1- SHARE CAPITAL
 
 a) During the year the Company has forfeited 1,93,000 shares of Rs.
 10/- each (Rs.5/- paid up) for non payment of allotment and call monies
 with the approval of the Board of Directors and the amount paid towards
 application money in respect of these forfeited shares has bpen
 transferred to Shares Forfeiture Account.
 
 b) The Government of India had released Rs.270 crores (for financial
 restructuring Rs.250 crores and Caustic Soda Plant recommisskMing Rs.20
 crores) against allotment of 8% Non-Cumulative Redeemable Preference
 Shares, thereby broadening the capital base as per the retjval scheme.
 The 8% Preference Shares were allotted to Govt, of India by the
 
 Board on 28th January, 2008, redeemable O 20% commencing from 4th year
 with last redemption in the 8th year. The first installment of (20%)
 i.e. Rs. 54 crores Is due for redemption in financial year 2011-12. The
 Company has requested to the Government of India to extend redemption
 starting in financial year 2014-15 O 25% each year.  c) During the
 year, the Unpaid Allotment Money Account and the Security Premium
 Account has been reconciled. As a result, It was found that an amount
 of Rs.0.405 lac received earlier from the shareholders was credited to
 Unpaid Allotment Money Account, although Rs.0.28 lac belonged to the
 Security Premium Account and Rs.0.125 lac for the Miscellaneous Deposit
 Account. This has been set right during the year by debiting Rs.0.405
 lac to Unpaid Allotment Money with corresponding credit of Rs.0.28 lacs
 to the Security Premium Account and Rs.0.125 lacs to the Miscellaneous
 Deposit Account. The amount of Rs.0.125 lacs credited to Miscellaneous
 Deposit Account is subject to final reconciliation.
 
 2.  SCHEDULE 2-RESERVES a SURPLUS
 
 Capital Reserve: An amount of Rs.698.45 lacs (Previous year Rs.279.38
 lacs) has been received from ISRO (Government of India) towards Capital
 Grant tor refurbishment of CNA Plant. Out of this, an amount of Rs.
 211.52 lacs has been spent upto 31st March, 2011 and accordingly same
 has been shown as Capital Reserve and balance amount of Rs.486.93 lacs
 has been shown as deposit under the head - Current Liabilities (Deposit
 from contractors & others) pending utilisation.
 
 3.  SCHEDULE 3-SECURED LOANS
 
 a) Interest on bonds, which are live at the year end, is provided at
 the coupon rate.
 
 b) As per the existing practice followed by the Company, the cheques in
 hand as on 31 st March, 2011 amounting to Rs.240.28 lacs (Previous year
 Rs.130.09 lacs) are included under Cash end Bank Balance as well as in
 Bank on Cash Credit Account (under the head Secured Loans).
 
 4.  SCHEDULE 4-UNSECURED LOANS
 
 b) The Company has not made provision for penal interest payable
 amounting to Rs.519.01 lacs (Previous year Rs.348.37 lacs) on overdue
 Government Loan upto 31st March, 2011 since the same is leviable at the
 discretion of Government of India. The Company has not received any
 demand from the Government of India for the same.
 
 5.  SCHEDULE 5-FIXED ASSETS
 
 a) Land in possession of the Company at Rasayani admeasuring 455.69
 hectares (previous year 455.69 hectares) has been given free of cost
 for use, by the Government of Maharashtra, against which a nominal
 value of Re.i/- Is Included in Land and Land Development by creating
 Capital Reserve. Land at Panvel amounting to Rs.0.80 lac (previous
 year Rs.0.80 lac) included in Land & Land development has been given
 by the Government of Maharashtra for the business/residential purpose
 of the Company.
 
 b) i) Capital Work-in-Progress and Expenditure during Construction
 includes Rs.2976.65 lacs (previous year Rs.2972.22 lacs) towards cost
 of JNPT Tank Terminal project wherein Management had decided to suspend
 further construction. Even though 1he lease period has expired in June,
 2010, the Company has written to JNPT authorities for extension of the
 lease period and Is hopeful of getting extension. Hence the assets are
 carried at cost In view of the decision or the management.
 
 ii) An amount of Rs.211.52 lacs (Previous year Rs.3B.69 lacs) has been
 spent on Refurbishment of CNA Plant and shown under Capital
 Work-in-Progress.
 
 IB) Company has incurred an expenditure of Rs. 46.35 lacs (previous
 year Rs. 48.35 lacs) towards feasibility study for Combined Heat and
 Power Project and Captive Co-gen Power Plant to be erected at Rasayani
 which is shown as capital work-in-progress. The said expenditure will
 be capitalized after the erection and commissioning of the proposed Gas
 based power plant
 
 c) I) AN-I, FD-I, NB-I, HYD-I, DNB, BOP, MCB, NCB, COGEN Boiler,
 ACETYL.COMP. AIR, PUSH, DM WATER, MPP Plants having WDV at Rs. 1376.00
 lacs (previous year Rs. 88.76 lacs) are held for disposal.
 
 These assets have been carried at lower of net book value and Net
 Realisable Value ascertained on the basis ol technical assessment made
 by the management / outside expert.
 
 ii) The Company has appointed consultant/valuers for assessing the
 impairment of Fixed Assets as per the provisions of AS-28 (impairment
 of Fixed Assets) for Rasayani Unit. As per the report of the consultant
 there is impairment of Fixed Assets and an amount of Rs.121.97 lacs was
 assessed by consultants by comparing the fair market value as on date
 with the WDV as on 31st March, 2010. Hence the impairment was
 recomputed considering the WDV as on 31st March, 2011 and the revised
 impairment loss worked out to Rs. 56.73 lacs which has been provided in
 the accounts.  iii) After a detailed feasibility study conducted by
 outside expert during 2007-08, actions ware taken to restart the
 Caustic Soda plant in the month of September, 2008 (Gross Block
 Rs.1137S.62 lacs). However, the Caustic Soda plant operation has been
 stopped temporarily from October, 2009 due to uneconomical operation.
 The above asset Is carried at cost in view of the decision of the
 management.  
 
 d) ERP IMPLEMENTATION (Kochl):
 
 The unit implemented ERP system integrating an departments using SAP
 during the year. The implementation partner was Tata Consultancy
 Services (TCS). The Consultant of the Project was WIPRO. All the
 modules except HCM went Go Live on 16-9-2010. The support period of TCS
 was available up to 31-12-2010 for the modules except HCM. Since
 additional support was required for several modules, for incorporating
 the modifications, development of reports, annual closing of accounts
 and annual shut down for the first time on ERP, the support period was
 extended for 31 man months with effect from 21-1-2011 at an additional
 cost of Rs.41 lacs excluding taxes. The HCM module went Go Live on
 31-1-2011. The support period for HCM module was for a period of three
 months.
 
 The unit has capttaUsed the ERP system covering Consultancy charges,
 hardware cost, software cost, development cost, cost of license,
 networking costs etc. on 31-03-2011 based on the completed milestones.
 The cost Includes the cost of hardware and networking of the Disaster
 Recovery Centre set up at Rasayani Unit amounting to Rs. 172.44 lacs.
 The Cost of work awarded to TCS was Rs.854.95 lacs and out of this, an
 amount of Rs.670.80 lacs has been paid up to 31.3.2011 towards the
 supplies effected and services rendered. As per the contract with TCS,
 the final 20% has to be paid only after the warranty period or on
 submission of the Performance Bank Guarantee (PBG) after the completion
 of the project. The unit has also paid consultancy charges to WIPRO til
 31-3-2011 amounting to Rs.24.16 lacs (previous year Rs.11.23 lacs). The
 Project was capitalised on 31st March 2011.
 
 6.  SCHEDULE 7-INVESTMENTS
 
 a) The Company had an investment of Rs.1106 lacs (previous year Rs.1106
 lacs) in the subsidiary Company M/s. Hindustan Fluorocarbons Ltd (HFL)
 which was under BIFR since 1994. HFL has been reporting profit in the
 last 3 years. The Subsidiary Company HFL has also been sanctioned CERs
 by UNFCCC under the CDM Project which has generated substantial revenue
 for the Company. In view of the improved financial position of HFL, its
 shares are traded much above the nominal value. In view of this, the
 Investment in HFL is stated at cost.
 
 b) The Company had invested Rs.3.00 lacs in the Equity of M/s. HOC
 Chematur Ltd. by way of joint venture as a co-promoter. The Company
 holds 60% of the Paid-up Equity Capital of HOC Chematur Ltd., hence
 HOC-Chematur Is a subsidiary Company of HOCL. HOC-Chematur Ltd., had
 initiated the process of implementing the project, however, abandoned
 subsequently due to Inadequate support from financial institutions. In
 view of such uncertainties involved In implementing the project, the
 Company had fully provided for the losses against the Investment. There
 is no change in the status of M/s HOC- Chematur Ltd., and the provision
 against the Investment is continued.
 
 7. SCHEDULE 8 - INVENTORIES
 
 a) Excise duty and Educational Cess provided on goods manufactured but
 not removed Rs.486.95 lacs (Previous year Rs.315.06 lacs).
 
 b) Inventories include Items not moved for last more than five years
 Rs.527.74 lacs (previous year Rs.498.76 lacs) and obsolete Inventory of
 Rs.30.66 lacs (previous year Rs.30.66 lacs). An adhoc provision of
 Rs.442.53 lacs (previous year Rs.431.05 lacs) has been made In the
 Accounts for obsolescence.
 
 C) KOCHIUNIT:
 
 I) The closings tocx of Stock-In-Process incluo Wunder the head
 lnvertors during the previous year Includes the stock of Lean 
 Propylene valuing Rs.17.21 lacs. But the value of Lean Propylene was 
 included under the head Finished Products for Captive consumption also 
 as was done during earlier years. The Production department has now 
 certified that the stock of Lean Propylene is included under the head 
 Stock-in-Process and there is no separate stock of Lean Propylene which 
 has to be included under the head Finished Products for Captive 
 consumption. Hence the value of Lean Propylene amounting to Rs.17.21 
 lacs included under the opening stock of finished goods for captive 
 consumption Is written off during the year.
 
 i) The Stock-in-Process consisting of LPG and Benzene lying in the
 pipeline in Propylene and Cumene plants which were shown under Stock-
 In-Process for Captive consumption during earlier years has now been
 included under the head Raw materials as part of SAP implementation.
 
 ii) The stock of main products shown under the head Stock-in-Process
 during earlier years is now included under the head Stock-in-Process -
 Cumene equivalent in Phenol plant.  
 
 8.  SCHEDULE 11-LOANS AND ADVANCES
 
 a) During the year 2007-08, for revival of HFL the Modified Draft
 Rehabilitation Scheme (MDRS) was approved by BIFR and accepted by HOCL
 & HFL for Implementation. As a part of mplsmentation of MDRS, HOCL had
 waived interest (Rs. 2260.26 lacs) accumulated on loan given to HFL and
 converted unsecured loan given to HFL amounting to Rs.2609.72 lacs
 (previous year Rs.  2609.72 lacs) as Zero Coupon Loan (ZCL), which is
 secured by creating first charge on HFL immovable properly (land valued
 to the extent of Rs.40 Crores) in favour of HOCL. In addition, the
 Company has provided loan amounting to Rs.1020.77 lacs (previous year
 Rs. 890.77 lacs) to meet the working capital need of HFL, out of which
 the loan of Rs.890.77 lacs is secured under the above mortgage of land.
 
 b) Expenses amounting to Rs.1065.89 lacs (previous year Rs.1065.62
 lacs) including amount paid to M/s Chematur Engh. A.B. Rs.664.71 lacs
 had been allocated as advances to joint venture M/s HOC- Chematur Ltd.
 In view of uncertainties involved in recovery/completion of the
 project, a provision for doubtful advance of equivalent amount was made
 during the earlier years.  Since there is no improvement in the status
 of the joint venture project the provision for doubtful advances is
 maintained.
 
 c) During the year 2001-2002, a case of misappropriation of Company''s
 funds to the tune of Rs.64.81 lacs (net and to the extent identified)
 by an official of the Company, Involving fraudulent / fake payments /
 withdrawals under various heads of accounts including sales tax,
 debtors etc. had been detected. The case is at present under
 Investigation of CBI. In the meantime, based on the report of the
 Vigilance Dept., a civil suit has been filed for recovery of the amount
 involved from the concerned employee who was dismissed from the
 services of the Company. Since in the opinion of the Management the
 value of assets seized by CBI is sufficient to cover the losses
 occurred on account of fraud, no provision in the accounts is made and
 the amount is shown as recoverable.
 
 d) Deposits/Advances include Rs.98.57 lacs (previous year Rs.97.60
 lacs) which are more than three years old. No provision has been made
 against these Deposits/Advances as the same are found to be good and
 furry recoverable.
 
 B.  JNPT ESCALATION CHARGES
 
 As per Lease Agreement with JNPT, the Lease Rentals provide for
 escalation O 10% on Leased Land payable to JNPT. The Company has
 provided for Lease Rentals with old rates without considering the
 escalation 0 10% per annum as the matter Is under arbitration. The
 amount accumulated till date comes to Rs.431.01 lacs (previous year
 Rs.426.01 Lacs), which has been disclosed as contingent liability.
 
 10. PROVISION FOR ARREARS OF WAGES RASAYAM UNIT:
 
 a) No provision has been made for the liability towards wage revision
 of employees (other than Kbchi Unit) for the period January 1,1997 to
 December 31,2000 amounting to Rs.2308.08 lacs, (previous year
 Rs.2308.08 lacs) since the arrears are payable only with the prior
 approval of Administrative Ministry and when the Company generates
 adequate surplus. This amount has been
 shown under Contingent Liability.  
 
 b) Wage Settlement / Salary Revision w.e.f.1/1/2007: Rasayanl Unit:
 
 (I) OFFICERS:
 
 As per the recommendations of the 2nd Pay Revision Committee, the
 revision of pay and allowances of Board level and below Board level
 executives had become due from 01.01.2007. The pay revision of the
 officers has been approved and the pay scales have been revised with
 effect from 1st January, 2007 for a period of 10 years. The actual
 payment of the revised salary has been made w.e.f. 1st August, 2009 and
 the Prior Period arrears from 1st January, 2007 are being paid in two
 financial years I.e. the financial year 2010-2011 and 2011-12, subject
 to condition that the Company generate adequate cash resources through
 improved productivity and profitability in line with the directions of
 Government of India and decision of Board. The arrears due from the
 period 1st April, 2008 to 31st July, 2009 has already paid/provided
 during the year. However, no provision has been made for arrears
 payable in the year 2011-12, for the period from 1st January, 2007 to
 31st March, 2008 amounting to Rs.278.96 lacs which is subject to the
 Company generating adequate cash resources which has been, however
 shown under contingent liability.
 
 (II) STAFF:
 
 For staff, though revision of pay scales is due with effect from 1st
 January, 2007, the same has not been implemented. However, provision
 has been made based on MOU signed with the unions, pending
 implementation of the revised pay scale for the period 1st April, 2008
 to 31st March,2011, on the same basis as that of officers. However, no
 provision has been made for the arrears payable for the period from 1st
 January,2007 to 31st March,2008 amounting to Rs.246.31 lacs in line
 with the principle followed in the case of officers and the MOU signed
 with the workmen/ unions stipulate that the arrears will be payable at
 par with officers which has been, however shown under contingent
 liability.
 
 KOCHI UNTT:
 
 i) The revision of Pay and Allowances with effect from 1-1-2007 of
 Board Level and below Board level executives was sanctioned by the
 Competent authority during the year 2009-10. The Board in its 327th
 meeting held on 9-8-2010 decided to release the arrear for the period
 1-1-2007 to 31-7- 2009 in eight quarterly installments subject to the
 Company generating cash surpluses in every quarter. Accordingly the
 arrear towards the four quarterly installments was paid/provided during
 the year. The unit has not provided the liability for the balance
 amount of arrears of Pay and allowances amounting to Rs.98.60 lacs
 (Previous year Rs.227.98 lacs) which is in line with the pay revision
 orders of the competent authority of HOC. The unit has introduced the
 Cafeteria approach for perks and allowances with a ceiling of 37% of
 the Basic Pay with effect from 1-8- 2009 and also granted four
 increments with effect from 1.1.2007 as per decisions of the Board.
 
 ii) The wage settlement with effect from 1-1-2007 was signed with trade
 unions representing workers on 25-3-2011. The arrears of wage revision
 was paid along with the salary for the month of March, 2011. The unpaid
 amount of certain allowances such as overtime allowances (part), shift
 allowance, nutrition allowance etc and the unpaid amount of wages &
 allowances of retired workmen has been provided for In the accounts.
 11. EMPLOYEES BENEFIT PLAN :
 
 a) Provision for Leave Encashment
 
 Company has made provision of Rs. 640.14 lacs (Previous Year Rs. 767.14
 lacs) for leave encashment as per revised AS-15 issued by Institute of
 Chartered Accountants of India based on Actuarial valuation.
 
 b) Provident Fund/Pension Fund
 
 Employees receive benefits from the provident fund managed by the
 Company. The employee and employer each make monthly contributions to
 the Provident Fund/Pension Fund plan equal to 12% of the employees''
 salary/ wages. Provident Fund is managed by a separate Exempted Trust.
 
 c) Gratuity
 
 The Employees'' Gratuity Fund Scheme, which is a defined benefit plan,
 is managed by the Trust through an Annuity Scheme maintained with Life
 Insurance Corporation of India (LIC). The present value of obligation
 is determined based on actuarial valuation, of liability done by using
 Projected Unit Credit Method, which recognizes each period of service
 as giving rise to additional unit of employee benefit entitlement and
 measures each unit separately to .bulk) up the final obligation.
 
 The celling of gratuity has been enhanced to Rs.10 lacs with effect
 from 1-1-2007 for executives and from 24-5-2010 for workmen. The
 gratuity paid prior to 1.7.2010 in excess of Rs.3.50 lacs by the
 Company, not reimbursable by LIC and the gratuity arrear payable to
 retired employees has been debited to Profit and loss Account under
 Employees Remuneration and Benefits.  (I) Reconciliation of opening and
 closing balances of the present value of the defined benefit obligation
 based on the present limit of Rs. 10 lacs (Previous year Rs. 3.50
 lacs):
 
 12. In Kochi Unit, the excess provision of Rs. 2.99 lacs (Previous Year
 Nil) towards the repair charges provided during earlier years of the
 Captive Power Plant, which was damaged due to an accident in year
 2005-06 has been written back to Profit & Loss Account.
 
 14. SEGMENT REPORTING.
 
 Since the Company is manufacturing only Chemicals, there are no
 separate reportable primary and secondary segments and all the
 chemicals manufactured by the Company are considered to have been
 representing as single reportable segment. The requirements of
 Accounting Standard 17 with regard to disclosure of segmental results
 are therefore considered not applicable to the Company.
 
 15. RELATED PARTY DISCLOSURE AS PER AS-18
 
 a)   Related Parties
 
 The Company is a State controlled enterprise therefore the disclosures
 as per Accounting Standard 18 are not considered applicable.
 
 16.  ACCOUNTING FOR TAXES ON INCOME AS PER AS-22
 
 The Company had reviewed its net deferred tax assets as at 31 st March,
 2004 and decided not to carry forward such assets due to uncertainty of
 realizing these assets against future taxable income due to uncertainty
 of its realization on account of accumulated losses. This decision is
 followed this year also in view of Accounting Standard Interpretation
 issued by the Institute of Chartered Accountants of India.
 
 17.  BALANCE CONFIRMATION
 
 Balances of debtors, creditors, loans, advances, other current assets
 and borrowings are subject to confirmation/reconciliation and
 subsequent adjustments.
 
 18.  CONTINGENT LIABILITIES 
 
                                                    (Rs in lacs)
 
                                               2010-11        2009-10
 
 1 a) Contingent Liabilities
 
 Claims against the Company not
 Acknowledged as debts:                            Nil            Nil
 
 i) Differential tax on account of concessional
 
 forms in respect of concessional sales         808.51         521.27
 
 ii) Income Tax Claims                          761.58            Nil
 
 ill)   Sales Tax Claim                           5.70            Nil
 
 iv)   Excise Claims                            212.01         212.01
 
 v)   Customs claim                              10.80          10.80
 
 vl)  JNPT claim                               2007.99        1631.95
 
 vh) Rental claim Harchandrai House            2457.75            Nil
 
 viii) Wage revision employees                 2931.95        3787.68
 
 ix)  Other Claims                              701.37        1887.59
 
 b) Letters of Credit opened, cheques and 
 bills of exchange discounted with
 the bankers and remaining outstanding           98.19         189.75
 
 c)    Counter guarantees given against
 
 bank guarantees                               3382.37        2586.31
 
 d)    Guarantees given on behalf of the
 Subsidiary Company, Hindustan
 Fluoro-carbons Limited to Financial
 Institutions and Commercial Banks for
 securing loans and cash credit facilities.    1253.00        1253.00
 
 e)    Security bond given to commercial
 
 taxes Dept. Govt, of Kerala                   2498.30         883.30
 
 2   Estimated amount of contracts remaining
 to be executed on capital account and not
 provided for (Net of advances)                 338.61         877.65
 
 19.  The Company has taken bank guarantee for Rs.Nil (Previous year
 Rs.814.00 lacs) against the term deposit receipt of Rs.2574.96 lacs
 (previous year Rs.2538 lacs) from Central Bank of India, Marine Lines,
 Mumbai, apart from loan amount of Rs.2164.12 lacs (Previous year
 Rs.1516 lacs) including interest thereon.
 
 20.  Previous year''s figures have been regrouped and readjusted
 wherever necessary and practicable.
 
 21.  Previous year''s figures are shown In bracket.