TRAVANCORE-COCHIN CHEMICALS LIMITED ANNUAL REPORT

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 Account for the year ended 31st March, 2010
17
Schedules to Balance Sheet
18
Schedules to Profit and Loss Account
24
Notes on Accounts
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
MAJOR PRODUCTS
Caustic Soda (Rayon Grade) Lye & Flakes
Liquid Chlorine
Hydrochloric Acid (Mercury Free)
Sodium Hypochlorite
Bankers
State Bank of Travancore
Board of Directors
Shri. K. S. Srinivas, I.A.S
Chairman
Auditors
M/s. Menon & Ayyar
Chartered Accountants
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 Accountants
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
Registered Office & Works

Udyogamandal - 683 501
Kerala State
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
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 & Administrative

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
581
-831
101
-618
-667
-1284
15
10
-47
53
-74
-250
-273
44
62
581
-829
101
-692
-667
-1284
Current Tax
-1
48
Fringe Benefit Tax
-1
11
10
-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
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
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
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
46
Share Capital (SC)
2131
2131
2131
2131
2131
2131
2131
2131
2131
2131
Interest Accrued
125
338
1064
388
136
Loan from Govt. of Kerala
372
372
372
Reserves & Surplus
Deferred Payment Liability
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
367
535
244
248
280
82
182
196
261
325
Work-in-Progress
Raw Materials
Materials in Transit
55
90
62
64
161
65
16
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
84
113
148
163
Stores and Spares in Transit
531
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
48
Government Levies
Income Tax Paid
NOTICE TO SHAREHOLDERS
Notice is hereby given that the Fifty-Eighth
Annual General Meeting of the Members of The
Travancore-Cochin Chemicals Limited will be
held on Thursday, the 30th September, 2010, at 11.00
AM at the Registered 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 pass 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 Account
for the year ended 31 st March, 2010 and
Auditors Report thereon.
2. To fix the remuneration of Auditors, and in
this connection to pass 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
terms 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 pass 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
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 registered office of the Company not less than 48 hours before the time of holding the meeting.
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 Accounts 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 registering an increase of approximately
6%. The installed capacity also increased to 32.02
lakhs MT, registering an increase of 10%. Our
products have to face more competition on
account 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)
(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 Companys proposal for the
enhancement of Caustic Soda capacity
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
signing 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.

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 accounts 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 Accountants, 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 Accountants,
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

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

accounts 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

accounts, the applicable Accounting
Standards have been followed along
with proper explanation relating to
material departures;
Your Directors wish to place on record their

appreciation of the support 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

accounting 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 accounting records in
accordance with the provision of the
Companies Act, 1956 for safeguarding the
Udyogamandal
28. 08. 2010
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 account 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 account 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:
Nil
2.

Chairman
Benefits derived as a result of the above

efforts e.g., product improvement, cost
reduction, product development, import
substitution etc.
Udyogamandal
28. 08. 2010
Nil
14
ADDENDUM TO DIRECTORS REPORT

Explanations of Board of Directors with reference to Para 9(b) and 11 of the
Annexure to Auditors 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.

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 Account
5
16,485.75
9,264.12
6
7
8
9
7,827.86
4,006.67
4,898.03
10
21

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 ACCOUNTS
(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 Accountants)
(Firm Regn. No. 0020S8S)
Sd/MOHANAN KUTTICKAT
Partner
(Membership No. 15842)
PROFIT AND LOSS ACCOUNT 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 & Administration 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 `)

Sd/R. MADHUSOODHANAN NAIR
Director
Sd/V. MURALEEDHARAN NAIR

Managing Director
Sd/JIJU FRANCIS
Sd/SUSAN ABRAHAM
Company Secretary
Udyogamandal
28 th August, 2010
17

For MENON & AYYAR
Partner
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 Account 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 account
(Refer Item No. 11 of Notes on Accounts)
TOTAL
SCHEDULE 4
UNSECURED LOANS
19
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

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

As at
31st March 2010
` in lakhs
B) Sundry Debtors (Unsecured)
Outstanding for over six months:
Considered Good
Considered Doubtful
Other debts: Considered Good
As at
31st March 2009
` in lakhs
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 Account
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

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 Premium
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 ACCOUNT
Account
Reserve as per contra
23
As at
31st March 2009
` in lakhs
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 ACCOUNT FOR THE YEAR ENDED 31st MARCH 2010
Quantity in MT
Value
Current
Year
Previous
Year
Current Year
` in lakhs
Previous 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 ACCOUNT (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 & ADMINISTRATION 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
Advertisement & Publicity
Travelling Expenses
Directors Sitting Fees
25
Current Year
` in lakhs
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
Premium 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

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 ACCOUNTS
SCHEDULE 21
1 . ACCOUNTING POLICIES
1. Accounting Convention
All revenues, costs, assets and liabilities are accounted for on accrual basis except
duty claims and insurance claims which are accounted for on receipt basis.
customs
2. Sales
Sales (gross) exclude Sales Tax.
3. Retirement Benefits
a) The Companys 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 accounted 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 ACCOUNTS (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 premium paid on
forward contract is recognized over the life of the contract.
c) Any income or expense on account of exchange difference either on settlement
or on translation is recognized in the Profit and Loss Account.
9 . Revenue Recognition
a) Sale of goods are recognised on accrual basis.
b ) Other income is accounted on accrual basis except where the receipt of income
is uncertain.
c) Dividend from investments are recognised in the Profit and Loss Account when
the right to receive payment is established.
29

10. Government Grants
Revenue grants received from Government are recognised as other income and related
expenses are debited to Profit and Loss Account.
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. Accounting for Taxes on Income
Deferred tax assets and deferred tax liabilities arising from timing difference between taxable
income and accounting 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 Accounting Standard 22 on Accounting for Taxes
on Income issued by the Institute of Chartered Accountants 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 Account, 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 account:
` 6.02 lakhs
(Previous Year ` 5.38 lakhs)
b) Counter Guarantees to bank outstanding:
` 441.88 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
30
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 PSUs 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 Account 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

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-passu basis in favour of the lender of all the immovable
properties, both present and future and first charge on pari-passu 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 registered 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
Accounting Standard 22 on Accounting for Taxes on Income issued by the Institute of
Chartered Accountants of India.
32

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 registered 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

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 employers 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
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

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
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%

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.
Current Year
` in lakhs
Previous Year
` in lakhs
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)
Previous 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
Current Year
(` in lakhs)
Previous Year
( ` in lakhs)
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 account 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
Current Year
(` in lakhs)
Previous Year
( ` in lakhs)
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 COMPANYS 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 %
1168778
(24917)
Nil
V . Generic Names of Three Principal Products/Services of Company (as per monetary terms)
Item Code No. (ITC Code)
Product Description
2815.12
Caustic Soda
2801.19
Chlorine
Sd/Sd/V. MURALEEDHARAN NAIR R.MADHUSOODHANAN NAIR
Director
Managing Director
Sd/JIJU FRANCIS
Sd/SUSAN ABRAHAM
Company Secretary
Udyogamandal
28 th August, 2010
39

For MENON & AYYAR
Partner
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.

Sd/Sd/R.MADHUSOODHANAN NAIR
V. MURALEEDHARAN NAIR
Director
Managing Director
Sd/JIJU FRANCIS
Sd/SUSAN ABRAHAM
Company Secretary
Udyogamandal
28 th August, 2010
40

For MENON & AYYAR
Partner
AUDITORS REPORT TO SHAREHOLDERS

annex hereto a statement on the matters
specified in paragraphs 4 & 5 of the said
Order.
To
The Members 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 Account and Cash Flow Statement for
the year ended on that date annexed thereto.
These financial statements are the responsibility of the Companys 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
account 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 supporting the
amounts and disclosures in the financial
statements. An audit also includes assessing the accounting 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

Account and Cash Flow Statement dealt
with by this report are in agreement
with the books of Account of the
Company.
d) In our opinion, the Balance Sheet,
Profit and Loss Account and Cash Flow
Statement dealt with by this report
comply with the Accounting 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 terms 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
accounts read together with the Significant Accounting 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 accounting
principles generally accepted in India;
i)
in the case of the Profit and Loss

Account, 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
in the case of the Balance Sheet, of

the state of affairs of the
company as at 31 st March, 2010;
Ernakulam
1st September, 2010
42
Partner

ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in paragraph 3 of
our report to the members of The
Travancore-Cochin Chemicals Limited, on
the accounts 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 register 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 register 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 register 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 account.
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 account of the Company, the

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 Accountants 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

accounts 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
accounts and records have been made and
maintained. However, we have not made
a detailed examination of those accounts
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 account 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

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
register 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 (Auditors
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

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
OFFICE OF THE PRINCIPAL ACCOUNTANT GENERAL

(AUDIT) KERALA, THIRUVANANTHAPURAM
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL
OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956
ON THE ACCOUNTS 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 accounting 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 Accountants 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 companys personnel and a selective examination of some of the accounting 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 account - 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 accounting 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 Accounting
Standard 2-Valuation of Inventories.
For and on behalf of the

Comptroller and Auditor General of India
Sd/V. KURIAN
Principal Accountant 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 ACCOUNTS 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 ACCOUNTS OF THE TRAVANCORE-COCHIN
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 accounted 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 accounting 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 accounting
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 AGS 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.
CHAIRMAN
Thiruvananthapuram
21.12.2010
49
REPLY TO THE COMMENTS OF THE PRINCIPAL SECRETARY (FINANCE)

ON THE AUDITED ANNUAL ACCOUNTS OF THE TRAVANCORE-COCHIN
1.
The accumulated loss of the Company is ` 1315 lakhs and not ` 4057 lakhs as mentioned in the comments after
adjusting the earlier years 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 account 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 account of the
above reasons. The loan will be repaid once the cash flow improves.
CHAIRMAN
Thiruvananthapuram
21.12.2010
50

TRAVANCORE-COCHIN CHEMICALS LIMITED ANNUAL REPORT

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TRAVANCORE-COCHIN CHEMICALS LIMITED ANNUAL REPORT

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THE TRAVANCORE-COCHIN CHEMICALS LIMITED

Ten year Financial Statistics

Directors Report to Shareholders

Annexure to the Directors Report

Balance Sheet as at 31 st March, 2010

Schedules to Balance Sheet

Schedules to Profit and Loss Account

Balance Sheet Abstract

Cash Flow Statement

Auditors Report to Shareholders

Comments of C & AG of India

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

Reply to the Comments of C & AG of India

Reply to the Comments of Principal Secretary (Finance)

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

Shri. V. Muraleedharan Nair

Shri. R. Madhusoodhanan Nair

Smt. Susan Abraham

Registered Office & Works

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

TEN YEAR FINANCIAL HIGHLIGHTS

10752 12063 9390 12321 10877

11770 12340 11068 12739 11048

Power, Fuel, Stores & Repairs

Selling & Administrative

10438 10864 9676 10846 9034

Interest and Bank Charges

Profit/Loss Before Prior

Fringe Benefit Tax

Prior Period Items

Income Tax Paid (prior period)

Current Assets Loans and

Current Liabilities and Provisions

Working Capital (WC) (CA-CL)

-1065 -2017 -1866 -2283 -2475

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

Long Term Borrowing

Short Term Borrowing

Share Capital (SC)

Loan from Govt. of Kerala

Reserves & Surplus

Deferred Payment Liability

Stores and Spares

Loans and Advances

Other Current Assets

Stores and Spares in Transit

Cash and Bank Balance

Capacity Utilisation (%)

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

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

Income Tax Paid

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

Additional Director of the Company and who

RESOLVED THAT Shri. R. Madhusoodhanan

3. To appoint a director in the place of Shri. J.

Consequent upon the advice of the Government of

THE TRAVANCORE-COCHIN CHEMICALS LIMITED

Your Directors consider it in the interest of the

Meeting. A notice under Section 257 of the

By order of the Board of Directors

THE TRAVANCORE-COCHIN CHEMICALS LIMITED