Notes to Accounts of Adarsh Chemicals & Fertilisers Ltd.

Mar 31, 2000

1. CONTINGENT LIABILITIES:

31-03-2000 31-03-1999 Rs. Rs.

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Contingent Liabilities not provided in respect of: - - (b) Guarantees given by the Companys Bankers 45,41,692 10,44,076

(c) Claim against the Company not acknowledged as debts in respect of:

i) Central Excise Duty 1,28,063 1,28,063

ii) Demmurages payable to M.M.T.C. 36,13,626 36,13,626

(d) Estimated liability for sales tax payable to MMTC on Sulphur purchased on high-seas basis for the year 1986-87 onwards 18,84,410 18,84,410

2. The financial statements are prepared on Going Concern Basis though the accumulated loss of the company as on 31-3-2000 exceeds the net worth of the company, current liabilities exceed current assets, total liabilities exceeds total assets, plant of the company remained non-operational for more than a year and the employees/workers have been retrenched by the company.

3. The company has relied upon an opinion of the expert in regard to qualification of directors for appointment/reappointment under section 274(1)(g) of the Companies Act, 1956. As stated in the opinion, the directors do not attract any disqualification in continuing as directors of the company.

4(a). No provision has been made for the doubtful Advance to others of Rs. 10,48,11,137/- (11,71,04,580/-). The company is in process of compiling/ascertaining the details of advances. Necessary provisions/write-off will be made on reconciling /adjusting/ ascertaining / recovering / settlement of the accounts with/from the parties.

(b). Advance to others include Rs. 27,41,628/- (27,41,628/-) for goods lying with the customs authority since 1994-95. No provision has been made for the duty and warehousing/demurrage charges, if any.

5. The company has discontinued the production of Sulphuric Acid, Super phosphate and Oleum. The written down value of such plant & machineries amount to Rs. 1,85,80,037/-(1,60,23,416/-) as at 31.03.2000.

The excess of unamortised value over the realisable scrap value are yet to be ascertained and adjustment for the loss, if any, will be made at the time of the disposal of the assets.

6. Stores and Spares relating to discontinued operation viz. Sulphuric acid, Super phosphate and Oleum plant amounts to Rs. 40,56,463/- (40,56,463/-). The estimated realisable value there of is yet to be ascertained and adjustments for the loss, if any will be made at the time of disposal of the stores and spares.

7. As per management, stock in process amounting to Rs. 65,71,548/- is considered of standard quality and the quantity of finished goods there from may not be adversely affected when the plant will be operated.

8. Balances of Debtors, Advances to others and Creditors as on 31.03.1999 are subject to confirmations. Adjustments including provisions/write-offs, if any, required in accounts will be made on final reconciliation and/or settlement.

9. provision has not been made for the doubtful Debtors a aggregating to Rs. 7,28,93,980/- (7,81,93.523/-) Provision/write- off will be made on settling/reconciling/realising the balance with the parties.

10. Advance Recoverable in cash or kind includes:

(a) Rs. 1,66,06,993/- (1,66,06,993/-) of Insurance Claim lodged with the Insurance Company in 1996-97 which has been repudiated by the insurance company. The company has filed complaint in the National Consumer Dispute Redressal Commission, New Delhi. The company is hopeful that its claim will be accepted.

(b) Rs, 32,87,685/- (Rs. 32,87,685/-) of Electricity duty refund since 1997-98. The Company is hopeful for the recovery of the same.

11.Deferred revenue expenditure amounting to Rs. 1,06,28,545/- comprises unamortised value of catalyst for the plant that remaianed non- operational for more than a year as on date. In the opinion of management, the standard yield of the catalyst will be lower due to frequent closure of plant. However, no adjustments are required to be made in accounts to record the loss of catalyst.

12. Provisions is not made for interest liability in respect of Fixed Deposits and Inter Corporate Deposits aggregating to Rs. 4,37,47,000/- (1,42,00,000/-) and Rs. 74,28,459/- (1,10,54,707/-) shown under the-head Unsecured Loans as the terms and conditions of settlement are not yet finalised. The same will be provided as and when finalised with the parties.

13. Fixed Assets taken on lease amount to Rs. 89,85,600/- (1,99,20,600/-). Future obligations towards lease rentals under the lease agreements as on 31.03.2000 amount to Rs. 39,31,200/-(87,78,270/-).

14. The company is in process of identifying suppliers who are covered under the interest on delayed payments to Small Scale and Ancillary Industrial undertaking Act, 1993. Consequently, the liability, if any, on account of interest under this Act has not been determined.

15. As required by the notification no. GSR 129 (E) dated 22nd February, 1999 issued by the Department of Company Affairs, Ministry of Laws Justice and Company Affairs, to the extent information available, the Company is not in the position of indentifying status of creators registered as SSI and hence amount payable to the SSI creditors and the list of different SSI to which the company owes Rs.1 Lac and above, which are outstanding for more than 30 days is not given.

16. Income-Tax Assessment have been completed upto Assessment Year 1998-99.

NOTES : (1) Installed Capacity is as certified by the Director on which the Auditors have placed reliance, being a technical matter.

(2) Figures within brackets relate to previous year.

(3) Actual Production is on the basis of entire production.

(4) The installed Capacity of Oleum of 11,000 tpa is within overall installed Capacity of Sulphuric Acid.

(5) 47 MT and 1419 MT (P.Y. 48 MT and 689 MT) of Maleic Anhydride is used as captive consumption for production of DL Malic Acid and Maleic Anhydride (Flakes)

17. Corresponding figures of the previous period have been regrouped / rearranged to confirm with the current years grouping wherever necessary.

18. BALANCE SHEET ABSTRACT AND A COMPANYS GENERAL PROFILE : Information pursuant to part IV of Schedule VI of the Companies Act. 1956.