 362.21 28.81 0.00 1,186.44 4,006.67

246.85 40.44 2.02 383.64 32.84 0.27 1,055.64 3,636.45

3,354.72 163.29 322.14 30.80 3,870.95

2,953.53 374.42 339.73 134.87 3,802.55

0.00 457.24 493.40 76.44 1,027.08 4,898.03

8.56 446.83 369.19 74.00 898.58 4,701.13

4,057.49 2,742.44 1,315.05

3,808.32 2,742.44 1,065.88


SCHEDULES TO PROFIT & LOSS FOR THE YEAR ENDED 31st MARCH 2010 Quantity in MT

Value

Current Year

Previous Year

Current Year ` in lakhs


Caustic Soda

44,549

45,450

8,754.60

9,484.75

Chlorine Products

42,801

40,917

1,993.24

2,576.50

10,747.84

12,061.25

88.05

47.61

162.01

162.77

Miscellaneous Receipts

64.48

47.93

Interest

29.44

28.88

336.21

0.69

Provision for expenses not required

0.00

0.25

Freight and transporting charges

0.00

2.53

Excise Duty (Net)

0.00

17.03

Exchange rate gain

5.41

5.77

685.60

313.46

1,448.81

1,773.31

152.72

261.93

1,601.53

2,035.24

SCHEDULE – 11 SALES

TOTAL SCHEDULE – 12 OTHER INCOME Other Sales Rent

Profit on Sale of Assets

TOTAL SCHEDULE – 13 RAW MATERIALS CONSUMED Common Salt

82,688

81,887

Other Chemicals TOTAL

24


SCHEDULES TO PROFIT & LOSS (Contd.....) Value Current Year Previous Year ` in lakhs ` in lakhs SCHEDULE – 14 POWER, FUEL, STORES AND REPAIRS Resin Consumed

0.00

4.56

5,410.78

5,700.26

Water Consumed

10.06

0.27

Packing Materials Consumed

68.44

50.91

Factory Expenses

17.62

11.20

Factory Insurance

25.12

23.02

654.23

584.19

6,186.25

6,374.41

1,819.72

1,714.83

Contribution-PF, ESI, Approved Gratuity Fund etc.

344.56

334.63

Welfare Expenses

290.60

283.66

2,454.88

2,333.12

Power and Fuel

Repairs and maintenance TOTAL SCHEDULE – 15 EMPLOYEE COST Salaries, Wages and Bonus

TOTAL SCHEDULE – 16 SELLING & ISTRATION EXPENSES Lighting

3.09

4.77

68.33

2.56

7.30

7.66

14.69

16.33

8.66

10.49

Freight & Transporting Charges

10.03

0.00

General Expenses

27.13

23.35

0.06

0.02

Rates & Taxes (other than Income Tax) Printing & Stationery ment & Publicity Travelling Expenses

Directors’ Sitting Fees

25


SCHEDULES TO PROFIT & LOSS (Contd.....)


Value Current Year Previous Year ` in lakhs ` in lakhs

Remuneration to Auditors: Audit Fees

0.90

0.90

Certification Fee

0.06

0.05

Expenses

0.25

1.21

0.25

Sales promotion expenses

0.28

0.13

Tax / cost / sales tax / internal audit fee expenses

1.93

1.86

Legal fees and expenses

0.38

2.01

Exchange Loss

1.84

5.95

144.93

76.33

1.47

37.69

10.54

0.03

4.00

0.00

33.27

0.00

49.28

37.72

Interest on Term Loans

467.09

595.91

Other Interests

163.44

161.65

Bank Charges

29.21

29.53

in forward contract

0.27

2.78

TOTAL

660.01

789.87

TOTAL SCHEDULE – 17 OTHER EXPENDITURE AND LOSSES Assets scrapped Bad debts and claims written off Provision for doubtful debts Excise Duty Paid (Net) TOTAL SCHEDULE – 18 INTEREST & FINANCIAL CHARGES

26


SCHEDULES TO PROFIT & LOSS (Contd.....) Current Year ` in lakhs

Value Current Year Previous Year ` in lakhs ` in lakhs

SCHEDULE – 19 INCREASE/DECREASE IN STOCKS & WORK-IN-PROGRESS Opening Stock of Finished Goods & Work-in-Progress

275.99

311.61

Closing Stock of Finished Goods & Work-in-Progress

608.80

275.99

-332.81

35.62

TOTAL SCHEDULE – 20 PRIOR PERIOD ITEMS (NET) Income/Credit Interest Inspection of DM Water units Service tax on transportation Excise Duty on raw materials Factory General expenses TOTAL (A) Computer/Weigh Bridge Service Charges Repairs & Maintenance Safety Manual Transport Charges Testing Charges Analysis Charges for Pollution Book Binding Charges Civil Works Staff Training Expenses Water Cess TOTAL (B)

0.00 0.25 3.25 0.91 17.22 21.63 0.00 0.41 0.00 0.70 0.00 3.06 0.00 0.37 0.09 2.39 7.02

Net (A-B)

11.60 0.00 0.17 0.00 0.00 11.77 0.27 0.84 0.10 0.40 0.13 0.16 0.08 0.00 0.00 0.00 1.98 14.61

27

9.79


NOTES ON S SCHEDULE – 21 1 . ING POLICIES 1. ing Convention All revenues, costs, assets and liabilities are ed for on accrual basis except duty claims and insurance claims which are ed for on receipt basis.

customs

2. Sales Sales (gross) exclude Sales Tax. 3. Retirement Benefits a) The Company’s liability towards gratuity to employees is covered by a Group Gratuity Scheme with Life Insurance Corporation of India. b) Leave encashment on cessation of employment is ed on the basis of actuarial valuation. 4. Inventories a) Stock-in-Trade Caustic Soda Lye, Flakes and by-products are valued at lower of cost or net realisable value. Work-in-Progress is valued at cost. b) Raw materials, Packing materials, Fuel Oil and Stores and Spares are valued at cost. Cost means the Weighted Average Cost. 5. Investments All Investments are of long term nature and are carried at cost. 6. Fixed Assets All Fixed Assets are carried at cost less depreciation. Interest on loan during the period of construction is added to the cost of Fixed Asset.

28


NOTES ON S (Contd.....) 7. Depreciation a) For Plant and Machinery: Depreciation is charged on straight line method on the plant and machinery existing as on 16-12-1993 at the rates prevailing prior to 16-12-1993 and on the plant and machinery acquired on or after that date at the revised rate as per circular No. 14/93 dt. 20-12-1993 and notification GSR No. 756 E dated 16-12-1993 issued by the Ministry of Finance, Department of Company Affairs in respect of revision of rates of depreciation in Schedule XIV to the Companies Act 1956, except in the case of Cell Membrane for which depreciation is charged at the rate of 25%, 16.67% on anode/cathode mesh of the AGC Plant and 12.5% on anode/cathode mesh of Uhde Plant depending on the life of these assets. b) For Buildings, Service Equipments, Fixtures, Office Equipment and Electrical Installation: Depreciation is calculated on written down value basis at the rates specified in Schedule XIV to the Companies Act, 1956. 8 . Foreign Exchange Transactions a) Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transactions. b ) Monetary items denominated in foreign currency at the year end are restated at year end rates. In case of items which are covered by forward exchange contract, the difference between the year end rate and rate on the date of the contract is recognized as income or expenditure and the paid on forward contract is recognized over the life of the contract. c) Any income or expense on of exchange difference either on settlement or on translation is recognized in the Profit and Loss . 9 . Revenue Recognition a) Sale of goods are recognised on accrual basis. b ) Other income is ed on accrual basis except where the receipt of income is uncertain. c) Dividend from investments are recognised in the Profit and Loss when the right to receive payment is established.

29


NOTES ON S (Contd.....) 10. Government Grants Revenue grants received from Government are recognised as other income and related expenses are debited to Profit and Loss . 11. Amortisation Deferred Research and Development expenditures are written off over a period of three years. 12. Segment Reporting The company is exclusively engaged in the manufacture of Caustic Soda and two by-products viz. Chlorine and Hydro-Chloric Acid which are considered to constitute a single chemical segment. 13. ing for Taxes on Income Deferred tax assets and deferred tax liabilities arising from timing difference between taxable income and ing income for a period that originate in one period and are capable of reversal in one or more subsequent periods are recognised, subject to consideration of prudence in respect of deferred tax assets as set out in ing Standard 22 on ing for Taxes on Income issued by the Institute of Chartered ants of India. 14. Impairment of Assets The Company has an internal system to assess the impairment of Assets. Appropriate disclosure on material impairment of losses and their treatment in Profit & Loss , classes of assets and nature of impairment will be made in the year in which the impairment is recognized. 2 . CONTINGENT LIABILITY NOT PROVIDED FOR a) The estimated amount of contract remaining to be executed on capital : ` 6.02 lakhs (Previous Year ` 5.38 lakhs) b) Counter Guarantees to bank outstanding: ` 441.88 lakhs (Previous Year ` 439.63 lakhs) c) Claims raised against the Company not acknowledged as debt: ` 28,269 lakhs (Previous Year ` 23,969 lakhs) d) LCs outstanding: ` 42.68 lakhs

(Previous Year ` 243.80 lakhs)

30


NOTES ON S (Contd.....)

3.

e) For Sales Tax: Nil


f) For Income Tax: ` 155.71 lakhs


g) For Central Excise ` 53.30 lakhs


h) For Service Tax: ` 115.39 lakhs

(Previous Year Nil)

LOANS AND ADVANCES INCLUDE: a) Claims on supplier for breach of contract for ` 9.68 lakhs for which recovery proceedings are in progress. (Previous year ` 9.68 lakhs). However, by way of abundant caution necessary provision has been created against the claim including interest accrued till 31-03-1992. b) Dues from Managing Director ` Nil (Maximum ` Nil) (Previous year ` Nil, Maximum ` Nil).

4.

Balances of Sundry Debtors, Sundry Creditors and Advances are subject to confirmation.

5.

In the opinion of the Board, the Current Assets, Loans and Advances have the value, on realisation, in the ordinary course of business at least equal to the amount at which they are stated.

6.

The Company has opted for Amnesty Scheme for the years 1980-81 to 2004-05 introduced by the Government of Kerala for PSU’s as per notification No. 9948/G2/09-10 Dt. 17/04/2009 for one time settlement of pending Sales Tax cases. Accordingly the Company has paid ` 65.37 lakhs (including the payments made during earlier years) against full settlement of pending cases and this amount is charged to Profit & Loss during the year under the head “Rates & Taxes”.

7.

Income Tax appeals for the assessment years 1992-93, 1993-94, 1994-95, 1996-97, 1997-98, 1998-99, 2001-02 and assessment for the assessment years 2008-09 and 2009-10 are pending.

8.

Stock of stores and spares include stock of packing materials ` 16.45 lakhs and stock of Fuel Oil ` 25.70 lakhs.

31


NOTES ON S (Contd.....) 9.

Individual items in excess of ` 5000/- each only have been disclosed under the head prior period Income/Expenditure.

10. Margin on Letter of Credit and Bank Guarantees have been deposited with State Bank of Travancore. 11. Loan from Kerala Financial Corporation and working capital loan from State Bank of Travancore are secured by first mortgage on pari-u basis in favour of the lender of all the immovable properties, both present and future and first charge on pari-u basis by way of hypothecation in favour of the lender, of all the movables (save and except book debts) including movable machinery, machinery spares, tools and accessories present and future. In addition to this, working capital loan is also secured by hypothecation of raw materials, general stores, packing materials, finished goods and book debts. 12. Micro & Small Scale Business Entities: There are no Micro and Small Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31 st March 2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company. 13. Claims receivable considered good includes ` 44.38 lakhs being the cenvat claims taken from the purchase of raw material and capital goods. 14. Credit to be availed on the KVAT on Capital goods: ` 0.86 lakhs. 15. As directed by the Govt. of Kerala vide G.O. No. (MS) No. 165/98/ID dated Thiruvananthapuram, 24.11.1998, the Company has leased out 20 acres of land to M/s. BSES Kerala Power Ltd. for 15 years. The lease deed has been ed on 23.07.1999. 16. Deferred Tax: The Company has unabsorbed depreciation and carried forward business losses available for set off against taxable income to be generated in future years as per Income Tax Act, 1961. However, in consideration of the accumulated loss of the company and in the absence of virtual certainty regarding generation of future taxable income, no deferred tax asset has been recognised for the year as a measure of prudence, in accordance with the ing Standard 22 on ing for Taxes on Income issued by the Institute of Chartered ants of India.

32


NOTES ON S (Contd.....) 17. Govt. of Kerala as part of financial restructuring has allowed various concessions/waivers to the Company vide G.O. (MS) No. 4/2003/ID dated 06.01.2003 and as part of this restructuring package, government has freezed the power tariff rate at the August 2001 rate of ` 2.42/kwh till the implementation of the Barapole Hydel Project by the Company in July 2004. Government of Kerala has directed the Company to remit the electricity charges from January 2005 onwards at the ruling tariff rate. For the period from August 2001 to December 2004, the Company has paid electricity charges at the rate of ` 2.42/kwh as per the above Government orders. But Kerala State Electricity Board (KSEB) has not accepted the Government orders granting concession to the Company and demanded the electricity charges at the then prevailing rates for the period from 01.08.2001 to 31.12.2004. An amount of ` 300 crores being the difference between the concessional rate and the existing rate of ` 51.25 crores and the interest accrued thereon up to 31.03.2010 of ` 248.75 has been demanded by KSEB which is not acknowledged as debt by the Company, but disclosed under contingent liabilities. 18. a) The Company has received notice from the Special Tahasildhar (LA), ICTT, Vallarpadam to acquire 4 acres 47 cents and 300 sq. links for National Highway in connection with Vallarpadam International Container Transhipment Terminal (ICTT) project and pending finalisation of the compensation as directed by the District Authorities, the Company has given advance possession of the land and allowed the National Highway Authority of India (NHAI) to carry on the road construction activity on this land during 2008-09. The District Collector has subsequently fixed the net compensation payable to the company for this land and building thereon at ` 342.70 lakhs and has intimated the same to the Special Tahasildhar (LA), ICTT, Vallarpadam vide his letter No. C6-25766/04 dated 21.04.2010 and sale deed was ed on 15.07.2010. Pending registration of the sale deed, on the strength of the legal advice received, the company has recognised the profit of ` 324.06 lakhs on the sale of this land and building thereon under acquisition during the year. As per the Government order No. G.O. (Ms) No. 113/2010/RD dt. 24/03/2010 sanctioning the sale of this land, the sale price is to be treated as capital contribution of the State Government to the company. As this land is acquired by the company, the cost of which is included in Fixed Assets, company could not implement this direction and the sale price is adjusted against the cost of land and profit on sale of fixed assets. b) Out of this 4 acres, 47 cents and 300 sq. links of land acquired by the National Highway Authority of India (NHAI) a dispute regarding the ownership of 16.729 cents by the Company is also pending in the court. Compensation to the Company for these lands are not paid since the land is a private holding land and liability, if any, on the disposal of these cases will be borne by the NHAI.

33


NOTES ON S (Contd.....) 19. The Company has also sold 49 cents of land to Eloor Panchayath as per the direction of Government GO (Rt) No. 211/2009/ID dated 17.02.2009 at ` 12.92 lakhs and the company has recognised a profit of ` 12.15 lakhs during the year. 20. Employee Benefits: The Company has classified the various benefits provided to employees as under: a)

Defined contribution plan During the year, the company has recognized the employer’s contribution to i) Employees provident fund amounting to ` 175.73 lakhs. ii) State Insurance Scheme amounting to ` 0.60 lakhs as part of Employee cost.

b)

Defined Benefit Plan: As per actuarial valuation as on 31st March 2010 and recognized in the financial statement in respect of employee benefit schemes:

1.

Reconciliation of opening and closing balances of Defined Benefit obligation

Particulars Defined Benefit obligation at beginning of the year Current Service Cost Interest Cost Actuarial (gain)/loss Benefits paid Defined Benefit obligation at year end 2..

(` in lakhs) Gratuity Leave Encashment (Funded) (Unfunded) 2009-10 2008-09 2009-10 2008-09 746.43 33.84 61.06 88.74 (203.11)

709.19 34.71 58.31 103.65 (159.25)

446.83 168.55 42.49 (57.77) (142.86)

393.50 177.20 38.57 (108.06) (54.38)

726.96

746.43

457.24

446.83

Reconciliation of opening and closing balances of fair value of plan assets Particulars

Fair value of plan assets at beginning of the year Expected return on plan assets Actuarial (gain)/loss Employer contribution Benefits Paid Fair value of plan assets at year end

34

(` in lakhs) Gratuity (Funded) 2009-10 2008-09 377.24 490.82 30.18 39.27 (5.31) 0.12 34.56 6.28 (203.11) (159.25) 233.56 377.24


NOTES ON S (Contd.....) 3.

Reconciliation of fair value of assets and obligations (` in lakhs) Gratuity Leave Encashment (Funded) (Unfunded) Particulars Fair value of plan assets as at 31st March Present value of obligation as at 31st March Amount recognized in Balance Sheet

4.

2009-10

2008-09

2009-10

2008-09

233.56

377.24

Nil

Nil

726.96

746.43

457.24

446.83

493.40

369.19

457.24

446.83

Expense recognized during the year (` in lakhs) Gratuity (Funded)

Particulars Current Service Cost Interest Cost Expected return on Plan Assets Actuarial (gain)/loss Net Cost 5.

Leave Encashment (Unfunded)

2009-10

2008-09

2009-10

2008-09

33.84 61.06 (30.18) 94.05 158.77

34.71 58.13 (39.27) 103.53 157.10

168.55 42.49 Nil (57.77) 153.27

177.20 38.57 Nil (108.06) 107.71

Actuarial Assumptions (` in lakhs) Gratuity Leave Encashment (Funded) (Unfunded) 1994-96 1994-96 (Ultimate) (Ultimate)

Particulars Mortality Table (Indian Lives Mortality) Discount rate (per annum) Expected return on plan assets (per annum) Rate of escalation in salary (per annum)

35

8% 8% 5%

8% 5%


NOTES ON S (Contd.....) 21. The previous year figures have been re-grouped/re-arranged wherever necessary and figures in brackets relate to those previous year. 22. Capacities and Production: Capacity per Annum

Production

Licensed M. T.

2009-10 Installed M. T.

2008-09 Installed M. T.

2009-10 M. T.

2008-09 M. T.

85,800

57,750

57,750

48,923

47,519

76,019

51,200

51,200

43,745

42,599

Caustic Soda By-products of Caustic Soda: Chlorine 23. a)

Opening and Closing stock of Goods Produced: Opening Stock as on 01-04-2009 Quantity Value M.T. ` in lakhs Caustic Soda By-products of Caustic Soda: Chlorine

Closing Stock as on 31-03-2010 Quantity Value M.T. ` in lakhs

1026 (1578)

220 (287)

2969 (1026)

574 (220)

649 (362)

27 (25)

344 (649)

16 (27)

(Figures for previous year are shown in brackets) b)

Details of trading goods: HCl Acid

Opening Stock

Purchase

Sales

Closing Stock

2009-10

MT Nil

Value Nil

MT 576.34

Value 1.38

MT 576.34

Value 4.61

MT Nil

Value Nil

2008-09

Nil

Nil

521.39

7.64

521.39

1.04

Nil

Nil

36


24.



Nil

Nil

Nil

Nil

Current Year (` in lakhs)

Previous Year ( ` in lakhs)

13.17 0.17 0.10 13.44

9.86 0.79 0.09 10.74

Current Year (` in lakhs) 0.85 0.49 7.33 8.67

Previous Year ( ` in lakhs) 1.46 0.39 8.64 10.49

i) Expenditure on employees who were in receipt of remuneration of not less than ` 24 lakhs per annum ii) Expenditure on employees for part of the financial year who were in receipt of remuneration of not less than ` 2 lakhs per month

25. Managerial Remuneration to Managing Directors and Directors:

Salaries and Allowances Contribution to Provident Fund Medical Expenses Total 26. Travelling Expenses paid to:

Managing Director Directors Staff Total

27. Value of imports calculated on CIF basis during the period in respect of: Current Year (` in lakhs)


Nil

Nil

Components and spare parts

111.97

319.52

Capital Goods

65.24

27.55

Raw materials including Process Chemicals

37


28. Expenditure in Foreign Currency for:

Professional charges Other matters



Nil Nil

Nil Nil

29. Value of all Raw Materials, Stores and Spares and Components consumed: Current Year Value % (` in lakhs) 186.53 8.01 2141.28 91.99 2327.81 100

Imported Indigenous Total

Previous Year Value % ( ` in lakhs) 165.76 6.20 2509.84 93.80 2675.60 100

30. Earnings in Foreign Exchange on of Export and Sales for Export

31. Earnings per share Net Profit/(Loss) as per Profit and Loss A/c. Number of equity shares outstanding Earnings per share (in Rupees)

38



Nil

Nil

31-03-2010

31-03-2009

` (249.17 lakhs)

` (280.55 lakhs)

21311900

21311900

-1.17

-1.32


BALANCE SHEET ABSTRACT 32. Information pursuant to the provisions of Part IV of Schedule VI to the Companies Act, 1956. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE I.

Registration Details Registration No. Balance Sheet Date

U24299KL1951SGC001237 31-3-2010

State Code

II. Capital raised during the year (Amount in ` Thousands) Public Issue Nil Rights Issue Bonus Issue Nil Private Placement

09

Nil Nil

III. Position of Mobilisation and Deployment of Fund (Amount in ` Thousands) Total Liabilities 787755 Total Assets 787755 Sources of Funds: Paid-up Capital 213119 Reserves & Surplus 0 Secured Loans 524891 Unsecured Loans 49745 Deferred Payment Liability 0 Application of Funds: Net Fixed Assets 745156 Investments 230 (including Capital Work in Progress)

Net Current Assets Accumulated Losses

(89136) 131505

Misc. Expenditure

IV. Performance of Company (Amount in ` Thousands) Turnover 1143805 Total Expenditure Profit/(Loss) Before Tax (24973) Profit/(Loss) After Tax Earnings Per Share in Rs. (1.17) Dividend Rate %

0

1168778 (24917) Nil

V . Generic Names of Three Principal Products/Services of Company (as per monetary ) Item Code No. (ITC Code) Product Description 2815.12 Caustic Soda 2801.19 Chlorine For and on behalf of the Board of Directors Sd/Sd/V. MURALEEDHARAN NAIR R.MADHUSOODHANAN NAIR Director Managing Director Sd/JIJU FRANCIS Deputy Financial Controller



39



CASH FLOW STATEMENT FOR THE YEAR ENDED 31 st MARCH 2010 (` in lakhs) 2009-10 A . CASH FLOW FROM OPERATING ACTIVITIES: Net Profit/(loss) before tax and extra ordinary items Adjustments for: Add: Depreciation Interest expenses Assets scrapped Less: Interest Income Profit on Sale of Assets Operating profit before working capital changes Adjustments for: Trade receivables Other receivables Inventories Trade and other payables Taxes on income Cash generated from Operating Activities (A)

2008-09

-249.74

-273.52

936.94 660.01 1.47 29.44 336.21 983.03

969.47 789.87 37.69 28.88 0.69 1493.94

-155.69 -130.80 -127.38 300.97 0.57 870.70

255.03 47.34 -485.94 -808.06 -7.03 495.28

CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets Sale of fixed assets Interest received Cash used in Investing Activities (B)

-585.02 355.62 29.44 -199.96

-263.87 1.71 28.88 -233.28

C . CASH FLOW FROM FINANCING ACTIVITIES: Repayment of long term borrowings Increase in working capital loan Interest paid Cash used in Investing Activities (C) Net Increase/Decrease in Cash (A+B+C) Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

258.38 3.29 -976.05 -714.38 -43.64 102.49 58.85

-21.75 172.54 -425.56 -274.77 -12.77 115.26 102.49

B.

For and on behalf of the Board of Directors Sd/Sd/R.MADHUSOODHANAN NAIR V. MURALEEDHARAN NAIR Director Managing Director Sd/JIJU FRANCIS Deputy Financial Controller



40



AUDITORS’ REPORT TO SHAREHOLDERS annex hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

To The of The Travancore-Cochin Chemicals Limited

4. Further to our comments in the Annexure referred to in paragraphs 3 above, we report that:

1. We have audited the attached Balance Sheet of The Travancore-Cochin Chemicals Limited, Udyogamandal - 683 501, as at 31st March 2010 and also the Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; b) In our opinion, proper books of as required by law have been kept by the Company so far as appears from our examination of those books.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes, examining on a test basis, evidence ing the amounts and disclosures in the financial statements. An audit also includes assessing the ing principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

c) The Balance Sheet, Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of of the Company. d) In our opinion, the Balance Sheet, Profit and Loss and Cash Flow Statement dealt with by this report comply with the ing Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; e) In view of notification No. GSR 829 (E) dated 21 st October, 2003, issued by Ministry of Finance, Department of Company Affairs, the provisions of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, are not applicable to the Company.

3. As required by the Companies (Auditors’ Report) Order, 2003, issued by the Central Government in of sub section 227 (4A) of the Companies Act, 1956, we

41


AUDITORS’ REPORT (Contd.....) ii)

f) In our opinion and to the best of our information and according to the explanations given to us, the said s read together with the Significant ing Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the ing principles generally accepted in India; i)

in the case of the Profit and Loss , of the loss for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For MENON & AYYAR Chartered ants (Firm Regn. No. 0020S8S)

in the case of the Balance Sheet, of the state of affairs of the company as at 31 st March, 2010;

Sd/MOHANAN KUTTICKAT Ernakulam 1st September, 2010

42

Partner (hip No. 15842)


AUDITORS’ REPORT (Contd.....) ANNEXURE TO THE AUDITORS’ REPORT Annexure referred to in paragraph 3 of our report to the of The Travancore-Cochin Chemicals Limited, on the s for the year ended March 31, 2010. 1.

taken nor granted any loan, secured or unsecured from/to companies, firms or other parties covered in the maintained under section 301 of the Companies Act, 1956. Accordingly, para 4 (iii) (b) (c) and (d) of the Order are not applicable.

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

4.

In our opinion and according to the information and explanations given to us, the internal control procedures for the purchase of inventories and fixed assets and for the sale of goods and services, are generally adequate commensurate with the size of the company and the nature of its business. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

5.

a) According to the information and explanations given to us we are of the opinion that the transaction that needs to be entered in the maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the physical verification of major items of fixed assets was carried out by the management during the year and no material discrepancies were noticed on such verification. c) During the year the company has not disposed of substantial part of its fixed assets which has effect on the Company as a going concern. 2.

a) As explained to us, inventories have been physically verified by the management at regular intervals during the year. b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company.

b) In our opinion, and according to the information and explanations given to us the transactions made in pursuance of contracts or arrangements entered in the maintained under section 301 of the Companies Act, 1956 and exceeding the value ` 5.00 lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

c) The company has maintained proper records of inventories. Discrepancies noticed on such physical vertification between physical stocks and the book records have been properly dealt with in the books of . 3.

6.

According to the information and explanations given to us, the Company has neither

43

According to the information and explanations given to us and as per the books of of the Company, the


AUDITORS’ REPORT (Contd.....) education and Protection Fund, Employees State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues wherever appliable with the appropriate authorities.

Company has not accepted any deposits from the public. 7.

The Company has appointed a firm of Chartered ants for conducting internal audit. In our opinion, the internal audit system is fairly adequate commensurate with the size of the Company and nature of its business.

8.

According to the information and explanations given to us no undisputed amounts payable in respect of the Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other statutory dues were in arrears as at March 31, 2010, for a period of more than six months from the date they became payable.

We have broadly reviewed the books of s maintained by the Company in pursuance to the rules made by the Central Government for the maintenance of the cost records under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed s and records have been made and maintained. However, we have not made a detailed examination of those s and records to determine whether they are accurate or complete.

9.

b) According to the information and explanations given to us, details of dues of Income Tax, Sales Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on of any dispute are detailed below:

a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor

Sl. Nature of Dues No. 1. Excise Duty

Amount involved (` in lakhs) 1.85 15.88 35.57

Forum where dispute is pending With Deputy Commissioner (Appeals) With Commissioner (Appeals) With CESTAT

2.

Income Tax

144.90 10.81

With Hon. High Court of Kerala With Commissioner (Appeals)

3.

Service Tax

115.39

With Commissioner (Appeals) / Deputy Commissioner

44


AUDITORS’ REPORT (Contd.....) 10. The accumulated losses of the Company has exceeded 50% of the Net Worth. The Company has not incurred cash losses during the year and during the immediately preceding financial year.

applied for the purpose for which they were raised. 17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investments and vice versa.

11. The Company has defaulted in repayment of loan amount of ` 93.01 lakhs and Interest & Penal Interest of ` 125.4 lakhs due to Goverment of Kerala, due during the last two years.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the maintained under section 301 of the Companies Act, 1956.

12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

19. The Company has not issued any debentures during the year.

13. In our opinion, the Company is not a chit fund or a nidhi, mutual benefit fund/ society, therefore the provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any funds by way of public issue during the year. 21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of the clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

For

MENON & AYYAR Chartered ants (Firm Regn. No. 0020S8S)

15. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

Sd/Ernakulam 1st September, 2010

16. In our opinion, the term loans have been

45

MOHANAN KUTTICKAT Partner (hip No. 15842)


OFFICE OF THE PRINCIPAL ANT GENERAL (AUDIT) KERALA, THIRUVANANTHAPURAM COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE S OF THE TRAVANCORE-COCHIN CHEMICALS LIMITED, KOCHI FOR THE YEAR ENDED 31 MARCH 2010 The preparation of financial statements of The Travancore-Cochin Chemicals Limited, Kochi for the year ended 31 March 2010 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 and the generally accepted ing principles is the responsibility of the management of the Company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 are responsible for expressing opinion on these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the Auditing and Assurance Standards prescribed by their professional body, the Institute of Chartered ants of India. This is stated to have been done by them vide their Audit Report dated 1st September 2010. I, on behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 619(3)(b) of the Companies Act, 1956 of the financial statements of The Travancore-Cochin Chemicals Limited, Kochi for the year ended 31 March 2010. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company’s personnel and a selective examination of some of the ing records. Based on my supplementary audit, I would like highlight the following significant matters under section 619(4) of the Companies Act, 1956 which have come to my attention and which in my view are necessary for enabling a better under

standing of the financial statements and the related Audit Report issued by the Statutory Auditors.

46


A. COMMENTS ON PROFITABILITY Profit and loss - Loss for the year ` 249.17 lakh 1.

Other income (Sch 12) - ` 685.60 lakh

This includes ` 324.06 lakh being profit on sale of land and structures, the sale deed of which was executed only on 15 July 2010. The ing of the transaction in the current year has resulted in understatement of loss for the year by ` 324.06 lakh with corresponding understatement of Fixed Assets by ` 18.64 lakh (net) and overstatement of current assets by ` 342.70 lakh. 2.

(Increase)/Dccrease in Stocks (Sch-19) - ( ` 332.81 lakh).

Loss for the year is understated by ` 35.07 lakh due to incorrect valuation of closing stock of Caustic Soda flakes by adopting price higher than what was actually realized. Valuation of closing stock of raw materials was also not in accordance with the provisions of ing Standard 2-Valuation of Inventories.

For and on behalf of the Comptroller and Auditor General of India Sd/V. KURIAN Principal ant General (C&CA) Kerala Thiruvananthapuram Dated: 03 -11-2010

47


GOVERNMENT OF KERALA No. 82400/PU.D3/2010/Fin.

Finance (PU.D) Department

COMMENTS OF THE PRINCIPAL SECRETARY (FINANCE) ON THE AUDITED ANNUAL S OF THE TRAVANCORE-COCHIN CHEMICALS LIMITED FOR THE YEAR 2009-2010 1)

The accumulated loss of the company is ` 4057 lakhs, which is more than 50% of its networth.

2)

The company has been in loss during the year evenafter the sale of assets to the tune of ` 336.21 lakhs and the conversion of loan from KIRFB to KFC resulted in the reduction of interest and Bank charges, compared to the previous year of 2008-09.

3)

The management should take initiatives to explore the possibilities of new export markets for products and services by strengthening the Research and Development wing by absorbing new technologies and bringing diversification of activities.

4)

Sharp increase in salary expenses to the tune of ` 105 lakhs against the previous year, does not seem commensurate with expansion of business opportunities.

5)

The company should take effective measures to settle the income tax appeals & assessment and the statutory dues pending before the Court/Tribunals.

6)

Government loan with interest should be repaid timely. Sd/Dr. A. K. DUBEY I.A.S. Principal Secretary (Finance) Thiruvananthapuram 27. 11. 2010

48


REPLY TO THE COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE AUDITED ANNUAL S OF THE TRAVANCORE-COCHIN CHEMICALS LIMITED FOR THE YEAR 2009-2010 A.

Comments on Profitability

1.

Other Income (Schedule 12) - ` 685.60 lakh

The Government of Kerala has vide its order G.O. (MS) No.113/2010 RD.dt.24/03/2010 has accorded sanction to transfer the land to NHAI for construction of the Vallarpadom ICTT connectivity road and to receive the compensation by the company. Even though the registration of sale deed was executed only on 15.07.2010, the compensation was accrued in the year in which the compensation package was determined as per the DLPC package and eligibility of the company established which is in the year 2009-10. The Company ed this amount of compensation as per the legal advice and with the consent of the Board of Directors and hence no understatement of loss of ` 324.06 lakhs and understatement of fixed assets of ` 18.64 lakhs and overstatement of current assets of ` 342.70 lakhs. 2.

Increase / Decrease in stock (Schedule 19) - ` 332.81 lakhs

As per the ing policy of the company, stock in trade is valued at lower of the cost or net realisable value. Accordingly the stock in trade is to be valued at lower of the cost or sale value as at the year end and not on the basis actual amount realised on subsequent sales. The ing standard 2 defines the net realisable value as “net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sales”. As such the valuation was correctly done. This method was consistently followed during previous years also. Earlier, the company used to value the stock in trade at lower of cost or average sales realisation of the financial year. Subsequently as per the direction of the then AG’S audit, we changed the valuation to lower of average cost of production or sale value in the month of April next year. This policy is being continuously followed since then and hence there is no understatement of loss. Sd/K. S. SRINIVAS, I.A.S CHAIRMAN Thiruvananthapuram 21.12.2010

49


REPLY TO THE COMMENTS OF THE PRINCIPAL SECRETARY (FINANCE) ON THE AUDITED ANNUAL S OF THE TRAVANCORE-COCHIN CHEMICALS LIMITED FOR THE YEAR 2009-2010 1.

The accumulated loss of the Company is ` 1315 lakhs and not ` 4057 lakhs as mentioned in the comments after adjusting the earlier year’s surplus and which is more than 50% of the net worth.

2.

The Company is taking all efforts to increase the profitability and thereby improve the net worth. The Company was unable to make profit during the year 2009-10 on of power cut imposed by KSEB and power surcharge resulting in reduced capacity utilization. The fixed overheads of the Company are huge and the Company has to produce at 100 % capacity in order to generate profits.

3.

The Management is taking all the efforts to increase profitability including exploring new export markets. The Company is planning to incur an amount of ` 5 crores in the current financial year in order to make the plant energy efficient and to reduce the cost of power which constitutes 50% of cost of production.

4.

The increase in employee cost is due to the increase in dearness allowance and effect of revision in salary.

5.

The income tax assessments are pending only for the assessment years 2008-09 to 2010-11 and income tax appeals are pending for seven years which is under various stages of the process.

6.

The cash flow position of the Company is not sufficient to repay the government loan and interest on of the above reasons. The loan will be repaid once the cash flow improves. Sd/K. S. SRINIVAS, I.A.S CHAIRMAN

Thiruvananthapuram 21.12.2010

50

Tcc A Report 64j6q

Overview 5o1f4z

More details 6z3438

Related Documents c2h70

Tcc A Report 64j6q

Tcc 5p624f

Tcc 5p624f

Tcc 5p624f

Tcc Radioterapia 56916

Glossario Tcc j3h4w

More Documents from "savitha satheesan" 2y6z4y

Tcc A Report 64j6q

Denon X4000 Factory Reset1 6n6k5a

Aircraft Types.ppt 4o1x5i

Belzona 3111 6s283m

Belzona 1311 2u3935

Belzona 4341 4l1p2i