DCW Ltd. - Annual Report - 2008-2009

8/7/2019 DCW Ltd. - Annual Report - 2008-2009

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DCW Limited l Annual Report 2008-2009 1

Corporate Directory

BOARD O. DIRECTORS

Dr. Shashi Chand JainChairman and Managing Director

Shri. Pramod Kumar JainManaging Director

Shri. Bakul JainManaging Director

Smt. Vandana JainExecutive Director

Shri. . H. Tapia

Shri. Sushil Kumar Jalan

Dr. V. H. Joshi

Shri Yuvraj Saheb of Dhrangadhra

Shri R. V. Ruia

Smt. Satyawati Jain*

BANKERSPunjab National Bank

State Bank of IndiaCity Union Bank Ltd.ING Vysya Bank Ltd.

AUDITORSV. Sankar Aiyar & Co.,Chartered Accountants, Mumbai.

REGISTERED O..ICEDhrangadhra 363 315, Gujarat.

HEAD O..ICENirmaI 3 rd loor,Nariman Point,Mumbai 400 021.

BRANCH O..ICEIndra Palace, 1 st loor,H-Block, Connaught Circus,New Delhi 110 001.

WORKSSoda Ash Division : Dhrangadhra 363315,

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.

* Resigned w.e.f. 8 th July, 2009

Note: The Balance Sheet, Profit and Loss Account and Key inancial Data are also presented in US $ on PageNumbers 15, 16 & 17 respectively.

70th Annual Report 2008 - 2009


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2 DCW Limited l Annual Report 2008-2009

TO THE MEMBERSYour Directors present their 70 thAnnual Report and Audited Accountsfor the inancial Year ended 31 stMarch, 2009:

1 .inancial Results:31-3-2009 31-3-2008

(Rs in lacs)(Rs. in lacs)

Gross Sales 1,01,192 73 86,358.96

Gross Profit 6,125 11 8,095.85Less:Provisions

Depreciation 4,123 28 3,002.85

Profit Before Tax 2,001 83 5,093.00

Tax: Current 225 00 575.00ringe

Benefit Tax 52 22 60.00MAT Credit (225 00) (155.00)available for set off

52 22 480.00

Profit After 1,949 61 4,613.00Current Tax &Tax AdjustmentsDeferred Tax 525 00 1,033.73

Profit after Tax 1,424 61 3,579.27Add:Balance 3,331 33 2,440.53

brought forward

Profit available 4,755 94 6,019.80for Appropriation

Appropriations:General Reserves 2,000 00 2,000.00Dividend

inal / Proposed 588 46 588.46Dividend 100 01 100.01Distribution Tax

Balance carried 2,067 47 3,331.33

forward

2 Dividend:Your Directors recommendpayment of Dividend of Rs. 0.30per equity share of Rs. 2/- each.

3 Operations:Sales during the year wereRs. 1011.93 crores as comparedto Rs. 863.59 crores recorded inthe previous year, registering an

Directors Report increase of 17%. The GrossProfit for the year(beforedepreciation) is Rs. 61.25 croresagainst Rs. 80.96 crores inprevious year. The profit beforetax amounted to Rs. 20.02crores as against Rs. 50.93crores in the previous year. Afterproviding Rs. 2.25 crores forcurrent taxes and Rs. 0.52crores, towards ringe benefittaxes, the profit before deferredtax is Rs. 19.50 crores, asagainst Rs. 46.13 crores. Theprofit after provision of deferredtax is Rs. 14.25 crores againstprevious years Rs. 35.79 crores.Deferred Tax is only a provisionas per accounting guidelines andis not an outflow. The profits of the Company got affected duringthe financial year mainly due toglobal slow down during thethird quarter of the financialyear where in the prices of allthe commodities witnessed a

fall. Depreciation in rupee alsoaffected the working of theCompany. The Company sperformance of late hasimproved as prices of Companysproducts have gone up andrupee has more or less stabilised.

4 Exports:The Company s exports areRs. 102.12 crores as comparedto Rs. 91.17 crores in theprevious year. This 12% increasein exports was mainly onaccount of better price realizationon Beneficated Ilmenite exportscoupled with exports of CausticSoda during the year.

5 Divisionwise Performance:a) PVC Division:

The turnover of the divisionwas Rs. 490.15 crores ascompared to Rs. 455.14crores, registering anincrease of 8 %. Thisincrease in sales was due toincrease in quantity andbetter realisation on PVC.The Company sold 90656MT of PVC resin comparedto 84142 MT in theprevious year. All majoruser segments are recordinggood demand and PVCindustry continues to showpositive growth. TheGovernment has identifiedirrigation, power andinfrastructure, as thrust areasand increased activity inthese sectors are likely toboost demand of PVC Resin.

b) Caustic Soda Division: The turnover of the divisionwas Rs. 305.80 crores as

compared to Rs. 233.02crores in the previous year,registering an increase of 31% in the sales. Thisincrease in turnover wasmainly due to increasedsales in quantitative termscoupled with better pricerealisation on Caustic Sodaduring the year. TheCompany sold 84778 MT of Caustic Soda during the

SALES(Rs. in Crores)

1011.93

863.59

754.20703.59

735.91

0

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200

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600

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800

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2005 2006 2007 2008 2009

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year as compared to 60778MT in the previous year.

c) Soda Ash Division: The turnover of the divisionwas Rs. 209.38 crores ascompared to Rs. 168.16crores in the previous yearregistering a growth of 24%.The increase in turnover ismainly due to betterrealization on Soda Ash andSoda Bicarbonate. TheCompany sold 65426 MT of Soda Ash, 17542 MT of Soda Bicarbonate and39222 MT of Detergentduring the year ascompared to 68021 MT of Soda Ash, 15546 MT of Soda Bicarbonate and40924 MT of Detergent, inthe previous year.

6 Projects implemented and underimplementation:

6.1 Thermal Power Plant The Thermal Co-generationPower Plant for generating50MW of power and 85TPH steam at Sahupuramunit in Tamilnadu, has beensuccessfully completedduring the year. Oncommissioning of theseplant the cost of generatingpower and steam has comedown. This will help inreducing the cost of energy

thus improving the bottomline.

6.2 Solway Towers at Dhran- gadhra Unit Solway towers installed atthe Soda Ash Unit are stillto be commissioned. Anassignment has been givento Akzo Noble, Netherlands,to do detailed engineeringfor increasing Soda Ash

production and to utilise thetowers to the efficiency of these towers. After carryingout the necessary capex andmodifications, towers willbe commissioned forcommercial production.

6.3 Calcium Chloride Plant The Calcium Chlorideproject at Company s SodaAsh unit has been assessedby Akzo Noble, Netherlandsand they have suggestedmodifications / improvementsin the unit to make itcommercially operational.The Company will take upthe modifications andimprovements required inthis unit as per AkzoNobles suggestions and thesame will be operational bynext year.

7 Corporate Governance:

The report on CorporateGovernance is annexed to thisreport.

8 Conservation of Energy, Techno-logy Absorption and .oreignExchange Earnings and Outgo:Information pursuant to Section

217 (1) (e) of the CompaniesAct, 1956, read with theCompanies (Disclosure of Particulars in the Report of theBoard of Directors) Rules, 1988is set out in the Annexureforming part of this Report.

9 Particulars of Employees:Information in accordance withSection 217 (2A) of theCompanies Act, 1956 read withthe Companies (Particulars of Employees) Rules, 1975 is setout in the Annexure forming partof this Report.

10 Environm ent and SafetyMeasures:The Company is committed toIndustrial Safety andEnvironment Protection andthese are on going processes atthe Company s various plants.The Sahupuram Unit has beengranted ISO 14001 Certificate

for complying with environmentprotection and safety.

11 Directors:Smt. Vandana Jain, Shri . H.Tapia and Shri. Yuvraj Saheb of Dhrangadhra, Directors, retireby rotation at the forthcomingAnnual General Meeting andbeing eligible, offer themselvesfor reappointment.

12 Auditors and Auditors Report:M/s V. Sankar Aiyar & Co.,Chartered Accountants, StatutoryAuditors of the Company, retireat the forthcoming AnnualGeneral Meeting and are eligiblefor reappointment. Regarding thequalifications in the Auditors Report on interest capitalisation,the notes to the accountsreferred to in the Auditors Report are self explanatory anddo not call for any further

61.25

80.96

56.6955.35

44.42

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

2005 2006 2007 2008 2009

YEAR

GROSS PRO.IT(Rs. in Crores)


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clarifications. As regardsaccounting of Insurance claim,in the opinion of theManagement, the claim hasaccrued and hence accounted.

13 Cost Audit:In accordance with the directionsreceived from the Ministry of Corporate Affairs, the Cost Auditof the Companys Soda Ash andCaustic Soda Divisions are beingconducted for the inancial Year

2008-2009 by Cost Auditors,M/s. N.D. Birla & Company andM/s. R. Nanabhoy & Companyrespectively. Their appointmentswere approved by the Ministryof Corporate Affairs. The CostAudit of these Divisions isconducted every year and theReports are submitted by theCost Auditors to the CentralGovernment.

14 Management Discussion andAnalysis Report:Outlook: The Company has a diversifiedoperation with three businesssegments viz. PVC, ChloroAlkali and Soda Ash. It is thusreasonably protected from thevagaries of business cycles of these products.

PVC Division: The Company, one of the sixproducers of the PVC resin, hasmaintained its market share of nearly 10%. With introductionof Value Added Tax (VAT) inTamilnadu and Pondicherry, theCompanys competitiveness andprofitability has improved. Alsowith the commissioning of Thermal Co-Generation Powerplant at Companys Sahupuramunit, the cost of power andsteam used for manufacturingPVC has come downstrengthening the bottomline.

Caustic Soda Division: The Company continues to be amajor player in the South Indiawith a market share of approximately 15%. Thedemand for caustic soda isexpected to grow at a steadyrate of 4% to 5% over the next3 years, especially withincreased demand fromaluminium manufacturers.However, due to internationaldowntrend in caustic sodademand there is pressure onrealization. or chlorine & HCLsituation is rather difficult due tovery poor off-take, although thesale prices is down theCompany is able to dispose of its HCL & Chlorine to maintainCaustic Production at fullcapacity. The conversion fromMercury Cell to Membrane Celltechnology has not only resultedin substantial capacity additionbut also has brought down theconsumption of power whichwill improve the bottomline.

Soda Ash Division: The Soda Ash Industry continuesto grow at a compounded rateof 4% to 5% per annum andthis trend is expected tocontinue due to strong demand

from end-user industries withbetter sales realization. Plans arebeing made to marginallyincrease Soda Ash production byutilizing the Solway Towers andinstallation of other equipmentslike Co2 Compressor to beimported.

Sale of Surplus Power: The Company s Thermal Co-Generation Power plant hasgone on stream. This power

plant has been established tomeet Company s present andfuture energy requirements,keeping in view the growthstrategy of the Company. ThisThermal Co-Generation Powerplant at present has additionalun-utilised capacity which hasbeen built keeping in viewfuture energy requirements of the Company. Looking to thepower shortfall in the country,your Company sees a bigopportunity in selling surplus

power available from thisThermal Co-Generation PowerPlant after meeting Company srequirement. The Company hasstarted selling power to TamilNadu Electricity Board (TNEB) atmarket related rates. TheCompany is also exploring thepossibility of selling surpluspower to the consumers in TamilNadu. Looking to the powershortfall in the country, theCompany will be able to sell itsexcess power in coming yearsand this will help in improvingthe bottom line. Presently, theCompany is selling power onlyto TNEB through a contractentered with Power TradingCorporation.

Proposed Projects: a. Stable Bleaching Powder

Plant: It is proposed to install a 20TPD Stable Bleaching

306.44299.08

241.84227.72

206.39

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300.00

350.00

2005 2006 2007 2008 2009

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Powder Plant at CompanysSahupuram Unit. This plantwill help in manufacturingvalue added product fromChlorine. Due to slacknessin demand and very lowprice of chlorine this willimprove the chlorinerealization. Discussions arebeing made with reputedconsultants for design anddetailed engineering.

b. Chlorinated Peraffin Wax Plant: It is also proposed to installa 100 TPD ChlorinatedParaffin Wax project formanufacturing value addedproduct from Chlorinegenerated in Company sCaustic Soda Plant. Herealso not only surpluschlorine will be used butwill off set the poor realiza-tion on the same. This infactwill add value to the surpluschlorine available.It is expected that boththese plants will go onstream in next 18-22 months.

Internal Control Systems:The Company has an adequateinternal control procedurecommensurate with the natureof its business and size of itsoperations. Internal Audit isconducted on a regular basis byan independent firm of

Chartered Accountants.However, the Board of Directorsare re-examining the scope of Internal Audit looking into thesize of operations of theCompany.The reports of the internal auditalong with comments from themanagement are placed forreview before Audit Committee.The Audit Committee alsoscrutinizes all the programmes

and the adequacy of the internalcontrols.

Human Resources: The Company has beenfollowing a standard procedurefor recruitment of best personnelfor all the departments and ismaking constant and continuousefforts to retain and groom themto meet its present and futurerequirements. The currentstrength is 2283 employees. The

Company sponsors employeesfor various seminars on finance,operations, marketing andhuman resource development toupdate their skills and developclose co-ordination with theircounterparts in industries. This isbasically done to enhance theirskills in order to achieve anoptimum output from them.

Cautionary Note: Statement in this reportdescribing the Company sobjectives, projections,estimates, expectations andpredictions may be forwardlooking statements . Actualresults could differ materiallyfrom those expressed or implieddue to variation in prices of rawmaterials, cyclical demand andpricing in the Company sprincipal markets, changes inGovernment regulations, taxregimes, economicdevelopments within India andother incidental factors.

15 Directors Respons ibilityStatement:In terms of Section 217(2AA) of the Companies Act, 1956 yourDirectors have:(a) followed in the preparation

of the Annual Accounts, theapplicable accountingstandards with properexplanation relating tomaterial departures;

b) selected such accountingpolicies and applied themconsistently and madejudgements and estimatesthat are reasonable andprudent so as to give a trueand fair view of the state of affairs of your Company atthe end of financial yearand of the profit of yourCompany for that period;

c) taken proper and sufficientcare for the maintenance of adequate accounting recordsin accordance with theprovisions of the CompaniesAct, 1956 for safeguardingthe assets of your Companyand for preventing anddetecting fraud and otherirregularities; and

d) prepared the AnnualAccounts on a goingconcern basis.

16 Insurance:

All the properties of theCompany are adequately insured.

17 Industrial Relations:The relations between theemployees and the managementwere cordial and an atmosphereof understanding prevailedthroughout the year.

18 Acknowledgement:The Board places on recordtheir grateful appreciation for the

assistance and co-operationreceived from the inancialInstitutions and the Banks.

On behalf of theBoard of Directors

Dr Shashi Chand JainChairman and

Managing Director

Mumbai, 18 th May, 2009.


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Annexure to Directors Report Report on Corporate Governance

(Pursuant to Clause 49 of the Listing Agreement)

A MANDATORY REQUIREMENTS1 Companys 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 theday to day functioning. The Company will endeavor to improve on these aspects on an ongoing basis.

2 Board of Directors:l Size of the Board

The Board of Directors of the Company consists of 10 Directors.l Composition, category and their attendance at the Board meetings during the year and at the last Annual

General Meeting and also the number of other Directorships/Memberships of Committees are as follows:

Category of Name of the Director Attendance Other Other CommitteeDirectorship Particulars at the Directorships

Board Last Member- Chairman-Meetings AGM ships ships

Promoter/Executive Dr. Shashi Chand Jain 4 No 4 1 Directors (Chairman & Managing Director)

Shri Pramod Kumar Jain 4 Yes 1 (Managing Director)

Shri Bakul Jain 4 No 2 (Managing Director)

Smt. Vandana Jain 4 No (Executive Director)

Promoter/Non- Smt. Satyawati Jain* 3 No Executive Director

Non Executive and Shri Yuvaraj Saheb of Independent Directors Dhrangadhra 4 No

Shri. . H. Tapia 3 No Dr. V.H. Joshi 4 Yes Shri Sushil K. Jalan 4 No 5 Shri R. V. Ruia 4 No 4

* Holds 1,04,000 Equity Shares of Rs. 2 each of the Company.

l No of Board Meetings held during the year along with the dates of the meeting:During the year four Board Meetings were held on:16.05.2008, 30.07.2008, 27.10.2008 and 28.01.2009The Company placed before the Board the Annual Budget, Performance of various units and otherinformation from time to time as specified in Annexure of the Listing Agreement.


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3 Audit Committee:l Terms of Reference:

The terms of reference of this Committeecover the matters as specified for AuditCommittees under Clause 49 of the ListingAgreement as well as per the provisions of Section 292 A of the Companies Act, 1956.

l 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. ShriYuvaraj Saheb of Dhrangadhra and Shri . H.Tapia are the other members of theCommittee.

l Meetings and Attendance during the year: The Committee met 4 times during the yearand the attendance of the Members at thesemeetings was as follows:

Date of Dr V H Shri . H Shri YuvarajMeetings Joshi Tapia Saheb of Dhrangadhra

16.05.2008 Yes No Yes30.07.2008 Yes Yes Yes27.10.2008 Yes Yes Yes28.01.2009 Yes Yes Yes

4 Remuneration Committee:l Terms of Reference:

The terms of reference of this Committeecover the matters as specified forRemuneration Committee under Clause 49of the Listing Agreement.

l Composition, Name of Members and Chairperson: The Remuneration Committee comprises 3Non-Executive Independent Directors. Shri .H. Tapia is the Chairman of this Committee.Dr. V.H. Joshi and Shri Yuvaraj Saheb of Dhrangadhra are the other members of theCommittee.

l Attendance during the year: There were no Remuneration Committeemeetings during the year

l Remuneration Policy:

The Remuneration of Managing Directorsand Whole-Time Director is approved by theRemuneration Committee and also by theBoard (subject to the subsequent approvalby the Shareholders at the general bodymeeting and such other authorities as thecase may be). The remuneration is fixedconsidering various factors such asqualification, experience, expertise andprevailing remuneration in the corporateworld, financial position of the Companyetc. The remuneration Structure comprisesSalary, Perquisites, Commission andContribution to Provident und, Super-Annuation und and other funds in

accordance with the provisions of theCompanies Act, 1956. The Non-ExecutiveDirectors do not draw any remunerationfrom the Company besides the sitting fees foreach meeting of the Board, Audit andRemuneration Committees attended by them.

l Details of the remuneration paid to the Directors for the inancial year 2008-2009 is given below:

Directors Salary Benefits Contribution to Commission Sitting TotalProvident .und .ees**& Other funds

(Rs ) (Rs ) (Rs ) (Rs ) (Rs ) (Rs )Dr. Shashi Chand Jain 24,00,000 8,99,760 7,20,960 7,07,500 47,28,220Shri Pramod Kumar Jain 24,00,000 9,00,000 7,20,960 7,07,500 47,28,460Shri Bakul Jain 24,00,000 8,99,157 7,20,960 7,07,500 47,27,617Smt. Vandana Jain 24,00,000 8,99,149 72,960 7,07,500 40,79,609Smt. Satyawati Jain* 17,500 17,500Shri . H. Tapia 30,000 30,000Dr. V. H. Joshi 37,500 37,500Shri Yuvaraj Saheb of Dhrangadhra 37,500 37,500Shri Sushil K. Jalan 25,000 25,000Shri R. V. Ruia 25,000 25,000

* Holds 1,04,000 Equity Shares of Rs. 2 each of the Company.** Sitting ee also includes payment for Board level committee meetings.


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Dr. Shashi Chand Jain, Shri Pramod KumarJain and Shri Bakul Jain and Smt. VandanaJain are each entitled for commission @ 25%of the difference between 10% of the netprofits as computed under Section 349 of the Companies Act, 1956, in a financial yearand the aggregate of the salary andperquisites and benefits paid to all theManaging Directors and Executive Directorin that year subject to the overall ceilingsstipulated in Sections 198 and 309 of theCompanies Act, 1956.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 byeither party by giving a six month notice.No severance fee is payable on terminationof appointment.Non-Executive Directors are not paid/entitledfor any remuneration other than sitting fees.Presently the Company does not have anyScheme for grant of any stock option eitherto the Directors or to the employees.

5 Shareholders /Investors Grievance Committee:Smt. Satyawati Jain, Non-executive Director is theChairperson of the Shareholders /Investors Grievance Committee.Mrs. Chital V. Shah, Assistant Company Secretary,is the Compliance Officer of the Company.There were 77 complaints received from theshareholders during the year.All the Complaints were resolved satisfactorily.There were no pending complaints as on31.03.2009

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

General Meetings held: Year Location Date Time No of Special

ResolutionsPassed2005-06 Dhrangadhra, 06.07.2006 10.00 a.m. 1

Gujarat

2006-07 Dhrangadhra, 23.07.2007 10.00 a.m. 2Gujarat

2007-08 Dhrangadhra, 30.06.2008 10.00 a.m. 1Gujarat

ii. No Special Resolution has been passed lastyear through postal ballot

iii. No Special Resolution is proposed to beconducted through postal ballot.

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

of material nature with the Promoters,Directors, Key Managerial Personnel or theirrelatives etc. that may have potential conflictwith the interest of the Company at large.

2. During the last three years, there were nostrictures or penalties imposed by either SEBIor the Stock Exchanges or any otherstatutory 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 SeniorManagement of the Company. The Code of Conduct is posted on the website of theCompany.In accordance with the Securities andExchange Board of India (Prohibition of Insider Trading) Regulations, 1992 asamended, the Board of Directors of theCompany formulated DCW Code of Conductfor the prevention of Insider Trading in theshares of the Company by its Directors anddesignated employees. The DCW Code,inter-alia, prohibits purchase/sale of shares of the Company by the Directors anddesignated employees, while in possession of unpublished price sensitive information inrelation to the Company. A system has beenput in place and Directors/DesignatedEmployees have been advised to take pre-clearance before purchase/sale of theCompanys shares.Whistle Blower mechanism is in existenceand no personnel has been denied access tothe Audit Committee.

4. Compliance with Mandatory Requirements: The Company has complied with themandatory requirements of the Code of Corporate Governance as stipulated underClause 49 of the Listing Agreement with theStock Exchanges.

Compliance with Non-Mandatory Requirements: 1) The Board:

The Company has an ExecutiveChairman and hence the requirementpertaining to reimbursement of expensesto a Non-Executive Chairman does notarise.


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2) Remuneration Committee:Please refer Item No. 4 under theheading Mandatory Requirements.

3) Shareholders Rights:As the Companys Quarterly results arepublished in English Newspapers havingcirculation all over India and in aGujarati Newspaper circulated inGujarat, the same are not sent to eachhousehold of shareholders.

4) Audit qualification:The Company move towards a regimeof unqualified financial statements.

5) Training of Board Members:The Board of Directors consists of professionals with expertise in theirrespective fields and industry. Theyendeavor to keep themselves updatedwith changes in economy andlegislation.

6) Mechanism for evaluating non-executiveBoard Members:The performance evaluation of non-executive Directors is done by the

Board of Directors, excluding theDirector being evaluated.

7) Whistle Blower Policy:The Company has in existence a systemfor the employees to report to theManagement about unethical behaviour,actual or suspected fraud or violation of the Companys Code of Conduct.

DECLARATION O. COMPLIANCE WITH THECODE O. CONDUCT/ETHICS:All the Directors and Senior Managementpersonnel have affirmed compliance with theCode of Conduct/Ethics as approved and adoptedby the Board of Directors.

8 Means of Communication:l The Quarterly results are published in

inancial Express / Economic Times including the Gujarat edition published fromAhmedabad. These are not sent individuallyto the shareholders.

l The above results are also displayed on theCompanys web-site viz. www.dcwltd.com

l There were no presentations made to theinstitutional investors or to the analysts.

9 General Shareholders information:ANNUAL GENERAL MEETING:l Day & Date Thursday, 27th August,

2009.l Time 10.00 A.M.l Venue at the Registered Office

(at Guest House No. 2),Dhrangadhra,Gujarat 363 315.

.inancial calendar : April 2008 March 2009Date of Book closure : 18th August, 2009 to

27th August, 2009.(both days inclusive).

Dividend Payment Date : 1st September, 2009.

Listing on Stock Exchanges: The Company s shares are listed with thefollowing Stock Exchanges:

l The Mumbai Stock Phiroze JeejeebhoyExchange (BSE) Towers, Dalal Street,

Mumbai 400 023l National Stock Exchange Plaza Bldg.,

Exchange of India 5th floor, Plot No. C-1,Limited (NSE) G Block, Bandra-Kurla

Complex,Near Wockhardt,Mumbai 400 051

Annual Listing fees as prescribed has been paidto the above Stock Exchanges for the year 2009-2010.GDRs of the Company are listed with theLuxembourg Stock Exchange

Stock Code : 500117 (BSE)DCW (NSE)

Demat ISIN No :INE 500A01011( ully Paid)

Share Transfers :Bigshare Services Pvt. Ltd.,and other Commu- (Unit DCW Ltd.),nications may be E/2, Ansa Industrial Estate,Addressed to Sakivihar Road, Saki Naka,

Andheri (East),Mumbai 400 072.

Investors complaints : Asst. Company Secretarymay be Addressed to DCW Limited

Nirmal, 3rd loor,Nariman Point,Mumbai 400 021


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Market price data:High/Low During each month in last .inancialyear:

Month/Year NSE BSEHigh Low High Low(Rs ) (Rs ) (Rs ) (Rs )

April, 2008 22.00 17.85 22.00 17.80May, 2008 24.25 18.95 24.30 1 9.60June, 2008 20.90 14.40 21.00 14.10July, 2008 18.35 13.30 1 8.25 13.31August, 2008 19.20 15.20 19.25 15.05

September, 2008 16.40 11.60 16.45 11.35October, 2008 13.20 6.50 13.25 6.25November, 2008 9.45 6.70 9.50 6.67December, 2008 10.40 6.70 10.44 6.06January, 2009 11.90 7.20 12.01 7.31

ebruary, 2009 9.95 7.05 9.60 7.50March, 2009 9.00 6.75 8.95 6.80

Stock Performance (Indexed):The performance of the Companys shares relativeto BSE Sensex is given in the chart below:

Share transfers are registered and returnednormally within 20 days from the date of lodge-ment, if documents are complete in all respects.Our Registrar & Transfer Agent M/s. BigshareServices Private Limited recently launched Gen-Next Investor Module i Boss the most advancedtool to interact with shareholders. Please logininto i Boss (www.bigshareonline.com) and helpthem to serve you better.

Shareholding Pattern as on 31 03 2009: Category of Shareholders No of Percentage

Shares of Share-held holding

(A) SHAREHOLDING O. PROMOTERAND PROMOTER GROUP1 INDIAN

(a) Individuals/Hindu Undividedamilies 2,80,79,593 14.32

(b) Central Government/StateGovernment(s)

(c) Bodies Corporate 4,76,59,504 24.30(d) inancial Institutions/Banks (e) Any Others (Specify) Sub Total (A)(1) 7,57,39,097 38 62

2 .OREIGN(a) Individuals (Non-Residents

Individuals/ oreign Individuals)(b) Bodies Corporate (c) Institutions (d) Any Others (Specify) Sub Total (A)(2) Total Shareholding of Promoter and PromoterGroup (A)= (A)(1)+(A)(2) 7,57,39,097 38 62

(B) PUBLIC SHAREHOLDING:1 INSTITUTIONS

(a) Mutual unds/UTI 27,955 0.01

(b) inancial Inst itut ions/Banks 48,475 0.02(c) Central Government/State

Government(s)(d) Venture Capital unds (e) Insurance Companies 91,53,158 4.67(f) oreign Institutional Investors 2,39,32,600 12.20(g) oreign Venture Capital

Investors(h) Any Other (specify)

(h-i) oreign Banks 42,225 0.02

Sub-Total (B)(1) 3,32,04,413 16 92

Registrar and Share Transfer Agents:The Company has appointed Bigshare ServicesPvt. Ltd., E/2, Ansa Industrial Estate, SakiviharRoad, Saki Naka, Andheri (East), Mumbai 400072 as Registrars and Share Transfer Agents of theCompany.The Company s shares are traded in the StockExchanges compulsorily under demat mode. Allthe applications received for transfer of physicalshares are approved by the Share TransferCommittee, which normally meets twice in amonth depending on the volume of transfers.


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2 NON-INSTITUTIONS:(a) Bodies Corporate 1,11,89,410 5.70(b) Individuals 6,45,82,055 32.92(c) Any Other (specify)

(c-i) Clearing Member 2,90,898 0.15(c-ii) NRIs 20,66,552 1.05(c-iii) OCBs 57,84,065 2.95(c-iv) Trust 49,350 0.03

Sub-Total (B)(2) 8,39,62,330 42.80

(B) Total Public Shareholding(B)= (B)(1)+(B)(2) 11,71,66,743 59 72

TOTAL (A)+(B) 19,29,05,840 98 34

(C) Shares held by Custodians andagainst which DepositoryReceipts have been issued 32,48,750 1 66

GRAND TOTAL (A)+(B)+(C) 19,61,54,590 100 00

Dematerialisation of shares: 19,01,10,240 Equityshares held by 68,760 Shareholders comprising96.92 % of the paid up Share Capital have beendematerialised as on 31st March, 2009.

Outstanding GDRs/ADRs/Warrants/convertible

instruments etc :Outstanding GDRs as on 31st March, 2009represent 32,48,750 shares (1.66%). There are nofurther outstanding instruments, which areconvertible into equity in the future.

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

Address for correspondence:DCW Limited,Nirmal, 3 rd loor,Nariman Point,Mumbai 400 021

Certificate on Clause 49 Compliance

The Board of DirectorsDCW LIMITED

I have reviewed the records concerning the Company scompliance of conditions of Corporate Governance asstipulated in Clause 49 of the Listing Agreement enteredinto, by the Company, with the Stock Exchanges of India,for the financial year ended 31 st March, 2009.

The compliance of conditions of Corporate Governance isthe responsibility of the management. My examination waslimited to procedures and implementation thereof, adoptedby the Company for ensuring the compliance of theconditions of the Corporate Governance. It is neither anaudit nor an expression of opinion on the financialstatements of the Company.

I have conducted my review on the basis of the relevantrecords and documents maintained by the Company and

furnished to me for the review and the information andexplanations given to me by the Company.

Based on such a review, in my opinion, the Company hascomplied with the conditions of Corporate Governance, asstipulated in Clause 49 of the said Listing Agreements.

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

Ms Kumkum R ShahPlace : Mumbai Company Secretary Date : 18 th May, 2009 CP No. - 7455

Category of Shareholders No of PercentageShares of Share-

held holding

PHYSICAL 3.08%

DEMAT 96.92%

3.08%

96.92%


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Annexure to the Directors Report

STATEMENT CONTAINING PARTICULARS PURSUANT TO THE COMPANIES (DISCLOSURE O. PARTICULARS IN THE REPORTO. BOARD O. DIRECTORS) RULES, 1988 AND .ORMING PART O. THE DIRECTORS REPORTA CONSERVATION O. ENERGY:

1 Installation of supermisers:Supermizers, the electronic device to reduce energy consumption in three phase induction motors, are being usedcontinuously in all plants to save energy. So far, 174 supermizers have been installed resulting in saving of 24.78 lacs unitsduring the year.

2 Installation of energy efficient lighting:E+ tube lights are energy efficient with longer life and high lumens. Each tube consumes 28 watts, compared toconventional tube lights, which consumes 53 watts. DCW continues the conversion programme in phased manner toreplace inefficient tube lights. Also, inefficient mercury and sodium vapour lamps were replaced by highly efficient metalhalide lamps. Annual energy saving to a tune of 3 lacs units is achieved.

3 .an less cooling towers:6 Nos of cooling towers have been in service and annual energy savings to a tune of 12.84 lacs units is achieved.

4 Cost Improvement Programmes:In-house cost improvements are conducted periodically where mostly energy saving proposals are given by all departmentsfor implementation. During the year under report, 2 programmes were conducted and 20 suggestions resulting in annualsavings to the tune of Rs. 15 Lacs have been implemented.

B TECHNOLOGY ABSORPTION:1 Research and Development:

1.1 BENE ICIATED ILMENITE: 1.1.1 Process optimization to reduce cycle time and conserve energy.

It is proposed to introduce PLC system for digester operation. Initially to carry out trials in one digester,necessary detailed engineering being carried out by a reputed consulted who has expertise in Synthetic Rutilemanufacture. Later, after optimizing the operation, similar system will be extended to all digesters.

1.1.2 Quality improvement UTOX.Trials in various types of equipments like jet mills, classifiers etc. being carried out to overcome qualityproblems (inconsistency of fineness) of UTOX.

1.2 PVC 1.2.1 Based on successful trials using indigenous catalyst to speed up reaction, action initiated for necessary

reengineering work to enhance production capacity.1.2.2 Also efforts are being made to reduce non reaction cycle time by introducing hot water charging system.1.2.3 Suitable augmentation of drier capacity being planned to meet the above increased production levels and the

production levels are expected to touch 1 lac MT per annum.

2 Expenditure on Research & Development:

(i) Capital Rs 33 97 lacs(ii) Recurring Rs 2 86 lacs

Rs 36 83 lacs

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

Technology Absorption, Adaptation and Innovation: Continuos efforts are made towards technology absorption, adaptation and innovation. The emphasis is onimproving the quality of the finished product and reducing energy consumption.

C .OREIGN EXCHANGE EARNINGS AND OUTGO:Particulars regarding foreign exchange earnings and outgo appear in Schedule 6 forming part of the Profit and Loss Account.


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REQUISITE DATA IN RESPECT O. ENERGY CONSUMPTION:

(A) Power and .uel Consumption:

Particulars Caustic Soda Unit PVC Unit Soda Ash Unit

Current Previous Current Previous Current PreviousYear Year Year Year Year Year

2008-2009 2007-2008 2008-2009 2007-2008 2008-2009 2007-2008

1 ELECTRICITY:a) Purchased:

Unit (Lakh KWH) 222 64 24.86 70 81 11.05 32 55 38.44Total Amount(Rs. in lakhs) 1,080 00 117.74 323 25 68.78 191 70 197.33

Rate/Unit (Rs.) 4 85 4.74 4 57 6.22 5 89 5.13b) Own Generation:

(i) Through Diesel GeneratorUnit (Lakh KWH) 822 41 1,968.52 145 63 199.95Unit/ltr of LSHS/Diesel Oil 4 32 4.50 1 32 1.79Cost/Unit (Rs.) 4 30 4.65 4 30 4.65

(ii) Through Steam Turbine GeneratorUnit (Lakh KWH) 1,439 69 67 03 236 91 245.19Unit/ltr of uelOil/Gas 127,455 05 5,933 78Cost/Unit (Rs.) 1 13 1 13

2 COAL (SPECI.Y QUALITY AND

WHERE USED)Quantity (MT) 133,388 83 29,842 1,585Total cost(Rs. In Lakhs) 6,256 63 1621 45 71.78Average rate (Rs.) 4,690 52 5,433 4,529

3 .URNACE OIL/LSHS/LS.O:Quantity (KL) 19,029 04 48,185.63 3,739 18 7,651.55Total Amount(Rs. in Lakhs) 4,737 10 10,280.53 641 13 923.62Average Rate (Rs). 23,117 37 17,516.37 17,146 26 12,070.97

4 OTHERS:(i) Hydrogen

Quantity (MT) 235 97Total Amount (Rs. in lakhs) 106 17Rate/Unit (Rs.) 16,068 37

(ii) LigniteQuantity (MT) 77,693 1,13,671Total Amount (Rs. in Lakhs) 1,760 12 2,026.70Rate/Unit (Rs.) 2,265 1,837

(iii) HSDQuantity (KL) 335 04 11.61 32 10 5.74Total Amount (Rs. in lakhs) 122 45 4.56 13 80 2.25Rate/Unit (Rs.) 36,547 54 39,292.03 36,547 54 39,292.03


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(B) Consumption per unit of Production:

Particular Caustic Soda Unit PVC Unit Soda Ash UnitCurrent Previous Current Previous Current Previous

Year Year Year Year Year Year2008-2009 2007-2008 2008-2009 2007-2008 2008-2009 2007-2008

1. Electricity (KWH) 2,367 2,390 242 239 245 2552. uel Oil (MT) 1 252 1.353 1 316 0.7493. Coal (MT) 0 180 0 279 0.0174. Others

(i) Hydrogen (Kgs) 0 010(ii) LSHS (MT)

(iii) Lignite (MT) 0 622 1.042(iv) HSD (Litres) 0 0001 0.0001

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

(Particulars of Employees) Rules, 1975 and forming part of the Directors ReportSr Name Designation/ Remuneration Qualification Experience Date of Age Last employment heldNo Nature of duties (Rupees) (Years) commence- (Years) Name of the Company,

ment of Designation and periodEmployment of service

Employed for whole of the year

1. Dr. Shashi Chand Jain Chairman & 4,728,220 Ph.D 53 01.04.1969 76 Sahu Brothers Pvt. Ltd.Managing Director (Economics) Director 11 years

2. Shri Pramod Kumar Jain Managing Director 4,728,460 B.A. (Hon.) 50 01.04.1969 71 Sahu Brothers Pvt. Ltd.Economics

3. Shri Bakul Jain Managing Director 4,727,617 B.Com., MBA 25 01.09.1984 54 4. Smt. Vandana Jain Executive Director 4,079,609 B.Com 3 01.08.2006 73 5. Shri Amitabh Gupta Sr.Vice President - 3,314,572 MSC. 37 15.07.1971 58

Marketing

Employed for part of the year1. Shri S. Sekar Dy. Manager (Elec) 4,04,768 B.E (Elec.) 19 01.08.1989 41 NIL2. Shri S. Selvanayagam Sr. GM (SP) 11,77,068 B.E. (Civil), 27 25.07.1988 52 Tamil Nadu Slum Clearance

M.B.A. as Asst. Engr. 2 years3. Shri M.S.Ramachandran Vice President - 17,46,527 B.Com 41 12.07.1971 61 C en tr al I nd ia M ac hi ne ry

Delhi Office Mfg. Co. Ltd. 3 years4. Ms.Nargis Khatib Supervisor- 539,514 .Y.B.A. 34 01.07.1980 58 Bombay Wire Ropes Ltd.

Administrator 6 years5. Shri G.D.Binwal Manager - 2,106,011 S.S.C. 15 02.04.1992 65

Public Relation

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

Commission, Companys contribution to Provident und, Superannuation und and Gratuity und.2. In case of other employees, the gross remuneration shown above (subject to tax) comprise salary, perquisites, Companys contribtion

to Provident und and in case of employees who were in the employment for a part of the year, the gross remuneration also includesgratuity paid.

3. The nature of employment of the Managing Directors & the Executive Director is contractual.4. Dr. Shashi Chand 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.


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Balance Sheet AS AT 31ST MARCH, 2009

As at As at 31 03 2009 31.03.2008

US$ in Millions* US$ in Millions# SOURCES O. .UNDS

Shareholders funds:Capital 7 73 9.78Reserves & surplus 54 49 67.13

Loan .unds:Secured Loans 83 81 94.10

Unsecured Loans 0 01 0.01

Deferred Tax Liability:Deferred Tax Liability 15 52 18.32Deferred Tax Asset

15 52 18.32

TOTAL 161 56 189.34

APPLICATION O. .UNDS.ixed Assets:Gross Block 198 43 209.43Less: Depreciation 62 49 69.87

135 94 139.56Capital Work-in-progress 13 12 37.81

149 06 177.37

Investments 0 06 3.19

Current Assets, Loans and Advances:Inventeries 23 36 31.09Sundry Debtors 19 17 16.61Cash and Bank balances 0 31 1.18Loans and advances 10 63 15.79

53 47 64.67Less: Current liabilities and ProvisionsLiabilities 37 85 51.97Provisions 3 18 3.92

41 03 55.89

Net Current Assets 12 44 8.78

TOTAL 161 56 189.34

* One US $ = Rs. 50.72# One US $ = Rs. 40.10


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Profit & Loss Account OR THE YEAR ENDED 31ST MARCH, 2009

.or the year ended or the year ended31 03 2009 31.03.2008

US$ in Millions* US$ in Millions#

INCOMESales (including Excise Duty) 199 51 215.36Less: Excise Duty 20 68 28.85

178 83 186.51Other income 5 97 1.03

184 80 187.54

EXPENDITUREManufacturing and other expenses 167 38 163.99Interest & inance Charges 5 34 3.36

172 72 167.35

Profit Before Depreciation 12 08 20.19Depreciation 8 13 7.49

Profit Before Tax 3 95 12.70

Provision .or TaxCurrent tax 0 44 1.43ringe Benefit Tax 0 10 0.15

MAT Credit Available for Set off (0 44) (0.38)Tax Adjustment of Previous Year

Profit after Current & Tax Adjustments 3 85 11.50

Deferred Tax 1 03 2.58

Profit After Deferred Tax 2 82 8.92Add: Surplus brought forward from last year 6 57 6.09

9 39 15.01

APPROPRIATIONTransfer to General Reserve 3 94 4.99Proposed Dividend on Equity Shares 1 16 1.47Tax on Dividend 0 20 0.24

Profit Carried forward 4 09 8.31

* One US $ = Rs. 50.72# One US $ = Rs. 40.10


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Key inancial Data

2008-2009 2007-2008

Rs In US $ in Rs. In US $ inMillions Millions* Millions Millions#

Gross Sales 10,119 27 199 51 8,635.90 215.36

.ixed Assets Gross Block 10,064 34 198 43 8,398.32 209.43Net Block 7,559 91 149 05 7,112.58 177.37

Export Earnings 1,021 20 20 13 911.68 22.74

Earning Before Depreciation and Interest 883 49 17 42 944.42 23.55

Interest 270 98 5 34 134.83 3.36

Earnings Before Depreciation 612 51 12 08 809.59 20.19

Depreciation 412 33 8 13 300.29 7.49

Earnings Before Tax 200 18 3 95 509.30 12.70

Taxation

Current 22 50 0 44 57.50 1.43

ringe Benefit Tax 5 22 0 10 6.00 0.15

MAT Credit available for set off (22 50) (0 44) (15.50) (0.39)

Tax adjustment of previous year Deferred Tax 52 50 1 04 103.37 2.58

Earnings After Tax 142 46 2 81 357.93 8.93

No. of shares of Rs.2/ each 196 15 196 15 196.15 196.15(Million Nos.)@

Earnings per Shares (Rs./US $) 0 73 0 01 1.82 0.05

Net Worth (Excl.Revaluation Reserve) 3,064 44 60 42 2,990.84 74.58

Book value per share 15 62 0 31 15.25 0.38

Gross profit to sales (%) 6 05 6 05 9.37 9.37(Earnings Before Depreciation)

Interest coverage Ratio 3 26 3 26 7.00 7.00

Debt/Equity 1 32:1 1 32:1 1.22:1 1.22:1

Current Assets/Current Liabilities 1 30 1 30 1.16 1.16

* 1 US $ = Rs. 50.72# 1 US $ = Rs. 40.10


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Auditors Report TO

THE SHAREHOLDERSDCW LIMITED

1 We have audited the attachedBalance Sheet of DCW Limited as at31st March, 2009 and also the Profitand Loss Account and Cash lowStatement of the Company for theyear ended on that date, annexedthereto. These financial statements arethe responsibility of the CompanysManagement. Our responsibility is to

express an opinion on these financialstatements based on our audit.

2 We conducted our audit inaccordance with auditing standardsgenerally accepted in India. ThoseStandards require that we plan andperform the audit to obtainreasonable assurance about whetherthe financial statements are free of material misstatement. An auditincludes examining, on a test basis,evidence supporting the amountsand disclosures in the financial

statements. An audit also includesassessing the accounting principlesused and significant estimates madeby management, as well as evaluatingthe overall financial statementpresentation. We believe that ouraudit provides a reasonable basis forour opinion.

3 As required by the Companies(Auditors Report) Order, 2003 andread together with the Companies(Auditors Report) Amendment Order,2004 (hereinafter referred to as theOrder) issued by the CentralGovernment of India in terms of sub-section (4A) of Section 227 of the

Companies Act, 1956, we enclose inthe Annexure a statement on thematters specified in paragraphs 4and 5 of the said Order.

4 urther to our comments in theAnnexure referred to in paragraph 3above, we report that:

(i) We have obtained all theinformation and explanationswhich to the best of ourknowledge and belief, werenecessary for the purposes of

our audit;(ii) In our opinion, proper books of

account as required by law,have been kept by the Companyso far as appears from ourexamination of those books;

(iii) The Companys Balance Sheet,Profit and Loss Account andCash low Statement dealt withby this Report are in agreementwith the books of account;

(iv) In our opinion, the Balance

Sheet, Profit and Loss Accountand Cash low Statement dealtwith by this report comply withthe Accounting Standardsreferred to in sub-section (3C) of Section 211 of the CompaniesAct, 1956, to the extentapplicable, except as indicated in Note B14 of Schedule N to the Accounts regarding interest capitalization of Rs. 153.15 lacs on carbonators & Note B17 of Schedule N to the Accounts regarding accounting of insurance claim of Rs. 285.75 lacs not yet approved by Insurance Authorities.

(v) On the basis of writtenrepresentations received fromthe Directors as on 31 st March,2009 and taken on record bythe Board of Directors, wereport that none of the Directorsis disqualified as on 31 st March,2009 from being appointed as aDirector in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the bestof our information andaccording to the explanationsgiven to us, the said accountssubject to our observation in para 4(iv) above which has consequential impact of Rs. 438.90 lacs on profits of the year and reserves and read withthe Significant AccountingPolicies and other notesthereon, give the informationrequired by the Companies Act,1956 in the manner so requiredand give a true and fair view in

conformity with the accountingprinciples generally accepted inIndia:

(a) In the case of the BalanceSheet, of the state of affairsof the Company as at 31 st

March, 2009,

(b) In the case of the Profitand Loss Account, of theprofit for the year endedon that date, and

(c) In the case of the Cashlow Statement of the cash

flows for the year endedon that date.

or V Sankar Aiyar & Co ,Chartered Accountants

Place : Mumbai S VenkatramanDated : 18 th May, 2009 Partner

Membership No. 34319


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i (a) The Company has maintainedproper records showingparticulars includingquantitative details andsituation of fixed assets.

(b) We are informed that the fixedassets have been physicallyverified by the Managementwith the assistance of externalagencies during the year. Inour opinion the frequency of verification is reasonable. Asper the information given tous by the management, nomaterial discrepancies ascompared to book recordswere noticed in respect of fixed assets verified during theyear.

(c) Since there is no disposal of asubstantial part of fixed assetsduring the year, thepreparation of financialstatements on a going concernbasis is not affected on thisaccount.

ii (a) The inventories of finishedgoods (except goods lyingwith consignees and intransit), stores, spare parts andraw materials (except salt atSahupuram and stocks intransit) have been physicallyverified by the managementwith the help of externalagencies. In our opinion, thefrequency of physicalverification is reasonable.

(b) In our opinion, the proceduresof physical verification of inventories (except finishedgoods lying with consigneesand in transit) followed by themanagement are reasonableand adequate in relation to

Annexure referred to in paragraph 3 of Auditors Report to the Shareholders of DCW Limited on the Accounts for the

year ended 31 st March, 2009

the size of the company andthe nature of its business.

(c) In our opinion, the companyis maintaining proper recordsof inventories and no materialdiscrepancies were noticed onphysical verification ascompared to the record of inventories.

iii Based on the audit proceduresapplied by us and according to theinformation and explanations givento us;

The company has not granted anyloans, secured or unsecured, tocompanies, firms or other partieslisted in the register maintainedunder Section 301 of theCompanies Act, 1956.

The company had during the yeartaken unsecured loans from acompany in which directors areinterested, a director and a relativeof a director aggregating to Rs.687.36 lacs. The said loans havebeen repaid during the yearalongwith interest thereon. The rateof interest and other terms andconditions of loans taken are primafacie, not prejudicial to the interestof the company.

iv In our opinion and according to the

information and explanations givento us, having regard to theexplanation that for purchase of certain raw materials, stores,components, and fixed assets,alternative sources of supply arelimited with reference to quality,delivery schedules, credit periodand some of the items purchasedare of special nature, and hencecomparable alternative quotationsare not available for these, there are

adequate internal controlprocedures commensurate with thesize of the Company and the natureof its business for the purchase of inventories and fixed assets and forthe sale of goods and services.During the course of our audit, wehave not observed any continuingfailure to correct major weaknesses

in the internal control system.

v (a) Based on the audit proceduresapplied by us, to the best of our knowledge and belief andaccording to the informationand explanations given to us,particulars of contracts orarrangements referred to inSection 301 of the CompaniesAct, 1956, have been enteredin the register required to bemaintained under that Section.

(b) Sub clause (b) of sub-para (v)of para 4 of the Order is notapplicable as there are nosuch transactions exceedingthe value of Rupees ive Lacsin respect of any party in thefinancial year.

vi In our opinion and according to theinformation and explanations givento us, the company has compliedwith the provisions of the Sections58A, 58AA and other relevantprovisions of the Companies Act,1956 and the rules framedthereunder, with regard to depositsaccepted from the public.

We are informed by theManagement that no order has beenpassed by the Company Law Boardor National Company Law Tribunalor Reserve Bank of India or anyCourt or any other Tribunal underSections 58A and 58AA of theCompanies Act, 1956.


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vii The Company has, in general, aninternal audit system commensuratewith the size and nature of theCompanys business.

viii We have broadly reviewed thebooks of account maintained by thecompany pursuant to the rulesmade by the Central Governmentfor the maintenance of cost recordsunder Section 209(1)(d) of theCompanies Act, 1956 and are of the opinion that, prima facie, the

prescribed accounts and recordshave been made and maintained.We have not, however, made adetailed examination of theserecords with a view to determine

whether they are accurate orcomplete.

ix (a) According to the records of the company, undisputedstatutory dues includingprovident fund, investoreducation and protectionfund, employees stateinsurance, income tax, salestax, wealth tax, service tax,custom duty, excise duty, cessand other material statutory

dues that are required to bedeposited regularly withauthorities, have generallybeen regularly deposited withthe appropriate authorities.

According to the informationand explanations given to us,no undisputed amounts inrespect of the aforesaidstatutory dues were in arrears,as at 31 st March, 2009, for aperiod of more than sixmonths from the date theybecame payable.

(b) According to the informationand explanations given to usand the records of thecompany, the dues of salestax / income tax / customs duty/ wealth tax / service tax / excise duty / cess, which havenot been deposited on accountof any dispute are as follows:-

(Amount in Rs. lacs)

Name of the Statute / Period .orum where Dispute is pendingNature of DuesHigh Appellate Appellate Commis- State Grand

Court Tribunal* Authority** sionerate Govern- Totalment

Customs Act, 1962 (Custom Duty 1997 to 2008 31.26 31.26Including Penalty & Interest, whereverapplicable)

Central Excise Act, 1944 (Excise Duty 1997 to 2008 50.39 178.30 67.26 295.95Including Penalty & Interest, whereverapplicable)

Sales Tax legislations (sales tax, 1982 to 2008 2.57 415.68 375.32 215.57 1,009.14including penalty & interest whereverapplicable)

Local cess, local cess surcharge [land 1989 to 2008 12.69 12.69revenue including penalty and interestwherever applicable]

Income Tax Act, 1961 2004-05 58.18 58.18GRAND TOTAL 52 96 683 42 442 58 215 57 12 69 1,407 22

* Appellate Tribunal includes STAT, CESTAT & ITAT

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


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x The company does not have anyaccumulated losses at the end of the financial year. The company hasnot incurred any cash losses duringthe financial year covered by ouraudit and the immediatelypreceding financial year.

xi On the basis of verification of records and according to theinformation and explanations givento us, the Company has notdefaulted in repayment of dues to

inancial Institutions / Banks orDebenture holders.

xii The Company has not granted anyloans 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 ora niche or a mutual benefit society.Therefore the provisions of sub para(xiii) of para 4 of the Order are notapplicable to the Company.

xiv In respect of shares, securities andother investments dealt in or tradedby the Company, proper records

have been maintained of thetransactions and contracts andtimely entries have been madetherein. All the investments are heldby the Company in its own nameexcept to the extent of theexemption granted under section 49of the Companies Act, 1956.

xv According to the information andexplanations given to us, theCompany has not given anyguarantee for any loans taken by

others from any bank or financialinstitution.

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

xvii According to the information andexplanations given to us, based onan overall examination of thebalance sheet of the Company,related information made availableto us and as represented to us bythe Management, funds raised onshort term basis, prima facie, have

not been used during the year forlong term investment.

xviii The Company has not made anypreferential allotment of sharesduring the year to parties andcompanies covered in the registermaintained under section 301 of theCompanies Act, 1956.

xix The Company has not issued anydebentures during the year andtherefore the question of creatingsecurity or charge in respect thereof does not arise.

xx The Company has not made anypublic issue of any securities duringthe year and therefore the questionof disclosing the end-use of moneyraised by any public issue does notarise.

xxi As represented to us by theManagement, there has been a theftof scrap materials amounting to Rs.400 lacs (approx) for which acriminal complaint has been filedby the company.

or V Sankar Aiyar & Co ,Chartered Accountants

Place : Mumbai S Venkatraman

Dated : 18 th May, 2009 Partner Membership No. 34319


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Balance Sheet AS AT 31ST MARCH, 2009

Schedule As at As at31 03 2009 31.03.2008

Rs in lacs Rs. in lacsSOURCES O. .UNDS

Shareholders .unds:Capital A 3,923 09 3,923.09Reserves and Surplus B 27,637 23 26,917.89

Loan .unds:Secured Loans C 42,508 11 37,735.13Unsecured Loans D 3 41 4.92

Deferred tax liability (Net)

(Refer Note B-5 of Schedule - N) 7,869 90 7,344.9050,381 42 45,084.95

TOTAL 81,941 74 75,925.93

APPLICATION O. .UNDS.ixed Assets:

Gross Block E 1,00,643 36 83,983.17Less: Depreciation 31,694 46 28,020.94

68,948 90 55,962.23Capital Work-in-progress 6,612 80 15,100.04Machinery/spares for erection and replacement 37 41 63.48

75,599 11 71,125.75

Investments 32 34 1,278.27Current Assets, Loans and Advances

Inventories G 11,847 83 12,466.74Sundry Debtors H 9,724 98 6,660.71Cash and Bank Balances I 158 08 474.64Loans and Advances J 5,390 04 6,333.70

27,120 93 25,935.79Less:Current Liabilities and Provisions

Liabilities K 19,197 56 20,840.26Provision L 1,613 08 1,573.62

20,810 64 22,413.88

Net Current Assets 6,310 29 3,521.91Contingent Liabilities not provided for MSignificant Accounting Policies and Notes forming Npart of Balance Sheet and Profit and Loss Account

TOTAL 81,941 74 75,925.93

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

or V Sankar Aiyar & Co Dr Shashi Chand Jain Dr V H JoshiChartered Accountants Chairman & Managing Director

Yuvaraj Saheb of DhrangadhraS Venkatraman Pramod Kumar JainPartner Bakul Jain R V Ruia

Managing Directors Directors

Place : Mumbai Chital V Shah Vimal JainDated : 18 th May, 2009 Asstt. Company Secretary Vice President ( inance)


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Profit and Loss Account OR THE YEAR ENDED 31ST MARCH, 2009

Schedule .or the year ended or the year ended31 03 2009 31.03.2008

Rs in lacs Rs. in lacs

INCOME:Sales 1 1,01,192 73 86,358.96Less: Excise Duty (10,489 53) (11,568.62)

Net Sales 90,703 20 74,790.34Other Income 2 3,025 44 411.85

93,728 64 75,202.19

EXPENDITURE:Manufacturing and Other expenses 3 84,893 75 65,758.00Interest & inance Charges (Net) 4 2,709 78 1,348.34

87,603 53 67,106.34Depreciation 5 4,123 28 3,002.85

91,726 81 70,109.19

Profit before tax 2,001 83 5,093.00Current Tax 225 00 575.00

ringe Benefit Tax 52 22 60.00MAT Credit Available for set off (225 00) (155.00)

Profit after Current Tax & Tax Adjustments 1,949 61 4,613.00Deferred Tax (Refer Note B-5 of Schedule N) 525 00 1,033.73

Profit after Deferred tax 1,424 61 3,579.27Add: Surplus brought forward from last year 3,331 31 2,440.53

Available for appropriation 4,755 92 6,019.80

APPROPRIATIONTransfer to General Reserve 2,000 00 2,000.00Proposed Dividend on Equity Shares 588 46 588.46Tax on Dividend 100 01 100.01

2,688 47 2,688.47

Profit Carried forward 2,067 45 3,331.33

Notes to Profit & Loss Account 6Earning per share (.ace Value Rs 2)

Basic 0 73 1.82Diluted 0 73 1.90







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CASH .LOW STATEMENT .OR THE YEAR ENDED 31ST MARCH, 2009

2008-09 2007-08Rs in Lacs Rs. in Lacs

A Cash flow from operating ActivitiesNet profit before tax and extraordinary items 2,001 83 5,092.99

Adjustments for:Non-cash items 58 27 49.83Depreciation 4,123 28 3,002.85Unrealised foreign exchange loss/(gain) (1,135 46) 155.24Interest (net) 2,709 78 1,348.34Dividend income (30 76) 5,725 11 (36.83) 4,519.43

Operating profit before working capital changes 7,726 94 9,612.42Adjustments for:Trade and other receivable (812 55) 2,542.45Inventories 618 91 (5,429.46)Current liabilities and provisions (1,328 11) (1,521 75) 3,505.18 618.17Cash generation from operations 6,205 19 10,230.59Direct taxes paid (320 05) (731.93)

Cash flow before Extraordinary items 5,885 14 9,498.66Extraordinary items Net cash flow from operating Activities 5,885 14 9,498.66

B Cash flow from Investing ActivitiesPurchase of fixed Assets (6,612 32) (25,345.90)Sale of ixed Assets 64 61 570.59Purchase/Sales of Investments 1,245 93 (1,231.63)Dividend Income 30 76 36.83Interest income 346 89 108.67Net cash used in investing Activities (4,924 13) (25,861.44)

C Cash from financing activitiesProceeds from issue of share capital 2,834.00Repayment of loans (4,238 62) (3,402.86)Repaymnet of Other borrowings (202 57) (57.83)Proceeds from Long Term Borrowings 827 17 20,469.20Proceeds from Short Term Borrowings 6,261 49 (144.48)Interest paid (3,236 57) (1,312.56)Dividend paid (588 46) (517.63)Tax on dividend (100 01) (87.97)Net cash used in financing Activities (1,277 57) 17,779.87Net increase in Cash and Cash equivalents (316 56) 1,417.09

Cash & Cash Equivalents as at 1 st April 2008 (474 64) (443.63)

Cash & Cash Equivalents as at 31st

March 2009 158 08 973.46(316 56) 1,417.09

Previous year figures have been regrouped to match with current year figures







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Schedules ORMING PART O THE BALANCE SHEET

As at As at31 03 2009 31.03.2008


SCHEDULE ASHARE CAPITAL

Authorised Capital

32,50,00,000 Equity Shares of Rs. 2/- each 6,500 00 6,500.00

(Previous Year 32,50,00,000 Equity Shares @ Rs. 2/- each)

TOTAL 6,500 00 6,500.00

Issued, subscribed and Paid-up Capital

19,61,54,590 Equity Shares of Rs 2/- each 3,923 09 3,923.09(Previous Year 19,61,54,590 shares @ Rs. 2/- each)

TOTAL 3,923 09 3,923.09

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 theCompany.

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 partlyconvertible debentures allotted in April1992.

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

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

6) 2,36,10,000 Shares were issued and allotted on preferential basis to the Promoters of the Company and IIsduring 2007-08.


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As at As at31 03 2009 31.03.2008


SCHEDULE BRESERVES AND SURPLUS

Capital Reserve:

As per last balance sheet 406 88 406.88

Capital Redemption Reserve:

As per last Balance sheet 5 30 5.30

Share Premium:

As per last balance sheet 9,440 70 7,079.70

Add: Received during the year 2,361.00

9,440 70 9,440.70

Revaluation Reserve:

As per last balance sheet 932 65 1,240.50

Less: Transferred to Profit and Loss Account 16 79 307.86

915 86 932.64

General Reserve:

As per last balance sheet 12,801 04 10,801.04

Add: Transfer from P&L account 2,000 00 2,000.00

14,801 04 12,801.04

PRO IT AND LOSS ACCOUNT 2,067 45 3,331.33

TOTAL 27,637 23 26,917.89


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As at As at31 03 2009 31.03.2008


SCHEDULE CSECURED LOANSBanks

Rupee Term loans 19,659 43 22,200.51oreign Currency Term Loan 10,143 98 8,019.98

Short Term Loan - Bank 3,694 52

Working Capital Loans 2,405 18 (161.79)

Other Loansinancial Institutions 5,855 00 6,426.43

Term Loans rom NB C 750 00 1,250.00

TOTAL 42,508 11 37,735.13

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 andspares including machinery spares not capitalized, bills receivable and book debts and furthersecured by a second charge by way of hypothcation over all of movable plant and machinery and byway 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 Lendersviz., Banks/ inancial Institutions.Term Loans and External Commercial Barrowings from Banks are secured by a pari-passu first chargeby way of hypothecation of movable fixed assets of the Company, including movable machineryspares, stores and further secured by mortgage on all the immovable properties of the Companysituated in the states of Tamilnadu and Gujarat on first pari passu charge basis.

Other loans Equipments inance Loan from a inancial Institution and term loan from NB C are secured bycreation 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 statesof Tamilnadu and Gujarat on first pari-passu charge basis.

As at As at 31 03 2009 31.03.2008


SCHEDULE DUNSECURED LOANSOthers

Deferred Sales Tax Credit 3 41 4.92

TOTAL 3 41 4.92

Due within one year Rs. 3.41 lacs (Previous Year Rs. 1.34 lacs)


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Schedules

ORMING PART O THE BALANCE SHEET

SCHEDULE "E" (Consolidated)

.IXED ASSETS

Rs in Lacs

GROSS BLOCK

DEPRECIATION

NET BLOCK

DESCRIPTION O.

At cost or

Additions

Sales and

At cost orDepreciationDepreciation

As at

As at

ASSETS

Revalued

and other

other

Revalued

or The

As at

31/3/2009

31/3/2008

Book Value

transfers

deductions

Book Value

Year31/3/2009

as at

as at

1/4/2008

31/3/2009

Land

457.83

8.42

46625

46625

457.83

Buildings

6,408.72

1,252.12

0.01

7,66085

173.16

2,12652

5,53433

4,455.41

Plant and Machinery

75,295.96

15,851.01

546.11

90,60085

3,467.17 28,52836

62,07249

50,202.20

urniture & ittings

705.89

73.63

27.69

75182

18.92

54817

20365

176.63

Vehicles

1,114.74

124.50

75.67

1,16358

64.97

49141

67217

670.14

TOTAL

83,98315

17,30967

64948

1,00,64335

3,72420

31,69446

68,94889

55,96222

Previous Year

60,194.17

28,191.80

4,402.81

83,983.16

3,026.55

28,020.94

55,962.22

31,702.40

Notes:

1.See Note B-2 of Schedule N.

2.Buildings include Rs.523.06 lacs being cost of ownership flats and office accommodation in Co-operative Societies and a Limited Company

against which the Company holds shares of the face value of Rs. 0.77 lacs in Co-operative Societies and the Limited Company.

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

yet to be executed by the State Government in favour of the Com

pany.

4.Land, Building and Plant and Machinery located at Sahupuram W

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

5.The Company exercised the option to purchase 793.39 acres of land leased by the State Government at Sahupuram works. Assignment deeds

in respect of the said land are yet to be executed by the State Government in favour of the Company.


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31st March, 2009 31st March, 2008

.ace Value No of Amount ace Value No. of Amountper Share/ Shares/ Rs in per Share/ Shares/ Rs. in

Bond Bonds Lacs Unit/Bond Units LacsRs Rs. Bonds

SCHEDULE .INVESTMENTS(AT COST)1 LONG TERM

In Subsidiary Company - Non-Trade (Unquoted)M/s. DCW Pigment Ltd. 10 4,950 4 95 10 4,950 4.95

In Govt & Trust Securities Unquoted7 years National Savings Certificates 1,000 10 0 10 1,000 10 0.10

In other Companies - Non-Trade (Unquoted)The Dhrangadhra Peoples Co-op. Bank Ltd. 25 10 *250 25 10 *250

In Govt & Trust Securities (Quoted)Unit Trust of India - 6.75% Tax ree Bonds 100 19,358 19.36Less:Deminition of value in Bonds 19,358

19.36

In other Companies - Non-Trade (Quoted)ully paid Equity Shares

Global Trust Bank Ltd. 10 1 9,000 1 90 10 19,000 1.90LIC Housing inance Ltd. 10 17,400 10 44 10 17,400 10.44

12 34 12.34

Less:Deminition of value in shares of Global 19,000 1 90 19,000 1.90Trust Bank

10 44 10.44

II CURRENT INVESTMENTS:ully paid Equity Shares

Tata Consultancy Services Ltd. 1 6 0 03 1 6 0.03Reliance Petroleum Ltd. 10 28,040 16 82 10 28,040 16.82

16 85 16.85

MUTUAL .UNDSPrincipal Mutual und - loating Rate und MP 10 1,22,29,943,473 1,226.57TOTAL 32 34 1,278.27

* igures Denote Amount in Rupees

31 03 2009 31.03.2008Rs in Lacs Rs. in Lacs

Aggregate value of long term quoted investments 39 07 48.66Aggregate value of current quoted investments 26 71 43.86

TOTAL 65 78 92.52

Aggregate value of unquoted investments 5 05 5.05Market value of quoted investments 65 79 112.16


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ace Value No. of Units

SCHEDULE . (Contd.) Investments Purchased and Redeemed / Sold during the year:1. MUTUAL UND UNITS

SBI Mutual und Premier Liquid und Instl. Plan DDR 10 3,566,499.44Principal Mutual und Cash Mgmt. und Liquid Instl. Premium DDR 10 221,713,297.92Principal Mutual und Cash Mgmt. und loating Rate und MP 10 17,330,891.19

As at As at31 03 2009 31.03.2008Rs in lacs Rs. in lacs

SCHEDULE GINVENTORIES(As Certified by the Management)(Refer Note A-7 of Schedule N)Stores, Spare Parts, uel (Including in Transit) 3,418 87 5,389.72Packing Materials (at or below cost) 54 06 48.95STOCK-IN-TRADERaw materials on hand & in transit 5,038 07 2,485.58

inished Goods 3,120 60 4,135.93Stock in process 117 62 87.79Packing Drums & Scrap 45 96 269.90Coke dust,Gypsum 44 07 40.29Shares (Refer Statement below) 8 58 8.58

TOTAL 11,847 83 12,466.74

Investments in shares (Stock in Trade) 31st March, 2009 31st March, 2008Particulars .ace Value No of Amount No. of Amount

per Share/ Shares Rs in Shares Rs. inBond Lacs Lacs

RsQuotedReliance Industries Ltd 10 561 0 44 561 0.44Reliance Communication Ltd., 5 553 553 Reliance Energy Ltd., 10 41 41 Reliance Natural Resources Ltd., 5 553 553 Reliance Capital Ltd., 10 27 27 Grasim Industries Ltd 10 700 2 01 700 2.01Ranbaxy Laboratories Ltd 5 5,426 5 60 5,426 5.60Reliance Industrial Infrastructure Ltd., 10 1,900 0 19 1,900 0.19Indian Telephone Industries Ltd., 10 3,400 0 34 3,400 0.34

TOTAL 8 58 8.58


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As at As at31 03 2009 31.03.2008


SCHEDULE KLIABILITIESAcceptances against Letters of Credit 9,741 08 13,854.27Dues of Micro & Small Enterprises 18 31 9.22Sundry Creditors other than dues of Micro & Small Enterprises 7,164 13 3,806.58(Includes Liabilities for capital items Rs. 436.69 Lacs)Advances from customers and consignees 1,006 65 1,418.06Trade and Other Deposits 477 16 425.63Unclaimed Dividend # 36 55 27.15Unclaimed Interest Public Deposit Monies # 0 04 0.04Other Liabilities 666 20 1,031.97Interest accrued but not due on Loans 87 44 267.34

TOTAL 19,197 56 20,840.26

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

SCHEDULE LPROVISIONSProposed Dividend - Equity 588 46 588.46Tax on Dividend 100 01 100.01Provision for Tax (net off Advance Tax and Tax Deducted at Source) 185 26 233.09Provision for fringe benefit tax 32 00 27.00Provision for Retirement & Other Emp. Benefits 707 35 625.06

TOTAL 1,613 08 1,573.62

SCHEDULE MA CONTINGENT LIABILITIES NOT PROVIDED .OR:

1. Disputed Sales Tax Demands 1,104 01 982.372. Disputed Excise Demands 297 25 304.97

3. Disputed Customs Demands 31 26 197.204. Disputed Income Tax Demand (A. Y. 2005-06 & 2006-07) 270 025. Companys contribution to ESI not made pursuant 86 04 85.87

to petitions for exemption pending before ESI Court6. Lease Rent, Local Cess, Interest on Lime Stone, Surcharge, 2,237 24 1,826.41

Stamp Duty, Octroi & Water and Electricity charges7. Disputed Industrial relations matters 359 78 293.12

TOTAL 4,385 60 3,689.94

B GUARANTEE AS A MEMBER O. THE ALKALI M.RS ASSN(A Company Limited by Guarantee) Rs 500 Rs, 500


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SCHEDULENSIGNI.ICANT ACCOUNTING POLICIES AND NOTES .ORMING PART O. THE BALANCE SHEET AND PRO.ITAND LOSS ACCOUNT .OR THE YEAR ENDED 31ST MARCH 2009A SIGNI.ICANT ACCOUNTING POLICIES:

1 SYSTEM O. ACCOUNTING:A. The Company follows the mercantile system of accounting and recognises income and expenditure on

accrual basis.B. The financial statements have been prepared in all material respects with accounting standards as

notified in the Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies

Act, 1956.C. inancial statements are prepared on historical cost basis and as a going concern, adjusted for

revaluation/dimunition in value of certain fixed assets.

2 USE O. ESTIMATES:The preparation of financial statements requires management to make certain estimates and assumptions thataffect the amounts reported in the financial statements and notes thereto. Differences between actual resultsand estimates are recognized in the period in which they materialize.

3 .IXED ASSETS AND DEPRECIATION:A) .ixed Assets:

ixed Assets are stated at their original cost net of Cenvat Credit where applicable (including expensesrelated to acquisition and installation) except certain ixed 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 balance fixed assets of the Company at rates specified in Schedule XIV to the Companies Act,

1956 on the original cost.c) On fixed assets added/disposed off during the year, on pro-rata basis with reference to the month of

addition/disposal.d) On Technical Know-how fees at 33.33%

4 REVENUE RECOGNITION:Revenue is recognized to the extent that it can be reliably measured and is probable that the economicbenefit will follow to the Company.

a. Sales: Revenue from sale of goods is recognized when significant risks and rewards of ownership of thegoods are transferred to the customer and is stated net of trade discounts, excise duty, sales returns andsales tax.

b. Interest: Revenue is recognized on time proportion basis taking into account the outstanding amountand the applicable rate of interest

c. Dividends: Revenue is recognized when the right to receive payment is established.

5 EXPENDITURE DURING CONSTRUCTION AND ON NEW PROJECTS:In the case of new projects and in the case of modernisation/expansion of existing units, interest onborrowings 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 theassets.


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6 INVESTMENTS:The Companys investments comprise long term and current investments. Long Term investments are stated atcost less permanent dimunition, if any, in value. Current investments are stated at lower of cost or market value.

7 INVENTORIES:Inventories are valued at lower of cost and net realisable value except stores, spares and stock in process andfuel which are valued at cost, packing materials which are valued at or below cost and scrap and by productswhich are 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.

8 ACCOUNTING .OR CENVAT AND SERVICE TAX CREDITS:

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

9 .OREIGN CURRENCY TRANSACTIONS:a) Transactions in oreign 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 or settlement are accounted

in the Profit & Loss Account, except as indicated in Note B-10 belowe) Premium/discounts on forward exchange contracts are amortised over the life of the contract and recognised

in the Profit and Loss account, exchange differences on such contracts are recognized in the profit and lossaccount in the reporting period in which the exchange rates change.

10 RESEARCH & DEVELOPMENT EXPENDITURE:Revenue Expenditure on Research & Development is charged against the Profit of the year in which it isincurred. Capital expenditure on Research & Development is shown as an addition to fixed assets.

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

12 EMPLOYEE BENE.ITS:a) Contributions to Provident and Superannuation unds are made to recognised funds and are charged to

Profit & Loss Account. The interest rate payable by recognized Provident und shall not be lower than thestatutory rate of interest declared by Central Government and shortfall, if any, shall be made good by theCompany.

b) The Company has created an Employees Group Gratuity und which has taken a Group Gratuity AssuranceScheme 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 yearend.

d) Contribution to Employee Pension Scheme 1995, are accounted on accrual basis with correspondingremittance made to Government Provident und authority.



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13 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 estimatedB. 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.

14 TAXES ON INCOME:Current tax is the amount of tax payable on the taxable income for the year as determined in accordancewith the provisions of the Income tax Act,1961. Deferred tax is recognised for all timing differences, subject

to consideration of prudence, applying the tax rates that have been substantially enacted by the BalanceSheet date.

15 IMPAIRMENT O. ASSET:The carrying amount of assets are reviewed at each balance sheet date for indication of any impairmentbased on internal/external factors. An impairment loss is recognized wherever the carrying amount of theassets exceeds its recoverable amount. Any such impairment loss is recognized by charging it to the profitand loss account. A previously recognized impairment loss is reversed where it no longer exists and theasset 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. 242.59 lacs (previous year Rs. 1,412.38 lacs)2 The depreciation charge on the assets revalued on 31-3-1993 is more by Rs. 16.79 lacs (previous year Rs.

23.70 lacs) than the depreciation charge thereon under section 205(2)(b) of the Companies Act, 1956 andthe same is met by drawing from Revaluation Reserve. The uplift on revalued assets discarded amounting toRs. Nil lacs (previous year Rs. 284.15 lacs) ha

Documents

DCW Ltd. - Annual Report - 2008-2009