Notes to Accounts of Borax Morarji Ltd.

Mar 31, 2015

1. Terms/rights attached to shares:

The Company has only one class of Equity Shares having a par of value of Rs. 10 per share. Each holder of Equity Share of the Gompany is entitled to one vote per share.

In the event of liquidation of the company, the Equity Shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution to the Equity Shareholders will be in proportion to the number of Equity Shares held by the Shareholder.

The preference shares are redeemable in three equal annual installments of Rs. 300.00 Lakhs each commencing from the financial year 2019-2020. The cumulative dividend on these Preference Shares aggregating to Rs. 55.04 Lacs (Previous year NIL) is to be paid as and when declared by the Company.

The holders of all preference shares do not have any voting rights. The holders of all Preference shares have a first right of cumulative dividend as compared to the shareholders of Equity shares in case the Company declares any dividend.

In the event of liquidation of the company, all Preference Shareholders will have a priority over the Equity shareholders to receive remaining assets of the Company, after distribution of all other preferential amounts. The distribution to the Preference shareholders will be in proportion of the number of shares held by each shareholder.

2. Secured

Cash Credit (Note 7 (I))

Cash Credit including Export Packing Credit is secured by hypothecation of stock-in-trade, stores and book debts of Chemical Division at Ambernath and Dahej, further secured by way of second charge by simple registered mortgage on the land of Chemical Division at Ambernath, Maharashtra and mortgage on the land at Dahej, Gujarat. Rate of interest is ranging from 15% to 17%.

3. Unsecured:

Corporate loan from HDFC Ltd( Note 7 (II) (b))

Corporate loan from HDFC Ltd. for financing factory premises at Dahej @ 14.85% rate of interest, repayable by July, 2015.

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 30 days either during the year or as at the Balance Sheet date, computed on unit wise basis. Further, no interest has been paid during the year or is payable to any Micro, Small and Medium Enterprise on the Balance Sheet date. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4. Deferred Tax Assets/ (Liabilities) [Net]

Deferred Tax Assets/ (Liabilities) for nine months ended 31st March, 2015 has been provided on the estimated tax computation.

5. Other loans and advance includes

(i) An amount Rs. 14.22 lacs was receivable from the State Trading Corporation of India Ltd. (STC), New Delhi, on account of rate difference and dispatch money earned. The Tis Hazari Court, Delhi, upheld the recovery, against which STC preferred further appeal in Delhi High Court & deposited 50% of decreed amount. In terms of the settlement agreement with STC, 50% of the amount deposited along with interest due thereon is receivable. Accordingly, an amount of Rs.6.16 Lakhs is continued to be shown as receivable from STC and balance amount of Rs..8.06 Lakhs has been written off during the year.

6. Contingent Liabilities not provided for:

Nine Months Fifteen Months Ended 31st Ended 30th March2015 June 2014

Rs. in Lacs Rs. in Lacs

(1) Bank Guarantees Outstanding 27.71 49.68

(2) Claims against the Company not acknowledged as debt:**

(a) Tax Demands under appeal:

i) Excise Duty demanded by Commissioner of Central Excise 12.65 12.65

ii) Custom Duty levied by Collector of Customs * 44.60 44.60

7.(a)(The Company has preferred an appeal with CESTAT against the above demand in respect of validity of DEPB licenses. The Company has also deposited an amount of Rs. 28 Lacs shown as recoverable "Loans & Advances" & has furnished bank guarantee for the balance of demand.) ** (Based on expert advise, the management is of the view that the company has good case on merits & no further liability is anticipated in above cases.)

(b) Some of the retrenched employees of Export Oriented Unit (EOU) of the erstwhile Timber Division have not accepted the retrenchment compensation offered by the company on the closure of the unit and matter is in the court. The amount as offered by the company has been duly provided for and as per legal opinion the possibility of any further liability is remote. The additional liability if any is presently not ascertainable.

(c) Some of the employees of Chemical Division at Ambernath have not accepted the relocation to Dahej Plant and have also not accepted Voluntary Separation Scheme offered by the Company. These employees have approached Thane Labour Court in the matter. However the Company has provided for the dues payable to them as per Voluntary Separation Scheme amounting to Rs. 89.54 Lacs.

(3) Arrears of Cumulative Preference Divided 55.04 -

The Company has reviewed all its pending litigations and proceedings and has-adequately provided for where provisions are required and disclosed the contingent liabilities where applicable. The Company does not expect the outcome of these proceedings to have materially adverse effect.

8. Segment Reporting

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organization structure and internal reporting system.

(ii) The company ‘s operations predominantly relate to manufacture of Boron Based Chemicals and Wind Power Generation.

(iii) The Company caters mainly to the need of domestic market. The export turnover is not significant in the context of total turnover. As such, there are no reportable geographical segments.

(iv) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis.

(v) The expenses , which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

31 Disclosures in respect of Related Parties pursuant to Accounting standard - AS 18 - issued by the Central Government Of India pursuant to Companies (Accounting Standards) Rules 2014 are as follows.

List of Related Parties with whom the Company has entered into transactions during the year.

a) Controlling Companies : There is no controlling Company

b) Subsidiary Company : Borax Moraiji (Europe) GmbH

c) Companies where Control Exists : The Dharamsi Moraiji Chemical Co. Ltd.

: L.P.Gas Equipment Pvt. Ltd.

: Kosan Industries Pvt. Ltd.

: Phoenix Distributors Pvt. Ltd.

: The Natural Gas Co. Pvt. Ltd.

: Jasraj Trading Company

: Bombay Foods Pvt. Ltd.

: L.P.Gas Transport & Bottling Co. P. Ltd.

: Gocul Gas Pvt.Ltd. *

: Autogas Conversion (India) Pvt. Ltd.

: B.S.and Services Private Ltd.

: Falcon Chemical LLC ..

d) Key Management personnel : Mr. Bimal L.Goculdas, Managing Director

: Mr. Laxmikumar N. Goculdas, Chairman

Mr. Dilip S. Nagle, Company Secretary .

Mr. Shreeram R.Mohite, C.F.O.

e) Relatives of Key Management Personnel & : Mr. Lalit N. Goculdas their enterprises where transactions have Mrs. Radha L. Goculdas taken place . Ms. Mitika L. Goculdas

6. Exceptional items includes (a) amount of Rs..48.99 lacs towards balance amount of insurance claim not granted by Consumer Disputes Redressal Commission, Maharashtra in respect of loss of stock due to flood at Chemical Division Ambernath and (b) 327.84 lacs towards cost incurred on account of Voluntary Separation Scheme resulting from shifting/ relocating the manufacturing facility of chemical division from Ambernath to Dahej

10. Previous year's figures have been regrouped and reclassified wherever considered necessary. Current year figures are for nine months ended on 31st March,2015 therefore not comparable with figures for previous year ended on 30th June,2014 for fifteen months.

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Jun 30, 2014

A Terms/rights attached to shares:

The Company has only one class of Equity Shares having a per of value of Rs. 10 per share. Each holder of Equity Share of the Company is entitled to one vote per share.

In the event of liquidation of the company, the Equity Shareholders will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution to the Equity Shareholders will be in proportion to the number of Equity Shares held by the Shareholder.

Note 1 (a)

Capital Reserves

Capital Reserve represents capital subsidy of Rs. 15 lacs and Rs. 20 lacs received from State Industrial Promotion Corporation of Tamil Nadu Ltd. and Maharashtra Energy Development Agency respectively.

1.1 Details of Securities and Terms of repayment

I. Secured

Term Loans :

(a) Vehicle Loans

Secured by hypothecation on respective vehicles. Rates of interest are 18% & 11.45 %. The loans are repayable in 36 EMIs ending March, 2015.

II. Unsecured Loan:

(a) Fixed Deposits:

Interest on Fixed Deposit for 9.50 % for one year and 10.50 % for three years. (Additional 0.5% interest will be paid on deposits accepted from shareholders of the company)

(b) Loan from Related Parties:

The loan taken from Related parties are interest free loan and repayable after 31st March 2015.

Cash Credit (Note 8 (I))

Cash Credit including Export Packing Credit is secured by hypothecation of stock-in-trade, stores and book debts of Chemical Division at Ambarnath and Dahej, further secured by way of second charge by simple registered mortgage on the land of Chemical Division at Ambarnath, Maharashtra and mortgage on the land at Dahej, Gujarat.

Note 2(b) Other loans and advance includes

(i) Insurance claim of Rs. 64.73 lacs being non-settlement of the Company''s claim by the The New India Assurance Company Limited (NIACL), in respect of loss of stock in the Chemical Division due to fl ood during June 2002. The Consumer Disputes Redressal Commission, Maharashtra State, Mumbai, wherein the Company had fi led the complaint,vide its interim order dated 14th November 2008 while allowing the interim relief , directed NIACL to deposit a sum of Rs. 6.93 lacs with the Commission, which the Company has withdrawn upon furnishing necessary bank guarantee . The Commission''s notice for fi nal hearing of this matter is awaited.

(ii) An amount Rs. 14.22 lacs receivable from The State Trading Corporation of India Ltd. (STC), New Delhi, on account of rate difference and dispatch money earned. The Tis Hazari Court, Delhi, wherein the Company fi led suit against STC for recovery of this amount, has upheld Company''s claim alongwith interest @ 6% per annum from the date of fi ling of the suit. STC has preferred further appeal in the Delhi High Court which is yet to be decided.

(iii) Amount of Rs. 32.35 lacs (Previous Year Rs. 37.84 lacs) paid to Gratuity Trust.

3 Contingent Liabilities not provided for:

Fifteen Months Year Ended Ended 31.03.2013 30th June 2014 < in Lacs Rs. in Lacs

(1) Bank Guarantees Outstanding 49.68 39.90

(2) Claims against the Company not acknowledged as debt:

(a) Tax Demands under appeal:

i) Excise Duty demanded by Commissioner of Central Excise 12.65 12.65

ii) Custom Duty levied by Collector of Customs * 44.60 44.60

* (The Company has prefered an appeal with CESTAT against the above demand in respect of validity of DEPB licenses. The Company has also deposited an amount of Rs. 28,00,000/- shown as recoverable "Loans & Advances" & has furnished bank guarantee for the balance of demand.)

iv) Excise Duty demanded by Commissioner of Central Excise, Thane-I** - 309.97

** (The Company has prefered an appeal with CESTAT against the above demand and unconditional stay on the demand has also been granted by the CESTAT. In the current year, the Company has received an award in its favour)

(b) Others - 7.69

(c) Some of the retrenched employees of Export Oriented Unit (EOU) of the erstwhile Timber Division have not accepted the retrenchment compensation offered by the Company on the closure of the unit and matter is in the court. The amount as offered by the Company has been duly provided for and as per legal opinion the possibility of any further liability is remote. The additional liability if any is presently not ascertainable.

4 Segment Reporting

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identifi ed taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

(ii) The company''s operations predominantly relate to manufacture of Boron Based Chemicals and Wind Power Generation.

(iii) The Company caters mainly to the need of domestic market. The export turnover is not signifi cant in the context of total turnover. As such, there are no reportable geographical segments.

(iv) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifi able to each of the segments as also amounts allocated on a reasonable basis.

(v) The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

(vi) Inter Segment transfer pricing policy is at ex-work price.

5 Related Party disclosures for fi fteen months ended 30th June, 2014

(1) Relationships:

a) Subsidiary Company : Borax Morarji (Europe) GmbH

b) Companies where Control Exists : The Dharamsi Morarji Chemical Co.Ltd.

: L.P.Gas Equipment Pvt. Ltd.

: Kosan Industries Pvt. Ltd.

: Phoenix Distributors Pvt. Ltd.

: The Natural Gas Co.Pvt. Ltd.

: Jasraj Trading Company

: Bombay Foods Pvt. Ltd.

: L.P.Gas Transport & Bottling Co.P.Ltd.

: Gocul Gas Pvt.Ltd.

: Autogas Conversion (India) Pvt.Ltd.

: B.S.and Services Private Ltd.

: Falcon Chemical LLC

c) Key Management personnel : Mr. Bimal L.Goculdas, Managing Director

: Mr. Laxmikumar N. Goculdas,Chairman

d) Relatives of Key Management Personnel & their enterprises : Mr. Lalit N. Goculdas where transactions have taken place Mrs. Radha L. Goculdas

Ms. Mitika L. Goculdas

* Inter-corporate deposit amounting to Rs. 201 lacs received from two of the entities mentioned in 1(b) above has been transferred to loans from key management personnel during the year.

** During the fi fteen month ended, 8% cumulative preference shares were allotted out of the balances of outstanding loans amounting to Rs. 900 lacs.

Note: Related party relationships are as identifi ed by the Company, relied upon by the Auditors.

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Mar 31, 2013

1 Segment Reporting

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

(ii) The company''s operations predominantly relate to manufacture of Boron Based Chemicals and Wind Power Generation.

(iii) The Company caters mainly to the need of domestic market. The export turnover is not significant in the context of total turnover. As such, there are no reportable geographical segments.

(iv) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis.

(v) The expenses , which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

2 Figures in brackets are in respect of previous year.

3 Previous Year''s figures have been regrouped and recast where necessary.

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Mar 31, 2012

1 Segment Reporting

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature to the products, the differing risks and returns, the organisation structure and internal reporting system.

(ii) The company is operations predominantly relate to manufacture of Boron Based Chemicals and Wind Power Generation.

(Hi) The Company caters mainly to the need of domestic market. The export turnover is not significant in the context of total turnover. As such, there are no reportable geographical segments.

(iv) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis.

(v) The expenses , which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

(vi) Inter Segment transfer pricing policy is at ex-work price.

2 Figures in brackets are in respect of previous year.

3 Previous Year's figures have been regrouped and recast where necessary.

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Mar 31, 2010

2009-10, 2008-09 Rupees Rupees

1. Contingent Liabilities not provided for:

(1) Bank Guarantees Outstanding 31,67,558 25,65,206

(2) Claims against the Company not acknowledged as debt:

(a) Tax Demands under appeal (i) Service tax demand by Assistant Commissioner of Service Tax 5,34,452 5,34,452

(ii) Excise Duty demanded by Commissioner of Central Excise 12,64,822 12,64,822 (iii) Custom Duty demanded by Assistant Commissioner of Customs 18,22,127 18,22,127

(b) Others 7,68,812 7,68,812

(c) Some of the retrenched employees of Export Oriented Unit (EOU) of the erstwhile Timber Division have not accepted the retrenchment compensation offered by the Company on the closure of the unit and matter is in the court. The amount as offered by the Company has been duly provided for and as per legal opinion the possibility of any further liability is remote. The additional liability if any is presently not ascertainable.

2. Other Deposits include an amount of Rs. 28,00,000/- which has been deposited by the Company in the High Court, Mumbai, pursuant to the court order arising out of disputes between the Company and the Commissioner of Customs (Exports), Mumbai, with regard to the validity of DEPB licenses purchased by the Company from the market for imports of its raw materials. During the year the division bench of the Customs, Excise and Service Tax Appellate Tribunal (WZB) heard the case and has set aside the Commissioners order. The matter has been remanded back to the Commissioner to decide the issue of limitation. The Management considers the amount of deposit as fully recoverable.

3. Advances Recoverable in cash or in kind includes:

(a) an amount of Rs. 36,88,280/- on account of expenses towards proposed Right Issue expenses. The same will be charged off against Securities Premium as and when the issue is actually made;

(b) an amount of Rs. 14,21,830/- receivable from the State Trading Corporation of India Ltd. (STC), New Delhi, on account of rate difference and dispatch money earned. The Tis Hazari Court, Delhi, wherein the Company filed suit against STC for recovery of this amount, has upheld Companys claim abngwith interest @6% per annum from the date of filing of the suit. STC has preferred further appeal in the Delhi High Court which is yet to be decided;

(c) Insurance claim of Rs. 71,65,255/- being non-settlement of the Companys claim by the The New India Assurance Company Limited (NIACL), in respect of loss of stock in the Chemical Division due to flood during June 2002. The Consumer Disputes Redressal Commission, Maharashtra State, Mumbai, wherein the Company had filed the complaint, vide its interim order dated 14th November, 2008 while allowing the interim relief, directed NIACL to deposit a sum of Rs. 6,92,558/- with the Commission, which the Company has withdrawn upon furnishing necessary bank guarantee. The Commissions notice for final hearing of this matter is awaited.

4. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 30 days at the Balance Sheet date, computed on unit wise basis. Further, no interest has been paid or is payable to any Micro, Small and Medium Enterprise on the Balance Sheet date. The above information and that given in "Sundry Liabilities - Schedule G" regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. Capital Reserve represents capital subsidy of Rs. 15,00,000/- and Rs. 10,00,000/- received from State Industrial Promotion Corporation of Tamil Nadu Ltd. and Maharashtra Energy Development Agency respectively.

6. Companys long term investment in Dharamsi Morarji Chemical Co. Ltd. (DMCC) represented by 2,34,196 fully paid up Equity Shares is considered at face value after making provision for diminution of Rs. 1,52,06,378/- in the year 2007-08. Taking into account, intrinsic business value of the DMCC and its business synergies to the Company no further diminution in value is considered necessary,

7. The Company in terms of its Board Resolution dated 9th July, 2007 had decided to discontinue the operations of its Timber Division at Shenbagaraman Puthur, Kanyakumari District, Tamil Nadu State. Pursuant to this, the assets of the Timber Division have been sold on 28th August, 2009 for a total consideration of Rs. 3,61,00,000/-. The profit of Rs. 1,38,91,169/- resulting from this sale has been included under the head "Other Income" in the Profit and Loss account.

8. Freehold land consists of agricultural land at Ratnagiri, Maharashtra amounting to Rs. 40,64,166/- purchased by the Company for conducting research on use of its products in improving the agricultural yields. Because of the restrictions for Corporates to purchase the agricultural land directly, the same has been purchased in the name of two of its Directors. Formalities for transfer of the land in the Companys name have been taken up with the Registrar, Ratnangiri.

9. Segment Reporting

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of the products, the differing risks and returns, the organisation structure and internal reporting system.

(ii) The Companys operations predominantly relate to manufacture of Boron Based Chemicals and Wind Power Generation. Other business segment viz. Timber Division reported earlier as discontinuing operation, was disposed off on 28th August, 2009.

(iii) The Company caters mainly to the need of domestic market. The export turnover is not significant in the context of total turnover. As such, there are no reportable geographical segments.

(iv) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis.

(v) The expenses, which are not directly attributable to the business segment, are shown as unallocated corporate cost. Assets and Liabilities that cannot be allocated between the segments are shown as a part of unallocated corporate assets and liabilities respectively.

(vi) Inter Segment transfer pricing policy is at ex-work price.

10. Related Party disclosures for year ended 31st March, 2010

(1) Relationships:

(a) Subsidiary Company

Borax Morarji (Europe) GMBH

(b) Companies where Control Exists

The Dharamsi Morarji Chemical Co. Ltd.

DMCC Oil Terminals (Navlakhi) Ltd.

L. R Gas Equipment Pvt. Ltd.

Kosan Industries Pvt. Ltd.

Phoenix Distributors Pvt. Ltd.

The Natural Gas Co. Pvt. Ltd.

Jasraj Trading Company

Bombay Foods Pvt. Ltd.

L. P. Gas Transport & Bottling Co. P. Ltd

(c) Key Management personnel

Mr. H. T. Kapadia, Chief Executive Officer (C E O) Mr. R. M. Goculdas, Chairman (till 09-11-2009) Mr. L. N. Goculdas, Chairman (from 10-11-2009)

(d) Relatives of Key Management Personnel & their enterprises where transactions have taken place

Mrs. Kanta H. Kapadia (Wife) (Wife of C E O)

11. Figures in brackets are in respect of previous year.

12. Previous Years figures have been regrouped and recast where necessary.