1.  Secured Loans
 
 a) Term Loan from Citibank N.A and External Commercial Borrowings (ECB)
 from International Finance Corporation, DBS Bank Limited, The Hong Kong
 and Shanghai Banking Corporation Ltd and ICICI Bank Limited are secured
 by first pari passu charge on all immovable and moveable fixed assets
 of the Company. ECB from The Hong Kong and Shanghai Banking Corporation
 Ltd is further secured by way of second pari passu charge on the entire
 current assets of the Company, both present and future.
 
 b) Term Loans from The Hong Kong and Shanghai Banking Corporation Ltd
 and External Commercial Borrowing from DEG- Deutsche Investitionsund
 Entwicklungsgesellschaft MBH (DEG) are secured by way of first
 pari-passu charge on all immovable and moveable fixed assets situated
 at Mahistikry, Hooghly (West Bengal).
 
 c) Term Loan from Non-Banking Finance Company (NBFC) is secured by way
 of first pari passu charge on the entire fixed assets of the Company''s
 Coal Tar pitch unit located at Mahistikry, Hooghly, West Bengal except
 Naphthalene Project and those relatable to subsequent expansion and is
 further secured by way of first pari passu charge on the leasehold land
 of the Company situated at Mahistikry, Hooghly, West Bengal.
 
 d) During the year the Company has made private placement of Secured
 Listed Redeemable Non Convertible Debentures (NCD) to ICICI Bank
 Limited and Life Insurance Corporation of India Limited. The NCDs are
 secured by way of first pari passu charge on all immovable and moveable
 fixed assets of the Company in favour of Axis Trustee Services Limited,
 the trustee of the Debenture Holders.
 
 e) Loan against equipment from ICICI Bank Limited is secured by
 hypothecation of the Equipment financed.
 
 f) Working Capital loans obtained from State Bank of India, Central
 Bank of India, DBS Bank Limited, Axis Bank Ltd, Citibank N.A., The Hong
 Kong and Shanghai Banking Corporation Ltd, Yes Bank Limited and ICICI
 Bank are secured by way of first pari passu charge on the entire
 current assets of the Company, both present and future. Working Capital
 facilities from Deutsche Bank, The Hong Kong and Shanghai Banking
 Corporation Ltd and CitiBank N.A are secured by pledge of investments
 in Mutual Funds for Rs.17350.09 lacs.
 
 Additionally,
 
 i) Working Capital loans obtained from State Bank of India and Axis
 Bank Ltd. are secured by second pari-passu charge over the entire fixed
 assets of the Company.
 
 ii) Working Capital loans obtained from The Hong Kong and Shanghai
 Banking Corporation Ltd and DBS Bank Limited are further secured by way
 of first pari-passu charge over the entire fixed assets of the Company
 situated at Liluah Unit- I & Liluah Unit-II (West Bengal) and
 Visakhapatnam (Andhra Pradesh) and second pari-passu charge on the
 entire fixed assets of the Company located at Mahistikry, Hooghly (West
 Bengal).
 
 iii) Credit facilities from State Bank of India, Central Bank of India
 and CitiBank N.A are personally guaranteed by the promoter directors of
 the Company.
 
 The Company is in the process of creating / modifying charge in favour
 of some of the lenders. Further, the Company is also in the process of
 standardisation / uniformity of security structure providing first
 parri-passu charge over current assets to working capital lenders and
 first parri-passu charge on all the fixed assets to the term loan
 lenders.
 
 2.  Contingent Liabilities not provided for in respect of: 
 
                                                         (Rs. in Lacs)
 
                                                     As at       As at
 
                                                31.03.2011  31.03.2010
 
 a) Bank Guarantees                                1870.80      993.63
 
 b) Letter of Credit outstanding                   1516.08      903.06
 
 c) Interest on FCCB                                258.15      121.80
 
 d) Bills discounted with Banks                    2406.25           –
 
 e) Claims against the Company in respect of 
 statutory liabilities disputed under appeal:
 
 – Custom Duty                                       28.83       28.83
 
 – Sales Tax                                        257.91      257.91
 
 – Service Tax / Excise Duty                         77.44       64.46
 
 3.  Estimated amount of commitments on capital account (net of
 advances) - Rs. 1792.04 lacs (Previous Year Rs. 6855.69 lacs).
 
 4.  Estimated amount of export obligation to be fulfilled in respect of
 goods imported under advance license/ Export Promotion Capital Goods
 Scheme (EPCG) - Rs. 3829.03 lacs. (Previous Year Rs. 8511.25 lacs)
 
 5.  Fixed Deposits of Rs. 714.40 lacs (Previous Year Rs 808.41 lacs)
 have been lodged with the Banks as margin against Bank Guarantees
 issued on behalf of the Company and for treasury facilities.
 
 6.  Capital Work-in-Progress includes:
 
 ii.  Rs.267.50 lacs on account of advances against capital expenditure
 (Previous year Rs. 2784.76 lacs).
 
 iii. Rs.1405.88 lacs on account of stock of stores and spares (Previous
 year Rs. 545.13 lacs ).
 
 7.  Research and Development expenses aggregating to
 
 a.  Rs. 178.15 lacs (Previous year Rs. 60.25 lacs) in the nature of
 revenue expenditure;
 
 b.  Rs.738.20 lacs (Previous year Rs. 121.86 lacs) in the nature of
 capital expenditure have been included under the appropriate account
 heads.
 
 (Capital expenditure of Rs.738.20 lacs includes Rs.13.48 lacs
 capitalised during the year and debited to the respective fixed assets
 and Rs. 724.72 lacs incurred for ongoing expansion projects debited to
 Capital Work-in-progress)
 
 8.  Fixed Deposits include interest accrued but not due amounting to Rs
 150.62 lacs (Previous year Rs. 39.87 lacs)
 
 9.  Amount of excise duty on variation in stocks shown in Schedule 17
 represents differential excise duty on opening and closing stock of
 finished goods.
 
 10.In the opinion of the management, Current Assets, Loans & advances
 have a value on realisation at least equal to the amount at which they
 are stated in the Balance Sheet. Adequate provisions have been made for
 all known losses and liabilities.
 
 11. Interest on Term Loan is net of Rs. 32.14 lacs, being interest
 subsidy receivable for earlier years.
 
 12.In the year 2009-2010, the Company had issued to International
 Finance Corporation (IFC), 70 Foreign Currency Convertible Bonds (FCCB)
 having a face value of USD 100,000 each aggregating USD 7 million. The
 FCCBs are hybrid instruments with an option of conversion into Equity
 Shares and an underlying foreign currency liability with redemption in
 the event of non conversion at the end of the period.
 
 The bond holder has an option of converting these bonds into Equity
 Shares at any time within a period of 7 years from the date of issue at
 an initial conversion price of Rs 13.50 per share (face value Re. 1/-
 each) at the exchange rate prevailing on the date of conversion
 request. Unless the conversion option is exercised, the outstanding
 FCCB''s will be redeemed in full at their par value together with
 interest at the rate of 6 months LIBOR 3.35% p.a. accrued on a
 compounded 6-monthly basis.
 
 As at 31st March, 2011 conversion option has not been exercised in
 respect of any bond. The Company expects that the Bond holder will opt
 for conversion rather than redemption and consequently no interest is
 expected to be payable and therefore, the same is not provided for.
 
 13. During the year 2009-10, the Company has issued and allotted
 63,10,000 Equity Shares of Rs. 10/- each on preferential basis to Bain
 Capital India Investments at a premium of Rs. 390 per share,
 aggregating to Rs. 25240.00 Lacs.
 
 The object of the issue was to part finance its ongoing projects,
 capacity expansion and to meet increased working capital requirements.
 Out of the above proceeds, the Company has expended Rs. 10786.00 Lacs
 on the objects of the issue and Rs.14454.00 Lacs representing temporary
 surplus funds are invested in Mutual Funds & Fixed Deposits.
 
 a) The estimates of rate of escalation in salary considered in
 actuarial valuation, take into account inflation, seniority, promotion
 and other relevant factors including supply and demand in the
 employment market.
 
 b) The discounting rate is considered based on market yield on
 government bonds having currency and terms consistent with the currency
 in terms of the post employment benefit obligations.
 
 c) Expected rate of return assumed by the insurance Company is
 generally based on their investment pattern as stipulated by the
 Government of India.
 
 viii.The above information is certified by the actuary.
 
 ix. The Company expects to contribute Rs. 7.50 lacs to the Gratuity
 Fund managed by the Life Insurance Corporation of India during the
 financial year 2011-12.
 
 Liability for gratuity and leave encashment is provided on actuarial
 basis for the Company as a whole. The amount pertaining to the
 directors is not ascertainable and therefore, not included above.
 
 The computation of net profit for the purpose of Director''s
 Remuneration u/s 349 of Companies Act, 1956 has not been enumerated
 since no commission has been paid to any of the directors. Fixed
 managerial remuneration has been paid to the whole-time directors
 within the limits prescribed in Schedule XIII of the Companies Act,
 1956.
 
 14. Segment Reporting:
 
 Primary Business Segment
 
 Based on the synergies, risks and returns associated with business
 operations and in terms of Accounting Standard - 17, the Company is
 predominantly engaged in a single reportable segment of Carbon
 Materials & Chemicals during the year. The risks and returns of power
 plant are also directly associated with its manufacturing operations
 and hence not treated as a separate reportable segment.
 
 Geographical Segment
 
 The secondary segmental reporting is based on the geographical location
 of customers. The Geographical segments have been disclosed based on
 revenue within India (sales to customers within India) and revenue
 outside India (sales to customers located outside India). Secondary
 segment assets and liabilities are based on the location of such asset
 / liability.
 
 15.The Company has made current tax provision for Minimum Alternate Tax
 (MAT) u/s 115JB of the Income Tax Act, 1961. As per the provisions of
 Section 115JAA, MAT Credit receivable for the amount in excess over tax
 liability as per normal computation has been recognised as an asset.
 MAT credit is recognised as an asset in accordance with the
 recommendations contained in Guidance Note issued by the Institute of
 Chartered Accountants of India. The said asset is created by way of a
 credit to the profit & loss account and shown as MAT Credit
 Entitlement. The Company will review the same at each balance sheet
 date and write down the carrying amount of MAT Credit Entitlement to
 the extent there is no longer convincing evidence to the effect that
 Company will pay normal Income Tax during the specified period.
 
 16.Related Party Disclosures:
 
 i.  Name of the related parties where control exists irrespective of
 whether transactions have occurred or not
 
 a) Enterprise on which the Company has control
 
 Himadri Global Investment Ltd. (HGIL) Wholly Owned Subsidiary
 
 Shandong Dawn Himadri Chemical Industry Co. Ltd.  Subsidiary of HGIL
 
 b) Entities / Individuals owning directly or indirectly an interest in
 the voting power that gives them control None
 
 ii.  Names of the other related parties with whom transactions have
 taken place during the year
 
 a) Key Managerial Personnel
 
 Mr. Bankey Lal Choudhary Managing Director
 
 Mr. Shyam Sundar Choudhary Executive Director
 
 Mr. Vijay Kumar Choudhary Executive Director
 
 Mr. Anurag Choudhary Chief Executive Officer
 
 Mr. Amit Choudhary President – Projects
 
 Mr. Tushar Choudhary President – Operations
 
 Mr. Jatin Kapoor CFO – (upto- 31st August,2010)
 
 b) Enterprises owned or significantly Influenced by the Key Mangerial
 Personnel or their relatives Himadri Credit & Finance Ltd.
 
 Himadri Dyes & Intermediates Ltd.  
 
 Himadri Industries Ltd.  
 
 AAT Techno-Info Ltd.  
 
 Sri Agro Himghar Ltd 
 
 Himadri e-Carbon Ltd.
 
 17.Operating Lease
 
 The company has taken an SNF manufacturing unit in Vapi, Gujarat on an
 operating lease vide agreement dated 27th Feb, 2009 from Chemsons
 Industrial Corporation for a period of 7 years with an option to exit
 or further renewal for a period of 10 years, effective from 1st April,
 2009. The lease rent payable shall increase by 10% every 5 years
 without cascading effect.
 
 b) Lease payments recognised in Profit and Loss Account – Rs. 24 lacs
 (P. Y. Rs. 24 lacs).
 
 18.Earnings per Share (EPS):
 
 Pursuant to the approval of the shareholders at the 22nd Annual General
 Meeting held on 28th Sep, 2010, the Equity Shares of the Company of Rs.
 10 each have been sub-divided into equity shares of Re. 1 each w.e.f.
 9th Nov, 2010. Weighted average number of Equity Shares used in
 computing the Earning Per Share is based on face value of Re. 1 per
 share. No. of Equity Shares for previous year has also been adjusted
 accordingly.
 
 19. There are no Micro, Small and Medium Enterprises to whom the
 Company owes dues, which are outstanding for more than 45 days as at
 31st March, 2011. This information as required to be disclosed under
 the Micro, Small and Medium Enterprises Development Act, 2006 has been
 determined to the extent such parties have been identified on the basis
 of information available with the Company.
 
 20. Earnings in Foreign Exchange:
 
 F.O.B. value of exports – Rs 12,255.12 lacs (Previous year – Rs.
 9,675.83 lacs)
 
 21. The Company has not made any remittance in foreign currencies on
 account of dividend during the year and does not have information as to
 the extent to which remittance in foreign currencies on account of
 dividends have been made on behalf of non - resident shareholders.
 
 22. a) The Company uses various forms of derivative instruments such as
 foreign exchange forward contracts, options, cross currency swaps and
 interest rate swaps to hedge its exposure to movements in Foreign
 Exchange and Interest rates.
 
 b) The Company has applied the Hedge Accounting principles set out in
 the Accounting Standard (AS) 30 Financial Instruments: Recognition and
 Measurement. Accordingly, all such contracts outstanding as on 31st
 March, 2011 are marked to market and the loss aggregating Rs. 355.74
 lacs (Previous Year – Rs. 440.51 lacs) arising on contracts that were
 designated as effective hedges of future cash flows has been recognised
 in the Hedging Reserve Account to be ultimately recognised in the
 Profit & Loss Account, depending on the exchange rate fluctuation till
 and when the underlying forecasted transactions occur.
 
 c) The Company has entered into Cross Currency Swaps ( Notional
 Principal Amount aggregating to Rs. 7500 lacs) whereby fixed INR
 interest rate payable to Debenture holders has been swapped into
 floating Libor linked interest rates . The differential amount of
 interest has been reduced from the Borrowing Costs. The Company has
 also entered into Principal only Swaps (POS) for equivalent to INR
 20000 lacs, being amount of Debentures, against receipt of periodic
 premium.  The quantum of mark to market loss on the said derivatives as
 at the Balance Sheet date (net of periodic premium) has been adjusted
 in the accounts with borrowing cost.
 
 23.The Company had been showing captive consumption of its finished
 products, being oils, used as fuel by inclusion thereof in Sales with
 corresponding debit to Power and Fuel in the Profit and Loss Account.
 The Company has discontinued the said practice in consonance with the
 spirit of AS 9 on Revenue Recognition notified by the Companies
 (Accounting Standards) Rules, 2006. This has no impact on the profit
 for the year of the Company. Accordingly, the accounts for the previous
 year have been regrouped by excluding the contra effect of oils used as
 fuel from ''sales, and ,Power and Fuel,.
 
 24.Sales are shown net of trade discounts which were hitherto included
 under Rebates and Discounts.
 
 25.Previous year''s figures have been reworked, re-grouped, re-arranged
 and reclassified, wherever considered necessary.  Accordingly amounts
 and other disclosures for the preceding year are included as an
 integral part of the current year financial statements and are to be
 read in relation to the amounts and other disclosures relating to the
 current year.