dcw ltd. - annual report - 2006-2007

DCW Limited Ò Annual Report 2006-2007 �

LIMITED

BOARD OF DIRECTORS

Dr. Shashi Chand JainChairman and Managing Director

Smt. Satyawati Jain

Shri F.H. Tapia

Dr. V.H. Joshi

Shri Yuvraj Saheb of Dhrangadhra

Shri Sushil Kumar Jalan

Shri R.V. Ruia

Shri Pramod Kumar JainManaging Director

Shri Bakul JainManaging Director

Smt. Vandana JainExecutive Director

BANKERSPunjab National BankState Bank of IndiaState Bank of SaurashtraCity Union Bank Ltd.ING Vysya Bank Ltd.

Corporate DirectoryAUDITORSV. Sankar Aiyar & Co.,Chartered Accountants, Mumbai.

REGISTERED OFFICEDhrangadhra 363 3�5, Gujarat.

HEAD OFFICE“Nirmal”, 3rd Floor,Nariman Point,Mumbai 400 02�.

BRANCH OFFICEIndra Palace, �st Floor,H-Block, Connaught Circus,New Delhi ��0 00�.

WORKSSoda Ash Division : Dhrangadhra 363 3�5, Gujarat.Caustic Soda Division : Arumuganeri P.O., Sahupuram 628 202, Tamil Nadu.PVC Division : Arumuganeri P.O., Sahupuram 628 202, Tamil Nadu.Salt Works : Kuda, Gujarat. Arumuganeri P.O., Sahupuram 628 202, Tamil Nadu.

68thAnnual Report2006-2007

Note: The Balance Sheet, Profit and Loss Account and Key Financial Data are also presented in US $ on Page Numbers �5, �6 & �7 respectively.

2 DCW Limited Ò Annual Report 2006-2007

LIMITED Directors’ ReportTO THE MEMBERS

Your Directors present their 68th Annual Report and Audited Accounts for the Financial Year ended 3�st March, 2007:

�. Financial Results:

31-3-2007 (Rs. in lacs)

3�-3-2006 (Rs. in lacs)

Sales 75,327.80 7�,024.�5

Gross Profit 5,668.77 5,535.05Less : ProvisionsDepreciation 2,532.88 2,305.56

Profit before Tax 3,135.89 3,229.49

Tax: Current 347.24 277.49Fringe Benefit Tax 73.58 40.00

MAT Credit available for set off (44.90) (272.35)Tax adjustments of Previous Year — (�30.00)

375.92 (84.86)

Profit after Current Tax & Tax Adjustments 2,759.97 3,3�4.35Deferred Tax 743.07 587.43

Profit after Tax 2,016.90 2,726.92Add: Balance brought forward 3,027.73 2,894.90

Profit available for Appropriation 5,044.63 5,62�.82

Appropriations :

General Reserves 2,000.00 2,000.00DividendInterim 345.09 —Final 172.54 5�7.63Dividend Distribution Tax 86.45 76.43Balance carried forward 2,440.55 3,027.76

2. Dividend: Your Directors recommend payment

of Final Dividend at Re. 0.�0 per equity share of Rs. 2/- each. The aggregate dividend declared for the year including the interim dividend of Rs. 0.20 per equity share is Rs. 0.30 per equity share of Rs. 2/- each.

3. Operations: Sales during the year were Rs. 753.28

crores as compared to Rs. 7�0.24 crores recorded in the previous year, registering an increase of 6%. The sales would have been more but due to an illegal strike at Company’s

Caustic Soda and PVC works during the month of August – September’06 lasting for 39 days, which has affected the sales by about Rs. 75 crores. The Gross Profit for the year increased from Rs. 55.35 crores to Rs. 56.69 crores. The profit before tax amounted to Rs. 3�.36 crores as against Rs. 32.29 crores in the previous year. After providing Rs. 3.02 crores for current taxes and Rs. 0.74 crores towards Fringe benefit taxes, the profit before deferred tax is Rs. 27.60 crores as against Rs. 33.�4 crores. The profit after provision of deferred tax is Rs. 20.�7 crores against previous years Rs. 27.27 crores. Deferred Tax is only a provision as per guidelines and is not an outflow.

The Net Profit has been lower by Rs. 7.�0 crores, which was mainly on account of Additional Tax Provision of Rs. 6.�5 crores including deffered tax provision of Rs. �.56 crores compared to previous year. However even considering the strike at Sahupuram Company’s works as mentioned above, the Company was able to achieve 6% increase in turnover and 2% increase in gross profit. However, net profit has been

lower due to additional tax provisions as mentioned above.

4. Exports: The Company’s exports increased

to Rs. 70.96 crores as compared to Rs. 67.36 crores in the previous year. This 5% increase in exports was mainly on account of increase in Beneficated Ilmenite exports coupled with better price realization on Beneficated Ilmenite.

5. Divisionwise Performance: (a) PVC Division The turnover of the division was

Rs. 372.�8 crores as compared to Rs. 350.92 crores, registering an increase of 6%. This increase in sales was mainly on account of better realization on PVC. The company sold 76533 MT of PVC resin compared to 75260 MT in the previous year. This increase in sales was inspite of the illegal strike of 39 days which had affected turnover and profitability of this division. All major user segments are recording good demand and PVC industry continues to show positive growth. The Government has identified irrigation, power and infrastructure as thrust areas and increased activity in these sectors are likely to boost demand of PVC Resin.

(b) Caustic Soda Division: The turnover of the division was

Rs. 2�7.6� crores as compared to Rs. 204.�7 crores in the previous year, registering an increase of 7% in the sales. This increase in turnover was mainly due to better price realisation on Caustic Soda during the year. The illegal strike has affected turnover and profitability of this division during the year. The production of Caustic Soda was 562�0 MT as compared to 60�00 MT in the previous year.

(c) Soda Ash Division The turnover of the division was

Rs. �57.22 crores as compared to Rs. �43.56 crores in the previous year registering a growth of �0%.

DCW Limited Ò Annual Report 2006-2007 3

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The company produced 808�6 MT of Soda Ash (previous year 87340 MT), �8299 MT of Soda Bi Carb (previous year �88�0 MT) and �599 MT of Ammonia Bi Carbonate (previous year 272� MT) during the year. The Company also produced 359�3 MT of detergents compared to 3�8�5 MT in the previous year.

6. Projects Implemented and Under Implementation:

(a) Increase of Capacity of Beneficated Ilmenite Plant:

The project for increase in Beneficated Ilmenite capacity from 30000 TPA to 42000 TPA, has been completed during March’07 and has started manufacturing Beneficated Ilmenite at higher capacity from April’07 onwards. As Beneficated Ilmenite is export-oriented product, this will result in increased exports and also contribute towards increasing the bottom line from the current year onwards.

(b) Conversion of Mercury Cells to Membrane Cells at Caustic Soda Unit

The Company’s project for conversion of mercury cells to membrane cells at its Caustic Soda Unit at Sahupuram, which is being implemented by UHDE India Ltd., is in the advanced stage of implementation and is expected to be completed by August 2007. On completion of the project production capacity of the Caustic Soda will increase from present �75 TPD to 283 TPD. This conversion from mercury will also result in substantial savings in power consumption for manufacturing Caustic Soda thereby increasing the bottom line of this division.

(c) Thermal Co-Generation Power Plant at Sahupuram Unit

The Company’s project of Thermal Co-generation Plant for generating 50 MW of power and 85 TPH steam at its Sahupuram Unit, being executed on turn

key basis by Thermax Ltd., is as per the schedule. This project is expected to be completed by end of this financial year. On implementation of this project, the cost of generation of power and steam will come down substantially thereby improving the profitability of the Company.

(d) Solway Towers at Dhrangdhra Unit

Solway Towers installed at the Soda Ash Unit have still to be commissioned as further capital expenditure is required to make them operational. An assignment has been given to an Internationally renowned Company in Soda Ash to suggest further improvements necessary to commission the Towers.

7. Fixed Deposits: The Company has not accepted

any fresh Deposits during the year. Deposits matured but not claimed as at the end of the financial year, amounted to Rs. 0.39 Lakhs. None of these deposits have been claimed since then.

8. Corporate Governance: The report on Corporate Governance

is annexed to this report.

9. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

Information pursuant to Section 2�7 (�) (e) of the Companies Act, �956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules �988 is set out in the Annexure forming part of this Report.

�0. Particulars of Employees: Information in accordance with

Section 2�7(2A) of the Companies Act, �956, read with the Companies (Particulars of Employees) Rules, �975 is set out in the Annexure forming part of this Report.

��. Environment and Safety Measures: The Company is committed to

Industrial Safety and Environment Protection and these are on going processes at the Company’s various plants. The Sahupuram Unit has been granted ISO �400� Certificate for complying with environment protection and safety.

�2. Directors: Dr. S.C. Jain, Shri P.K. Jain and

Dr. V.H. Joshi, Directors, retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for reappointment.

Shri S.K. Jain, Vice Chairman & Managing Director of the Company ceased to be a Director with effect from �st August, 2006 due to his ill health. Mr. S.K. Jain has been with the Company since �969 and joined the Board in �989 and was in charge of the Caustic Soda division of the Company. The Board has put on record its appreciation for the valuable service rendered by Mr. S.K. Jain during his long tenure.

Mr. N.R. Ruia, Director of the Company passed away in April, 2007. He was on the Board for more than two years. The Directors have placed on record their condolences on his demise.


LIMITED

Smt. Vandana Jain has been appointed as an Additional Director and also as Whole Time Director with effect from �st August, 2006. Mr. R.V. Ruia has been appointed as a Director with effect from �9th May, 2007 in the casual vacancy caused by the demise of Mr. N.R. Ruia. Shri Bakul Jain who was Executive Director of the Company has been appointed as Managing Director of the company with effect from July 27, 2006. Resolutions have been incorporated in the notice convening the forthcoming Annual General Meeting for the appointment of Ms. Vandana Jain and Mr. R.V. Ruia, and Mr. Bakul Jain.

�3. Auditors and Auditors’ Report: M/s. V. Sankar Aiyar & Co., Chartered

Accountants-Statutory Auditors of the Company retire at the forthcoming Annual General Meeting and are eligible for reappointment. Regarding the qualifaction in the Auditors Report, the notes to the Accounts referred to in the Auditors Report are self explanatory and do not call for any further clarification.

�4. Cost Audit: In accordance with the directions

received from the Department of Company Affairs, the Cost Audit of the Company’s Soda Ash and Caustic Soda Divisions are being conducted for the Financial Year 2006-2007 by Cost Auditors, M/s. N.D. Birla & Company and M/s. R. Nanabhoy & Company respectively. Their appointments were approved by the Department of Company Affairs. The Cost Audit of these Divisions is conducted every year and the Reports are submitted by the Cost Auditors to the Central Government.

�5. Management Discussion and Analysis Report:

Outlook The Company has a diversified

operation with three business segments viz. PVC, Chloro Alkali and Soda Ash. It is thus reasonably protected from the vagaries of business cycles of these products.

PVC Division The Company, one of the six

producers of the PVC resin and despite competition, has maintained its market share of nearly �0%. With introduction of Value Added Tax (VAT) in Tamilnadu and Pondicherry from January’07, the Company’s competitiveness and profitability has improved. Also with the commissioning of Thermal Co-Generation plant at Company’s Sahupuram unit, the cost of power and steam used for manufacturing PVC will come down strengthening the bottomline.

Caustic Soda Division The company continues to be a major

player in the South India with a market share of an approximately �5%. The demand for caustic soda is expected to grow at a steady rate of 4% to 5% over the next 3 years due to healthy growth in demand and production in end-user industries. Production in end-user industries is expected to grow at healthy rates especially in aluminium, which is expected to grow at ��% over the next three years.

The ongoing conversion of Mercury Cell to Membrane Cell technology

will not only result in substantial capacity addition but also will bring down the consumption of power in this division which will go a long way in strengthening the bottomline.

The capacity addition in Beneficiated Ilmenite Plant will make further growth in the division. Also better realization on Beneficated Ilmenite exports will help in improving the bottomline of this division.

Soda Ash Division The Soda Ash Industry continues to

grow at a compounded rate of 4 % to 5% per annum and this trend is expected to continue due to strong demand from end-user industries. Domestic prices of soda ash move in line with international prices due to the threat from imports. The decreasing trend of import duties in India is a cause of concern as decline in landed costs will exert pressure on domestic prices.

Internal Control Systems The Company has an adequate internal

control procedure commensurate with the nature of its business and size of its operations. Internal Audit is conducted on a regular basis by an independent firm of Chartered Accountants. However the Board of Directors are re-examining the scope of Internal Audit looking into the size of operations of the Company.

The reports of the internal audit along with comments from the management are placed for review before audit committee. The Audit Committee also scrutinizes all the programmes and the adequacy of the internal controls.

Human Resources The Company has been following a

standard procedure for recruitment of best personnel for all the departments and is making constant and continuous efforts to retain and groom them to meet its present and future requirements. The current strength is 2336 employees. The Company sponsors employees for various seminars on finance, operations, marketing and human resource development to update their


LIMITED

skills and develop close co-ordination with their counterparts in industries. This is basically done to enhance their skills in order to achieve an optimum output from them.

Cautionary Note Statement in this report describing the

company’s objectives, projections, estimates, expectations and predictions may be “forward looking statements”. Actual results could differ materially from those expressed or implied due to variation in prices of raw materials, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and other incidental factors.

�6. Directors’ Responsibility Statement: In terms of Section 2�7(2AA) of the

Companies Act, �956 your Directors have:

(a) Followed in the preparation of the Annual Accounts, the applicable accounting standards with proper explanation relating to material departures;

(b) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of financial year and of the profit of your Company for that period;

(c) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, �956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

(d) Prepared the Annual Accounts on a going concern basis.

�7. Insurance: All the properties of the Company are

adequately insured.

�8. Industrial Relations: The relations between the employees

and the management were generally cordial and an atmosphere of

understanding prevailed throughout the year except during the short period of illegal strike of 39 days during the months of August-September’06 at Company’s Sahupuram Unit. The Company has entered into a long-term wage settlement Agreement with the workers at Sahupuram unit.

�9. Acknowledgement: The Board places on record their

grateful appreciation for the assistance and co-operation received from the Financial Institutions and the Banks.

On behalf of the Board of Directors

Dr. Shashi Chand JainChairman and Managing

Director

Mumbai, �9th May, 2007

� DCW Limited Ò Annual Report 200�-2007

LIMITED Annexure to Directors’ Report Report on Corporate Governance(Pursuant to Clause 49 of the Listing Agreement)

A. MANDATORY REQUIREMENTS:

1. Company’s philosophy on Code of Corporate Governance: The Company believes in the practice of good Corporate Governance. A continuous process of delegation of powers

commensurate with accountability coupled with trust, faith and transparency has been embedded in the day to day functioning. The Company will endeavor to improve on these aspects on an ongoing basis.

2. Board of Directors:

Ò Size of the Board: The Board of Directors of the Company consists of 10 Directors.

Ò Composition, category and their attendance at the Board meetings during the year and at the last Annual General Meeting as also the number of other Directorships/Memberships of Committees are as follows:

Category of Directorship Name of the Director

Attendance Particulars at the Other

Directorships

Other Committee

Board Meetings

Last AGM

Memberships Chairmanships

Promoter/Executive Directors

Dr. Shashi Chand Jain (Chairman & Managing Director)

4 No 3 1 —

Shri Sharad Kumar Jain * (Vice Chairman & Managing Director)

— No — — —

Shri Pramod Kumar Jain (Managing Director)

3 Yes 1 — —

Shri Bakul Jain (Managing Director)

4 No 2 — —

Smt. Vandana Jain ** (Executive Director)

3 — — — —

Promoter/Non-Executive Director

Smt. Satyawati Jain *** 3 No — — —

Non-Executive and Independent Directors

Shri Yuvaraj Saheb of Dhrangadhra

2 No — — —

Shri F. H. Tapia 3 No — — —

Dr. V. H. Joshi 3 Yes — — —

Sushil K. Jalan 3 No � — —

Shri N. R. Ruia 1 No — — —

* Ceased to be a Director w.e.f. August 1, 200� ** Appointed as a Director w.e.f. August 1, 200�*** Holds 1,02,000 Equity Shares of Rs. 2 each of the Company.

Ò No. of Board Meetings held during the year along with the dates of the meeting: During the year four Board Meetings were held on:

23.05.200�, 27.07.200�, 23.10.200� and 29.01.2007.

The Company placed before the Board the Annual Budget, Performance of various units and other information from time to time as specified in Annexure of the Listing Agreement.

DCW Limited Ò Annual Report 200�-2007 7

LIMITED

3. Audit Committee:

• Ò Terms of Reference : The terms of reference of this Committee

cover the matters as specified for Audit Committees under Clause 49 of the Listing Agreement as well as per the provisions of Section 292 A of the Companies Act, 195�.

Ò Composition, name of members and Chairperson:

The Audit Committee comprises 3 Non-Executive Independent Directors. Dr. V. H. Joshi is the Chairman of this Committee. Shri Yuvaraj Saheb of Dhrangadhra and Shri F. H. Tapia are the other members of the Committee.

Ò Meetings and Attendance during the year: The Committee met 4 times during the year

and the attendance of the Members at these meetings was as follows:

Dates of Meetings

Dr. V. H. Joshi Shri F. H. Tapia Shri Yuvaraj Saheb of Dhrangadhra

23.05.200� Yes No Yes

27.07.200� Yes Yes Yes

23.10.200� Yes Yes Yes

29.01.2007 Yes Yes No

4. Remuneration Committee:

Ò Terms of Reference: The terms of reference of this Committee

cover the matters as specified for Remuneration Committees under Clause 49 of the Listing Agreement.

Ò Composition, Name of Members and Chairperson:

The Remuneration Committee comprises 3 Non-Executive Independent Directors. Shri F. H. Tapia is the Chairman of this Committee. Dr. V. H. Joshi and Shri Yuvaraj Saheb of Dhrangadhra are the other members of the Committee.

Ò Attendance during the year: There were two Remuneration Committee

meetings during year held on 23rd May, 200� and 27th July, 200�. Shri Yuvraj Saheb of Dhrangadhra and Dr. V. H. Joshi were present at the meeting of 23rd May, 200� and all members attended the meeting of 27th July, 200�.

Ò Remuneration Policy: The Remuneration of Managing Directors

and Whole-time Director is approved by the Remuneration Committee and also by the Board (subject to the subsequent approval by the Shareholders at the general body meeting and such other authorities as the case may be). The remuneration is fixed considering various factors such as qualification, experience, expertise, and prevailing remuneration in the corporate world, financial position of the Company etc. The remuneration Structure comprises Salary, Perquisites, Commission, and Contribution to Provident Fund, Super-Annuation Fund and other funds in accordance with the provisions of the Companies Act, 195�. The Non-Executive Directors do not draw any remuneration from the Company besides the sitting fees for each meeting of the Board, Audit and Remuneration Committees attended by them.

Ò Details of the remuneration paid to the Directors for the Financial year 2006-2007 is given below:

Directors Salary

(Rs.)

Benefits

(Rs.)

Contribution to Provident Fund & Other funds

(Rs.)

Commission

(Rs.)

Sitting Fees

(Rs).

Total

(Rs.)Dr. Shashi Chand Jain 24,00,000 2,40,000 7,20,9�0 18,75,000 — 52,35,9�0 Shri Sharad Kumar Jain* 8,00,000 1�,�8,029 2,40,320 �,25,000 — 33,33,349 Shri Pramod Kumar Jain 24,00,000 2,80,740 7,20,9�0 18,75,000 — 52,7�,700 Shri Bakul Jain 24,00,000 2,90,204 7,20,9�0 18,75,000 — 52,8�,1�4 Smt. Vandana Jain ** 1�,00,000 �,00,000 4,80,�40 12,50,000 — 39,30,�40Smt. Satyawati Jain — — — 15,000 15,000Shri F.H. Tapia — — — 22,500 22,500Dr. V.H. Joshi — — — 27,500 27,500Shri Yuvaraj Saheb of Dhrangadhra — — — 20,000 20,000Shri Sushil K. Jalan 15,000 15,000Shri Nirmal Kumar Ruia — — — 5,000 5,000* Ceased to be a Director w.e.f. August 1, 200�** Appointed as a Director w.e.f. August 1, 200�Sitting Fee also includes payment for Board level committee meetings.

8 DCW Limited Ò Annual Report 200�-2007

LIMITED

Dr. Shashi Chand Jain, Shri Sharad Kumar Jain, Shri Pramod Kumar Jain and Shri Bakul Jain and Mrs. Vandana Jain are each entitled for commission @ 25% of the difference between 10% of the net profits as computed under Section 349 of the Companies Act, 195�, in a financial year and the aggregate of the salary and perquisites and benefits paid to all the Managing Directors and Executive Director in that year subject to the overall ceilings stipulated in Sections 198 and 309 of the Companies Act, 195�.

The appointments of Managing Directors/Executive Director are contractual and are for a period of 5 years.

The appointment of the Managing Directors/Executive Director may be terminated by either party by giving a six-month notice.

No severance fee is payable on termination of appointment.

Non-Executive Directors are not paid/entitled for any remuneration other than sitting fees.

Presently the Company does not have any Scheme for grant of any stock option either to the Directors or to the employees.

5. Shareholders’/Investors’ Grievance Committee: Smt. Satyawati Jain, Non-executive Director is

the Chairperson of the Shareholders’/Investors’ Grievance Committee.

Mrs. Chital V. Shah is the Compliance Officer of the Company.

There were 94 complaints received from the shareholders during the year.

All the Complaints were resolved satisfactorily.

There were no pending complaints as on 31.03.2007

6. General Body Meetings: (i) Location and time where last 3 Annual

General Meetings held: Year Location Date Time No. of Special

Resolutions Passed

2003-04 Dhrangadhra, Gujarat

12.08.2004

11.00 a.m.

�

2004-05 Dhrangadhra, Gujarat

25.08.2005

11.00 a.m.

1

2005-0� Dhrangadhra, Gujarat

0�.07.200�

11.00 a.m.

1

(ii) No Special Resolution has been passed last year through postal ballot.

(iii) No Special Resolution is proposed to be conducted through postal ballot.

7. Disclosures: 1. During the year, there were no transactions

of material nature with the Promoters, Directors or the management or relatives etc. that may have potential conflict with the interest of the Company at large.

2. During the last three years, there were no strictures or penalties imposed by either SEBI or the Stock Exchanges or any other statutory authority for non-compliance of any matter related to the Capital Market.

3. DCW Code of Conduct: The Board has laid down a Code of

Conduct for all Board Members and Senior Management of the Company. The Code of Conduct is posted on the website of the Company.

In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 as amended, the Board of Directors of the Company formulated DCW Code of Conduct for the prevention of Insider Trading in the shares of the Company by its Directors and designated employees. The DCW Code, inter-alia, prohibits purchase/sale of shares of the Company by the Directors and designated employees, while in possession of unpublished price sensitive information in relation to the Company. A system has been put in place and Directors/Designated Employees have been advised to take pre-clearance before purchase/sale of the Company’s shares.

Whistle Blower mechanism is in existence and no personnel has been denied access to the Audit Committee.

4. Compliance with Mandatory Requirements: The Company has complied with the

mandatory requirements of the Code of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has also complied with the requirements of amended clause 49 after it came into force.

Compliance with Non-Mandatory Requirements:

(1) The Board : The Company has an Executive

Chairman and hence the requirement pertaining to reimbursement of expenses to a Non-Executive Chairman does not arise.


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(2) Remuneration Committee: Please refer Item No. 4 under the

heading ‘Mandatory Requirements’.

(3) Shareholders’ Rights: As the Company’s Quarterly results

are published in English Newspapers having circulation all over India and in a Gujarati Newspaper circulated in Gujarat, the same are not sent to each household of shareholders.

(4) Audit qualification : The Company move towards a

regime of unqualified financial statements.

(5) Training of Board Members : The Board of Directors consists

of professionals with expertise in their respective fields and industry. They endeavor to keep themselves updated with changes in economy and legislation.

(�) Mechanism for evaluating Non-Executive Board Members:

The performance evaluation of Non-Executive Directors is done by the Board of Directors, excluding the Director being evaluated.

(7) Whistle Blower Policy The Company has in existence a

system for the employees to report to the Management about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct.

DECLARATION OF COMPLIANCE WITH THE CODE OF CONDUCT/ETHICS:

All the Directors and Senior Management personnel have affirmed compliance with the Code of Conduct/Ethics as approved and adopted by the Board of Directors.

8. Means of Communication Ò The Quarterly results are published in

‘Financial Express’ in all editions in India including in the Gujarat edition published from Ahmedabad. These are not sent individually to the shareholders.

Ò The above results are also displayed on the Company’s web-s i te v iz . www.dcwltd.com

Ò There were no presentations made to the institutional investors or to the analysts.

9. General Shareholders information:

ANNUAL GENERAL MEETING:

Ò Day & Date - : Monday, 23rd July, 2007Ò Time : 10.00 A.M.Ò Venue : at the Registered Office

(at Guest House No. 2) Dhrangadhra, Gujarat - 3�3 315,

Financial calendar: April 2007 – March 2008:Date of Book closure: : 17th July, 2007 to

23rd July, 2007 (both days inclusive)

Dividend Payment Date

: 27th July, 2007

Listing on Stock Exchanges: The Company’s shares are listed with the following Stock Exchanges: :

Ò The Mumbai Stock Exchange (BSE)

: Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 023

Ò National Stock Exchange of India Limited (NSE)

: Exchange Plaza Bldg., 5th floor, Plot No. C-1, ‘G’ Block, Bandra- Kurla Complex, Near Wockhardt, Mumbai 400 051

Annual Listing fees as prescribed has been paid to the above Stock Exchanges for the year 2007 -2008. GDRs of the Company are listed with the Luxembourg Stock Exchange.

Stock Code : 117 (BSE), DCW (NSE)

Demat ISIN Nos. : INE 500A01011 (Fully Paid)

Share Transfers and other Communications may be Addressed to

: Bigshare Services Pvt. Ltd., (Unit DCW Ltd.,) E/2, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai 400 072.email: [email protected]

Investors’ complaints may beAddressed to

: Asst. Company Secretary DCW Limited Nirmal, 3rd floor, Nariman Point, Mumbai - 400 021

10 DCW Limited Ò Annual Report 200�-2007

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Market price data:

High/Low During each month in last Financial year:

Month/YearNSE BSE

High(Rs.)

Low(Rs.)

High(Rs.)

Low(Rs.)

April, 200� 1�.80 11.10 1�.75 11.57May, 200� 18.45 10.00 19.90 10.00June, 200� 14.25 8.50 14.25 8.�5July, 200� 12.20 8.15 11.93 9.70August, 200� 13.00 10.�0 13.00 10.�4September, 200� 14.40 11.75 14.30 11.75October, 200� 13.70 11.55 13.70 11.00November, 200� 12.15 9.80 12.25 10.00December, 200� 11.85 9.45 11.87 9.32January, 2007 15.75 10.80 1�.00 10.80February, 2007 15.30 11.00 15.30 11.10March, 2007 12.70 10.10 12.70 10.20

Stock Performance (Indexed): The performance of the Company’s shares relative

to BSE Sensex is given in the chart below:

Registrar and Share Transfer Agents: The Company has appointed Bigshare

Services Pvt.Ltd., E/2, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (East), Mumbai - 400 072 as Registrars and Share Transfer Agents of the Company.

The Company’s shares are traded in the Stock Exchanges compulsorily under demat mode. All the applications received for transfer of physical shares are approved by the Share Transfer Committee, which normally meets twice in a month depending on the volume of transfers. Share transfers are registered and returned normally within 20 days from the date of lodgement, if documents are complete in all respects.

Shareholding Pattern as on 31.03.2007:

Category of Shareholder No. of Shares held

Percent- age of Share-

holding

(A) SHAREHOLDING OF PROMOTER AND PROMOTER GROUP

(1) INDIAN (a) Individuals/Hindu Undivided

Family 28,42�,9�5 1�.48(b) Central Government/

State Government(s) — —(c) Bodies Corporate 44,515,853 25.80(d) Financial Institutions/Banks — —(e) Any Others (Specify) — —

Sub Total (A)(1) 72,942,818 42.27(2) FOREIGN

(a) Individuals (Non-Residents Individuals/ Foreign Individuals) — —

(b) Bodies Corporate — —(c) Institutions — —(d) Any Others (Specify) — —

Sub Total (A)(2) — — Total Shareholding of

Promoter and Promoter Group (A)= (A)(1)+(A)(2) 72,942,818 42.27

(B) PUBLIC SHAREHOLDING

(1) INSTITUTIONS (a) Mutual Funds/UTI 38,955 0.02(b) Financial Institutions/Banks 93,27,�73 5.41(c) Central Government/

State Government(s) — —(d) Venture Capital Funds — —(e) Insurance Companies — —(f) Foreign Institutional Investors 4,337,�00 2.51(g) Foreign Venture Capital Investors — —(h) Any Other (specify) — — (h-i) Foreign Banks 44,725 0.03

Sub-Total (B)(1) 13,748,953 7.97(2) Non-institutions

(a) Bodies Corporate 11,11�,920 �.44(b) Individuals 58,93�,335 34.1�(c) Any Other (specify) (c-i) Clearing Member 99�,�94 0.58 (c-ii) NRI 4,904,�90 2.84 (c-iii) OCBs �,495,180 3.7� (c-iv) Trust 123,330 0.07 (c-v) Non Domestic Company 5,920 —

Sub-Total (B)(2) 82,579,0�9 47.8�

(B) Total Public Shareholding (B)= (B)(1)+(B)(2) 96,328,022 55.83

TOTAL (A)+(B) 169,270,840 98.10(C) Shares held by Custodians and against

which Depository Receipts have been issued 3,273,750 1.90

GRAND TOTAL (A)+(B)+(C) 172,544,590 100.00


LIMITED

Dematerialisation of shares: 1�,11,40,835 Equity shares held by 30,5�1 Shareholders comprising 93.39% of the paid up Share Capital have been dematerialised as on 31st March, 2007.

Auditors Certificate on Clause 49 Compliance

Outstanding GDRs/ADRs/Warrants/convertible instruments etc.:

Outstanding GDRs as on 31st March, 2007 represent 32,73,750 shares (1.90%). There are no further outstanding instruments, which are convertible into equity in the future.

Plant Location: Given in the 1st page of this Annual Report.

Address for correspondence: DCW Limited, Nirmal, 3rd floor, Nariman Point, Mumbai – 400 021.

The Board Of DirectorsDCW LIMITED

I have reviewed the records concerning the Company’s compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into, by the Company, with the Stock Exchanges of India, for the financial year ended 31st March, 2007.

The compliance of conditions of corporate governance is the responsibility of the management. My examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

I have conducted my review on the basis of the relevant records and documents maintained by the Company and furnished to

me for the review, and the information and explanations given to me by the Company.

Based on such a review, in my opinion, the Company has complied with the conditions of Corporate Governance, as stipulated in Clause 49 of the said Listing Agreements.

I further state that, such compliance is neither an assurance as to the future viability of the Company, nor as to the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Ms. Kumkum R. ShahPlace : Mumbai Company SecretaryDate : 19th May, 2007. CP No. - 7455


LIMITED

Annexure to the Directors’ Report

STATEMENT CONTAINING PARTICULARS PURSUANT TO THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT.

A. CONSERVATION OF ENERGY:

1. Supermizers, the electronic device to reduce energy consumption in three phase induction motors, are being used continuously in all plants to save energy. So far, 230 supermizers have been installed resulting in saving of 41 lacs units during the year.

2. Asia E+ tube lights are energy efficient with longer life and high lumens. Each tube consumes 28 watts, compared to conventional tube lights which consumes 53 watts. The conversion programme to replace inefficient tube lights in phased manner is being carried out continuously. Also, inefficient mercury and sodium vapor–lamps were replaced by highly efficient metal halide lamps. Annual energy saving to a tune of 6.2 lacs units is achieved.

3. Energy audit on all the motors of capacity 30 KW and above was carried out and energy conservation to a tune of 56,400 units have been achieved in installation of energy efficient motors.

4. So far, 9 Nos of cooling towers have been installed and annual energy savings to a tune of 12 lacs units is achieved.

5. In–house cost improvements are conducted periodically where mostly energy saving proposals are given by all departments for implementation. During the year under report, 2 programmes were conducted and 34 suggestions resulting in annual savings to the tune of Rs. 33 Lacs have been implemented.

6. Plant scale trials for Yellow Iron Oxide production by recycling of Ammonium Chloride filtrate have been carried out and observed that quality of product has not been affected. This trial has been done to increase Ammonium Chloride concentration for energy saving in downside processes of ammonia recovery and Calcium Chloride production.

B. TECHNOLOGY ABSORPTION :

1. Research and Development:

1.1 BENEFICIATED ILMENITE AREA:

1.1.1. Process optimization to reduce cycle time and increase productivity.

Acid preheating system (designed in–house) installed in digester house which has resulted in 10% reduction in reaction time and also 5% reduction in effluent.

With in–house modification of burner system, roaster capacity was increased from 3.2 TPH to 5 TPH.

1.1.2 . Capacity enhancement and quality improvement of UTOX

Additional filter presses and calciner have been installed to increase UTOX production from 1400 TPA to 3300 TPA.

A 9 MT capacity blender was installed to achieve uniform color values for UTOX. This consistency in quality of UTOX has been achieved to increase UTOX sales.

1.2 PVC

1.2.1. Plant scale trials by using indigenous catalyst in place of imported one are being carried out to explore the possibility of reducing reaction time and thus to increase productivity.

1.2.2. An effluent treatment plant was designed, supplied and erected by M/s. Ion Exchange Ltd. resulting in 85% of effluent is recycled / reused.

1.3 CPP

1.3.1. The electrical heaters were totally replaced by steam heaters to reduce auxiliary power consumption.

1.3.2. Indigenisation of Lube oil separator control module by PLC was done with in house efforts with a saving of Rs. 2 lacs.

2. Expenditure on Research & Development:

(i) Capital Rs. 8.02 lacs

(ii) Recurring Rs. 17.31 lacs

Rs. 25.33 lacs

(iii) Total Research & Development Expenditure as a percentage of total turnover (Net of Excise) : 0.04 percentage.


LIMITED

Technology Absorption, Adaptation and Innovation : Continuos efforts are made towards technology absorption, adaptation and innovation. The emphasis is on improving the quality

of the finished product and reducing energy consumption.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars regarding foreign exchange earnings and outgo appear in Schedule 6 forming part of the Profit and Loss Account. REQUISITE DATA IN RESPECT OF ENERGY CONSUMPTION (A) Power and Fuel Consumption

Particulars

Caustic Soda Unit PVC Unit Soda Ash Unit

Current Year

2006-2007

Previous Year

2005-2006

Current Year

2006-2007

Previous Year

2005-2006

Current Year

2006-2007

Previous Year

2005-2006

1. ELECTRICITY(a) Purchased

Unit (Lakh Kwh) – – 3.11 3.03 37.77 21.90Total Amount(Rs. in lakhs)

– – 22.29 21.46 192.68 112.22

Rate/Unit (Rs.) – – 7.16 7.09 5.10 5.12

(b) Own Generation

(i) Through Diesel Generator Unit (Lakh Kwh) 1,942.80 2,034.23 153.50 185.34 – – Unit/ltr of LSHS/Diesel Oil 4.43 4.43 4.43 4.43 – – Cost/Unit (Rs.) 4.63 3.89 4.63 3.89 – –(ii) Through Steam Turbine Generator Unit (Lakh Kwh) – – – – 238.25 258.57 Unit/ltr. of Fuel Oil/Gas

– – – – – –

Cost/Unit (Rs.) – – – – – –

2. Coal (specify quality and where used) – – – – – –Total cost – – – – – –Average rate – – – – – –

3. FURNACE OIL/LSHS/LSFOQuantity (Kl) 47,280.26 50,074.03 3,640.14 4,072.07 – –Total Amount(Rs. in Lakhs) 9,680.46 8,007.41 630.34 588.04 – –Average Rate (Rs). 17,303.34 13,911.73 17,316.45 14,440.89 – –

4. OTHERS

(i) HydrogenQuantity (MT) 89.513 194.840 – – – –Total Amount (Rs. in lakhs) 42.919 72.07 – – – –Rate/Unit (Rs.) 47,947.406 36,991.68 – – – –

(ii) LigniteQuantity (MT) – – – – 1,13,859 1,14,095Total Amount (Rs. in Lakhs) – – – – 1,746.96 1,602.97Rate/Unit (Rs.) – – – – 1,534 1,405

(iii) HSDQuantity (MT) 11.03 21.98 3.77 4.51 – –Total Amount (Rs. in lakhs) 4.35 7.78 1.49 1.59 – –Rate/Unit (Rs.) 38,489.90 35,386.75 39,489.90 35,386.75 – –


LIMITED

(B) Consumption per unit of Production

Particulars

Caustic Soda Unit PVC Unit Soda Ash Unit

Current Year

2006-2007

Previous Year

2005-2006

Current Year

2006-2007

Previous Year

2005-2006

Current Year

2006-2007

Previous Year

2005-2006

1. Electricity (Kwh) 3,026 3,002 229 226 241 2432. Fuel Oil (Mt) 0.175 0.200 0.054 0.052 – –3. Others

(i) Hydrogen (Kgs.) 4.12 9.73 – – – –(ii) LSHS (MT) – – – – – –(iii) Lignite (MT) – – – – 0.926 0.908(iv) HSD (Litre) 0.0001 0.0001 – – – –

Annexure to the Directors’ ReportInformation as per Section 217 (2A) of the Companies Act, 1956, read with the Companies

(Particulars of Employees) Rules, 1975 and forming part of the Director’s Report

Sr.No.

Name Designation/ Nature of duties

Remuneration (Rupees)

Qualification Experience (Years)

Date ofcommence- ment of Employment

Age

(Years)

Last employment held. Name of the Company, Designation and periodof service

Employed for whole of the year

1 Dr. Shashi Chand Jain Chairman & Managing Director

67,22,260 Ph.D (Economics) 51 01.04.1969 74 Sahu Brothers (Saurashtra) Pvt. Ltd.Director - 11 years

2 Shri Pramod Kumar Jain Managing Director 67,59,450 B.A. (Hon.) Economics

48 01.04.1969 69 Sahu Brothers (Saurashtra) Pvt. Ltd.

3 Shri Bakul Jain Managing Director 67,68,914 B.Com., MBA 23 01.09.1984 52 —

Employed for part of the year

1 Shri Sharad Kumar Jain Vice Chairman &Managing Director

26,84,029 B.A. (Hons.) Economics

49 01.04.1969 72 Sahu Brothers (Saurashtra) Pvt. Ltd.Director - 11 years

2 Smt. Vandana Jain Executive Director 56,06,390 B.Com. 1 01.08.2006 71 -----

3 Shri Sadhu Sundarsingh T.

Sr. Officer(Stores)

4,31,884 B.A. 36 01.02.1971 58 ------

4 Shri Ramakrishnan B.S. Officer(Misc. Sales)

4,26,179 D.M.E. 31 29.03.1978 58 Shivram Engineering Company -2 1/2 years.

Notes :1. In case of Managing Directors and Executive Director the gross remuneration shown above (subject to tax) comprise salary, Perquisites, Commission,

Company’s contribution to Provident Fund, Superannuation Fund and Gratuity Fund.2. In case of other two employees, the gross remuneration shown above (subject to tax) comprise salary, perquisites, Company’s Contribution to

Provident Fund and gratuity paid. 3. The nature of employment of the Managing Directors & the Executive Director is contractual. 4. Dr. Shashi Chand Jain, Shri Sharad Kumar Jain, Shri Pramod Kumar Jain, Shri Bakul Jain - Managing Directors and Smt. Vandana Jain - Executive

Director, are related to Smt. Satyawati Jain - Director of the Company.


LIMITEDBalance Sheet AS AT 31ST MARCH, 2007

As at31/03/2007

US $ in Millions*

As at31/03/2006

US $ in Millions#

SOURCES OF FUNDS Shareholders Funds: Capital 7.94 7.73 Reserves & surplus 50.54 46.24 Loan Funds: Secured Loans 50.04 29.31 Unsecured Loans 3.33 0.01 Deferred Tax Liability: Deferred Tax Liability 15.23 14.06 Deferred Tax Asset (0.71) (1.58)

14.52 12.48 TOTAL 126.37 95.78

APPLICATION OF FUNDS Fixed Assets: Gross Block 138.44 134.39 Less: Depreciation 65.53 63.89

72.91 70.50 Capital Work-in-progress 41.39 6.95

114.30 77.45 Investments 0.11 2.49 Current Assets, Loans and Advances: Inventories 16.19 27.07 Sundry Debtors 14.60 11.42 Cash and Bank balances 3.19 2.15 Loans and advances 20.62 12.50

54.60 53.13 Less: Current liabilities and Provisions Liabilities 39.09 34.63 Provisions 3.55 2.66

42.64 37.30

Net Current Assets 11.96 15.84

TOTAL 126.37 95.78

* 1 US $ = Rs. 43.48

# 1 US $ = Rs. 44.63


LIMITED Profit & Loss AccountFOR THE YEAR ENDED 31ST MARCH, 2007

For the year ended31/03/2007

US $ in Millions*

For the year ended31/03/2006

US $ in Millions#

INCOME Sales (including Excise Duty) 173.25 159.14

Less : Excise Duty 21.04 21.49

152.21 137.65

Other income 3.68 3.91

155.89 141.56

EXPENDITURE

Manufacturing and other expenses 141.61 128.19

Interest & Finance Charges 1.24 0.97

142.85 129.16

Profit Before Depreciation 13.04 12.40

Depreciation 5.82 5.16

Profit Before Tax 7.22 7.24

Provision For Tax

Current tax 0.80 0.62

Fringe Benefit Tax 0.17 0.09

MAT Credit Available for Set off (0.10) (0.61)

Tax Adjustment of Previous Year 0.00 (0.29)

Profit after Current Tax & Tax Adjustments 6.35 7.43

Deferred Tax 1.71 1.32

Profit After Deferred Tax 4.64 6.11

Add : Surplus brought forward from last year 6.96 6.49

11.60 12.60

APPROPRIATION

Transfer to General Reserve 4.60 4.48

Interim Dividend on Equity Shares 0.79 0.00

Proposed Dividend on Equity Shares 0.40 1.16

Tax on Dividend 0.20 0.17

Profit Carried forward 5.61 6.79

* 1 US $ = Rs. 43.48

# 1 US $ = Rs. 44.63


LIMITEDKey Financial Data2006-2007 2005-2006

Rs. In Millions

US $ inMillions*

Rs. in Millions

US $ inMillions#

Gross Sales 7,532.78 173.25 7,102.42 159.14

Fixed Assets – Gross Block 6,019.42 138.44 5,997.85 134.39

Net Block 4,969.66 114.30 3,456.58 77.45

Export Earnings 710.03 16.33 673.62 15.09

Earning Before Depreciation and Interest 621.05 14.28 596.71 13.37

Interest 54.17 1.25 43.21 0.97

Earnings Before Depreciation 566.88 13.04 553.50 12.40

Depreciation 253.29 5.83 230.56 5.17

Earnings Before Tax 313.59 7.21 322.94 7.24

Taxation

Current 34.72 0.80 27.75 0.62

Fringe Benefit Tax 7.36 0.17 4.00 0.09

MAT Credit available for set off (4.49) (0.10) (27.24) (0.61)

Tax adjustment of previous year – – (13.00) (0.29)

Deferred Tax 74.31 1.71 58.74 1.32

Earnings After Tax 201.69 4.64 272.69 6.11

No. of shares of Rs. 2/- each (Million Nos.) @ 172.54 172.54 172.54 172.54

Earnings per Shares ( Rs. / US $ ) 1.17 0.03 1.58 0.04

Net Worth (Excl.Revaluation Reserve) 2,418.44 55.62 2,277.16 51.02

Book value per share 14.02 0.32 13.20 0.30

Gross profit to sales (%)(Earnings Before Depreciation)

7.53 7.53 7.79 7.79

Interest coverage Ratio 11.46 11.46 13.81 13.81

Debt/Equity 0.91:1 0.91:1 0.57:1 0.57:1

Current Assets/Current Liabilities 1.28 1.28 1.43 1.43

* 1 US $ = Rs. 43.48

# 1 US $ = Rs. 44.63


LIMITED

AUDITOR’S REPORT TO THE SHAREHOLDERS OF DCW LIMITED

1. We have audited the attached Balance Sheet of DCW Limited as at 31st March, 2007 and also the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 and read together with the Companies (Auditor’s Report) Amendment Order, 2004 (hereinafter referred to as the Order) issued by the Central Government of India in terms of sub-

section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law, have been kept by the Company so far as appears from our examination of those books;

(iii) The Company’s Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable; except as indicated in Note B–15 of Schedule ‘N’ to the Accounts.

(v) On the basis of written representations received from the Directors as on 31st March,

2007, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2007 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our observation in para 4(iv) above which has consequential impact of Rs. 313.13 lacs on profits of the year and reserves and read with the Significant Accounting Policies and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2007,

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date, and

(c) In the case of the Cash Flow Statement of the cash flows for the year ended on that date.

For V. Sankar Aiyar & Co.,

Chartered Accountants.

S. VenkatramanPlace : Mumbai PartnerDated : 19th May, 2007. Membership No. 34319

Auditor’s Report


LIMITED

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITOR’S REPORT TO THE SHAREHOLDERS OF DCW LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2007.

i. (a) The Company has maintained proper records, except in respect of Pantape Division, showing particulars including quantitative details and situation of fixed assets.

(b) We are informed that the fixed assets, except in respect of Pantape Division, have been physically verified by the Management with the assistance of external agencies during the year. In our opinion the frequency of verification is reasonable. As per the information given to us by the management, no material discrepancies as compared to book records were noticed in respect of fixed assets verified during the year.

(c) Since there is no disposal of a substantial part of fixed assets during the year, the preparation of financial statements on a going concern basis is not affected on this account.

ii. (a) The inventories of finished goods (except goods lying with consignees and in transit), stores (except Mercury in process), spare parts and raw materials (except salt at Sahupuram) have been physically verified by the management with the help of external agencies. In our opinion, the frequency of physical verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventories (except finished goods lying with consignees and in transit) followed by the management are reasonable

and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventories and no material discrepancies were noticed on physical verification as compared to the record of inventories.

iii. Based on the audit procedures applied by us and according to the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanation that for purchase of certain raw materials, stores, components, and fixed assets, alternative sources of supply are limited with reference to quality, delivery schedules, credit period and some of the items purchased are of special nature, and hence comparable alternative quotations are not available for these, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. (a) Based on the audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that Section.

(b) Sub-clause (b) of sub-para (v) of para 4 of the Order is not applicable as there are no such transactions exceeding the value of Rupees Five Lacs in respect of any party in the financial year.

vi. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of the Sections 58A, 58AA and other relevant provisions of the Companies Act, 1956 and the rules framed thereunder, with regard to deposits accepted from the public.

We are informed by the Management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal under Sections 58A and 58AA of the Companies Act, 1956.

vii. The Company has, in general, an internal audit system commensurate with the size and nature of the Company’s business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.

ix. (a) According to the records of the Company, undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material


LIMITED

(Rs. in lacs)

Name of the Statute/ Nature of Dues

Period Forum where Dispute is pending

SupremeCourt

HighCourt

AppellateTribunal*

AppellateAuthority**

StateGovern-

ment

GrandTotal

Customs Act, 1962 (Customs Duty Including Penalty & Interest, wherever applicable)

1997 to 2006 — — 95.79 — — 95.79

Central Excise Act, 1944 (Excise Duty Including Penalty & Interest, wherever applicable)

1997 to 2006 — 102.80 214.30 11.66 — 328.76

Sales Tax Legislations (Sales Tax, including Penalty & Interest, wherever applicable)

1982 to 2006 — 246.24 558.69 125.55 — 930.48

Local cess, Local cess surcharge (Land Revenue Including Penalty and Interest, wherever applicable)

1989 to 2007 — 0.69 — — 12.69 13.38

Grand Total — 349.73 868.78 137.21 12.69 1,368.41

* Appellate Tribunal includes STAT, CESTAT and ITAT

** Appellate Authority includes Commissioner Appeals, Assistant Commissioner Appeals, Deputy Commissioner Appeals, Joint Commissioner Appeals and Deputy Commissioner Commercial Taxes Appeals.

statutory dues that are required to be deposited regularly with authorities, have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of the aforesaid statutory dues were in arrears, as at 31st March, 2007, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company, the dues of sales tax/income tax/customs duty/wealth tax/service tax/excise duty/cess,

which have not been deposited on account of any dispute are as per the details mentioned below:

x. The Company does not have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. On the basis of verification of records and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions/Banks or Debenture holders.

xii. The Company has not granted any loans and advances on the basis

of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund or a nidhi or a mutual benefit society. Therefore the provisions of sub- para (xiii) of para 4 of the Order are not applicable to the Company.

xiv. In respect of shares, securities and other investments dealt in or traded by the Company, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name except to the extent of the exemption granted under section 49 of the Companies Act, 1956.


LIMITED

xv. According to the information and explanations given to us, the Company has not given any guarantee for any loans taken by others from any bank or financial institution.

xvi. In our opinion, the term loans taken during the year have, prima facie, been applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us, based on an overall examination of the balance sheet of the Company,

related information made available to us and as represented to us by the Management, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xviii. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures during the year and

therefore the question of creating security or charge in respect thereof does not arise.

xx. The Company has not made any public issue of any securities during the year and therefore the question of disclosing the end-use of money raised by any public issue does not arise.

xxi. We are informed that during the year, no instances of material fraud on or by the Company have been noted or reported by the management.

For V. Sankar Aiyar & Co.,

Chartered Accountants.

S. VenkatramanPlace : Mumbai PartnerDated : 19th May, 2007. Membership No. 34319


LIMITED Balance SheetAS AT 31ST MARCH, 2007

Schedule As at 31/03/2007

Rs. in lacs

As at 31/03/2006 Rs. in lacs

SOURCES OF FUNDS Shareholders’ Funds : Capital A 3,450.89 3,450.89 Reserves and Surplus B 21,973.98 20,642.55 Loan Funds : Secured Loans C 21,758.91 13,081.64 Unsecured Loans D 1,448.52 6.15 Deferred tax liability (Refer Note B - 5 of Schedule - N) Deferred tax liability 6,620.53 6,274.69 Less : Deferred tax asset (309.36) (706.59)

6,311.17 5,568.10

29,518.60 18,655.89

TOTAL 54,943.47 42,749.33 APPLICATION OF FUNDS Fixed Assets : Gross Block E 60,194.16 59,978.52 Less : Depreciation 28,491.76 28,512.44

31,702.40 31,466.08 Capital Work-in-progress 17,387.60 3,099.66 Machinery/spares for erection and replacement 606.62 0.00

49,696.62 34,565.75

Investments F 46.64 1,109.95 Current Assets, Loans and Advances Inventories G 7,037.28 12,083.48 Sundry Debtors H 6,348.15 5,096.31 Cash and Bank Balances I 1,388.95 957.73 Loans and Advances J 8,966.30 5,580.55

23,740.68 23,718.07 Less: Current Liabilities and Provisions Liabilities K 16,997.26 15,457.53 Provision L 1,543.21 1,186.91

18,540.47 16,644.44

Net Current Assets 5,200.21 7,073.63 Contingent Liabilities not provided for MSignificant Accounting Policies and NNotes forming part ofBalance Sheet and Profit and Loss Account TOTAL 54,943.47 42,749.33

As per our Report attached For and on behalf of the Board

For V. Sankar Aiyar & Co. Dr. Shashi Chand Jain Dr. V. H. JoshiYuvraj Saheb of DhrangadhraSushil Kumar JalanR. V. RuiaDirectors

Chartered Accountants Chairman & Managing Director

S. Venkatraman Vandana JainPramod Kumar Jain Bakul Jain

Partner Executive Director Managing Directors

Place : Mumbai Chital V. Shah T. M. BhandariDate : 19th May, 2007 Asstt. Company Secretary Sr. Vice President (Finance)


LIMITEDProfit and Loss AccountFOR THE YEAR ENDED 31ST MARCH, 2007

Schedule For the year ended 31/03/2007

Rs. in lacs

For the year ended 31/03/2006 Rs. in lacs

INCOME Sales ‘1’ 75,327.79 71,024.15 Less : Excise Duty (9,146.03) (9,591.46) Net Sales 66,181.76 61,432.69 Other Income ‘2’ 1,598.73 1,746.76

67,780.49 63,179.45

EXPENDITURE Manufacturing and Other expenses ‘3’ 61,570.00 57,212.36 Interest & Finance Charges (Net) ‘4’ 541.72 432.05

62,111.72 57,644.41 Depreciation ‘5’ 2,532.88 2,305.56

64,644.60 59,949.97

Profit before tax 3,135.89 3,229.48 Current Tax 347.24 277.49 Fringe Benefit Tax 73.58 40.00 MAT Credit Available for set off (44.90) (272.35) Tax Adjustment of Previous Year — (130.00) Profit after Current Tax & Tax Adjustments 2,759.97 3,314.34 Deferred Tax (Refer Note B - 5 of Schedule N) 743.07 587.43 Profit after Deferred tax 2,016.90 2,726.91 Add : Surplus brought forward from last year 3,027.73 2,894.90 Available for appropriation 5,044.63 5,621.81APPROPRIATION Transfer to General Reserve 2,000.00 2,000.00 Interim Dividend on Equity Shares 345.09 — Proposed Dividend on Equity Shares 172.54 517.63 Tax on Dividend 86.45 76.43

2,604.08 2,594.06

Profit Carried forward 2,440.55 3,027.75

Notes to Profit & Loss Account ‘6’Weighted average number of Equity Sharesoutstanding during the year 17,25,44,590 17,25,44,590Basic and diluted earning per share Rs. 1.17 Rs. 1.58








LIMITED

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2007

2006-07 Rs. in Lacs

2005-06 Rs. in Lacs

A. Cash flow from operating Activities Net profit before tax and extraordinary items 3135.88 3229.49 Adjustments for : Non-cash items (823.72) (1018.83) Depreciation 2532.88 2305.56 Interest ( net ) 541.72 432.05 Dividend income (98.36) 2152.52 (61.07) 1657.71

Operating profit before working capital changes 5288.40 4887.20 Adjustments for : Trade and other receivables (4592.68) (521.05) Inventories 5046.20 (4097.89) Current liabilities and provisions 1534.95 1988.47 3059.34 (1559.60)

Cash generation from operations 7276.87 3327.60 Direct taxes paid (146.17) (229.34)

Cash flow before Extraordinary items 7130.70 3098.26 Extraordinary items — — Net cash flow from operating Activities 7130.70 3098.26 B. Cash flow from Investing Activities Purchase of fixed Assets (19307.09) (8594.93) Sale of Fixed Assets 3007.69 1806.94 Purchase / Sales of Investments 1063.20 (1008.12) Dividend Income 98.36 61.07 Interest income including gain/loss on

foreign currency transactions 163.78 274.44

Net cash used in investing Activities (14974.06) (7460.60)C. Cash from financing activities Proceeds from issue of share capital — (0.04) Repayment of loans (2682.86) (1390.38) Repayment of Other borrowings (97.73) (137.81) Proceeds from Long Term Borrowings 12900.23 7946.44 Interest paid (1256.35) (996.65) Dividend paid (517.63) (409.91) Tax on dividend (71.08) (57.96)

Net cash used in financing Activities 8274.58 4953.69

Net increase in Cash and Cash equivalents 431.22 591.35

Cash & Cash Equivalents as at 1st April 2006 957.73 366.38 Cash & Cash Equivalents as at 31st March 2007 1388.95 957.73

431.22 591.35








LIMITEDSchedulesFORMING PART OF THE BALANCE SHEET

As at 31/03/2007

Rs. in lacs


SCHEDULE “A”

SHARE CAPITAL

Authorised Capital 32,50,00,000 Equity Shares of Rs. 2/- each

(Previous Year 17,50,00,000 Equity Shares of Rs. 2/- each) 6,500 3,500

TOTAL 6,500 3,500

ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

17,25,44,590 Equity Shares of Rs 2/- each (Previous Year 17,25,44,590 shares of Rs. 2/-each) 3,450.89 3,450.89

TOTAL 3,450.89 3,450.89

Notes :

Of the Equity Shares

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

(a) 5,25,000 Shares to Vendors

(b) 4,550 Shares to Equity Shareholders of the erstwhile, PRC Limited, pursuant to the amalgamation with the Company.

(2) 3,74,50,985 Shares were allotted as fully paid up Bonus Shares by Capitalisation of Capital Redemption Reserve, Share Premium Account and General Reserve.

(3) 2,66,66,550 Shares were issued and allotted consequent to conversion of Part A of the 26,66,655 partly convertible debentures allotted in April’1992.

(4) 4,61,25,000 Shares were issued in 1994-95 against which Global Depository Receipts were issued by the Depository viz. Citi Bank, USA.

(5) 2,80,94,525 shares were issued and allotted pursuant to Rights issue made during 2000-01.


LIMITED SchedulesFORMING PART OF THE BALANCE SHEET

As at 31/03/2007

Rs. in lacs


SCHEDULE “B”

RESERVES AND SURPLUS

CAPITAL RESERVEAs per last balance sheet 355.83 355.83 Add : Transfer from Contribution for Capital Expenditure 51.05 —

406.88 355.83

CAPITAL REDEMPTION RESERVEAs per last Balance sheet 5.30 5.30

SHARE PREMIUMAs per last balance sheet 7,079.70 7,079.70

REVALUATION RESERVEAs per last balance sheet 1,321.88 1,380.38 Less : Transferred to Profit and Loss Account 81.38 58.50

1,240.50 1,321.88

GENERAL RESERVEAs per last balance sheet 8,801.04 6,801.04 Add : Transfer from P&L account 2,000.00 2,000.00

10,801.04 8,801.04

CONTRIBUTION FOR CAPITAL EXPENDITUREAs per last balance sheet 51.05 51.05Less : Transfer to Capital Reserve 51.05 — — 51.05

PROFIT AND LOSS ACCOUNT 2,440.55 3,027.75

TOTAL 21,973.98 20,642.55



As at 31/03/2007

Rs. in lacs


SCHEDULE “C”

SECURED LOANS

Banks Term loans 17,426.80 7,688.24

Working Capital Loans 871.32 286.26

Other Loans

Financial Institutions 1,714.29 2,857.14

Term Loans from NBFC 1,746.50 2,250.00

TOTAL 21,758.91 13,081.64

Notes :

LOANS Secured byBanks Working Capital facilities are secured by a first charge by way of hypothecation and/or pledge of current assets, namely,

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

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

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

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

As at 31/03/2007

Rs. in lacs


SCHEDULE “D”

UNSECURED LOANS

Short Term Loans – Banks 1,442.87 —

OTHERS

Deferred Sales Tax Credit 5.65 6.15

TOTAL 1,448.52 6.15

Due within one year Rs. 1,443.60 lacs (Previous Year Rs. 0.61 lacs)


LIMITED

Sche

dule

sFO

RMING PART

OF TH

E BA

LANCE SH

EET

SCHED

ULE “E”

FIXED ASSETS

Rs in Lacs

GRO

SS BLO

CK

DEPRECIATION

NET BLO

CK

Description of

Assets

At cost or

Revalued

Book Value

as at

01-04-2006

Additions

and other

transfers

Sales and

other

deduc-

tions

At c

ost o

r Re

valu

ed

Book

Val

ue

as a

t 31

-03-

2007

Depreciation

For T

he

Year

Dep

reci

atio

n A

s at

31

-03-

2007

As

at

31-0

3-20

07

As at

31-03-2006

Land

449.25

16.03

9.10

456

.19

——

456

.19

449.25

Buildings

7,798.94

1,314.72

3,907.62

5,2

06.0

4 97.90

1,8

38.1

6 3

,367

.88

4,057.98

Plant and M

achinery

50,104.62

3,384.01

646.34

52,

842.

29

2,343.50

25,

778.

43

27,

063.

86

26,357.28

Furniture & Fittings

789.24

67.06

219.89

636

.40

42.99

492

.69

143

.71

123.14

Railw

ay Sidings

0.59

— 0.59

——

——

—

Vehicles

835.87

300.27

82.90

1,0

53.2

5 81.11

382

.49

670

.76

478.43

TOTA

L 59,978.53

5,082.09

4,866.46

60,

194.

17

2,565.49

28,

491.

76

31,

702.

40

31,466.09

Previous Year

52,200.44

9,313.50

1,535.42

59,978.53

2,352.45

28,512.44

31,466.09

25,328.36

Notes

1.

See Note “B-2” of Schedule “N

”.

2.

Buildings in

clude Rs. 5

23.06 lacs being cost o

f ownership flats and office accom

modation in Co-operative Societies and a Limited Com

pany against which th

e Com

pany holds shares of the face value of R

s. 0.77 lacs in Co-operative Societies and the Limited Com

pany.

3.

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

4.

Assignm

ent d

eeds in

respect o

f 9.13 acres of Land at Caustic Soda Division, transferred by Central G

overnm

ent to the State Governm

ent, are yet to be executed

by the State Governm

ent in favour of the Com

pany.

5.

Land, B

uilding and Plant and M

achinery located at Sahupuram

Works (other than PVC Division) were revalued on 31.03.1993.

6.

The Com

pany exercised the option to purchase 793.39 acres of land leased by the State Governm

ent at Sahupuram

works. A

ssignm

ent deeds in respect of the sa

id

land are yet to be executed by the State Governm

ent in favour of the Com

pany.

7.

Fixed Assets includes assets taken over from

erstwhile Pantape M

agnetics Limited at revalued figure as per an independent valuer’s report.



SCHEDULE “F” As at 31/03/2007 As at 31/03/2006

INVESTMENTS (At Cost)

Face Value per

Share/ Bond Rs.

No. Of Shares/Bonds

Amount Rs. in Lacs

Face Value

per Share/Unit/

Bond Rs.

No. Of Shares/ Bonds

Amount Rs. in Lacs

I. LONG TERM : In Govt & Trust Securities Unquoted 7 years National Savings Certificates 1000 10 0.10 1,000 10 0.10 In other Companies-Non-Trade (Unquoted) 25 10 *250 25 10 *250 The Dhrangadhra Peoples Co-op Bank Ltd In Govt & Trust Securities (Quoted) Unit Trust of India - 6.75 % Tax Free Bonds 100 19,358 19.36 100 19358 19.36 Less : Diminution of value in Bonds 19,358 0.10 — — —

19.26 19.36

In other Companies - Non-Trade (Quoted) Fully paid Equity Shares Global Trust Bank Ltd 10 19,000 1.90 10 19000 1.90 LIC Housing Finance Ltd 10 17,400 10.44 10 17400 10.44

12.34 12.34

Less : Diminutions of value in shares of Global Trust Bank 19,000 1.90 19,000 1.90

10.44 10.44

II. CURRENT INVESTMENTS : Fully paid Equity Shares Tata Consultancy Services Ltd., 1 6 0.03 1 3 0.03 Reliance Petroleum Ltd., 10 28,040 16.82 — — —

16.85 0.03

MUTUAL FUNDS Principal Mutual Fund - Liquid Cash

Management Fund — — 10

9,999,400.775 1,000.01 Tata Mutual Fund - Liquid Fund SHIP Daily

Dividend — — 1,000 7,179,095 80.01

— 1,080.02

TOTAL 46.65 1109.95

* Figures Denote Amount in Rupees

31/03/2007 Rs. in Lacs

31/03/2006 Rs. in Lacs

Aggregate Value of long term quoted investments 23.96 32.99

Aggregate Value of current quoted investments 20.12 0.06

TOTAL 44.08 33.05

Aggregate Value of unquoted investments 0.10 0.10

Market Value of quoted investments 63.33 52.75


LIMITED

FORMING PART OF THE BALANCE SHEET

Face Value Rupees

No. of Units/Shares

SCHEDULE “F” (Contd.)Investments Purchased and Redeemed/Sold during the year:I. MUTUAL FUND UNITS: SBI Mutual Fund - Magnum Institutional Income Fund 10 66,904,973.75 Prudential ICICI Mutual Fund - Super Institutional Liquid Plan 10 10,882,717.79 Principal Mutual Fund - Liquid Cash Management Fund 10 300,608,011.45 Tata Mutual Fund - Liquid Fund SHIP Daily Dividend 1,000 144,994.65

II. SHARES: Reliance Petroleum Ltd., 10 28,040 Associated Cement Company Ltd., 10 6,375 Bharat Electronics Ltd., 10 8,399 Bharti Airtel Ltd., 10 7,000 Bongaigaon Refinery & Petrochemicals Ltd., 10 20,250 Colgate Palmolive (India) Ltd., 10 4,725 Essar Oil Ltd., 10 1,550,590 Gujarat Narmada Valley Fertilizers Co. Ltd., 10 2,950 Hindalco Industries Ltd., 1 3,190 Hindustan Lever Ltd, 1 10,000 ICICI Bank Ltd., 10 47,689 IVRCL Infrastructure & Projects Ltd., 2 7,000 I-Flex Solutions Ltd., 5 3,148 India Cement Ltd., 10 21,750 Indusind Bank Ltd., 10 11,550 Infosys Technologies Ltd., 5 20,214 Mangalore Refinery & Petrochemicals Ltd., 10 40,050 Maruti Udyog Ltd., 5 51,138 Nagarjuna Fertilizers & Chemicals Ltd., 10 616,000 Oil & Natural Gas Corporation Ltd., 10 10,044 Ranbaxy Laboratories Ltd., 5 10,000 Reliance Capital Ltd., 10 7,180 Reliance Industries Ltd., 10 242,556 Steel Authority Of India Ltd., 10 89 Tata Motors Ltd., 10 825 State Bank of India 10 105,410 Tata Steel Ltd., 10 20,250 Videsh Sanchar Nigam Ltd., 10 9,521 Vijaya Bank 10 3,450

As at 31/03/2007

Rs. in lacs


SCHEDULE “G”

INVENTORIES(As Certified by the Management)(Refer Note A-6 of Schedule ‘N’)Stores,Spare Parts,Fuel 1,944.21 2,760.54 Packing Materials (at or below cost) 24.76 18.81 Mercury on hand & in process 228.65 210.85

STOCK-IN-TRADERaw materials on hand & in transit 2,896.36 3,239.82 Finished Goods 1,787.03 5,661.41 Stock in process 58.09 100.15 Packing Drums & Scrap 35.77 31.22 Coke dust,Gypsum 54.16 52.43 Shares (Refer Statement below) 8.25 8.25 TOTAL 7,037.28 12,083.48

Schedules


LIMITED


Investments in shares (Stock in trade) As at 31/03/2007 As at 31/03/2006

Particulars

Face Value per Share Rs.

No of Shares

Amount Rs. in

lacs

No of Shares

Amount Rs. in lacs

Quoted

Reliance Industries Ltd 10 553 0.42 553 0.42

Reliance Capital Ltd., 10 — — 553 —

Reliance Communication Ltd., 5 553 — 553 —

Reliance Energy Ltd., 10 41 — 553 —

Reliance Natural Resources Ltd., 5 553 — 553 —

Reliance Capital Ltd., 10 27 — — —

Grasim Industries Ltd 10 700 2.01 700 2.01

Ranbaxy Laboratories Ltd 5 5,426 5.60 5,426 5.60

Reliance Industrial Infrastructure Ltd., 10 1,900 0.19 1,900 0.19

Indian Telephone Industries Ltd., 10 3,400 — — —

IPCL 10 43 0.03 43 0.03

TOTAL 8.25 8.25

SCHEDULE “H”

As at 31/03/2007

Rs. in lacs


Sundry Debtors (Unsecured unless otherwise stated)

(a) Over 6 Months

Considered good (Secured) 30.00 30.00

Considered good 1,611.61 99.64

Considered doubtful 276.47 276.47

(b) Other Debts (considered good) 4,706.54 4,966.67

6,624.62 5,372.78

Less: Provision for doubtful debts 276.47 276.47

TOTAL 6,348.15 5,096.31

Schedules


LIMITED


As at31/03/2007

Rs. in lacs

As at31/03/2006Rs. in lacs

SCHEDULE “I”

CASH AND BANK BALANCES 1. Cash on hand 2.69 1.802. Cheques, Stamps, Hundi papers on hand 0.05 0.053. Balance with Scheduled Banks a. in Current Account * 1,341.73 444.59 b. in Fixed Deposits (Pledged with Bank as Margin Money) 44.45 510.434. Post office Savings Deposit (Pass Book Pledged with Central Excise Department) 0.01 0.015. Balance with Dhrangadhra People’s Co-op Bank Ltd. (Maximum amount outstanding Rs. 0.85 lacs) 0.02 0.85 TOTAL 1,388.95 957.73

* Including Debit Balance of Rs. 1,200.25 lacs in cash credit Account with State Bank of India

SCHEDULE “J”LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD) Advances recoverable in cash or kind or for value to be received (Including advance for capital items) 5,221.25 4,065.99 Staff loans 42.49 51.97Interest accrued on Inter Corporate Deposits 0.44 0.44 DCW Pigments Ltd. 0.31 0.00 Electricity and other Deposits 135.58 149.43 Balance with Customs, Central Excise etc. 3,147.64 659.22 Claims against Insurance, Railways, Custom etc. 101.34 381.15 MAT Credit Entitlement 317.25 272.35 TOTAL 8,966.30 5,580.55

SCHEDULE “K”LIABILITIESAcceptances against Letters of Credit 7,632.58 10,962.93Sundry Creditors (Includes Liabilities for capital * 6,818.99 1,813.82items Rs. 4215.81 Lacs)

Advances from customers and consignees 1,445.77 1,186.28Trade and Other Deposits 344.04 611.95Unclaimed Debentures Monies # — 35.53Unclaimed Dividend # 18.91 12.24Unclaimed Public Deposit Monies # 0.43 0.43Other Liabilities 613.65 782.52Interest accrued but not due on Loans 122.89 51.83 TOTAL 16,997.26 15,457.53

* Includes outstanding dues of small scale industrial undertakings of Rs. 18.57 lacs (Previous year Rs. 14.81 lacs)

# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

Schedules


LIMITED


As at31/03/2007

Rs. in lacs

As at31/03/2006Rs. in lacs

SCHEDULE “L”

PROVISIONS

Tax on Dividend 87.97 72.60

Provision for Tax (net off Advance Tax and Tax Deducted at Source) 345.00 58.35

Interim Dividend – Equity 517.63 517.63

Provision for fringe benefit tax 9.00 21.00

Provision for Retirement & Other Emp. Benefits 583.61 517.33

TOTAL 1,543.21 1186.91

SCHEDULE “M”

A. CONTINGENT LIABILITIES NOT PROVIDED FOR :

1. Disputed Sales Tax Demands 987.94 615.75

2. Disputed Entry Tax Demands — 592.64

3. Disputed Excise Demands 331.55 291.91

4. Disputed Customs Demands 95.79 58.14

5. Disputed Income tax Demand (TDS Appeal pending before ITAT, Demand adjusted against refund due to the company) — 0.12

6. Company’s contribution to ESI not made pursuant to petitions for exemption pending before High Court 82.40 79.08

7. Lease Rent, Local Cess, Interest on Lime Stone, Surcharge, Stamp Duty, Octroi & Water and Electricity charges 1,609.13 1,396.10

8. Disputed Industrial relations matters 251.68 285.98

B. Claims not acknowledged as debts : — 18.13

TOTAL 3,358.49 3,337.85

C. GUARANTEE AS A MEMBER OF THE ALKALI MFRS.

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

Schedules


SchedulesFORMING PART OF THE BALANCE SHEET

LIMITED

SCHEDULE - “N”

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007.

A. SIGNIFICANT ACCOUNTING POLICIES

1. SYSTEM OF ACCOUNTING

(A) The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis.

(B) Financial statements are prepared on historical cost basis and as a going concern, adjusted for revaluation/dimunition in value of certain fixed assets.

2. USE OF ESTIMATES

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Differences between actual results and estimates are recognized in the period in which they materialize.

3. FIXED ASSETS AND DEPRECIATION

(A) Fixed Assets

Fixed Assets are stated at their original cost net of Cenvat Credit where applicable (including expenses related to acquisition and installation) except certain Fixed Assets which are adjusted for revaluation.

(B) Depreciation and Amortisation

Depreciation is charged in the Accounts on straight line method as under:

(a) On assets revalued at Sahupuram Unit on 31-3-93 @ 3% on the revalued cost based on revision in useful life estimated by the valuer (Refer Note B2).

(b) On fixed assets added pursuant to the amalgamation of Pantape Magnetics Limited with the Company, at rates specified in Schedule XIV to the Companies Act, 1956 on the revalued cost.

(c) On balance fixed assets of the company at rates specified in Schedule XIV to the Companies Act, 1956 on the original cost.

(d) On fixed assets added/disposed of during the year, on pro-rata basis with reference to the month of addition/disposal.

(e) On Technical Know-how fees at 33.33%.

4. EXPENDITURE DURING CONSTRUCTION AND ON NEW PROJECTS

In the case of new projects and in the case of modernisation/expansion of existing units, interest on borrowings for the same and all pre-operative expenditure, incurred during implementation upto the date of installation are included under Capital Work in Progress and capitalised by adding pro-rata to the cost of the assets.

5. INVESTMENTS

The Company’s investments comprise long term and current investments. Long Term investments are stated at cost less permanent dimunition, if any, in value. Current investments are stated at lower of cost or market value.

6. INVENTORIES

Inventories are valued at lower of cost and net realisable value except stores, spares, mercury on hand and stock in process which are valued at cost, packing materials which are valued at or below cost and scrap which is valued at net realisable value. Cost is computed on weighted average basis and includes cost of conversion and other costs incurred in bringing the inventories to their present location and condition.



LIMITED

7. ACCOUNTING FOR CENVAT AND SERVICE TAX CREDITS

Cenvat credit available on Raw Materials, Fuel and Packing materials, stores, spares and Capital goods and Service tax credit on services availed are accounted for by reducing purchase cost of the related material or the expenses respectively and Cenvat Credit available on fixed assets is accounted by reducing the same from the cost of respective fixed assets.

8. FOREIGN CURRENCY TRANSACTIONS

(a) Transactions in Foreign Currency are recorded at the exchange rates prevailing on the date of Transactions.

(b) Monetary items denominated in foreign currencies (such as cash receivables, payables, etc.) outstanding at the year end, are translated at exchange rate applicable as of that date.

(c) Non-monetary items denominated in foreign currency (such as investments, fixed assets, etc.) are valued at the exchange rate prevailing on the date of transaction.

(d) Any gains or losses arising due to exchange differences at the time of translation of settlement are accounted in the Profit & Loss Account, except those relating to acquisition of fixed assets.

(e) Exchange difference arising on liabilities incurred on repayment of borrowings in foreign currency for acquisition of fixed assets are accounted in the following manner:

(i) In respect of fixed assets acquired from a country outside India, exchange differences are adjusted in the carrying cost.

(ii) In respect of fixed assets acquired in India:

Ò Exchange difference on transactions in foreign currency entered prior to 1st April, 2004 are adjusted in carrying cost.

Ò Exchange difference on transactions in foreign currency entered on or after 1st April, 2004, are recognised in the Profit and Loss Account.

(f) Foreign currency Current Assets/Liabilities covered by forward contracts are translated at forward cover rates at the close of the year. The resultant gain or loss on translation difference is recognised in the Profit and Loss Account.

(g) Premium/discounts on forward exchange contracts are amortised over the life of the contract and recognised in the Profit and Loss account.

9. RESEARCH & DEVELOPMENT EXPENDITURE

Revenue Expenditure on Research & Development is charged against the Profit of the year in which it is incurred. Capital expenditure on Research & Development is shown as an addition to fixed assets.

10. BORROWING COSTS

Borrowing costs attributable to acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

11. RETIREMENT BENEFITS

(a) Contributions to Provident and Superannuation Funds are made to recognised funds and are charged to Profit & Loss Account.

(b) The company has created an Employees’ Group Gratuity Fund which has taken a Group Gratuity Assurance Scheme with the Life Insurance Corporation of India. Premium charged by the Life Insurance Corporation of India, based on actuarial valuation is debited to the Profit and Loss account.

(c) Liabilities towards Leave Encashment Benefit is provided for based on actuarial valuation done at the year end.

(d) Contribution to Employee Pension Scheme 1995 are accounted on accrual basis with corresponding remittance made to Government Provident Fund authority.



LIMITED

12. PROVISIONS & CONTINGENCIES

(a) A provision arising out of a present obligation is recognized when it is probable that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

(b) Wherever there is a possible obligation that may, but probably will not require an outflow of resources, the same is disclosed by way of contingent liability.

(c) Show Cause Notices are not considered as Contingent Liabilities unless converted into demand.

13. TAXES ON INCOME

Income tax expenses comprises current tax and deferred tax charge or credit. Deferred tax assets/liabilities are measured by applying tax rate and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax asset arising on account of unabsorbed depreciation under tax laws is recognised only to the extent there is virtual certainty of its realisation supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of Deferred Tax Asset is reviewed based on developments to reassess realisation.

14. IMPAIRMENT OF ASSET

The carrying amount of assets are reviewed at each balance sheet date for indication of any impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount. Any such impairment loss is recognized by charging it to the profit and loss account. A previously recognized impairment loss is reversed where it no longer exists and the asset is restated to that effect.

B. NOTES ON ACCOUNTS

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

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

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

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

5. The break up of Deferred Tax Assets/Liabilities are as under:(Rs. in lacs)

Nature of timing difference Deferred Tax Liability/(Asset)

as at 1st April, 2006

(Debit/Credit) for the year

Deferred Tax Liability/(Assets)

as at 31st March, 2007

(a) DEFERRED TAX LIABILITIES Depreciation 6,274.69 345.85 6,620.54

SUB-TOTAL 6,274.69 345.85 6,620.54

(b) Deferred Tax assets Provision for dimunition in value of

Business Centre Immovable Property 420.75 (420.75) — Provision for Doubtful debts 10.30 (10.30) — Expenses allowed on payment basis 269.59 39.78 309.37 Long-term capital loss to be set-off 5.95 (5.95) —

SUB-TOTAL 706.59 (397.22) 309.37

5568.10 743.07 6311.17



LIMITED

6. RELATED PARTY INFORMATION

(i) RELATIONSHIPS:

(a) WHERE CONTROL EXISTS

Double Dot Finance Ltd.

Crescent Finstock Ltd.

Sahu Brothers (Saurashtra) Pvt. Ltd.

Dhrangadhra Trading Company Pvt. Ltd.

Kishco Ltd.

Kalpataru Botanical Garden Pvt. Ltd.

Crescent Holdings Pvt. Ltd.

DCW Pigments Ltd.

(b) KEY MANAGEMENT PERSONNEL

Dr. S. C. Jain Chairman & Managing Director

Shri P. K. Jain Managing Director

Shri Bakul Jain Managing Director

Smt. Vandana Jain Executive Director

Shri Vivek Jain Sr. President

Shri Mudit Jain President

Shri Ashish Jain President

Smt. Paulomi Jain Vice President

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

(ii) DISCLOSURE OF TRANSACTIONS BETWEEN THE GROUP AND RELATED PARTIES AND THE STATUS OF OUTSTANDING BALANCES AS ON 31ST MARCH, 2007

(Rs. in lacs)

Particulars Enterprises where control exists

Key Management Personnel

Commission paid — —

Remuneration paid — 338.84

Purchases 0.96 —

Balances as on 31st March, 2007 27.06 —



LIMITED

7. SEGMENT INFORMATION FOR THE YEAR 2006-07

(Rs. In lacs)

CAUSTIC PVC SODA ASH OTHERS TOTAL

SEGMENT REVENUE

External Revenue 20,130.58 32,614.13 13,440.90 1,594.88 67,780.48 18,504.14 29,640.40 12,312.63 975.53 61,432.70

Inter Segment Revenue — — — — — — — — — —

Total Revenue 20,130.58 32,614.13 13,440.90 1,594.88 67,780.48 18,504.14 29,640.40 12,312.63 975.53 61,432.70

RESULT

SEGMENT RESULT 571.55 437.46 1,289.32 1,280.93 3,579.26 1,009.63 324.85 1,923.56 342.40 3,600.44

Add: Unallocated Corporate Income (Net of Expenses) — — — — 98.35

— — — — 61.07

Less: Finance Charges

541.72 432.05

Current Tax 375.92 (84.86)

Deffered Tax 743.07 587.43

NET PROFIT 2,016.90 2,726.89

OTHER INFORMATION

Segment Assets 41,943.28 9,808.73 14,869.26 6,309.45 72,930.72 24,196.12 12,501.28 12,843.07 7,625.75 57,166.23

Add: Unallocated Corporate Assets — — — — 553.20

— — — — 2,140.03

Total 41,943.28 9,808.73 14,869.26 6,309.45 73,483.92 24,196.12 12,501.28 12,843.07 7,625.75 59,306.26

Segment Liabilities 24,912.98 11,292.96 5,499.47 5,394.06 47,099.47 1,292.08 13,069.01 1,037.85 553.04 15,951.98

Add: Unallocated Corporate Liabilities — — — — 757.73

— — — — 18,670.60

Total 24,912.98 11,292.96 5,499.47 5,394.06 47,857.20 1,292.08 13,069.01 1,037.85 553.04 34,622.58

Capital Expenditure 19,976.64 8,868.89

Depreciation 1,365.15 309.08 482.14 376.53 2,532.89 1,296.30 262.96 455.74 290.55 2,305.55



LIMITED

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

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

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

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

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

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

(Rs. in lacs)

Particulars Amount

Profit before tax as per Profit & Loss Account 3,135.88

Add: Wealth Tax paid 3.55

Managerial remuneration 282.73

Directors’ sitting fees 1.05

Less: Interest capitalized 313.13

Net profit U/S 349 3,110.08

10% thereof i.e. (3110.08 X 10/110) 282.73

Less: Managerial remuneration paid 148.47

Commission payable 134.31

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

15. (a) Sundry Creditors (Schedule K) include Rs. 17.94 lacs due to small scale and ancillary undertakings outstanding for more than 30 days. This amount has been determined to the extent such parties have been identified from available information. This has been relied upon by the auditors.

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

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

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



LIMITED

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

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

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

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

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

2006-07 Rs. lacs

2005-06 Rs. lacs

Profit after Tax 2,016.88 2,726.92

No. of Equity shares of Rs. 2 each as on 31.3.2007 Basic & Diluted 17,25,44,590 17,25,44,590

EPS (Rs.) Basic & Diluted 1.17 1.58

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

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

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








SchedulesFORMING PART OF THE PROFIT AND LOSS ACCOUNT

LIMITED

For the year ended 31/03/2007

Rs. in lacs


SCHEDULE “1”SALES (less Rebates and Trade Discount but including excise duty)

Direct Sale * 39,776.10 42,279.35

Consignment Sales 28,211.79 21,396.99

Export Sales 7,074.98 6,768.26

Other Sales * 246.97 227.58

Sale of Services [TDS Rs. Nil (Previous Year Rs. 69.75 lacs)] 17.95 351.97

TOTAL 75,327.79 71,024.15

* Includes Sale of Traded Goods Rs. Nil (Previous Year Rs. 69.75 lacs)

SCHEDULE “2”

OTHER INCOME

Profit/Loss on Sale of Investments — 16.82

Profit on Sale of Fixed Assets 962.29 888.16

Unclaimed balance written back 5.95 1.32

Dividend received on current Investments 95.40 59.16

Dividend received on Long Term Investments 2.96 1.91

Bad Debts Recovered — 10.42

Miscellaneous Income 532.13 768.97

TOTAL 1,598.73 1,746.76



LIMITED


Rs. in lacs


SCHEDULE “3”MANUFACTURING AND OTHER EXPENSES

1. Consumption of Materials : Raw Materials

Stock in hand and in process as at opening 3,239.82 3,150.35

Add: Purchases 32,833.91 37,194.72

Less: Closing stock in hand & in process (including taxes duties etc.) 2,896.36 3,239.82

TOTAL 33,177.37 37,105.25

2. (a) INCREASE/DECREASE IN STOCK

Closing Stock:

Manufactured Products 1,787.03 5,661.41

Stock in process 58.09 100.15

Packing Drums and Scrap 35.77 31.22

Coke Dust & Gypsum 54.16 52.43

Stock of Traded Shares 8.25 8.25

1,943.30 5,853.46

Opening Stock:

Manufactured Products 5,690.39 2,788.55

Stock in process 71.17 56.77

Packing Drums and Scrap 31.22 24.25

Coke Dust & Gypsum 52.43 14.55

Stock of Traded Goods — 5.34

Stock of Traded Shares 8.25 8.06

5,853.46 2,897.52

Opening Stock – Closing Stock 3,910.16 (2,955.94)

(b) Purchases for resale (Net of stock of traded goods capitalised/written off)

32.73 (5.34)

TOTAL 3,942.89 (2,961.28)

3. SALARIES, WAGES & BENEFITS TO EMPLOYEES

Salaries & Wages 2,967.12 2,824.16

Contribution to Provident and other Funds 445.37 523.61

Employees’ Welfare 336.64 311.78

TOTAL 3,749.13 3,659.55

4. Power and Fuel 12,221.66 10,440.03



LIMITED


Rs. in lacs


SCHEDULE “3” (Contd.)

5. OPERATION AND MAINTENANCE Repairs and Maintenance – Buildings 301.68 357.75 Repairs and Maintenance – Plant & Machinery 1,847.55 2,304.25 Repairs and Maintenance – Other Assets 133.06 138.36 Packing Charges 1,471.11 1,365.73 Other Operation & Maintenance Expenses 1,137.17 1,116.76

TOTAL 4,890.57 5,282.85

6. ASSETS SOLD OR WRITTEN OFF Fixed Assets discarded, obsolete, written off 117.00 427.84 Less : Drawn from Revaluation Reserve (48.77) (11.61)

68.23 416.23 Loss on Sale of Fixed Assets (Unserviceble etc. written off)

70.24 94.20

TOTAL 138.47 510.43

7. ADMINISTRATION EXPENSES Rent 18.16 15.09 Rates, Taxes and licence fees 217.60 415.48 Insurance 231.70 232.11 Wealth tax paid 3.55 3.73 Donation 2.84 3.77 Other expenses 724.99 653.57 TOTAL 1,198.84 1,323.75

8. SELLING AND DISTRIBUTIONFreight, Transportation, Loading and Other 1,443.04 1,055.16 Charges (Net)Commission to wholesalers/others 474.90 459.54 Cash discount 65.40 94.16 Octroi – Consignment Sale 1.90 2.78 TOTAL 1,985.24 1,611.64

9. (a) PAYMENT TO AUDITORS (i) Audit Fees 5.00 5.33 (ii) Tax Audit 1.25 1.33 (iii) Representation in Tax matters — 3.00 (iv) Retainer fees 3.60 3.60 (v) Other Services 1.70 1.64 (vi) Reimbursement of Expenses 3.89 2.62 TOTAL 15.44 17.52



LIMITED


Rs. in lacs


SCHEDULE “3” (Contd.)(b) Details of Directors’ Remuneration under Section 198 (i) Managing Director’s and Whole time Directors’ Remuneration : Salary 96.00 96.00 Perquisites on House 9.60 9.60 Company’s Contribution to PF 9.59 11.52 Medical Expenses 7.53 20.99 Company’s Contribution to Superannuation 12.00 14.40 Commission 134.31 68.46 MD’s Leave Encashment 13.69 — (ii) Directors Sitting Fees 1.05 1.65

283.77 222.62Less : Amount capitalised 33.38 —

250.39 222.62 TOTAL 61,570.00 57,212.36

SCHEDULE “4”INTEREST AND FINANCE CHARGES

Fixed loans 307.35 442.57 Others 398.15 263.92

705.50 706.49

Less : Interest from banks & others (TDS Rs. Nil) (Previous Year Rs. 80.65 lacs) 34.92 355.65

Gain on Foreign Exchange 128.86 (81.21)TOTAL 541.72 432.05

SCHEDULE “5”DEPRECIATION

Depreciation on Fixed Assets for the year 2,565.49 2,352.45 2,565.49 2,352.45

Less : Drawn from Revaluation Reserve 32.61 46.89 TOTAL 2,532.88 2,305.56








LIMITED

SCHEDULE “6”

(a) Quantitative information with regard to each class of goods manufactured/traded (as certified by Chairman & Managing Director)

PARTICULARS CAPACITY - MT OPENING STOCK PRODUCTION SELF CONSUMP-

TION

CLOSING STOCK SALES

Licensed Installed Quantity MT

Value Rs. in lacs

Quantity MT

Quantity MT

Quantity MT

Value Rs. in lacs

Quantity MT

Value Rs. in lacs

Dharangadhra Unit

Soda Ash 96,000 96,000 1,437 124.54 80,816 10,136 414 38.70 71,703 7,859.37 (96,000) (96,000) (753) (62.72) (87,340) (9,679) (1,437) (124.54) (76,977) (7,825.84)

Soda Bicarbonate 12,000 12,000 1,533 147.42 18,299 — 212 22.20 19,620 2,212.93 (12,000) (12,000) (1,973) (184.20) (18,810) (—) (1,533) (147.42) (19,250) (1,998.68)

Amonium Bicarbonate 5,000 — 13 1.04 1,599 — — 0.04 1,612 149.46 (5,000) (—) (34) (2.50) (2,721) (—) (13) (1.04) (2,742) (216.61)

Detergent – Green — — — — 4,482 — — — 4,482 590.87 (—) (—) (—) (—) (7,391) (—) (—) (—) (7,391) (915.42)

Detergent – Active — — — — 31,431 — 247 28.98 31,184 4,804.51 (—) (—) (—) (—) (24,160) (—) (—) (—) (24,160) (3,473.78)

Sahupuram Unit

Caustic Soda Lye 66,000 66,000 1,346 147.75 56,210 22,664 1,064 133.64 33,828 5,047.55 (60,000) (60,000) (425) (41.34) (60,100) (20,609) (1,346) (147.75) (38,570) (6,275.15)

Caustic Soda Solid — — 5 0.70 89 — 5 0.68 89 21.09 (—) (—) (8) (1.37) (187) (—) (5) (0.70) (190) (41.37)

Caustic Soda Flakes — — 390 55.23 21,612 91 647 102.98 21,264 4,435.06 (—) (—) (—) (—) (19,848) (201) (390) (55) (19,257) (3,572.77)

Sodium Hypochlorine — — — — 2,199 2 — — 2,197 56.59 (—) (—) (—) (—) (2,343) (4) (—) (—) (2,339) (56.61)

Hydrochloric Acid 100% 48,000 48,000 14 0.61 38,257 35,916 17 0.69 2,338 116.63 (39,600) (33,000) (16) (0.94) (35,655) (32,553) (14) (0.61) (3,104) (203.06)

Liquid Chlorine 36,000 36,000 116 8 12,470 6,003 41 2.28 6,542 409.41 (40,000) (40,000) (118) (8) (18,400) (6,598) (116) (7.54) (11,804) (814.55)

Trichloroethylene 7,200 7,200 373 169 3,920 1 266 127.34 4,026 2,101.47 (5,400) (5,400) (384) (171) (4,333) (—) (373) (169.22) (4,344) (2,051.92)

Upgraded Ilmenite 48,000 48,000 1,681 383.62 35,841 — 2,764 709.60 34,758 8,968.66 No Licence Required (25,000) (1,640) (337) (33,536) (—) (1,681) (383.62) (33,495) (6,932.97)

Utox No Licence 600 66 10.78 829 4 115 21.82 776 216.76Required (600) (41) (7) (687) (4) (66) (10.78) (658) (182.45)

Ferric Chloride — 10,000 302 2.80 4,115 14 525 5.97 3,878 111.24(—) (10,000) (140) (2) (2,730) (23) (302) (2.80) (2,545) (38.80)

Yellow Iron Oxide — — 15 4.67 186 — — 0.30 201 59.83 (—) (—) (40) (10) (386) (—) (15) (4.67) (411) (118.25)

PVC Resin 90,000 90,000 10,619 4,539.55 67,140 1 1,117 534.43 76,641 37,206.24 (—) (60,000) (3,599) (1,891) (82,280) (—) (10,619) (4,539.55) (75,260) (34,879.25)

Caustic Soda Lye — — — — 170 — — — 170 —(Traded Goods) (—) (—) (—) (—) (32.73) (—) (—) (—) (32.73) (—)

Misc. Sales — — — — — — — — — — (—) (—) (—) (—) (—) (—) (—) (—) (—) (—)

TOTAL 74,367.67 (69,597.48)

Note : 1. Licensed capacity is not applicable in view of the company’s products having been delicensed as per the new liberalised licensing policy announced by the Government of India.

2. Ammonium Bicarbonate production is out of part of Soda ash plant. 3. Self consumption quantity mentioned includes quantity lost in handling, lost in transit, wash loss, samples, etc. 4. Previous year figures are given in bracket. 5. Lye sales quantity excludes 157 mt excess as per survey.




LIMITED

Rs. in lacs

SCHEDULE “6” (Contd.)Consolidated

(b) Expenditure in Foreign Currency

(i) Know-how fees 49.66 (129.41)

(ii) Consultant fees — (—)

(iii) Others 559.08 (617.53)

(c) Earnings in Foreign Exchange

(i) Export on F.O.B. basis 7,095.79 (6,736.23)

(ii) Others 12.73 (32.73)

(d) Consumption of imported/indigenous Raw Materials, Stores and Spares at Landed Cost

Raw Material Imported 23,831.22 (28,509.82)

Indigenous 10,084.88 (9,258.00)

Stores and Spare parts (Including Consumption for Capital jobs)

Imported 1,603.71 (949.32)

Indigenous 14,974.74 (5,127.59)

Mercury

Imported 1.82 (1.61)

Indigenous — (—)

(e) Value of Imports on C.I.F. basis

(i) Raw Materials 22,719.56 (26,855.37)

(ii) Fuel Oil — (—)

(iii) Mercury 14.71 (11.61)

(iv) Stores and Spare parts 224.61 (1,015.23)

(v) Capital Goods 1,059.14 (624.18)

(f) Amount remitted in Foreign Currencies on account of Dividend — (—)



LIMITED

TOTAL Quantity

(M.T)Value

Rs. in lacs

SCHEDULE “6” (Contd.)(g) Raw Materials consumed:

Salt 317,316 480.28 (310,922) (586.77)

Ilmenite Sand 71,794 2,694.22 (64,150) (2,288.23)

Calcium Carbide 2,893 726.32 (3,251) (820.36)

Vinyl Chloride Monomer 67,938 22,918.29 (83,199) (27,466.40)

Lauryl Peroxide 19 51.91 (23) (63.05)

Limestone 210,781 1,387.20 (224,946) (1,096.17)

Coke 19,910 1,283.31 (23,518) (1,689.23)

Ammonia 1,808 331.08 (1,667) (248.65)

Others — 3,286.13 (—) (2,842.91)

Consumption of own manufactured products and Intermediates — 757.35 (—) (666.05)

TOTAL 33,916.09 (37,767.82)








LIMITED

Statement Pursuant to Part IV of Scheme VI of the Companies Act, 1956Balance Sheet Abstract And Company’s General Business Profile

Balance Sheet DateRegistration No. 7 4 8

I. Registration Details

II. Capital raised during the year (Amount in Rs. Thousands)

III. Position of Mobilisation and Deployment of Fund (Amount in Rs. Thousands)

3 1 / 0 3 / 2 0 0 7State Code 0 4

Public IssueN I LBonus IssueN I L

Right IssueN I LPrivate PlacementN I L

Total Liabilities7 3 4 8 3 9 2

Total Assets7 3 4 8 3 9 2

Source of FundsPaid up Capital3 4 5 0 8 9Secured Loans2 1 7 5 8 9 0

Reserves & Surplus2 2 1 7 5 8 3Unsecured Loans1 4 4 8 5 2

Application of FundsNet Fixed Assets4 9 6 9 6 6 2Net Current Assets5 4 0 2 0 5Accumulated LossesN I L

Investments4 6 6 5Misc. ExpenditureN I LProject ExpenditureN I L

IV. Performance of Company (Amount in Rs. Thousands)Turnover7 5 3 2 7 7 8 + – Porfit/Loss Before Tax+ 3 1 3 5 8 9Earnings per Share in Rs. 1.17

Total Expenditure6 4 6 4 4 5 9 + – Profit/Loss After Tax+ 2 0 1 6 8 9Dividend Rate (%)

15

V. Generic Names of Three Principal Products/Services of the Company (as per monetary term)a) Item Code No. (ITC Code)

3 9 0 0 4 2 1 0 22 8 1 5 1 1 0 12 8 3 6 2 0 0 9

Product DescriptionPOLY VINYL CHLORIDE BY SUSPENSIONCAUSTIC SODASODA ASH

(Date / Month / Year)







dcw ltd. - annual report - 2006-2007

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