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Notes to Accounts of Phillips Carbon Black Ltd.

Mar 31, 2015

1b(ii) iny became a subsidiary of Rainbow Investments Limited (RIL) pursuant to a Scheme of Amalgamation and Arrangement between

Rainbow Investments Limited and certain companies and their respective shareholders as sanctioned by the Hon'ble High Court at Calcutta vide order passed during the current year. The certified copy of the aforesaid order has been filed with the Registrar of Companies on July 8, 2014 (effective date of the aforesaid Scheme). Effective September 23, 2014, the holding of RIL in the Comapny became 49.95%. 2c. Terms/ Rights attached to Equity Shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

2d. Allotment of 1823 shares is pending against Rights Issue made during 1993-94.

2e. 48 Shares have not been issued to the concerned non-resident shareholders pending approval of the Reserve Bank of India.

Balance outstanding as at 31st March, 2015 in respect of Commercial Paper was Rs. Nil (Previous Year Rs. Nil). Maximum amount outstanding at any time during the year was Rs. 7,500 Lakhs (Previous Year Rs. Nil)

Nature of Security on Secured Borrowings availed from the Banks

Secured Loan from banks are secured by way of hypothecation in favour of the banks as and by way of first charge, ranking pari-passu among themselves, of the Company's existing and future stock of Raw Materials, Finished and Semi Finished Goods, Consumables Stores and Spares, including Stock in transit and in the possession of any third party, present and future Book debts, Monies Receivable, Claims etc. held by any third party to the order of the disposition of the Company (excluding those relating to 30 MW Co-generation power plant at Durgapur in West Bengal) and also by a pari-passu second charge created/to be created on the fixed assets of the Company at Durgapur in West Bengal (excluding those relating to 30 MW Co-Generation power plant at Durgapur in West Bengal), Palej and Mundra in Gujarat and Kochi in Kerala.

2.3 Raw material purchase is net of Rs. 2,099.96 lakhs (Previous year Rs. 2,439.52 lakhs) being benefits under duty exemption scheme pertaining to exports/deemed exports.

2.4 VALUE OF IMPORTED AND INDIGENOUS RAW MATERIALS, STORE AND SPARE PARTS CONSUMED*:

3 CONTINGENT LIABILITIES

Contingent Liabilities for :

(a) (i) Claims against the Company not acknowledged as debts :

Income-tax matters under dispute 42.27 -

Excise Duty matters under dispute 310.27 367.51

Custom Duty matters under dispute 57.12 57.12

(ii) Others

Excise Duty matters under dispute 156.52 99.28

Entry Tax matter under dispute 1,605.77 1,046.08

(b) Outstanding Bank Guarantees etc. 911.70 1,024.59

(c) Guarantees or Counter Guarantees or Counter Indemnity given by the Company :

On behalf of bodies corporate and others

- Limit 9.00 9.00

- Outstanding 9.00 9.00

(d) Bills Discounted -- 205.33

4 SEGMENT REPORTING

a Information relating to the two business segments, being Carbon black and Power has been disclosed as Primary Segment. b Inter-Segment transfers being power consumed for manufacture of Carbon Black are based on price paid for power purchased from external Sources.

c Segment Revenues, Results and other information:

39A POST EMPLOYMENT DEFINED BENEFIT PLANS I. Gratuity and Post retirement medical benefits Gratuity

In keeping with the Company's gratuity scheme, eligible employees are entitled for gratuity benefit as per The Payment of Gratuity Act, 1972 on retirement/death/incapacitation/termination etc. Also refer Note 1.11 (b) (iii) for accounting policy related to gratuity.

Post retirement medical benefits

Post Retirement Medical Benefits [comprising payment of annual medical insurance premium to cover hospitalizations and reimbursement of domiciliary medical expenses within a defined monetary limit] are extended to certain employees. The liability in respect thereof is determined by actuarial valuation at the year end based on the Projected Unit Credit Method and are recognized as a charge on accrual basis. This is a defined benefit plan.

The expected return on plan assets is determined after taking into consideration composition of plan assets held, assessed risks of asset management, historical results of return on plan assets, company's policies for plan asset management and other relevant factors.

4.3 Actual Return on Plan Assets -

Rupees in Lakhs

4.4 Plan assets for gratuity is funded with Life Insurance Corporation of India.

The expenses for the above mentioned benefits have been included and disclosed under the following line items:- Gratuity - under 'Contribution to Provident and other Funds' in Note 25 Post Retirement Medical Benefit - under 'Staff Welfare Expenses' in Note 25

4.5 (a) Principal Actuarial Assumptions used (Gratuity) -

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

4.6 Effect of increase / decrease of one percentage point in the assumed medical cost trend rates on:

4.7 The contribution to the defined benefits plan expected to be made by the company during the annual period beginning after the balance sheet date is yet to be reasonably determined.

II. Provident Fund

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on employee benefits issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, a provident fund setup by the Company is a defined benefit plan in view of the Company's obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of the plan's liabilities and interest rate guarantee obligations as at the balance sheet date using Projected Unit Credit Method and deterministic approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, the future anticipated shortfall with regard to interest rate obligation of the Company written back during the year amounts to Rs 0.43 lakhs (Previous year Rs.11.03 lakhs) and outstanding as at the balance sheet date amounts to Rs 35.67 lakhs (Previous year Rs. 36.10 Lakhs). Disclosure given hereunder are restricted to the relevant information available as per the Actuaries Report.

39B Amount recognised as expenses (included in Note 25 Employee Benefit Expense under the line item Contribution to Provident and Other Funds) during the year under Defined Contribution Plan aggregate to Rs.155.21 lakhs (Previous year Rs. 255.33 lakhs).

(c) Mark to Market Losses provided for

41. Based on the valuation reports submitted by the valuers appointed for the purpose, certain items of the Company's fixed assets [viz., Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such Land, Flats, Electrical Installations, Plant and Machinery and Railway Siding] were revalued on 30th November, 1984, on 30th September, 1991 and also on 30th September, 2001 (except Railway Siding) after considering the following factors:

- Estimated current market value pertaining to Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such land and Flats.

- Values of Electrical Installations, Plant and Machinery and Railway Siding (when applicable) based on their current cost of replacement.

- Adjustments for the condition, the standard of maintenance, depreciation up to valuation dates, etc.

The resultant revaluation surplus of Rs.1,011.07 lakhs, Rs.2,994.04 lakhs and Rs. 5,995.27 lakhs arising from the aforesaid revaluations were transferred to Revaluation Reserve in the Company's annual accounts for the years 1983-84, 1990-91 and 2000-01 respectively. Such Revaluation Reserves have however been fully adjusted in earlier years.

5. Depreciation for the year ended 31st March, 2015 on items of fixed assets revalued include an additional charge of Rs. 165.81 lakhs (Previous Year - Rs. 180.92 lakhs) over that calculated on original cost at lives based on technical evaluation carried out during the year by the Company's expert representing depreciation on the incremental amounts added on revaluation calculated at the rates considered applicable by the valuers and confirmed on technical evaluation carried out during the year by the Company's expert.

6. Capital Work in Progress/Tangible assets as at 31st March 2015 includes, Consumption of Raw Material Rs. Nil (Previous Year - Rs. 5,919.84 lakhs), Salaries and wages Rs. Nil (Previous Year- Rs. 363.40 Lakhs), Contribution to Provident Fund and Other Funds Rs. Nil (Previous Year- Rs.24.89 lakhs), Staff Welfare expenses Rs. Nil ( Previous Year- Rs.9.16 lakhs), Consumption of Stores and Spares parts Rs. Nil (Previous Year- Rs.2,060.07 lakhs), Rent Rs. Nil (Previous Year- Rs.2.52 lakhs), Rates and Taxes Rs. Nil (Previous Year- Rs.0.40 lakhs), Repairs and Maintenance - Plant & Machinery Rs. Nil (Previous Year - Rs. 64.02 lakh), Repairs and Maintenance - Others Rs. Nil lakhs (Previous Year - Rs. 5.34 lakhs), Power Rs. Nil (Previous Year - Rs. 0.18) incurred during the year on various projects.

7. Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to the Scheme of Amalgamation of Transmission Holdings Limited with the Company in 2001- 2002, such assets remain included in the books of the Company under the name of the transferor company.

8. A) Rent of Rs. 448.80 lakhs (Previous Year - Rs. 251.63 lakhs) relates to operating leases taken on or after 01.04.2001. These lease arrangements range from 11 months to 3 years and are primarily in respect of accommodation for offices, warehouses etc. and inter alia include escalation clause and option for renewal.

9. Effective 1st April, 2014, the Company has changed the basis of determining the cost of raw material from "First in First out (FIFO)" to "Weighted Average" for the purpose of inventory valuation. As a result of this change, year end inventories is higher by Rs. 42.97 lakhs, with corresponding favorable impact on the profit before tax for the year.

10. The Company has charged depreciation in keeping with the requirements of Schedule II to the Companies Act, 2013. Consequently, the estimated useful lives of certain fixed assets have been revised, where considered appropriate, in keeping with the provisions of Schedule II to the Companies Act, 2013 effective 1st April, 2014. Pursuant to the said revision in useful lives, the depreciation expense for the year ended 31st March, 2015 is higher and profit before tax is lower by Rs. 85.55 lakhs and the net book value aggregating Rs. 72.94 lakhs (net of deferred tax Rs.37.56 lakhs) relating to fixed assets, where the revised useful lives have expired by 31st March, 2014, has been adjusted against opening balance of retained earnings as on 1st April, 2014.

11. The Company has provided interest bearing (which is not lower than prevailing yield of related Government security close to the tenure of the respective loans) unsecured loans repayable on demand during the year aggregating to Rs. 12,406.00 lacs (Previous Year Rs. 7,300.00 lacs) to certain companies for temporary financial assistance. Year-end balance of aforesaid loans is Rs. Nil (31.03.2014 Rs. Nil).

12. Previous year's figures have been regrouped/rearranged wherever necessary.


Mar 31, 2013

1 SEGMENT REPORTING

a) Information relating to the two business segments, being Carbon black and Power has been disclosed as Primary Segment.

b) Inter-Segment transfers being power consumed for manufacture of Carbon Black are based on price paid for power purchased from external Sources.

c) Segment Revenues, Results and other information:

2 POST EMPLOYMENT DEFINED BENEFIT PLANS

I. Gratuity and Post retirement medical benefits

Gratuity

In keeping with the Company''s gratuity scheme, eligible employees are entitiled for gratuity benefit as per The Payment of Gratuity Act, 1972 on retirement/death/incapacitation/termination etc. Also refer Note 1.1 (b) (iii) for accounting policy related to gratuity.

Post retirement medical benefits

Post Retirement Medical Benefits [comprising payment of annual medical insurance premium to cover hospitalizations and reimbursement of domiciliary medical expenses within a defined monetary limit] are extended to certain categories of employees. The liability in respect thereof is determined by actuarial valuation at the year end based on the Projected Unit Credit Method and are recognized as a charge on accrual basis. This is a defined benefit plan.

3.1 Plan assets for gratuity is funded with Life Insurance Corporation of India.

3.2 The contribution to the defined benefits plan expected to be made by the company during the annual period begining after the balance sheet date is yet to be reasonably determined.

II. Provident Fund

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on employee benefits issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, a Provident Fund setup by the Company is a defined benefit plan in view of the Company''s obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation actuarial valuation of the plan''s liabilities and interest rate guarantee obligations as at the balance sheet date using Projected Unit Credit Method and deterministic approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, the future anticipated shortfall with regard to interest rate obligation of the Company provided during the year amounts to Rs. 9.66 lakhs and outstanding as at the balance sheet date amounts to Rs. 50.35 lakhs. Disclosure given hereunder are restricted to information available as per the Actuaries Report.

For the Defined Contribution plans, contribution to provident fund aggregating to Rs. 220.72 lakhs (Previous Year - Rs. 184.05 lakhs) and contribution to superannuation fund aggregating to Rs. 168.65 lakhs (Previous Year - Rs. 126.96 lakhs) have ben recognized as an expense during the year in Note 25 Employee Benefit Expense under the line item Contribution to Provident and Other Funds.

4 For the purpose of these accounts, following methods and rates of depreciation have been used for depreciating the original cost of fixed assets:

(a) Certain items of Plant and Machinery being energy saving devices added during the period ended 31st March, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

(b) Other assets added up to 31st March, 1987: Under written down value method at rates specified in Schedule XIV of the Companies Act, 1956.

(c) Additions since 1st April, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

5 Based on the valuation reports submitted by the valuers appointed for the purpose, certain items of the Company''s fixed assets [viz. Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such Land, Flats, Electrical Installations, Plant and Machinery and Railway Siding] were revalued on 30th November, 1984, on 30th September, 1991 and also on 30th September, 2001 (except Railway Siding) after considering the following factors:

- Estimated current market value pertaining to Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such land and Flats.

- Values of Electrical Installations, Plant and Machinery and Railway Siding (when applicable) based on their current cost of replacement.

- Adjustments for the condition, the standard of maintenance, depreciation up to valuation dates, etc.

The resultant revaluation surplus of Rs.1,011.07 lakhs, Rs.2,994.04 lakhs and Rs. 5,995.27 lakhs arising from the aforesaid revaluations were transferred to Revaluation Reserve in the Company''s annual accounts for the years

1983-84, 1990-91 and 2000-01 respectively. Such Revaluation Reserves have however been fully adjusted in earlier years.

6 Depreciation for the year ended 31st March, 2013 on items of fixed assets revalued include an additional charge of Rs. 187.99 lakhs (Previous Year - Rs. 196.04 lakhs) over that calculated on original cost at rates prescribed under Schedule XIV of the Companies Act, 1956 as amended during 1993-94 representing depreciation on the incremental amounts added on revaluation calculated at the rates considered applicable by the valuers.

7 Capital Work-in-Progress as at 31st March, 2013 includes Raw Materials Consumed Rs. Nil (Previous Year- Rs.15.17 lakhs), Salaries and wages Rs. 144.71 Lakhs (Previous Year-195.65 lakhs), Contribution to Provident Fund and Other Funds Rs. 6.86 lakhs (Previous Year- Rs. 9.88 lakhs), Staff Welfare expenses Rs. 1.58 lakhs (Previous Year- Rs. 9.18 lakhs), Consumption of Stores and spares parts Rs. 14.31 lakhs (Previous Year-14.04 lakhs), Rent Rs. 0.70 lakhs (Previous Year- Rs. 1.50 lakhs), Rates and Taxes Rs. 0.02 lakhs (Previous Year- Rs.4.55 lakhs), Repairs and Maintenance Rs. 5.86 lakhs (Previous Year - Rs. 9.84 lakhs), Insurance Rs. Nil (Previous Year- Rs. 4.78 lakhs) incurred on various projects under implementation.

8 Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to the Scheme of Amalgamation of Transmission Holdings Limited with the Company in 2001- 2002, such assets remain included in the books of the Company under the name of the transferor company.

9 Rent of Rs. 190.26 lakhs (Previous Year - Rs. 57.02 lakhs) relates to cancellable operating leases taken on or after 1.04.2001. These lease arrangements range from 11 months to 3 years and are primarily in respect of accommodation for offices, warehouses etc. and inter alia include escalation clause and option for renewal.

10 Previous year''s figures have been regrouped/rearranged wherever necessary.


Mar 31, 2012

A. Terms/ Rights attached to Equity Shares

The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b. Allotment of 1823 shares is pending against Rights Issue made during 1993-94

c. 48 Shares have not been issued to the concerned non-resident shareholders pending approval of the Reserve Bank of India

Nature of Security on Secured Borrowings availed from the Banks

Secured Loan from banks are secured by way of hypothecation in favour of the banks as and by way of first charge, ranking pari-passu among themselves, of the Company's existing and future stock of Raw Materials, Finished and Semi Finished Goods, Consumables Stores and Spares, including Stock in transit and in the possession of any third party, present and future Book debts, Monies Receivable, Claims etc. held by any third party to the order of the disposition of the Company (excluding those relating to 30 MW Co-generation power plant at Durgapur in West Bengal) and also by a pari-passu second charge created/to be created on the fixed assets of the Company at Durgapur in West Bengal (excluding those relating to 30 MW Co-Generation power plant at Duragpur in West Bengal), Palej and Mundra in Gujarat and Karimugal in Kerala.

1.1 Raw material purchase is net of Rs. 3,990.24 lakhs (Previous year - Rs. 3,106.15 lakhs) being benefits under duty exemption schemes pertaining to exports/deemed exports.

As at As at 31st March, 2012 31st March, 2011 2 CONTINGENT LIABILITIES Rupees in Lakhs Rupees in Lakhs

Contingent Liabilities for :

(a) Claims against the Company not acknowledged as debts :

Income-tax matters under dispute 232.60 245.12

Excise Duty matters under dispute 91.03 49.63

(b) Outstanding Bank Guarantees etc. 1097.94 807.10

(c) Guarantees or Counter Guarantees or Counter Indemnity given by the Company :

On behalf of bodies corporate and others

- Limit 9.00 9.00

- Outstanding 9.00 9.00

3. SEGMENT REPORTING

a) Information relating to the two business segments, being Carbon black and Power has been disclosed as Primary Segment.

b) Inter-Segment transfers being power consumed for manufacture of Carbon Black are based on price paid for power purchased from external Sources.

4. In terms of the Guidance on implementing Accounting Standard 15 on employee benefits issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, a provident fund setup by the Company is a defined benefit plan in view of the Company's obligation to meet shortfall, if any, on account of interest.

Unlike previous year, consequent upon issuance of Guidance Note by the Institute of Actuaries of India in 2011-12, actuarial valuation of provident fund as at the year end has been done under the Projected Unit Credit Method and the resultant charge/gain has been recognised in the accounts. Information pertaining to the year required to be considered as per AS 15 in this regard is also disclosed. However, in the absence of a Guidance Note from the Institute of Actuaries of India in earlier years, such exercise was not carried out and the related information has not been disclosed in respect of earlier years.

@ Represent accretion to plan assets relating to earlier year communicated by LIC during the year which has been adjusted against gratuity expense recognised in the accounts.

The expected return on plan assets is determined after taking into consideration composition of plan asstes held, assessed risks of asset management, historical results of return on plan assets, company's policies for plan asset management and other relevant factors.

The expenses for the above mentioned benefits have been included and disclosed under the following line items:- Gratuity - under 'Contribution to Provident and other Funds' in Note 25

Provident Fund - under 'Contribution to Provident and other Funds' in Note 25, other than employees' statutory contributions, voluntary contribution etc. which are recovered from their salaries, as included under 'Salaries and Wages' in Note 25 Post Retirement Medical Benefit - under 'Staff Welfare Expenses' in Note 25

5.1 For the Defined Contribution plans amount aggregating Rs 184.05 lakhs (previous year- Rs. 299.22 lakhs) have been recognized as an expense during the year. The Contribution to the defined benefits plan expected to be made by the company during the annual period begining after the balance sheet date is yet to be reasonably determined.

6 Change in Accounting Policy

The Company has exercised the option as set out in paragraph 46A of Accounting Standard 11 on "The Effects of Changes in Foreign Exchange Rates", pursuant to the notification dated 29th December, 2011. Accordingly, exchange differences arising on restatement of long term foreign currency loans obtained for the purpose of acquisition of depreciable capital assets, which were until previous year being recognized in the Statement of Profit and Loss, is adjusted in the cost of depreciable asset, which would be depreciated over the balance life of the asset.

Had the Company continued to follow the earlier accounting policy, the net foreign exchange loss recognized in the Statement of Profit and Loss would have been higher by Rs. 1205.84 lakhs with corresponding decrease in net profit for the year and Fixed Assets would have been lower to the same extent.

7 For the purpose of these accounts, following methods and rates of depreciation have been used for depreciating the original cost of fixed assets:

(a) Certain items of Plant and Machinery being energy saving devices added during the period ended 31st March, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

(b) Other assets added up to 31st March, 1987: Under written down value method at rates specified in Schedule XIV of the Companies Act, 1956.

(c) Additions since 1st April, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

8 Based on the valuation reports submitted by the valuers appointed for the purpose, certain items of the Company's fixed assets [viz., Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such Land, Flats, Electrical Installations, Plant and Machinery and Railway Siding] were revalued on 30th November, 1984, on 30th September, 1991 and also on 30th September, 2001 (except Railway Siding) after considering the following factors:

- Estimated current market value pertaining to Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such land and Flats.

- Values of Electrical Installations, Plant and Machinery and Railway Siding (when applicable) based on their current cost of replacement.

- Adjustments for the condition, the standard of maintenance, depreciation up to valuation dates, etc.

The resultant revaluation surplus of Rs.1,011.07 lakhs, Rs.2,994.04 lakhs and Rs. 5,995.27 lakhs arising from the aforesaid revaluations were transferred to Revaluation Reserve in the Company's annual accounts for the years 1983-84, 1990-91 and 2000-01 respectively. Such Revaluation Reserves have however been fully adjusted in earlier years.

9 Depreciation for the year ended 31st March, 2012 on items of fixed assets revalued include an additional charge of Rs. 196.04 lakhs (Previous Year - Rs. 214.22 lakhs) over that calculated on original cost at rates prescribed under Schedule XIV of the Companies Act, 1956 as amended during 1993-94 representing depreciation on the incremental amounts added on revaluation calculated at the rates considered applicable by the valuers.

10 Capital Work in Progress as at 31st March 2012 includes Raw Materials Consumed Rs.15.17 lakhs (Previous Year-1183.24 lakhs, Salaries, Wages and Bonus Rs. 195.65 Lakhs (Previous Year-107.66 lakhs), Contribution to Provident Fund, Super Annuation Fund, Gratuity, Other Funds Rs. 9.88 lakhs (Previous Year-7.24 lakhs), Labour and Staff Welfare Rs. 9.18 lakhs (Previous Year- 7.43 lakhs), Consumption of Stores and spares parts Rs. 14.04 lakhs (Previous Year-17.48 lakhs), Rent Rs. 1.50 lakhs (Previous Year- 8.42 lakhs), Rates and Taxes Rs. 4.55 lakhs (Previous Year-4.09 lakhs), Repairs and Maintenance Rs. 9.84 lakhs (Previous Year-13.61 lakhs), Insurance Rs.4.78 lakhs (Previous Year-9.31 lakhs) incurred on various projects under implementation.

11 Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to the Scheme of Amalgamation of Transmission Holdings Limited with the Company in 2001- 2002, such assets remain included in the books of the Company under the name of the transferor company.

12 On exercise of the option to subscribe to the Company's Equity Shares by the holders of 12,50,000 convertible warrants of Rs. 196/- each allotted on 30th April, 2010 pursuant to the approval of the members of the Company in accordance with SEBI Guidelines, 12,50,000 Equity Shares of Rs. 10/- each fully paid up have been issued and allotted on 28th October, 2011 on conversion of said warrants. Consequently, out of the proceeds of Rs. 2,450 lakhs of the Convertible Warrants Rs. 125 lakhs and Rs.2,325 lakhs have been transferred to Share Capital and Securities Premium Account respectively.

13 Rent of Rs. 57.02 lakhs (Previous Year - Rs. 75.07 lakhs) relates to cancellable operating leases taken on or after 1.04.2001. These lease arrangements range from 11 months to 3 years and are primarily in respect of accommodation for offices; warehouses etc. and inter alia include escalation clause and option for renewal.

14 Members of the Company in the Annual General Meeting held on 30th July, 2008 and the Central Government vide its letter dated 15th Nov, 2010 approved payment of commission to Non Executive Directors up to a ceiling of 1% of the net profits of the Company. The Board of Directors in its meeting held on 29th May, 2012 has approved payment of commission up to 5% of the net profits of the Company subject to approval of members in the ensuing Annual General Meeting and of the Central Government as required under section 310 of the Companies Act, 1956. Accordingly, Commission of Rs. 190.43 lakhs in excess of 1% of the net profits is subject to approval of the members and of the Central Government as stated above.

15 The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

As at As at 31st March, 2011 31st March, 2010 Rupees in lakhs Rupees in lakhs

1. Contingent liabilities for :

(14.1) Claims against the Company not acknowledged as debts :

- Incomeltax matters pending ( other than matters set aside for reassessment) 245.12 119.95

- Excise and Customs matter etc 49.63 l

(1.2) Outstanding Bank

Guarantees etc. 807.10 716.56

2. Premium on foreign exchange arising from forward exchange contract to be recognised in the accounts of future periods Rs. 183.45 lakhs (Previous year - Rs. 29.00 lakhs).

3. Capital Commitments [(net of advances Rs. 2,660.84 lakhs, (31st March, 2010 - Rs. 2,604.94 lakhs)] not provided for as at 31st March, 2011 are estimated at Rs. 2,390.19 lakhs (31st March, 2010 - Rs. 4,498.24 lakhs).

4. As regards contribution to the provident fund maintained with separate Trust, in keeping with consistent practice, the Company's Actuary has carried out an assessment as to the adequacy of the related Trust Fund for distribution of interest at the rate prescribed by the Government and based on such assessment an amount of Rs 20.34 lakhs ( Previous Year-Nil) towards Shortfall in interest for the year has been provided for by the Company.

5. For the Defined Contribution Plans amounts aggregating Rs 299.22 lakhs( Previous Year-Rs 223.92 lakhs) have been recognized as expense during the year.

The contribution to the Defined Benefit Plans expected to be made by the Company during the annual period beginning after the balance sheet date is yet to be reasonably determined.

6. Segment Reporting

a) Information relating to the two business segments, being Carbon Black and Power has been disclosed as primary segments.

b) Interlsegment transfers being power consumed for manufacture of carbon black are based on price paid for power purchased from external sources.

c) Segment Revenues, Results and Other Information :

7. Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to the Scheme of Amalgamation of Transmission Holdings limited with the Company in 2001l2002, such assets remain included in the books of the Company under the name of the transferor company.

8. In accordance with SEBI Guidelines and Members approval, the Company has allotted 4,964,376 Equity Shares of Rs10 each at a premium of Rs190 per share to the Qualified Institutional Buyers by way of Qualified Institutional Placements on 30th April 2010.Further in keeping with SEBI regulations, dividends( General and Golden Jubilee Year) at the rate of Rs 5 per share for the year ended 31st March 2010 has also been paid on such shares.

9. On 30th April,2010 the Company had allotted on a preferential basis to certain companies in the promoter group, 1,250,000 Convertible Warrants against receipt of 25% of the consideration of Rs 196/ l per warrant determined in keeping with the related SEBI Guidelines. Each Warrant is convertible into one Equity Share of nominal value of Rs 10/- each at a premium of 186/- per share at the option of the warrant holders within 18 months from the date of allotment in accordance with relevant SEBI Guidelines and the terms of the issue upon payment of balance consideration by the warrant holders. The shares to be allotted would rank pari passu in all respect with the then existing Equity Shares. In case, the conversion option is not exercised before the expiry of the period allowed for such conversion 25% of the consideration received as aforesaid shall be forfeited.

10. Expenses are after adjustment of amounts reimbursed to or by the Company.

11. Interest expenditure is net of Rs. 409.82 lakhs (Previous Year - Rs.226.67 lakhs) being interest earned on Fixed Deposits and Margin Money Deposits and Others [Gross, Tax Deducted at Source Rs.28.21lakhs (31.03.2010 Rs 32.33 lakhs)] and borrowing cost capitalised Rs.851.99 lakhs (31st March, 2010 lRs. 1508.47 lakhs)

12. Rent of Rs. 75.07 lakhs (Previous Year - Rs.116.96 lakhs) relates to cancellable operating leases taken on or after 1.04.2001. These lease arrangements range from 11 months to 3 years and are primarily in respect of accommodation for offices; warehouses etc. and inter alia include escalation clause and option for renewal.

13 Previous Year's figures are regrouped or rearranged where considered necessary to

Signatures to Schedules numbered 1 to 19


Mar 31, 2010

1. Directors Remuneration:

1.1 Shareholders approval will be obtained in the ensuing Annual General Meeting for re-appointment of Managing Director with effect from 23rd October 2009 and remuneration amounting to Rs. 82.57 lakhs paid to him from that date.

1.2 Computation of Net Profit under Section 198 (1)/ 349 of the Companies Act, 1956 had not been provided in the previous year as no commission was payable in view of inadequacy of profit.

2.0 Raw Material Purchase is net of Rs. 1,407.28 lakhs (Previous year - Rs. 1,747.62 lakhs) being benefits under various duty exemption schemes pertaining to exports / deemed exports.

2.1 Research and Development Expenses mainly includes Raw Materials Consumed Rs.355.25 lakhs (Previous year - Rs. 245.40 lakhs), Salaries, Wages and Bonus Rs. 46.91 lakhs (Previous year - Rs.50.33 lakhs), Contribution to Provident Fund, Superannuation Fund and Gratuity Fund Rs.2.71 lakhs (Previous year - Rs. 1.36 lakhs), Labour and Staff Welfare Rs. 1.78 lakhs (Previous year - Rs. 2.03 lakhs) and Miscellaneous Expenses Rs. 0.72 lakhs (Previous year - Rs. 0.46 lakhs).

3. Advances recoverable in cash or in kind or for value to be received of Rs. 2,273.00 lakhs (Previous Year - Rs. 2,148.13 lakhs) includes Rs.0.77 lakh (Previous Year - Rs. 0.93 lakh) due by an Officer of the Company, maximum amount due at any time during the year - Rs.0.93 lakh (Previous Year - Rs.1.09 lakhs).

3.1 For the purpose of these accounts, following methods and rates of depreciation have been used for depreciating the original cost of fixed assets:

(a) Certain items of Plant and Machinery being energy saving devices added during the period ended 31st March, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

(b) Other assets added up to 31 st March, 1987: Under written down value method at rates specified in Schedule XIV of the Companies Act, 1956.

(c) Additions since 1st April, 1987: Under Straight line method at rates specified in Schedule XIV of the Companies Act, 1956.

4.0 Based on the valuation reports submitted by the valuers appointed for the purpose, certain items of the Companys fixed assets [viz., Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such Land, Flats, Electrical Installations, Plant and Machinery and Railway Siding] were revalued on 30th November, 1984, on 30th September, 1991 and also on 30th September, 2001 (except Railway Siding) after considering the following factors:

- estimated current market value pertaining to Land (Freehold/Leasehold), Acquisition and Development Expenses, Buildings on such land and Flats

- Values of Electrical Installations, Plant and Machinery and Railway Siding (when applicable) based on their current cost of replacement

- Adjustments for the condition, the standard of maintenance, depreciation up to valuation dates, etc.

The resultant revaluation surplus of Rs.1,011.07 lakhs, Rs.2,994.04 lakhs and Rs. 5,995.27 lakhs arising from the aforesaid revaluations were transferred to Revaluation Reserve in the Companys annual accounts for the years 1983-84, 1990-91 and 2000-01 respectively.

4.1 Depreciation for the year ended 31 st March, 2010 on items of fixed assets revalued include an additional charge of Rs. 255.84 lakhs (Previous Year - Rs. 278.33 lakhs) over that calculated on original cost at rates prescribed under Schedule XIV of the Companies Act, 1956 as amended during 1993-94 representing depreciation on the incremental amounts added on revaluation calculated at the rates considered applicable by the valuers.

4.2 Capital Expenditure in Progress includes Capital Advances unsecured, considered good - Rs.2,604.94 lakhs (31 st March, 2009-Rs. 11,105.45 lakhs)

5. According to the letters of undertaking given by the Company to the concerned Financial Institutions, its investments in equity shares of Maple Circuits Limited and Norplex Oak India Limited cannot be pledged, charged or otherwise encumbered or disposed off without their prior consent, during the currency of the loan facilities granted by the Financial Institutions to the said companies.

As at As at 31st March, 2010 31st March, 2009 Rupees in Lakhs Rupees in Lakhs 6. Contingent Liabilities for: (6.1) Claims against the Company not acknowledged as debts: Income-tax matters pending (other than matters set aside for reassessment) 119.95 0.87

(6.2) Outstanding Bank Garentees etc. 716.56 377.20

(6.3) Bills discounted - 1,923.90

(6.4) Guarantees or Counter Guarantees or Counter Indemnity given by the Company: on behalf of bodies corporate and others (other than guarantees which according to legal opinion are no longer enforceable against the Company) - Limit 9.00 9.00 - Outstanding 9.00 9.00

7 Premium on foreign exchange arising from forward exchange contract to be recognised in the accounts of future periods Rs. 29.00 lakhs (Previous year - Rs. 248.30 lakhs).

8. Capital Commitments [net of advances Rs. 2,604.94 lakhs, (31st March, 2009- Rs. 11,105.45 lakhs)] not provided for as at 31st March, 2010 are estimated at Rs. 4,498.24 lakhs (31st March, 2009 - Rs. 10,806.34 lakhs.)

9.0 As regards contribution to the provident fund maintained with separate Trust, the Companys Actuary has certified that the Trust fund is adequate for distribution of interest at the rate currently prescribed by the Government and based on actuarial valuation carried out in terms of revised AS 15 no additional contribution to the fund is required from the Company towards any inadequacy.

9.1 For the Defined Contribution Plans amounts aggregating Rs.223.92 lakhs (Previous Year - Rs. 196.24 Lakhs) have been recognised as expense during the year.

The contribution to the Defined Benefit Plans expected to be made by the Company during the annual period beginning after the balance sheet date is yet to be reasonably determined.

10. Segment Reporting

a) Information relating to the two business segments, being carbon black and power has been disclosed as primary segments.

b) Inter-segment transfers being power consumed for manufacture of carbon black are based on price paid for power purchased from external sources.

c) Segment Revenues, Results and Other Information :

11. Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to the Scheme of Amalgamation of Transmission Holdings Limited with the Company in 2001-2002, such assets remain included in the books of the Company under the name of the transferor company.

12. Expenses are after adjustment of amounts reimbursed to or by the Company.

13. Interest expenditure is net of Rs. 226.67 lakhs (Previous Year - Rs.466.89 lakhs) being interest earned on Fixed Deposits and Margin Money Deposits and Others [Gross, Tax Deducted at Source Rs. 32.33 lakhs (31.03.2009 Rs 104.58 lakhs)] and borrowing cost capitalised of Rs. 1,508.47 lakhs (31st March, 2009 - Rs. 2,938.02 lakhs)

14. Rent of Rs. 116.96 lakhs (Previous Year - Rs. 73.61 lakhs) relates to cancelable operating leases taken on or after 1.04.2001. These lease arrangements range from 11 months to 3 years and are primarily in respect of accommodation for offices; warehouses etc. and inter alia include escalation clause and option for renewal.

15. Commercial operation of 90,000 MT p.a. capacity carbon black plant at Mundra, 30 MW of Co-generation Power Plant at Durgapur and 16 MW of Co-generation power plant at Mundra commenced from 17th October, 2009, 1st April, 2009 and 24th December, 2009 respectively.

16. Previous Years figures have been regrouped or rearranged where considered necessary to make the same comparable with current years figures.

 
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