Phillips Carbon Black

1. On exercise of the option to subscribe to the Companys Equity
 Shares by the holders of 3,000,000 Convertible Warrants of Rs.149/-
 each allotted on 15th March, 2007 pursuant to the approval of the
 members of the Company in accordance with SEBI guidelines, 3,000,000
 Equity Shares of Rs.10/- each fully paid up have been issued and
 allotted on 15th September, 2008 on conversion of said Warrants.
 Consequently, out of the proceeds of Rs. 4,470 lakhs of the Convertible
 Warrants, Rs. 300 lakhs and Rs. 4,170 lakhs have been transferred to
 Share Capital and Securities Premium Account respectively.
 
 2.1 Computation of Net Profit under Section 198(1)/349 of the Companies
 Act, 1956 has not been provided as no commission is payable in view of
 inadequacy of profit.
 
 3.1 Raw Material Purchase is net of Rs. 1747.62 lakhs (Previous year -
 Rs. 916.31 lakhs) being benefits under various duty exemption schemes
 pertaining to exports / deemed exports.
 
 3.2 Research and Development Expenses includes Raw Materials Consumed
 Rs. 245.40 lakhs (Previous year - Rs.255.88 lakhs),
 Salaries, Wages and Bonus Rs.50.33 lakhs (Previous year - Rs. 30.98
 lakhs), Contribution to Provident Fund, Superannuation Fund and
 Gratuity Fund Rs.1.36 lakhs (Previous year - Rs. 3.25 lakhs), Labour
 and Staff Welfare Rs.2.03 lakhs (Previous year - Rs. 1.64 lakhs),
 Maintenance and Repairs - Building Rs. Nil (Previous year - Rs. 0.19
 lakhs), Travelling and Transport Expenses Rs. Nil (Previous year - 3.18
 lakhs) and Miscellaneous Expenses Rs. 0.46 lakhs (Previous year - Rs.
 14.03 lakhs).
 
 4. Advances of Rs. 2,148.13 lakhs (Previous year - Rs. 742.28 lakhs)
 includes Rs.0.93 lakh (Previous year - Rs. 1.08 lakhs) due by an
 Officer of the Company, maximum amount due at any time during the year
 - Rs.1.09 lakhs (Previous year - Rs.1.24 lakhs).
 
 5.1 For the purpose of these accounts, following methods and rates of
 depreciation have been used for depreciating the original cost of fixed
 assets :
 
 (a) Certain items of Plant and Machinery being energy saving devices
 added during the period ended 31st March, 1987 : Under Straight line
 method at rates specified in Schedule XIV of the Companies Act, 1956.
 
 (b) Other assets added upto 31st March,1987 : Under written down value
 method at rates specified in Schedule XIV of the Companies Act, 1956.
 
 (c) Additions since 1st April, 1987 : Under Straight line method at
 rates specified in Schedule XIV of the Companies Act, 1956.
 
 5.2 Based on the valuation reports submitted by the valuers appointed
 for the purpose, certain items of the Companys fixed assets [viz.,
 Land (Freehold / Leasehold), Acquisition and Development Expenses,
 Buildings on such Land, Flats, Electrical Installations, Plant and
 Machinery and Railway Siding] were revalued on 30th November, 1984, on
 30th September, 1991 and also on 30th September, 2001 (except for
 Railway Siding) after considering the following factors:
 
 - estimated current market value pertaining to Land (Freehold/
 Leasehold), Acquisition and Development Expenses, Buildings on such
 Land and Flats
 
 - values of Electrical Installations, Plant and Machinery and Railway
 Siding (when applicable) based on their current cost of replacement
 
 - adjustments for the condition, the standard of maintenance,
 depreciation upto valuation dates, etc.
 
 The resultant revaluation surplus of Rs.1,011.07 lakhs, Rs.2,994.04
 lakhs and Rs. 5,995.27 lakhs arising from the aforesaid revaluations
 were transferred to Revaluation Reserve in the Companys annual
 accounts for the years 1983-84,1990-91 and 2000-01 respectively.
 
 5.3 Depreciation for the year ended 31 st March, 2009 on items of
 fixed assets revalued include an additional charge of Rs. 278.33 lakhs
 (Previous Year - Rs. 279.39 lakhs) over that calculated on original
 cost at rates prescribed under Schedule XIV of the Companies Act, 1956
 as amended during 1993-94 representing .  depreciation on the
 incremental amounts added on revaluation calculated at the rates
 considered applicable by the valuers.
 
 5.4 Capital Expenditure in Progress includes:
 
 (a) Capital Advances unsecured, considered good - Rs. 11,105.45 lakhs
 (31st March, 2008 - Rs. 4,738.05 lakhs)
 
 (b) Borrowing cost Rs. 2,938.02 lakhs (31st March, 2008 - Rs 555 34
 lakhsl
 
 6. According to the letters of undertaking given by the Company to the
 concerned Financial Institutions, its investments in equity shares of
 Maple Circuits Limited and Norplex-Oak India Limited cannot be pledged,
 charged or otherwise encumbered or disposed off without their prior
 consent, during the currency of the loan facilities granted by the
 Financial Institutions to the said companies.
 
                                          As at           As at
                                  31 st March, 2009   31 st March, 2008
                                  Rupees in Lakhs     Rupees in Lakhs
 
 7. Contingent Liabilities for:
 
 (7.1)  Outstanding Bank               377.20            74.96
 Guarantees etc.
 (7.2)  Bills discounted             1,923.90              -
 (7.3)  Guarantees or Counter
 Guarantees or Counter
 Indemnity given by
 the Company:
 
 (a) on behalf of bodies corporate
 and others (other than guarantees
 which according to legal opinion
 are no longer enforceable against
 the Company)
 
 - Limit                                  9.00              9.00
 - Outstanding                            9.00              9.00
 (b)for repayment of Housing Loan         6.55              8.90 
 granted by Housing Development
 Finance Corporation Ltd. to
 employees of the Company
 
 (7.4) Claims against the Company not
 acknowledged as debts:
 
 (a)  Income-tax matters                  0.87            301.54
 pending (other than matters set
 aside for reassessment)
 
 (b)  Sales Tax matters                    -              193.27
 
 8. Premium on foreign exchange arising from forward exchange contract
 to be recognised in the accounts of future periods Rs. 248.30 lakhs
 (Previous year - Rs. 2.53 lakhs).
 
 9. Capital Commitments (net of advances Rs. 11,105.45 lakhs,
 31.03.2008 - Rs. 4,738.05 lakhs) not provided for as at 31st March,
 2009 are estimated at Rs. 10,806 lakhs (31.03.2008 -Rs. 11,950 lakhs).
 
 10. As regards contribution to the provident fund maintained with
 separate Trust, the Companys Actuary has certified that the Trust fund
 is adequate for distribution of interest at the rate currently
 prescribed by the Government and based on actuarial valuation carried
 out in terms of AS 15, no additional contribution to the fund is
 required from the Company towards any inadequacy.
 
 11. For the Defined Contribution Plans amounts aggregating Rs, 196.24
 lakhs have been recognised as expenses during the year (Previous Year-
 Rs. 187.31 lakhs)
 
 The contribution to the Defined Benefit Plans expected to be made by
 the Company during the annual period beginning after the balance sheet
 date is yet to be reasonably determined.
 
 12.  Segment Reporting
 
 a) Information relating to the two business segments, being carbon
 black and power has been disclosed as primary segments.
 
 b) Inter-segment transfers being power consumed for manufacture of
 carbon black are based on price paid for power purchased from external
 sources.
 
 c) Segment Revenues, Results and Other Information :
 
 13. Pending completion of the relevant formalities of transfer of
 certain assets acquired pursuant to the Scheme of Amalgamation of
 Transmission Holdings Limited with the Company in 2001-2002, such
 assets remain included in the books of the Company under the name of
 the transferor company.
 
 14.  Expenses are after adjustment of amounts reimbursed to or by the
 Company.
 
 15.  Interest expenditure is net of Rs. 278.60 lakhs (Previous Year -
 Rs. 95.41 lakhs) being interest earned on Fixed Deposits and Margin
 Money Deposits [Gross, Tax Deducted at source Rs. 63.13 lakhs (Previous
 Year - Rs. 21.62 lakhs)]
 
 16.  Rent of Rs. 73.61 lakhs (Previous Year - Rs. 62.19 lakhs) relates
 to cancelable operating leases taken on or after 1.04.2001. These lease
 arrangements range from 11 months to 3 years and are primarily in
 respect of accommodation for employees, offices, warehouses etc.  and
 inter alia include escalation clause and option for renewal.
 
 17.  In respect of the investments, in the opinion of the Board, the
 year - end diminution in value (estimated to be in the region of Rs.
 1560.57 Lakhs (31.03.2008 - is on account of temporary market features
 and these being long term investments, no provision has been deemed
 necessary. These would, however, be covered adequately by the Companys
 year end free reserves.
 
 18.  Previous Years figures have been regrouped or rearranged where
 considered necessary.