Nirma

1.  CONTINGENT LIABILITIES NOT PROVIDED FOR IN ACCOUNTS :
 
 (Rs. in crores)
 
                                                  As at       As at
                                                  31.03.2009  31.03.2008
 
 (A) Claims against the Company not acknowledged 
     as debts
 
 (I) For custom duty                                 1.48       0.25
 
 (II) For direct tax (*)                          1005.30     846.47
 
 (III) For sales tax                                19.60      22.86
 
 (IV) For excise duty (appeals decided in 
      favour of the Company                        111.42     108.90 
      Rs.107.71 Crores p.y. RS.107.71 crores)
 
 (V) Disputed liabilities for Custom duty
     and Excise duty of the                          4.50       4.50 
     Demerged Undertaking, as per the 
     Financial Statement of CHL
     as certified by Statutory Auditor of CHL
 
 (VI) Others                                         8.63       9.69 
      This includes the claims not acknowledged 
      as debt of Rs.4.71 crores of the Demerged 
      Undertaking, as per the Financial Statement of
      CHL as certified by Statutory Auditor of CHL
 
                                                  1150.93     992.67
 
 (B) Estimated amount of contracts, remaining 
     to be executed, on capital                    341.11      96.74 
     account (Net of Payment)
 
 (C) For letters of credit                          96.73      46.84
 
 (D) For bank guarantee                              2.87       0.73
 
    (Issued for import of capital goods under 
     Export Promotion Capital Goods Scheme of 
     Government of India etc.)
 
 (E) Company has given Corporate Guarantee in 
     favour of lenders for                         659.62     860.79 
     securing loans extended to Kamavati 
     Holding Inc., Searles Valley Minerals Inc. 
     and Searles Valley Minerals Operations 
     Inc (Wholly owned Subsidiaries)
 
 (F) Any liability and / or claim pertaining to 
     Demerged Undertaking, for non availability 
     of information / record from CHL, which may arise
     in future is not disclosed.
 
 (*) Income - tax department has raised demands by making various
 additions/ disallowances. The Company is contesting demand, in appeals,
 at various levels. However, based on legal advice, the Company does not
 expect any liability in this regard.
 
 2.  Borrowing cost capitalised during the year Rs. 21.87 crores (p.y.
 Rs.13.02 crores) including Rs. Nil pertaining to previous year (p.y.
 Rs. 6.71 crores)
 
 3.  Secured Loans
 
 External Commercial Borrowings (ECBs)
 
 The External Commercial Borrowings are secured by first pari-passu
 charge on movable plant and machineries situated at Bhavnagar, Gujarat
 and by pledge of shares of Kamavati Holdings Inc. held by the Nirma
 Limited.
 
 Short Term Buyers Line of Credit and Loans and Advances from Banks.
 
 The loans from banks are secured on pari-passu basis, by a first
 charge, by way of hypothecation of specified stock of raw materials,
 stock in process, finished goods, other merchandise being movable, book
 debts, both present and future and by way of second charge on specified
 fixed assets, both present and future, of the Company.
 
 4.  Unsecured Loans
 
 Floating Rate Non Convertible Debentures:
 
 Secured Floating Rate Non Convertible Debentures (FRNCD) aggregating to
 Rs. Nil (p.y Rs. 140 crores) together with interest and other charges
 due in respect thereof are to be secured by way of mortgage of
 immovable properties which shall rank pari-passu with the charges to be
 created by the Company. The said FRNCDs are redeemable with interest on
 the expiry of 364 days from the deemed date of allotment. However the
 investor/ company shall have the option to put/call the FRNCD any day
 from the date of allotment.
 
 5.  As per Accounting Standard 15 Employees Benefits (Revised
 2005)the disclosures of Employees Benefits are defined in the
 Accounting Standard are given below:
 
 (I) Pursuant to the transitional provision of Accounting Standard (AS)
 15 (Revised) on Employee Benefits, an amount of Rs. Nil has been
 debited to the General Reserve(p.y. Rs.1.65 crores). The said amount
 represents the difference between the liability in respect of various
 employee benefits determined under AS 15 (Revised) as on April 1, 2007
 and the liability that existed as on that date as per AS 15 prior to
 the revision.
 
 (III) Defined Benefit Plan
 
 The employees gratuity fund scheme managed by a Trust is defined
 benefit plan. The present value of obligation is determined based on
 actuarial valuation using the Projected Unit Credit Method, which
 recognizes each period of service to build up the final obligation. The
 obligation for leave encashment is recognized in the same manner as
 gratuity.
 
 The expected rate of return on plan assets is determined considering
 several applicable factors, mainly the composition of plan assets held,
 assessed risks, historical results of return on plan assets and the
 Companys policy for plan assets management.
 
 (*) Employees of Nirma Consumer Care Ltd., (Wholly owned subsidiary)
 have been transferred to the Company from 01.04.2008.
 
 6.  The Composite Scheme of Compromise and Arrangement between Core
 Healthcare Limited (CHL), the Demerged Company, its Lenders and
 Shareholders and Nirma Limited (NL), the Resulting Company and its
 Shareholders (the Scheme) under Sections 78, 100, 391 to 394 of the
 Companies Act, 1956, has been sanctioned by Honble High Court of
 Gujarat vide an Order dated 01.03.2007. The Scheme has become effective
 with effect from 07.03.2007. Three parties of CHL have filed an appeal
 before the Division Bench of Honble High Court of Gujarat. The Scheme
 is subject to the result of the said appeal.
 
 7.  No physical verification of fixed assets and inventories has been
 carried out and, therefore, the value of these assets as shown in the
 books of accounts of Demerged Undertaking have been incorporated
 herein.  All of the vouchers, documents, data, records and books of
 accounts for the period from the Appointed Date of Demerger i.e. 1st
 December, 2004 and up to and including the effective Date i.e. 7th
 March, 2007 in relation to Demerged Undertaking are yet to be received
 from CHL.
 
 8.  Bank Balance
 
 Bank Balance in current accounts includes Rs.0.59 crores(p.y. 0.59
 crores) of demerged company acquired during financial year 2006-2007 is
 considered doubtful in absence of further information.
 
 9.  During the year, the impairment in respect of Building Rs.20
 crores and Plant and Machinery Rs.40 crores aggregating to Rs.60 crores
 is charged to Profit and Loss Account. The impairment was towards fixed
 assets employed in Pharma Division at Sachana Undertaking.
 
 10.  Effective from April 1,2008, consequent to the exercise of the
 option available as per the new paragraph 46 of the Accounting Standard
 11 The Effects of Changes in Foreign Exchange Rates notified by the
 Ministry of Corporate Affairs vide Notification dated March 31,2009 on
 Companies (Accounting Standard) Amendment Rules, 2009 (G.S.R 225 [ E ]
 dated 31.03.2009), on exercise of option, the Company transferred
 Rs.89.59 crores to Foreign Currency Monetary Item Translation
 Difference Account. The Company written off Rs.29.86 crores to Profit
 and Loss Account and Rs.59.73 crores is remaining to be amortised. Had
 the Company not changed the Accounting Policy, the Profit before tax
 the year ended March 31,2009 would have been lower by Rs.59.73 crores.
 
 11.  As per the provisions of The Micro, Small And Medium Enterprises
 Development Act, 2006 the principal amount payable to micro, small and
 medium enterprises is Rs.0.59 crores (p.y. Rs.0.37 crores) and no
 interest due thereon is remaining unpaid. These amounts have been
 included in Sundry Creditors.
 
 This information has been determined to the extent such parties have
 been identified on the basis of information available with the Company.
 
 Aaditya Control, Adit Engineer, Aira Pneumatics, Alfa Industrial Eng.,
 Alpmit Engineers, Alpmit Engineers Pvt. Ltd., Ami Industrial Corpn,
 Anju Dye Chem, Arbuda Sil-Chem Pvt. Ltd., Ardor Chemicals, Arjay
 Polymers, Ashok Industries, Asia Engineers, Avro Industries, Brinda
 Industries, Capri Dye Chem Pvt. Ltd., Champion Jointings Pvt. Ltd.,
 Champion Seals (India) Pvt. Ltd., Chemtech Industrial Valves Pvt. Ltd.,
 Chemtrols Engineering, Chintan Engineering, Chintan Rubber Industries,
 Devraj Engineers, Dhan Minerals, Dotcad Pvt. Ltd., Dresser Valve India,
 Durga Engineering Co., Excel Pneumatics, Farris Engineering, Ganesh
 Engineers, Gujarat Acetyline Pvt. Ltd., Hardik Engineers, Indswep
 Energy System, Inmarco Industrial, Areva T & D India, Engineers
 Combine, Madhavdas Manilal & Co., Maize Products, Mazda Limited,
 Monarch Chemicals, Pankaj Packaging, Perfect Valves & Pneumatics,
 Polycab Wires Pvt. Ltd., Ppi Pump (Pvt.) Ltd., Premium Pulman Pvt.
 Ltd., Rangers Industrial Co., S K Insulation, S.M. Engineers, Safeworld
 Systems Pvt. Ltd., Samson Controls Pvt. Ltd., Saurabh India Pvt. Ltd.,
 Schenck Jenson & Nich, Shiv Shakti Wire Indu, Shri Ambika Scale Mfg,
 Shyam Chemicals, Siri Ram Filteration, Standard Spring Works, Super
 Stainless Steel, Sweta Rubber, Tech Aid, Techniks, The Kcp Limited,
 Trio Engineering Work, Trio Gasket Co., Triotransformer, Triveni
 Equipments, Vamech Seals, Vikram Aroma Pvt. Ltd., Volpak Systems Pvt.
 Ltd., Voltamp Transformers, Xsis Power System, Yogi Fabrications,
 Zenith (Mumbai) Rolle.
 
 12. (A) Figures of previous year have been regrouped wherever
 necessary.
 
 13. The names of related parties with relationship and transactions
 with them are disclosed as under.  
 
 (A) Relationship:
 
 (I) Shareholders :
 
 Shri Karsanbhai K. Patel, Smt. Shantaben K. Patel, Shri Rakeshbhai K.
 Patel, Shri Hirenbhai K.  Patel, Shri Ambubhai M. Patel, Kargil
 Holdings Pvt. Ltd., Uri Holdings Pvt. Ltd., Leh Holdings Pvt. Ltd.,
 Banihal Holdings Pvt. Ltd. and Kulgam Holdings Pvt. Ltd. are holding
 totally 77.17% equity shares in the Company.
 
 (II) Subsidiaries of the Company : (Wholly Owned)
 
 (a) Wholly Owned-Direct Holding : Nirma Consumer Care Limited,
 Karnavati Holdings Inc. USA
 
 (b) Indirect Holding : Searles Valley Minerals Operations Inc (SVMO)
 USA, Searles Valley Minerals Inc. (SVM) USA, wholly owned subsidiaries
 of Karnavati Holdings Inc USA.
 
 Searles Domestic Water Company LLC, Searles Valley Residences LLC.Trona
 Railway Company LLC, NATI LLC wholly owned by SVMO., Searles Valley
 Minerals Europe (wholly owned by SVM w.e.f 04.11.08)
 
 (III) Associates Entities :
 
 Kargil Holdings Pvt. Ltd., Uri Holdings Pvt. Ltd., Leh Holdings Pvt.
 Ltd., Banihal Holdings Pvt.  Ltd., Kulgam Holdings Pvt. Ltd., Nirma
 Credit & Capital Ltd., Nirma Industries Pvt. Ltd. (Converted into
 Private Ltd. w.e.f. 20.02.2009), Nirma Chemical Works Pvt. Ltd.
 (Converted into Pvt. Ltd.  w.e.f. 25.02.2009), Saurashtra Chemicals
 Ltd., Baeurer Infotech Ltd., Nefron Ltd., Mahuva Port and
 Infrastructure Pvt Ltd,. Kanak Castor Products Pvt. Ltd., Nirma
 Education and Research Foundation, Nirma University, Nirma Labs, Trona
 Export Terminals LLC, USA.
 
 (IV) Key Management Personnel :
 
 Shri Hirenbhai K. Patel - Managing Director Shri Kalpeshbhai A. Patel -
 Executive Director
 
 (V) Relatives
 
 Shri Karsanbhai K. Patel, Smt. Shantaben K. Patel, Shri Rakeshbhai K.
 Patel, Shri Ambubhai M. Patel, Smt. Keyuriben R. Patel and Smt.
 Rajalben H.Patel.