Notes to Accounts of Oriental Aromatics Ltd.

Mar 31, 2022

Rights of Equity Shareholders

1. The Company has one class of equity shares having a par value of '' 5 per share. Each shareholder is eligible for one vote per share held.

2. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

3. In the event of liquidation of the Company, 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. Nature and purpose of reserves

a) Capital Reserve on Amalgmation : During business combination, the excess of net assets taken over the cost of consideration paid is treated as capital reserve.

b) General Reserve : The General reserve is created by way of transfer of profits from retained earnings for appropriation purposes. This reserve is utilised in accordance with the provisions of the Act

c) Retained Earnings : Retained earnings are the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distribution paid to shareholder.

d) Items of other Comprehensive income : Difference between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in acturial assumtions or experience adjustment within the plans, are recognised in ''Other Comprehensive income'' and subsequently not reclassified to the Statement of Profit and Loss.

Contingent liabilities and commitments (to the extent not provided for)		INR (In Lakh)
Particulars	2021-22	2020-21
Contingent Liabilities
Claims against the Company not acknowledged as debts in respect of:-
- Disputed Labour Claims	9.96	9.96
Where Company is in appeal
- Disputed Excise Duty Matters	13.78	13.78
- Disputed Income Tax Matters	429.35	609.16
Where Department is in appeal
- Disputed Sales Tax Matters	459.65	459.65
- Disputed Income Tax Matters	54.83	54.83
Total	967.57	1,147.38

The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements the Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

37 Commitments

A. Capital expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:

INR (In Lakh)
Particulars	As on 31-Mar-2022	As on 31-Mar-2021
Property, plant and equipment	1,315.16	1,000.32
Less: Capital advances	(345.71)	(57.73)
Net Capital commitments	969.45	942.59

39 Financial risk management objectives and policies

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

The Company''s market risk is manage by Senior Management, who evaluates and exercises independent control over the entire process of market risk management. The Senior Management recommend risk management objectives and policies, which are approved by the Audit Committee. The activities of Senior Management include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies and ensuring compliance with market risk limits and policies.

i. Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company''s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

ii. Market Risk- Foreign currency risk.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodities and services in the respective currencies.

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty''s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements .

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

iii. Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

Concentration Risk Disclosure

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment

The Company had three (P.Y. three) customers whose revenue individually represented 10% or more of the Company''s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company''s total accounts receivable, as follows:

40 Fair Value measurement

Financial Instrument by category and hierarchy

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

iv. Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the companies short - term, medium term and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by maturing the profiles of assets and liabilities.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The fair values for loans, security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

v. Impact of COVID-19

The Company has considered the possible impact of COVID-19, inter-alia, readability of inventories and recoverability of Trade receivables, in preparation of the financial statement. The impact of the global health pandemic may be different from that estimated as at the date of approval of financial statement. Considering the continuing uncertainties, the Company will continue to closely monitor any material changes to future economic conditions.

42 LEASES

Under Ind AS 116, the nature of expenses in respect of operating leases has changed from “lease rent” to “depreciation cost” and ‘''finance cost'''' for the right-to-use assets and for interest accrued on lease liability respectively

The weighted average lessee''s incremental borrowing rate applied to the lease liabilities is 9%.

The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

47 Operating segment

The Company is engaged in the business of manufacture of Fine Chemicals, considering its business activities primarily operated within India and reviewed by the Chairman and Managing Director to make decisions about resources to be allocated to the segment and assess its Performance. Accordingly, the Company has only one business segment.

II. COMPENSATED ABSENCES:

The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as at the balance sheet date performed by an independent actuary. The Company doesn''t maintain any plan assets to fund its obligation towards compensated absences. Compensented absences write back for the year is '' 18.22 lakhs and charged to the statement of profit and loss for the prevoius year is '' 94.30 lakhs.

44 Capital risk management

The Company''s objectives when managing capital are to

> safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

> maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt

The Company''s strategy is to maintain a minimum gearing ratio. The gearing ratios were as follows:

48 Impairment testing of Goodwill on Amalgamation

Goodwill on amalgamation of '' 4497.72 Lakh is relating to the merged business of its fragrance and flavours division (‘CGU''). Goodwill is not amortised, instead it is tested for impairment annually or more frequently if indicators of impairment exist. The recoverable amount is determined based on value-in-use calculation which require the use of certain assumptions. The calculation use cash flow projections based on management approved cash flow projections for the 3-5 years period. Cash flow post that is extrapolated using the estimated growth rates.

As a result of impairment test for the year ended 31^st March 2022, no goodwill impairment was identified as the fair value of the CGU to whom goodwill is relating to exceed their respective carrying amount. An analysis of the sensitivity of the changes in key parameters (cash flows, Discount rate and Long term average growth rate), based on reasonable probable assumptions, did not result in any probable scenario in which the recoverable amount of the CGU would decrease below the carrying amount.

Key assumption used as at March 31, 2022 and March 31, 2021

Discount rate - 11.5% (P.Y. 11.5%)

Terminal Growth rate - 5% (P.Y. 5%)"

50 Fire Insurance Claim

Other non-operative Income for year ended March 31, 2022, includes '' 190.56 lakhs being the amount of insurance claim in respect of fire at Bareilly plant in 2019.

51 Relationship with Struck Off companies

The Company has not entered into transaction with struck off companies under Section 248 of the Companies Act, 2013.

52 a) No proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions

(Prohibition) Act, 1988, as amended, and rules made thereunder.

b) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

c) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

d) There were no transactions relating to previously unrecorded income that have been surrendered and disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

e) The Company has not advanced or loaned to or invested in funds to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

f) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend to or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

g) The Company has not been declared wilful defaulter by any bank or financial Institution or other lender.

53 The Board of Directors has not recommended any further Dividend on equity Shares for the Financial Year 2021-22. The Interim Dividend of '' 2.50 per equity share declared and paid ( '' 841.47 lakh) shall be considered as Final Dividend for the Financial Year 2021-22.

54 The Standalone Financial Statements have been approved by the Board of Directors in its meeting held on 10^th May, 2022.

55 The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code and recognise the same when the Code becomes effective.

56 The previous year''s figures have been re-grouped / re-classified wherever required to conform to current year''s classification. All figures of financials has been rounded off to nearest lakh rupees.

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Mar 31, 2018

Note No. 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES :

I. Background and Operations

Oriental Aromatics Limited formerly Camphor and Allied Products Limited, (CAPL) is a publicly listed company on BSE Ltd., involved in manufacturing of variety of terpene chemicals, camphor, speciality aroma chemicals, fragrances and flavours. Its product range includes synthetic camphor, terpineols, pine oils, resins, astromusk, perfumery chemicals, speciality chemicals, fragrances and flavours and other chemicals, used in different industries such as flavours and fragrances, pharmaceuticals, soaps and cosmetics, rubber and tyre, paints and varnishes, fast-moving consumer goods etc.

Oriental Aromatics Limited (erstwhile), which had a 57.66% stake in CAPL, was amalgamated with CAPL with the effective date for the scheme of amalgamation being January 2, 2018. The name of Camphor and Allied Products Limited was changed to Oriental Aromatics Limited with effect from February 26, 2018.

Note No. 2 First-time adoption of Ind AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31st March, 2018, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions

(a) Business Combination

All transactions qualifying as business combinations under Ind AS103, occurring before the transition date, the company has opted not to restate any business combinations before the date of transition.

(b) Deemed Cost

The Company has opted para D7 AA and accordingly considered the carrying value of property, plant and eqquipments and Intangible assets as deemed cost as at transition date.

(c) Investments in subsidiaries, joint ventures and associates

The Company has opted para D14 and D15 and accordingly considered the cost of Investments as deemed cost as at transition date.

(d) Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate instruments at FVOCI on the basis of the facts and circumstancess at the date of transition to Ind AS.

B. Mandatory Exceptions Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Group made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVPL or FVOCI;

- Impairment of financial assets based on simplified approach.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

I. Reconciliation of Balance sheet as at April 1, 2016 (Transition Date)

II. A. Reconciliation of Balance sheet as at March 31, 2017

B. Reconciliation of Statement of total Comprehensive Income for the year ended March 31, 2017.

III. Reconcilition of Equity as at April 1, 2016 and March 31, 2017

The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

b) Rights of Equity Shareholders

i) Equity shares having a par value of Rs.10, Each holder of equity shares is entitled to one vote per share.

ii) The Company declares and pays dividends in Indian rupees. In the event of dividend being declared by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

iii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amount in proportion to their shareholding.

e) During previous 5 years, the Company has not issued bonus share/bought back share/issued share for consideration other than cash except during the current financial year, 3279746 shares of Rs. 327.97 lakh issued for consideration other than cash.

B. Nature and purpose of reserves

a) Capital Reserve on Amalgmation : During amalgamtion, the excess of net assets taken, over the cost of consideration paid is treated as capital reserve.

b) Security Premium Reserve : The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve.

c) General Reserve : The Company has transferred a portion of the net profit of the company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

e) Retained Earnings : Retained earnings are the profits that the Company has earned till date, less any transfer to general reserve, dividends or other distribution paid to shareholder.

f) Items of other Comprehensive income : Difference between the interest income on plan assets and the return actually achived, and any changes in the liabilities over the year due to changes in acturial assumtions or experience adjustment within the plans, are recognised in ‘Other Comprehensive income’ and subs equently not recalssified to the Statement of Profit and Loss.

Note No. 3

“Pursuant to the approval to the Scheme of Amalgamation (the ‘Scheme’) by the Hon’ble National Company Law Tribunal vide its Order dated 16th November, 2017, the entire business and all assets, liabilities, duties and obligations of erstwhile Oriental Aromatics Ltd. (the “Transferor Company”) with Camphor & Allied Products Ltd. (the “ Transfree Company” / the Company), engaged in the business of fragrances and flavours, were transferred to and vested in the Company from 1^st April, 2016, the appointed date. Accordingly, the effect of the Scheme has been given in these financial statements.

The amalgamation in terms of the Scheme has been accounted as prescribed by the Indian Accounting Standard - 103, “Business Combination”, specified under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting standards) Rules,2015 and other relevant provisions of the Act. and the accounting treatment has been given as under:

A) “Issue of Shares in consideration of the amalgamation:

i) As per the Scheme, 6,240,000 (including 29,60,280 held by OAL) equity shares of Rs. 10 each at par are to be issued to the shareholders of Oriental Aromatics Ltd.

ii) Pending issue of the aforesaid equity shares as at the close of the year on 31^st March, 2017 and as also as on 1^st April, 2016, a sum of Rs. 32,797,200 has been shown under Instrument entirely in nature of equity.

B) The amalgamation has resulted in transfer of assets, liabilities reserves of the Transferor Company as at 1st April, 2016 in accordance with the terms of the Scheme. The book values at which the asset & liabilities were transferred are as follows :

C) Rs. 4497.72 Lakh has been recognised as Goodwill on Amalgamation being the difference between the above net assets, shares to be issued to the shareholder of Transferor Company, cost of the investment in the Transferor Company and cancellation of shares held by Transferor Company.

D) From 1st April, 2016, the Transferor Company had carried out the business in trust on behalf of the Company and all the vouchers, documents, etc. for that period were made in the name of the Transferor Company.

E) There were no significant difference in the accounting policies followed between the erstwhile Company and the Company on the appointed date.

F) Pursuant to the Scheme, the bank accounts, agreements, licenses and certain immovable properties of the Transferor Company is in the process of being transferred in the name of the Company. Further, the Company is in the process of getting the charges modified / released.

The earnings per share in respect of all the previous reported periods have been restated after considering the issue of shares on the aforesaid merger referred in Note No. 34 of the results.

The Group’s pending litigations comprise of claims against the group and proceedings pending with Tax and other Authorities. The group has reviewed all its pending litigations and proceedings and has made adequate provisions wherever required and disclosed the contingent liabilities, wherever applicable, in its consolidated financial statements the group does not reasonable expect the outcome of these proceedings to have a material impact on its consolidated financial statements.

Note No. 4 Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates,equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

The Company manges market risk through a treasury departments, which evalutates and exercises independent control over the entire process of market risk management. The treasury department recommend risk mangament objectives and policies, which are approved by Senior Management and the Audit Committee. The acitivies of this department include management of cash resources, implementing hedging strategies for foreign currency exposures, borrowing strategies and ensuring compliance with market risk limits and policies.

(i). Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury prerforms a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

(ii). Market Risk- Foreign currency risk.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales and services in overseas and purchases from overseas suppliers in various foreign currencies. Foreign currency exchange rate exposure is partly balanced by purchasing of goods, commodites and services in the respective currencies.

iii. Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.

The Company considers the probablity of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throught each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occuring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the opertaing results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements .

Financial assests are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. The Company categorises a loan or receivable for write off when a debtor fails to make contractual payments greater than 2 years past due.Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit or loss.

Concentration Risk Disclosure

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment

The Company had two customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

iv. Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidty risk management framework for the management of the companies short - term, medium term and long term funding and liquidity management requirments. The Company manages liquidity risk by maintaning adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by maturing the profiles of assets and laibilities..

The table provides details regarding the remaining contractual maturities of Company’s financial laibilities.

Note No. 5 Fair Value measurement

Financial Instrument by catogory and hierarchy

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The fair values for loans, security deposits and investment in preference shares were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counter party credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note No. 6 Related Parties Disclosures :

A. List of Related party and their relationships with whom company has entered into transactions during the year :

a) Party where control exists :

Subsidiary : Oriental Aromatics Inc, USA Subsidiary :PT. Oriental Aromatics, Indonesia

b) Other Parties with whom the Compnay has entered into transactions during the year :

i. Associate :

Keshavlal V.Bodani Education Foundation.

ii. Key Management personnel :

Late Mrs. Chandrika A. Bodani (Executive Chairperson till 14.07.17)

Mr. Dharmil A. Bodani (Chairman and Managing Director)

Mr. Shyamal A. Bodani (Executive Director)

Mr. D.S. Raghava (Executive Director)

Mrs. Indira Bodani (Relative KMP)

Mrs. Kinnari Punjabi (Relative KMP))

Mr. Animesh Dhar (Executive Director)

Mr. Satish Ray (Executive Director)

Mr. Girish Khandelwal (Chief Financial Officer)

Mrs. Kiranpreet Gill (Company Secretary)

Note :

i) Figures in brackets pertain to previous year.

ii) No amounts in respect of realted parties have been writeen off/write back/provided for during the year.

iii) During the year, Mr D. S. Raghava resigned w.e.f. 03.08.17 and his remuneration inculdes gratuity and leave encashment.

iv) Related party relationship have been identified by the management and relied upon by the auditors.

Note No. 7 Post retirement benefit plans

As per Actuarial Valuation as on 31^st March, 2018, 2017 and 1^st April, 2016 and recognised in the financial statements in respect of Employee Benefit Schemes:

E. Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans and post retirement medical benefits at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date

Demographic Assumptions

Mortality in Service : Indian Assured Lives Mortality (2006-08) Ultimate table Mortality in Retirement : LIC Buy out Annuity.

Rates & UK Published PA (90) Annuity Rates suitably adjusted for Indian Lives.

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

Note No. 8 Capital risk management

The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt

Note No. 9

The Board of directors of the Company has recommended the payment of dividend on equity shares of Rs.10/-each @ Rs. 2 per share for the year ended 31^st March, 2018. The final dividend shall be subject to approval of shareholders at the ensuing Annual General Meeting.

Note No. 10

The Standalone Financial Statements have been approved by the Board of Directors in its meeting held on 31^st May, 2018.

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Mar 31, 2017

b. Commitments:

i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs, 1056.45 Lakh (Previous year Rs, 192.54 Lakh).

31. Related Party Disclosures as per Accounting Standard (AS) 18:

A) List of Related party and their relationships with whom company has entered into transactions during the year :

a) Party where control exists:

Holding Company: Oriental Aromatics Limited.

Fellow Subsidiary: Oriental Aromatics Inc, USA Fellow Subsidiary: Pt. Oriental Aromatics, Indonesia.

b) Other Parties with whom the Company has entered into transactions during the year:

i. Associate:

Keshavlal V. Bodani Education Foundation.

ii. Key Management personnel :

Mrs. Chandrika A. Bodani (Executive Chairperson)

Mr. Dharmil A. Bodani (Managing Director)

Mr. Shyamal A. Bodani (Executive Director)

Mr. D.S.Raghav (Executive Director)

Mr. Girish Khandelwal (Chief Financial officer)

Ms. Kiranpreet Gill (Company Secretary)

* Sum of Rs, 269.66 Lakh (Previous year Rs, 205.59 Lakh) lying in the Gratuity Fund managed by Life Insurance Corporation of India. Breakup of the same is not available.

1. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year’s financial statements on such reconciliation/adjustments.

* For the purposes of this clause, the term “Specified Bank Notes” shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407€, dated the 8th November, 2016.

2. Previous year''s figures have been regrouped / rearranged/ recast wherever necessary to conform to current year''s presentation.

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Mar 31, 2016

a) the company has a present obligation as a result of a past event,

b) the probable outflow of resources is expected to settle the obligation and

c) the amount of the obligation can be reliably estimated.

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognized to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from the a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, unless the probability of outflow of resources is remote.

Contingent assets are not recognized or disclosed in the financial statements.

1. Contingent liabilities (to the extent not provided for (Net of interest, if any, as may be levied on conclusion of relevant cases) and Commitments :-

a. Contingent liabilities:

i) Disputed Sales Tax :

Where Department is in appeal, Rs.Nil (Previous year Rs.12.75 Lakhs)

ii) Disputed Income Tax:

Where Company is in appeal, Rs.Nil Lakhs (Previous year Rs.404.06 Lakhs)

Where Department is in appeal, ''352.26 Lakhs (Previous year Rs.Nil Lakhs) which has been paid and shown under Note no. 16.

iii) Disputed Labour claim made by ex-employees estimated amounting to Rs.9.96 lacs approx. (Previous year Rs.9.96 lacs).

iv) Pine Chemicals Limited which was amalgamated with the Company had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31^st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 Lakhs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the Company will be liable to repay Rs.98.11 Lakhs in respect of three years ended 31^st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

v) The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

b. Commitments:

i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.192.54 Lakhs (Previous year Rs.20.70 Lakhs).

2. During the year, the Company has acquired technical know-how and certain identified assets and liabilities relating to the business carried on by Arofine Chemical Industries, a partnership firm and Vaishnavi Chemicals Private Limited engaged in the development, manufacture and sale of aroma chemicals, at a total consideration of Rs.1,729.22 Lakhs. The difference of Rs.1,588.14 lacs between consideration and net assets of Rs.141.08 Lakhs acquired is considered as technical know-how and the same is disclosed as Intangible Assets.

3. Segment Reporting:

Primary Segment: The Company is exclusively engaged in the business of manufacture of fine chemicals, which is considered to constitute only one business segment.

Note:

i) Figures in brackets pertain to previous year.

ii) No amounts in respect of related parties have been written off/written back/provided for during the year.

iii) Related party relationships have been identified by the management and relied upon by the auditors.

4. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/adjustments.

5. Previous year’s figures have been regrouped / rearranged/ recast wherever necessary to conform to current year’s presentation.

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Mar 31, 2015

1. Contingent liabilities (to the extent not provided for (Net of interest, if any, as may be levied on conclusion of relevant cases) and Commitments

a. Contingent liabilities:

i) Disputed Sales Tax :

Where Department is in appeal, Rs. 12.75 Lacs (Previous year Rs. 12.75 Lacs)

ii) Disputed Income Tax:

Where Company is in appeal, Rs. 404.06 Lacs (Previous year Rs. 406.56 Lacs)

iii) Disputed Labour claim made by ex-employees estimated amounting to Rs. 9.96 lacs approx. (Previous year Rs. 9.96 lacs).

iv) Pine Chemicals Limited which was amalgamated with the Company had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 Lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs. 98.11 Lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

v) The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

b. Commitments:

i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 20.70 Lacs (Previous year Rs. 4.89 Lacs).

ii) Derivative Instruments:

2. Segment Reporting :

Primary Segment: The Company is exclusively engaged in the business of manufacture of fine chemicals, which is considered to constitute only one business segment.

3. Related Party Disclosures as per Accounting Standard (AS) 18:

A) List of Related party

a. Party where control exists:

Holding Company: Oriental Aromatics Limited. Fellow Subsidiary: Oriental Aromatics Inc.

b. Other Parties with whom the Company has entered into transactions during the year :

i. Associate:

Oriental Fragrances & Flavours Pvt. Ltd. Keshavlal V. Bodani Education Foundation.

ii. Key Management personnel

Mr. Anil K. Bodani (Executive Chairman) till 20.12.2014

*Mrs. Chandrika A. Bodani (Executive Chairperson)

Mr. Dharmil A. Bodani (Managing Director)

Mr. Shyamal A. Bodani (Executive Director)

Mr. D.S.Raghav (Executive Director)

Mr. Girish Khandelwal (Chief Financial officer) w.e.f 01.04.2014

Ms. Nirmala Agarwal (Company Secretary) till 01.12.2014

Ms. Sweta Pandey (Company Secretary) w.e.f. 01.12.2014

*Appointed as an Additional Director w.e.f. 20.01.2015 and as an Executive Chairperson w.e.f. 06.02.2015

4. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/ adjustments.

5. Previous year''s figures have been regrouped / rearranged/ recast wherever necessary to conform to current year''s presentation

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Mar 31, 2014

1) The above Cash Flow Statement has been prepared under the ''Indirect Method'' as set out in Accounting Standard - 3 on "Cash Flow Statements" prescribed by Companies (Accounting Standards) Rules, 2006.

2) Previous year''s figures have been regrouped / rearranged whenever necessary to conform to the current year''s presentation.

b) Terms & Rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs.10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting.

(ii) In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion to the shareholding. However, no such preferential amount exist currently.

d) During previous 5 years, the Company has not issued bonus shares/Bought back share/issued shares for consideration other than cash.

Note 3 - Long Term Borrowings

Secured

Term loans from Banks*

(Secured By First Pari pasu Charge on Movable and Immovable Fixed Assets of the Company situated at 3, GIDC Industrial Area, Nandesari, Gujarat and Personal Guarantee of a Director)

Secured - Working Capital Loan from Banks

(Secured by first pari passu charge by way of Hypothecation of

Current Assets both Present and Future and other movable assets

and Second charge on Movable & Immovable Fixed Assets of the

Company at 3,GIDC Industrial Area, Nandesari, Gujarat in favour of Banks)

Additions during the year in Buildings and Plant & Machinery include

a) Foreign Exchange Loss aggregating to Rs. 813.41 Lacs (which includes Rs. 653.74 Lacs pertaining to previous years)

b) Borrowing cost aggregating to Rs. Nil (which include Rs. 1434.94 Lacs pertaining to previous years)

Unsecured, Considered good

Outstanding for a period exceeding six months from the due date

Outstanding for a period not exceeding six months from the due date

Note 4 - Short Term Loans and Advances

Unsecured, considered good

Balance with Government Authorities

Advances recoverable in cash or in kind or for value to be received

Note 5 - Other Current Assets

Claims and other receivables

Dividend, Interest Subsidy and Interest receivable

6. Contingent liabilities (to the extent not provided for (Net of interest, if any, as may be levied on conclusion of relevant cases) and Commitments

a. Contingent liabilities:

i) Disputed Sales Tax :

Where Department is in appeal, Rs.12.75 Lacs (Previous year Rs. 12.75 Lacs) ii) Disputed Income Tax:

Where Company is in appeal, Rs. 406.56 Lacs (Previous year Rs. 16.65 Lacs)

iii) Disputed Labour claims made by ex-employees estimated at Rs. 9.96 lacs (Previous year Rs. 9.96 lacs).

iv) Penalties / Interest, if any as may be levied in respect of non-payment / late payment of certain statutory dues, amount unascertainable. In the opinion of the management liability, if any would not be material.

v) Pine Chemicals Limited which was amalgamated with the Company had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 Lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs. 98.11 Lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

b. Commitments:

i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 4.89 Lacs (Previous year Rs. 63.99 Lacs)

7. Segment Reporting :

Primary Segment: The Company is exclusively engaged in the business of manufacture of fine chemicals, which is considered to constitute only one business segment.

8. Related Party Disclosures as per Accounting Standard (AS) 18: A) List of Related party

a. Party where control exists:

Holding Company: Oriental Aromatics Limited. Fellow Subsidiary: Oriental Aromatics Inc.

b. Other Parties with whom the Company has entered into transactions during the year :

i. Associate:

Oriental Fragrance & Flavours Ltd. Keshavlal V. Bodani Education Foundation.

* Sum of Rs. 191.13 Lacs (Previous year Rs. 192.83 Lacs) lying in the Gratuity Fund managed by Life Insurance Corporation of India.

9. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/ adjustments.

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Mar 31, 2013

1. Contingent liabilities (to the extent not provided for (Net of interest, if any, as may be levied on conclusion of relevant cases) and Commitments

a. Contingent liabilities:

i) Sales Tax :

Where Department is in appeal, Rs. 12.75 Lacs (Previous year Rs. 12.75 Lacs) ii) Income Tax:

Where Company is in appeal, Rs. 16.65 Lacs (Previous year Rs. 11.10 Lacs)

Where Department is in appeal, Rs. Nil (Previous year Rs. 16.10 Lacs) iii) Excise Duty:

Where Department is in appeal, Rs. Nil (Previous year Rs. 66.20 Lacs)

iv) There are litigations and demands for re-instatement, recovery of wages and compensation, filed by certain ex-employees amounting to Rs. 9.96 lacs approx (Previous year Rs. 9.96 lacs) which are not acknowledged by the Company and not provided for, amount unascertainable. In the opinion of the management amount would not be material.

v) Penalties / Interest, if any as may be levied in respect of non-payment / late payment of certain statutory dues, amount unascertainable. In the opinion of the management liability, if any would not be material.

vi) Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 Lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs. 98.11 Lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

vii) In the year 2011-12, the Company has settled the Nagar Nigam, Bareilly house tax and water cess demands aggregating to Rs. 50.53 Lacs. However, interest of Rs. 22.02 on the above amount has been disputed by the company as not payable, before Civil Court Bareilly. The management expects a favourable outcome.

b. Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 63.99 Lacs (Previous year Rs. 3,252.85 Lacs)

(ii) Derivative Instruments:

(iii) The Company has during the year, in compliance with the announcement issued by ICAI has provided for the MTM Loss on Interest Rate Swap Derivative aggregating to Rs. 441.11 Lacs which hither to were accounted for as and when arose and it has been disclosed as an exceptional item.

2. Related Party Disclosures as per Accounting Standard (AS) 18: A) List of Related party and their relationships:

a. Party where control exists:

Holding Company: Oriental Aromatics Limited. Fellow Subsidiary: Oriental Aromatics Inc.

b. Key Management personnel & Relatives

Mr. Anil K. Bodani (Executive Chairman) Mr. Dharmil A. Bodani (Managing Director) Mr. Shyamal A. Bodani (Executive Director) Mr. D.S.Raghav (Executive Director)

3. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/ adjustments.

4. Previous year''s figures have been regrouped / rearranged/ recast wherever necessary to conform to current year''s presentation

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Mar 31, 2012

A) Terms & Rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting.

(ii) In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion to the shareholding. However, no such preferential amount exist currently.

Secured - Working Capital Loan from Banks

(Secured by First Pari pasu charge by way of Hypothecation of Current Assets both Present and Future and other movable assets and Second charge on Movable & Immovable Fixed Assets of the Company at 3, GIDC Industrial Area, Nandesari, Gujarat in favour of a Bank)

1. Contingent liabilities (to the extent not provided for (Net of interest, if any, as may be levied on conclusion of relevant cases) and Commitments

a. Contingent liabilities:

i) Sales Tax :

Where Department is in appeal, Rs.12.75 Lacs (Previous year Rs. 12.75 Lacs)

ii) Income Tax:

Where Company is in appeal, Rs.11.10 Lacs (Previous year Rs.4.97 Lacs)

Where Department is in appeal, Rs.16.10 Lacs (Previous year Rs.48.10 Lacs)

iii) Excise Duty:

Where Department is in appeal, Rs. 66.20 Lacs (Previous year Rs.66.20 Lacs)

iv) There are litigations and demands for re-instatement, recovery of wages and compensation, filed by certain ex-employees which are not acknowledged by the Company and not provided for, amount unascertainable. In the opinion of the management amount would not be material.

v) Penalties / Interest, if any as may be levied in respect of non-payment / late payment of certain statutory dues, amount unascertainable. In the opinion of the management liability, if any would not be material.

vi) Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal. Status whereof not yet known to the new management.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 Lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs. 98.11 Lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

vii) The Company has during the year settled the Nagar Nigam, Bareilly house tax and water cess demands aggregating to Rs.50.53 Lacs. However, interest of Rs.22.02 on the above amount has been disputed by the company as not payable before Civil Court Bareilly. The management expects a favourable outcome.

b. Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.3,252.85 Lacs (Previous year Rs.217.12 Lacs)

(ii) Derivative Instruments:

(iii) Accounting Standard relating to derivative instruments are yet to be notified and accordingly the company has adopted the policy to provide the losses or gain on fair value measurement as and when they arise. Loss of Rs.598.87 lacs as at 31st March, 2012 arising out of fair value measurement on the aforesaid interest rate swap derivative instruments as entered by the Company has not been recognized.

2. Segment Reporting :

Primary Segment: The Company is exclusively engaged in the business of manufacture of fine chemicals, which is considered to constitute only one business segment. All assets are located in India

3. Related Party Disclosures as per Accounting Standard (AS) 18: A) List of Related party and their relationships:

a. Party where control exists:

Holding Company: Oriental Aromatics Limited.

Fellow Subsidiary: Oriental Aromatics Inc.

b. Key Management personnel & Relatives

Mr. Anil K. Bodani (Executive Chairman)

Mr. Dharmil A. Bodani (Managing Director)

Mr. Shyamal A. Bodani (Executive Director)

Mr. D.S.Raghav (Executive Director)

4. i) In the opinion of the Board, assets other than fixed assets and non-current investment have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Trade receivable, Trade payable, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/ adjustments.

5. Please refer attached significant accounting policies.

6. Current year''s financial statements has been prepared according to the Revised Scheduled VI, previous year''s figures have been regrouped/rearranged/ recast wherever necessary to conform to current year''s presentation.

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Mar 31, 2011

A. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 217.12 Lacs (Previous year Rs. 32.24 Lacs) net of advances of Rs. 127.35 Lacs (Previous year Rs. 195.02 Lacs)

b. Contingent liabilities not provided for in respect of (Net of interest, if any, as may be levied on conclusion of relevant cases) :

i) Sales Tax :

Where Company is in appeal, Rs. Nil (Previous year Rs. Nil)

Where Department is in appeal,Rs.12.75 Lacs (Previous year Rs.12.75Lacs)

ii) Income Tax:

Where Company is in appeal,Rs.4.97 Lacs(Previous year Rs.74.09 Lacs)

Where Department is in appeal, Rs. 48.10 Lacs (Previous year Rs. 45.50 Lacs)

iii) Excise Duty:

Where Department is in appeal, Rs. 66.20 Lacs (Previous year Rs. 66.20 Lacs)

iv) There are litigations and demands for re-instatement, recovery of wages and compensation, filed by certain ex-employees which are not acknowledged by the company and not provided for, amount unascertainable. In the opinion of the management amount would not be material.

v) Penalties / Interest, if any as may be levied in respect of non-payment / late payment of certain statutory dues, amount unascertainable. In the opinion of the management liability if any would not be material.

vi) Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company''s claim in the light of Supreme Court decision on a similar issue. The Company had filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal. Status whereof not yet known to the management.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

c. Nagar Nigam Bareilly''s notice of demand for House Tax, Water Tax etc. for the period from 01.06.2004 to 31.03.2008 has been disputed by the company and the matter is in Allahabad High Court pursuant writ petition filed by the Company. The management does not foresee any possibility of an outflow of / adjustment to the resources embodying economic benefits.

d. i) The amount of exchange difference (net) Credited to the Profit and Loss Account for the year Rs. 83.69 Lacs (Previous year debited Rs. 87.94 Lacs).

i) Derivative Instruments:

Details of foreign currency hedged - Nil

e. Segment Reporting :

Primary Segment: The Company is exclusively engaged in the business of manufacture of fine chemicals, which is considered to constitute only one business segment. All assets are located in India

g. Managerial Remuneration*:

*Excluding Contribution to Gratuity and Leave Entitlement.

No commission is payable to Directors / Managing Director and hence computation of Net Profit in accordance with Section 198, 309 and 349 of the Companies Act, 1956 has not been given.

i. Related Party Disclosures as per Accounting Standard (AS) 18:

List of Related party and their relationships:

A) Parties with whom the Company has entered into transactions during the year in the ordinary course of business.

a. Party where control exists:

Holding Company : Oriental Aromatics Limited.

Fellow Subsidiary : Oriental Aromatics Inc.

b. Key Management personnel & Relatives

Mr. Anil K. Bodani (Executive Chairman) Mr. Dharmil A. Bodani (Managing Director) Mr. Shyamal A. Bodani (Executive Director) Mr. D.S.Raghav (Executive Director)

B) The following transactions were carried out with the aforesaid related parties in the ordinary course of Business during the year:

Note:i) Figures in brackets pertains to previous year.

ii) No amounts in respect of related parties have been written off/written back/provided for during the year.

iii) Related party relationships have been identified by the management and relied upon by the auditors.

l. Disclosure as required by Accounting Standard 15 (Revised) on Employee Benefits, applicable to the Company from the current year: -

* Funds of Rs.196.85 lacs (Previous year Rs. 171.30 lacs) lying in the Gratuity trust managed by Life Insurance Corporation of India.

m.i) In the opinion of the Board, current assets, loans and advances have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Sundry Debtors, Creditors, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation/adjustments.

n. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

o. Additional Information pursuant to paragraph 3 and 4 of part II of Schedule VI to the Companies Act, 1956.

A. Licensed Capacity*, Installed Capacity and actual production.

Note : The License Capacities are De-licensed. ** As Certified by the Management and accepted by the Auditors, without verification, being a technical matter *** Based on yield as verified and certified by the Management.

F.

Notes: 1.Figures in bracket relate to previous year.

2.Previous year''s figure have been regrouped / rearranged / recast / wherever necessary to conform to current year''s presentation.

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Mar 31, 2010

A. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 32.24 Lacs (Previous year Rs 29.25 Lacs) net of advances of Rs. 195.02 Lacs (Previous year Rs 29.25 Lacs)

b. Contingent liabilities not provided for in respect of (Net of interest, if any, as may be levied on conclusion of relevant cases) :

i) Sales Tax :

Where Company is in appeal, Rs. Nil (Previous year Rs. 1.58 Lacs)

Where Department is in appeal, Rs. 12.75Lacs (Previous year Rs. 12.75 Lacs)

ii) Income Tax:

Where Company is in appeal, Rs. 74.09 Lacs (Previous year Rs. 86.66 Lacs) Where Department is in appeal, Rs.45.50 Lacs (Previous year Rs. 262.01 Lacs)

iii) Excise Duty :

Where Department is in appeal, Rs. 66.19 Lacs (Previous year Rs. 66.19 Lacs)

iv) There are litigations and demands for re-instatement, recovery of wages and compensation, filed by certain ex-employees which are not acknowledged by the company and not provided for, amount unascertainable but in the opinion of the management amount would not be material.

c. Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. The Company has filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

d. Nagar Nigam Bareillys notice of demand for House Tax, Water Tax etc. for the period from 01.06.2004 to 31.03.2008 has been disputed by the company and the matter is in Allahabad High Court pursuant writ petition filed by the Company. The management does not foresee even a remote possibility of an outflow of I adjustment to the resources embodying economic benefits, in view of the expert legal opinion in the matter obtained by the Company.

e. i) The amount of exchange difference (net) Credited to the Profit and Loss Account for the year

Rs. 87.94 Lacs (Previous year debited Rs. 96.62 Lacs).

ii) Derivative Instruments:

Details of foreign currency hedged - Nil

j. Related Party Disclosures as per Accounting Standard (AS) 18:

List of Related party and their relationships:

A) Parties with whom the Company has entered into transactions during the year in the ordinary course of business.

a. Party where control exists:

Holding Company : Oriental Aromatics Limited.

Fellow Subsidiary : Oriental Aromatics Inc.

b. Key Management personnel & Relatives

Mr. Anil K. Bodani (Executive Chairman)

Mr. Dharmil A. Bodani (Managing Director)

Mr. Shyamal A. Bodani (Executive Director)

Mr. D.S.Raghav (Executive Director)

Note: i) Figures in brackets pertains to previous year.

ii) No amounts in respect of related parties have been written off/written back/provided for during the year.

iii) Related party relationships have been identified by the management and relied upon by the auditors.

n. i) In the opinion of the Board, current assets, loans and advances have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Banks, Sundry Debtors, Creditors, Loans and Advances are however, subject to confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current years financial statements on such reconciliation/adjustments.

o. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

p. Additional Information pursuant to paragraph 3 and 4 of part II of Schedule VI to the Companies Act, 1956.

---

Mar 31, 2009

A. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.29.25 Lacs (Previous year Rs Nil) net of advances of Rs. 29.25 (Previous year Rs Nil)

b. Contingent liabilities not provided for:

Claims not acknowledged by the Company relating to cases contested by the Company and which are not likely to be devolved on the Company relating to the following areas:

i) Sales Tax :

Where Company is in appeal, Rs. 1.58 Lacs (Previous year Rs. 1.58 Lacs)

Where Department is in appeal, Rs. 12.75 Lacs (Previous year Rs. 12.75 Lacs)

ii) Income Tax :

Where Company is in appeal, Rs. 86.66 Lacs (Previous year Rs. 86.66 Lacs)

Where Department is in appeal, Rs. 262.01 Lacs (Previous year Rs. 262.01 Lacs)

iii) Excise Duty :

Where Department is in appeal, Rs. 66.19 Lacs (Previous year Rs. 66.19 Lacs)

iv) There are litigations and demands for re-instatement, recovery of wages and compensation, filed by certain ex-employees which are not acknowledged by the company and not provided for, amount unascertainable but in the opinion of the management amount would not be material.

c. Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31!t March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. The Company has filed Writ Petition before the Hon. High Court at Jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 lacs in respect of two years ended 31 /03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

d. i) The amount of exchange difference (net) Debited to the Profit and Loss Account for the year Rs. 96.62 Lacs (Previous year credited Rs. 10.12 Lacs).

ii) Derivative Instruments:

Details of foreign currency hedged - Nil

Details of foreign currency unhedged:

e. Nagar Nigam Bareillys notice of demand for House Tax, Water Tax etc. for the period from 01.06.2004 to 31.03.2008 has been disputed by the company and the matter is in Allahabad High Court pursuant writ petition filed by the Company. The management does not foresee even a remote possibility of an outflow of / adjustment to the resources embodying economic benefits, in view of the expert legal opinion in the matter obtained by the Company.

i. Related Party Disclosures as per Accounting Standard (AS) 18: List of Related party and their relationships:

A) Parties with whom the Company has entered into transactions during the year in the ordinary course of business. i) Party where control exists:

Holding Company : Oriental Aromatics Limited. Fellow Subsidiary: Oriental Aromatics Inc.

ii) Key Management personnel & Relatives

Mr. Harshul Dalai (Chairman & Managing Director) (upto 22.08.08)

Mr. S. R. Laghate (Executive Director) (upto 28.02.09)

Mrs. Nina H. Dalai (Non Executive Director) (upto 22.08.08)

Ms. Stuti H. Dalai, (G.M. Business Development) (upto 22.08.08)

Mr. Anil K. Bodani (Executive Chairman) (from 22.08.08)

Mr. Dharmil A. Bodani (Managing Director) (from 22.08.08)

Mr. Shyamal A. Bodani (Executive Director) (from 22.08.08)

f. i) In the opinion of the Board, current assets, loans and advances have value on realization in the ordinary course of business, at least equal to the amount at they are stated.

ii) The accounts of certain Sundry Debtors, Creditors, Loans and Advances are however, subject to confirmations/ reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current years financial statements on such reconciliation/adjustments.

g. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

h. Additional Information pursuant to paragraph 3 and 4 of part II of Schedule VI to the Companies Act, 1956.

i. Previous years figure have been regrouped / rearranged / recast / wherever necessary to conform to current years presentation.

---

Mar 31, 2008

1) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. NIL (Previous year Rs. 145.18 lacs) net of advances.

2) Contingent Liabilities on Account of:

a. Sales Tax Rs 3.92 lacs (Previous year Rs.25.12 lacs).

b. Income Tax Rs. Nil (Previous Year Rs. 20.63)

c. There are litigations and demands for re-instatement, recovery of wages and compensation, filed by ex-employees which are not acknowledged by the company and not provided for, amount unascertainable.

3) Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 31 st March, 1984. The (High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. The Company has filed Writ Petition before the Hon. High Court at jammu which is still pending disposal.

In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 lacs in respect of two years ended 31 /03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31 st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

4) MICRO, SMALL AND MEDIUM ENTERPRISES DISCLOSURE.

Under the Micro, Small and Medium Enterprises Development Act, 2006 which, came into force from 2nd October,2006, certain disclosure are required to be made relating to Micro, Small and Medium. Enterprises. The Company is in the process of compiling relevant information from its suppliers about their coverage under the said Act. Since the relevant information is not readily available, no disclosure have been made in the accounts. However, in the view of the management the impact of interest if any, that may be payable in accordance with provisions of this Act is not expected to be material.

5) The previous year figures have been regrouped and recast wherever necessary to make them comparable with current year figures

6) Debtors and Creditors balances are subject to confirmation. However, in the opinion of the Board the Current Assets, Loans and Advances are approximately of the value stated, if realized in ordinary course of business.

7) Disclosures in accordance with Revised AS - 15 on "Employee Benefits"

The Accounting Standard 15 (Revised 2005) on " Employee Benefits" issued by the ICAI was adopted by the Company with effect 01/04/2007. Consequently, the transitional liability on account of employee benefits amounting to Rs.42,85,943/- (net of deferred tax of Rs.Nil) was debited to the opening balance of General Reserve and Loss account as at 01 /04/2007.

a) Defined Contribution Plan:

The Company makes contribution to provident fund for qualifying employees which is recognized in the Profit and Loss account on accrual basis.

b) Defined Benefit Plan:

The Company offers its employees defined benefit plan in the form of Gratuity Scheme and Leave Encashment. In case of gratuity scheme, the Company contributes funds to a Gratuity Trust, while the Leave encashment scheme is not funded. Commitments are actuarially determined at year end. On adoption of the revised Accounting Standard, (AS)-15 on "Employee Benefits" notified under the Companies (Accounting Standards) Rules, 2006, actuarial valuation is done based on "Projected Unit Credit" method. Gains & Losses of changed actuarial assumptions are charged to the Profit & Loss account. *

---

Mar 31, 2007

1) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 145.18 lacs (Previous year Rs. 35.71 lacs) net of advances.

2) Contingent Liabilities on Account of

a. Sales Tax Rs 25.12 lacs (Previous year Rs.0.84 lacs),

b. Income Tax Rs.20.63 Lacs (Previous Year Rs. NIL)

c. There are litigations and demands for re-instatement, recovery of wages and compensation, filed by employees which are not acknowledged by the company and not provided for, amount unascertainable

3) Pine Chemicals Limited which was amalgamated with the Company (Camphor & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period five years ending 3 I st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. The Company has filed Writ Petition before the Hon. High Court. Which is still pending for disposal. In the event of the claim being decided in favour of the Company, the Company would be entitled to refund of Rs. 59.03 lacs in respect of two years ended 31/03/1984 and in the event of it being decided against the Company, the company will be liable to repay Rs.98.1 I lacs in respect of three years ended 3 I st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the petition.

4) Auditors Remuneration

(Rs. in lacs) 2006-2007 2005-2006

(a) Audit Fees 2.80 2.20 Tax Audit Fees & Taxation Matters 0.56 0.55 Certification charges 1.30 1.37 Expenses Reimbursed 1.19 0.59 (b) Cost Audit fees 0.22 0.22

5) Miscellaneous Expenses includes a. Directors & Managing Directors (I) Travelling Expenses 3.11 3.25 (II)Foreign Travel Expenses 11.15 10.54 b. Other Foreign Travel Expenses 3.85 2.22

6) No amounts were over due to SSI for more than 30 Days which are included in Sundry Creditors.

7) The previous year figures have been regrouped and recast wherever necessary to make them comparable with current year figures

8) Debtors and Creditors balances are subject to confirmation. However, in the opinion of the Board the Current Assets, Loans and Advances are approximately of the value stated, if realized in ordinary course of business.

---

Mar 31, 2006

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.35.71 lacs (Previous year Rs. 1.04 lacs) net of advances.

2. Contingent Liabilities on Account of:

a. Sales Tax Rs 0.84 lacs (Previous year Rs.0.84 lacs).

b. There are. litigations and demands for re-instatement, recovery of wages and compensation, filed by employees which are not acknowledged by the company and not provided for, amount unascertainable.

5. Pine Chemicals Limited which was amalgamated with the Company (Camphor. & Allied Products Limited) had earlier filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. The Company has filed Writ Petition before the Hon. High Court which is still pending for disposal.

In the event of the claim being decided in favour of the Company, the Company would be-entitled to refund of Rs. 59.03 lacs in respect of two years ended 31/03/1984, and in the event of it being decided against the Company, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March, 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be, will be accounted for after the final outcome of the petition.

6. Auditors Remuneration includes

(Rs. in lacs) 2005-2006 2004-2005

(a) Audit Fees 2.20 120

Tax Audit Fees & Taxation Matters 0.55 0.55

Certification charges 1.37 1.71

Expenses 0.59 1.34

(b) Cost Audit fees 0.22 0.22

7. Miscellaneous Expenses includes

a. Directors & Managing Directors

(1) Travelling Expenses 3.25 3.66

(1.1) Foreign Tour Expenses 10.54 6.01

b. Other Foreign Tour Expenses 2.22 0.00

8. Segment Reporting

The Company is exclusively engaged in the business of manufacture of Fine Chemicals. In context of Accounting Standard 17 on Segment Reporting-issued by the Institute of Chartered Accountants of India, this is considered to constitute only one reporcable segment. The geographical location of its main operations and the internal organisation/reporting and management Structure supports such treatment.

10. Related Party Disclosure

a) Related parties and transactions with these parties

I. Key management personnel and their relatives. Mr. Harshul Dalal, Mr. S. R. Laghate, Ms. Sturi H. Dalal

II. Other Related Parties Harshul J. Dalal.HUF, Midland Finance & Investments Pvt. Ltd.

III. Transactions with Parties mentioned above

No. Nature of Transaction : Transaction with Key Other Related Managerial personnel Parties & then-relatives

Rs. In lacs

1. Outstanding Balance of Intercorporate deposits as on 31.03.2006 200.00

2. Interest on Intercorporate deposits 27.93

3. Interest free rent deposit 10.00

4. Rent paid 9.36

5. Managerial Remuneration Mr. Harshul Dalal 49.49

Mr. S.R. Laghate 11.15

6. Remuneration to Ms. Stuti H. Dalal 1.14

b) Other related parties

Mrs. Nina H. Dalal

Mrs. Jayshree S. Laghate

Ms. Punya H. Dalal

7. The previous year figures have been regrouped and recast wherever necessary to make them comparable with current year figures

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Mar 31, 2005

1. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 1.04 lacs (Previous year Rs. 624.281acs) net of advances.

4. Contingent Liabilities on Account of:

a. Sales Tax Rs.0,84 lacs (Previous year Rs.6.51 lacs).

b. Guarantees given by Banks to Sales Tax Department Rs.0.00 lacs (Previous year Rs. 5.76 lacs).

c. There are litigations and demands for re-instatement, recovery of wages and compensation, filed by employees which are not acknowledged by the company and not provided for, amount unascertainable

5. Earlier Pine Chemicals Limited had filed a Writ Petition challenging the retrospective rescission by the Government of jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The High Court of jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of Pine Chemicals Limited, the Company would be entitled to further refund of Rs.59.03 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against Pine Chemicals Limited, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March 1982, which Pine Chemicals Limited had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department. The Company has filed contempt petition for securing the refund and the matter is under consideration of the Industries Department.

6. Working Capital facilities from Banks are secured by hypothecation of Inventories and book debts.

7. Auditors Remuneration includes

2004-2005 2003-2004

(a) Audit Fees 2.20 2.16

Tax Audit Fees & Taxation Matters 0.55 0.54

Certification charges 1.71 1.23

Expenses 1.34 1.27

(b) Cost Audit fees 0.22 0.22

8. Miscellaneous Expenses includes

a. Directors & Managing Directors

(I) Travelling Expenses 3.66 2.64

(II) Foreign Tour Expenses 6.01 8.50

b. Other Foreign Tour Expenses 0.00 0.81

9. Segment Reporting

The Company is exclusively engaged in the business of manufacture of Fine Chemicals. In context of Accounting Standard 17 on Segment Reporting - issued by the Institute of Chartered Accountants of India, this is considered to constitute only one repertable segment. The geographical location of its main operations and the internal organisation reporting and management structure supports such treatment.

10. Profit on sale of Assets for the year includes Rs.428.90 lacs being Capital Profit on sale of Office Premises.

11. Related Party Disclosure

a) Relationship

a) Key management personnel and their relatives. Mr. Harshul Dalal, Mr. S. R. Laghate Mrs. Nina H. Dalal, Ms. Stuti Dalal, Ms. Punya Datal & Mrs.Jayshree Laghate

b) Other Related Parties Harshul J. Dalal HUF, Midland Finance & Investments Pvt. Ltd.

b) Transactions with Parties mentioned above

No. Nature of Transaction Transaction with Key Other Related Managerial personnel Parties & their relatives Rs. In lacs Rs. In lacs

1 Outstanding Balance of Intercorporate deposits as on 31.03.2005 - 325.00

2 Interest on Intercorporate deposits 1.70

3 Interest free rent deposit 10.00

4 Rent paid 9.36

5 Managerial Remuneration 46.34

13 Managerial Remuneration under Section 198 of the Companies Act 1956.

(Rupees in Lacs) 2004-2005 2003-2004 Managing & Whole Time Directors Remuneration

Salary 28.77 23.40

Commission 0.00 12.00

Perquisites in Cash or in kind 8.46 5.66

Contribution to Provident and other funds. 9.11 7.19

46.34 48.25

Computation of Managing Director & other Directors Commission :-

Profit as per Profit & Loss Account 227.18 392.45

Add: Depreciation 188.38 150.09

Provision for Taxation 30.00 220.00

Defered Taxation 99.90 (0.18)

Directors sitting fees 1.22 1.09

Managerial Remuneration 46.34 55.25

Compensation under Voluntary Retirement Scheme w.off 0.00 61.49

Loss on Sale of Investments 0.00 10.84

Provision for Contigencies 0.00 0.29

Loss discarding sale of Assets (Net) 40.60 4.04

633.62 895.36

Less : Provision for Doubtful Debts written back 0.00 12.51

Less : Depreciation under section 350 of the Companies Act, 1956 188.38 150.09

Less: Capital Profit on Sale of Office Premises 428.90 0.00

617.28 162.60

16.34 732.76

Maximum Commission Payable, to Managing Director & Executive Director 0.00 37.03

Commission Payable to Managing & Executive Director as determined 0.00 12.00 by the Board

Maximum Commission Payable to Other Directors @ 1. % 0.00 7.33

Commission Payable to other Directors as determined by the Board 0.00 7.00

Note : Due to the inadequacy of profit for the financial year 2004-05, minimum Managerial Remuneration has been paid in accordance with the provision of Part B, Section II of Schedule XIII of the Companies Act, 1956 and as approved by the Remuneration Committee and the Board. The Company is now seeking approval of the shareholders for the same in the ensuing Annual General Meeting as required by the provisions of Sched- ule XIII. In the event the necessary approval is not obtained the Managing Director and Executive Director will refund the amounts back to the Company.

15. The previous year figures have been regrouped and recast wherever necessary to make them comparable with current year figures.

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Mar 31, 2004

1. Estimated amount of contracts remaining to be executed-on Capital Account and not provided for Rs.624.28 lacs (Previous year Rs.41.431acs) net of advances.

2. Contingent Liabilities on account of:

a. Sales Tax.R.s.6.51 lacs (Previous year Rs.67.70 lacs).

b. Guarantees given by Banks to Sales Tax Department Rs.5.76 lacs (Previous year Rs.5.76 lacs).

c. Demands and litigations for re-instatement, recovery of wages and compensation, filed by employees which are not acknowledged by the company and not provided for. amount unascertainable

5. Earlier Pine Chemicals Limited had filed a Writ Petition challenging the retrospective rescission by the Government ofJammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984.

The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of Pine Chemicals Limited, the Company would be entitled to further refund of Rs.59.03 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against Pine Chemicals Limited, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March 1982, which Pine Chemicals Limited had accounted for as income in earlier years.

The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department,

The Company has filed contempt petition for securing the refund and the matter is under consideration of the Industries Department.

6. Working Capital facilities from Banks are secured by hypothecation of inventories and book debts.

7. Auditors Remuneration includes 2003-2004 2002-2003

(a) Audit Fees 2.16 1.58

Tax Audit Fees & Taxation Matters 0.54 0.53

Certification charges 0.23 0.74

Expenses 1.27 0.73

(b) Cost Audit fees 0.22 0.21

8. Miscellaneous Expenses includes

a. Directors & Managing Directors

(i) Travelling Expenses 2.64 1.63

(ii) Foreign Tour Expenses 8.50 2.79

b. Other Foreign Tour Expenses 1.81 0.00

9. Segment Reporting

The Company is exclusively engaged in the business of manufacture of Fine Chemicals. In the context of Accounting Standard 17 on Segment Reporting - issued by the Institute of Chartered Accountants of India, this is considered to constitute one segment.

11. Voluntary Retirement Scheme

In earlier years, the compensation paid under the Voluntary Retirement Scheme was deferred, to be written off over a period of 5 years. The balance of such expenditure Co be written off over a period in future years, aggregated to Rs.61.49 lacs as at 31st March 2003. However, considering the requirement of Accounting Standard 26 on Intangible Assets issued by the Institute of Chartered Accountants of India, the Company has written off the entire amount of Rs.61.49 lacs to the Profit & Loss Account in the current year.

Consequently, the charge to P&L is higher by Rs.42.84 lacs as compared to that under the accounting policy followed earlier by the Company.

12. Related Party Disclosure Relationship

a) Key management personnel and their relatives.

Mr. Harshul Dalal,

Mrs. Nina H. Dalal,

Ms. Stuti Dalal, &

Ms. Punya Dalal.

Mr. S. R. Laghate,

Mrs. Jayshree Laghate

b) Other Related Parties Harshul J. Dalal HUF, Midland Finance & Investments Pvt. Ltd.

13. Transactions with Parties mentioned above

Sl. No. Nature of Transaction Transaction Other with Key Associates Managerial personnel & their relatives

Rs. In lacs Rs. In lacs

1. Outstanding Balance of Fixed Deposit as on 31.03.2004 5.00 -

2. Interest on Fixed Deposit paid 2.76 -

3. Interest free rent deposit _ 10.00

4. Rent paid _ 9.36

5. Managing and Executive Directors Remuneration - 48.25

14. The previous year figures have been regrouped and recast wherever necessary to make them comparable with current year figures

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Mar 31, 2003

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.41.43 lacs (Previous year Rs. 20.30 lacs) net of advances.

2. Contingent Liabilities on Account of:

a. Excise duty Rs.30.18 lacs (Previous year Rs.20.75 lacs), Sales Tax Rs.67.70 lacs (Previous year Rs.16.42 lacs).

b. Guarantees given by Banks to Excise and Custom Department Nil (Previous year Rs.34.12 lacs). Sales Tax Department Rs.5.76 lacs (Previous year Rs. S.I I lacs).

c. Bill of Exchange discounted with banks Nil (Previous year Rs.64.15 lacs).

d. Claims not acknowledged as Debts Nil (Previous year Rs. 8.21 lacs).

e. Recovery suit filed by State Bank of Patiala on Vidharbha Iron & Steel Corporation Ltd and others in which the erstwhile Pine Chemicals Limited (PCL) which amalgamated with the Company is impleaded as one of the defendants - amount unascertainable.

f. There are demands and litigations for re-instatement, recovery of wages and compensation filed by employees which are not acknowledged by the company and not provided for, amount unascertainable.

3. Earlier PCL had filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984-The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of PCL, the Company would be entitled to further refund of Rs.59.03 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.1 I lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years.The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department. The Company has filed contempt petition for securing the refund and the matter is under consideration of the Industries Department.

4. Cash Credit from Banks are secured by hypothecation of stores, spares and packing materials and stock in trade and book debts.

5. Extra ordinary items of credit of Rs.31.00 lacs to Profit & Loss Account consist of Advances received from M/S Zedon Exports who had purchased Lease hold Land & Buildings. The Buildings were written off by erstwhile Pine Chemicals Ltd. on closure of its operations. M/S Zedon Exports had filed a petition before the Honorable High Court of Jammu & Kashmir for possession of Leasehold Land as the same was not regularised by SIDCO which was transferred by erstwhile Pine Chemicals Ltd. During the year vide Tripartite agreement between Camphor & Allied Products Ltd., SIDCO and Zedon Exports the transfer of Lease was concluded. Accordingly the amount received has been treated as income of the current year.

6. Auditors Remuneration includes: 2002-2003 2001-2002

(a) Audit Fees 1.58 1.58

Tax Audit Fees & Taxation Matters 0.53 0.53

Certification charges 0.74 0.68

Expenses 0.73 0.79

(b) Cost Audit fees 0.21 0.21

7. Miscellaneous Expenses includes

a. Directors & Managing Directors

(I) Travelling Expenses 1.63 1.03

(II) Foreign Tour Expenses 2.79 7.05

b. Other Foreign Tour Expenses 0.00 0.91

8. Segment Reporting

With reference to accounting standard 17 the company has only one segment i.e. manufacture of Fine Chemicals.

II Deferred Taxation: Deferred Current Deferred Tax Liability year charge Tax Liability /(assets) /(credit) /(assets) Deferred Tax Liability as at as at 1/4/2002 31.3.2003 Rs.in Lacs Rs.in Lacs Rs. In Lacs (A) Difference between book and Tax depreciation 596.48 7.97 604.45

(A) 596.48 7.97 604.45

(B) Deferred Tax assets

1. Unpaid Bonus (1.54) 0.87 (0.67)

2. Disallowance u/s 43B (0.16) (0.63) (0.79)

3. Provision for Leave Salary (2.51) 1.68 (0.83)

4. Share Issue Expenses (0.59) 0.57 (0.02)

5. Provision for Bad Debts 0 (2.76) (2.76)

(B) (4.80) (0.27) (5.07)

Deferred Tax Liability net (A-B) 591.68 7.70 599.38

Pursuant to Accounting Standard (AS) 22 - Accounting for taxes on Income, the Company has recorded a net cumulative deferred tax liability of Rs.599.38 lacs upto 31.3-2003. The impact of Deferred Tax Liability of Rs.7.70 lacs for the year ended 31.3.2003 has been debited to Profit & Loss Account.

9. Voluntary Retirement Scheme

In accordance with past practice the Compensation paid under the Voluntary retirement Scheme has been deferred, to be written off over a period of 5 years. The total expenditure on this account amounted to Rs.80.14 lacs (Previous Year Rs.65.45 lacs). Accordingly Rs.18.65 lacs (Previous Year Rs.13.09 lacs ) has been included as an expenses under the head "payment and provisions for employee".

10. Related Party Disclosure

1. Relationships

a) Key management personnel and their relatives. Mr. Harshul Dalal, Mrs. Nina H. Dalal, Ms. Stuti Dalal & Ms. Punya Dalal.

b) Other Related Parties Harshul Dalal HUF, Midland Finance & Investments Pvt. Ltd.

2 Transactions with Parties mentioned above.

a) Outstanding balance of fixed deposits as on 31.03.2003 Rs. 25 lacs.

b) Interest paid on above Rs. 3.08 lacs.

c) Interest free rent deposit of Rs. 10.00 lacs

d) Rent paid Rs.7.38 lacs.

e) Managerial Remuneration Rs. 27.62 lacs

11. Managerial Remuneration under Section 198 of the Companies Act 1956. (Rupees in Lacs) 2002-2003 2001-2002 To Managing Director: Salary 15.00 13.75

Commission 4.00 3.40

Perquisites in Cash or in kind 3.84 4.39

Contribution to Provident and other funds. 4.78 4.29

27.62 25.83

Computation of Managing Director & other Directors

Commission: Profit as per Profit & Loss Account 293.80 225.68

Add: Depreciation 153.63 159.87

Provision for Taxation 160.00 125.00

Defered Taxation 7.70 60.60

Directors sitting fees 1.04 0.40

Managerial Remuneration 31.62 28.83

Compensation under Voluntary Retirement Scheme 18.65 13.09

Provision for Doubtfull Debts 7.70 0.00

Provision for Contingencies 28.71 0.00

702.85 613.47

Add/(Less): Loss/(Profit) on sale of assets (Net) I 1.09 31.06 Add: Provision for Diminution in value of Investment (3.10) 10.03

710.84 654.56 Less: Depreciation under section 350 of the Companies Act, 1956 153.63 159.87

557.21 494.69

557.21 494.69

Commission to Managing Director @ I % 5.57 4.94

Maximum payable to Managing Director as per terms of agreement 4.00 3.40

Commission to Others Directors @ I % 5.57 4.94

Maximum payable to other Directorsin terms of the resolution passed by the Board of Directors. 4.00 3.00

15. Information required to be given in Pursuance of Part II of Schedule VI of the Companies Act, 1956.

a. Details of Licensed Capacity, Installed Capacity and Production (Quantity in Metric Tons unless otherwise stated)

Products Actual Production

Licensed Installed Capacity Capacity 2002-2003 2001-2002

Camphor/Isoborneol 4,500.00 4,500.00 3,290.99 3,061.05 (4,500.00)

Pine Oil/Terpineols 1,100.00 1,100.00 1,223.07 1,047.34 (1,100.00)

Poly - Terpene Resin 1,200.00 1,000.00 751.34 633.65 (1,000.00)

Perfumery Chemicals 850.00 750.00 585.03 552.95 (750.00)

Speciality Chemicals 1,650.00 1,050.00 484.83 508.07 (1,050.00)

NOTES : Installed Capacity being technical matter is taken as certified by the Director upon which the Auditors have relied.

b. Details of Opening and Closing Stocks (Quantity in Metric Tons - unless otherwise stated)

Products Opening Stock Quantity Value 2002-03 2001-02 2002-03 2001-02

Camphor/lsoborneol 258.00 360.41 264.82 360.15

Pine Oil/Terpineols 57.05 82.94 45.02 53.95

Poly-Terpene Resin 70.99 122.09 41.91 66.81

Perfumery Chemicals 25.16 48.17 55.74 138.16

Speciality Chemicals 14.82 20.70 18.19 39.48

By Products & Intermediate Products - - 38.18 94.68

TOTAL 463.86 753.23

(Rupees in Lacs) Products Opening Stock Quantity Value 2002-03 2001-02 2002-03 2001-02

Camphor/lsoborneol 75.51 258.00 73.33 264.82

Pine Oil/Terpineols 101.83 57.05 71.62 45.02

Poly-Terpene Resin 56.58 70.99 32.81 41.91

Perfumery Chemicals 39.01 25.16 111.11 55.74

Speciality Chemicals 22.05 14.82 33.31 18.19

By Products & Intermediate Products - - 56.72 38.18

TOTAL 378.90 463.86

16. The previous years figures have been regrouped and recast wherever necessary to make them comparable with current year figures.

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Mar 31, 2002

Secured Loans:

(a) The Non-convertible Debentures were secured by mortgage of immovable properties being Plot No. 3 situated at G. I. D. C. Industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 31st January 2000. The said Debentures were further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties at Clutterbuckganj Bareilly (U. P.) including plant & machinery and accessories and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (U. P.) both present and future (save & except Book Debts) subject to prior charges created/to be created in favour of Companys bankers for securing borrowings for working capital requirement. The said Debentures were repayable in three equal annual instalments during the years 2002-2004. The above charge ranked pari passu in respect of term loan from EXIM Bank. The above Debentures and Term loan have been prepaid during the year.

(b) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

Fixed Assets:

1) Buildings include Rs. 0.05 lacs (previous year Rs 0.05 lacs) being cost of 20 fully paid up shares of face value of Rs. 50/- each and deposit in a cooperative society.

2) Leasehold land Rs 2.40 lacs (Previous year Rs 2.40 lacs) acquired consequent upon the scheme of amalgamation of PCL with the Company is pending transfer in the name of the company

Other Notes:

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 20.30 lacs (Previous year Rs. 36.16 lacs) net of advances.

2. Contingent Liabilities on Account of:

a) Excise duty Rs. 20.75 lacs (Previous year Rs. 183.30 lacs), Sales Tax Rs. 16.42 lacs (Previous year Rs. 9.78 lacs), U. P. State Electricity Board Rs. Nil (Previous year Rs. 35.93 lacs).

b) Guarantees given by Banks to Excise and Custom Department Rs. 34.12 lacs (Previous year Rs. 21.88 lacs). Sales Tax Department Rs. 5.11 lacs (Previous year Rs. 1.79 lacs).

c) Bill of Exchange discounted with banks Rs. 64.15 lacs (since realized) (Previous year Rs. 54.53 lacs).

d) Claims not acknowledged as Debts Rs. 8.21 lacs (Previous year Rs. 8.21 lacs).

e) Recovery suit filed by State Bank of Patiala on Vidharbha Iron & Steel Corporation Ltd and others in which the erstwhile Pine Chemicals Limited (PCL) which amalgamated with the Company is impleaded as one of the defendants - amount unascertainable.

f) There are demands and litigations for re-instatement, recovery of wages and compensation filed by employees which are not acknowledged by the company and not provided - amount unascertainable.

3. Earlier PCL had filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March, 1984. The High Court of Jammu & Kashmir has passed and order directing the Sales Tax Department to review the Companys claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of PCL, the Company would be entitled to further refund of Rs. 66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department.

4. Segment Reporting

With reference to accounting standard 17 the company has only one segment i. e. manufacture of Fine Chemicals.

5. During current year 41 employees have opted for Voluntary Retirement Scheme. The Total expenses on this account amounts to Rs. 65.45 lacs which is being amortized over a period of five years. Accordingly Rs. 13.09 lacs has been included as an expenses under the head "payment to and provisions for employees".

6. The previous years figures have been regrouped and recast wherever necessary.

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Mar 31, 2001

Share Capital

Includes : 34,96,584 Equity Shares of Rs. 10/- each allotted as fully paid up Shares for a consideration other than cash pursuant to the Schemes of amalgamation.

Secured Loans

(a) The Non-convertible Debentures are secured by mortgage of immovable properties being Plot No.3 situated at G.I.D.C. Industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 31st January 2000. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties (excluding plot No. 64 & 75 situated at village Bidhaulia and constructions thereon) at Clutterbuckganj Bareilly (U.P.) including plant & machinery and accessories and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (U.P.) both present and future (save & except Book Debts) subject to prior charges created/to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said Debentures are repayable in three equal annual instalments during the years 2002-2004. The above charge ranks part passu pending documentation in respect of term loan from EXIM Bank.

(b) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

Fixed Assets

1) Buildings include Rs. 0.05 lacs (previous year Rs. 0.05 lacs) being cost of 20 fully paid up shares of face value of Rs. 50/- each and deposit in a co-operative society.

2) Leasehold land Rs. 2.40 lacs (Previous year Rs. 2.40 lacs) and Buildings Rs. 44.02 Lacs (previous year Rs. 44.02 lacs) acquired consequent upon the scheme of amalgamation of PCL with the Company are pending transfer in the name of the company.

Other Notes

1. Estimated amount of contracts remaining to be executed in Capital Account and not provided for Rs. 36.l6 lacs (Previous year Rs. 33.95 lacs) net of advances.

2. Contigent Liabilities on Account of :

a. Excise duty Rs. 183.30 lacs (Previous year Rs. 130.54 lacs), Sales Tax Rs. 9.78 lacs (Previous year Rs. 1.62 lacs).

Custom duty on material in transit Rs.Nil (Previous year Rs. 37.85 lacs),U.P.State Electricity Board Rs.35.93 lacs (Previous year Rs. 11.57 lacs).

b. Guarantees given by Banks to Excise and Custom Department Rs. 21.88 lacs (Previous year Rs. 20 lacs). Sales Tax Department Rs. 1.79 lacs (Previous year Rs. 1.79 lacs).

c. Bill of Exchange discounted with banks Rs.54.53 lacs(since realized) (Previous year Rs. 54.94 lacs).

d. Claims not acknowledged as Debts Rs. 8.21 lacs (Previous year Rs. 9.17 lacs).

e. Recovery suit filed by State Bank of Patiala on Vidharbha Iron & Steel Corporation Ltd and others in which the erstwhile Pine Chemicals Limited (PCL) which amalgamated with the Company is impleaded as one of the defendants - amount unascertainable.

f. There are demands and litigations for re-instatement, recovery of wages and compensation which are not acknowledged by the company and not provided - amount unascertainable.

3. Earlier PCL had filed a Writ Petition challenging the retrospective rescission by the Government of ]ammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The High Court of ]ammu & Kashmir has passed an order directing the Sales Tax Department to review the Company's claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of PCL. the Company would be entitled to further refund of Rs. 66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL. the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department.

4. During the year the Appeals for the seven Assessment Years from 1992-93 to 1998-99 were heard and Appellate Orders are received after 31 st March 2001. resulting in substantial relief to the company. However, as no Orders giving effect to the Appeal Orders are received no adjustment has been made. No Income-Tax provision is required to be made in respect of the above mentioned seven years.

5. Previous years figures have been regrouped and recast wherever necessary

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Mar 31, 2000

Includes : 34,96,584 Equity Shares of Rs 10/- each allotted as fully paid up Shares for a consideration other than cash pursuant to the Schemes of amalgamation.

(a) The Non - convertible Debentures are secured by mortgage of immovable properties being Plot No.3 situated at G.I.D.C. Industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 26th September 1997 and 31st January 2000. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties (excluding plot no. 64 & 75 situated at village Bidhaulia and constructions thereon) at Clutterbuckganj Bareilly (U.P) including plant & machinery and accessories and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (U.P) both present and future (save & except Book Debts) subject to prior charges charged/to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said Debentures are repayable in three equal annual instalments during the years 2002-2004. The above charge ranks pari passu pending documentation in respect of terms loan from EXIM Bank.

(b) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

(c) The HDFC Loan is secured by Equitable Mortgage by deposit of original title documents in respect of plot no 64 & 75 situated at village Bidhaulia Clutterbuckganj, Dist. Bareilly (UP) & construction thereon both present and future.

1. Estimated amount of contracts remaining to be executed in Capital Account and not provided for Rs.33.95 lacs (Previous year Rs.505.09 lacs) net of advances.

2. Contingent Liabilities on Account of :

a. Excise duty Rs.130.54 lacs (Previous year Rs.173.08 lacs), Sales Tax Rs.1.62 lacs(Previous year Rs.3.38 lacs), Custom duty on material in transit Rs.37.85 (previous year Rs.28.14 lacs), U.P. State Electricity Board Rs.11.57 lacs (Previous year Rs.11.57 lacs).

b. Guarantees given by Banks to Excise and Custom Department Rs.20 lacs (Previous year Rs.30.24 lacs). Sales Tax Department Rs. 1.79 lacs (Previous year Rs. 7.79 lacs).

c. Bill of Exchange discounted as Debts Rs.9.17 lacs (Previous year Rs.9.17 lacs),

d. Claims not acknowledged as Debts R.9.17 lacs (Previous year Rs.9.17 lacs).

e. Recovery suit filled by State Bank of Patiala on Vidharbha Iron & Steel Corporation Ltd and others in which the erstwhile Pine Chemicals Limited (PCL) which amalgamated with the Company is impleaded as one of the defendants - amount unascertainable.

3. For the Assessment year 1994-95 an addition liability of Rs.110.88 lacs was raised on account of disallowance of bad debts. The Company is advised that the said claim is allowable deduction. The Company is in appeal before the Appellate authority which is still pending hearing and pending disposal of the said appeal the Company has deposited the full amount. No provision has been made in respect of this demand. For the Assessment Year 1996-97 and 1997-98, the company has received Assessment Orders from the Income-Tax Department raising demands aggregating to Rs. 139.98 lacs and has filed an appeal against the said orders and pending disposal no provision has been made in respect of this demand.

4. Earlier PCL had filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax on Gum Resign for the period of five years ending 31st March 1984. The High Court of Jammu & Kashmir has passed on order directing the Sales Tax Department to review the Company's claim in the light of Supreme Court decision on a similar issued. In the event of the claim being decided in favour of PCL, the Company would be entitled to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March, 1982, which PCL had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department.

5. As required by Accounting Standard-2 which is mandatory from 1st April 1999, the excise duty liability on stocks lying in the bounded godown as on 31st March 2000 is included in valuation of finished goods and this change has no effect on the profits of the year.

6. Investments and some other rights and legal titles acquired consequent upon the scheme of amalgamation of PCL with the Company are pending transfer in the name of the Company.

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Mar 31, 1999

NOTES ON SECURED LOANS

A. The 190/0 Non - convertible Debentures are secured by mortgage of immovable properties being Plot No.3 situated at G.I.D.C. Industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 26th September 1997. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties (excluding plot no.64 & 75 situated at village Bidhulia and constructions thereon) at Clutterbuckganj Bareilly (U.P.) including plant & machinery and accessories and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (U.P.) both present and future (save & except Book Debts) subject to prior charges created/to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said Debentures are repayable in three equal annual instalments during the years 2002-2004.

B. Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

C. The HDFC Loan is secured by Equitable Mortgage by deposit of original title documents in respect of plot no 64 & 75 situated at village Bidhulia Clutterbuckganj, Dist. Bareilly, (UP) & construction thereon both present and future.

1. Estimated amount of contracts remaining to be executed in Capital Account and not provided for Rs.505.09 lacs (Previous year Rs.142.63 lacs) net of advances.

2. Contigent Liabilities on Account of :

a. Excise duty Rs. 173.08 lacs (Previous year Rs. 264.33 lacs), Sales Tax Rs. 3.38 lacs (Previous year Rs. 20.14 lacs), Custom duty on material in transit Rs. 28.14 lacs (previous year Rs. 19.21 lacs), U.P.State Electricity Board Rs. 11.57 lacs (Previous year Rs. 11.57 lacs).

b. Guarantees given by Banks to Excise and Custom Department Rs. 30.24 lacs (Previous year Rs. 31.07 lacs). Sales Tax Department Rs. 7.79 lacs (Previous year Rs. 5.47 lacs).

c. Bill of Exchange discounted with banks Rs. 10.98 lacs(since realized) (Previous year Rs. 21.88 lacs).

d. Claims not acknowledged as Debts Rs. 9.17 lacs (Previous year Rs. 10.67 lacs).

e. Recovery suit filed by State Bank of Patiala on Vidharbha Iron & Steel Corporation Ltd. and others in which the erstwhile Pine Chemicals Limited (PCL) which amalgamated with the Company is impleaded as one of the defendants - amount unascertainable.

3. For the Assessment year 1994-95 an additional liability of Rs. 110.88 lacs was raised on account of disallowance of bad debts. The Company is advised that the said claim is allowable deduction. The Company is in appeal before the Appellate authority which is still pending hearing and pending disposal of the said appeal the Company has deposited the full amount. No provision has been made in respect of this demand. For the Assessment Year 1996-97, the company has received an Assessment Order from the Income-Tax Department demanding Rs. 85.78 lacs. The company has made an application to the department for rectification and has also filed an appeal against the said order and pending disposal no provision has been made in respect of this demand.

4. Earlier PCL had filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The High Court of Jammu & Kashmir has passed an order directing the Sales Tax Department to review the Company's claim in the light of Supreme Court decision on a similar issue. In the event of the claim being decided in favour of PCL, the Company would be entitled to further refund of Rs. 66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years. The refund or payment as the case may be will be accounted for after the final outcome of the review by the Sales Tax Department.

5. The company has not made provision for excise duty estimated at Rs. 22.20 lacs(Previous year Rs. 60.46 lacs) for the stocks not cleared from the factory and has not included the said amount in valuation of stocks. This has no effect on the profits for the year.

6. Investments and some other rights & legal titles acquired consequent upon the scheme of amalgamation of PCL with the Company are pending transfer in the name of the Company.

7. The Company has a Y2K Project Team with representatives from various departments and most of the hardware and software in use in the Company has been determined to be Y2K compliant upto 95% and steps have been taken to update remaining equipment 1 systems by July 1999. The total cost incurred upto 31.3.1999 on hardware is Rs. 6.25 lacs. The majority of software changes were made in-house.

Initiatives have also been taken by the Company to evaluate the systems operating with its vendors and customers with a view to ensuring that the business continuity plans take into account Y2K problems.

The company does not perceive any system break-down due to Y2K problems.

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Mar 31, 1998

1.(a) The 19% Non-convertible Debentures are secured by mortgage of immovable properties being Plot No. 3 situated at G.I.D.C Industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 26th September, 1997. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties at Clutterbuckganj Bareilly (UP) including plant & machinery and accessories and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (UP) both present & future (save & except Book Debts) subject to prior charges created I to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said Debentures are repayable in three equal annual installments during the years 2002-2004.

(b) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

(c) The HDFC Loan is secured by Equitable Mortgage by deposit of original title documents in respect of plot no 64 & 75 situated at village Bidhaulia Clutterbuckganj, Dist. Bareilly (UP) & construction thereon both present and future.

2. For the Assessment year 1994-95 an additional liability of Rs. 110.88 lacs was raised on account of disallowance of bad debts. The Company is advised that the said claim is allowable deduction. The Company is in appeal before the Appellate authority and pending disposal of the said appeal has deposited the full amount. No provision has been made in respect of this demand.

3. PCL has filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on the Gum Resin for the period of five years ending 31st March 1984. The said Writ Petition was admitted by the High Court Jammu & Kashmir and is pending disposal. In the event of the said Writ Petition being decided in favour of PCL, the Company would be entitled of further refund of Rs. 66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March 1982, which the PCL has accounted for as income in earlier year.

4. The Company, in terms of MOU dt. 8-8-1997 entered into with The Supreme Industries Ltd. has transferred its Profeel Sentinel Division to the said The Supreme Industries Ltd., as a going concern with effect from 3/10/1997. In terms of the said MOU, the Company has transferred Land, Building, Plant & Machinery, Furniture & Fixtures, Vehicles, Office Equipments, Stores & Spares and other fixed assets including goodwill, brand names, Knowhow etc for a consideration of Rs. 521 lacs. The profit of 125.86 lacs arising on such transfer has been taken under profit on transfer of Profeel Division under Other Income.

In terms of the said MOU, it was agreed that the purchaser will take over Packing Materials and Raw Materials at cost. The Finished goods and stock in process were handed over at a value of Rs. 67.26 lacs and this amount of Rs. 67.26 lacs has been reflected as a separate item in the Profit and Loss Account for the year ended 31/3/1998.

5. The Company has not made provision for excise duty estimated at Rs. 60.46 lacs (Previous year Rs. 58.80 lacs) for the stocks not cleared from the factory and has not included the said amount in valuation of stocks. This has no effect on the profits for the year.

6. Investments and some other rights & legal titles acquired consequent upon the scheme of amalgamation of PCL with the Company are pending transfer in the name of the Company.

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Mar 31, 1997

1. Secured Loan

(a) The 14% Non - convertible Debentures are secured by mortgage of immovable properties being Plot No. 3 part situated at G.I.D.C industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 21st March 1992. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties at Clutterbuckganj Bareilly (UP) including plant & machinery and accessories (other than machinery purchased or to be purchased under Assets Credit Scheme) and first charge by way of hypothecation of all movable properties at Clutterbuckganj Bareilly (UP) both present & future (save & except Book Debts) subject to prior charges created/to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said debentures are redeemable at premium of 5 % in one lot between March 1998 & May 1998.

(b) Pending execution of documents, 19% Non Convertible Debentures amounting to Rs.600 Lacs &e secured pari passu with the securities given against 14% Non Convertible Debentures in the said manner as mentioned above.

(c) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

2. During the year Income Tax Assessments for the Assessment Year 1994-95 was completed and in the said Assessment an additional liability of Rs. 110.88 lacs was raised on account of disallowance of bad debts. The Company is advised that the said claim is allowable deduction. The Company is in appeal before the Appellate Authority and pending disposal of the said appeal have deposited Rs. 90.25 lacs. No provision has been made in respect of this demand.

3. PCL has filed a Writ Petition challenging the retrospective rescission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The said Writ Petition was admitted by the High Court Jammu & Kashmir and is pending disposal. In the event of the said Writ Petition being decided in favour of PCL, the Company would be entitled to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years.

3. The company has not made provision for excise duty estimated at Rs.58.80 lacs (Previous year Rs.134.15 lacs) for the stocks not cleared from the factory and has not included the said amount in valuation of stocks. This has no effect on the profits for the year.

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Mar 31, 1996

(a) The 14% Non-convertible Debentures are secured by mortgage of immovable properties being Plot No. 3 part situated at G.I.D.C industrial Estate at Nandesari, Baroda together with Buildings and Structures thereon vide trust deed dated 21st March 1992. The said Debentures are further secured by equitable mortgage by Deposit of title deeds in respect of immovable properties at Clutterbuckganj Bareilly (UP) including plant & machinery & accessories (other than machinery purchased or to be purchased under Assets Credit Scheme) and first charge by way of hypothecation of all moveable properties at Clutterbuckganj Bareilly (UP) both resent & future (save & except Book Debts) subject to prior charges created/to be created in favour of Company's bankers for securing borrowings for working Capital requirement. The said debentures are redeemable at premium of 5% in one lot between March 1998 & May 1998.

(b) Cash Credit from Banks are secured by Hypothecation of Stores, spares and packing materials and stock-in-trade and book debts.

(c)&(d) The Foreign currency loans, Rupee loans as stated above are secured by equitable joint mortgage by deposit of title deeds in respect of immovable properties situated at 122/6-9, G.I.D.C Industrial Estate at Nandesari, Baroda together with all buildings & structures thereon and all plant & machineries attached to earth or permanently fastened to any thing attached to earth and by a first charge by way of Hypothecation of all the movables of the Profeel Division of the company/(save and except Book Debts) including moveable machinery, Machinery/Spares, tools and accessories, both present and future, (other than machinery purchased or to be purchased under Assets Credit Scheme) subject to prior charges created and/or to be created in favour of Company's bankers in respect of all such moveables as may be required for securing Cash Credit/Over Draft facilities.

(e) Assets Credit Loans are Secured by hypothecation of specific machineries purchased under Asset Credit Scheme.

The erstwhile Pine Chemicals Ltd (PCL) which amalgamated with the Company had filed a Writ Petition challenging the retrospective recession by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of refund of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The said Writ Petition was admitted by the High Court of Jammu & Kashmir and is pending disposal. In the event of the said Writ Petition being decided in favour of PCL, the Company would be entitled to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March 1982, which PCL had accounted for as income in earlier years.

Under the provisions of Section 8(B) of Jammu & Kashmir General Sales Tax Act, read with Section 9 of Central Sales Tax Act, Jammu & Kashmir Sales Tax Department has raised on the PCL, a demand of Rs.189.25 lacs for interest. According to the company, the demand of interest raised by the Department is contrary to the provisions of Sales Tax Laws and as such the company has filed a writ petition in Jammu & Kashmir High Court. Against the said demand the company has already deposited Rs.55.70 lacs and the Hon'ble Jammu & Kashmir High Court has stayed the recovery of Rs.133.55 lacs being the balance amount of interest demanded. As such there is a contingent liability of Rs.133.55 lacs on account of interest demanded.

The company has not made provision for excise duty estimated at Rs.134.15 lacs (Previous year Rs.100.72 lacs) for the stocks not cleared from the factory and has not included the said amount in valuation of stocks. This has no effect on the profits for the year.

The company has received a grant through the United Nations Development Programme amounting to Rs.95.10 lacs for change over of its production process in the Profeel Division from use of ozone depleting substances to use of eco-friendly substances and an amount of Rs.24.40 lacs by way of premium on surrender of its leasehold rights in respect of land at Mehatpur. These amounts being receipts of a capital nature, have been credited to Capital Reserves.

Balance in current account with Banks and Balance in short-term Fixed Deposits includes deposit under Export Earners Foreign Currency Scheme amounting to Rs.42.84 lacs (USD 1.26 lacs) and Rs.144.88 lacs (USD 4.26 lacs) respectively.

Investments and some other rights & legal titles acquired consequent upon the scheme of amalgamation of PCL with the company are pending transfer in the name of the company.

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Mar 31, 1995

1. Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.68.18 lacs (previous year Rs.65.29 lacs) net of advances.

2. Contingent Liabilities on Account of:

a. Excise duty Rs.21.74 lacs (Previous year Rs.23.88 lacs) Sales Tax Rs.19.55 lacs (Previous year Rs.13.31 lacs)., Custom duty on Material in transit Rs.25.42 lacs (Previous year Rs.3.24 lacs), U.P. State Electricity Board Rs.13.74 lacs (Previous year Rs. NIL)., for transfer fees of Balarama premises at Bombay of Erstwhile Pine Chemicals Ltd. (PCL) in the name of the Camphor & Allied Products Ltd. of Rs.8.21 lacs (Previous year NIL) and in case of Jammu Assets of the said company; amount unascertainable.

b. Guarantees given by Banks to Excise and Custom Department Rs.37.25 lacs (Previous year Rs.35.97 lacs). Post Master G.P.O. Rs.0.10 lacs (Previous year Rs.0.10 lacs), Sales Tax Department Rs.5.57 lacs (Previous year Rs.6.50 lacs), Raw Materials suppliers Rs.23.00 lacs. (Previous year Rs.16.50 lacs), UPSEB Rs.5.17 lacs (Previous year Rs.5.17 lacs) and to M.T.N.L, Bombay Rs. NIL (Previous year Rs.0.63 lacs).

c. Bills of Exchange discounted with banks Rs.55.48 lacs (since realised) (Previous year Rs.70.56 lacs).

d. Claims not acknowledged as Debts Rs.13.24 lacs (Previous year Rs.13.24 lacs).

e. Recovery suit field by State Bank of Patiala on Vidarbha Iron & Steel Corporation Ltd. and others where PCL who has amalgamated with company is impleaded as one of the defendants. Amount unascertainable.

3. The PCL amalgamated with the Company had filed writ Petition challenging the retrospective recession by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of refund of Sales Tax paid on Gum Resin for the period of five years ending 31st March 1984. The said writ Petition was admitted by the High Court of Jammu & Kashmir and is pending disposal. In the event of the said writ petition being decided in favour of PCL., the Company would be entitled to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March 1982 which the PCL had accounted for as income in earlier years.

4. The Govt. of Jammu & Kashmir had filed a Review Petition on the judgement of the Hon'ble Supreme Court which has held that PCL is entitled to exemption of Central Sales Tax (CST) on the interest sale of finished goods for the initial period of five years under the provisions of Section 8(2A) of Central Sales-Tax Act, read with Section 5 of Jammu & Kashmir General Sales Tax Act and G.D. No. 159 and 414 of 1971 granting exemption from payment of local Sales Tax to new Industrial undertaking. The Hon'ble Supreme Court has also upheld PCL's contention of Promissory Estoppel. On hearing the Review Petition Hon'ble Supreme Court has changed the earlier interpretation of Sec. 8(2A) of CST Act and held that PCL is not entitled to exemption of Central Sales Tax. As a result of this judgment in review, liability is fixed on company to pay CST of Rs.75 lacs. The whole of this amount has already been paid by the company and hence there is no liability on this account. However, under the different proceedings under Section 8(B) of J & K General Sales Tax Act, read with Section 9 of CST Act, further liability of Rs.1.88 crores of interest has been raised by J & K Sales tax Department against which company has deposited Rs.55 lacs. According to Company, the demand of interest raised by the Department is contrary to the provision of Sales Tax Laws and as such Company has filed writ petition in J & K High Court and the Hon'ble High Court has stayed the recovery of Rs.133.51 lacs being the balance amount of interest demanded as such there is a contingent liability of Rs.1.33 crores on account of interest demanded.

5. The Company has not made a provision for excise duty estimated at Rs.100.72 lacs (Previous year Rs.115.07 lacs) for the stocks not cleared from the factory and not included the said amount in valuation of stocks. This has no effect on the profits of the year.

6. Investments and some other rights & legal titles acquired consequent upon the scheme of amalgamation of PCL with the Company are pending transfer in the name of the Company.

7. The company has changed the method of valuation of closing stock by excluding interest as a cost element for the purpose of valuation of closing stock of finished goods & work in progress. Had the company continued the past practice of including interest as an element of cost for the purpose of valuation, closing stock would have been valued higher by 12.65 lacs and profits for the year would have also been higher by the said amount.

8. Earnings in Foreign Exchange on account of Exports on F.O.B. basis are Rs.269.95 lacs (previous year Rs.275.39 lacs).

9. The previous year's figures have been regrouped and recast wherever necessary.

10. Information required to be given in pursuance of Part IV of Schedule VI of the Company's Act 1956.

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Mar 31, 1994

The Erstwhile Pine Chemicals Limited (PCL) now amalgamated with the company had filed writ petition challenging the retrospective recission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of refund of Sales Tax paid on Gum resin for the period for five years ending 31st March, 1984. The said Writ Petition was admitted by the High Court of Jammu & Kashimir and is pending disposal. In the event of the said Writ Petition being decided in favour of PCL, the company would be entiteld to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs.98.11 lacs in respect of three years ended 31st March, 1982 which the erstwhile PCL had accounted for as income in earlier years.

The erstwhile PCL. had filed before the Hon'ble Supreme Court of India a Civil Appeal against the Judgement of the Jammu & Kashimir High Court dismissing the Writ Petition for grant of exemption fro payment of Central Sales Tax on sale of finished Goods for a period of 5 years. the said appeal was decided in favour of the Erstwhile PCL, by the Hon"ble Supreme court. PCL had thus become entitled to refund of Rs.130.14 lacs deposited by it as per the Court Order. However, the department of Sales Tax Jammu & Kashmir on the alleged grounds of wrongful collection of tax, had appropriated the said amount of deposit and raised a further demand of Rs.133.51 lacs on PCL as interest on account of delayed payment. PCL was advised to contest the same as the appropriation of deposit and the demand of interst are contrary to the provision of law. Accordingly the erstwhile PCL had filed a Writ Petition before the Hon'ble High Court of Jammu & Kashmir challenging the said action by the Sales Tax Department. The High Court has admitted the said Petition and stayed the recovery of further amount of Rs.133.51 lacs pending disposal of the same. In view of amalgamation of PCL with the company, in the event of the said Writ Petition being decided in favour of PCL, the company would be entitled to the refund of Rs.130.414 lacs deposited by PCL and in the event of it being decided against PCL, the company would be liable to pay further amount of Rs.133.51 lacs. In the meantime, Department of Sales Tax, Jammu & kashmir has filed a review Petition before Hon'ble Supreme Court, the hearing of which is pending.

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Mar 31, 1993

The 14% Non-convertible Debentures are secured by mortage of immoveable properties being Plot No. 3 part situated at G.I.D.C. Industrial Estate at Nandesari, Baroda together with Buildings and structures there-on vide trust deed dated 21st March 1992. The said Debentures are to be further secured by equitable mortgage by Deposit of title deeds in respect of immoveable properties at Clutterbuckganj Bareilly (UP) including plant & machinery & accessaries (other than machinery purchased or to be purchased under Assets Credit Scheme) and first charge by way of hypothecation of all moveable properties at Clutterbuckganj Bareilly (UP) both present & future (save & except book Debts) Subject to prior charges created/to be created in favour of Company's bankers for securing borrowings for working capital requirement. The creation of further securities is pending. The said debentures are redeemable at premium of 5% in one lot between March 1998 & May 1998.

Cash Credit from Banks in respect of Camphor Division are secured by Hypothecation of stores, spares and packing materials and stock-in-trade and book debts of the said division and Cash Credit from Bank in respect of Profeel Division are secured by hypothecation of stocks, stores and book debts of the said division and personal guarantee of two Directors.

Bank Overdraft & Short term Loans from The British Bank of the Middle East, in respect of Rosin undertaking at Nandesari, Baroda, availed by Erstwhile PCL are secured by hypothecation of revolving stocks & other moveable assets including present and future Book Debts (other than Plant & Machinery) of the said undertaking and corporate guarantee given by the Company.

Rupee term Loan from The British Bank of the Middle East, in respect of Rosin Undertaking at Nandesari, Baroda availed by Erstwhile PCL, is secured by hypothecation of Plant & Machinery and other equipments situated at the said Rosin Undertaking. Rupee term Loan given by State Bank of Patiala for Profeel Division is secured as mentioned in clause (iii).

Pursuant to the Scheme of Amalgamation approved by the Hon'ble High Court of Gujarat vide its order dated 16th February 1993 of the Erstwhile Pine Chemicals Ltd., amalgamated with the company on 29th March 1993 effective from 1.4.1992.

The Erstwhile PCL, now amalgamated with the Company had filed a Writ Petition challenging the retrospective recission by the Government of Jammu & Kashmir, of the Backward Area Incentive Scheme in respect of refund of Sales Tax paid on Gum Resin for the period of five years ending 31st March,1984. The said Writ Petition was admitted by the High Court of Jammu & Kashmir and is pending disposal. In the event of the said Writ Petition being decided in favour of PCL, the Company would be entitled to further refund of Rs.66.80 lacs in respect of two years ended 31.3.1984 and in the event of it being decided against PCL, the company will be liable to repay Rs. 98.11 lacs in respect of three years ended 31st March 1982 which the erstwhile Pine Chemicals Ltd., had accounted for as income in earlier years.

The Erstwhile PCL, had filed before the Hon'ble Supreme Court of India a Civil appeal against the Judgement of the Jammu & Kashmir High Court dismissing the Writ Petition for grant of exemption from payment of Central Sales Tax on sale of finished goods for a period of 5 years. The said appeal was decided in favour of the Erstwhile Pine Chemicals Ltd., by the Hon'ble Supreme Court. P.C.L. has thus become entitled to refund of Rs. 130.14 lacs deposited by it as per the Court Order. However, the department of Sales Tax Jammu & Kashmir on the alleged grounds of wrongful collection of tax, had appropriated the said amount of deposit and raised a further demand of Rs. 133.51 lacs on P.C.L. as interest on account of delayed payment. P.C.L. was advised to contest the same as the appropriation of deposit and the demand of interest are contrary to the provision of law. Accordingly the erstwhile P.C.L. had filed a Writ Petition before the Hon'ble High Court of Jammu & Kashmir challenging the said action by the Sales Tax Department. The High Court has admitted the said Petition and stayed the recovery of further amount of Rs.133.51 lacs pending disposal of the same. In view of amalgamation of PCL with the company, in the event of the said Writ Petition being decided in favour of PCL, the company would be entitled to the refund of Rs. 130.14 lacs deposited by PCL and in the event of it being decided against PCL, the company would be liable to pay further amount of Rs.133.51 lacs.

The Erstwhile PCL, had disposed off its Pinsel Undertaking, at NOIDA (U.P.) to Vidarbha Iron & Steel Corporation Ltd.(VISCO) in the year 1989. In terms of the agreement dated 17th April,1989 read with supplement Agreement dated 1st June, 1990 between VISCO and PCL, VISCO was to pay the amount due in quarterly instalments commencing from 1st April, 1991 over a period of three years. Installments due and outstanding as on 31st March,1993 are Rs.103.20 lacs with interest accrued of Rs. 45.89 lacs. Due to the worsening market condition, import restrictions and sharp devaluation of rupee, the said unit has suffered a set back and VISCO could not discharge the repayment obligation to the financial institutions including interest. The transfer of liabilities to financial institutions on sale of Pinsel undertaking by the said PCL was subject to the condition that the purchase consideration and interest payable by VISCO to PCL would be sub-ordinate to the dues of institutions. In view of this no provision has been made for interest of Rs. 25.59 lacs accrued for the year on the balance purchase consideration due which now stands transferred to the Company on amalgamation of PCL VISCO has approached the institutions for financial reliefs and after the settlement of terms of the said relief by the financial institutions, the dues of the company can be paid by VISCO.

On closure of chemical plant of Erstwhile PCL at Jammu in earlier years, certain fixed Assets were then written off and the same are being accounted for as & when realised.

The previous year's figures have been regrouped and recast wherever necessary. Further consequent upon amalgamation of the Erstwhile Pine chemcials Ltd., with the Company with effect from 1.4.1992, the same are not comparable with the figures of current year.

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Mar 31, 1992

Earnings in Foreign Exchange on account of Exports on F.O.B. basis are Rs 163.74 lacs (Previous year Rs 114.94 lacs).

VALUATION OF FIXED ASSETS:

Fixed Assets are valued at the cost of acquisition inclusive of inward freight duties, taxes and incidental expenses related to such acquisition.

The original cost of the fixed assets acquired through foreign currency loan are adjusted at the end of each financial year to the extent of any change in the liability arising out of restment of outstanding foreign currency loan at the rate of exchange prevailing as on the date of balance-sheet.

Following the above policy during the current year, foreign currency loan has been increased by Rs 86.53 lacs and with the corresponding increase in the value of fixed assets.

In respect of assets, scraped, discarded or retired during the year the book value of such assets in written off as Loss on Discarding of Assets. The receipts on sale of such scrapped assets are accounted for as and when realised.

VALUATION OF INVESTMENT Investments are valued at cost inclusive of all expenses incidental to their acquisition. In case of material diminution in the value of investments, necessary provision is made in the accounts.

VALUATION OF INVENTORIES Inventories are value on following basis: a) Raw Material, stores, spares and packing materials are valued at cost on the basis of weighted average.

b) Finished Goods: i) Principal products are valued at a lower of the cost or net realisable value. ii) By-products & process scrap are valued at net realisable value.

c) Work in progress is valued at cost & in cases where the net realisable value of the ultimate product is lower than the cost of production, necessary adjustments in the cost of work in progress is made.

d) Excise duty payable on finished goods held in factory is not included in the expenditure and consequently not taken into account for valuation of stock. The amount of excise duty payable on finished goods not cleared from factory as at 31.03.1992 is estimated at Rs 56.94 lacs (Previous year Rs 40.48 lacs). This has no effect on profits for the year.

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Mar 31, 1991

1) Foreign Currency Loan balances have been restated at the rates of exchange prevailing as at 31st March, 1991. Consequently, the liability has increased by Rs 27.71 lacs with corresponding increase of Rs. 27.71 lacs in the Fixed assets consistent with the past practice, Depreciation thereon has been provided from the year of the acquisition of the assets.

2) As per practice consistently followed, excise duty payable on finished goods held in factory is neither included in expenditure note accounted for in such stocks but is accounted for on clearance of goods from factory. This accounting treatment has no impact on profits. The amount of excise duty payable on finished goods not cleared from factory as at 31-3-1991 is estimated at Rs 40.48 lacs. (Previous year Rs 25.99 Lacs).

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Mar 31, 1990

Pursuant to the Scheme of Amalgamation and Arrangement which was approved by the Hon'ble High Courtof Bombay on 12th Oct. 1989 and the Hon'ble High Court of Gujarat on 23rd Nov. 1989 the Erstwhile CAP was amalgamated with the Company on 3rd Jan 1990, retrsopectively with effect from 1st July 1988 and the name of the company was changed with effect from 3rd Jan. 1990 from Profeel Sentinel Limited to Camphor and Allied Products Ltd.

The assets and liabilities of the Estwhile Camphor and Allied products as on 30th June, 1988 and profit for the nine months from 1st July 1988to 31st March, 1989 are on the basis of the financial statements audited and reported upon by M/s.Batliboi & Purohit, the Auditors of Erstwhile CAP.

Pursuant to the said scheme of Amalgamation and Arrangement as confirmed by the Hon'ble High Courts of Bombay and Gujurat effective from 1st July 1988, the equity capital ofthe company has been reduced and reconstituted from Rs.150 lacs dividend into 15 lacs Equity shares of Rs.10 each to Rs.18.75 lacs divided into 1,87,500 equity shares of Rs.10 each fully paid up.

In view of carry forward losses, Investment allowance reserve and unabsorbed depreciation, provision for taxation has been made in accordance with Sec.115 J of the Income tax act of 1961.

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Mar 31, 1989

Bank Fixed Deposit Receipt of Rs.0.15 lacs which have been endorsed in favour of the President of India and Deposited with the Customs Authorities, has matured during the previous year but not encashed.

Consequent upon the accrual basis of accounting being made staturory under sec.209 of the Companies act of 1956 certian items of revenue, which were accounted on receipt basis hitherto are now accounted on accrual basis. This change has the effect of increasing the profit before tax by Rs.21.71 lacs.

As per practice consistently followed, excise duty payable on finished goods held in factory is neither included in expenditure nor valued in such stocks but is accounted for on clearence of goods from factory. This accounting treatment has no impact on profits. The amount of excise duty payable on finished goods not cleared from factory as at 31st March, 1989 is estimated at Rs.15.71 lacs.

The scheme of Amalgamation of the company with Profeel Sentinel ltd (PSL) on 01/07/1988 has been approved by the members and creditor's of both the companies and is approved by the high court of Bombay. However the same is pending before the High court of Gujarat for its sanction.

According to the scheme of Amalgamation, all the assets and undertaking as also Debts, Liabilities, duties, obligations and Reserves & Surplus of the company stand transferred to PSL with effect from the said date. However, no effect to said scheme has been given in the account under review, pending sanction by the high court of Gujarat. In terms of the said scheme, the profit/loss account of the company, after the appointed date i;e 01/07/1988, shall be treated as profit/loss of PSL. In view of this, provision for taxation has been made in respect of profits accrued after that date. But for this, the provision for taxation for the entire period under review would have been lower by Rs.140 lacs. In the opinion of the directors, as the company is being amalgamated, it will not be necessary to make any further provisions than already made in the accounts. However, sufficient surplus is available to meet the tax liability, if any, that may arise in the unlikely event of the scheme not being approved.