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Notes to Accounts of DCW Ltd.

Mar 31, 2016

"Money received against Share Warrants:

13,06,000 convertible warrants out of 26,12,000 have been issued & allotted to promoters during the year. The Warrants are convertible into Equity Shares in one or more tranches within 18 months from the date of their allotment. Each Warrant will be convertible into 1 (one) Equity Share of par value of Rs.2 each at an issue price of Rs.23 per equity share (including premium of Rs. 21 per equity share). 25% of the issue price of the Warrants will be paid on the date of allotment of the Warrants. The balance 75% of the issue price of the Warrants is payable at the time of allotment of the Equity Shares and non-payment would entail in forfeiture of the amount paid."

LOANS - Security : Banks/ Institutions

Term Loans and External Commercial Barrowings from Banks and Institutions are secured by a pari-passu first charge by way of hypothecation of movable fixed assets of the Company, including movable machinery spares, stores and further secured by mortgage on all the immovable properties of the Company situated in the states of Tamilnadu and Gujarat on first pari passu charge basis and second charge on Current Assets.

LOANS - Security Working Capital

Loans from Banks Working Capital facilities are secured by a first charge by way of hypothecation and/or pledge of current assets, namely, stocks of materials, semi-finished and finished goods, consumable stores and spares including machinery spares not capitalized, bills receivable and book debts and further secured by a second charge by way of hypothecation over all of movable plant and machinery and by way of mortgage by deposit of title deeds over the immovable properties, both present and future, such mortgage to rank second to the mortgages created/to be created in favour of term loan lenders viz., Banks / Financial Institution.

Notes11

1 The Depreciation charge on the assets revalued on 31.03.1993 is more by Rs. 27.52 Lacs ( Previous year Rs. 46.18 Lacs) than the depreciation charge thereon under Companies Act, 201 3 and the same is met by drawing from Revaluation Reserve.

2 The Company opted for accounting foreign exchange difference on realignment of long term foreign currency loan related to acquisition of depreciable capital assets, as per AS 11 amended by the Companies (Accounting Standard ) Amendment Rules 2009. Accordingly exchange difference of Rs. 51.37 Lacs (Previous Year Rs. 116.92 Lacs) relating to current year has been added to the cost of fixed assets and depreciation had been charged to Profit & Loss Account.

3 Building includes Rs. 523.06 Lacs being cost of ownership flats and office accommodation in Co-operative Societies and a Limited Company against which the company holds shares of the face value of Rs. 0.77 Lacs in Co-operative Societies and the Limited Company.

4 Assignment deeds in respect of 9.13 acres of land at Caustic Soda Division, transferred by Central Government to the State Government, are yet to be executed by the State Government in favour of the Company.

5 Land, Building and Plant & Machinery located at Sahupuram Works (other than PVC Division) were revalued on 31 st March 1993.

6 The Company exercised the option to purchase 793.39 acres of land leased by the State Government at Sahupuram works. Assignment deeds in respect of the said land is yet to be executed by the State Government in favour of the Company.

7 Encroachers have occupied some portion of the land belonging to the company atSahupuram. Efforts are being made to evict them.

8 Previous Period figures have been regrouped/rearranged to match with the current year.

NOTE NO 9: Commitments

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 9,086 lacs (previous year Rs. 13,972 lacs).

b) In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2016 amount to Rs. 35.90 lacs (previous year Rs. 42.10 lacs).

c) The Company has given an undertaking for the purposes of obtaining 100% Export Oriented Unit status that it would export Synthetic Iron Oxide Pigment and Calcium Chloride to the extent of USD 121000 (Rs.80,223 lacs) by 20th May 2020. The Company has exported Rs 339.78 lacs of Synthetic Iron Oxide Pigment till 31st March, 2016.

d) The company does not have any other commitments.

NOTE NO. 10:

a) Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

b) Assets and liabilities are classified as current and non-current based on the terms of the contract where available and based on the judgment of the management in other cases.

c) Confirmation of balances from some of the Debtors and Creditors, have not been received.

d) In the opinion of the management, current assets, long term loans and advances and other noncurrent assets have a realizable value in ordinary course of business at least equal to the amounts at which they are stated in the balance sheet.

e) Other Long Term Liabilities represents security deposits received towards sale of CPVC.

NOTE NO. 11:

Sales Tax Assessments of Dhrangadhra Unit are pending for 1994-95, 1995-96, 1997-98, 2004-05, 2005-06 and 2011-12 to 2014-15. In respect of Sahupuram Unit Central Sales Tax Assessments and Tamil Nadu General Sales tax assessment are completed up to 2010-11.

NOTE NO. 35:

Financial Derivative Instruments

a. Derivative contracts entered into by the Company and outstanding as on 31st March, 2016 for Hedging currency and interest related risks

Nominal amount of derivative contracts entered by the company and outstanding as on 31st March, 2016 amount to US$ NIL. (Previous year US$ 3.61 mn.) Category wise break up is given below:

b. Foreign Currency payables and receivables that are not hedged by derivative instruments as on 31st March, 2016, amount to US$ 40.72 mn. (Previous year US$ 40.44 mn.)

c. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

NOTE NO. 12:

a. Based on the report of a chartered engineer, the Company is of the view that the Company does not have significant component whose useful life is different from the useful life of the main asset.

b. During the year the Company has changed the accounting policy with regard to export benefits such as MEIS LICENCE from receipt basis to accrual basis. This change has resulted in increase in the profit for the year by Rs. 45 lacs with corresponding increase in the Reserves & Surplus.

NOTE NO. 13:

a. The Company has during the year capitalized Calcium Chloride plant at Soda Ash division.

b. The Company has commenced commercial production in the Synthetic Iron Oxide Pigment (SIOP) Plant during the year and obtained Letter of Permission which is valid up to 20.05.2020 from the Government of India, Ministry of Commerce and Industry for manufacture and export of Synthetic Iron Oxide Pigment and Calcium Chloride under 100% EOU Scheme. The Company has started producing Calcium Chloride at SIOP Plant from May 2016.

NOTE NO. 14:

a. The Tamil Nadu Government vide Government order dated 23-09-1996 issued under TamilNadu Electricity (Taxation & Consumption) Act, 1961, exempted specified industries (including the industry in which the company operates) permanently from payment of Electricity Tax on consumption of power generated captively. The Supreme Court vide order dated 15th May, 2007 held that the withdrawal of the permanent exemption by the Act of 2003 was invalid. In November, 2007 the TamilNadu government passed the TamilNadu tax on consumption or Sale of Electricity (Amendment) Act, amending the Act of 2003 to invalidate the permanent exemption granted with retrospective effect. The writ petition filed by the company against this amendment has been dismissed by the Madras High Court. The SLP filed by the company against the High Court Order has been admitted by the Supreme Court.

The Electrical Inspectorate, Government of Tamil Nadu''s vide letter dated 2nd September 2014 informed the Company that the electricity tax exemption would not be applicable to the Company and demanded Electricity Tax of Rs.2026.72 lacs and interest of Rs.1541.98 lacs for the period 2003 to 2012.The Company has filed writ petition before the Hon''ble High Court of Judicature at Madras and has also obtained interim stay of the said demand vide Order dated 22nd September, 2014 on payment of Rs.640 lacs towards pre-deposit.

The Special Leave Application filed before the Hon''ble Supreme Court and the writ petition filed before the Hon''ble Madras High Court are pending for adjudication.

The company has been legally advised and is hopeful of favorable outcome before the Supreme Court on the invalidity of and the retrospective application of the Amending Act of 2003 and in the writ petition filed before the Hon''ble Madras High Court. An amount of Rs.422.69 lacs has been provided on a prudent basis in the earlier financial year. No provision is considered necessary by the management for the balance electricity tax demand and has been disclosed as contingent liability.

b. In the matter of leasehold land in respect of the salt works at Kuda, Dhrangadhra, the Honourable Supreme Court has admitted the SLP filed by the Company against the Order of the Gujarat High Court upholding that the lease of the aforesaid land is not permanent and hence is terminable. The Company is confident of succeeding in the Supreme Court.

c. The Commissioners of Customs, Tuticorin and Kandla during the year issued Order rejecting the classification of coal imported by the company during the year 2011 and 2012 as Steam Coal and reclassified the same as Bituminous Coal and demanded differential duty of Rs.1311.31 lacs along with applicable interest of Rs.341.34 lacs and imposed penalty of Rs.1309 lacs. The Company has filed appeal with CESTAT against the said Orders. The appeal is pending with CESTAT. The Company has been legally advised that it has a fair chance of winning the case before CESTAT. Accordingly no provision has been made in the accounts and has been disclosed as contingent liability.

d. In the matter of custom duty on imported Calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs.41.48 lacs, to the extent of Rs.17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

e. In the matter of Export Duty on Upgraded Benefited Limonite classification dispute, the Company has given an undertaking to remit the disputed duty in case; the dispute is decided against the Company by the highest judicial forum. As at 31st March 2016 the duty liability is Rs.1971.01 Lacs. Since the Company has got the favorable order from the adjudicating authority in some other shipments made by the Company, relating to the same period, the possibility of outflow of resources in this matter is considered remote.

f. In the matter of disputed demand of Rs.443.40 lacs consequent to revision in the lease rent rates fixed by the Tariff Authority for Major Ports (TAMP) from 2006 to 2016 in respect of the port lands taken on lease by the Company from the V. O. Chidambaranar Port Trust, the Company has obtained interim stay from the Honourable High Court of Judicature at Madras vide order dated 01.08.2014. Accordingly no provision is considered necessary by the Management for the same and has been disclosed as Contingent Liability.

NOTE NO. 15:

Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits"

a. Effective 1st April''07, the company has adopted Accounting Standard 15 (revised 2005) "Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

b. Defined Contribution Plans:

NOTE NO. 16:

Expenditure incurred on Corporate Social Responsibility (CSR) activities:

(a) Gross amount required to be spent during the year is Rs. 142.00 Lacs

(b) Amount spent during the year:

NOTE NO. 17:

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2015

A) 2,36,10,000 Shares were issued and allotted on preferential basis to the promoter of the company and FII''s during 2007-2008

b) 1,36,36,363 & 37,03,361 Shares were issued and allotted to the promoters on conversion of warrants issued on preferential basis to promoters group during 2011-2012 & 2014-2015 respectively.

c) Name of Share Holders holding more than 5% shares

LOANS - Security : Banks/ Institutions

Term Loans and External Commercial Barrowings from Banks and Institutions are secured by a pari-passu first charge by way of hypothecation of movable fixed assets of the Company, including movable machinery spares, stores and further secured by mortgage on all the immovable properties of the Company situated in the states of Tamilnadu and Gujarat on first pari passu charge basis and second charge on Current Assets.

Institutions:

The term loans from IREDA is secured by first charge on moveable properties and assets pertaining to windmill assets in the state of Rajasthan on specific charge basis.

NBFC:

Term loan from NBFC are secured by creation of charge on all the assets purchased under the loan.

Working Capital

Loans from Banks Working Capital facilities are secured by a first charge by way of hypothecation and/or pledge of current assets, namely, stocks of materials, semi-finished and finished goods, consumable stores and spares including machinery spares not capitalized, bills receivable and book debts and further secured by a second charge by way of hypothecation over all of movable plant and machinery and by way of mortgage by deposit of title deeds over the immovable properties, both present and future, such mortgage to rank second to the mortgages created/to be created in favour of term loan lenders viz., Banks / Financial Institution.

NOTE "2"

A. CONTINGENT LIABILITIES NOT PROVIDED FOR:

1 Disputed Sales Tax Demands 3,271.89 4,100.39

2 Disputed Excise/Service Tax Demands 635.61 488.15

3 Disputed Customs Demands 3,121.26 321.18

4 Company''s contribution to ESI not made pursuant to petitions for

exemption pending before High Court. 156.57 187.01

5 Lease Rent, Local Cess, Octroi, Interest on Octroi

Surcharge, Stamp Duty, Water and Electricity duty 8,472.34 4,797.97

6 Disputed Industrial relations matters 521.96 523.96

B. Claims not acknowledged as debts: - -

Total 16,179.63 10,418.66

C. GUARANTEE AS A MEMBER OF THE ALKALI MFG.

ASSN. ( A Company Limited by Guarantee) Rs 500 Rs 500

NOTE NO 3:

Commitments

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 13,972 lacs (previous year Rs. 15,213 lacs).

b) In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2015 amount to Rs. 42.10 lacs (previous year Rs. 60.44 lacs).

c) The company does not have any other commitments.

NOTE NO. 32:

a) Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

b) Assets and liabilities are classified as current and non-current based on the terms of the contract where available and based on the judgment of the management in other cases.

c) Confirmation of balances from some of the Debtors and Creditors, have not been received.

d) In the opinion of the management, current assets, long term loans and advances and other noncurrent assets have a realizable value in ordinary course of business at least equal to the amounts at which they are stated in the balance sheet.

e) Other Long Term Liabilities represents security deposits towards sale of CPVC.

NOTE NO. 4:

RELATED PARTY INFORMATION.

(I) Relationships:

(a) The related parties where control exists

Note:

Related party relationships on the basis of the requirements of Accounting Standard (AS) - 18 disclosed above is as identified by the company and relied upon by the auditors.

Sales Tax Assessments of Dhrangadhra Unit are pending for 1994-95, 1995-96, 1997-98, 2004-05, 2005-06 and 2010-11 to 2012-13. In respect of Sahupuram Unit Central Sales Tax Assessments and Tamil Nadu General Sales tax assessment are completed up to 2010-11.

NOTE NO. 5:

Financial Derivative Instruments

a. Derivative contracts entered into by the Company and outstanding as on 31st March, 2015 for Hedging currency and interest related risks

Nominal amount of derivative contracts entered by the company and outstanding as on 31st March, 2015 amount to US$ 3.61 mn. (Previous year US$ 7.61 mn.) Category wise break up is given below:

b. Foreign Currency payables and receivables that are not hedged by derivative instruments as on 31st March, 2015, amount to US$ 40.44 mn. (Previous year US$ 41.63 mn.)

c. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

During the year ended 31st March, 2015, the company has reassessed the remaining useful lives of fixed assets with effect from 1st April 2014 in accordance with Part A of Schedule II to the Companies Act, 2013. As a result of the same, depreciation for the year is lower by Rs. 891.67 lacs. For assets that had completed their useful lives as at 1st April 2014, the net residual value of Rs. 704.38 lacs has been adjusted to Statement of Profit and Loss.

NOTE NO. 6:

a. Since the equipments meant for Calcium Chloride plant at Soda Ash division are capable of being used for manufacture of salt, the expenditure incurred on the same is shown under Capital Work in Progress.

b. The work on Synthetic Iron Oxide Pigment (SIOP) Project has been completed and commercial production has started with effect from May 2015. The company has also filed the declaration of commercial production with the EOU authorities. Hence the expenditure incurred on the project including interest, trial run expenditure less sale of products manufactured during the trial run, administration expenditure relating to the construction of the project etc., has been shown under Capital Work in Progress.

NOTE NO. 7:

a) The Tamil Nadu Government vide Government order dated 23-09-1996 issued under TamilNadu Electricity (Taxation & Consumption) Act, 1961, exempted specified industries (including the industry in which the company operates) permanently from payment of Electricity Tax on consumption of power generated captively. The Supreme Court vide order dated 15th May, 2007 held that the withdrawal of the permanent exemption by the Act of 2003 was invalid. In November, 2007 the TamilNadu government passed the TamilNadu tax on consumption or Sale of Electricity (Amendment) Act, amending the Act of 2003 to invalidate the permanent exemption granted with retrospective effect. The writ petition filed by the company against this amendment has been dismissed by the Madras High Court. The SLP filed by the company against the High Court Order has been admitted by the Supreme Court.

The Electrical Inspectorate, Government of Tamil Nadu''s vide letter dated 2nd September 2014 informed the Company that the electricity tax exemption would not be applicable to the Company and demanded electricity tax of Rs.2026.72 lacs and interest of Rs.1541.98 lacs for the period 2003 to 2012.The Company has filed writ petition before the Hon''ble High Court of Judicature at Madras and has also obtained interim stay of the said demand vide Order dated 22nd September, 2014 on payment of Rs.640 lacs towards pre-deposit.

The Special Leave Application filed before the Hon''ble Supreme Court and the writ petition filed before the Hon''ble Madras High Court are pending for adjudication.

The company has been legally advised and is hopeful of favourable outcome before the Supreme Court on the invalidity of and the retrospective application of the Amending Act of 2003 and in the writ petition filed before the Hon''ble Madras High Court. An amount of Rs.422.69 lacs has been provided on a prudent basis. No provision is considered necessary by the management for the balance electricity tax demand and has been disclosed as contingent liability.

b) In the matter of leasehold land in respect of the salt works at Kuda, Dhrangadhra, the Honourable Supreme Court has admitted the SLP filed by the Company against the Order of the Gujarat High Court upholding that the lease of the aforesaid land is not permanent and hence is terminable. The Company is confident of succeeding in the Supreme Court.

c) The Commissioners of Customs, Tuticorin and Kandla during the year issued Order rejecting the classification of coal imported by the company during the year 2011 and 2012 as Steam Coal and reclassified the same as Bituminous Coal and demanded differential duty of Rs.1311.31 lacs along with applicable interest of Rs.341.34 lacs and imposed penalty of Rs.1309 lacs. The Company has filed appeal with CESTAT against the said Orders. The appeal is pending with CESTAT. The Company has been legally advised that it has a fair chance of winning the case before CESTAT. Accordingly no provision has been made in the accounts and has been disclosed as contingent liability.

d) In the matter of custom duty on imported calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs.41.48 lacs, to the extent of Rs.17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

e) In the matter of Export duty on Upgraded Benefited Ilmenite classification dispute, the Company has given an undertaking to remit the disputed duty in case, the dispute is decided against the Company by the highest judicial forum. As at 31st March 2015 the duty liability is Rs.1553.50 Lacs. Since the Company has got the favourable order from the adjudicating authority in some other shipments made by the Company, relating to the same period, the possibility of outflow of resources in this matter is considered remote.

NOTE NO. 8:

The details of amounts outstanding to Micro, Small and Medium Enterprises based on information available with the Company is as under:

NOTE NO. 9:

Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits"

a. Effective 1st April''07, the company has adopted Accounting Standard 15 (revised 2005) "Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

b. Defined Contribution Plans:

The Company has recognized the following amounts in the Profit & Loss Account which are included under contribution to Provident Fund and Other Funds:

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest of at the rate declared on Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company.

NOTE NO. 10 :

Expenditure incurred on Corporate Social Responsibility (CSR) activities is Rs. 63.60 lacs. NOTE NO. 45 :

Previous year figure are regrouped to match current year grouping

Note 1: Significant Accounting Policies and Practices

1 The Company is yet to commence its commercial operations. Considering no immediate future business plans the financial statements are not prepared on a going concern basis and accordingly, Current assets and Current liabilities are stated at the values at which they are realizable / payable. In view of the above, the statement of profit and loss and Cash Flow statement has not been prepared. The Company had net cash outflow of Rs. 0.54 lac during the year, being the decrease in balance with bank at the year end compared with the balance at the beginning of the year.

2 Expenses incurred during the year are shown under the head "Other Non-Current Assets" in the Balance Sheet.

3 Since the Company has not commenced its commercial operations and there are no Fixed Asstes, other clauses are not applicable.

4 Related party relationships on the basis of the requirements of Accounting Standard (AS) - 18 is as identified by the company and relied upon by the auditors.

Name of the related parties Nature of relationship

DCW Limited Holding company

Sahu Brothers Pvt. Ltd., Entities in which key management personnel

Jain Sahu Brothers Properties Pvt. Ltd., and / or their relatives have significant influence.

Dhrangadhra Trading Company Pvt. Ltd.,

5 Previous years figures have been regrouped wherever necessary.


Mar 31, 2014

NOTE NO. 1: Commitments

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 15,213 lacs (previous year Rs. 28,594 lacs).

b) In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2014 amount to Rs. 60.44 lacs (previous year Rs. 58.64 lacs).

c) The company does not have any other commitments.

NOTE NO. 2:

a) Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

b) Assets and liabilities are classified as current and non–current based on the terms of the contract where available and based on the judgment of the management in other cases.

c) Confirmation of balances from some of the Debtors and Creditors, have not been received.

d) In the opinion of the management, current assets, long term loans and advances and other non–current assets have a realizable value in ordinary course of business at least equal to the amounts at which they are stated in the balance sheet.

NOTE NO. 3:

RELATED PARTY INFORMATION.

(i) Relationships:

(a) The related parties where control exists

Name of the related parties

DCW Pigments Ltd

Double Dot Finance Ltd.

Crescent Finstock Ltd.

Sahu Brothers Pvt. Ltd.

Jain Sahu Brothers Properties Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Crescent Holdings Pvt. Ltd.

Nature of relationship

Subsidiary

Entities in which key

management personnel & / or

their relatives have significant

influence

(b) Key Management Personnel

Shri Pramod Kumar Jain Chairman & Managing Director

Shri Bakul Jain Managing Director

Shri Vivek Jain Managing Director

Shri Mudit Jain Managing Director

Shri Ashish Jain Sr. President

Smt. Paulomi Jain President

Smt. Malti Jain President

Shri Saatvik Jain President

Note:

Related party relationships on the basis of the requirements of Accounting Standard (AS) – 18 disclosed above is as identified by the company and relied upon by the auditors

NOTE NO. 4:

Sales Tax Assessments of Dhrangadhra Unit are pending for 1994–95, 1995–96, 1997–98, 2004–05, 2005–06 and 2010–11 to 2012–13 (except for 1996–97, 1998–99 to 2003–04 and 2006–07 to 2009-10 which have been completed). In respect of Sahupuram Unit Central Sales Tax Assessments and Tamil Nadu General Sales tax assessment are completed up to 2009–10.

NOTE NO. 5:

Financial Derivative Instruments

a. Derivative contracts entered into by the Company and outstanding as on 31st March, 2014. For Hedging currency and interest related risk

Nominal amount of derivative contracts entered by the company and outstanding as on 31st March, 2014 amount to US$ 7.61 mn. (Previous year US$ 10.98 mn.) Category wise break up is given below:

b. Foreign Currency payables that are not hedged by derivative instruments as on 31st March, 2014, amount to US$ 41.63 mn. (Previous year US$ 36.88 mn.)

NOTE NO. 6:

In the matter of custom duty on imported calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

NOTE NO. 7:

Capital expenditure on Calcium Chloride plant at Soda Ash division are being held under capital work in progress, since management intends to use the same in the Soda Ash unit in due course as indicated in Para 6 of the Directors Report.

NOTE NO. 8

a. The Tamil Nadu Government vide Government order dated 23-09-1996 issued under Tamil Nadu Electricity (Taxation & Consumption) Act, 1961, exempted specified industries (including the industry in which the company operates) permanently from payment of electricity tax on consumption of power generated captively. The Supreme Court vide order dated 15th May, 2007 held that the withdrawal of the permanent exemption by the Act of 2003 was invalid. In November, 2007 the Tamil Nadu government passed the Tamil Nadu tax on consumption or Sale of Electricity (Amendment) Act, amending the Act of 2003 to invalidate the permanent exemption granted with retrospective effect.

b. The writ petitions filed by the company against this amendment having been dismissed by the Madras High Court, the company has filed an SLP before the Supreme Court challenging the High Court order. The company has been legally advised and is hopeful of favourable outcome before the Supreme Court on the invalidity of and the retrospectively of the Amending Act of 2003. Accordingly no provision is considered necessary by the management for electricity tax relating to the period up to June 2012 aggregating Rs. 1165.08 crs. For subsequent periods provision for the liability has been made in the accounts.

c. In the matter of leasehold land in respect of the salt works at Kuda, Dhrangadhra, the Honourable Supreme Court has admitted the SLP filed by the Company against the Order of the Gujarat High Court upholding that the lease of the aforesaid land is not permanent and hence is terminable. The Company is confident of succeeding in the Supreme Court.

NOTE NO. 9:

The details of amounts outstanding to Micro, Small and Medium Enterprises based on information available with the Company is as under:

NOTE NO. 10:

Disclosure pursuant to Accounting Standard – 15 (Revised) "Employee Benefits"

a. Effective 1st April''07, the company has adopted Accounting Standard 15 (revised 2005) "Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

b. Defined Contribution Plans:

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared on Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company

1. Name of Subsidiary DCW Pigments Limited

2. Financial year ended

31st March 2014

3. Holding Company''s Interest: Equity Capital:

Number of Shares of Rs. 10/- each 50,000

Extent of Holding 100%

4. The net aggregate of Profit/(Loss) of the Subsidiary Company

in so far as it concerns the members of the Holding Company :

(a) Not dealt with in the accounts of the Company for the year ended 31st March, 2014:

(1) For the Subsidiary''s financial year ended as in two above

(2) For the previous financial years of the Subsidiary

(1) For the Subsidiary''s financial year ended as in 2 above

(2) For the previous financial years of the Subsidiary


Mar 31, 2013

NOTE NO. 1 : Commitments

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 28,594 lacs (previous year Rs. 32,998.53 lacs).

b) In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2013 amount to Rs. 58.64 lacs (previous year Rs. 55.28 lacs).

c) The company does not have any other commitments.

NOTE NO. 2 :

a) Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

b) Assets and liabilities are classified as current and non–current based on the terms of the contract where available and based on the judgement of the management in other cases.

c) Confirmation of balances from some of the Debtors and Creditors, have not been received.

d) In the opinion of the management, current assets, long term loans and advances and other non–current assets have a realizable value in ordinary course of business at least equal to the amounts at which they are stated in the balance sheet.

NOTE NO. 3 :

RELATED PARTY INFORMATION :

(i) Relationships:

(a) Subsidiary Companies

DCW Pigments Ltd.

(b) Where control exists

Double Dot Finance Ltd.

Crescent Finstock Ltd.

Sahu Brothers Pvt. Ltd.

Jain Sahu Brothers Properties Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Crescent Holdings Pvt. Ltd.

NOTE NO. 4 :

Sales Tax Assessments of Dhrangadhra Unit are pending for 1994–95, 1995–96, 1997–98 and 2004–05, 2005–06 and 2009–10 to 2011–12 (except for 1996–97, 1998–99 to 2003–04 and 2006–07,2007–08 and 2008–09 which have been completed). In respect of Sahupuram Unit Central Sales Tax Assessments and Tamilnadu General Sales tax assessment are completed up to 2008–09.

NOTE NO. 5 :

Financial Derivative Instruments

a. Derivative contracts entered into by the Company and outstanding as on 31st March, 2013. For Hedging currency and interest related risks

Nominal amount of derivative contracts entered by the company and outstanding as on 31st March, 2013 amount to US$ 10.98 mn. (Previous year US$ 15.02 mn.) Category wise break up is given below:

b. Foreign Currency payables that are not hedged by derivative instruments as on 31st March, 2013, amount to US$ 36.88 mn. (Previous year US$ 49.84 mn.)

NOTE NO. 6 :

In the matter of custom duty on imported calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

NOTE NO. 7 :

Capital expenditure on Calcium Chloride plant at Soda Ash division are being held under capital work in progress, since management intends to use the same in the Soda Ash unit in due course as indicated in Para 6 of the Directors Report.

NOTE NO. 8 :

a. The Tamilnadu Government had passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The Honourable Supreme Court has admitted the SLP filed by the Company along with other captive power producers against the order of the Madras High Court upholding the validity of the legislation. The company has been legally advised that the company has a fair chance of succeeding in the Supreme Court and hence, no provision is considered necessary.

b. The Commercial tax officer, Dhrangdhara has raised a demand of Rs 1120.77 lacs under the Central Sales Tax Act, pertaining to the Assessment Year 2008–09 on account of error in the forms obtained from a customer. The company has filed appeal with the appellate authorities and is confident of obtaining the corrected forms from the customer and therefore does not expect any liability on the account.

c. In the matter of leasehold land in respect of the salt works at Kuda, Dhrangadhra, the Honourable Supreme Court has admitted the SLP filed by the Company against the Order of the Gujarat High Court upholding that the lease of the aforesaid land is not permanent and hence is terminable. The Company is confident of succeeding in the Supreme Court.

NOTE NO. 9 :

Disclosure pursuant to Accounting Standard – 15 (Revised) "Employee Benefits"

a. Effective 1st April''07, the company has adopted Accounting Standard 15 (revised 2005) " Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

b. Defined Contribution Plans:

The Company has recognized the following amounts in the Profit & Loss Account which are included under contribution to Provident Fund and Other Funds:

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest of at the rate declared to Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company.

NOTE NO. 10 :

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2012

NOTE NO. 1 :

Commitments

a) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 32998.53 lacs (previous year Rs. 16871.42 lacs).

b) In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2012 amount to Rs. 55.28 lacs (previous year Rs. 74.11 lacs).

c) The company does not have any other commitments.

NOTE NO. 2 :

a) Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

b) Assets and liabilities are classified as current and non–current based on the terms of the contract where available and based on the judgment of the management in other cases.

c) Confirmation of balances from some of the Debtors and Creditors, have not been received.

d) In the opinion of the management, current assets, long term loans and advances and other non–current assets have a realizable value in ordinary course of business at least equal to the amounts at which they are stated in the balance sheet.

NOTE NO. 3 :

RELATED PARTY INFORMATION.

(i) Relationships:

(a) Subsidiary Companies

DCW Pigments Ltd

(b) Where control exists

Double Dot Finance Ltd.

Crescent Finstock Ltd.

Sahu Brothers Pvt. Ltd.

Jain Sahu Brothers Properties Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Crescent Holdings Pvt. Ltd.

Note:

Related party relationships on the basis of the requirements of Accounting Standard (AS) – 18 disclosed above is as identified by the company and relied upon by the auditors.

b. Foreign Currency payables that are not hedged by derivative instruments as on 31st March, 2012, amount to US$ 49.84 mn. (Previous year US$ 43.62 mn.)

NOTE NO. 4 :

In the matter of custom duty on imported calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

NOTE NO. 5 :

Capital expenditure on Solway Towers and Calcium chloride plant at Soda Ash division are being held under capital work in progress since management intends to use the same in the Soda Ash unit in due course as indicated in Para 6 of the Directors Report.

NOTE NO. 6 :

The Tamilnadu Government had passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The company along with other captive power producers had challenged the levy in the Madras High Court, which has upheld the validity of the levy of Electricity Tax. The company along with other captive power producers is proposing to prefer appeals to the Hon. Supreme Court challenging the decision of the Madras High Court and based on the legal opinion no provision is considered necessary.

NOTE NO. 7 :

Disclosure pursuant to Accounting Standard – 15 (Revised) "Employee Benefits"

a. Effective 1st April''07, the company has adopted Accounting Standard 15 (revised 2005) " Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest of at the rate declared to Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Accordingly for the current deficiency estimated at Rs.8 lacs has been provided.

NOTE NO. 8 :

a) Money received against share warrants represents money received against issue of convertible share warrants to the Promoters / Promoter Group on preferential basis during the year.

Note: Since the market price of shares of the Company as at the balance sheet date was less than the price at which the convertible warrants issued on preferential basis to promoters / promoter group are convertible and not converted as at the balance sheet date, the said convertible warrants are not potential dilutive and hence are not considered for calculation of EPS (both Basic and Diluted).

NOTE NO. 9 :

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2011

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 16871.42 lacs (previous year Rs. 2675.04 lacs)

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 23.57 lacs (previous year Rs. 23.54 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 2.11 lacs (previous year Rs. 5.77 lacs) has also been met by drawing from Revaluation Reserve.

3 Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

5. RELATED PARTY INFORMATION. (i) Relationships :

(a) Subsidiary Companies

DCW Pigments Ltd.

(b) Where control exists

Double Dot Finance Ltd.

Crescent Finstock Ltd.

Sahu Brothers Pvt. Ltd.

Jain Sahu Brothers Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Kalpataru Botanical Garden Pvt. Ltd.

Crescent Holdings & Enterprises Pvt. Ltd.

(c) Key Management Personnel

Dr. S. C. Jain Chairman & Managing Director

Shri P. K. Jain Managing Director

Shri Bakul Jain Managing Director

Smt. Vandana Jain Executive Director

Shri Vivek Jain Sr. President

Shri Mudit Jain President

Shri Ashish Jain President

Smt. Paulomi Jain President

NOTE : Related party relationships on the basis of the requirements of Accounting Standard (AS) – 18 disclosed above is as identified by the company and relied upon by the auditors.

6. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

7. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95, 1995-96, 1997-98 and 2004-05, 2005- 06 and 2007-08 to 2009-10 (except for 1996-97, 1998-99 to 2003-04 and 2006-07 which have been completed). Central Sales Tax Assessments and Tamilnadu General Sales tax assessment of Sahupuram Unit are completed upto 2005-06 and 2006-07 resprectively.

8. In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2011 amount to Rs. 74.11 lacs (previous year Rs. 92.95 lacs)

9. The company has opted for accounting foreign currency exchange difference on realignment of long term foreign currency loan related to acquisition of a depreciable capital asset, as per AS-11 amended by Companies (Accounting Standard) Amendment Rules 2009. Accordingly exchange difference of Rs. 51.17 lacs, (previous year Rs. 1164 lacs) relating to current year has been reduced from the cost of fixed assets and depreciation charged to the Profit and Loss Account.

10. The company has entered into option to hedge its exposure on US$ Libor related to its external commercial borrowing aggregating to US$ 20 Mn.

11. Acceptances under current liabilities are disclosed after netting off fixed deposits for Rs. 1459.32 lacs, given as security to the Company''s Bankers for issuing letter of credit. This does not understate the net current assets of the company.

12. In the matter of custom duty on imported calciner, the Hon''ble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed company''s civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Hon''ble Supreme Court in this regard. The case is pending for hearing.

13. Based on Management''s review of the Capital Expenditure on Carbonation Towers and Calcium Chloride plant at Soda Ash plant in 2004-05 & 2006-07 respectively and based on detailed study by technical experts, justifying additions and modifications, the same are being held as capital work in progress.

14. The Tamilnadu Government has passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The company along with other captive power producers has challenged the levy in the Madras High Court, which has admitted the writ-petition.

15. (a) Due to Micro & Small Enterprises include Rs. 10.17 lacs, outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors. (b) The Mirco & Small Enterprises from whom amounts outstanding for more than 30 days are as under :–

1. Chetan Engineering Works.

2. Virendra Vikram Enterprise.

3. Tamilnadu Synthetic Packaging.

16. Due from a company in which Director(s) of the company is director is Rs. 5.64 Lacs (Previous year Rs. 5.64 lacs).

17. Disclosure pursuant to Accounting Standard – 15 (Revised) "Employee Benefits"

a. Effective 1st April, 2007, the company has adopted accounting standard 15 (revised 2005) " Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

18. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2010

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 2675.04 lacs (previous year Rs. 242.59 lacs)

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 23.54 lacs (previous year Rs. 16.79 lacs ) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 5.76 lacs (previous year Rs. NIL) has also been met by drawing from Revaluation Reserve.

3. Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

5. RELATED PARTY INFORMATION:

(I) RELATIONSHIPS:

(a) SUBSIDIARY COMPANIES:

DCW Pigments Ltd

(b) WHERE CONTROL EXISTS:

Double Dot Finance Ltd.

Crescent Finstoce Ltd.

Sahu Brothers Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Crescent Holdings Pvt. Ltd.

NOTE:Related party relationships on the basis of the requirements of

Accounting Standard (AS) - 18 disclosed above is as identified

by the Company and relied upon by the auditors.

6. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

7. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95, 1995-96, 1997-98 and 2004-05 to 2008- 09 (except for 1996-97, 1998-99 to 2003-04 which has been completed). Central Sales Tax Assessments and Tamilnadu General Sales tax act of Sahupuram Unit are completed upto 2005-06.

8. In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2010 amount to Rs. 92.95 lacs (previous year Rs. 95.43 lacs)

9. The company has opted for accounting foreign currency exchange difference on realignment of long term foreign currency loan related to acquisition of a depreciable capital asset, as per AS-11 amended by Companies (Accounting Standard) Amendment Rules 2009. Accordingly exchange difference of Rs.1164 lacs, relating to current year has been reduced from the cost of fixed assets and depreciation charged to the Profit and Loss Account.

10. The company has entered into option to hedge its exposure on US$ Libor related to its external commercial borrowing aggregating to US$ 20 Mn.

The year end foreign currency exposure that have not been hedged by derivative instrument or otherwise Payables Rs. 10505.26 Lacs.

11. In the matter of custom duty on imported calciner, the Honble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed companys civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Honble Supreme Court in this regard. The case is pending for hearing.

12. Based on Managements review of the Capital Expenditure on Carbonation Towers and Calcium Chloride plant at Soda Ash plant in 2004-05 & 2006-07 respectively and based on detailed study by technical experts, justifying additions and modifications, the same are being held as capital work in progress. Till such time the Carbonation Towers and Calcium Chloride plant becomes operational, interest of Rs.78.85 lacs, for this year has been capitalized.

13. The Tamilnadu Government has passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The company along with other captive power producers has challenged the levy in the Madras High Court, which has admitted the writ-petition.

14. (a) Due to Micro & Small Enterprises include Rs.10.62 lacs, outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The Mirco & Small Enterprises from whom amounts outstanding for more than 30 days are as under:

1.Warkin Enterprises Pvt. Ltd.

2.Tamilnadu Synthetics

3. Ganesh Polymer

15. Due from a company in which Director(s) of the company is director is Rs.5.64 Lacs (Previous year Rs. Nil lacs).

The Rules of the Corporate Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest of at the rate declared to Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments the Company does not expect any deficiency in the foreseeable future.

16. Information required in terms of Port IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2009

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 242.59 lacs (previous year Rs. 1,412.38 lacs)

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 16.79 lacs (previous year Rs. 23.70 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. Nil lacs (previous year Rs. 284.15 lacs) has also been met by drawing from Revaluation Reserve.

3. Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

5. RELATED PARTY INFORMATION: (I) RELATIONSHIPS:

(a) SUBSIDIARY COMPANIES: DCW Pigments Ltd

(b) WHERE CONTROL EXISTS: Double Dot Finance Ltd. Crescent Finstock Ltd. Sahu Brothers Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Ltd.

Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd.

6. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

7. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95, 1995-96, 1997-98 and 2004-05 to 2007- 08 (except for 1996-97, 1998-99 to 2003-04 which has been completed). Central Sales Tax Assessments and Tamilnadu General Sales tax act of Sahupuram Unit are completed upto 2004-05 except for the year 2003-04.

8. In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2009, amount to Rs. 95.43 lacs (previous year Rs. 112.98 lacs).

9. The Company has opted for accounting foreign currency exchange difference on realignment of long term foreign currency loan related to acquisition of a depreciable capital asset, as per AS-11 amended by Companies (Accounting Standard) Amendment Rules 2009. Accordingly exchange difference of Rs. 2,124 lacs, relating to current year has been added to the cost of fixed assets and depreciation charged to the Profit and Loss Account.

10. The Company has entered into option to hedge its exposure on US$ Libor related to its external commercial borrowing aggregating to US$ 20 million.

The year end foreign currency exposure that have not been hedged by derivative instrument or otherwise Payables Rs. 13,435.60 lacs.

11. In the matter of custom duty on imported calciner, the Honble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed Companys civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Honble Supreme Court in this regard. The case is pending for hearing.

12. Based on Managements review of the Capital Expenditure on Carbonation Towers and Calcium Chloride plant at Soda Ash plant in 2004-05 & 2006-07 respectively and based on detailed study by technical experts, justifying additions and modifications, the same are being held as capital work in progress. Till such time the Carbonation Towers and Calcium Chloride plant becomes operational, interest of Rs. 153.15 lacs, for this year has been capitalized.

13. The Tamilnadu Government has passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The Company along with other captive power producers has challenged the levy in the Madras High Court, which has admitted the writ-petition.

14. (a) Due to Micro & Small Enterprises include Rs. 4.81 lacs, outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The Mirco & Small Enterprises from whom amounts outstanding for more than 30 days are as under:

1. Tamilnadu Synthetics, 2. Arun Pack 3. Bharat Engineering

15. Insurance claim accounted as other income of Rs. 450.97 Lacs (previous year Rs. 45.19 lacs) out of which claim of Rs. 285.75 Lacs, is pending approval from insurance authorities.

16. Due from companies in which Directors of the Company are directors is Rs. NIL lacs (Previous year Rs. Nil lacs).

17. Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits"

a. Effective 1st April 2007, the Company has adopted accounting standard 15 (revised 2005) "Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

18. Based on evaluation by the management of their being reasonable certainty that the Company will be liable to pay normal income tax within 7 subsequent years, MAT credit of Rs. 225 lacs (Previous Year Rs. 155 lacs), has been recognized as an asset with corresponding credit to profit and loss account.

19. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.


Mar 31, 2008

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 1412.38 lacs (previous year Rs. 17662.68 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 23.70 lacs (previous year Rs: 32.61 lacs ) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 284.15 lacs (previous year Rs. 48.77 lacs) has also been met by drawing from Revaluation Reserve.

3. Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

6. RELATED PARTY INFORMATION.

(i) RELATIONSHIPS:

(a) SUBSIDIARY COMPANIES DCW Pigments Ltd

(b) WHERE CONTROL EXISTS Double Dot Finance Ltd. Crescent Finstock Ltd.

Sahu Brothers (Saurashtra) Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Ltd.

Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd.

7. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

8. The Company has changed the method of valuation of closing stock of Caustic Soda Lye group by treating Chlorine, Hydrogen Gas and Hydrochloric Acid as by-products instead of joint products. This has resulted into decrease in valuation of Finished Goods by Rs. 48.21 lacs, which has decreased the Profit for the year by the same amount.

9. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95, 1995-96, 1997-98 and 2004-05 to 2006-07 (except for 1996-97, 1998-99 to 2003-04 which has been completed). Central Sales Tax Assessments and Tamilnadu General Sales tax act of Sahupuram Unit are completed upto 2004-05 except for the year 2003-04.

10. In respect of land on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2008 amount to Rs. 112.98 lacs (previous year Rs. 189.29 lacs).

11. During the year the company has entered into option to hedge its exposure on US$ Libor related to its external commercial borrowing aggregating to US$ 20 Million.

The year end foreign currency exposure that have not been hedged by derivative instrument or otherwise Payables Rs. 18,121.65 lacs.

12. In the matter of custom duty on imported calciner, the Honable Gujarat High Court, has vide order dated 15th December, 2005, partly allowed companys civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 1 7.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Honable Supreme Court in this regard. The case is pending for hearing.

14. Based on Managements review of the Capital Expenditure on Carbonation Towers and Calcium Chloride plant at Soda Ash plant in 2004-05 & 2006-07 respectively and based on detailed study by technical experts, justifying additions and modifications, the same are being held as capital work in progress. Till such time the Carbonation Towers and Calcium Chloride plant becomes operational, interest of Rs. 225.82 lacs, for this year has been capitalized.

15. The Tamilnadu Government has passed fresh legislation imposing Electricity Tax on captive power generated with retrospective effect from 2003. The company along with other captive power producers has challenged the levy in the Madras High Court, which has admitted the writ-petition.

16. (a) Sundry Creditors ( Schedule K) include Rs. 9.22 lacs, due to small scale and ancillary undertakings outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under.:- 1. Tamilnadu Synthetics, 2. Canesh Polymenrs,

(c) In the absence of requisite information pertaining to Micro Small & Medium Enterprises under Micro Small & Medium Enterprises Development Act, 2006, dues to SSI undertakings is reported as per the earlier requirements.

17. Insurance claim received in respect of machinery Rs. 45.19 lacs (previous year Rs. NIL lacs) is taken as other income.

18. Due from companies in which Directors of the company are directors is Rs. NIL lacs (Previous year Rs. 0.31 lacs).

19. Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee Benefits"

(a) Effective 1st April 07, the company has adopted accounting standard 15 (revised 2005) " Employee Benefits" issued by ICAI. The Company has classified the various benefits provided to employees as under:

(b) Defined Contribution Plans:

The Company has recognized the following amounts in the Profit & Loss Account which are included under contribution to Provident Fund and Other Funds:

The Rules of the Corporate Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared on Employees Provident Fund by the Government under the Employees Provident Fund Scheme, for the reason that the return on investment is less or for any other reason, then the deficiency shall be made good by the Company. Having regard to the assets of the fund and the return on the investments the Company does not expect any deficiency in the foreseeable future.

20. Acceptances under current liabilities are disclosed after netting off fixed deposits for Rs. 5535 lacs (Previous Year Rs. NIL lacs) given as security to the Companys Bankers for issuing letter of credit. This does not understate current assets of the company.

21. Based on evaluation by the management of their being reasonable certinity that the company will be liable to pay normal income tax within 7 subsequent years, MAT credit of Rs. 155 lacs (Previous Year Rs. 44.89 lacs), has been recognized as an asset with corresponding credit to profit and loss account.

23 Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2007

SECURED LOAN Notes:

LOANS Secured by

Banks Working Capital facilities are secured by a first charge by way of hypothecation and/or pledge of current assets, namely, stocks of materials, semi-finished and finished goods, consumable stores and spares including machinery spares not capitalized, bills receivable and book debts and further secured by a second charge by way of hypothcation over all of movable plant and machinery and by way of mortgage by deposit of title deeds over the immovable properties, both present and future, such mortgage to rank second to the mortgages created to be created in favour of Term Loan Lenders viz., Banks/Financial Institutions.

Term Loans from Banks are secured by a pari-passu first charge by way of hypothecation of movable fixed assets of the Company, including movable machinery spares, stores and further secured by mortgage on all the immovable properties of the Company situated in the states of Tamilnadu and Gujarat on first pari passu charge basis.

Other loans The Long Term Working Capital Loan from a Financial Institution is secured by creation of first pari passu charge on all the immovable fixed assets, both present and future by way of hypothecation and further secured by mortgage on all the immovable properties situated in the states of Tamilnadu and Gujarat on first pari-passu charge basis.

Equipments Finance Loan from a Financial Institution and term loan from NBFC are secured by creation of first pari-passu charge on all the movable fixed assets, both present and future by way of hypothecation and further secured by mortgage on all the immovable properties situated in the states of Tamilnadu and Gujarat on first pari-passu charge basis.

FIXED ASSETS NOTES: .

1. Buildings include Rs. 523.06 lacs being cost of ownership flats and office accommodation in Co-operative Societies and a Limited Company against which the Company holds shares of the face value of Rs. 0.77 lacs in Co-operative Societies and the Limited Company.

2. Land includes the leasehold land valued at Rs. 70.99 lacs.

3. Assignment deeds in respect of 9.13 acres of Land at Caustic Soda Division, transferred by Central Government to the State Government, are yet to be executed by the State Government in favour of the Company.

4. Land, Building and Plant and Machinery located at Sahupuram Works (other than PVC Division) were revalued on 31.03.1993.

5. The Company exercised the option to purchase 793.39 acres of land leased by the State Government at Sahupuram works. Assignment deeds in respect of the said land are yet to be executed by the State Government in favour of the Company.

6. Fixed Assets includes assets taken over from erstwhile Pantape Magnetics Limited at revalued figure as per an independent valuers report.

OTHER NOTES

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 17,662.68 lacs (Previous year Rs. 18,315.87 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 32.61 lacs (Previous year Rs. 46.89 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 48.77 lacs (Previous year Rs. 11.61 lacs) has also been met by drawing from Revaluation Reserve.

3. Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

5. The break up of Deferred Tax Assets/Liabilities are as under:

6. RELATED PARTY INFORMATION

(i) RELATIONSHIPS:

(a) WHERE CONTROL EXISTS Double Dot Finance Ltd. Crescent Finstock Ltd. Sahu Brothers (Saurashtra) Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Ltd.

Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd. DCW Pigments Ltd.

8. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

9. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95 to 1997-98 and 2003-04 to 2006-07 (except for 1998-99 to 2002-03 which has been completed). Central Sales Tax Assessments and Tamiinadu General Sales Tax Act of Sahupuram Unit are completed upto 2004-05 except for the year 2003-04.

10. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31 st March, 2006 amount to Rs. 189.29 lacs (Previous year Rs. 187.63 lacs).

11. In the matter of custom duty on imported calciner, the Honble Gujarat High Court, has vide order dated 15th December, 2005, partly allowed companys civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 17.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Honble Supreme Court in this regard. The case is pending for hearing.

12. The Companys pending application to the Government of Tamilnadu for renewal of the lease of 3185 acres and 153 cents of land at Vedaranayam from 1st April, 2003has been directed by the Honble Supreme Court to be considered by the learned Single Judge of the Madras High Court. The increase in lease rent, cess etc. on the said lease hold land relating to the past period claimed by the State Government is disputed in writ petitions filed and pending in the Madras High Court.

13. Computation of net profits under Section 349 of the Companies Act, 1956.

(Rs. in lacs)

Particulars Amount

Profit before tax as per Profit & Loss Account 3,135.88 Add: Wealth Tax paid 3.55 Managerial remuneration 282.73 Directors sitting fees 1.05 Less: Interest capitalized 313.13 Net profit U/S 349 3,110.08 10% thereof i.e. (3110.08 X 10/110) 282.73 Less: Managerial remuneration paid 148.47 Commission payable 134.31

14. Based on Managements review of the Carbonation Tower installed at Soda Ash plant during the year 2004-05, and after a detailed study, justifying the need to add certain additional equipments requiring capital expenditure, the towers are being held as capital work in progress. Till such time the Carbonation Tower becomes operational, interest of Rs. 196.94 lacs, that was charged to revenue in the earlier years along with interest of Rs. 116.19 lacs, for this year has been capitalized by netting off against current year interest. This accounting treatment has effect of increasing profit of the year by Rs. 313.13 lacs, with corresponding effect on the reserves.

15. (a) Sundry Creditors (Schedule K) include Rs. 17.94 lacs due to small scale and ancillary undertakings outstanding for more

than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under:

1. Bipinkumar Electrical Corpn., 2. Elite Chemicals, 3. Tamilnadu Synthetics, 4. Ganesh Polymers, 5. Arun Packs

(c) In the absence of requisite information pertaining to Micro Small & Medium Enterprises under Micro Small & Medium Enterprises Development Act, 2006, dues to SSI undertakings is reported as per the earlier requirements.

16. Insurance claim received in respect of machinery Rs. Nil (Previous year Rs. 631 lacs) is taken as other income.

17. Due from companies in which Directors of the company are directors is Rs. 0.31 lacs (Previous year Rs. Nil).

18. Acceptances undercurrent liabilities are disclosed after netting off fixed deposits for Rs. Nil (Previous year Rs. 501.16 lacs) giving as security to the Companys Bankers for issuing letter of credit. This does not understate current assets of the company.

19. Based on evaluation by the management of their being reasonable certainty that the company will be liable to pay normal income tax within 7 subsequent years, MAT credit of Rs. 44.89 (Previous year Rs. 272.35 lacs), has been recognized as an asset with corresponding credit to profit and loss account.

Note : 1. Licensed capacity is not applicable in view of the companys products having de-licensed as per the new liberalised licensing policy announced by the Government of India.

2. Ammonium Bicarbonate production is out of part of Soda ash plant.

3. Self consumption quantity mentioned includes quantity lost in handling, lost in transit, wash loss, samples, etc.

4. Previous year figures are given in bracket.

5. Lye sales quantity excludes 1 57 mt excess as per survey.


Mar 31, 2006

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 18,315.87 lacs (Previous year Rs. 4,676.51 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 46.89 lacs (previous year Rs. 43.24 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act. 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 11.60 lacs (previous year Rs. 15.33 lacs) has also been met by drawing from Revaluation Reserve.

3. Consignment sales and expenses are incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

5. The break up of Deferred Tax Assets/Liabilities are as under: (DC jn |acs)

Nature of timing difference Deferred Tax Debit/fCredit) Deferred Tax Liability/(Assets) for the year Liability/ as at1st April, (Assets) as at 2005 31st March, 2006 (a) DEFERRED TAX LIABILITIES

Depreciation 5,658.48 616.21 6,274.69

SUB TOTAL 5,658.48 616.21 6,274.69

(b) DEFERRED TAX ASSETS

Provision for dimunition in value ofBusiness Centre Immovable Property 457.41 (36.66) 420.75

; Provision for dimunition in value of Investments 0.70 (0.70) -

Provision for Doubtful debts 11.20 (0.90) 10.30

Expenses allowed on payment basis 202.03 67.56 269.59

Long-term capital loss to be set-off 6.47 (0.52) 5.95

SUB-TOTAL 677.81 28.78 706.59

4.980.67 587.43 5,568.10

6. RELATED PARTY INFORMATION (i) RELATIONSHIPS:

(a) WHERE CONTROL EXISTS Double Dot Finance Ltd. Crescent Finstock Ltd. Sahu Brothers (Saurashtra) Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Cutlery Ltd.

Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd.

(b) KEY MANAGEMENT PERSONNEL

Dr. S. C. Jain Chairman & Managing Director

Shri S. K. Jain Vice Chairman & Managing Director

Shri P. K. Jain Managing Director

Shri Bakul Jain Executive Director

Shri Vivek Jain Sr. President

Shri Mudit Jain President

Shri Ashish Jain President

Smt. Paulomi Jain Vice President

NOTE: Related party relationships on the basis of the requirements of Accounting Standard (AS)-18 disclosed above is as identified by the Company and relied upon by the auditors.

(ii) DISCLOSURE OF TRANSACTIONS BETWEEN THE GROUP AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS ON 31ST MARCH, 2006

(Rs. in lacs) Particulars Enterprises where Key Management control exists personnel

Commission paid - -

Remuneration paid - 264.77

Purchases 0.96 -

Balances as on 31st March, 2006 3.26 -

8. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

9. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95 to 1997-98 and 2003-04 to 2005-06 (except for 1998-99 and 2002-03 which have been completed). Central Sales Tax Assessments and Tamil Nadu General Sales Tax Act of Sahupuram Unit are pending since 2001-2002.

10. The amount of exchange difference in respect of forward contracts to be recognised in the Profit and Loss Account in the subsequent accounting year is Rs. Nil (Previous year Rs. 7.95 Lacs).

11. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2006 amount to Rs. 187.63 lacs (previous year Rs. 217.13 lacs).

12. In the matter of customs duty on imported calciner, the Honable Gujarat High Court has vide order, dated 15th December, 2005, partly allowed companys civil application for refund of Rs. 41.48 lacs, to the extent of Rs. 1 7.50 lacs, that has since been received and denied claim for refund of balance Rs. 23.98 lacs on account of unjust enrichment. The Company has filed special leave petition before Honble Supreme Court in this regard. The case is pending for hearing.

13. The Companys pending application to the Government of Tamil Nadu for renewal of the lease of 3185 acres and 153 cents of land at Vedaranayam from 1st April, 2003 has been directed by the Honable Supreme Court to be considered by the learned Single Judge of the Madras High Court. The increase in lease rent, cess etc. on the said lease hold land relating to the past period claimed by the State Government is disputed in writ petitions filed and pending in the Madras High Court.

14. Computation of net profits under Section 349 of the Companies Act, 1956

(Rs. in lacs) Particulars Amount

Profit before tax as per Profit & Loss Account 3,229.49

Add: Wealth Tax paid 3.73

Managerial remuneration 222.62

Directors sitting fees 1.65

Less: Profit on sale of Investments 1 6.82

Excess realization over original cost on fixed aseets 1,214.96

Net profit U/S 349 2,225.71

10% thereof i.e. (2225.71 X 10/110) 202.34

Less: Managerial remuneration paid 1 33.88

Commission payable 68.46

15. During the year 2004-05, the 3 carbonation towers at Soda Ash plant, were not commissioned as the desired results relating to quality and efficiency were not forth coming during the trial runs. In the current year leading technical experts have after evaluation recommended the installation of a higher capacity screw compressor to achieve desired results. The Company proposes to establish this compressor along with doubling capacity of Soda Ash Plant. Pending this an amount of Rs. 21.56 crores incurred on the carbonation towers, including trial run expenditure, is included under capital work in progress.

16. (a) Sundry Creditors (Schedule K) include Rs. 14.81 lacs due to small scale and ancillary undertakings outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available ; information. This has been relied upon by the auditors.

(b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under.:-

1. Industrial Traders 2. Hitesh Salt Traders 3. Cl Pipe Mfg. Corpn. 4. Calcutta Belt Centre 5. Shree Shakti Rewinding Works 6. Shree Darshan Engineering Works 7. Sandeep Salt Works 8. Decent Enterprise Salt 9. Gujarat Carbon Products 10. SS Computech Pvt. Ltd. 11. Sri Rama Poly Bags. 12. Tamilnadu Synthetics Ltd.

17. Acceptances under current liabilities are disclosed after netting off fixed deposits for Rs. 501.16 lacs given as security to the Companys Bankers for issuing letter of credit. This does not understate the net current assets of the company.

18. Insurance claim received in respect of machinery damaged of Rs. 631 lacs is taken as other income and the written down value of damaged machinery has been fully written off.

19. Based on evaluation by the management of their being reasonable certainity that the company will be liable to pay normal income tax within 7 subsequent years, MAT credit of Rs. 272.35 lacs has been recognized as an asset with corresponding credit to profit and loss account.

20. Earning per share (EPS) as per Accounting Standard -20

2005-06 2004-05 Rs. in lacs Rs. in lacs

Profit after Tax 2,726.92 2,103.33

No. of Equity shares of Rs. 2 each as on 31.3.2006

Basic & Diluted 17,25,44,590 17,25,66,670

EPS (Rs.) Basic & Diluted 1.58 1.22

(The existing equity shares of Rs. 10 each were sub-divided into 5 shares of Rs. 2 each w.e.f. 28th Sept., 05. Consequently the average number of equity shares of previous year, have been adjusted for share split for computing EPS in accordance with AS-20 issued by ICAI)

21. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2005

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided tor is Rs. 4,676.51 lacs (Previous year Rs. 1561.99 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 43.24 lacs (previous year Rs. 52.77 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 1 5.33 lacs (previous year Rs. 81.91 lacs) has also been met by drawing from Revaluation Reserve.

3 Consignment sales and expenses arc incorporated on the basis of sale notes when received from consignees.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

The break up of Deferred Tax Assets/Liabilities are as under: in Rs

Nature of timing difference Deferred Tax Debit/(Credit) Deferred Tax Liability/ Liability Assets) for the year (Assets) as at as at 1st April, 2004 31st March, 2005

(a) DEFERRED TAX LIABILITIES Depreciation 5,563.83 94.65 5,658.48

SUB TOTAL 5,563.83 94.65 5,658.48

(b) DEFERRED TAX ASSETS

Provision for dimunition in value of Business Centre Immovable Property 448.50 8.91 457.41

Provision for dimunition in value of Investments 0 0.70 0.70

Provision for Doubtful debts 10.98 0.22 11.20

Expenses allowed on payment basis 211.89 (9.85) 202.03

Long-term capital loss to be set-off 6.25 0.23 6.47

SUB-TOTAL 677.62 0.19 677.81

4,886.21 94.46 4,980.67

RELATED PARTY INFORMATION

(i) RELATIONSHIPS:

(a) WHERE CONTROL EXISTS Double Dot Finance Ltd. Crescent Finstock Ltd. Sahu Brothers (Saurashtra) Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Cutlery Pvt. Ltd. Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd.

(b) KEY MANAGEMENT PERSONNEL

Dr. S. C. lain Chairman & Managing Director

Shri S. K. Jain Vice Chairman & Managing Director

Shri P. K. jain Managing Director

Shri Bakul lain Executive Director

Shri Vivek jam Sr. President

Shri Mudit Jain President

Shri Ashish Jain President

Smt. Paulomi Jain Vice President

8. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

9. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95 to 1997-98 and 2002-03 to 2004-05 (except for 1998-99 and 2001-02 which have been completed) and Centra! Sales Tax Assessments of Sahupuram Unit are pending from 1998-99 Sales tax assessments under Tamil Nadu deneral Sales Tax Act, are pending since 1999-2000.

10. The amount of exchange difference in respect of forward contracts to be recognised in the Profit and Loss Account in the subsequent accounting year is Rs. 7.95 Lacs (Previous year Rs. 9.50 Lacs).

11. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2005 amount to Rs. 217.13 lacs (previous year Rs. 197.50 lacs).

12. In the matter of customs duty on imported calciner, CEGAT vide its order, dt. 8th December, 2000 has held that the calciner imported would be entitled to exemption under Notification No. 59/87 and has also reduced the fine levied for alleged import of the calciner without licence to Rs-5 lacs. The Company has consequentially applied for refund of Rs-41.48 lacs to the Customs authorities who have denied the claim on account of unjust enrichment. The Company filed a Civil application before the Honable Gujarat High Court. The case is pending for hearing.

13. The Companys pending application to the Government of Tamilnadu for renewal of the lease of 3185 acres and 1 53 cents of land at Vedaranayam from 1st April, 2003 has been directed by the Honable Supreme Court to be considered by the learned Single Judge of the Madras High Court. The increase in lease rent, cess etc. on the said lease hold land relating to the past period claimed by the State Government is disputed in writ petitions filed and pending in the Madras High Court.

14. Computation of net profits under Section 349 of the Companies Act, 1956

(Rs. in lacs) Particulars Amount

Profit before tax as per Profit & Loss Account 2368

Add: Wealth Tax paid 3

Managerial remuneration 234

Directors sitting fees 1

Less:

Provision for dimunition in value of Investments written back 2

Profit on sale of Investments 24

Net profit U/S 349 2580

10% thereof i.e. (2580 X 10/110) 234

Less: Managerial remuneration paid 101

Commission payable 133

15. During the year, trial runs wore conducted at Dhrangadhra between August 04 and November 04 on the modernisation/revamping of Soda Ash plant. Since the desired results relating to quality and efficiency was not forthcoming, the trial run were suspended pending assessment and carrying out necessary modifications. The company has invited foreign technics! experts to evaluate and recommend changes if any required Efforts are on to complete the revamping/modernisation of Soda Ash plant.

The trial run expenditure of Rs. 296 41 Lacs, incurred during the year construction period is included under Capital work ID progress.

16. (a) Sundry Creditors ( Schedule K) include Rs.10.26 lacs due to small scale and ancillary undertakings outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under.:-

1) Austin Engg. Co. Ltd., 2) Shanti Trading Company 3) Peeyelcee Polysacks 4) ESSVEE Agro Polymers 5) Tamilnadu Synthetics Ltd.

17. Acceptances under current liabilities are disclosed after netting off fixed deposits for Rs. 2216.13 lacs given as security to the Companys Bankers for issuing letter of credit. This does not understate the net current assets of the company. Outstanding short term foreign currency unsecured loan of Rs. 2001.50 lacs taken from a foreign branch of a Bank has been netted off against fixed deposits of like amount given as security to the Companys Bankers for issuing comfort letter towards the said loan.

18. Information required in terms of Part IV of Schedule VI of the Companies Act, 1 956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1 to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2004

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs.1,561.99 lacs (Previous year Rs. 35.56 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 52.77 lacs (previous year Rs. 1 75.49 lacs ) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 81.91 lacs (previous year Rs. 28.17 lacs) has also been met by drawing from Revaluation Reserve.

3. In compliance with Accounting Standard 26 on Intangible Assets, technical know-how fees of Rs. 46.02 lacs which was being depreciated over an estimated useful life of more than ten years, has been adjusted against the opening balance of General Reserve.

4. Confirmation of balances from some of the Debtors and Creditors, have not been received.

6. RELATED PARTY INFORMATION

(i) RELATIONSHIPS:

(a) WHERE CONTROL EXISTS Double Dot Finance Ltd. Crescent Finstock Ltd. Sahu Brothers (Saurashtra) Pvt. Ltd. Dhrangadhra Trading Company Pvt. Ltd. Kishco Cutlery Ltd. Kalpataru Botanical Garden Pvt. Ltd. Crescent Holdings Pvt. Ltd.

(b) KEY MANAGEMENT PERSONNEL

Dr. S.C. Jain Chairman & Managing Directo

Shri S.K. Jain Vice Chairman & Managing Director

Shri P. K. Jain Managing Director

Shri Bakul Jain Executive Director

Shri Vivek Jain Sr. President

Shri Mudit Jain President

Shri Ashish Jain President

Smt. Paulomi Jain Vice President

NOTE: Related party relationships on the basis of the requirements of Accounting Standard (AS) - 18 disclosed above is as identified by the Company and relied upon by the auditors.

(ii) DISCLOSURE OF TRANSACTIONS BETWEEN THE GROUP AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS ON 31ST MARCH, 2004 (Rs. in lacs)

Particulars Enterprises where Key Management control exists personnel

Rent paid 0.05 -

Commission paid 7.01 -

Remuneration paid - 202.30

Acquisition of Tenancy Rights 9.74 -

Purchases 0.91 -

Balances as on 31st March, 2004 (4.52) -

8. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

9. Sales Tax Assessments of Dhrangadhra Unit are pending from 1994-95 (except for 1998-99 and 1999-2000 which have been completed) and Central Sales Tax Assessments of Sahupuram Unit are pending from 1995-96 (except for 1997-98 which has been completed). Sales tax assessments under Tamil Nadu General Sales Tax Act, are pending since 1997-98.

10. The amount of exchange difference in respect of forward contracts to be recognised in the Profit and Loss Account in the subsequent accounting year is Rs. 9.50 Lacs (Previous year Rs. Nil).

11. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2004 amount to Rs. 197.50 lacs (previous year Rs. 220.82 lacs).

12. In the matter of customs duty on imported calciner, CEGAT vide its order, dt. 8th December, 2000 has held that the calciner imported would be entitled to exemption under Notification No. 59/87 and has also reduced the fine levied for alleged import of the calciner without licence to Rs. 5 lacs. The Company has consequentially applied for refund of Rs. 41.48 lacs to the Customs authorities who have denied the claim on account of unjust enrichment. The matter is pending before the Collector (Appeals).

13. The Company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres and 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court.

The consideration of Rs. 50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

14. Computation of net profits under Section 349 of the Companies Act, 1956 (Rs. in lacs) Particulars Amount Profit before tax as per Profit & Loss Account 1928.78

Add:

Wealth Tax paid 3.17

Managerial remuneration 185.54

Directors sitting fees 0.77

Less:

Provision for dimunition in value of Investments written back 7.32

Provision for doubtful debts written back 17.00

Profit on sale of Investments 53.05

Net profit U/S 349 2040.90

10% thereof i.e. (2040.90 X 10/110) 185.54

Less: Managerial remuneration paid 72.02

Commission payable 113.52

15. (a) Sundry Creditors (Schedule K) include Rs.17.48 lacs due to small scale and ancillary undertakings. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under.:-

(1) Bharat Engineering Works

(2) C.I. Pipes Mfg. Corporation

(3) Arul Rubbers (P) Ltd.

(4) Peeyelcee Polysacks

(5) ESVEE Agro Polymers

(6) Tamilnadu Synthetics Ltd.

(c) Acceptances under Current Liabilities are disclosed after adjusting fixed deposits for Rs. 790 lacs with a Scheduled Bank given as security for opening a Letter of Credit. This treatment does not understate the net current assets of the Company.

16. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years grouping.


Mar 31, 2003

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 35.56 lacs (previous year Rs. 82.13 lacs).

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 175.49 lacs (previous year Rs. 122.51 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies.Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 28.17 lacs (previous year Rs. 250.30 lacs) has also been met by drawing from Revaluation Reserve.

3. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, Interest on customs duty for goods in bond, duty draw back from Government are accounted for on cash basis and Wealth Tax is accounted when paid.

4. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

5. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

6. Confirmation of balances from some of the Debtors and Creditors have not been received.

7. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

8. Sales tax collections are treated as liability and not as revenue of the company.

12. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

13. Sales Tax Assessments of Dhrangadhra Unit are pending from 1992-93 (except for 1998-99 which has been completed) and Central Sales Tax Assessments of Sahupuram Unit are pending from 1992-93. (except for 1997-98 which has been completed). Sales tax assessments under Tamil Nadu General Sales Tax Act, are pending since 1998-99.

14. Interest and finance charges others, are net and arrived at after deducting Rs. 115.46 lacs (previous year Rs. 70.06 lacs) being interest earned from Banks, on Security Deposits, on Bills, on Income Tax Refunds etc. .

15. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2003 amount to Rs. 220.82 lacs (previous year Rs. 294.79 lacs).

16. Fixed Deposits with Scheduled banks includes Rs. 0.15 lacs (previous year Rs. 2.56 lacs) pledged with banks against guarantees given by them.

1 7. In the matter of customs duty on imported calciner, CEGAT vide its order dt. 8th December, 2000 has held that the calciner imported would be entitled to exemption under Notification NO. 59/87 and has also reduced the fine levied for alleged import of the calciner without licence to Rs. 5 lacs. The company has consequentially applied for refund of Rs. 41.48 lacs to the Customs authorities who have denied the claim on account of unjust enrichment. The matter is pending before the Collector (Appeals).

18. The company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres and 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court.

The consideration of Rs. 50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

20. (a) Sundry Creditors (Schedule K) Include Rs. 33.57 lacs due to small scale and ancillary undertakings. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors. (b) The small scale undertakings from whom amounts outstanding for more than 30 days are as under:-

(1) C.I. Pipes Mfg. Corporation (2) Gautam Minerals (3) Heena Minerals (4) Bapodra Minerals (5) Balyogi Corporation (6) Munu Trade Links (7) ESVEE Agro Polymers.

FORMING PART OF THE BALANCE SHEET

21. No provision has been made for Rs. 52.96 lacs being amount of increase in basic wages of piece rate workers of Salt works at Kuda, Dhrangadhra determined under notification dated 5th October, 2000 issued by the Govt. of Gujarat, as the company's civil application challenging the notification is pending in the High Court of Gujarat.

22. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "1" to "6" form an integral part of the Profit and Loss Account.

Previous year figures are regrouped to match with current years' grouping.


Mar 31, 2002

Share Capital

Of the Equity Shares

(1) The following Shares were allotted as fully paid-up without payment being received in cash:

(a) 1,05,000 Shares to Vendors.

(b) 910 Shares to Equity Shareholders of the erstwhile PRC Limited, pursuant to the amalgamation with the Company.

(2) 74,90,197 Shares were allotted as fully paid-up Bonus Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

(3) 53,33,310 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 Partly Convertible Debentures allotted in April 1992.

(4) 92,25,000 Shares were issued in 1994-95 against which Global Depository Receipts were issued by the Depository viz. Citibank, U.S.A.

(5) 56,18,905 Shares were issued and allotted pursuant to Rights issue made during 2000-01.

Secured Loans

1. Debentures

(a) Rs. 496.04 lacs (previous year Rs. 748.04 lacs) comprising 16,62,304 - 16.5 percent Non-Convertible Debentures of Rs. 45/- each are redeemable at par from May 2001 to February 2004 in 12 quarterly instalments and are secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/ Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Re-discounting Scheme ranking pari passu with the mortgage referred to in Note l(b) below.

(b) Rs. 258.45 lacs (previous year Rs. 345.45 lacs) comprising of 3,45,450 - 14 percent Non-Convertible Debentures of Rs. 100/- each are redeemable at par from August 2001 to May 2004 in 12 quarterly instalments and are secured by a mortgage of all the movable and immovable properties of the Company ranking subsequent, subservient and subordinate to all prior mortgages/charges and created/to be created in future, in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Re-discounting Scheme and rank pari passu with the mortgage referred to in Note 1(a) above.

(c) Rs. 933.33 lacs (previous year Rs. 1,400 lacs) comprising of 14,00,000 - 17.5 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except Specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 2(c), 3(a) and 3(b).

2. Banks

(a) Rs. Nil lacs (previous year Rs. 300 lacs) term loan from Punjab National Bank (PNB) is secured by way of exclusive charge by hypothecation of the assets purchased from the loan amount viz. 3 numbers of 6 MW DC Sets, Switchgears, Cables etc.

(b) Rs. 340.60 lacs (previous year Rs. 1,241.55 lacs) by way of working capital facilities from Banks are secured by hypothecation of all inventories, book debts and all other movables of the company and are further secured by a second charge on all the fixed assets of the company excepting specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBI and hypothecated to PNB referred to in Note 4 below.

(c) Rs. Nil lacs (previous year Rs. 162.60 lacs) by way of Foreign Currency Loan from EXIM Bank and Rs. NIL (previous year Rs. 62.50 lacs) by way of Rupee Term Loan from EXIM Bank are secured by hypothecation/mortgage of the movable/ immovable properties of the company but subject to such specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in Notes 1(c), 3(a) and 3(b) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(d) Rs. 96.43 lacs (previous year Rs. 160.72 lacs) by way of term loan from EXIM Bank under Production Equipment Finance Program are secured by way of exclusive charge on movable fixed assets acquired viz. 7 digestors and other equipment.

(e) Rs. 88.41 lacs (previous year Rs. 76.78 lacs) by way of hypothecation of vehicles accquired under Hire purchase Scheme.

3. Other Loans

(a) Rs. 56.00 lacs (previous year Rs. 284 lacs) by way of Rupee Term Loans from Financial Institutions are secured by hypothecation/mortgage of the movable/immovable properties of the Company such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in notes 1(c), 2(c) and 3(b) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(b) Rs. 506.03 lacs (previous year Rs. 761.49 lacs) by way of Foreign Currency Loan from IDBI are secured by hypothecation/ mortgage of the movable/immovable properties of the company subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4 and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2(d) ranking pari passu with the charges referred to in Notes 1(c), 2(c) and 3(a) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(c) Rs. Nil (previous year Rs. 220 lacs) by way of Working Capital Loan from IDBI are secured by hypothecation of movable assets of the company (save and except book debts and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2 (d)) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities and on specific items of machinery purchased under Deferred Payment facilities granted by SIDBI and co-accepted by PNB referred to in Note 4.

(d) Rs. Nil (previous year Rs. Nil) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company.

(e) Rs. 830 lacs (previous year Rs. 1,298 lacs) by way of corporate loan from IDBI are secured by hypothecation of movable properties of the company (save and except 7 digestors and other equipment which are charged exclusively to EXIM Bank under Production Equipment Finance Program referred to in Note 2(d) but subject to prior charges created/ to be created on current assets and book debts in favour of banks for working capital facilities and such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4).

f) Rs. 697.59 lacs (previous year Rs. 375 lacs) by way of term loan from IDBI for pollution abatement and debottle necking/ modernisation schemes secured by a first mortgage in favour of IDBI on the companys immovable properties, both present and future and a first charge by way of hypothecation of all movables (save and except 7 digestors and other equipments which are charged exclusively to EXIM Bank under Production Equipment Financial Program referred to in Note 2(d)) subject to prior charges created and/or to be created in favour of the companys banks on inventories and book debts for securing working capital and specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypthecated to PNB referred to in Note 4 and ranking pari passu with the charges referred to in Notes 1(a), (c), 2(c), and 3(a), (b), (c), (e).

4. Deferred Credits outstanding as under from SIDBI are against deferred payments Gurantee/Co-Acceptance facility of Rs. 100 lacs granted by PNB which is secured by hypotecation of the special assets purchased under such facility.

Other notes

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 82.13 lacs (previous year Rs. 2174.62 lacs)

2. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 122.51 lacs (previous year Rs. 137.98 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 250.30 lacs (previous year Rs. 2.11 lacs) has also been met by drawing from Revaluation Reserve.

3. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, Interest on customs duty for goods in bond, duty draw back from Government are accounted for on cash basis and Wealth Tax is accounted when paid.

4. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

5. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

6. Confirmation of balances from some of the Debtors, Creditors, Depositors and Banks have not been received.

7. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

8. Sales tax collections are treated as liability and not as revenue of the company.

9. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

10. Sales Tax Assessments of Dhrangadhra Unit are pending from 1990-91 and Central Sales Tax Assessments of Sahupuram Unit are pending from 1990-91. Sales Tax assessments under Tamil Nadu General Sales Tax Act, are pending since 1997-98.

11. Previous years expenses accounted this year are Rs. 26.05 lacs (previous year Rs. 19.53 lacs). Previous years income/sales accounted this year are Rs. Nil (previous year Rs. 17.59 lacs).

12. Interest and finance charges others, are net and arrived at after deducting Rs. 70.06 lacs (previous year Rs. 37.01 lacs) being interest earned from Banks, on Inter-corporate Deposits, Security Deposits, on Bills, on Income Tax Refunds etc.

13. In respect of Plant & Machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2002 amount to Rs. 294.79 lacs (previous year Rs. 427.26 lacs)

14. Fixed Deposits with Scheduled banks includes Rs. 2.56 lacs (previous year Rs. 63.52 lacs) pledged with banks against guarantees given by them.

15. In the matter of customs duty on imported calciner, CEGAT vide its order dt, 8th December, 2000 has held that the calciner imported would be entitled to exemption under Notification NO. 59/87 and has also reduced the fine levied for alleged import of the calciner without licence to Rs. 5 lacs. The company has consequentially applied for refund of Rs. 41.48 lacs to the Customs authorities who have issued a notice requiring the company to show cause why the refund cannot be denied on account of unjust enrichment. The matter is pending before the customs authorities.

16. The company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres and 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court.

A fresh conducting agreement has been executed with GHCL after terminating the existing agreement with Double Dot Finance Ltd. (formerly known as DCW Home Products Ltd.). The consideration of Rs.50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

17. Sundry Creditors include liability for vehicles purchased

on hire purchase Rs. 7.96 lacs

Less: interest included in above Rs. 1.12 lacs

Rs. 6.84 lacs

18. In view of inadequate profits no commission is payable to the managing directors and the whole time director and hence computation of net profits under section 349 of the Companies Act, 1956 has not been given.

19. (a) Sundry Creditors ( Schedule K) include Rs. 81.48 lacs due to small scale and ancillary undertakings. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The undertakings from whom amounts outstanding for more than 30 days in respect of small scale undertakings where such dues exceed Rs.1 lac are as under:-

(1) Akash Coke (2) C.I. Pipes Mfg. Corporation (3) Gautam Minerals (4) R. R. Minerals (5) Bapodra Minerals (6) Balyogi Corporation (7) Jayesh Trading Co. (8) Jitendra Minerals (9) Kirti Minerals.

20. Based on the comparison between the market value of Business Centre Building as valued by a valuer and the net value as appearing in the books of account, the company has provided Rs. 1263.60 las towards dimunition in the value of buidling to recognise impairment.

21. No provision has been made for Rs. 52.96 lacs being amount of increase in basic wages of piece rate workers of Salt works at Kuda, Dhrangadhra determined under notification date 5th October, 2000 issued by the Govt. of Gujarat, as the companys civil application challenging the notification is pending in the High Court of Gujarat.

22. Figures are expressed in lacs and have been rounded off to the nearest thousands.

23. Previous year figures are regrouped to match with current years grouping.


Mar 31, 2001

1. Of the Equity Shares

(1) The following Shares were allotted as fully paid-up without payment being received in cash :

(a) 1,05,000 Shares to Vendors.

(b) 910 Shares to Equity Shareholders of the erstwhile PRC Limited, pursuant to the amalgamation with the Company.

(2) 74,90,197 Shares were allotted as fully paid up Bonus Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

(3) 53,33,310 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 Partly Convertible Debentures allotted in April 1992.

(4) 92,25,000 Shares were issued in 1994-95 against which Global Depository Receipts were issued by the Depository viz. Citibank, U.S.A.

(5) 56,18,905 shares were issued and allotted pursuant to Rights issue made during the year.

6. Debentures

(a) Rs. 748.04 lacs (previous year Rs. 748.04 lacs) comprising 16,62,304 - 16.5 percent Non-Convertible Debentures of Rs. 45/- each are redeemable at par from May 2001 to February 2004 in 12 quarterly instalments and are secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bills Re-discounting Scheme ranking pari passu with the mortgage referred to in Note 1(b) below.

(b) Rs. 345.45 lacs (previous year Rs. 345.45 lacs) comprising of 3,45,450 - 14 percent Non-Convertible Debentures of Rs. 100/- each are redeemable at par from August 2001 to May 2004 in 12 quarterly instalments and are secured by a mortgage of all the movable and immovable properties of the Company ranking subsequent, subservient and subordinate to all prior mortgages/charges and created/to be created in future, in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Re-discounting Scheme and rank pari passu with the mortgage referred to in Note 1(a) above.

(c) Rs. 1,400 lacs (previous year Rs. 1,400 lacs) comprising of 14,00,000 - 17.5 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBl and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in Notes 1(d), 2(c), 3(a) , 3(b) and 3(f).

(d) Rs. Nil lacs (previous year Rs. 500 lacs) comprising of 5,00,000 -18.50 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC Mutual Fund are redeemable at par from April 2000 in two equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 numbers of 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBl and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in Notes 1(c), 2(c), 3(a), 3(b) and 3(0.

7. Banks

(a) Rs. 300 lacs (previous year Rs. 900 lacs) term loan from Punjab National Bank (PNB) is secured by way of exclusive charge by hypothecation of the assets purchased from the loan amount viz. 3 numbers of 6 MW DG Sets, Switchgears, Cables etc.

(b) Rs. 1,241.55 lacs (previous year Rs. 2,819.42 lacs) by way of working capital facilities from Banks are secured by hypothecation of all inventories, book debts and all other movables of the company and are further secured by a second charge on all the fixed assets of the company excepting fixed assets hypothecated to PNB and referred to in Note 2(a) above and specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBl and hypothecated to PNB referred to in Note 4 below.

(c) Rs. 162.60 lacs (previous year Rs. 304.48 lacs) by way of Foreign Currency Loan from EXIM Bank and Rs. 62.50 lacs (previous year Rs. 187.50 lacs) by way of Rupee Term Loan from EXIM Bank are secured by hypothecation/mortgage of the movable/immovable properties of the company (except 3 numbers of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking par! passu with the charges referred to in Notes 1(c), 1(d), 3(a), 3(b) and 3(f) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(d) Rs. 160.72 lacs (previous year Rs. 225.01 lacs) by way of term loan from EXIM Bank under Production Equipment Finance Program are secured by way of exclusive charge on movable fixed assets acquired viz. 7 digestors and other equipment.

(e) Rs. 76.78 lacs (Previous year Rs. Nil lacs) by way of hypothecation of vehicles acquired under Hire purchase Scheme.

8. Other Loans

(a) Rs. 284 lacs (previous year Rs. 519.93 lacs) by way of Rupee Term Loans from Financial Institutions are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 Nos. of 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pan passu with the charges referred to in notes 1 (c), 1(d), 2(c), 3(b) and 3(f) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(b) Rs. 761.49 lacs (previous year Rs. 914.66 lacs) by way of Foreign Currency Loan from IDBI are secured by hypothecation/ mortgage of the movable/immovable properties of the company (except 3 Nos. of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4 and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2(d) ranking pari passu with the charges referred to in Notes 1 (c), 1 (d), 2(c), 3(a) and 3(f) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(c) Rs. 220 lacs (previous year Rs. 1,100 lacs) by way of Working Capital Loan from IDBI are secured by hypothecation of movable assets of the company (save and except book debts and 3 Nos. of 6 MW DG sets. Cables, Swithgears etc., which are exclusively charged to PNB referred to in Note 2(a) and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2 (d)) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities and on specific items of machinery purchased under Deferred Payment facilities granted by SIDBI and co-accepted by PNB referred to in Note 4.

(d) Rs. Nil lacs (previous year Rs. Nil lacs) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company.

(e) Rs. 1,298 lacs (previous year Rs. 1,766 lacs) by way of corporate loan from IDBI are secured by hypothecation of movable properties of the company (save and except 3 Nos. of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB referred to in Note 2(a) and 7 digestors and other equipment which are charged exclusively to EXIM Bank under Production Equipment Finance Program referred to in Note 2(d) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities and such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4).

(f) Rs. 375 lacs (Previous year Rs. Nil lacs) by way of term loan from IDBI for pollution abatement and debottle necking/ modernisation schemes secured by a first mortgage in favour of IDBI on the company's immovable properties, both present and future and a first charge by way of hypothecation of all movables (save and except 3 Nos 6 MW DG sets Switchgears, Cables etc. exclusively charged to PNB referred to in Note 2(a), 7 digesters and other equipments which are charged exclusively to EXIM Bank under Production Equipment Financial Program referred to in Note 2(d)) subject to prior charges created and/or to be created in favour of the company's banks on inventories and book debts for securing working capital and specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4 and ranking pari passu with the charges referred to in Notes 1(a), (c), (d), 2(c), 3(a) and 3(b).

9. Deferred Credits outstanding as under from SIDBI are against deferred payment Guarantee/Co-Acceptance facility of Rs. 100 lacs granted by PNB which is secured by hypothecation of the specific assets purchased under such facility.

31/03/2001 31/03/2000 Rs. in lacs Rs. in lacs

Total Usance Bills outstanding 47.21 98.51 Less : Interest in respect of future Instalments included above 4.67 14.62

42.54 83.89

10. Rs. 5.02 lacs (Previous year Nil lacs) by way of hypothecation of vehicles acquired under hire purchase scheme.

11. Under certain loan agreements entered into by the Company, the relevant lenders have the right to convert all or part of their outstanding loans, into equity shares of the Company at par on the occurrence of certain defaults including non-payment.

12. AMALGAMATION OF DCW FINANCE LIMITED WITH THE COMPANY

During the year, DCW Finance Ltd., a wholly owned subsidiary of the company was amalgamated with the company. Brief particulars of the amalgamation are as follows:

i. General nature of business of amalgamating company.

DCW Finance Ltd., a Non Banking Finance Company was engaged in the business of hire purchase and leasing of capital assets.

ii. Brief particulars of Scheme of amalgamation and method used to effect the amalgamation.

(a) Pursuant to the Scheme of Amalgamation of erstwhile DCW Finance Limited, with the Company, as approved by the shareholders in the court convened meeting held on 9th April, 2001 and subsequently sanctioned by the Hon'ble High Courts of Gujarat and Madras on 21st June, 2001 and 22nd June, 2001, respectively, the assets and liabilities of the erstwhile DCW Finance Limited were transferred to and vested in the Company as and from 1st April, 2000, the appointed date, under the Scheme.

(b) The Amalgamation has been accounted for under the "Purchase Method" as prescribed by Accounting Standard (AS-14) on Accounting for Amalgamation issued by the Institute of Chartered Accountants of India. Accordingly, the assets, liabilities and other reserves of the erstwhile DCW Finance Limited as at 1st April, 2000 have been taken over at their book values subject to adjustments of inter company dues as specified in the Scheme of Amalgamation.

(c) As provided in the Scheme of Amalgamation, 1,50,00,000 equity shares of Rs.10 each of DCW Finance Limited by the Company stand cancelled.

13. Expenditure of Rs. 12.81 on Rights Issue of equity shares made during the year has been charged to revenue. Such expenditure was hitherto adjusted to the share premium account. As a result of this change in the method of accounting, the profits for the year are lower by Rs. 12.81 with corresponding effect on the reserves of the company.

14. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 2174.62 lacs (previous year Rs. 2061.98 lacs)

15. The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 137.98 lacs (previous year Rs. 131.93 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 2.11 lacs (previous year Rs. 13.19 lacs) has also been met by drawing from Revaluation Reserve.

16. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, Interest on customs duty for goods in bond, duty draw back from Government are accounted for on cash basis and Wealth Tax is accounted when paid.

17. Income tax provision for the year ended 31st March, 2001 has been computed in accordance with Sec.115-JB of the Income Tax Act, 1961 at Rs. 55 lacs. The Company is entitled to a future tax credit of Rs. 258 lacs for years ended 31st March, 1997 to 31st March, 2000 under Section 115-JAA of the said Act.

18. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

19. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

20. Confirmation of balances from some of the Debtors, Creditors, Depositors and Banks have not been received.

21. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

22. Sales tax collections are treated as liability and not as revenue of the company.

23. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

24. Sales Tax Assessments of Dhrangadhra Unit are pending from 1990-91 and Central Sales Tax Assessments of Sahupuram Unit are pending from 1990-91. Sales Tax assessments under Tamil Nadu General Sales Tax Act, are pending since 1997-98.

25. Interim Stay of all proceedings had been granted by the Madras High Court pursuant to the petition filed by the Company against the pre assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs. 1371.95 lacs in respect of Sahupuram Unit. The said petition has been disposed off by the Madras High Court during the year directing the company to present its case before the concerned authorities. The company does not expect any significant liability in the assessment.

26. Previous years expenses accounted this year are Rs. 19.53 lacs (previous year Rs. 15.53 lacs). Previous years income/sales accounted this year are Rs. 17.59 lacs (previous year Rs. 2.41 lacs) .

27. Interest and finance charges others, are net and arrived at after deducting Rs. 37.01 lacs (previous year Rs. 96.29 lacs) being interest earned from Banks, on Inter-corporate Deposits, Security Deposits, on Bills, on Income Tax Refunds etc.

28. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2001 amount to Rs. 427.26 lacs (previous year Rs. 772.79 lacs)

29. Cash at bank includes Fixed Deposits pledged with banks Rs. 63.52 lacs (previous year Rs. 59.21 lacs) against guarantees given by them,

30. In the matter of customs duty on imported calciner, CEGAT vide its order dt. 8th December, 2000 has held that the calciner imported would be entitled to exemption under Notification NO. 59/87 and has also reduced the fine levied for alleged import of the calciner without licence to Rs.5 lacs. The company has consequentially applied for refund of Rs. 41.48 lacs to the Customs authorities who have issued a notice requiring the company to show cause why the refund cannot be denied on account of unjust enrichment. The matter is pending before the customs authorities.

31. No further debenture redemption reserve is created as the balance available in the debenture redemption reserve on aggregate basis adequately equated over 50% of the amount of debentures due for redemption in subsequent years.

32. The company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres and 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court.

A fresh conducting agreement has been executed with GHCL after terminating the existing agreement with DCW Home Products Ltd. The consideration of Rs. 50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

33. The imported supermizers lying in stock reflected as "stock of traded goods" and grouped under "Inventories" are reflected at cost of Rs. 530.84 lacs in the Balance Sheet as the same will be capitively used for replacement of defective supermizers installed in the operations of the Company.

34. Sundry Creditors include liability for vehicles purchased

on hire purchase Rs. 8.08 lacs Less: interest included in above Rs. 1.31 lacs Rs. 6.77 lacs

35. In view of inadequate profits no commission is payable to the managing directors and the whole time director and hence computation of net profits under section 349 of the Companies Act, 1956 has not been given.

36. Mr. T.S. Ravikumar was appointed as Additional Director on the Board of Directors and designated as Whole Time Director with effect from 25th January, 2001 subject to approval by the shareholders. The remuneration of Rs. 1.84 lacs paid to him is subject to approval of the Shareholders at general body.

37. (a) Sundry Creditors ( Schedule K) include Rs. 144.37 lacs due to small scale and ancillary undertakings. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

(b) The undertakings from whom amounts outstanding for more than 30 days in respect of small scale undertakings where such dues exceed Rs. 1 lac are as under.:-

(1)Akash Coke (2) C.I. Pipes Mfg. Corporation (3) S. V. Agro Polymers (4) Premier Engineering Eqpt

38. Since the expenditure involved in the rights issue not substantial, the same is charged to revenue.

39. Figures are expressed in lacs and have been rounded off to the nearest thousands.

40. In view of the amalgamation of DCW Finance Ltd, the erstwhile Wholly owned subsidiary of the company, with the company with effect from 1st April, 2000, the figure for the current year are not comparable to those of the previous year. Previous year figures are regrouped wherever necessary to conform to the current years grouping.

41. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

Schedule "A" to "N" form an integral part of the Balance Sheet and Schedule "V to "6" form an integral part of the Profit and Loss Account.


Mar 31, 2000

Notes :

1. Debentures

(a) Rs. 748.04 lacs (previous year Rs. 1,199,99 lacs) comprising 16,62,304 - 16.5 percent Non-Convertible Debentures of Rs. 45/- each are redeemable at par from May 2001 to February 2004 in 12 quarterly instalments and are secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase f specific items of machinery and equipment under any Deferred Payment Scheme or Bills Red-discounting Scheme ranking pari passu with the mortgage referred to in Note 1(b) below.

(b) Rs. 345.46 lacs (previous year Rs. 971.38 lacs) comprising of 3,45,463 - 14 percent Non-Convertible Debentures of Rs. 100/-each are redeemable at par from August 2001 to May 2004 in 12 quarterly installments and are secured by a mortgage of all the movable and immovable properties of the Company ranking subsequent, subservient and subordinate to all prior mortgages/charges and created/to be created in future, in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Re-discounting Scheme and rank pari passu with the mortgage referred to in Note 1(a) above.

(c) Rs. 1,400 lacs (previous year Rs. 1400 lacs) comprising of 14,00,000-17.5 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and moveable properties of the Company (except 3 numbers of 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in Notes 1(d), 2(c), 3(a), 3(b) and 6.

(d) Rs. 500 lacs (previous year Rs. 500 lacs) comprising of 5,00,000-18.50 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC Mutual Fund are redeemable at par from April 2000 in two equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 numbers of 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from IDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with charges referred to in Notes 1(c), 2(c), 3(a), 3(b) and 6.

2. Banks

(a) Rs. 900 lacs (previous year Rs. 1,568.88 lacs) term loan from Punjab National Bank (PNB) is secured by way of exclusive charge by hypothecation of the assets purchased from the loan amount viz. 3 numbers of 6 MW DG Sets, Switchgears, Cables etc.

(b) Rs. 2,819.42 lacs (previous year Rs. 3,564.94 lacs) by way of working capital facilities from Banks are secured by hypothecation of all inventories, books debts and all other movables of the company and are further secured by a second charge on all the fixed assets of the company excepting fixed assets hypothecated to PNB and referred to in Note 2(a) above and specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBI and hypothecated to PNB referred to in Note 4 below.

(c) Rs. 304.48 lacs (previous year Rs. 444.31 lacs) by way of Foreign Currency Loan from EXIM Bank and Rs. 187.50 lacs (previous year Rs. 312.50 lacs) by way of Rupee Term Loan from EXIM Bank are secured by hypothecation/mortgage of the movable/immovable properties of the company (except 3 numbers of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit Facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in Notes 1(c), 1(d), 3(a), 3(b) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(d) Rs. 225.01 lacs (previous year Rs. 257.15 lacs) by way of term loan from EXIM Bank under Production Equipment Finance Program are secured by way of exclusive charge on movable fixed asses acquired viz. 7 digestors and other equipment.

3. Other Loans

(a) Rs. 519.93 lacs (previous year Rs. 1,166.03 lacs) by way of Rupee Term Loans from Financial Institution are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 Nos. of 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4) ranking pari passu with the charges referred to in notes 1(c), 1(d), 3(b) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(b) Rs. 914.66 lacs (previous year Rs. 980.08 lacs) by way of Foreign Currency Loan from IDBI are secured by hypothecation/mortgage of the movable/immovable properties of the company (except 3 Nos. of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4 and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2(d) ranking pari passu with the charges referred to in Notes 1(c), 1(d), 2(c), 3(a) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(c) Rs. 1,100 lacs (previous year Rs. 1,100) by way of Working Capital Loan from IDBI are secured by hypothecation of movable assets of the company (save and except book debts and 3 Nos. of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB referred to in Note 2(a) and 7 digestors and other equipment exclusively charged to EXIM Bank referred to in Note 2 (d)) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities and on specific items of machinery purchased under Deferred Payment facilities granted by SIDBI and co-accepted by PNB referred to in Note 4.

(d) Rs. Nil lacs (previous year Rs. Nil) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company.

(e) Rs.1,766 lacs (previous year Rs. 1,000 lacs) by way of corporate loan from IDBI are secured by hypothecation of movable properties of the company (save and except 3 Nos. of 6 MW DG sets, Cables, Switchgears etc., which are exclusively charged to PNB referred to in Note 2(a) and 7 digestors and other equipment which are charged exclusively to EXIM Bank under Production Equipment Finance Program referred to in Note 2(d) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities and such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note (4).

4. Deferred Credits outstanding as under from SIDBI are against deferred payment Guarantee/Co-Acceptance facility of Rs. 100 lacs granted by PNB which is secured by hypothecation of the specific assets purchased under such facility.

31/03/2000 31/03/1999 Rs. in Lacs Rs. in Lacs

Total Usance Bills outstanding 98.51 162.01

Less : Interest in respect of future Instalments included above 14.62 31.12

83.89 130.89

5. Under certain loan agreements entered into by the Company, the relevant lenders have the right to convert all or part of their outstanding loans, into equity shares of the Company at par on the occurrence of certain defaults including non-payment.

6. The Company has been sanctioned Foreign Currency Loan of US$ 15 Million by IDBI for setting up a project to manufacture Iron Oxide. Pending disbursements of the same, the company has created a charge on its movable/immovable assets similar to those indicated in Notes 2(c) and 3(b).

B. NOTES ON ACCOUNTS

1. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 2061.98 lacs (previous year Rs. 844.28 lacs).

2. (a) Consequent to revision in the economic life of the revalued assets by the reorganised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier year. This has no impact on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve.

(b) The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 131.93 lacs (previous year Rs. 136.34 lacs) than the depreciation charge thereon under Section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 13.19 lacs (previous year Rs. 45.48 lacs) has also been met by drawing from Revaluation Reserve.

3. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, Interest on customs duty for goods in bond, duty draw back from Government are accounted for on cash basis and Wealth Tax is accounted when paid.

4. Income tax provision for the year ended 31st March, 2000 has been computed in accordance with Sec. 115-JA of the Income Tax Act, 1961 at Rs. 50 lacs. The Company is entitled to a future tax credit of Rs. 258 lacs (including Rs. 208 lacs for years ended 31st March, 1997 to 31st March, 1999) under Section 115-JAA of the said Act.

5. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

6. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

7. Confirmation of balances from some of the Debtors, Creditors, Depositors, Banks and financial institutions have not been received.

8. In compliance with Accounting Standard - 2 (Revised) on "Valuation of Inventories" issued by the Institute of Chartered Accountants of India, which is mandatory for accounting periods commencing from 1st April, 1999, the Company has :

(a) Provided liability for excise duty on Finished Goods lying at factories and Customs Duty on Raw Materials and Trading Stock lying at bonded warehouse, at the close of the year, resulting in increase in the value of inventories and corresponding increase in Current Liabilities by Rs. 428.15 lacs. However, this has no impact on the profits for the year.

(b) Changed the computation of cost of Raw Material produced, conversion cost of raw materials, process stock and finished goods by including depreciation and a systematic allocation of factory and administration overheads. This change has resulted in a net decrease in the value of inventories and profits by Rs. 22.47 lacs.

(c) Ilmenite Stock which hitherto was valued at net contracted sale value has in this year been valued at the lower of cost or net realisable value. This change has no impact on the profits for the year.

(d) Identified machinery spares aggregating to Rs. 311.78 lacs relatable to fixed assets and whose use is expected to be irregular, which hitherto were considered as part of inventory, have in this year been included under "Fixed Assets" as "Machinery/Spares for erection and replacement" to be capitalised on usage and amortised over the residual life of the related machinery. This change has the effect of increase in Fixed Assets with consequential decrease in Inventories.

9. Modvat credit on capital goods which hitherto was recognised as income, has in this year been reduced from the cost of fixed asset and depreciation charged accordingly. This change has the net effect of decreasing the profit for the year by Rs. 57.64 lacs.

10. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

11. Based on approval of Reserve Bank of India, the amount of S$ 53565.30 (Rs. 13.39 lacs) realised on execution of decree in favour of the company against the supplier from whom electrical stores and spares were imported in earlier years and which was lying in escrow with the lawyers, has been accounted in the current year.

12. Sales tax collections are treated as liability and not as revenue of the Company.

13. Encroaches have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

14. Pursuant to arrangement with DCW Finance Ltd. (wholly owned subsidiary) the liability for payment to raw material suppliers on the expiry of the credit period has been undertaken to be discharged by them. The said amount is credited to the account of the subsidiary on the date of receipt of raw materials at part at the then prevailing rate of exchange and is treated as loan. Interest @ 9% p.a. is credited on the outstanding balances. The outstanding balance lying to the credit of subsidiary company is shown as unsecured loan in the Balance Sheet.

15. Sales Tax Assessments of Dhrangadhra Unit and Central Sales Tax Assessments of Sahupuram Unit are pending from 1990-91.

16. Interim Stay of all proceedings has been granted by the Madras High Court pursuant to the petition filed by the Company against the pre assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs. 1371.95 lacs in respect of Sahupuram Unit.

17. Previous year expenses accounted this year are Rs. 15.53 lacs (previous year Rs. 95.04 lacs). Previous year income/sales accounted this year are Rs. 2.41 lacs (previous year Rs. 163.24).

18. Interest and finance charges others, are net and arrived at after deducting Rs. 96.29 lacs (previous year Rs. 102.88 lacs) being interest earned from Banks, on Inter-corporate Deposits, Security Deposits, on Bills, on Income Tax Refunds etc.

19. In respect of plant, machinery equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 2000 amount to Rs. 772.79 lacs (previous year Rs. 407.30 lacs).

20. Cash at bank includes Fixed Deposits pledged with banks Rs. 59.21 lacs (previous year Rs. 84.59 lacs) against guarantees given by them.

21. In the matter of customs duty on imported calciner, the Commissioner of Customs consequent to denovo adjudication has ordered that the calciner imported be classified under heading No. 8479.89 of the Customs Tariff and the inclusion of basic engineering and specific charges of Rs. 51.27 lacs in arriving at the assessable value and transaction value of the calciner for levy of customs duty. He has also imposed a fine of Rs. 51.27 lacs for alleged import of the calciner without a licence. The company has filed an appeal with CEGAT against the order who have, pending final hearing, stayed the recovery of the fine. Based on the denovo adjudication the aggregate customs duty works out to Rs. 150.66 lacs against which the Company has already paid Rs. 197.14 lacs. The Company has given an undertaking to create a second charge on the imported calciner favouring customs authority.

22. No further debenture redemption reserve is created as the balance available in the debenture redemption reserve on aggregate basis adequately equated over 50% of the amount of debentures due for redemption in subsequent years.

23. The Company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres and 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court. A fresh conducting agreement has been executed with GHCL after terminating the existing agreement with DCW Home Products Ltd. The consideration of Rs. 50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

24. The imported supermizers lying in stock reflected as "stock of traded goods" grouped under "inventories" have a realisable value atleast equal to their carrying cost in the Balance Sheet.

25. Sundry Creditors include liability for vehicles purchased

on hire purchase Rs. 3.82 lacs

Less interest included in above Rs. 0.22 lac

Rs. 3.60 lacs

26. In view of inadequate profits no commission is payable to the managing directors and the whole time director and hence computation of net profits under Section 349 of the Companies Act, 1956 has not been given.

27. (a) Sundry Creditors (Schedule K) in include Rs. 106.37 lacs due to small scale and ancillary undertakings.

(b) The undertakings from whom amounts outstanding for more than 30 days in respect of small scale undertakings where such dues exceed Rs. 1 lac are as under. :-

(1) Akash Coke 2) R.R. Minerals 3) Heena Minerals 4) Shiv Shakti Mineral 5) Premier Engineering Eqpt. 6) Gautam Minerals.


Mar 31, 1999

I. Of the Equity Shares :

1) The following Shares were allotted as fully paid-up without payment being received in cash

a) 1,05,000 Shares to Vendors

b) 910 Shares to Equity Shareholders of the erstwhile PRC Limited, pursuant to the amalgamation with the Company.

2) 74,90,197 Shares were allotted as fully paid up Boots Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

3) 53,33,310 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 partly convertible debentures allotted in April 1992.

4) 92,25,000 Shares were issued in 1994-95 against which Global Depository Receipts were issued by the Depository viz. Citibank U.S.A.

II. The Company has given an option on its unissued Share Capital by way of entitlement to subscribe to 19,67,000 Equity Shares against warrants issued to Debentoreholders at a premium of Rs. 40/- per share on such dates as may be fixed by the Board. The said option, is exercisable between August 1996 and August 1999 (Refer Note 1 (c) of Schedule "C").

1) Debentures

a) Rs. 175 lacs 14%, Non Convertible Debentures have been redeemed during the year. The Company is in the process of obtaining No Objection Certificates from the erstwhile debenture holders and completing formalities of filing documents in respect of satisfaction of charge created in this regard.

b) Rs. 1199.99 lacs (Previous Year Rs. 1,199.99 lacs) comprising 26,66,655 126,66,655) - 16.5 percent Non-Convertible Debentures of Rs. 45 each issued as Rights in Shareholders of the Company are Redeemable at par in April, 1999 and are Secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bills Re-discounting Scheme and ranking pari passu with the mortgage refereed to in Note (c) below.

c) Rs. 971.38 lacs (Previous Year Rs. 983.50 Lacs) comprising of 9,83,500 - 14 percent Non Convertible Debentures of Rs. 100/-each issued as Rights to Shareholders of the Company are Redeemable at par in August 1999, secured by a mortgage of all the movable and immovable properties of the Company ranking subservient, subservient and subordinate to all prior mortgages/charges and created/to be created in future, in favour of Public Financial Institution/ Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Rediscounting Scheme and rank pari passu with the mortgage referred to in Note 1(b) above.

As pee the terms of issue of these Debentures, 9,83,500 Detachable Warrants have been issued to the Debentureholders with a right to pay and apply for and get allotted 2 equity shares of Rs. 10 each at a premium of Rs. 40 per share against each warrant held, on date as may be fixed by the Board, which will not be earlier than 17th August, 1996 and not later than 15th August, 1999.

d) Rs. 1,400 lacs (Previous Year Rs 1,400 lacs) comprising of 14,00,000 17.5 per cent Non Convertible Debentures of Rs. 100 each privately placed with LIC/ UTI/GIC and its subsidiaries and Army Group Issurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and moveable properties of the Company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility, from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1 (a), 1(e) 2(c), 3(a), 3(b), 3(d) and 6.

e) Rs. 500 lacs - Year Rs. 500 lacs) comprising of 5,00,000 18.50 percent Non-Convertible Debentures of Rs. 100 each privately placed with DC Mutual Fund are redeemable at par from April 2000 in two equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 numbers of 6 NW DC Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking par passu with the charges referred to in Notes 1(a), 1(d), 2(c), 3(a), 3(b), 3(d) and 6.

2) Banks

a) Rs. 1568.88 lacs (Previous Year Rs. 1800 lacs) term loan from Punjab National Bank (PNB) is secured by exclusive charge by way of hypothecation of the assets purchased from the loan, amount viz 3 numbers of 6 MW DG Sets, Switchgears, Cables etc.

b) Rs. 3365.94 lacs (Previous Year Rs. 5005.96 lacs) by way of working capital facilities from Banks, are secured by hypothecation of all current assets and book debts of the Company and are further secured by a second charge on all the fixed assets of the Company.

c) Rs. 444.31 lacs (Previous Year Rs. 552.25 lacs) by way of Foreign Currency Loan from EXIM Bank and Rs. 312.50 Lacs (Previous Year Rs. 437.50 lacs) by way of Rupee Term Loan from EXIM Bank are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 numbers of 6 MW DC sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deterred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges refereed join Notes 1(a), 1(d), 1(e), 3(a), 3(b), 3(d) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

d) Rs. 257.15 Lacs (Previous Year Rs. Nil) by way of term loan from Exim Bank under Production Equipment Finance Program are secured by exclusive charge on moveable fixed assets viz. 7 digestors and other equipment purchased under the scheme

3) Other Loans :

a) Rs. 1166.03 lacs (Previous Year Rs. 1950.83 lacs) by way of Rupee Term Loans from Financial Institutions are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc. which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in notes 1(a), 1(d), 1(e), 2(c), 3(b), 3(d) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks toe working capital facilities.

b) Rs. 980.80 lacs (Previous Year Rs. 516.49 lacs) by way of Foreign Currency Loan from IDBI and working capital demand loan of Rs. 1100 lacs from IDBI (Previous Year Rs. 11110 lacs) are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 numbers of 6 MW DC sets. Cables, Switchgears etc, which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking purl passu with the charges referred to in Notes 1(a) 1(d), 1(e), 2(c), 3(a), 3(d) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

c) Rs. Nil - Previous Year Rs. 189.78 lacs) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company

d) Rs. 1000 lacs (Previous Year Rs. Nil) by way of corporate loan from IDBI are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 numbers of 6 MW DC sets, Cables, Switchgears etc., which are exclusively charged to PNB and 7 digestors and other equipment which are charged exclusively to Exim Bank under Production Equipment Finance Program but subject to such specific, items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 41 ranking pari passu with the charges referred to in Notes 1(a), 1(d), 1(e), 2(c), 3(a), 3(b) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities. 4) Under certain loan agreements entered into by the Company, the relevant lenders have the right to convert all or part of their outstanding loans, into equity shares of the Company at par on the occurrence of certain defaults including non-payment.

5) The Company has been sanctioned Foreign Currency Loan of US$ 15 Million by IDBI for setting up a project to manufacture Iron Oxide. Pending disbursements if the same, the Company has created a charge on its movable/immovable assets similar to those indicated in Notes 2(c) and 3(b).

6. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is Rs. 844.28 lacs (Previous Year Rs. 1072.68 lacs)

7. a) Consequent to revision in the economic life of the revalued assets by the recognised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier years. This has no impact on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve.

b) The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 136.34 lacs Previous Year Rs. 147.31 lacs) than the depreciation charge thereon under Section 205 (2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 45.48 lacs ( Previous Year Rs. 134.02 lacs) has also been met by drawing from Revaluation Reserve.

8. Sale of Vegetable Products and Advance licenses Interest on Government Securities, duty draw back from Government are accounted when received and Wealth Tax is accounted when paid.

9. Income tax provision amounting to Rs. 6 lacs has been computed in accordance with Section 115-JA of the Income Tax Act, 1961. The Company is entitled to a future tax credit of Rs. 208 lacs under Section 115-JAA of the said Act.

10. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

11. Sales tax assessments of Dhrangadhra Unit are pending from 1983-84 and Central Sales Tax assessments of Sahupuram Unit from 1990-91.

12. The Stores and spares consumption is allocated to different heads (including capital jobs) can functional basis.

13. Confirmation of balances from some of the Debtors, Creditors, Depositors and Banks have not been received.

14. i) Liability for excise duty in respect of finished goods manufactured and lying in stock at factory as at 31st March 1999, amounting to Rs. 253.48 lacs (Previous Year Rs. 253.67 lacs, will be charged to Profit and Loss Account at the time of removable of goods. This has no impact on the profits for the year.

ii. Liability bar customs duty payable on imported goods lying in Bond with customs authorities as at 31st March, 1999, amounting to Rs. 147.78 lacs (Previous Year Rs. 179.16 lacs), will be charged to the Profit and Loss Account in the year of clearance of goods. This has no impact on the profits for the year.

15. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

16. The suit filed by the Company against the supplier from whom electrical stores and spares were imported, claiming recovery of cost for defective supplies plus freight, interest and other expenses thereon has been decreed in favour of the Company against which only $ 53565.30 (Rs. 22.68 lacs) have been realised and is lying in escrow with the lawyers.

17. Sales tax collections are treated as liability and not as revenue of the Company.

18. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

19. Pursuant to arrangement with DCW Finance Ltd (wholly owned subsidiary) the liability for payment to raw material suppliers on the expiry of the credit period has been undertaken to he discharged by them. The said amount is credited to the account if the subsidiary on the date of receipt of raw material at port at the then prevailing rate of exchange and is treated as loan. Interest @ 12.50% p.a. is credited on the outstanding balances. The outstanding balance lying to the credit, subsidiary company is shown as unsecured loan in the Balance Sheet.

20. Interim Stay of all proceedings bus been granted by the Madras High Court pursuant to the petition filed by the Company against the pre-assessment notice issued by the Sales Tax Department of the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs. 1371.95 lacs in respect of Sahupuram Unit.

21. Previous years sales accounted this year are Rs. 163.24 lacs (Previous Year Rs. 549.68 lacs) and the related previous year expenses accounted this year are Rs. 95.04 lacs (Previous Year Rs. 89.14 lacs)

22. Interest and finance charges others, are net and arrived at after deducting Rs. 102.88 lacs (Previous Year Rs. 113.69 lacs) being interest earned from Bank, on Inter-corporate Deposits. Security Deposits, on Bills, on Income Tax Refunds etc.

23. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 1999 amount to Rs. 407.30 lacs (Previous Year Rs. 755.86 lacs)

24. Cash at bank includes Fixed Deposits pledged with banks Rs. 84.59 lacs (Previous Year Rs. 83.08 lacs) against guarantees given by them.

25. In the matter of customs duty on imported calciner and related technical engineering fees, pending readjudication and reassessment by the Collector of Customs, Kandla, the Customs Authorities have in terms of the Supreme Courts order encashed Rs. 70 lacs out of the Bank Guarantees aggregating Rs. 145.23 lacs given in their favour. The balance guarantees outstanding are reflected under contingent liabilities. In addition, Rs. 17.5 lacs is lying as Deposit with Gujarat High Court. The Company's rectification application has been disposed off by CEGAT vide order dated 26th April, 1996 remanding the matter to the Commissioner of Customs for denovo adjudication.

The Company has given an undertaking to create a second charge on imported calciner favouring customs authority.

25. No further debenture redemption reserve is created as the balance available in the debenture redemption reserve in aggregate basis adequately equated over 50% of the amount of debentures due for redemption in subsequent years.

26. The Company, subject to the approval of the Government of Tamil Nadu has offered to transfer the lease hold rights and interest in 3185 acres aid 153 cents of leasehold land at Vedaranyam to Gujarat Heavy Chemicals Ltd. (GHCL), for a lumpsum consideration of Rs. 50 lacs. The increase in lease rent, cess, etc. on the said lease hold land relating to the past period, claimed by the State Government is disputed in a writ petition filed and pending in the Madras High Court A fresh conducting agreement has been executed with GHCL after terminating the existing agreement with DCW Home Products Ltd. The consideration of Rs. 50 lacs payable by GHCL would be paid after deducting payments, if any, made by them towards increase in lease rent.

27. The imported supermizers lying in stock reflected as "stock of traded goods and "Stores Spare Parts, Fuel" grouped under "current assets, Loans & Advances Inventories" have a realisable value atleast equal to their carrying cost in the Balance Sheet and are proposed to be used for replacement of defective supermizers installed in the operations of the Company. 28. Sundry Creditors include liability for vehicles purchased on hire purchase

Rs. 10.08 lacs less interest included in above Rs. 91.35 lacs Rs. 118.73 lacs 29. In view of inadequate profits no commission is payable to the managing directors and the whole time director and hence computation of net profits under Section 349 of the Companies Act, 1956 has not been given. 30. a) The undertakings from whom amounts outstanding for more than 30 days in respect of small scale undertakings where such dues exceed Rs. 1 lac are as under.

1) Akash Coke 2) R. R. Minerals 3) Heena Minarals 4) Shiv Shakti Mineral 5) Premier Engineering Eqpt.

b) The above information has been compiled in respect of parties to the extent to which they would be identified as small scale and ancilliary undertakings on the basis of information available with the Company.

31. Figures are expressed in lacs and have been rounded off to the nearest thousands.

32. Previous year figures are regrouped wherever necessary to conform to the current years grouping.

33. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.


Mar 31, 1998

1. Of the Equity Shares

1) The following Shares were allotted as fully paid-up without payment being received in cash :-

a) 1,05,000 Shares to Vendors

b) 910 Shares to Equity Shareholders of the erstwhile PRC Limited, pursuant to the amalgamation with the Company.

2) 74,90,197 Shares were allotted as fully paid up Bonus Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

3) 53,33,310 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 Partly Convertible Debentures allotted in April 1992.

4) 92,25,000 Shares were issued in 1994-95 against which Global Depository Receipts were issued by the Depository viz. Citibank U.S.A.

2. The Company has given an option on its unissued Share Capital by way of entitlement to subscribe to 19,67,000 Equity Shares against warrants issued to Debentureholders at a premium of Rs. 40/- per share on such dates as may be yet to be issued by the Board. The said option, is exercisable between August 1996 and August 1999 (Refer Note 1(c) of Schedule "C").

3. Debentures :

a) Rs. 17500 lacs (previous year Rs.433 33 lacs) comprising 1,75,000 - (4,33,330) 14 percent Non-Convertible Debentures of Rs. 100/-each privately placed with Financial Institutions and Army Group Insurance Fund are redeemable from 1994 onwards in various annual instalments at a premium of Rs.5/- per debenture, and are secured by a legal mortgage of all the immovable and movable properties of the company and moveable assets of the Company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the mortgages/charges on the Fixed Assets of the company, referred to in Notes 1(d),1(e),2(c),3(a),3(b) and 6 but are subject to prior charges created/to be created on current assets and book debts in favour of Banks for working capital facilities.

b) Rs.1199.99 lacs (previous year Rs. 1199.99 lacs) comprising 26,66,655 (26,66,655) - 16.5 percent Non-Convertible Debentures of Rs 45/-each issued as Rights to Shareholders of the Company are redeemable at par in April-1999 and are secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bills Re-discounting Scheme and ranking pari passu with the mortgage referred to in Note 1(c) below.

c) Rs.983.50 lacs (previous year Rs. 983.50 lacs) comprising of 9,83,500 - 14 percent Non-Convertible Debentures of Rs.100/- each issued as Rights to Shareholders of the Company are redeemable at par in August 1999, secured by a mortgage of all the movable and immovable properties of the Company ranking subsequent, subservient and subordinate to all prior mortgages / charges and created/to be created in future, in favour of Public Financial Institutions/ Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Rediscounting Scheme and ranking pari passu with the mortgage referred to in Note 1(b) above.

As per the terms of issue of these Debentures, 9,83,500 Detachable Warrants have been issued to the Debentureholders with a right to pay and apply for and get allotted 2 equity shares of Rs.10/- each at a premium of Rs. 40/- per share against each warrant held, on such date as maybe fixed by the Board, which will not be earlier than 17th August, 1996 and not later than 18th August, 1999.

d) Rs. 1400.00 lacs (previous year Rs. 1400 lacs) comprising of 14,00,000 - 17.5 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and moveable properties of the Company (except 3 numbers of 6MW DC Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1 (a),1(e),2(c),3(a),3(b) and 6.

e) Rs.500.00 lacs (previous year Rs. 500 lacs) comprising of 5,00,000 - 18.50 percent Non-Convertible Debentures of Rs. 100/-each privately placed with LIC Mutual Fund are redeemable at par from April 2000 in two equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1(a), 1(d),2(c),3(a),3(b) and 6.

4. Banks :

a) Rs. 1800.00 lacs (previous year Rs.2400 lacs) term loan from Punjab National Bank (PNB( is secured by exclusive charge by way of hypothecation of the assets purchased from the loan amount viz. 3 numbers of 6 MW DC Sets, Switchgears, Cables etc.

b) Rs.5005.96 lacs (previous year Rs.4388 20 lacs) by way of working capital facilities from Banks, are secured by hypothecation of all current assets and book debts of the company and are further secured by a second charge on all the fixed assets of the company.

c) Rs.552.25 lacs (previous year Rs. Nil) by way of Foreign Currency Loan from EXIM Bank and Rs. 437.50 lacs (previous year Rs.500 lacs) by way of Rupee Term Loan from EXIM Bank are secured by hypothecation /mortgage of the movable/immovable properties of the company (except 3 numbers of 6 MW DC Sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1(a),1(d),1(e),3(a),3(b) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

5. Other Loans

a) Rs.1950.33 lacs (previous year Rs.3123.66 lacs) by way of Rupee Term Loans from Financial Institutions are secured by hypothecation /mortgage of the movable / immovable properties of the Company (except 3 numbers of 6MW DC Sets, Cables, Switchgears etc. which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1(a),1(d),1(e),2(c),3(b) and 6 but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

b) Rs .516.49 lacs (previous year Rs. Nil) by way of Foreign Currency Loan from IDBI and working capital demand loan of Rs. 1100 lacs from IDBI (previous year Rs.Nil) are secured by hypothecation/mortgage of the movable/immovable properties of the company (except 3 numbers of 6MW DC Sets, Cables, Switchgears etc., which are exclusively charged to PNB but subject to such specific items of machinery purchased or to be purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note 4) ranking pari passu with the charges referred to in Notes 1(a), 1(d), (e),2(c),3(a) and 6 but subject to prior charges created / to be created on current assets and book debts in favour of banks for working capital facilities.

c) Rs. 189.73 lacs (previous year Rs. 66.02 lacs) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company.

6. Deferred Credits outstanding as under from SIDBI are against Deferred Payment Guarantee/Co-Acceptance facility of Rs.100 lacs granted by PNB which is secured by hypothecation of the specific assets purchased under such facility.

7. (a) Consequent to revision in the economic life of the revalued assets by the recognised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier years. This has no impact on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve. (b) The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 147.31 lacs (previous year Rs. 153.01 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting to Rs. 134.02 lacs (previous year Rs. 163.51 lacs) has also been met by drawing from Revaluation Reserve. 8. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, duty drawback from Government are accounted when received and Leave Encashment and Wealth Tax are accounted when paid. 9. In respect of debts outstanding of Rs. 352.31 lacs due from two parties which have been reflected as doubtful of recovery. Suits have been filed and the company is hopeful of recovering the amounts. 10. Income tax provision amounting to Rs. 2 lacs has been computed in accordance with Sec.115-JA of the Income Tax Act, 1961. The Company is entitled to a future tax credit of Rs.202 lacs under Section 115-JAA of the said Act.

11. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

12. Sales tax assessments of Dhrangadhra Unit are pending from 1983-84 and Central Sales Tax assessments of Sahupuram Unit from 1990-91.

13. The Stores and spares consumption is allocated to different heads(including capital jobs) on functional basis.

14. Confirmation of balances from some of the Debtors, Creditors and Depositors have not been received.

15. i) Liability for excise duty in respect of finished goods manufactured and lying in stock at factory as at 31st March, 1998, amounting to Rs. 258.67 lacs (previous year Rs.320.94 lacs) will be charged to Profit and Loss Account at the time of removable of goods. This has no impact on the profits for the year. ii) Liability for customs duty payable on imported goods lying in Bond with customs authorities as at 31st March, 1998, amounting to Rs. 179.16 lacs (previous year Rs.233.64 lacs), will be charged to the Profit and Loss Account in the year of clearance of goods. This has no impact on the profits for the year. 16. i) The Company has given undertakings to Financial Institutions to meet the shortfall, if any, in the resources of the erstwhile subsidiary, DCW Home Products Ltd., for completion of its lodised Salt project and Wheat Flour project and for working capital thereto, and not to withdraw the loans given, if any, by the Company to it, during the currency of the loans received by the said company from the financial institutions without the prior written approval of the concerned Institutions. ii) DCW Home Products Ltd; the erstwhile subsidiary had made a preferential offer of its equity shares of Rs. 10/- each at a premium of Rs.20/- per share to the shareholders and Fixed Deposit holders of DCW Ltd. The Company has offered to buy the said equity shares from the said shareholders and Fixed Deposit holders at the offer price of Rs.30/- per share at any time after June/July 1994 but within one month prior to the date of the first public issue of DCW Home Products Ltd. If the offer is accepted, the commitment of DCW Ltd. will be to buy a maximum of 10.8 lacs shares and the amount involved is Rs.324.10 lacs. The Company has so far not been called upon to buy any of these shares.

iii) The company has given undertakings to buy at par and pay arrears of dividend in respect of the following cumulative redeemable preference shares of Rs. 100 each of DCW Home Products Ltd., the erstwhile subsidiary, in the event of dividend falling in arrears or non-redemption on due dates :-

a) 3 lacs 16.5% cumulative redeemable preference shares of Rs. 100/- each (due for redemption between 05/10/1998 and 08/ 10/1998).

b) 2 lacs 15% cumulative redeemable preference shares of Rs.100/- each (due for redemption on 07/08/1998).

c) 10 lacs 19.5% cumulative redeemable preference shares of Rs. 100/- each (due for redemption between 04/06/98 and 17/07/1998) and dividend in arrears.

d) The Company gave an undertaking during the year to Financial Institutions to buy at certain rates 5.64 lacs equity shares of Rs. 10/- each being held by them in DCW Home Products Ltd, the erstwhile subsidiary (as and when called upon by them), if the said shares are not listed before 31st December, 1996 on major Stock Exchanges. The company has been called upon during the year to buy the shares at an estimated value of Rs.80.40 lacs.

17. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

18. The suit filed by the company against the supplier from whom electrical stores and spares were imported, claiming recovery of cost for defective supplies plus freight, interest and other expenses thereon is pending.

19. Sales tax collections are treated as liability and not as revenue of the company.

20. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

21. Pursuant to arrangement with DCW Finance Ltd. (wholly owned subsidiary) the liability for payment to raw material suppliers on the expiry of the credit period has been undertaken to be discharged by them. The said amount is credited to the account of the subsidiary on the date of receipt of raw material at port at the then prevailing rate of exchange. The outstanding balance lying to the credit of subsidiary company is shown as unsecured loan in the Balance Sheet. In consideration of the subsidiary undertaking to bear exchange risk and Letter of Credit charges, etc., interest at 12.50% p.a. is credited to them on the unsecured loan outstanding at the beginning of the year as per agreement.

22. Interim Stay of all proceedings has been granted by the Madras High Court pursuant to the petition filed by the Company against the pre assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs. 1371.95 lacs in respect of Sahupuram Unit.

23. Previous years expenses accounted thin year are Rs.89.14 lacs (previous year Rs.1.36 lacs).

24. Interest and finance charges others, are net and arrived at after deducting Rs 113.69 lacs (previous year Rs. 137.66 lacs) being interest earned from Bank, on Inter-corporate Deposits, Security Deposits, on Bills, on Income Tax Refunds etc.

25. Based on information available with the company anon 31st March 1998, there were no amounts overdue and remaining unpaid on account of Principal / Interest to Small Scale / Ancillary Industrial Suppliers.

26. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements anon 31st March, 1998 amount to Rs. 755.86 lacs (previous year Rs. 90.02 lacs).

27. Cash at bank includes Fixed Deposits pledged with banks Rs. 83.08 lacs (previous year Rs. 69.24 lacs) against guarantees given by them.

28. In the matter of customs duty on imported calciner and related technical engineering fees, pending readjudication and reassessment by the Collector of Customs, Kandla, the Customs Authorities have in terms of the Supreme Court's order encashed Rs.70 lacs out of the Bank Guarantees aggregating Rs. 145.23 lacs given in their favour. The balance guarantees outstanding are reflected under contingent liabilities. In addition, Rs. 17.5 lacs is lying as Deposit with Gujarat High Court. The company's rectification application has been disposed of by CEGAT vide order dated 26th April, 1996 remanding the matter to the Commissioner of Customs for denovo adjudication. The company has given an undertaking to create a second charge on imported calciner favouring customs authority.

29. The closing stock of Upgraded Ilmenite, which in the previous year was valued at cost or net realisable value, whichever is lower, has in the current year been valued at net contracted sale value. Consequent to this change, the profits of the year and Reserves and Surplus at the end of the year are higher by Rs. 619.77 lacs.

30. The Scheme of Arrangement presented by the company was approved by the Honourable Gujarat High Court under Section 391 of the Companies Act, 1956 by their order dated 22nd January, 1998 and consequential order under section 394 of even date passed by the High Court for the purpose of transferring the investment undertaking of the company to Crescent Finstock Private Limited (CFPL) and the property undertaking of the company to DCW Estates Private Limited (DEPL). Pursuant to the petition filed by the company subsequently, the Honourable Gujarat High Court by their order dated 5th March, 1998 have by way of interim relief stayed the implementation, operation and execution of their order in so far as it relates to the transfer of the property undertaking to DEPL. Subject to the stay, implementation and operation stated above, the Honourable High Court order was filed with the Registrar of Companies on 10th March, 1998 and the order in so far as relating to the transfer of the investment undertaking of the company to CFPL is implemented.

Accordingly, 1,02,49,977 fully paid equity shares of Rs. 10/- each held by the company in DCW Home Products Limited stand transferred to and vented in CFPL together with all the debts and liabilities (including contingent liabilities) of DCW Limited relating to such shares, at book value, as from 1st January, 1998. As per the Scheme, Rs.1977.64 lacs Out of the Share Premium Account and Rs.1109.84 lacs out of the General Reserve Account of the company as at 31st March, 1997 stand adjusted.

The shareholders of the company have since approved the modified Scheme of Arrangement for deleting references in so far as they relate to the property undertaking, at their meeting held on 17th April, 1998.

31. DCW Home Products Ltd., the erstwhile subsidiary has declared dividend on equity shares at its Annual General Meeting held on 30th March, 1998. The dividend when received will be passed on to Crescent Finstock Private Ltd., in consonance with the Scheme of Arrangement relating to the Investment Undertaking referred to in Note B-27 of Schedule "N", after adjusting dues, if any, of the erstwhile subsidiary and Crescent Finstock Private Ltd.


Mar 31, 1997

NOTES TO SECURED LOANS:

1. DEBENTURES.

a) Rs. 433.33 lacs (previous year Rs. 708.33 lacs) comprising 4,33,330 - (7,08,330) 14 percent Non-Convertible Debentures of Rs. 100/- each privately placed with Financial Institutions and Army Group Fund are redeemable from 1994 onwards in various annual instalments at a premium of Rs. 5/- per debenture and are secured by a legal mortgage of all the immovable and movable properties of the Company and movable assets of the Company (except 3 Numbers 6MW DG Sets, Cables, Switchgears etc., which are exclusively charged to Punjab National Bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note No. 4) ranking pari passu with the mortgages.charges on the Fixed Assets of the Company, referred to in Notes 1(d), 1(e) and 3(a) but are subject to prior charges created/to be created on current assets and book debts in favour of Banks for working capital facilities.

b) Rs. 1,199,99 lacs (previous year Rs. 1,199.99 lacs) comprising 26,66,655 (26,66,655) - 16.5 percent Non-Convertible Debentures of Rs. 45/- each issued as Rights to Shareholders of the Company are redeemable at par in April-1999 and are secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent and subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bills Re-discounting Scheme and ranking pari passu with the mortgage referred to in 1(c) below.

c) Rs. 983.50 lacs (previous year Rs. 983.50 lacs) comprising of 9,83,500 - 14 percent Non-Convertible Debentures of Rs. 100/- each issued as Rights to Shareholders of the Company are redeemable at par in August 1999, secured by a mortgage of all the movable and immovable properties of the Company ranking subsequent, subservient and subordinate to all prior mortgages/charges and created/to be created in future, in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Rediscounting Scheme and rank pari passu with the mortgage referred to in 1(b) above.

As per the terms of issue of these Debentures, 9,83,500 Detachable Warrant have been issued to the Debentureholders with a right to pay and apply for and get allotted 2 equity shares of Rs. 10/- each at a premium of Rs. 40/- per share against each warrant held, on such date as may be fixed by the Board, which will not be earlier than 17th August, 1996 and not later than 18th August, 1999.

d) Rs. 1,400 lacs (previous year Rs. 1,400 lacs) comprising of 14,00,000 - 17.5 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured by a legal mortgage of all the immovable and moveable properties of the Company (except 3 Numbers 6 MW DG Sets, Cables, Switchgers etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note No. 4) ranking pari passu with the charges referred to in Notes 1(a), 1(e) and 3(a).

e) Rs. 500 lacs (previous year Nil) comprising 5,00,000 - 18.50 percent Non-Convertible Debentures of Rs. 100/- each privately placed with LIC Mutual Fund are redeemable at par from April 2000 in two equal annual instalments and are secured by a legal mortgage of all the immovable and movable properties of the Company (except 3 Numbers 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to PNB and such specific assets purchased under Deferred Credit facility form SIDBI and hypothecated to PNB referred to in Note No.4) ranking pari passu with the charges referred to in Notes 1(a), 1(d) and 3(a).

2) FROM BANKS.

a) Rs. 2,400 lacs (previous year Rs. 3,000 lacs) term loan from Punjab National bank (PNB) is secured by exclusively charge by way of hypothecation of the assets purchased from the loan amount viz. 3 Numbers 6 MW DG Sets, Switchgears, Cables etc.

b) Rs. 4,388.20 lacs (previous year of Rs. 5,600.38 lacs) by way of working capital facilities from Banks, are secured by hypothecation of all current assets and book debts of the Company and are to be further secured by a second charge on all the fixed assets of the Company.

3.OTHER LOANS.

a) Rs. 3623.66 lacs (previous year Rs. 2986.53 lacs) by way of Rupee Term Loans from Financial Institutions are secured by hypothecation/mortgage of the movable/immovable properties of the Company (except 3 Numbers 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to Punjab National bank (PNB) and such specific assets purchased under Deferred Credit facility from SIDBI and hypothecated to PNB referred to in Note No.4) ranking pari passu with the charges referred to in Notes 1(a), 1(d) and 1(e) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

b) Rupees 66.02 lacs (previous year Rs. 12.41 lacs) outstanding under bill discounting facility of Rs. 400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are further secured by a second charge by way of mortgage of the immovable properties of the Company.

4) Deferred Credits outstanding as under from SIDBI are against deferred payment Guarantee/Co-Acceptance facility of Rs. 100 lacs granted by PNB which is secured hypothecation of the specific assets purchased under such facility.

31.03.1997 31.03.1996 Rs. in lacs Rs. in lacs

Total Usance Bills outstanding 208.12 31.07

Less : Interest in respect of future instalments included above 61.48 9.84

146.64 21.23

5) Under certain loan agreements entered into by the Company, the relevant lenders have the right to convert all or part of their outstanding loans, into equity shares of the Company at par on the occurrence of certain defaults including non-payment.

NOTES TO FIXED ASSETS:

1. Building include Rs. 410.05 lacs being cost of ownership flats and office accommodation in Co-operative Societies and a Limited Company against which the Company holds shares of the face value of Rs. 0.61 lacs in Co-operative Societies and the Limited Company.

2. Land includes the leasehold land valued as Rs. 62.40 lacs.

3. Assignment deeds in respect of 9.13 acres of Land as Caustic Soda Division yes to be executed by the State Government. Transfer Deeds in favour of the Company are pending in view of the dispute regarding the value payable for the purchase.

4. Addition to Fixed Assets includes Rs. 953.20 lacs (previous year Rs. 375.32 lacs) towards interest and Rs. 119.34 lacs (previous year Rs. 135.77 lacs) towards erection period expenses

5. Land, Building and Plant and Machinery located at Sahupuram Works (Other than PVC Division) were revalued on 31.03.1993.

6. Leasehold land of 793.39 acres at Sahupuram works has not been amortised since the Company has exercised the option to purchase. Assignment of the leasehold land in favour of the Company is pending.

7. Fixed Assets includes assets taken over from erstwhile Pantape Magnetics Limited at revalued figure as per independent valuer's report.

8. Vehicles valued at Rs. 12.80 lacs were purchased under hire purchase arrangement.

NOTES TO ACCOUNTS:

1. Certain fixed assets of the Caustic Soda Division were revalued by an approved valuer as at 30th September, 1985. Some of these revalued assets together with the additions between 1st October, 1985 and 31st March, 1993 of all units at the Caustic Soda Division were again revalued on 31st March, 1993 by Valuer's M/s. Virendra Padamsey Shah, Mumbai. The details of assets revalued as on 31st March, 1993 are as follows :

Book Valuer's Appreciation Head WDV figure on Figure 31.03.93

(Rs. in lacs)

Land 235.25 314.55 79.30 Buildings 576.27 1,045.76 469.49 Plant and Machinery 3,323.65 7,378.22 4,054.57

4,135.17 8,738.53 4,603.36

The resulting appreciation has been transferred to revaluation reserve account on 31.03.93.

2. The details of revaluation on 02.10.1991 of fixed assets of Pantape Division are as follows :

Head Increase/(Decrease) (Rs. in lacs)

Leasehold Land 3.06 Buildings (4.49) Plant and Machinery (315.21) Furnitures etc., (1.60)

(318.24)

3. (a) Consequent to revision in the economic life of the revalued assets by the recognised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier years. This has no impact. on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve.

(b) The depreciation charge on the assets revalued on 31.03.1993 is more by Rs. 153.01 lacs (previous year Rs. 163.65 lacs) than the depreciation charge therein under Section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from the revaluation reserve. The uplift on revalued assets discarded amounting to Rs. 163.51 lacs also been made by drawing from Revaluation Reserve.

4. Sale of Vegetable Products and Advance Licenses, Interest on Government Securities, Duty draw back from Government are accounted when received and Leave Encashment and Wealth Tax is accounted when paid.

5. As per actuarial valuation of gratuity liability as on 31.03.97, gratuity liability is Rs. 580.27 lacs which is adequately covered by provision.

6. Income tax provision amounting to Rs. 200 lacs has been computed in accordance with Sec. 115-JA of the Income Tax Act, 1961. The Company is entitled to a future tax credit of Rs. 200 lacs under Section 115-JAA of the said Act.

7. Sales tax assessments of Dhrangadhra Unit are pending from 1978-79 and of Central Sales Tax assessments of Sahupuram Unit from 1990-91.

8. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

9. The Stores and Spares consumption is allocated to different heads (including capital jobs) on functional basis.

10. Confirmation of balances from some of the Debtors, Creditors and Depositors have been received.

11. (i) Liability for excise duty in respect of finished goods manufactured and lying in stock at factory as at 31st March, 1997, amounting to Rs. 320.94 lacs (previous year Rs. 292.21 lacs) will be charged to Profit and Loss Account at the time of removal of goods. This has no impact on the profits for the year.

(ii) Liability for customs duty payable on imported goods lying in Bond with customs authorities as at 31st March, 1997, amounting to Rs. 233.64 lacs (previous year Rs. 23.98 lacs), will be charged to the Profit and Loss Account in the year of clearance of goods. This has no impact on the profits for the year.

12. (i) The Company has given undertakings to Financial Institutions to meet the shortfall, of any, in the resources of the subsidiary, DCW Home Products Ltd., for completion of its Iodised Salt project and Wheat flour project and for working capital thereto, and not to withdraw the loans given by the Company to it, during the currency of the loans received by the subsidiary from the financial institutions and not to transfer or create any lien in the shares held in the subsidiary so long as any moneys remain due to the financial institutions by the subsidiary or till the equity shares of the subsidiary are listed on any recognised stock exchange in India, without the prior written approval of the concerned Institution.

(ii) DCW Home Products Limited had made a preferential offer of its equity shares of Rs. 10/- each a premium of Rs. 20/- per share to the shareholders and Fixed Deposit holders of DCW Limited, has offered to buy the said equity shares from the said shareholders and Fixed Deposit holders at the offer price of Rs. 30/- per share at any time after shares from the said shareholders and Fixed Deposit holders at the offer price of Rs. 30/- per share at any time after June/July 1994 but within one month prior to the date of the first public issue of DCW Home Products Ltd. If the offer is accepted, the commitment of DCW Ltd., will be to buy a maximum of 10.8 lacs shares and the amount involved is Rs. 324.10 lacs.

(iii) The Company has given undertakings to buy at par and pay arrears of dividend in respect of the following cumulative redeemable preference shares of Rs. 100/- each of DCW Home Products Ltd., in the event of dividend falling in arrears or non-redemption in due dates :-

(a) 3 lacs 16.5% cumulative redeemable preference shares of Rs. 100/- each (due dates for redemption between 05.10.1998 and 08.10.1998).

(b) 5 lacs 16.5% cumulative redeemable preference shares of Rs. 100/- each (due dates for redemption 05-05-1997)

(c) 10 lacs 19.5% cumulative redeemable preference shares Rs. 100/- each (due dates for redemption between 04.06.98 and 17.07.1998) and dividend in arrears.

(iv) The Company gave an undertaking during the year to Financial Institutions to buy at certain rates 5.64 lacs equity Shares of Rs. 10/- each being held by them in DCW Home Products Ltd., (as and when called upon by them) if the said shares are not listed before 31st December, 1996 on major Stock Exchanges.

13. Consignment Sales and Expenses are incorporated on the basis of Sales Notes when received from the consignees.

14. The suit filed by the company against the Supplier from whom electrical stores and spares were imported, claiming recovery of cost for defective supplies plus freight, interest and other expenses thereon is pending.

15. Sales tax collections are treated as liability and not as revenue of the Company.

16. Encroachers have occupied some portions of the land belonging to the Company at Sahupuram. Efforts are being made to evict them.

17. Pursuant to arrangement with DCW Finance Ltd. (wholly owned subsidiary) the liability for payment to raw material suppliers on the expiry of the credit period has been undertaken to be discharged by them. The said amount is credited to the account of the subsidiary on the date of opening of Letter of Credit on the then prevailing rate of exchange. In consideration of the subsidiary undertaking to bear exchange risk and Letter of Credit charges, etc., interest at 16.50% p.a. is credited to them. The outstanding balance lying to the credit of subsidiary company is shown as unsecured loan in the Balance Sheet.

18. Interim Stay of all proceedings has been granted by the Madras High Court pursuant to the petition filed by the Company against the pre assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs. 1,371.95 lacs in respect of Sahupuram Unit.

19. Previous year's expenses accounted this year are Rs. 1.36 lacs (previous year Rs. 13.72 lacs)

20. Interest and finance charges others, are net and arrived at after deducting Rs. 137.66 lacs (previous year Rs. 162.97 lacs) being interest earned from Bank, on Inter-corporate Deposits, Security Deposits, on Bills, On Income Tax Refunds etc.

21. Based on information available with the company as on 31.03.1997, there were no amounts overdue and remaining unpaid on account of Principal/Interest to Small Scale/Ancillary Industrial Suppliers.

22. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 1997 amount to Rs. 90.02 lacs (previous year Rs. 289.59 lacs).

23. Cash at bank includes Fixed Deposits pledged with banks Rs. 69.24 lacs (previous year Rs. 58.75 lacs) against guarantees given by them.

24. In the matter of customs duty on imported calciner and related technical engineering fees, pending readjudication and reassessment by the Collector of Customs, Kandla, the Customs Authorities have in terms of the Supreme Court's order encashed Rs. 70 lacs out of the Bank Guarantees aggregating to Rs. 145.23 lacs given in their favour. The balance guarantees outstanding are reflected under contingent liabilities. In addition, Rs. 17.5 lacs is lying as Deposit with Gujarat High Court. The company's rectification application has been disposed of by CEGAT vide order dated 26th April, 1996 remanding the matter to the Commissioner of Customs for de novo adjudication. The Company has given an undertaking to create a second charge on imported calciner favouring customs authority.

25. Sundry Creditors include liability for vehicles purchased on hire purchase Rs. 2.66 lacs

Less : Interest included in above Rs. 0.53 lacs

Rs. 2.13 lacs

26. Insurance receipts in respect of machinery damaged in transit while being transported for installation is taken as income while expenses for repair of the damaged machinery is capitalised. This has the effect of increasing the profits of the year and reserves at the end of the year by Rs. 188.45 lacs

27. In view of inadequate profits no commission is payable to the managing directors and the whole time director and hence computation of net profits under Section 349 of the Companies Act, 1956 lacs not been given.

28. Figures are expressed in lacs and have been rounded off to the nearest thousands.

29. Previous Year Figures are regrouped wherever necessary to conform to the current year's grouping.


Mar 31, 1996

I. 20,994 - 15% Cumulative Redeemable Preference Shares of Rs.25/- each were allotted as fully paid-up without payment being received in cash an 24th December, 1993 to Shareholders of erstwhile Pantape Magnetics Limited merged with the Company pursuant to Scheme of Amalgamation sanctioned by the AAIFR and are redeemable at par at any time before the expiry of ten years from the date of allotment by giving three months notice.

II. Of the above Equity Shares:

1) The following Shares were allotted as fully paid-up without payment being received in cash:- a) 1,05,000 Shares to Vendors. b) 910 Shares to Equity Shareholders of the erstwhile, PRC Limited, pursuant to the amalgamation with the Company.

2) 74,90,197 Shares were allotted as fully paid-up Bonus Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

3) 53,33,310 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 Partly Convertible Debentures allotted in April, 1993.

4) 92,25,000 Shares were issued in 1994-95 against which Global Depositary Receipts were issued by the Depositary viz., Citibank U.S.A.

III. The Company has given an option an its unissued Share Capital by way of entitlement to subscribe to 19,67,000 Equity Shares against warrants issued to the Debentureholders. The said option, is exercisable between August 1996 and August 1999 (Refer Nate 1(c) of Schedule "C").

Notes: 1. Debentures: a) Rs.708.33 lacs (previous year Rs.745 lacs) comprising 7,08,000-(7,45,000) 14 percent Non-Convertible Debentures of Rs.100 each privately placed with Financial Institutions, Navel Group Insurance Fund and Array Group Insurance Fund are redeemable from 1994 onwards in various annual instalments at a premium of Rs.5/- per debenture, and are secured by a Legal mortgage of all the immovable and movable properties of the company and movable assets of the Company (except 3 Numbers 6 MW DG Sets, Cables, Switchgears etc. Which are exclusively charged to Punjab National Bank (PNB)) ranking pari passu with the mortgages/charges on the Fixed Assets of the Company, referred to in Notes 1(d) and 3(a) but are subject to prior charges created/to be created on current assets and book debts in favour of Banks for working capital facilities.

b) Rs.1199.99 lacs (previous year Rs.1199.99 lacs) comprising 26,66,655 - 16.5 percent Non-Convertible Debentures of Rs.45/- each issued as Rights to Shareholders of the Company are redeemable at par in April-1999 and are Secured by a mortgage of all the movable and immovable properties of the Company, present and future, ranking subsequent, subservient and subordinate to all prior mortgages/charges created and to be created in favour of Public Financial Institutions/Banks for purchase at assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bills Re-discounting Scheme.

c) Rs.983.50 lacs (previous year Rs.983.50 lacs) comprising 9,83,500 - 14 percent Non-Convertible Debentures of Rs.100/- each issued as Rights to Shareholders of the Company are redeemable at par in August 1999, secured by a mortgage of all the movable and immovable properties of the Company anking subsequent, subservient and subordinate to all prior mortgages /charges and created/to be created in future, in favour of Public Financial Institutions/Banks for purchase of assets or for working capital or for purchase of specific items of machinery and equipment under any Deferred Payment Scheme or Bill Rediscounting Scheme and rank pari passu with the mortgage referred to in 1(b) above.

As per the terms of issue of these Debentures, 9,83,500 Detachable warrant have been issued to the Debentureholders with a right to pay and apply for and get allotted 2 equity shares at Rs.10 each at a premium of Rs.40 per share against each warrant held, on such date as may be fixed by the Board, which will not be earlier than 17th August, 1999 and not later than 18th August, 1999.

d) Rs.1400 lacs (previous year nil) comprising 14,00,000 - 17.5 percent Non-Convertible Debentures of Rs.100/- each privately placed with LIC/UTI/GIC and its subsidiaries and Army Group Insurance Fund are redeemable at par from October 2001 in three equal annual instalments and are secured/to be secured by a legal mortgage of all the immovable and movable properties of the Company (Except 3 Numbers 6 MW DG Sets, Cables, Switchgears etc. which are exclusively charged to PNB ranking pari passu with the charges referred to in Notes 1 (a) and 3 (a).

2. Banks: a) Rs.3000 lacs (previous year Rs.1655 lacs) Term Loan from Punjab National Bank (PNB) is secured by exclusive charge by way of hypothecation of the assets purchased from the loan amount viz. 3 Numbers 6 MW DG Sets, Switchgears, Cables etc. b) Rs.5600.38 lacs (previous year Rs.3001.21 lacs) by way of working capital facilities from Banks, are secured by hypothecation of all current assets and book debts of the Company and are to be further secured by a second charge on all the fixed assets of the Company.

3. Other Loans: a) Rs.2986.53 lacs (previous year Rs.4004.35 lacs) by way of Rupee Term Loans and Foreign Currency Loans from Financial Institutions and Banks are secured by hypothecation/mortgage of the movable/immovable properties of the Company ranking pari passu with the charges referred to in Notes 1 (a),

1 (d) but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

b) Rs.12.41 lacs outstanding under bills discounting facility of Rs.400 lacs sanctioned by SIDBI are secured by a second charge by way of hypothecation of the movable properties both present and future and are to be further secured by a second charge by way of mortgage of the immovable properties of the Company.

4. Loan from Government of Karnataka is a liability of erstwhile Pantape Magnetics Ltd., takenover pursuant to its amalgamation with the Company and is secured by a second charge, in favour of Government of Karnataka on land, buildings and certain plant and machinery of the erstwhile company.

5. Under certain loan agreements entered into by the Company, the relevant lenders have the right to convert all or part of their outstanding loans, into equity shares of the Company at par on the occurrence of certain defaults including non-payment.

6. a) Consequent to revision in the economic life of the revalued assets by the recognised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier years. This has no impact on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve.

b) The depreciation charge on the assets revalued on 31-3-1993 is more by Rs.163.65 lacs (Previous Year Rs.165.80 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from the revaluation reserve.

7. In respect of advances of Rs.61.06 lacs and debts of Rs.12.27 lacs which have been reflected as doubtful of recovery in the Accounts, decree has been obtained in the Company's favour for Rs.47.86 lacs of Advances and efforts are being made to recover the advance. Suits have been filed/are being filed in respect of the balance advances and debts against the concerned parties and the Company is hopeful of recovering all the amounts.

8. Sale of Vegetable products and Advance Licenses, Interest on Government Securities, Duty draw back from Government are accounted when received and Wealth Tax is accounted when paid.

9. Gratuity Liability for the period prior to 1.4.1989 amounting to Rs.64.03 lacs is not provided.

10. Sales tax assessments of Dhrangadhra Unit are pending from 1977-78 and at Central Sales Tax assessment of Sahupuram Unit from 1990-91.

11. Interest and Commitment charges on the loans from Financial Institutions for modernisatian and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

12. The Stores and spares consumption is allocated to different heads (including capital jabs) on functional basis.

13. Confirmation of balances from same of the Debtors, Creditors and Depositors have not been received.

14. i) Liability for excise duty in respect of finished goods manufactured and lying in stack at factory as at 31st March, 1996, amounting to Rs.292.21 lacs (Previous Year Rs.531.79 lacs) will be charged to Profit and Loss Account at the time of removable of goods. This has no impact on the profits for the year.

ii) Liability for customs duty payable on imported goods lying in Bond with customs authorities as at 31st March 1996, amounting to Rs.23.98 lacs (Previous Year Rs.38.53 lacs), will be charged to the Profit and Loss Account in the year at clearance of goods. This has no impact on the profits for the year.

15. i) The Company has given undertakings to Financial Institutions to meet the shortfall, it any, in the resources at the subsidiary, DCW Home Products Ltd., for completion of its Iodised Salt project and Wheat flour project and for working capital thereto, and not to withdraw the loans given by the Company to it, during the currency at the loans received by the subsidiary from the financial institutions and not to transfer or create any lien on the shares held in the subsidiary so long as any moneys remain due to the financial institutions by the subsidiary or till the equity shares of the subsidiary are listed an any recognised stock exchange in India, without the prior written approval of the concerned Institutions.

ii) DCW Home Products Limited made a preferential offer of its equity shares of Rs.10 each at a premium of Rs.20 per share to the shareholders and Fixed Deposit holders of DCW Ltd. DCW Ltd. has offered to buy the said equity shares from the said shareholders and Fixed Deposit holders at the offer price of Rs.30 per share at any time after June/July 1994 but before the shares of DCW Home Products Ltd. are listed on the Stack Exchange, on spot delivery basis. If the offer is accepted, the commitment of DCW Ltd. will be to buy a maximum of 108 lakh shares and the amount involved is Rs.324.10 lakhs.

iii) The Company has given an undertaking to buyback 16% - 15,00,000 Cumulative Redeemable Preference Shares of the face value of Rs.100 each, aggregating to Rs.10 crores allotted by DCW Home Products Ltd. (DHPL) to a financial institution and a finance company in certain circumstances including non-redemption.

16. Consignment Sales and Expenses are incorporated on the basis of Sales Notes received from the cansignees.

17. Sales tax collections are treated as liability and not as revenue at the Company.

18. Encroachers have occupied some portions of the Land belonging to the Company at Sahupuram. Efforts are being made to evict them.

19. Modvat Credit on Capital Goods has been recognised as income during the year. In the previous year, such Modvat was credited to the cost of Fixed Assets. As a result of the change in the method of accounting, the gross fixed assets and profit for the year are higher by Rs.308.48 lacs.

20. Pursuant to arrangement with DCW Finance Ltd. (a subsidiary) the liability for payment to raw material suppliers on the expiry of the credit period has been undertaken to be discharged by them. The said amount is credited to the account of the subsidiary on the date of receipt of raw material at the then prevalent rate of exchange. In consideration of the subsidiary undertaking to bear exchange risk and Letter of Credit charges, etc., interest at 16.50% p.a. is credited to them. The outstanding balance lying to the credit of subsidiary company is shown as unsecured loan in the Balance Sheet.

21. Interim Stay of all proceedings has been granted by the Madras High Court pursuant to the petition filed by the Company against the pre-assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs.1371.95 lacs in respect of Sahupuram Unit.

22. Previous year's expenses accounted this year are Rs.13.72 lacs.

23. Interest and finance charges others, are arrived at after deducting Rs.162.97 lacs (Previous Year Rs.1013.41 lacs), Tax deducted at source Rs.31.98 lacs (Previous Year Rs.181.42 lacs) being the interest earned from Bank, on Inter Corporate Deposits, Security Deposits, an Bills, on Income tax refunds etc.

24. Based on information available with the company as on 31/3/96, there were no amounts overdue and remaining unpaid on account of Principal / Interest to Small Scale / Ancillary Industrial Suppliers.

25. Investments in quoted shares are not held as permanent investments and hence diminution in market value has not been provided.

26. Applications made in shares / debentures of other companies and shares held on behalf of third parties, arrangements, are shown as Inter Corporate Deposits. In respect at a party who defaulted in repaying inter corporate deposit, the guarantor has issued post dated cheques dated 31st August, 1996 for a one time settlement of the balance outstanding with accrued interest upto 31st March, 1995. In view of this no interest is charged during the year.

27. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 1996 amount to Rs.289.59 lacs.

28. Cash at bank includes Fixed Deposits pledged with banks Rs.58.75 lacs (Previous Year Rs.164.84 lacs) against guarantees given by them.

29. In the matter of customs duty on imported calciner and related technical engineering fees, pending readjudication and reassessment by the Collector of Customs, Kandla, the Customs Authorities have in terms at the Supreme Court's Order encashed Rs.70 lacs during the year out of the Bank Guarantees aggregating Rs.145.23 lacs given in their favour. The balance guarantees outstanding are reflected under contingent liabilities. In addition, Rs.17.5 lacs is lying as Deposit with Gujarat High Court. The Company's rectification application has been disposed of by CEGAT vide Order dated 26th April 1996 remanding the matter to the Collector of Customs for de nova adjudication.


Mar 31, 1995

1. (a) Consequent to revision in the economic life of the revalued assets by the recognised valuers, depreciation rates adopted for those assets for the year are lower than the rates of the earlier years. This has no impact on the profits of the year since the extra depreciation over that provided under the Companies Act, 1956 would have been met by transfer from revaluation reserve.

(b) The depreciation charge on the assets revalued on 31.3.1993 is more by Rs. 165.80 lacs (previous year Rs. 123.88 lacs) than the depreciation charge thereon under Section 205(2)(b) of the Companies Act, 1956 and the same is met by drawing from the revaluation reserve.

2. In respect of advances of Rs. 61.06 lacs and debts of Rs. 12.27 lacs which have been reflected as doubtful of recovery in the Accounts decree has been obtained in the Company's favour for Rs. 47.86 lacs of Advances and efforts are being made to recover the advance. Suits have been filed/are being filed in respect of the balance advances and debts against the concerned parties and the Company is hopeful of recovering all the amounts.

3. Sale of Vegetable products, Interest on Government Securities, Cash Compensatory Subsidy and Duty draw back from Government are accounted when received and Wealth Tax is accounted when paid.

4. Gratuity Liability for the period prior to 1.4.1989 amounting to Rs. 64.03 lacs is not provided.

5. Sales tax assessments of Soda Ash Unit are pending from 1976-77.

6. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books are claimed as revenue expenditure for taxation.

7. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

8. Confirmation of balance for loans from some of the Debtors and Creditors have not been received.

9. (i) Liability for excise duty in respect of finished goods manufactured and lying in stock at factory as at 31st March, 1995, amounting to Rs. 531.79 lacs (previous year Rs. 537.81 lacs) will be charged to Profit and Loss Account at the time of removable of goods. This has no impact on the profits for the year.

(ii) Liability for customs duty payable on imported goods lying in Bond/with customs authorities as at 31st March,1995, amounting to Rs. 38.53 lacs (previous yea Rs. 33.71 lacs), will be charged to the Profit and Loss Ac count in the year of clearance of goods. This has no impact on the profits for the year.

10. (i) The Company has given undertakings to Financial Institutions to meet the shortfall, if any, in the resources of the subsidiary, DCW Home Products Ltd., for completion of its Iodised Salt project and Wheat flour project and for working capital thereto, and not to withdraw the loans given by the Company to it, during the currency of the loans received by the subsidiary from the financial institutions and not to transfer or create any lien on the shares held in the subsidiary so long as any moneys remain due to the financial institutions by the subsidiary or till the equity shares of the subsidiary are listed on any recognised stock exchange in India, without the prior written approval of the concerned Institutions.

(ii) DCW Home Products Limited made a preferential offer of its equity shares of Rs. 10/- each at a premium of Rs. 20/- per share to the shareholders and Fixed Deposit holders of DCW Ltd. DCW Ltd. has offered to buy the said equity shares from the said shareholders and Fixed Deposit holders at the offer price of Rs. 30 per share at any time after June/July, 1994 but before the shares of DCW Home Products Ltd., are listed on the Stock Exchange on spot delivery basis. If the offer is accepted, the commitment of DCW Ltd. will be to buy a maximum of 108 lakh shares and the amount involved is Rs.324.10 lacs.

(iii) The Company has given an undertaking to buy back 16% 10,00,000 Cumulative Redeemable Preference Shares of the face value of Rs. 100/- each, aggregating to Rs. 10 crores allotted by DCW Home Products Ltd. (DHPL) to a financial institution, in certain circumstances including non-redemption.

11. Consignment Sales and Expenses are incorporated on the basis of Sales Notes received from the consignees. 12. Sales tax collections are treated as liability and not as revenue of the Company.

13. Encroachers have occupied some portions of the Land belonging to the Company at Sahupuram. Efforts are being made to evict them.

14. (i) Modvat Credit on Capital Goods which in the previous year was considered as Income, has in this year been credited to cost of Capital Assets in consonance with the accounting standard regarding accounting for Fixed Assets issued by the Institute of Chartered Accountants of India. This change in the method of accounting has no material effect on the profits of the year.

(ii) Debenture Issue Expenses attributable to projects, which in earlier years was charged to revenue, has this year been capitalised to projects. This change in the method of accounting has no material effect on the profits of the year.

15. Interim Stay of all proceedings has been granted by the Madras High Court pursuant to the petition filed by the Company against the pre assessment notice issued by the Sales Tax Department for the Assessment Year 1989-90 proposing to raise a demand aggregating to Rs.1371.95 lacs in respect of Sahupuram Unit.

16. Previous year's expenses accounted this year are Rs. 0.37 lacs.

17. Interest and finance charges others, are arrived at after deducting Rs. 1015.41 lacs (previous year Rs.252.39 lacs) Tax deducted at source Rs.181.42 lacs (Previous year Rs.24.91 lacs) being the interest earned from Bank, on Inter Corporate Deposits, Security Deposits, on Bills, on Income tax refunds etc.

18. Based on information available with the Company as on 31.3.95, there were no amounts overdue and remaining unpaid on account of Principal/Interest to Small Scale/Ancillary Industrial Suppliers.

19. Fixed Deposits of Rs. Nil (Previous year Rs. 830.25 lacs) in banks are placed against issue of Stock Invest of equivalent amount used towards application for shares/debentures in certain companies as security under Financing arrangements.

20. Applications made in shares/debentures of other companies and shares held on behalf of third parties, under financing arrangements, amounting to Rs. 184.27 lacs are shown as Inter Corporate Deposits.

21. In respect of plant, machinery, equipment and other items taken on lease, the future obligations towards lease rentals under the lease agreements as on 31st March, 1995 amount to Rs. 55.58 lacs.

22. Cash at bank includes Fixed Deposits pledged with banks Rs. 164.84 lacs (previous year Rs. 91.70 lacs) against guarantees given by them.

23. In the matter of customs duty on imported calciner and related technical engineering fees, pending readjudication and reassessment by the Collector of Customs, Kandla, the Customs Authorities have in terms of the Supreme Court's order encashed Rs. 70 lacs during the year out of the Bank Guarantees aggregating Rs. 145.23 lacs given in their favour. The balance guaranteed outstanding are reflected under contingent liabilities. In addition, Rs. 17.5 lacs is lying as Deposit with Gujarat High Court. The Company has in July 1995 filed a Miscellaneous Application before CEGAT seeking rectification of CEGAT's order dated 16th May, 1994.

24. The loans granted by the Company were within the limits specified under Section 370 of the Companies Act as on 31st March, 1995.

25. Figures are expressed in lacs and have been rounded off to the nearest thousands.

26. Previous years figures have been regrouped wherever necessary.

27. Schedules "A" to "N" form an integral part of the Balance Sheet and Schedules "1" to "6" form an integral part of the Profit and Loss Account.


Mar 31, 1994

1. Certain fixed assets of the Caustic Soda Division were revalued by an approved Valuer as at 30th September, 1985. Some of these revalued assets together with the additions between 1st October 1985 and 31st March 1993 of all divisions at Caustic Soda Division assets were revalued on 31st March 1993 by Valuer's M/S Virendra Padamsey Shah, Bombay. The details of assets revalued as on 31st March 93 are as follows:

Head Book WDV Valuer's Appreciation on 31-3-93 figure (Rupees in lacs) Land 235.26 314.55 79.30 Buildings 576.27 1045.76 469.49 Plant and Machinery 3323.65 7378.22 4054.57 -------- -------- -------- 4135.17 8378.53 4603.36 -------- -------- --------

2. The resulting appreciation has been transferred to revaluation reverse account on 31-3-93.

3. The details of revaluation on 21.10.1991 of fixed assets of Pantape division are as follows :

Head Increase/(Decrease) in value (Rs.in lacs)

Leasehold Land 3.06 Buildings (4.49) Plant and machinery (315.21) Furniture etc., (1.60) -------- 318.24 -------- 4. The depreciation charge on the assets revalued on 31.3.1993 is more by Rs.13.88 lacs than the depreciation charge thereon under Section 205 (2) (b) of the Companies Act, 1956 and the same is met by drawing from the revaluation reserve.

5. Pursuant to revision made vide Notification dated 16th December, 1993 in Schedule XIV to the Companies Act, 1956, the company has provided depreciation for this year, on all assets, including existing assets at the revised rates of depreciation, in accordance with the guidance given by the Department of Company Affairs, Government of India, in their Circular No.14/93 dated 20th December, 1993, resulting in a lower charge of depreciation by Rs.535 lakhs.

6. In respect of doubtful advances of Rs.61.19 lacs and doubtful debts of Rs.12.33 lacs suits/criminal suits have been filed against the concerned parties.

7. Gratuity Liability for the period prior to 1.4.1989 amounting to Rs.63.37 lacs is not provided.

8. Sales tax assessments of Soda Ash Unit are pending from 1976-77. - Interest and commitment charges on the loans from Financial Institutions for modernisation and expansion of fixed assets, though capitalised in the books, are claimed as revenue expenditure for taxation.

- Having regard to the above, to higher rates of depreciation available under tax laws and to other tax reliefs available, no tax liability is expected for the current year and hence no provision for taxation is made in the accounts.

9. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

10. Excise duty in respect of goods manufactured by the Company is accounted at the time of removal of goods. Hence Excise Duty liability on closing stock of finished goods at factory has not been provided. This has no impact on the profits for the year. The amount of excise duty payable onfinished goods not cleared as at 31st March, 1994 is estimated to be Rs.537.81 lacs.

- Customs Duty of Rs.33.71 lacs payable onimported goods lying with Customs authorities as at 31st March, 1994 will, as per the company's practice, be charged in the year of clearance of the goods. This has no impact on the profits for the year.

11. The Company has given an undertaking to Financial Institutions to meet shortfall, if any, in the resources of the subsidiary DCW Home Products Ltd., for completion of its Iodised Salt project and for working capital relating thereto, and not to transfer or create any lien on the shares held in that company and not to withdraw interest free loan given by the company to it, during the currency of loan received by the subsidiary from the Financial Institutions.

12. Consignment Sales and Expenses are incorporated on the basis of Sales Notes received from the consignees.

13. Previous year's Expenses and Income accounted this year are Rs 5.36 lacs.

14. Sales tax collections are treated as liability and not as revenue of the company.

15. Encroachers have occupied some portions of the Land belonging to the Company at Sahupuram. Efforts are being made to evict them.

16. Capital work-in-progress has a difference of Rs.5.42 lacs with the job ledger which is under reconciliation and necessary adjustments will be made on completion of the same.

17. Interim stay of all proceedings has been granted by the Madras High Court pursuant to the petititon filed by the company against the pre assessment notice issued by the Sales Tax Department for the Assessment year 1989-90 proposing to raise a demand aggregating to Rs.1371.95 lacs in respect of Caustic Soda Unit.

18. Interest and finance charges is after deduction of Rs.252.39 lacs lacs (Tax deducted at source Rs 24.91 lacs) being the interest earned from Banks and on Inter Corporate Deposits, Security Deposits on Bills and on Income tax refunds etc.

19. Unpaid amounts due as on 31.3.94 to Small Scale and/or Ancillary Industrial Suppliers to the extent identified from available information, on account of principal amounts together with interest, aggregate Rs.3.25 lakhs.

20. Fixed Deposits of Rs.830.25 lacs in banks are placed against issue of Stockinvest of equivalent amount used towards application for shares/debentures in certain companies as security under financing arrangements.

21. Cash at bank includes fixed deposits pledged with banks Rs.91.71 lacs against guarantees given by them.

22. DCW Home Products Limited made a preferential offer of its equity shares of Rs.10 each at a premium of Rs.20 per share to the shareholders and Fixed Deposits holders of DCW Ltd. DCW Ltd., has offered to buy the said equity shares from the said shareholders and Fixed Deposit holders at the offer price of Rs.30 per share at any time after June/July 1994 but before the shares of DCW Home Products ltd., are listed on the Stock Exchange, on spot delivery basis. if the offer is accepted, the commitment of DCW Ltd., will be to buy a maximum of 108 lakh shares and the amount involved is Rs.324.10 lakhs.

23. Pursuant to the order of CEGAT issued on 16th May, 1994, setting aside the order of the Collector of Customs, Kandla and remanding the case to the Collector for reassessment, adjudication on the imported calciner and technical engineering fees by the Collector of Customs. As per legal advice the company has written to the Bank not to renew the bank guarantees aggregating Rs.145.23 lacs when they expire on 10th August, 1994.

24. "Miscellaneous Expenditure" includes Share/Debenture Issue expenses on Euro-issue and Non-convertible Debentures to be adjusted against Share Premium Account in the next year, in accordance with Section 78(2) of the Companies Act, 1956 since the allotment of the relevant shares and debentures has taken place during the year 1994-95.


Mar 31, 1993

1. Certain fixed assets of Sahupuram works (other than PVC division assets) were revalued by an approved Valuer as at 30th September, 1985. Some of these revalued assets together with the additions between 1st October 1985 and 31st March 1993 of all divisions at Sahupuram works (except assets of PVC Division) have been again revalued on 31st March 1993 by Valuer's M/S Virendra Padamsey Shah, Bombay. The details of assets revalued as on 31st March 93 are as follows:

Head Book WDV Valuer's Appreciation on 31-3-93 figure (Rupees in lacs) Land 235.25 314.55 79.30 Buildings 576.27 1045.76 469.49 Plant and Machinery 3323.65 7378.22 4054.57 -------- -------- -------- 4135.17 8378.53 4603.36 -------- -------- --------

The resulting appreciation has been transferred to revaluation reverse account on 31-3-93.

2. (a) The depreciation for the year 1992/93 has been calculated on the same basis as in the previous year since the revaluation is as on 31.3.1993. (b) The depreciation charge on the assets revalued on 30-9-1985 is more by Rs 249.10 lacs than the depreciation charge thereon under section 205 (2) (b) of the Companies Act, 1956, and the same is met by drawing from the revaluation reserve.

3. As the company is manufacturing PVC Resins from purchased VCM some of the Fixed Assets (WDV Rs 18.08 lacs) and Current Assets (WDV Rs 10.67 lacs) of the Company for processing Naptha to VCM are not used and their market value may be lower than reflected in the Balance Sheet.

4. Hydrochloric Acid and Vegetable products, Interest on Government Securities, Cash Compensatory Subsidy and Duty draw back from Government are accounted when received and Wealth tax when paid.

6. Sales tax assessments of Soda Ash Unit are pending from 1976-77.

7. The Stores and spares consumption is allocated to different heads (including capital jobs) on functional basis.

8. i) Excise duty in respect of goods manufactured by the Company is accounted at the time of removal of goods. Hence Excise Duty liability on closing stock of finished goods at factory has not been provided. This has no impact on the profits for the year.

ii) Customs Duty payable on imported goods lying with Customs authorities will, as per the Company's practice, be charged in the year of clearance of the goods. Such liability as on 31st March, 1993 has not been ascertained. This has no impact on the profits for the year.

9. The Company has given an undertaking to Financial Institutions to meet shortfall, if any, in the resources of the subsidiary DCW Home Products Ltd., for completion of its Iodised Salt project and for working capital relating thereto, and not to transfer or create any lien on the shares held in that company and not to withdraw interest free loan given by the company to it, during the currency of loan received by the subsidiary from the Financial Institutions.

10. Consignment Sales and Expenses are incorporated on the basis of Sales Notes received from the consignees.

11. Previous year's Expenses and Income accounted this year are Rs 20.06 lacs and Rs 142.11 lacs respectively.

12. Sales tax collections are treated as liability and not as revenue of the company.

13. Encroachers have occupied some portions of the Land belonging to the Company at Sahupuram. Efforts are being made to evict them.

14. Figures are expressed in lacs and have been rounded off to the nearest thousands.

15. Capital work-in-progress has a difference of Rs. 5.42 lacs with the job ledger which is under reconciliation and necessary adjustments will be made on completion of the same.

16. The Company has imported equipment on which Customs Duty has been paid on concessional basis. The difference between the Concessional duty paid and the actual duty is Rs 127.59 lacs, for which the company has given a bank guarantee of Rs 127.59 lacs and in relation to which there is an export obligation of Rs 3,809 lacs.

17. Interim Stay of all proceedings has been granted by the Madras High Court in the petition filed by the Company against pre assessment notice issued by Sales Tax Department for 1989-90 proposing to raise a demand aggregating to Rs 1371.95 lacs.

18. Raw Material consumption for the year is after adjusting net credit of Rs 127.44 lacs on account of receipt on cancellation of foreign exchange cover contract under LERMS and foreign exchange cover changes paid.

19. Reconcilliation of unpaid dividend accounts for some years and unpaid interest or Partly Convertible Debentures is in progress. Necessary adjustments will be made on completion of reconcilliation.

20. Interest and finance charges is after deduction of Rs 314.48 lacs (Tax deducted at source Rs 20.19 lacs) being the interest earned from Banks and on Inter Corporate Deposits.

21. Since the sanctioning of the merger scheme of Pantape Magnetics Ltd with the company is in April 93, the outstanding statutory liability of Sales Tax of Rs 1.83 lacs of the amalgamating company will be paid in accounting year 1993-94.

22. Consequent to merger order, the assets and liabilities and the working results of the amalgamating company, Pantape Magnetics Ltd for the year are included in the accounts of the company.

Debentures: (a) Rs 765 lacs (previous year Rs 765 lacs) comprising 7,65,000-- 14% Non-Convertible debentures of Rs 100/- each privately placed, redeemable from 1994 onwards in various annual instalments at a premium of Rs 5/- per debenture secured by way of Legal mortgage of all the moveable and fixed assets of the Company [excepting the diesel generator set at the Company's plant at Sahupuram exclusively charged in favour of Industrial Development Bank of India (IDBI) and the fixed assets of the Bromide and Bromine plant at Kuda charged/ to be charged exclusively in favour of State Bank of Saurashtra (SBS) and State Bank of India (SBI)]; ranking pari passu with the mortgages and charges created/ to be created in favour of financial institutions and banks but subject to prior charges created/to be created on current assets and book debts in favour of banks for working capital facilities.

(b) Rs. 1199.99 lacs (previous year nil) comprising 26,66,655 - 16.5% Non-Convertible Debentures of Rs. 45/- each redeemable at par in April - 1999 Secured by way of legal mortgage of all the moveable and fixed assets of the Company [excepting the diesel generator set at the Company's plant at Sahupuram exclusively charged in favour of Industrial Development Bank of India (IDBI) and the fixed assets of the Bromide and Bromine plants at Kuda charged/to be chaged exclusively in favour of State Bank of Saurashtra (SBS) and State Bank of India (SBI)]; ranking subsequent and subservient with the charges referred to in note 1(a),2(b),3(a) and 4 and subject to prior charges created/to be created on current assets and book debts in favour of Banks for working capital facilities.


Mar 31, 1992

1. The depreciation charged on the revalued assets is in excess of depreciation charged section 205(2) (b) of the Companies Act, 1956, by Rs. 272.26 lacs and out of the Revaluation Reserve of Rs.189.59 lacs, an amount of Rs. 74.59 lacs is drawn to meet the additional charge on revalued assets.

2. As the Company is manufacturing PVC Resins from purchased VCM some of the Fixed Assets (WDV Rs. 21.16 lacs) and Current Assets (Rs.10.67 lacs) of the Company for processing Naptha to VCM are not used and their market value may be lower than reflected in th Balance Sheet.

3. Interest on Government Securities, Sales of Vegetable Products and Cash Compensatory Subsidy from Government are accounted when received. Amount is not material.

4. The appreciation in rupee liability amounting to Rs.63.73 lacs on account of exchange difference as at 31st March, 1992, on outstanding foreign currency loan obtained for import of Machinery has been debited to Fixed Assets.

5. Consequent to the change in the allocation of common expenses, the valuation of closing stock of some products has undergone a change. But the overall effect is not material.

6. i. Interest and Commitment charges on the loans from Financial Institutions for modernisation and expansion though capitalised in the books, are claimed as revenue expenditure for taxation.

ii. The Board of Directors, subject to the approval of the General Body, have agreed for amalgamation of a sick industrial Company, Pantape Magnetics Ltd., with DCW LTD., effective from 1st October 1991 , on certain terms specified in a scheme framed by the operating agency (ICICI LTD) appointed by the Appellate Board of Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provision) Act, 1985. If the scheme goes through, the company will get benefit under section 72A of the Income tax Act, 1961 in respect of the sick company's losses. The matter is pending before the Appellate Board of Industrial and Financial Reconstruction.

iii. Having regard to the above two factors no tax liability is expected for the current year and hence no provision for taxation is made in the accounts.

7. i. Excise duty in respect of goods mnufactured by the Company is accounted at the time of removal of goods. Hence excise duty liability on closing stock of finished goods at factory has not been provided. This has no impact on the profits for the year.

ii. Import duty payable on goods lying in Customs Bonded Warehouse will as per the Company's practice be charged in the year of clearance of the goods. Such liability as on 31st March, 1992 has not been ascertained. This has no impact on the profits for the year. 8. The Company has given an undertaking to Financial Institution to meet shortfall, if any, in the resources of the subsidiary DCW Home Products Ltd., for completion of its project and for working capital, and not to transfer or create any lien on the shares held in that company and not to withdraw interest free loan given by the company to it, during the currency of loan received by the subsidiary from the Financial Institutions.

9. Encroachers have occupied some portions of the Land belonging to the Company at Sahupuram. Efforts are being made to evict them.

10. The Company has imported equipment on which Customs Duty has been paid on concessional basis. The difference between the Concessional duty paid and the actual duty is Rs. 127.59 lacs for which the company has given a bank guarantee and in relation to which there is an export obligation of Rs. 3,809 lacs.


Mar 31, 1991

As the Company is manufacturing PVC Resins from purchased VCM , some of the Fixed Asset and Current Assets of the Company for processing Naptha to VCM are not used and their market value may be lower than reflected in the Balance Sheet.

Gratuity liability for the period prior to 1-4-1989 amounting to Rs.63.47 lacs is not provided.

The Company has given an undertaking to Financial Institution to meet shortfall, if any, in the resources of the subsidiary DCW Home Products Ltd., for completion of its project and for working capital, and not to transfer or create any lien on the share held in that company and not to withdraw interest free loan given by the company to it, during the currency of loan received by the subsidiary from the Financial Institutions.

CONTINGENT LIABILITIES NOT PROVIDED FOR 31-3-1991 31-3-1990 Rs.in lacs Rs. in Lacs

Disputed Sales-tax Demands (Appeal pending . Rs. 82.63 lakhs paid against the above, is included in Advance Reco- verable in Cash or in Kind) 110.49 108.27

Disputed Excise Demands (The Court have stayed the Department from raising any demand on Acetylene for period Subsequent to 30-9-1982). 86.02 128.89

Disputed Customs Demand. 14.84 14.84


Mar 31, 1990

As the company is manufacturing PVC Resins from purchased VCM, some of the Fixed Assets and Current Assets, of the company for processing Naptha to VCM are not used and their market value may be lower than reflected in the Balance Sheet.

The Vendor of Vedaraniam Salt Unit and the company have jointly made an application to the Government of Tamilnadu for transfer of the lease rights from the vendor to the company for the unexpired period of 13 years and the same is pending.

The Board has allocated the purchase consideration to various moveable Fixed Assets and Current Assets of Vedaraniam undertaking as per Valuer's Certificate.

Consequent to the change in the allocation of common expenses, the valuation of closing stock of some products has undergone a change. But the overall effect is not material.

The profit for the year is less by Rs.127.75 lacs consequent to adoption of accrual basis of accounting for certain items, hitherto accounted on receipt basis.

Previous year's figures, being for a period of 18 months, are not comparable with those of current year.


Mar 31, 1989

Depreciation on Fixed Assets is provided on the following basis :

a) On the assets added upto 30.9.1987, at the Straight line equivalent of Income-tax rates in force at the time of addition and as permitted by the Company Law Board circular 1/86 dated 21.5.1986.

b) On the Assets added or sold or discarded during 1.10.1987 to 31.3.1989 at Straight line rates on pro-rata basis, but in Sahupuram Unit on Assets sold/discarged pro-rata depreciation has not been provided upto the date of sale/discarding. However, this has no impact on the profits of the period.

As the company is manufacturing PVC Resins from purchased VCM, some of the Fixed Assets and Current Assets, of the Company for processing Naphtha to VCM are not used and their market value may be lower than reflected in the Balance Sheet.

Consequent to settlement with some parties made this year, interest refereable to earlier years crystallised at Rs.20.27 lacs and is charged as current period expenditure.

The company's appeal against Sales-tax and penalty demands aggregating to Rs.96.83 lacs is pending disposal. No provision is made in the accounts.

Excise duty, Sale-tax, Freight and Insurance on Stores and Spare parts are now directly charged off to respective revenue heads. Consequent to this change the profits of the period are less by Rs.4.88 lacs.

Freight on unsold finished stock with depots and excise duty on unsold stocks with depots and consignees are treated as elements of cost on 31.3.1989. Consequent to this change the profits of this period are higher by Rs.4.71 lacs.