1. CONTINGENT LIABILITIES
 
 Claims against the company not acknowledged as debts:
 
 a) Excise Duty: Show cause Notices received in earlier years for
 withdrawal of Modvat credit of Rs. 3.90 Lacs have been remanded back by
 the collector of appeals to A.C. Moradabad. The matter is still
 pending. Pending final decision, no liability is provided.
 
 b) Trade Tax : The company has opted for compounding scheme for trade
 tax w.e.f 1.12.1999 for year 1999-2000. The learned Commissioner Trade
 Tax had raised an additional demand of 22.50 lacs for the year
 1999-2000, assessing higher installed capacity, against which company
 has filed writ with Allahabad High Court which is pending. The
 Compounding scheme application of the company for year 2000-2001,
 2001-2002, and 2002-3 have also not yet been accepted by Trade Tax
 deptt. The amount involved in sales tax in these three year is Rs.
 251.67 lacs. The company has filed writs with Allahabad high Court who
 has granted stay in all these cases. In the opinion of management, no
 provision is required to be made.
 
 c) The Trade Tax authorities have created total demand of Rs. 3.40 lacs
 (Net of refund of Rs. 1.54 lacs for 1997-98) against the company in
 various orders pertaining to previous period (except compounding scheme
 demand) and the company has preferred appeals/in the process of filing
 appeals, against these demands before higher authorities which are
 pending. The company has made provision of Rs. 2.18 lacs against these
 demands which in its opinion is adequate,
 
 d) Income Tax Assessments have been completed up to the Assessment Year
 2000-2001 and there is no demand outstanding against the company.
 There is no liability for subsequent years as per Returns filed.The
 company is of the opinion that no provision is required to be made For
 any contingent liability which may arise in Appeals filed by Income Tax
 Deptt/cases reopened.
 
 e) In respect of sales tax demand created in earlier years of Rs. 9.01
 lacs on account of non inclusion of by-products in the exemption
 certificates, company has received a certificate duly amended including
 the by products. The respective order for rectification of demand has
 also been received. However company is seeking cancellation of demand
 as a consequence of the rectification order received.
 
 2. Depreciation is provided in the Accounts on the straight line
 method basis and in the manner prescribed under schedule XIV of the
 Companies Act, 1956 including triple shift depreciation of Rs. 31.80
 lacs for the current year Company has not provided for arrears of
 depreciation in respect of earlier years of Rs 141.25 Lacs. As a result
 the balance of profit and loss account as shown in the balance sheet is
 lower and fixed assets as shown in schedule 4 are higher to that
 extent.
 
 3. Advance from Customer of Rs. 220.40 lacs:
 
 i) include Rs. 6.70 lacs received from the C&F Agents as security
 deposit and interest thereon in the earlier years were transferred from
 security deposits to regular running accounts. These depots have been
 closed. In the opinion of management these amounts are payable.
 
 ii) include Rs. 1.55 lacs and Rs. 3.46 lacs received from customers
 through its Oil supply/sales agent in the months of April and May
 2002,respectively which have not been adjusted pending complete details
 from them.
 
 iii) include Rs. 195.79 lacs due to Hindustan lever Ltd. which is not
 confirmed and is after debiting the total claim of Rs. 147.53 lacs
 comprising of Rs. 88.89 lacs debited in the year under Audit and
 Rs.58.64 lacs debited in earlier year. Company has also lodged claims
 of Rs. 624.99 lacs representing short lifting of agreed quantity of
 Dalda, claims against revision of conversion cost, short delivery of
 CPO expenses on installation of HLL machinery and rate difference (RY.
 2003-04) against Hindustan Lever Ltd., but has not accounted for the
 same in the Books. Company is of the view that Rs. 195.79 lacs is to be
 adjusted against the claims lodged. Total claim of Rs. 772.52 lacs is
 not yet acknowledged by Hindustan Lever Ltd.
 
 iv) Management is of the view that advance from customers of Rs. 7.71
 lacs is adjustable against supplies. The complete details of these
 transactions after 31.3.03 is being compiled and could not be shown to
 auditors for verification.
 
 4. Sundry creditors of Rs.332.92 lacs include opening, balance of Rs.
 135.48 lacs. Detailed analysis in respect of these creditors is not
 done in absence of receipt of confirmation from creditors/subsequent
 account position. Management is of the view that necessary adjustments
 if any shall be carried out after receipt of complete details/
 detailed analysis.
 
 5. Bank balances with scheduled banks amounting to Rs. 12.18 lacs
 include demand draft of Rs. 10.55 lacs in favour of custom department
 for payment of duty, which was paid along with bill of entry dated
 3.4.03, and accounted for in subsequent year. The other bank balances
 of Rs.0.42 lacs as on 31.3.03 are unconfirmed.
 
 6. (i) SecuredLoansfromlFCIamountingtoRs.1.92Croresandinterestaccrued
 of Rs. 1.84 Crores aggregating to Rs. 3.76 Crores has been recalled by
 IFCI vide their letter dated 19th May, 1999. The interest of Rs. 146.56
 (after adjusting the payment of Rs. 3.15 lakhs) for the period
 01.04.2002 to 31.03.2003 has been provided at contractual rate of
 interest. Rs.3.15 Lacs was paid during the year to IFCI against OTS
 settlement which did not mature and amount has been debited to them.
 
 (ii) Secured loans from Oriental Bank of Commerce of principal amount
 and interest accrued of Rs. 3.78 Crores is on the basis of Certificate
 received from the Bank as on 31.3.99. Interest of Rs.130.82 Lacs for
 the period 1.04.02 to 31.03,2003 has been provided at contractual rate.
 
 (iii) Secured loans from SBOP of Rs. 162.56 Lacs of Principal amount is
 as per Certificate from the Bank. The interest of Rs. 90.90 Lacs.for
 the period 1.04.02 to 31.03.2003, has been provided at contractual
 rate. The second charge on fixed assets on the company has been
 filed but not yet registered. Company has not received any intimation
 from the Registrar of Companies with regard to the same.
 
 (iv) The outstanding balances of Term Loan and working capital loans as
 on 31.3.2003 are not confirmed. Interest on these loans has been
 provided at contractual rate.
 
 (v) The company has not provided interest of Rs. 12.41 lacs on
 unsecured loans from a company under the same management during the
 year (previous year Rs. 16.21 lacs, and aggregate up to date of Rs.
 41.03 lacs). As per the terms of loans/deposit interest is payable
 and will be accounted for on actual payment basis. As a result the loss
 of the year has been understated by Rs. 12.41 lacs.
 
 7. (i) Advances include a sum of Rs. 2.19 lacs deposit of margin with
 M/s Durga Automobiles Ltd. New Delhi in respect of deposit of booking
 of vehicles in June96. The finance was to be provided by City Bank.
 The Bank refused to give finance in July96. On follow up with Durga
 Automobiles to refund the deposit, it has been reported vide their
 letter dated 22.5.97 that the amount has been refunded to M/s Sukrit
 Finlease P. Ltd. on the written instruction of Sh. H.S. Chhabra
 erstwhile Dy. Managing Director of the Company. The Company has sought
 written clarifications from the Directors concerned as directed by the
 Board vide its meeting dated 26.6.1997.
 
 (ii) Advances include a sum of Rs. 0.88 lacs receivable from M/s Ajay
 Associates. The amount was given for payment of Road Tax etc. for
 purchases of vehicles as mentioned in 9(i) above.
 
 (iii) It had been observed at the time of reconciliation of accounts in
 earlier years with M/s Rising Polymers, a packing material supplier
 that purchases of Rs. 3.51 lacs vide purchase voucher no. 9512/45 and
 credited in the account of supplier and payment of Rs. 3.50 lacs vide
 cheque no. 552550 dated 18.1.96 did not appear in the books of the
 party. On further verification with the Bank, it was found that the
 cheque originally was issued for transfer of fund from Oriental Bank of
 Commerce to State Bank of Patiala under the joint signatures of MD and
 the then Deputy MD Sh. H.S. Chhabra of the Company was altered in the
 name of Dee kay Enterprises under the sole signature of the then Dy MD
 
 (iv) Another cheque no. 5661479 dated 17.5.96 issued for Rs. 3.50 Lacs
 for inter bank transfer was altered under the sole signature of the
 then Dy. MD Sh. H.S. Chhabra in favour of Sh. Om Prakash, with whom
 company had no business dealings. The relevant vouchers/entries are not
 traceable in records. Efforts are being made to find these entries.
 
 (v) Further, two cheques bearing no 528312 dated 20.10.95 lor Rs. 0.90
 lacs and cheque no. 928320 dt. 28.10.95 lor Rs. 0.66 lacs issued in
 favour of Hindustan Lever Ltd. and Jai Enterprises respectively were
 changed in the name of JVD Enterprises by the then Dy. MD. Sh. H.S.
 Chhabra. The account of JVD Enterprises has been credited by these
 amount on account of bills lor office renovation which are not
 traceable and it appears that these credits are fake.
 
 The Board had authorised the Managing Director to take actions as may
 be required under various applicable laws against the then Dy. M.D. Sh.
 H.S. Chhabra. The Audit committee vide its meeting held on 5.9.02 had
 directed to place the legal opinion sought earlier in the matter and
 further directed to seek legal opinion to remove Mr. Chhabra from the
 office of director. The directions of Audit committee are under
 consideration of the management.
 
 8 Provision has been made for liability towards leave encashment of
 Rs.1.11 lacs and gratuity payable of Rs.2.37 lacs as per Payment of
 Gratuity Act, in respect of factorys staff. No further liability in
 respect of H.O. is made as it is considered that provision already made
 in books in earlier year is adequate. Total provision in respect of
 leave encashment in books as at 31.03.2003 is Rs. 5.56 Lacs, detail of
 which is under preparation.
 
 9. Payment to the auditors includes Rs. 1.00 lacs for Audit Fee, Rs.
 0.30 lac for taxation matters.
 
 10. The company had been declared sick company under the provisions of
 SICA vide order of the BIFR dt 20th April, 2001. AAIFR vide its order
 dated 29.10.2001 set aside the order of BIFR dated 20.04.01 and
 dismissed the reference made by the company under section 15(1) of
 SICA. The Company has filed Writ on 06.08.2002 against Order of AAIFR
 in Delhi High Court, which is pending.The company made fresh reference
 before the BIFR on 04.01.2002 on the basis of annual accounts for the
 period ending 31.03.2001. The BIFR vide its order dated 24.06.2002
 dismissed the reference on the ground that reference made by the
 company was time barred. Against the order of BIFR dated 24.06.2002
 company has filed appeal on 26.08.2002 before AAIFR, which is pending.
 Company filed third reference with BIFR based on Balance Sheet dated
 31.3.02 which was also rejected by BIFR being time barred. Company
 filed Appeal with AAIFR which is pending.
 
 11. The accounts of the company for the year ended 31.03.2003 have
 been prepared on Going Concern basis. The ability of the company to
 continue as a Going Concern is inter alia dependent upon the decision
 of appellate authorities with regard to acceptance of the reference
 application under section 15(1) of SICA and the rehabilitation package
 as a result thereto.
 
 12. IFCI, Oriental Sank of Commerce, and State Bank of Patiala have
 filed suit for recovery of dues with Debt Recovery Tribunal, Delhi
 which are pending.The company is contesting the same on the ground that
 these suits are not maintainable as it is a sick company and its
 Appeal/Writ are pending with Delhi High Court and AAIFR.
 
 13. Managerial Remuneration
 
 Managerial Remuneration paid to Directors.
 
 Salary                                                    Rs. 3.18 lacs
 
 Perquisites                                               Rs. 1.69 lacs
 
 (Previous year 4.87 lacs)
 
 14. Detail of security deposit of Rs. 0.30 lacs included in other
 current assets is presently not available. Efforts are being made to
 trace the same and necessary accounting entries, it any will be passed
 subsequently.
 
 15. (i) Fixed Assets include vehicles costing Rs. 9.64 lacs taken
 under lease agreement by the directors in their individual capacities
 and sold to the companies at original cost in October, 1998. Payment to
 lessors have been made and steps are being taken to register the
 vehicles in the name of the company.
 
 (ii) Addition in Plant & Machinery include Rs. 4.91 Lacs incurred
 towards purchase of Thermic Fluid Heater.
 
 16. Company has received the Cost Auditor Report for the financial
 year ending 2001. Inter alia, Cost Auditors have made certain
 observations with regard to maintenance of records relating to
 receipts, issue & balance of direct materials/ stores and spares in
 terms of value, records for power generated laying standard norms for
 consumption of power etc. Cost audit has not yet been completed for
 subsequent years.
 
 17. Expenses Payable include Telephone Expenses payable of Rs. 0.60
 lacs  & unpaid salary of Rs. 0.06 lacs outstanding for more than 3
 years.
 
 18. Soap stock is used internally to manufacture Acid Oil.
 
 19. Loans & Advances include other advances of Rs. 1.30 lacs which
 represent excess payments made to the depositor against his credit
 balance lying at the opening of the year.The balance is not confirmed.
 It is not ascertainable whether the amount is recoverable or not.
 
 20. Sundry Debtors of Rs 12.90 lacs are unconfirmed as at the close of
 the year.
 
 21. Loans and Advances include
 
 (I) Rs 11.71 lacs due from M/s Velani Oil Traders. The party has given
 a confirmation showing that there is debit balance of Rs 15.08 lacs in
 his books of accounts. The difference of Rs 26.78 lacs include Rs 35.00
 lacs admitted by him through a undated letter but not credited by him
 in the account. Similarly another sum of Rs 10.00 lacs credited by us
 in his account on account of money received has not been debited by him
 in our account in his books of account. The remaining difference of Rs
 1.78 lacs remains unreconciled at the year end. The company is in the
 process of obtaining the statement of account of the party uptill date
 and necessary entries if any shall be made thereafter.
 
 (ii) Rs 22.33 lacs due from M/s Siri Ram Kishan Chand against
 commission of Rs 14.65 lacs payable to M/s Pawa Associates. With regard
 to excess payment of Rs. 5.68 lacs company is asking the details from
 the party and on receipt of the same the necessary entries, if any,
 will be passed in the books of account.
 
 (iii) Rs 3.20 lacs towards electricity charges receivable and adjusted
 in the month of April 2003. The relevant document could not be produced
 before audit for verification on account of non completion of
 subsequent books of account.
 
 22. Material consumed vide schedule no 10 is net of highsea sales of
 245 MT of CPO amounting to Rs 53.10 lacs. The cost of purchase of this
 material of Rs 50.82 lacs is also debited in this account. The sale
 proceeds of Rs 53.10 lacs includes profit of Rs 2.28 lacs on this
 transaction and is on the basis of the amount actually realised in the
 subsequently year which could not be shown to the audit pending
 completion of subsequent books of account.
 
 23. Closing stock of Raw Material of 13.0890 MT amounting to Rs 4.59
 lacs is in transit, the documents of which could not be produced before
 audit for verification.
 
 24. Discount on sales of Rs 5.34 lacs is debited on the basis of
 statement received from M/s Velani Oil Traders representing major
 amount towards freight charges for goods dispatched on FOR basis.
 Necessary supporting documents are being obtained.
 
 25. Current Liability include :
 
 (i) Rs 0.47 lacs payable to employees who have left the organisation.
 
 (ii) TDS payable of Rs 2.24 lacs
 
 (iii) PF payable of Rs 1.21 lacs
 
 (iv) ESI payable of Rs 0.07 lacs
 
 (v) Sales Tax payable of Rs 1.12 lacs These amounts could not be paid
 due to financial crunch.
 
 26. Administration & Other Expenses include, Freight Rs 0.60 lacs and
 Legal & Professional Charges include Rs 0.36 lacs, supporting document
 of which could not be produced before the audit for verification.
 
 27. Company has verbally made an arrangement with M/s Velani Oil
 Traders in respect of manufacture of Vanaspati sold directly under the
 brand Grih Laxmi. Total sale of the same during the year under audit
 is Rs 20.30 crores. The sale proceeds in this respect is received by
 M/s Velani Oil Traders in its personal bank account and payments to the
 supplier of oil is also made by him through the same. Monthly statement
 of receipt and payment by M/s Velani Oil Traders is received by the
 company on the basis of which entries regarding transaction of sales,
 purchases and other expenses are recorded in the books of account.
 
 28. During the Year Companys product have been made subject to levy
 of Excise Duty. During the year a sum of Rs 30. 08 lacs have been paid
 towards excise duty. Sales are shown inclusive of excise duty and
 corresponding expenses are debited to the Profit & Loss Account. Excise
 reconciliation is under progress and, therefore, could not be produced
 before audit for verification.
 
 29. Related Party Disclosures :
 
 As accounting standard 18 `Related Party Disclosures came into effect
 in respect of accounting period commencing on or after 01.04.2001, the
 information given below is only in respect of transactions entered into
 by the company during the year with the related parties,
 
 (i) Name and nature of relationship with related parties:
 
 Enterprises over which key management personnel is able to exercise
 
 Significant influence :
 
 Rattan Chand Harjas Rai, Delhi
 
 Rattan Chand Harjas Rai, Moulding Pvt. Ltd. Delhi
 
 Crystic Resins India Pvt. Ltd.
 
 Key Management Personnel:
 
 Sh. P.B. Jain (Managing Director)
 
 Sb..,R.B. Jain (Director)
 
 Sh. S.K. Jain (Director)
 
 (ii) Transaction with the related parties during the year ended 31st
 March, 2003
                                                             Rs. in lacs
 
 Raised unsecured Loan free of interest                             8.49
 
 (iii) Key Management personal:
 
 Remuneration
 
 Sh. P.B. Jain                                                      3.24
 
 Sh. S.K. Jain                                                      1.63
 
 30. The accounting loss is more than tax loss as at 31.03.2003. The
 deferred tax assets has not been recognised (as per AS 22) as there is
 no reasonable certainty with regard to generation of sufficient future
 income to recover such deferred tax assets.
 
 31. As company is dealing in single product requirements relating to
 segmental reporting (AS 17) are not applicable.
 
 32. Earning Per Share :- Computation for Basic
 
 Earning Per Share :  31.03.2003                            Rs.(in lacs)
 
 a) Loss as per Profit & Loss Account                             415.78
 
 b) Computation of Weighted Average
 
 Number of Equity Shares :
 
 No. of Equity Share outstanding as on 01.04.2002              72,77,500
 
 No. of Equity Share outstanding as on 31.03.2003              72,77,500
 
 Basic Earning Per Share(Weighted Average)                   Rs. (-)5.73
 
 33. Previous year figures have been regrouped wherever considered
 necessary to make them comparable with those of current year.
 
 34. Information with respect to dues to small scale industrial
 undertakings is not available.