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apcotex industries limited

Annual Report 2007-2008

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BOARD OF DIRECTORS AUDIT COMMITTEE

Atul C. Choksey Chairman Manubhai G Patel Chairman

S.K. Lahiri Director & CEO Girish G Choksey Member

Girish C. Choksey Director Bipin V Jhaveri Member

Amit C. Choksey Director Dr. S. Rengachary Member

Manubhai G. Patel Director

Bipin V. Jhaveri Director

Dr. S. Rengachary Director

Dr. S. Sivaram Director

T. N. V. Ayyar Director

Abhiraj Choksey Executive Director

GM – ACCTS., FIN. ANDCOMPANY SECRETARY

Anand V. Kumashi

AUDITORS

Shah & CO.Chartered Accountants

BANKERS

State Bank of India

REGISTERED OFFICE & FACTORY CORPORATE OFFICE

Plot No.3/1, M I D C Industrial Area, N. K. Mehta International House,P.O. Taloja - 410208, Dist. Raigad , 178, Backbay Reclamation,Maharashtra Babubhai M. Chinai Marg, Mumbai - 400020Telephone: (022) 2741 2239 / 2360 /1611/1613 Telephone: (022) 2283 8302 / 04Fax: (022) 2741 2052 Fax: (022) 2283 8291E-mail – [email protected] : www.apcotex.com

REGISTRARS AND SHARE TRANSFER AGENTS

INTIME SPECTRUM REGISTRY LTDC - 13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (W),Mumbai - 400 078Tel. No.- (022) 2596 3838 Fax – (022) 2594 6969Email: [email protected]: www.intimespectrum.com

APCOTEX INDUSTRIES LIMITED

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NOTICE

NOTICE

NOTICE is hereby given that the Twenty Second Annual GeneralMeeting of apcotex industries limited will be held at Plot no. 3/1,MIDC Industrial Area, Taloja - 410 208, Dist. Raigad, Maharashtraon Saturday, the 12th day of July 2008 at 11.30 a.m. to transact thefollowing business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Statement of Accounts forthe year ended 31 March 2008 together with the Reports of theBoard of Directors and Auditors thereon.

2. To declare a dividend on Equity Shares.

3. To appoint a Director in place of Dr. S. Rengachary, who retiresby rotation and, being eligible, offers himself for reappointment.

4. To appoint a Director in place of Mr. T.N.V. Ayyar, who retiresby rotation and, being eligible, offers himself for reappointment.

5. To appoint a Director in place of Mr. Abhiraj Choksey, who retiresby rotation and, being eligible, offers himself for reappointment.

6. To appoint M/s. Shah & Co., Chartered Accountants as Auditorsof the Company, and fix their remuneration.

SPECIAL BUSINESS:

7. To consider and if thought fit, to pass with or withoutmodification(s), the following Resolution as a SpecialResolution;

“RESOLVED THAT pursuant to Section 314(1) of theCompanies Act, 1956, Dr. S. Rengachary, a Director of theCompany, be and is hereby appointed as an Advisor to theCompany for a further period of one year with effect from 1st

May 2008, and be entitled to reimbursement of all businessrelated expenses incurred by him on car and telephone providedto him for the performance of his duties as Advisor and the Boardof Directors of the Company, be directed to enter into anagreement, where necessary, for the purpose”.

BY ORDER OF THE BOARDfor apcotex industries limited

ANAND V. KUMASHIGM – Accounts, Finance &

Date: 13th May 2008 Company Secretary

Registered Office:Plot no. 3/1, MIDC Industrial Area,Taloja - 410 208,Dist. Raigad, Maharashtra

NOTES:

1. The relevant explanatory statement pursuant to Section 173 ofthe Companies Act 1956, is annexed hereto.

2. A member entitled to attend and vote, is entitled to appoint aproxy to attend and, on a poll, vote instead of himself/herself. Aproxy need not be a member. Proxies in order to be effectivemust be received by the Company at its Registered Office notlater than forty-eight hours before the commencement of themeeting.

3. The Register of Members and Share Transfer Books of theCompany will remain closed from Friday, the 4th day of July2008 to Friday, the 11th day of July 2008 (inclusive of bothdays).

4. Members are requested to notify the changes, if any, in theiraddresses to the Company’s Registrars immediately.

5. Members are requested to hand over the enclosed AttendanceSlip, duly signed in accordance with their specimen signatureregistered with the Company, for admission to the meeting hall.

6. Members are hereby informed that the Company has transferredto the Central Government all unclaimed dividends relating tothe accounting years upto 31.3.2000. Members who have notcollected dividends for any accounting year upto and including31.3.1995 are requested to make an application to the Registrarof Companies, Maharashtra, CGO Complex, Belapur, NaviMumbai, for an order for payment of such uncollected dividends.Such application has to be made in the prescribed Form No. IIunder the Companies Unpaid Dividend (Transfer to GeneralRevenue Account of the Central Government Rules, 1978).

7. Members desirous of getting any information relating to theaccounts and operations of the Company are requested toaddress their queries to the Company at least seven days inadvance of the Annual General Meeting so that the informationrequired may be made readily available at the meeting.

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ANNEXURE TO NOTICE

EXPLANATORY STATEMENT

(Pursuant to section 173(2) of the Companies Act, 1956)

Item No.7

Dr. S. Rengachary – Ex Managing Director of the Company, retiredfrom the services of the Company on 31st March 2002, after workingin the Company’s plant for a continuous period of 25 years. He haswide and varied experience of the Synthetic Rubber and Laticesindustry. To get continuing benefit of his experience, the Board ofDirectors appointed him as Advisor to the Company for the period ofone year effective from 1st May 2002, which appointment wasapproved by the shareholders in the Annual General Meeting heldon 27th July 2002. On the recommendation of the Board of Directorshis appointment as the Advisor to the Company was extended forone year each by special resolution passed at the annual generalmeetings resting with the general meeting held on 27th July 2007 andthe term of appointment expires on 30th April 2008. The Board ofDirectors have decided to appoint him as Advisor to the Company,for a further period of one year effective from 1st May 2008, and hewill continue to be entitled to reimbursement of all business relatedexpenses incurred on car and telephone provided at his residence,for the performance of his duties as Advisor.

By virtue of this appointment, Dr. S. Rengachary, will continue tohold office or place of profit in the Company in accordance with theprovisions of Section 314(1) of the Companies Act, 1956, whichrequires the approval of the Company in General Meeting.

Your Directors commend the resolution.

Except Dr. S. Rengachary, no other Director of the Company isinterested in this resolution.

BY ORDER OF THE BOARDfor apcotex industries limited

ANAND V. KUMASHIGM – Accounts, Finance &

Company SecretaryDate: 13th May 2008Registered Office:Plot no. 3/1,MIDC Industrial Area,Taloja - 410 208,Dist. Raigad, Maharashtra

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DIRECTORS’ REPORTTO THE MEMBERS

Your Directors have pleasure in presenting to you Twenty-secondAnnual Report of the Company and the audited Statements ofAccounts for the year ended 31st March 2008.

COMPANY PERFORMANCE

FINANCIAL HIGHLIGHTS

Particulars 2007-08 2006-07(Rs. In Lacs) (Rs. In Lacs)

GROSS SALES 11,899.25 9,036.86

Gross Profit Before Depreciation,Interest and Tax, after prior yearadjustments 908.14 293.26

Less: Depreciation 211.71 319.48

Interest 44.87 33.62

Provision for Tax & FBT 107.62 23.23

Adjustment for Deferred TaxLiability/(Asset) 56.70 (84.40)

------------------------ ------------------------

Profit/ (Loss) for the Year 487.24 1.33

Add: Balance brought forwardfrom Previous year 29.52 28.19

------------------------ ------------------------Disposable Profit (Loss) 516.76 29.52

================ ================The Directors recommend theappropriation of the disposableprofit as under:

Dividend on Equity Shares 165.82 —

Tax on Dividend 28.18 —

Transfer to General Reserve 48.75 —

Balance carried to Balance Sheet 274.01 29.52------------------------ ------------------------516.76 29.52

================ ================

1. DIVIDEND

Your Directors have recommended a dividend @ Rs.3.00(Rupees Three) per Equity Share of Rs.10/- each. The EquityDividend, if approved, will absorb a sum of Rs.165.82 lacs(excluding the dividend tax of Rs.28.18 lacs) out of net profit asabove and will be paid to those shareholders whose namesappears on the Register of Members on 4th July 2008.

2. MANAGEMENT DISCUSSION AND ANALYSIS

The Company manufactures and markets Styrene ButadieneRubber and Synthetic Rubber Latices.

I. CURRENT SCENARIO

Your company is one of the leading producer of polymerproducts namely Synthetic Latices (VP latex, XSB latex,Nitrile latex) and Synthetic Rubber (HSR, SBR) in India.The company has one of the broadest ranges of productsbased on Styrene – Butadiene chemistry available in themarket today and caters mainly to the industrial segment.Our range of Synthetic Latices is used, among otherapplications, for tyre cord dipping, paper and paperboard

coating, carpet backing, concrete modification/waterproofing and textile finishing. The various grades ofSynthetic Rubber find application in products such asfootwear, automotive components, v-belts, conveyer beltsand hoses.

The company’s major raw materials are petrochemicalbased product and therefore the business is vulnerable tothe increasing cost of crude oil and its downstream products.Even though margins were under pressure during FY 2007-08, the company’s performance was satisfactory due to (a)good revenue growth (b) a strong commitment to R&D toimprove the performance of our current products (c) additionof new value-added products to our current range and (d)achievement of better operational performance throughseveral cost-saving and efficiency-improvement initiatives.

The technology was developed and is being continuouslyupgraded through in-house research and developmentefforts to meet the changing needs of customers.Competition remains intense across most of the products.

The Company manufactures range of polymer products andover the next few years we expect good domestic growthin most of the industries we cater to. We also envision goodexport prospects for some of our products.

II. OPERATIONS DURING THE YEAR

The Company achieved Gross Value Sales of Rs.119 croresand a volume sale of 17138 MT registering a growth of32% and 24% respectively.

Input materials mainly Butadiene price registered declineduring the beginning of the financial year. However, itstarted firming up by end of the third quarter of the financialyear under review. Packaging materials registered marginalincrease. Availability of input materials was satisfactory.

Exports registered a marginal decline due to theappreciating rupee but continue to offer good potential.

There was continuous thrust from the management todevelop a strong R&D and technical service team to betterunderstand the changing customer needs, improve productquality, productivity and process controls throughtechnology up-gradation. Several energy conservationmeasures were introduced during the year which will resultin recurring savings in power, fuel and spares.

Company continued several measures of cost control andexpense optimization. Total overheads, therefore,registered a fall as percentage to Net Sales.

Operating Profits before tax and depreciation increased toabout Rs.870 lacs during the year from about Rs.213 lacsduring the previous financial year.

Other Income, which includes profit on sale of investment,was at Rs.224 lacs.

The profit after tax stood at Rs.487 lacs as compared to amarginal profit in the previous financial year.

Your Directors consider company’s performancesatisfactory.

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III. OUTLOOK

Operating environment for the Company’s products willremain challenging in the year 2008-09 due to steeply risingcost of petro-based raw materials resulting from increasingcrude oil prices.

Since the Company’s products mainly cater to the industrialsegment and the company faces intense competition formost of its products, we expect a resistance to priceincreases. The Company will endeavor its best to bring inefficiencies in its operations at all levels to mitigate to someextent the cost increase from rising input material prices.Profit margins will remain under pressure.

Your Directors’ view the prospects for the year 2008-09with cautious optimism.

IV. RISK AND CONCERNS

o Rising price of input materials is the main area ofconcern.

o Some of the major raw materials are directly importedor have USD based pricing. If the INR weakens againstthe USD, the currency effect is expected to be adverse.

o Rising inflation within the country will seriously affectdisposable income levels of all consumers - both ruraland urban. Uncertain consumer demand can also havean effect on the growth prospects of your company.

V. INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

The Company has recently successfully introduced ERPsystem within the Company. A re-look at internal checksand controls after the introduction of ERP system is dueand will be carried out in the current financial year. Adequatesystem exists to safeguard Company’s assets throughinsurance and maintenance of proper records. TheCompany has well defined procedures to execute financialtransactions. The Company is presently working onoverhauling its internal audit areas in the light of allencompassing ERP system introduced as mentionedabove.

VI. DEVELOPMENT OF HUMAN RESOURCE /INDUSTRIAL RELATIONS

The Company continuously monitors its Human Resourcerequirement to ensure that it has adequate human skillscommensurate with its needs. Cordial relations existbetween the employees at various levels and themanagement.

The Company continuously organizes and deputesemployees to seminars/ workshops to enhance their skills/ knowledge.

CAUTIONARY STATEMENT:

Statement in this Management Discussion and Analysisdescribing the Company’s objectives, projections,estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicablesecurities laws and regulations. Actual results could differmaterially from those expressed or implied. Importantfactors that could make a difference to the Company’sOperations include raw material availability and prices,cyclical demand, movements in Company’s principalmarkets, changes in Government regulations, tax regimes,economic developments within and outside India and otherincidental factors.

3. STATUTORY DISCLOSURES

A. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Information sought under the provisions of Section 217(1)(e)of the Companies Act, 1956, read with the Companies(Disclosures of Particulars in the Report of the Board ofDirectors) Rules, 1988 regarding conservation of energy,technology absorption and foreign exchange earnings andoutgo are given in the Annexure, forming part of this report.

B. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

i. That in the preparation of the annual accounts, theapplicable accounting standards have been followedand that no material departures have been made fromthe same;

ii. That they have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of theCompany at the end of the financial year and of theprofits of the Company for that period;

iii. That they have taken proper and sufficient care forthe maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956, for safeguarding the assets of the Company andfor preventing and detecting fraud and otherirregularities.

iv. That they have prepared the annual accounts on agoing concern basis.

C. CORPORATE GOVERNANCE

Your Company has always strived to imbibe appropriatestandards for good Corporate Governance.

Detailed reports on the Corporate Governance andManagment Discussion and Analysis, forms part of thisreport. A certificate from the Company’s Auditors regardingcompliance of conditions of Corporate Governance asstipulated under Clause 49 of the Listing Agreement isannexed to the said Report.

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4. FIXED DEPOSITS MATURED BUT NOT CLAIMED

Fixed Deposits from the public and the shareholders stood atRs.10.25 lacs at the end of the year. The Central Bureau ofInvestigation (CBI) has instructed the Company, not to repaythe proceeds of four fixed deposits amounting to Rs.48,000/-and accrued interest of Rs.22,491/- thereon. These depositsmatured during the first week of December 2002.

Three other fixed deposits worth Rs.15,000/- matured, withaccrued interest of Rs.673/- but were not claimed by theconcerned depositors despite reminders.

5. INSURANCE

All insurable assets of the Company including inventories,buildings, plant and machinery etc., as also liability underlegislative enactments, are insured.

6. ECOLOGY AND SAFETY

Members of the Safety Committee of the Company’s TalojaPlant, have been regularly reviewing the safety measures andtheir implementation, to ensure adequate safety in materialhandling, control of pollution caused by liquid effluents, dustand emissions from chimney etc. Samples were periodicallydrawn and the reports submitted to the Pollution Control Boardas required, ensuring compliance with the standards. Consenthas been obtained from Maharashtra Pollution Control Board tooperate the plant at Taloja till 31st December 2009.

7. PERSONNEL

Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules 1975, as amended,is not applicable to the Company as there are no employeesdrawing remuneration exceeding the prescribed limits.

The Board would like to place on record their appreciation ofthe contribution made by all employees during the year.

The industrial relations with the employees were cordial. Thefresh charter of demand from the daily rated workman at factoryare under negotiation.

8. BANKS

Your Directors wish to place on record their appreciation of thesupport received from the Company’s Bankers, State Bank ofIndia.

9. DIRECTORS

Dr. S. Rengachary, Mr. T. N. V. Ayyar and Mr. Abhiraj Choksey,retire by rotation and being eligible, offer themselves forreappointment.

10. AUDITORS

The Company’s Auditors, M/s. Shah & Co., CharteredAccountants, retire at the conclusion of the ensuing AnnualGeneral Meeting and are eligible for reappointment.

FOR AND ON BEHALF OF THE BOARD

ATUL C CHOKSEYCHAIRMAN

Mumbai: 13th May 2008

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FORM A

DISCLOSURE OF PARTICULARS WITH RESPECT TOCONSERVATION OF ENERGY:

A. POWER AND FUEL CONSUMPTION

Electricity:

2007-08 2006-07

a) Purchased Units (‘000 KWH) 5721.867 4761.280

Total amount (Rs. In lacs) 280.678 242.200

Rate/Unit (Rs.) 4.905 5.090

b) Own Generation:

Through Diesel generator

Units (‘000 KWH) 74.572 82.44

Units per ltr. of diesel oil 1.700 1.85

Cost/Unit (Rs.) 21.170 19.90

B. CONSUMPTION PER UNIT OF PRODUCTION

Synthetic Rubber

including Latices 334 344

Electricity (KWH/MT)

ANNEXURE TO DIRECTORS’ REPORT

FORM B

DISCLOSURE OF PARTICULARS WITH RESPECT TOTECHNOLOGY ABSORPTION:

RESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R & D is carried out by the Company:

The R & D activities of the Company pertain to:

i. Development of new products to meet changing customerneeds.

ii. Modification of existing products for up-gradation ofperformance.

iii. Evaluation of alternative raw materials and identifyingsources, for cost reduction and flexibility in the inputmaterials management.

iv. Absorption of imported technology, if any.

v. Improvement in process technology.

2. Benefits derived as a result of the above R & D.

i. Company has commercialized a range of latices for paper/board coating industry, construction and carpet industry.

ii. Improvement in quality consistency of products.

iii. Customers are less dependent on imported products.

3. Further plan of action:

i. Continued efforts towards identifying additional end usesfor existing products.

ii. Develop new products, and upgrade existing products asper market requirement.

4. Expenditure on R & D during the Financial Year is as follows:

(Rs. in lacs)

Particulars 2007-08 2006-07

Capital 20.07 4.22

Recurring 44.03 34.16------------------------------- -------------------------------

Total 64.10 38.38------------------------------- -------------------------------

Total R & D expenditure as apercentage of turnover 0.63% 0.49%

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

No new technology has been acquired requiring the above.

IMPORTED TECHNOLOGY

No technology import has been made in the recent past.

OTHERS

The recognition of the in-house R & D facilities of the company hasbeen renewed by the Department of Scientific & Industrial Researchupto 31st March 2010.

FOREIGN EXCHANGE EARNINGS & OUTGO

The Company is currently assessing export potential for its productsin various markets. Details of foreign exchange earnings and outgoare given in Notes 13 & 14 of Schedule ‘M’ to the accounts.

FOR AND ON BEHALF OF THE BOARD

ATUL C CHOKSEYMumbai: 13th May 2008. CHAIRMAN

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Company’s Philosophy On Code of Corporate Governance:

The Company believes in adopting good practices in the areas of Corporate Governance and follows the principles of transparency anddisclosure in its operations.

Board Of Directors:

The Company presently has ten Directors. Two of them are whole-time Directors and eight are non-executive directors. Out of non-executivefive are independent directors.

During the Financial year 2007-08, Meetings of the Board of Directors were held on the following days: -

a) 9th May 2007, b) 27th July 2007, c) 29th October 2007 and d) 30th January 2008

None of the Directors on the Board hold the office of director in more than fifteen companies or membership of committee of the Board in morethan ten committees or chairmanship of more than five committees.

The details are explained in the Table below:

Name of Designation/Category Board Attendance at No. of other No. ofDirector(s) of Directorship Meetings last AGM Directorships Committees of

attended held which Member /Chairman*

Atul C. Choksey Non-Executive – 4 Yes 10 –DIN 00002102 Chairman Promoter

S K Lahiri CEO & Director 4 Yes – –DIN 00027943

Girish C. Choksey Non-Executive 2 Yes 5 2/-DIN 00246196

Amit C. Choksey Non-Executive 1 No 5 1/-DIN 00001470

Manubhai G. Patel Non-Executive, Independent 4 Yes 3 1/3DIN 00001662

Bipin V. Jhaveri Non-Executive, Independent 4 Yes 6 1/2DIN 00001648

Dr. S. Rengachary Non-executive, Independent 4 Yes 2 0/0DIN 00126980

Dr. S. Sivaram Non-Executive, Independent 3 No 3 2/-DIN 00009900

T.N.V. Ayyar Non-Executive, Independent — No 5 4/4DIN 00008493

Abhiraj Choksey Executive Director 4 Yes 3 –DIN 00002120

* Committee Membership of Audit Committee, Investors’ Grievance Committee & Remuneration Committee are considered.

Code of Conduct

The Company has a Code of Conduct for Directors and Members of senior Management. The code is available on the Company’s website. AllBoard members and senior management personnel have affirmed compliance with the code. A declaration to that effect signed by Mr. SanjayK Lahiri CEO & Director is appearing in the Annual Report.

Audit Committee

The Audit Committee was constituted in April 2000. It Comprises of four directors viz. Mr. M.G.Patel as the Chairman, Mr. Bipin Jhaveri,Mr. Girish Choksey and Dr. S. Rengachary as members. Mr. M.G.Patel is Non- Executive Independent Director.

The terms of reference of the Audit Committee include the matters specified in clause 49 (II) of the Listing Agreement with the StockExchanges. The terms of reference of Audit Committee includes the following:

Overseeing the company’s fiancial reporting process and disclosure of its financial information to ensure that the financial statement areproper, sufficient and credible.

Discussing / reviewing with the management:

a) Company’s Annual Plan;

b) Quarterly, half yearly and annual financial performance statements;

CORPORATE GOVERNANCE

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c) Adequacy of internal Checks and controls within the organization;

d) Observations of the Statutory and Internal Auditors in the course of their Audit;

e) Complaince with Stock Exchange and other Statutory/regulatory requirements;

f) Management Disccussion and Analysis of Company’s periodical performance;

g) Risks being faced by the Company and framework of management thereof from time to time;

h) Applicability, compliance and impact of various Accounting Standards and guidelines issued by the Concenrned Institute/Authoritiesto the financial Statements of Accounts of the Company;

i) Accounting Policies followed by the Company and changes required in them from time to time;

j) Significant related parties transactions, if any.

Reviewing with the management and the Statutory and/or Internal Auditors:

a) Adequacy of internal checks and controls within the organization.

b) Scope of Internal Audit / Statutory Audit.

c) Findings of Internal Audit.

During the year, five meetings of Audit Committee were held on a) 9th May 2007, b) 27th July 2007, c) 29th October 2007, d) 30th

January 2008 and e) 23rd February 2008

Attendance at Audit Committee meetings:

Name Non-Executive / IndependentNumbers of Meetings held - Five

Attended

M. G. Patel Non-Executive, Independent 5

Bipin Jhaveri Non-Executive, Independent 5

Girish C. Choksey Non-Executive 1

Dr. S. Rengachary Non-Executive, Independent 5

Shareholders/Investors Grievances:

Mr. M. G. Patel, a non-executive independent Director, is Chairman of the shareholders grievances committee. Other members are Mr. GirishChoksey and Mr. Bipin Jhaveri.

Terms of Reference

To review the existing Investors Redressal System and suggest measures for improvement.

To review the report of Registrars and Share Transfer Agents about investor’s grievances and action taken for redressal thereof.

To suggest improvement in investor’s relations.

To consider and take on record the Certificate from practicing Company Secretary under Clause 47(c) of the Listing Agreement.

To consider appointment / reappointment of Registrars and Share Transfer Agents and review terms and conditions of their appointments,their remuneration, service charges, fees etc.

To consider and take on record Secretarial Audit certificates issued by practicing Company Secretary certifying aggregate number ofequity shares held in depositories and in physical form tally with the total number of shares in Company’s issued, listed and admittedshare capital.

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The details of correspondences / grievances received and redressed during the financial year 2007-08 by the Company through the RegistrarsINTIME SPECTRUM REGISTRY LTD., are as under

Source Correspondences

Received Redressed /Attended

A Compliants

Directly from Shareholders 27 27

Consumer Forum – –

Department of Company Affairs – –

Advocates – –

SEBI

Stock Exchanges 3 3

NSDL 7 7

Any Other Government Body – –

Total (A) 37 37

B Type of Requests from Shareholders

Request for changes of Address 74 74

Request for transfer / Transmission of Share / deletion of Name 17 17

Request for change / correction of bank details 32 32

Request for revalidation / issue of new divdend warrants 99 99

Issue of Duplicate Share Certificate 1 1

Nomination 5 5

Miscellaneous 49 49

Total (B) 277 277

Grand Total (A + B) 314 314

Mr. Anand V. Kumashi, GM – Accounts, Finance and Company Secretary, has been appointed as the Compliance Officer, as required by theListing Agreements entered into by the Company with Bombay Stock Exchange and National Stock Exchange. He has been entrusted thetask of overseeing the share transfer work done by the Registrars and Share Transfer Agents, attending to grievances of the shareholders andinvestors; compliance with the statutory and regulatory requirements, etc. of SEBI, and stock exchanges.

There are no pending legal matters, in which the Company has been made a party, before any Court(s) / Consumer Forum(s) etc, SEBI,Department of Company Affairs relating to Investors’ grievances / complaints.

With reference to clause 47(f) of the Listing Agreement, Company has designated exclusive e-mail ID as [email protected] for investorsto register their grievances, if any. This has been initiated by the company to resolve investors’ grievances, immediately. The Company hasdisplayed the said e-mail ID on its Website for the knowledge of Investors.

Remuneration Committee:

To comply with the requirements of Schedule XIII of the Companies Act, 1956, the Board of Directors have appointed Remuneration Committeeconsisting of Company’s Directors, Mr. M G Patel as Chairman, Mr. Bipin V Jhaveri and Dr. S. Sivaram.

During the year Remuneration Committee met once on 9th May 2007.

Attendance at Remuneration Committee meeting:

Name Non-Executive / IndependentNumbers of Meetings held - One

Attended

M. G. Patel Non-Executive, Independent 1

Bipin Jhaveri Non-Executive, Independent 1

Dr. S. Sivaram Non-Executive, Independent 1

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Remuneration of Directors:

The payments made to Executive Director(s) have been reviewed by the Remuneration Committee and approved by the Board ofDirectors.

Non Executive Directors were paid Sitting Fees of Rs.6, 000/- (Rupees Six Thousand Only) for each meeting of the Board of Directors orcommittee(s) thereof, for the meetings attended by them.

The Company has not advanced any loans to any of the directors.

Directors’ Service Contracts’ Details:

Executive Directors Service Contract and Period Severance Fees

Sanjay K Lahiri Agreement dt. 30-07-2007:Period:04-06-2007 to 03-06-2010 Nil

Abhiraj Choksey Agreement dt. 10-08-2005:Period:01-05-2005 to 30-04-2010 Nil

Elements of remuneration paid to the directors have been provided in the following statements:

Name of Director Sitting Salary Allowances Contribution to Perquisites TotalFees Statutory Funds

Executives Directors

Sanjay K Lahiri 5,57,235 9,84,525 1,51,174 4,861 16,97,795

Abhiraj Choksey 4,36,248 6,07,566 51,337 3,08,030 14,03,181

Non-Executives Directors

Atul Choksey 24,000 – – – – 24,000

Girish Choksey 18,000 – – – – 18,000

Amit Choksey 6,000 – – – – 6,000

M.G.Patel 60,000 – – – – 60,000

Bipin Jhaveri 60,000 – – – – 60,000

Dr. S. Rengachary 54,000 – – – – 54,000

Dr. S. Sivaram 24,000 – – – – 24,000

T N V. Ayyar – – – – – –

Statement showing number of Equity Shares of Rs. 10/- each of the company held by the present Non Executive Directors ason 31st March 2008:

Non-Executive Directors No. of Shares % to paid up capital

Atul C. Choksey 1,28,339 2.326

Girish C. Choksey 7,850 0.142

Amit C. Choksey 9,933 0.180

Manubhai G. Patel 137 0.002

Bipin V. Jhaveri — —

Dr. S. Rengachary 3,000 0.054

Dr. S. Sivaram — —

T.N.V. Ayyar — —

Particulars of Directors to be re-appointed at ensuing Annual General Meeting:

Name: DR. S. RENGACHARY

Dr. S. Rengachary (64) is M.Sc (Tech) and Ph.D. and a post-graduation in the field of surface coating technology and doctoral degree inpolymer science.

Dr. S. Rengachary has been associated with the Company since inception in various capacities and actively involved in the day-to-day affairsof the Company till 31st March 2002, on which day he retired as Managing Director. He has more than three decades of experience in the fieldof Synthetic Rubber and Latices Industry. His overall experience includes management of product development, marketing, techno-commercialareas and Company management.

The Board of Directors had appointed Dr. S. Rengachary as an Additional Director of the Company, liable to retire by rotation with effect from1st April 2002. He was appointed as Director of the Company in the Annual General Meeting held on 27th July 2002. Dr. S. Rengachary is dueto retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for re-appointment.

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His Directorship and Committee membership of other Public Limited Companies as at 31st March 2008 is as follows:

Company Position Committee membership

Apcon Enterprises Limited Director Nil

Nurture Finance Limited Director Nil

He is holding 3000 (0.05%) Equity Shares of Rs. 10/- each of the company.

Name: MR. TNV AYYAR

Mr. TNV Ayyar (48) is a Fellow Member of the Institute of Chartered Accountant of India.

Mr. T. N. V. Ayyar has has more than 2 decades of post qualification experience in the field of Accounts, Audit, Development & PublicFinance, Investment banking, Corporate Finance and was associated with State Government projects relating to Infrastructure in India. Hehas experience in working in twelve developing countries in Africa, Asia and West Indies.

Presently he is a free lancing financial consultant with well-known companies as his clients.

The Board of Directors had appointed Mr. T.N.V. Ayyar as an Additional Director of the Company, liable to retire by rotation with effect from21st November 1997. He was appointed as Director of the Company in the Annual General Meeting held on 3rd September 1998. Mr. T.N.V.Ayyar is due to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for re-appointment.



Tata Ceramics Limited Director Audit Committee (Member)

GTL Limited Director Nomination and Remuneration Committee (Chairman)

Crest Communication Ltd Director Audit Committee (Chairman)Investors Grievance Committee (Member)Remuneration Committee (Member)

Emco Ltd Director Audit Committee (Chairman)Remuneration & Nomination Committee (Member)Compensation Committee (ESOP Committee) (Chairman)

R.T.Exports Ltd Director N.A.

He is not holding any Equity Share of the company.

Name MR. ABHIRAJ CHOKSEY

Mr Abhiraj Choksey (30) is a Bachelor of Science in Economics from Wharton Business School and also Bachelor of Science in Engineeringfrom the Engineering School, both of University of Pennsylvania in U.S.A.

Experience: He has several years of experience in the field of finance, system engineering, strategy formulation, administration etc, havingworked in a consulting firm in USA and a software company in the Country.

The Board of Directors had appointed Mr. Abhiraj Choksey as an Additional Director of the Company, liable to retire by rotation with effectfrom 26th November 2002 and appointed as Director of the Company in the Annual General Meeting held on 12th July 2003. Mr. AbhirajChoksey was appointed as Executive Director of the Company effective from 1st May 2005, in the Board meeting held on 17th May 2005,subject to approval of the shareholders in the ensuing Annual General Meeting.

Mr. Abhiraj Choksey is due to retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers himselffor re-appointment.



Apcon Enterprises Ltd Director NIL

Titan Trading & Agencies Ltd Director NIL

Trivikram Investments & Trading Ltd Director NIL

He is holding 42172 (0.76%) Equity Shares of Rs. 10/- each of the company.

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General Body Meetings

Details of last three Annual General Meetings Held:

1. 21th Annual General Meeting 27th July 2007 at 12.30 p.mPlot no. 3/1, MIDC Industrial Area,Taloja - 410 208, Dist. Raigad,Maharashtra

Special resolution passed:

For appointment of Dr. S. Rengachary as Advisor to the company.

Re-appointment of Mr. Sanjay K Lahiri, as “Wholetime Director” of the Company for a period of three years from 4th June 2007.

For approval of shareholders for allowing re-imburesement of medical expenses to Mr. Atul Choksey and his spouse.

For maintaing of Registers and Indexes of members with Registrar and Share Transfer Agents.

For approval of shareholders for payment of commission to non-executive directors for five financial years from 1st April 2007.

2. 20th Annual General Meeting 21st June 2006 at 11.00 a.mPlot no. 3/1, MIDC Industrial Area,Taloja - 410 208, Dist. Raigad,Maharashtra



3. 19th Annual General Meeting 28th July 2005 at 10.30 a.mPlot no. 3/1, MIDC Industrial Area,Taloja - 410 208, Dist. Raigad,Maharashtra



For appointment of Shri Abhiraj Choksey, as “Executive Director” of the Company for a period of five years from 1st May 2005.

For Change of the name of the company to Apcotex Industries Limited.

There were no special resolutions required to be passed through postal ballot at any of the above Annual General Meetings.

Disclosures:

Related Party Transactions:

There has not been any materially significant related party transaction between the Company and its Directors, promoters etc., that may havepotential conflict with the interest of the Company at large.

Risk Management:

The Company has initiated the exercise of identifying risks being faced by the company. Risk Minimisation is being built up in the operatingsystems, these procedures will be periodically reviewed by the Board of Directors to ensure that the Management minimises the risks throughmeans of a properly defined framework.

CEO and CFO Certification:

Certificate from Mr. S. K. Lahiri, Director & CEO and Mr. Anand V Kumashi, GM – Accts., Fin and Company Secretary, in terms of clause49(V) of the Listing Agreement entered into with Stock Exchanges, was placed before the Board Of Directors of the company in its meetingheld on 13th May 2008.

Compliances

The Company believes that it has complied with all the regulations of Stock Exchanges, Securities and Exchange Board of India (SEBI) orother statutory authority/ties on matters related to capital markets. No penalties have been imposed or strictures passed during the yearagainst the Company by SEBI, Stock Exchange(s), or any other statutory authority.

Means of Communication:

Half yearly / Quarterly Results have not been sent to shareholders; instead shareholders were intimated these through press and the Company’swebsite, www.apcotex.com. The Company also posted its Quarterly Results and Quarterly Shareholding pattern on the SEBI website viz.www.sebiedifar.nic.in. The results were intimated to the Stock Exchange(s) at the end of the respective board meetings.

The quarterly, half yearly and annual results of the Company’s financial performance were published in two newspapers viz. Free PressJournal and Navshakti. These, before release to the press, were informed to the Bombay Stock Exchange and National Stock Exchange.

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Management Discussion and Analysis forms part of the Annual Report and appears as Annexure to the Directors’ Report.

Compliance:

Certificate from Company’s Auditors on Corporate Governance, as required by Clause 49 of the Listing Agreement, is incorporated in thisAnnual Report.

General Shareholders Information:

a) 22nd Annual General Meeting will be held on Saturday, 12th July 2008 at 11.30 A.M at Plot no. 3/1, MIDC Industrial Area,Taloja - 410 208, Dist. Raigad, Maharashtra

b) The Company’s financial Year begins on 1st April to 31st March

c) Dates of book closure: Friday, 4 July 2008 to Friday, 11 July 2008 (both days inclusive) for the Purpose of Annual General meeting andpayment of dividend.

d) Dividend payment date: on or after 15th July 2008

e) Listing on Stock Exchanges: The Company’s equity shares are listed on Bombay Stock Exchange Limited and National Stock ExchangeLimited, Mumbai.The Annual Listing fees have been paid and there is no outstanding payment towards the stock exchanges, as on date

f) Stock Code: Bombay Stock Exchange Limited - 523694

Symbol : National Stock Exchange Limited – APCOTEXIND

g) ISIN allotted to Equity Shares is INE116A01016

Market Price Data:

Monthly high and low prices of equity shares of the company quoted at Bombay Stock Exchange and National Stock Exchangeduring the year 2007-08:

(Amount in Rs.)

Month / Year Bombay Stock Exchange National Stock Exchange

High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

April 2007 43.90 37.90 43.90 36.50

May 2007 41.20 35.00 41.65 34.70

June 2007 36.45 31.20 36.70 31.65

July 2007 38.85 33.15 38.90 33.05

August 2007 38.45 33.25 38.95 34.00

September 2007 43.00 35.25 43.90 35.10

October 2007 47.70 34.00 47.30 34.75

November 2007 55.00 40.05 55.00 41.55

December 2007 72.00 46.20 72.90 46.20

January 2008 74.40 40.00 67.00 40.20

February 2008 52.35 39.60 53.60 40.00

March 2008 49.95 31.00 55.95 31.05

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Stock Performance Index :

Registrars and Share Transfer Agents:

The Company has appointed Intime Spectrum Registry Limited. as its Registrars and Share Transfer Agents w.e.f 1st August 2006. ShareTransfers, dematerialisation of shares, and all other investors related activities are attended and processed at the office of the Registrars andShare Transfer Agents at the following address :

INTIME SPECTRUM REGISTRY LTDC-13, Pannalal Silk Mills Compound,L.B.S. Marg, Bhandup (W),Mumbai - 400078Tel. No.- (022) 2596 3838Fax : (022) 2594 6969Email : [email protected]

Share Transfer System:

Company’s shares are compulsorily traded in the demat segment on the stock exchange(s), and most transfers of shares takeplace in electronic form.

For expediting Physical transfer of shares, the Board has delegated the share transfer formalities to the officials of Registrar andShare Transfer Agent, to approve the transfer of shares on every Monday. Physical transfers are effected well within the stipulatedperiod of 30 days.

Distribution of Share: Distribution of shareholding as on 31st March 2008.

Category No. of Shareholders % to total No. of No. of shares % to total SharesShareholders

1 - 500 19,581 96.98 11,09,019 20.06

501 - 1000 281 1.39 2,21,679 4.01

1001 - 2000 143 0.71 2,15,052 3.89

2001 - 3000 47 0.23 1,13,957 2.06

3001 - 4000 28 0.14 98,736 1.79

4001 - 5000 22 0.11 1,02,815 1.86

5001 - 10000 41 0.20 2,86,861 5.19

Above 10001 48 0.24 33,79,233 61.14

Total 20,191 100.00 55,27,352 100.00

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Categories of Shareholding as on 31st March 2008:

Sr.No. Category No. of Shares % of shareholding

1. Promoters’ HoldingIndian Promoters 28,47,649 51.52

2. Non promoters’ HoldingMutual Funds/Trusts/clearing members 2,226 0.04

Insurance companies/Banks/Financial 2,546 0.05

Instituttion – –

Indian Public 21,62,854 39.13

Non Resident Indians 51,962 0.94

Other Corporate Bodies 4,60,115 8.32

Total 55,27,352 100.00

Dematerialisation of Shares:

The shares of the Company are available for dematerialisaion (holding of shares in electronic form) on both the depositories viz. NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Equity Shares of the company are to be compulsorily traded in the dematerialised form. As on 31st March 2008, 26,32,531 Equity Sharescomprising of 47.63% of paid up capital of the company, have been dematerialised by the investors and bulk of transfers take place in thedemat segment.

Outstanding GDR’s/ADR’s/Warrants or any convertible instruments, conversion data and impact on equity: NIL

Other Information:

Corporate Identification Number (CIN No.):

L99999MH1986PLC039199

Plant Location:

Plot No.3/1, MIDC Industrial AreaTaloja – 410 208, Dist. Raigad, MaharashtraTelephone: (022) 2741 2239 / 2360 / 1611 / 1613Fax: (022) 2741 2052

Investors Correspondence:

Investor correspondence may be addressed to any of the following;

Registered Office and Plant Registrar & Share Transfer Agents

Plot No.3/1, MIDC Industrial Area, INTIME SPECTRUM REGISTRY LTDTaloja – 410208, Dist. Raigad, C-13, Pannalal Silk Mills Compound,Maharashtra L.B.S. Marg, Bhandup (W),Mumbai - 400078Telephone: (022) 2741 2239 / 2360 1611 / 1613 Tel. No.- (022) 2596 3838Fax: (022) 2741 2052 Fax : (022) 2594 6969Website: www.apcotex.com Website: www.intimespectrum.comE-mail: [email protected] E-mail. : [email protected]

Unclaimed Dividend

Under the Companies Act, 1956, dividends that are unclaimed for a period of seven years are to be transferred to the Investors Education andProtection Fund, administered by the Central Government. The table given below gives the dates of dividend declaration or payment and thecorresponding date when unclaimed dividends will be due to be transferred to the Central Government.

Year Dividend Bank name Date of Date due for transferAccount No. declaration to Central Government

2001-02 00602230003184 HDFC Bank (Vijaya Bank correspondence Banker) 27/07/2002 26/07/2009





The concerned shareholders are requested to get their uncashed dividend warrants revalidated and encash thereafter.

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Declaration – Code of Conduct

The Board has laid down the code of conduct for the all the Board Members and Senior Management of the company, which is posted on theCompany’s Website. All the Board Members and Senior Management personnel of the company, for the financial year ended 31st March2008, have affirmed compliance with code of conduct.

For Apcotex Industries Limited

Place : Taloja S K LahiriDated : 13th May 2008 Director and CEO

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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE;

To the Members of Apcotex Industries Limited

Taloja, Dist. Raigad, Maharashtra.

We have examined the compliance of conditions of Corporate Governance by apcotex industries limited for the financial year 2007-08, asstipulated in Clause 49 of the Listing Agreement entered into by the said Company with the stock exchange(s).

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review ofthe procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance.It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directorsand the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 ofthe abovementioned Listing Agreement.

As required by the Guidance note issued by the Institute of Chartered Accountants of India, we have to state that the Registrar and ShareTransfer Agent of the Company has maintained records to show Investors’ Grievances against the Company and have certified that as on31st March 2008, there were no investor grievances remaining unattended / pending for a period exceeding one month.

We further state that such compliance is neither an assurance as to the future viability of the Company or the efficiency or effectiveness withwhich the management has conducted the affairs of the Company.

For Shah & Co.Chartered Accountants

H. N. ShahPartner

Mumbai: 13th May 2008 Membership No. 8152

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AUDITORS’ REPORT

REPORT OF THE AUDITOR TO THE MEMBERS

1. We have audited the attached Balance Sheet of APCOTEXINDUSTRIES LIMITED as at 31st March 2008, and also the Profitand Loss Account and the Cash Flow statement of the Companyfor the year ended on that date, annexed thereto. These financialstatements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those Standards require that weplan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accountingprinciples used and significant estimates made by Management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis of ouropinion.

3. As required by the Companies (Auditor’s Report) Order, 2003,issued by the Central Government of India in terms of sub-section(4A) of Section 227 of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in paragraphs4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to in paragraph3 above, we state that:

(a) We have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purpose of our audit.

(b) In our opinion proper books of account as required by lawhave been kept by the Company so far as appears formour examination of those books.

(c) The Balance Sheet, the Profit and Loss Account and theCash flow Statement referred to in this report are inagreement with the books of account.

(d) In our opinion, the Balance Sheet, the Profit and LossAccount and the Cash Flow statement dealt with by thisreport comply with the Accounting Standards referred to inSection 211(3C) of Companies Act, 1956.

(e) On the basis of the written representations received fromthe directors, and taken on record by the Board of Directors,we report that none of the directors is disqualified as on31st March 2008 from being appointed as a director in termsof clause (g) of sub-section (1) of section 274 of theCompanies Act, 1956.

(f) In our opinion and as per the information and according tothe explanations given to us, the said Accounts, readtogether with the notes thereon, give the informationrequired by the Companies Act, 1956, in the manner sorequired and give a true and fair view in conformity with theaccounting principles generally accepted in India.

(i) In the case of the Balance Sheet, of the state of affairsof the Company as on 31st March 2008.

(ii) In the case of the Profit and Loss Account, of the profitof the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cashflows for the year ended on that date.


H N ShahPartner


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ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS’ REPORT TO THEMEMBERS OF APCOTEX INDUSTRIES LIMITED FOR THE YEAR ENDED 31ST MARCH 2008

1) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of theFixed Assets.

(b) There is a regular program of physical verification, whichin our opinion is reasonable, having regard to the size ofthe Company and the nature of fixed assets. Materialdiscrepancies noticed by the management during the thecourse of physical verification have been properly dealt with.

(c) The Company has not disposed of substantial part of fixedassets during the year.

2) (a) Inventories have been physically verif ied by themanagement during the year. In our opinion, the frequencyof verification is reasonable.

(b) The procedures of physical verification of stocks followedby the management are reasonable and adequate in relationto the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory.The discrepancies noticed on verification between thephysical stocks and book records were not material andhave been properly dealt with in the books of account.

3) (a) The Company has not granted any loans during the year tothe parties covered in the register maintained under section301 of the Companies Act, 1956.

(b) The Company has not accepted any loans during the yearfrom the parties covered in the register maintained undersection 301 of the Companies Act, 1956.

(c) In view of clause 4 (iii)(a) of the Companies (Auditor’sReport) Order, 2003, clause 4 (iii) (b, c & d) are notapplicable to the Company.

4) In our opinion, and according to the information and explanationsgiven to us, there are adequate internal control systemscommensurate with the size of the Company and the nature ofits business with regard to the purchase of inventory and fixedassets and with regard to sale of goods and services. There isno continuous failure in the internal control system.

5) (a) All the transactions with parties covered under section 301of the Companies Act, 1956 have been properly entered inthe register maintained under section 301 of the Act.

(b) In our opinion, and according to the information andexplanations given to us, the transactions of purchase ofgoods, materials or services and sale of goods, materialsor services, made in pursuance of contracts orarrangements have been made at prices which arereasonable having regard to the prevailing market price forsuch goods, materials or services or the prices at whichtransaction for similar goods, materials or services havebeen made with the other parties.

6) In our opinion, and according to the information and explanationsgiven to us, directives issued by the Reserve Bank of India andthe provisions of Section 58A and 58AA or any other relevantprovisions of the Companies Act, 1956 and the rules framedthere under, to the extent applicable, have been complied with.We are informed by the management that no order has beenpassed by the Company Law Board, National Company Law

Tribunal or Reserve Bank of India or any Court or any otherTribunal.

7) In our opinion, the Company has an internal audit systemcommensurate with the size and nature of its business.

8) As informed to us the Company maintains the cost recordsprescribed under Sec. 209(1)(d) of the Companies Act, 1956.We have, however, not checked those records or the statementsprepared as per requirements.

9) (a) According to the information and explanations given to usand the records of the company examined by us, in ouropinion, the company is generally regular in depositing theundisputed statutory dues including provident fund, investoreducation and protection fund, employees’ state insurance,income tax, sales tax, wealth tax, customs duty, cess andother material statutory dues as applicable with appropriateauthorities. As explained to us, the company did not haveany dues on account of excise duty.

(b) According to the information and explanations given to usand the records of the company examined by us, there areno dues of wealth tax, service tax and cess as at 31st March,2008 which have not been deposited on account of disputeother than income tax, customs duty and excise duty, whichis as follows-

Name of the Nature of Amount Period to Forum whereStatute Dues (Rs. In which the dispute is

Lacs) amount pendingrelates

Income Tax Act Income Tax Penalty 3.75 2002-03 CIT(A)

Customs Act Custom Duty & Penalty 506.00 August 2000 CESTATto July 2004

Excise Act Excise Duty & Penalty 19.75 2002-03 JointCommissioner

2003-04 CESTAT

2005-06 AssistantCommissioner



10) The Company has no accumulated losses as at 31st March, 2008and it has not incurred any cash losses in the financial yearended on that date or in the immediately preceding financialyear.

11) The Company has not defaulted during the year in repaymentof dues to any financial institutions, banks or debenture holders.

12) The Company has not granted any loans and advances on thebasis of security by way of pledge of shares, debentures andother securities.

13) As the Company is not a chit fund, nidhi, mutual benefit fund orsociety, the provisions of clause 4(xiii) of the Companies(Auditor’s Report) Order, 2003 is not applicable to the Company.

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14) As the Company is not dealing or trading in shares, securities,debentures and other investments, the provision of clause 4 (xiv)of the Companies (Auditor’s Report) Order, 2003 is not applicableto the Company.

15) The Company has not given any guarantees for loans taken byothers from Banks or Financial institutions during the year.

16) The Company has not taken any terms loans during the year.

17) According to the information and explanations given to us, theCompany has not applied short-term borrowings for long-terminvestment.

18) The Company has not made any preferential allotment of sharesduring the year.

19) The Company has not issued any debentures during the year.

20) The Company has not raised any money by way of public issueduring the year.

21) As per the information and explanation given to us, no fraud onor by the Company has been noticed or reported during theyear.


H N ShahPartner


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BALANCE SHEET AS AT 31ST MARCH 2008

As at As atSchedules 31st March 2008 31st March 2007

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

FUNDS EMPLOYED

SHAREHOLDERS’ FUNDSShare Capital A 556.64 556.64Reserves and Surplus B 4,799.15 4,484.18

----------------------- -----------------------5,355.79 5,040.82

LOANS C

Secured 236.17 471.75

Unsecured 10.25 28.70----------------------- -----------------------

246.42 500.45

DEFERRED TAX LIABILITY 271.97 215.28----------------------- -----------------------

TOTAL 5,874.18 5,756.55============================================================ ============================================================

APPLICATION OF FUNDS

FIXED ASSETS D

Gross Block 5,724.85 5,866.90

Less : Depreciation 3,699.78 3,796.60----------------------- -----------------------

Net Block of Fixed Assets 2,025.07 2,070.30

Capital Work-in-Progress and Advance 11.61 50.98----------------------- -----------------------

2,036.68 2,121.28

INVESTMENTS (At Cost) E 1,476.94 1,040.65

CURRENT ASSETS, LOANS AND ADVANCES F

Inventories 942.53 676.76Sundry Debtors 1,807.00 1,870.43Cash and Bank Balances 169.36 236.18Loans and Advances 685.94 497.34Advance Payment of Taxes 121.01 36.93Retirement Benefit Asset 21.73 –

----------------------- -----------------------3,747.57 3,317.64

Less :

CURRENT LIABILITIES AND PROVISIONS G 1,387.01 723.02----------------------- -----------------------

NET CURRENT ASSETS 2,360.56 2,594.62

----------------------- -----------------------TOTAL 5,874.18 5,756.55

============================================================ ============================================================Notes M

As per our Report of even date ATUL C. CHOKSEY Chairman

S. K. LAHIRI Director & C.E.O.

GIRISH C. CHOKSEYAMIT C. CHOKSEYMANUBHAI G. PATEL

DirectorsBIPIN V. JHAVERIDr. S. RENGACHARYDr. S. SIVARAM

For SHAH & CO. ABHIRAJ A. CHOKSEY Executive DirectorChartered Accountants

H.N. SHAH ANAND V. KUMASHI GM – Accounts, Finance &Partner Company SecretaryMumbai : 13th May 2008 Mumbai : 13th May 2008

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PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH 2008

Schedules 31st March, 2008 31st March, 2007(Rs. in Lacs) (Rs. in Lacs)

INCOMESales (net of discounts ) H 1,1774.08 8,926.59

Less: Excise 1,617.12 1,161.76----------------------- -----------------------

Sales (net of discounts & excise ) 10,156.96 7,764.83

Other income I 309.15 216.03----------------------- -----------------------

10,466.11 7,980.86----------------------- -----------------------

EXPENDITUREMaterials Consumed J 7,675.17 6,205.80

Employees’ Remuneration and Benefits K 443.47 354.67

Manufacturing, Administrative, Selling and

Distribution Expenses L 1,477.88 1,207.89----------------------- -----------------------

9,596.52 7,768.36----------------------- -----------------------

GROSS PROFIT 869.59 212.50

Less : Depreciation D 211.71 319.48

Add/(Less) : Earlier year adjustments (net) 6.32 (47.15)----------------------- -----------------------

PROFIT / (LOSS) BEFORE TAXES 651.56 (59.83)Less : Provision for Taxation Current Tax 102.99 18.73

Less : Provision for Taxation FBT 4.63 4.51

Add/(Less) : Adjustment for Deferred Tax 56.70 (84.40)----------------------- -----------------------

PROFIT / (LOSS) AFTER TAX 487.24 1.33Add/(Less) :Balance brought forward from previous year 29.52 28.19

----------------------- -----------------------DISPOSABLE PROFIT 516.76 29.52

============================================================== ==============================================================DISPOSAL OF PROFITDividend on Equity Shares 165.82 0.00

Tax on Dividend 28.18 0.00

Transfer to General Reserve 48.75 0.00

Balance carried to Balance Sheet 274.01 29.52----------------------- -----------------------

516.76 29.52============================================================== ==============================================================

Rs. Rs.

EPS (Basic & Diluted) (Refer note 21 of Schedule M) 8.82 0.02



GIRISH C. CHOKSEYAMIT C. CHOKSEYMANUBHAI G. PATEL

DirectorsBIPIN V. JHAVERIDr. S. RENGACHARYDr. S. SIVARAM



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SCHEDULES FORMING PART OF THE ACCOUNTS

As at As at31st March 2008 31st March 2007


SCHEDULE A : SHARE CAPITAL

Authorised

14,970,000 Equity Shares of Rs. 10/- each 1,497.00 1,497.00

500 Preference Shares of Rs. 100/- each 0.50 0.50

25,000 Unclassified shares of Rs. 10/- each 2.50 2.50--------------------- ---------------------

1,500.00 1,500.00====================================================== ======================================================

Issued and Subscribed

55,27,352 (Previous year 55,27,352) Equity Shares of Rs. 10/- each fully paid 552.74 552.74

Add : Amount Originally paid on 78051 shares forfeited 3.90 3.90--------------------- ---------------------

556.64 556.64====================================================== ======================================================

NOTES :

Out of the above, 9,58,909 Equity Shares had been issued to the shareholdersof Asian Paints (I) Ltd. for consideration other than cash pursuant to the terms ofScheme of Arrangement sanctioned by the Hon’ble High Court, Mumbai.

SCHEDULE B : RESERVES AND SURPLUS

Capital Redemption Reserve 0.01 0.01

Share Premium 3,388.89 3,388.89

General Reserve

As per last Balance Sheet 1,065.76 1,065.76

Add : Transfer from Profit and Loss A/c. 48.75 –Add: Adjustment on account of adoption of Accounting Standard 21.73 –

(AS-15) (Revised) --------------------- ---------------------(Refer Note No. 19 in Schedule “M’) 1,136.24 1,065.76

PROFIT & LOSS A/C. 274.01 29.52--------------------- ---------------------

4,799.15 4,484.18====================================================== ======================================================

SCHEDULE C : SECURED AND UNSECURED LOANS

SECURED LOANS

SHORT TERM :

Loans and Advances

From Banks (refer note)

Cash Credit Account 236.17 471.75--------------------- ---------------------

236.17 471.75====================================================== ======================================================

UNSECURED LOANS

Loans and Advances from others

Fixed Deposits 10.25 28.70

(Repayable within one year Rs10.25 lacs, previous year Rs.28.70 lacs)--------------------- ---------------------

10.25 28.70====================================================== ======================================================

Notes :

Term Loan from a bank secured by hypothecation of the Company’s entiremovables except book debts and equitable mortgage by way of secondcharge in respect of Company’s immovable property located at Talojatogether with all buildings, structures, godowns,

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SCHEDULES FORMING PART OF THE ACCOUNTSSCHEDULE D : FIXED ASSETS

(Rs.in lacs)

PARTICULARS GROSS BLOCK DEPRECIATION NET BLOCK

Total Addition/ Deduction/ Total As at For the Deductions Total As at As atas on adjustments adjustments as on 01/04/2007 year for the year as on 31/03/2008 31/03/2007

01/04/2007 for the year for the year 31/03/2008 31/03/2008

Lease Hold Land 7.64 – – 7.64 1.76 0.10 – 1.86 5.78 5.89

Buildings 1,268.47 55.93 15.66 1,308.74 458.96 39.21 2.49 495.68 813.06 809.52

Plant & Machinery 3,615.04 57.14 252.45 3,419.73 2,820.03 123.23 245.48 2,697.77 721.96 795.01

Computer Software 10.01 32.79 – 42.80 8.54 1.78 – 10.32 32.48 1.47

Scientific ResearchEquipments 163.29 20.07 7.10 176.26 61.53 6.57 2.65 65.45 110.81 101.75

Electric & Pipe Fittings 590.30 21.03 44.17 567.16 347.17 25.51 39.08 333.60 233.56 243.14

Furniture & Office Equip. 132.80 6.30 28.81 110.29 62.39 7.86 16.56 53.69 56.60 70.41

Vehicles 79.34 17.36 4.47 92.23 36.22 7.45 2.26 41.41 50.82 43.11

Total 5,866.89 210.62 352.66 5,724.85 3,796.60 211.71 308.53 3,699.78 2,025.07 2,070.30

Previous Year 5,506.17 385.72 24.99 5,866.90 3,491.44 319.48 14.32 3,796.60 2,070.30



SCHEDULE E: INVESTMENTS (At Cost)

LONG TERM INVESTMENTS

1) UNQUOTED

i) TRADE INVESTMENTS

333 Ordinary Shares of Bombay Mercantile Co-op. Bank Ltd.,Mumbai of the face value of Rs.30/- fully paid 0.10 0.10

Share of Landmark Co-op. Hsg. Soc. Ltd. (Rs. 260/-) 0.01 0.01

ii) INVESTMENTS IN MUTUAL FUNDS

1 Nil units (Previous Year542.3980 units) of

Standard Chartered Liq.Mgr Plus- Daily Div. Rein. – 5.42

2 50,000 units (Previous Year 50000 units) ofSBI Magnum Multicap Fund. 5.00 5.00

--------------------------- ---------------------------5.11 10.53

============================================================= =============================================================

2) QUOTED

NON-TRADE INVESTMENTS

1 4080 (P. Y. 4080) Equity Shares of Asian Paints (I) Ltd.(includes 3580 bonus shares) of the face value of Rs.10/- fully paid 4.99 4.99

2 2000 (P. Y. 2000) Equity Shares of Tata Motors Ltd. of the facevalue of Rs.10/- fully paid 1.52 1.52

3 Nil (P. Y. 5500) Equity Shares of Ador Welding Ltd of the facevalue of Rs. 10/- fully paid Sold during the year – 16.20

4 Nil (P. Y. 5200) Equity Shares of All Cargo Global Logistics Ltd.of the face value of Rs. 10/- fully paid Sold during the year – 42.34

5 7500 (P. Y. Nil) Equity Shares of Axis Bank Ltd. of the face valueof Rs. 10/- fully paid purchased during the year 73.15 –

6 Nil (P. Y. 10900) Equity Shares of Biocon Ltd. of the face valueof Rs. 5/- fully paid Sold during the year – 41.06

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7 Nil (P. Y. 3600) Equity Shares of Bajaj Auto Ltd. of the face value ofRs. 10/- fully paid Sold during the year – 89.94

8 Nil (P. Y. 30600) Equity Shares of Bharat Forge Ltd. of theface value of Rs. 2/- fully paid Sold during the year – 104.26

9 4250 (P. Y. Nil) Equity Shares of B. L. Kashyap & Sons Ltd. ofthe face value of Rs. 5/- fully paid purchased during the year 78.96 –

10 17550 (P. Y.Nil) Equity Shares of Century Textiles Ltd. of the facevalue of Rs. 10/- fully paid purchased during the year 171.45 –

11 28200 (P. Y. Nil) Equity Shares of Everest Kanto Cylinder Ltd of theface value of Rs. 2/- fully paid purchased during the year 67.35 –

12 9900 (P. Y. Nil) Equity Shares of ICICI Bank Ltd of the face value ofRs. 10/- fully paid purchased during the year 112.58 –

13 Nil (P. Y. 3500 includes 200 bonus shares) Equity Shares of InfosysTechnology of the face value of Rs. 5/- fully paid Sold during the year – 61.78

14 11800 (P. Y. 12900) Equity Shares of Kirloskar Brothers Ltd. of theface value of Rs. 2/- fully paid 38.67 41.53

15 9650 (P. Y. 9650) Equity Shares of Kotak Mahindra Bank Ltd. of theface value of Rs. 10/- fully paid 49.40 49.40

16 Nil (P. Y.5700) Equity Shares of Laxmi Machine Works Ltd. of theface value of Rs. 10/- fully paid Sold during the year – 91.95

17 Nil (P. Y. 3100) Equity Shares of Larsen & Toubro Ltd.(includes 3100 bonus shares) Of the face value of Rs. 2/-fully paid Sold during the year – 37.77

18 1400 (P. Y. Nil) Equity Shares of Madras Cement Ltd. Of the facevalue of Rs. 10/- fully paid purchased during the year 53.43 –

19 16600 (P. Y. 16600) Equity Shares of Maharashtra Seamless Ltdof the face value of Rs. 5/- fully paid 78.85 78.85

20 Nil (P. Y. 800) Equity Shares of Motor Industries Company of theface value of Rs. 10/- fully paid Sold during the year – 18.93

21 200 (P. Y. Nil) Equity Shares of Nicholas Priamal India Ltd.of the face value of Rs. 2/- fully paid purchased during the year 0.57 –

22 15500 (P. Y. Nil) Equity Shares of Punj Lloyd Ltd. of the face valueof Rs. 2/- fully paid purchased during the year 48.31 –

23 3250 (P. Y. Nil) Equity Shares of Reliance Capital Ltd. of the facevalue of Rs. 10/- fully paid purchased during the year 35.83 –

24 21350 (P. Y. 23550) Equity Shares of Reliance Industries Ltd. of theface value of Rs. 10/- fully paid 225.05 243.71

25 18150 (P. Y. 40000) Equity Shares of Reliance Comm. Ltd. of theface value of Rs. 5/- fully paid 57.28 89.89

26 4625 (P. Y. Nil) Equity Shares of State Bank of India Ltd of the facevalue of Rs. 10/- fully paid purchased during the year 72.81 –


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27 7250 (P. Y.Nil) Equity Shares of Sterlite Industries (India) Ltd.of the face value of Rs. 2/- fully paid purchased during the year 74.23 –

28 114500 (P. Y.Nil) Equity Shares of Voltas Ltd of the face value ofRe. 1/- fully paid purchased during the year 145.27 –

29 37800 (P. Y.Nil) Equity Shares of Welspun Gujarat Stahl Rohern Ltdof the face value of Rs. 5/- fully paid purchased during the year 66.13 –

--------------------------- ---------------------------1,455.83 1,014.12

--------------------------- ---------------------------3) UNQUOTED

NON-TRADE INVESTMENTS

120000 (P.Y. 120000) Equity Shares of Cybele Paradise Pvt Ltd.of the face value of Rs.10/- fully paid 16.00 16.00

20 (P.Y. Nil) Equity Shares of Piramal Life Science Limited ofthe face value of Rs.10/- fully paid – 16.00 –

--------------------------- --------------------------- ---------------------------1,476.94 1,040.65

================================================================ ================================================================AGGREGATE MARKET VALUE OF INVESTMENTS

Cost of Purchase Market Value(Rs. in lacs) (Rs. in lacs)

QUOTED INVESTMENTS 1,455.83 1796.53

UNQUOTED INVESTMENTS 16.11 16.11

Unit/Shares/Debentures purchased and sold during the period

Shares No.Of Units/Shares Cost of Purchase Sales Value

Cropmton Greaves Ltd 12400 32.58 31.22

Infosys Tech 250.00 5.02 4.84

Larson & Toubro Ltd 500.00 10.83 22.06

Reliance Capital Ltd 1100.00 11.65 23.09

Voltas Ltd 5900.00 6.47 12.28

Welspun Gujarat Stahl Rohern Ltd 1500.00 2.15 6.72

68.70 100.21


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SCHEDULES FORMING PART OF THE ACCOUNTSAs at As at

31st March 2008 31st March 2007(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

SCHEDULE F : CURRENT ASSETS, LOANS AND ADVANCES AND ADVANCESA) CURRENT ASSETS

i) Inventories (Lower of cost and market value -as taken,valued and certified by General Manager-Factory)(a) Packing Materials 13.80 8.14(b) Raw Materials 395.58 170.07(c) Finished Goods 208.64 226.96(d) Work - in - Process 173.89 129.80(e) Stores, Spares & Consumables 150.62 141.79

------------------------ ------------------------942.53 676.76

ii) Sundry Debtors (Unsecured)(a) Outstanding for more than six months

Considered good 9.69 94.92Considered doubtful 0.00 4.70

------------------------ ------------------------9.69 99.62

Less : Provision for doubtful debts 0.00 4.70------------------------ ------------------------

9.69 94.92(b) Other debts 1797.31 1775.51

------------------------ ------------------------1807.00 1870.43

iii) Cash and Bank Balances(a) Cash on hand 1.74 1.93(b) With Scheduled Banks 43.05 214.58(c) Term Deposit Receipts 124.57 19.67

------------------------ ------------------------169.36 236.18

iv) Retirement benefit asset 21.73 –(Refer Note No. 19 in Schedule ‘M’)

B) LOANS AND ADVANCES(i) Unsecured, considered good

a) Balances with Customs, Central Excise etc. 43.06 44.60b) Sundry Deposits 219.44 218.55c) Advances/claims recoverable in cash or in kind 220.65 224.90d) Loans/Advances to staff 1.63 1.22e) Inter Corporate Deposit 200.00 –f) Capital Advance 1.16 8.07

------------------------ ------------------------685.94 497.34

(ii) Advance Payment of Taxes 121.01 36.93------------------------ ------------------------

3,747.57 3,317.64=================================================================== ===================================================================

SCHEDULE G: CURRENT LIABILITIES AND PROVISIONSA] CURRENT LIABILITIES

(i) Sundry Creditors for goodsa) Total outstanding dues of small scale industrial undertakings

(refer note 17 in Schedule M) 38.79 21.10b) Total outstanding dues of creditors other than small scale

industrial undertakings 721.37 378.55------------------------ ------------------------

760.16 399.65(ii) Other liabilities 211.03 183.78(iii) Advance from customers including security deposits 42.58 49.58(iv) Investors’ Education & Protection Fund shall be credited by

the following amount (Refer Note below)Unclaimed Dividend 8.74 9.67

------------------------ ------------------------1022.51 642.68

B] PROVISIONS(i) Proposed Dividends 165.82 –(ii) Tax on Dividends 28.18 –(iii) Provision for taxation 107.62 23.23(iv) Other Provisions 62.88 57.11

------------------------ ------------------------364.50 80.34

------------------------ ------------------------1,387.01 723.02

=================================================================== ===================================================================Note: There is no amount due and outstanding as at Balance Sheet date to be credited to Investors’ Education & Protection Fund

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For the period ended For the period ended31st March, 2008 31st March, 2007


SCHEDULE H : SALES

Sales 11963.21 9053.58

Less : Goods return 63.96 16.72------------------------ ------------------------

Gross Sales 11899.25 9036.86

Less : Discounts and rebates 125.17 110.27

Excise Duty & CESS 1617.12 1161.76------------------------ ------------------------

Sales (net of discounts, rebates and excise) 10156.96 7764.83=================================================================== ===================================================================

SCHEDULE I : OTHER INCOME

Interest 22.95 10.52

Dividend from investments 6.69 18.93

Surplus on sale of investments 224.37 166.75

Rent 22.03 0.54

Sundry balances written back 25.10 3.42

Miscellaneous Income 8.01 15.87------------------------ ------------------------

309.15 216.03=================================================================== ===================================================================

SCHEDULE J : MATERIALS CONSUMED

Raw Materials Consumed :

Opening Stock 170.07 294.52

Add : Purchases and Expenses (Net of exchange difference ofRs.7.35 lacs credited ( P.Y 2.50 Lacs) ) 7,609.64 5799.30

------------------------ ------------------------7,779.71 6093.82

Less : Closing Stock 395.58 170.07------------------------ ------------------------

7384.13 5923.75

Packing Materials Consumed 316.81 285.10

Less : (Increase) / Decrease in finished and semi-finished stock

Opening Stock 356.76 353.71

Closing Stock 382.53 356.76------------------------ ------------------------

(25.77) (3.05)------------------------ ------------------------

7675.17 6205.80=================================================================== ===================================================================

SCHEDULE K : EMPLOYEES’ REMUNERATION AND BENEFITS

Salaries, wages, allowances, provision for bonus and accrued leave salary 361.29 285.37

Staff Welfare Expenses 38.57 29.71

Contribution to Provident and other funds 19.76 18.28

Contribution to Gratuity and Superannuation funds 1.80 2.79

Contract Labour 22.05 18.52------------------------ ------------------------

443.47 354.67=================================================================== ===================================================================

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For the period ended For the period ended31st March, 2008 31st March, 2007


SCHEDULE L : MANUFACTURING, ADMINISTRATIVE,SELLING AND DISTRIBUTION EXPENSES

Stores and spares consumed 101.63 87.41

Power and fuel 375.40 309.56

Freight and transport charges 167.66 157.05

Repairs and Maintenance

Buildings 146.06 42.78

Machinery 63.66 50.42

Other assets 11.78 10.72------------------------ ------------------------

221.50 103.92

Rent 11.40 5.76

Rates and taxes 40.37 28.62

Insurance 19.09 29.36

(including accident insurance for Director Rs. 0.05 lacs - previous year Rs. 0.05 lacs)

Advertisement 4.49 2.59

Printing, stationary, postage and telephones 24.96 26.30

Travelling Expenses

Directors 30.27 21.98

Others 64.62 45.73------------------------ ------------------------

94.89 67.71

Commission on sales 86.20 98.91

Donation 0.50 0.15

Miscellaneous expenses 233.01 238.57

Directors’ meeting fees 2.46 3.06

Bad & Doubtful Debts – 4.70

Bad Debts 4.99 –

Audit Fees 1.75 1.50

Loss on sale/discarded assets (Net) 42.71 9.10

Interest and financing charges :

On fixed loans 5.58 5.17

On other loans 39.29 28.45------------------------ ------------------------

44.87 33.62------------------------ ------------------------

1477.88 1207.89=================================================================== ===================================================================

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SCHEDULE M: NOTES ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED IN THE COMPILATION OF THE ACCOUNTS

a) Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting tocomply with the Accounting Standards prescribed in the Companies (Accounting Standards) Rule 2006 and with relevant provisionsof the Companies Act, 1956.

b) Method of Accounting

i. The method of accounting followed by the Company is mercantile/accrual basis.

ii. The rights and liabilities pertaining to prior period operations but arising in the current year, if material, are shown under ‘priorperiod adjustments’ in the Profit and Loss Account.

c) Fixed Assets

i. The ‘gross block’ of fixed assets is shown at the cost of acquisition, which includes taxes, duties (net of MODVAT/CENVAT andset-offs availed) and other identifiable direct expenses.

ii. Leasehold lands are amortized over the period of lease.

d) Depreciation

1) The Company has provided depreciation

i. On all additions upto 31.03.1994 under Written Down Value Method and at rates specified under Schedule XIV of theCompanies Act, 1956.

ii. On all additions after 31.03.1994 under Straight Line Method and at rates specified under Schedule XIV of the CompaniesAct, 1956.

2) In respect of all additions during the year depreciation is provided pro-rata on monthly basis.

3) Intangible Assets -Computer Software expenses are written off over period of three years.

e) Investments

i. Short-term investments, if any, are carried at the lower of cost and quoted/fair value, computed category wise. Long-terminvestments are carried at cost. Provision for diminution in the value of the long-term investments is made only, if such adecline is not temporary, in the opinion of the management.

ii. Cost is arrived at by specific identification method.

f) Inventory

i. Raw and packing materials are valued at cost or market value, whichever is lower, computed on FIFO basis. The costincludes the cost of purchase and other expenses directly attributable to their acquisition but excludes duties and taxes, whichare subsequently recoverable from the taxing authorities.

ii. The finished goods inventory is valued on the principle of cost, or market value whichever is lower. It includes material cost,conversion and other costs incurred in bringing the inventories at their present location and condition.

iii. Work-in-process is valued at material cost and cost of conversion appropriate to their location in the manufacturing cycle.

iv. Stores, spares and consumables are valued at cost, computed on FIFO basis. The cost includes the cost of purchase andother expenses directly attributable to their acquisition but excludes duties and taxes that are subsequently recoverable fromthe taxing authorities, if any.

v. Damaged, unserviceable and inert stocks are suitably depreciated.

g) Transactions in foreign exchange

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction or at the exchangerates under related forward exchange contracts. The realised exchange gains/losses are recognised in the Profit & Loss account.All foreign currency current assets/liabilities are translated in rupees at the rates prevailing on the date of balance sheet.

h) Sundry Debtors

Sundry debtors are stated after writing off debts considered as bad. Adequate provision is made for doubtful debts, if any. Discountsdue, yet to be quantified at the customer level are provided for under other provisions.

i) Employees’ Benefits

The Company has taken Group Gratuity Policy from Life Insurance Corporation of India ( LIC ) for future payments of gratuities. Thegratuity liability is determined based on an actuarial valuation performed by LIC.

Liability towards Superannuation is funded @ 15% of basic salary.

Provision for leave encashment, which is defined benefit, is made based on an actuarial valuation carried out by an independentactuary at 31 st March 2008.

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j) Research and Development

• Capital expenditure is shown separately under respective heads of fixed assets.

• Revenue expenses are included under the respective heads of expenses.

k) Provision for Taxation

Provision for taxation is computed as per ‘total income’ returnable under the Income Tax Act, 1961 after taking into accountavailable deductions and exemptions. Deferred tax is recognized for all timing differences between taxable income and accountingincome that originate in one period and are capable of reversal in one or more subsequent periods.

l) Borrowing Costs.

Borrowing cost directly attributable to the acquisition and construction of qualifying assets are capitalized. Other borrowing costsare recognized as expenses in the period, which they are incurred.

m) Other Accounting Policies

These are consistent with generally accepted accounting practices.

n) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amountof the Company’s fixed assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognizedwhenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net sellingprice and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on anappropriate discount factor.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognisedfor the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of animpairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net ofdepreciation) had no impairment loss been recognised for the asset in prior years.

2. Estimated amount of contracts to be executed on capital account and not provided for Rs. 3.79 lacs (Net of advances) [Previous YearRs. 16.86 lacs (Net of Advances)].

3. Contingent Liabilities:

Claims against the Company not acknowledged as debts [Gross] Rs. 529.50 lacs (Previous Year Rs. 526.31 Lacs).

(Rs. In Lacs)

Particulars F.Y 2007-08 F.Y 2006-07

Direct Tax Matters 3.75 3.74

Excise & Custom 525.75 522.56

4. During the period sum of Rs. 21.49 lacs, being rental income of office premises arising from court order had been accounted under‘Other Income’ .

5. In addition to Audit Fees, reimbursement of expenses Rs. 0.10 lacs (Previous Year Rs. 0.10 lacs), Rs. 0.30 lacs towards other services(Previous Year Rs. 0.16 lacs) and Rs. 0.20 lacs have been paid towards attending audit committee (Previous year Rs. 0.30 lacs). Inaddition to Rs. Nil lacs paid towards other services during the year to their associates (Previous year Rs. Nil lacs).

6. During the year the company had written off the fixed assets worth Rs 41.22 Lacs (WDV) being the assets discarded.

7. Managerial remuneration under Section 198 of the Companies Act, 1956, read with schedule XIII (Minimum applicable)

31st March, 2008 31st March, 2007

Salaries 10.02 9.18

Allowances 17.19 12.93

Contribution to Provident & Superannuation Funds 2.13 1.91

Perquisites 3.09 2.40

Directors’ sitting fee 2.46 3.06

Total 34.89 29.48

The above remuneration does not include contribution to Gratuity Fund, as this contribution is a lump sum amount based on actuarialvaluation.

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8. Installed Capacity:

UnitInstalled Capacity*


Synthetic Rubber & Latices MT# 21000 21000

* As per certificate given by the GM - Works on which the Auditors have relied since it is a Technical matter.

# Installed capacity is on dry basis.

9. Production, Stocks and Turnover:

31st March 2008

Production Opening Stock Closing Stock Turnover

Unit Quantity Quantity Value Quantity Value Quantity Value(Rs.in lacs) (Rs.in lacs) (Rs. in lacs)

Synthetic Rubber M.T. 17291.39 398.25 226.96 489.97 208.64 17137.86 11899.25including Latices (13812.81) (424) (240.17) (398.25) (226.96) (13838.55) (9036.86)

• Bad stock destroyed / reprocess loss during the year Nil MT (Previous Year Nil M.T.).

• Free Sample 2.18 M.T.

• Received after Reprocessing 59.63 M.T. (Previous year Issued for Reprocess 13.12 M.T.)

10. Raw Materials Consumed:

2007-2008 2006-2007

Unit Quantity Value Quantity Value(Rs. In lacs) (Rs. In lacs)

Monomers MT 11356.64 6667.73 8118.75 5372.42

Others MT 1346.44 721.97 1026.43 551.33

7389.70 5923.75

11. CIF value of direct imports:

2007-2008 2006-2007(Rs. in lacs) (Rs. in lacs)

Raw materials 510.24 400.13

Stores and spares 0.32 3.53

Capital items 9.28 17.73

12. Value of imported and indigenous raw materials and spares consumed and percentage of each to total consumption:

2007-2008 % to 2006-2007 % to(Rs. in lacs) Total (Rs. in lacs) Total

Raw Materials:

Direct Imports 241.54 3.27 213.90 3.64

Others {including value of consumption of importedraw materials purchased through indigenous sourcesRs.3965.01 Lacs} (Previous Year Rs. 2967.82 lacs) 7142.59 96.73 5709.85 96.36

7384.13 100.00 5923.75 100.00

Stores and Spares:

Direct Imports 2.34 2.30 3.90 4.21

Indigenous 99.29 97.70 88.83 95.79

101.63 100.00 92.73 100.00

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13. Earnings in foreign currency:


F.O.B. value of Exports 308.57 344.22

14. Expenditure in foreign Currency:


a. Books and periodicals & other memberships 0.61 1.97

b. Foreign Travel 4.72 9.43

c. Professional fees 18.37 45.31

d. Sales Commission 1.07 2.39

15. No Dividend has been remitted in foreign currency during financial year 2007-08 (Previous Year – Rs. 0.05 lacs and No. of ShareHolders – 38)

16. Revenue expenses amounting to Rs. 44.03 Lacs on Research and Development have been included under the respective heads ofexpense accounts (Previous Year Rs. 34.16 lacs).

17. The Company deals with several Small Scale Industrial (SSI) undertakings on mutually accepted terms and conditions. Based on therecords of the company and the information received from SSI suppliers, the various amounts due to SSI’s and included under sundrycreditors. The names of SSI Undertakings to whom the company owe any sum outstanding for more than 30 days are as under:

NAME OF THE PARTY Rs. In lacs

ADVANCE COOLING TOWERS PVT. LTD. 0.60

AVA CHEMICALS PVT LTD. 6.27

DIAMOND ENGINEERING WORKS 1.35

K.T. PLASTIC INDUSTRIES LIMITED. 10.69

MYSORE AMMONIA PVT. LTD. 0.05

PAR SPECIALITY POLYMERS PVT LTD. 1.20

TYTAN ORGANICS PVT. LTD. 0.17

VIKRAM PLASTICIZER 18.45

TOTAL 38.78

The Company has not received any intimation from suppliers regarding their status under the Micro Small & Medium EnterprisesDevelopment Act, 2006, and hence disclosures, if any, relating to amount unpaid as at the end together with interest paid/ payable asrequired under the said Act have not been given.

18. Company is engaged in the business of Synthetic rubber including latices.

19 Discloser as per Accounting Standard 15 (Revised )

The following table sets out the status of the gratuity Plan as required under AS 15 (Revised ).

Statement Showing changes in Present Value of obligation as on 31st March 2008.Present Value of Obligation of the year 32.27

Interest Cost 2.50

Current service Cost 3.54

Benefits paid 3.11

Actuarial Loss on obligations 9.89

Present Value of obligations as at the end of the year 44.09

Table showing changes in the fair value of plan asset as on 31st March 2008Fair value of plan assets 62.28

Contributions 1.09

Benefits Paid 3.11

Actuarial Gain / Loss on plan asset NIL

Fair Value of Plan Asset as the end of the year 65.82

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Actuarial Gain / Loss recognized as on 31 st March, 2008Actuarial Loss for the year – Obligation 9.89

Actuarial Gain / Loss for the year – plan asset NIL

Total Loss for the year 9.89

Actuarial Loss recognized in the year 9.89

Amount to be recognized in the Balance SheetPresent Value of Obligation as at the end of the year 44.09

Fair value of plan asset as at the end of the year 65.82

Net Asset recognize in the Balance sheet 21.73

Actuarial AssumptionsDiscount Rate 8 %

Salary Escalation 5 %

Investment detailsGOI securities 63.28 %

State Government Securities 13.57 %

Approved Marketable Securities 00.24 %

Bonds / Debentures etc. 17.67 %

Loans 00.47 %

Equity 02.43 %

Liquid Fund / Money Market 02.34 %

Total 100 00 %

Note:1) Comparative values of defined benefit plans as required by Accounting Standard (AS 15) (Revised) are not provided, this being the first

year of adoption of the standard.

2) During the year the company has adopted Accounting Standard (AS 15) (Revised) & accordingly had recognized the present value ofobligation netted against fair value of plan assets Rs. 21.73 lacs had been transferred to General Reserve as provisions of AccountingStandard (AS 15) (Revised) & included the amount of retirement benefits assets under the heading Current Assets.

20. As per requirement of Accounting standard for related parties transaction (AS 18) issued by ICAI:

Related Party Disclosure

Transactions with Related Parties (Rs. In Lacs)

Sl. Nature of Transaction Person(s) having Directors Associates Key TotalNo. controlling (Common Management

interest Control) Personnel

1 Reimbursement of Officemaintenance, Traveling,Rent and Other expenses - - 15.29 - 15.29

2 Remuneration - - - 32.43 32.43

3 Directors sitting fees 0.24 2.22 - - 2.46

4 Inter Corporate Deposits - - 200.00 - 200.00

5 Interest on Inter Corporate Deposits - - 4.36 - 4.36

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Names of related parties and description of relationship

Sr. No. Names of related parties Description

1 Mr. Atul C. Choksey Person/s having controlling interest

2 Mrs. Ashvinaben C. Choksey Relatives of person/s having controllingMrs. Parul Choksey interestMrs. Devanshi JalanMr. Anantveer JalanMrs. Rita Ashok ParekhMrs. Biyash ChokseyBaby. Alekha Choksey

3 Mr. Girish C. Choksey DirectorsMr. Bipin V. JhaveriMr. Manubhai G. PatelMr. Amit C. ChokseyMr. T.N.V. AyyarDr. S. SivaramDr. S. Rengachary

4 Apcon Enterprises Limited Associates (Common Control)Shyamal Finvest (India) LimitedTrivikram Investments & Trading Company LimitedApcosoft Private LimitedDhumraketu Investments & Trading Company Pvt. LimitedLaxmanjhula Trading & Investments Pvt. LimitedNurture Finance LimitedPropycon Trading & Investments Private LimitedSaldhar Investments & Trading Company Pvt. LimitedTitan Trading & Agencies LimitedAquamarine Trading & Investments Pvt. LimitedBhuvantray Investments & Trading Co. Pvt. LimitedChoksey Chemical Pvt. LimitedGauriputra Investments & Trading Co. Pvt. LimitedJoshimath Trading & Investments Pvt. LimitedThe Hindustan Mineral Products Co. LimitedMazda Colours LimitedSunshield Chemicals LimitedAbhiraj Trading & Investments Pvt. LimitedAeonian Investments Company LimitedAmisha Credit & Capital Pvt. LimitedBalasesh Leafin LimitedCons Holdings LimitedHMP Mineral Pvt. LimitedMustang Investments Pvt. LimitedPriyam Investment Consultants LimitedSammelan Investment & Trading LimitedForest Hills Trading & Investments Pvt. LimitedHaridwar Trading & Investments Pvt. LimitedBelt Trading & Investments Pvt. LimitedDhumravarma Trading & Investments Pvt. LimitedStandard Chartered Asset Management Co. Pvt. LimitedCasabella Interior Pvt. LimitedCybele Paradise Pvt Ltd

5 Mr. S.K. Lahiri - Key Management Personnel Director & C.E.O.Mr. Abhiraj A. Choksey - Key Management Personnel Executive Director

21. Earning per Share:

2007-2008 2006-2007

1. Profits/(Loss) after Tax – Rs. In lacs 487.24 1.33

2. Number of Shares 55,27,352 55,27,352

3. Earning per Share – Rs. 8.82 0.02

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22. Deferred Tax

As at As at31-03-2008 31-03-2007

(Rs. In lacs) (Rs. In lacs)

Deferred Tax Liability on account of:

Difference between Book & Tax Depreciation 274.17 272.66

Capital Expenditure on Scientific Research 6.82 1.43

Other Net Deffrences 8.28 6.41

(A) 289.27 280.50

Deferred Tax Assets on account of:

Provision for Leave Encashment 13.04 9.79

Provision for Bad & Doubtful Debts - 1.60

Unabsorbed Business Loss - 53.83

Provision for Bonus 4.26 -

(B) 17.30 65.22

(A-B) 271.97 215.28

23. As per requirements of Accounting Standard for the Contingent liabilities & Provisions (AS 29) issued by ICAI.

Particulars Opening Additions Adjustments/ ClosingBalance Payments Balance

Provision for Privilege Leave liability – The Provision is made as per 28.78 9.58 — 38.36the actuarial Valuation of the Estimated Liability for Encashment ofthe Privilege Liability of the Employees as on 31st March 2008.

Provision for Income Tax – The addition is towards the Income Tax 342.54 104.65 — 447.19Payable on the current years profit.

Provision for Bad & Doubtful Debts 4.70 4.98 9.68 —

24. Previous year’s figures have been regrouped, wherever necessary. Figures in brackets are for the previous year.



GIRISH C. CHOKSEY

MANUBHAI G. PATEL

BIPIN V. JHAVERI Directors

Dr. S. RENGACHARY

Dr. S. SIVARAM



}

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BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI REGISTRATION DETAILS

Registration No. 0 3 9 1 9 9 State Code: 1 1

Balance Sheet Date: 3 1 0 3 2 0 0 8Date Month Year

II CAPITAL RAISED DURING THE YEAR (Amount Rs. in thousands)Public Issue Rights Issue

N I L N I L

Bonus Issue Private Placement

N I L N I L

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in thousands)Total Liabilities Total Assets

7 2 6 1 1 9 7 2 6 1 1 9SOURCE OF FUNDSPaid-up Capital Reserves and Surplus

5 5 6 6 4 4 7 7 7 4 1Secured Loans Unsecured Loans

2 3 6 1 7 1 0 2 5

Deferred Tax Liability2 7 1 9 8

APPLICATION OF FUNDSNet Fixed Assets Investments

2 0 3 6 6 8 1 4 7 6 9 4

Net Current Assets Miscellaneous Expenditure2 3 6 0 5 6 N I L

Accumulated Losses

N I L

IV PERFORMANCE OF COMPANY (Amount Rs. in thousands)Turnover (Total Income) Total Expenditure

1 0 4 6 6 1 1 9 8 0 8 2 3+ - Profit/(Loss) Before Tax + - Profit/(Loss) After Tax but before and extraordinary items extraordinary items

6 5 1 5 6 4 8 7 2 4Earning per share in Rs. Dividend Rate (%)

8 . 8 2 3 0

V GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY (As per monetary terms)Item Code No. (ITC Code) Product Description

4 0 0 2 1 1 0 0 S T Y R E N E B U T A D I E N E

R U B B E R ( S B R ) L A T E XItem Code No. (ITC Code) Product Description

4 0 0 2 1 9 0 0 S T Y R E N E B U T A D I E N E

R U B B E R ( S B R )Item Code No. (ITC Code) Product Description

4 0 0 2 9 1 0 0 O T H E R L A T E X

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CASH FLOW STATEMENT FOR THE F.Y. 2007-20082007-2008 2006-2007

(Rs. in lacs) (Rs. in lacs)

A. CASH FLOW FROM OPERATING ACTIVITIES :Net profit / (loss) before tax and extraordinary items 651.56 (59.83)Adjustments for :- Depreciation 211.71 319.48- Interest Paid 44.87 33.62- Loss on sale of Asset 42.71 9.10- Bad and doubtful Debts – 4.70- Bad Debts 4.99 –- Interest/dividend/Other Income (309.15) (216.03)

------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Operating profit before working capital changes 646.69 91.04Adjustments for :- Trade and other receivables (125.17) 89.73- Inventories (265.77) 119.35- Trade and other payables 385.33 (187.01)

------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Cash (used) / generated from operations 641.08 113.11Interest paid (44.87) (33.62)Direct taxes paid (107.31) (38.35)

------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Cash flow before extraordinary items (a) 488.90 41.14

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (171.25) (373.91)

Sale of fixed assets 1.48 1.45Purchase of investments (1,072.77) (1,124.33)Sale of investments 632.64 1,133.29Surplus on Sale of Investment 224.37 166.76Interest received 22.95 10.22Dividend received 6.69 19.38Other Income 55.14 19.83

------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Net cash generated / (used) in investing activities (b) (300.75) (147.31)

C. CASH FLOW FROM FINANCING ACTIVITIES- Proceeds from long term borrowings – 414.48- Repayment of long term borrowings (254.03) (3.98)- Dividends paid (0.93) (126.15)

------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------Net cash used in financing activities (c) (254.96) 284.35Net increase/ (decrease) in cash and cash equivalents (a+b+c) (66.81) 178.18

Cash and cash equivalents as at 1st April 2007 236.18 58.00Cash and cash equivalents as at 31st March 2008 169.37 236.18

}As per our Report of even date ATUL C. CHOKSEY Chairman


GIRISH C. CHOKSEY

MANUBHAI G. PATEL

BIPIN V. JHAVERI Directors

Dr. S. RENGACHARY

Dr. S. SIVARAM



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NOTES :

Plot No.3/1, M I D C Industrial Area, P.O. Taloja, Dist. Raigad 410 208, Maharashtra

ATTENDANCE SLIPFolio No./DP ID or BEN No. :____________________________

I/We hereby record my/our presence at the 22nd ANNUAL GENERAL MEETING at Plot No.3/1, M I D C IndustrialArea, P.O. Taloja - 410208, Dist. Raigad, Maharashtra on Saturday, the 12th day of July 2008at 11.30 a.m.

____________________________________ ______________________________________Name of the Shareholder/Proxyholder Signature of the Shareholder/Proxyholder

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE

Plot No.3/1, M I D C Industrial Area, P.O. Taloja - 410208, Dist. Raigad, Maharashtra

PROXY FORMFolio No./DP ID or BEN No. :____________________________

I/We ____________________________________________________________________________________

being a Member / Member(s) of APCOTEX INDUSTRIES LIMITED, hereby appoint ..........................................

............................................................................... of ...........................................................................................

or failing him/her .............................................. of .................................................................................................

or failing him/her ............................................... of ................................................................................................

as my/our proxy to attend and vote to me/us on my/our behalf at the 22nd Annual General Meeting of the Companyto be held on Saturday, the 12th day of July 2008 at 11.30 a.m. or at adjournment thereof.

AS WITNESS my hand/our hands this ____________________ day of _____________________ 2008.

Signature ____________________________________

NOTE : The Proxy Form must be deposited at the Registered Office of the Company at Plot No.3/1, M I D CIndustrial Area, P.O. Taloja - 410208, Dist. Raigad, Maharashtra not less than 48 hours before the time forholding the Meeting.



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Affix

Revenue

Stamp

BOOK-POST

If undelivered, please return to :

apcotex industries limitedPlot No.3/1, M I D C Industrial Area, P.O. Taloja, Dist. Raigad 410 208, Maharashtra

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S P

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TD

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I 400

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L. :

403

1 7

777

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