NAVINfLUORINE

YOUR IDEAL PARTNER

India's No. 1 in Fluorochemicals

POLYOLEFIN5 RUBBER CHEMISES LIMITED

5th Annual Report
2002-200$

AMB
ARVMD MMWLM. GROUP , -
POLYOLEFINS RUBBER CHEMICALS LIMITED

CONTENTS

Board of Directors, etc 1

Notice 2

Directors' Report : 15

Audttors'Report 25

Balance Sheet 28

Profit and Loss Account 29

Schedules 1 to 18 30

Cash Flow Statement 42

1. Shareholders intending to require

information about accounts to be
explained in the Meeting are requested
to inform the Company at least seven
days in advance of the Annual General
Meeting.

Fifth Annual General Meeting 2. Shareholders are requested to bring their

on Monday, . copy of the Annual Report to the Meeting
the 29th September, 2003 as the practice of handing out copies of
At 2.30 P.M. at S.N.D.T. Women's University, the Annual Report at the Annual General
Patkar Hall, Meeting has been discontinued in view
1, Nathlbai Damodar Thackersey Road, of the high cost of paper and printing.
Churchgate, Mumbai 400 020.
ANNUAL REPORT 2002-2003
BOARD OF DIRECTORS

SHRI HRISHIKESH A. MAFATLAL Chairman & Managing Director

SHRI P. N. KAPADIA Director

(w.e.f. 21.01.2003)

SHRI VISHAD P. MAFATLAL Director

(W.e.f. 21.01.2003)

SHRI A. K. PURI Director

(w.e.f. 21.01.2003)

SHRI SUNIL S. LALBHAI Director

(w.e.f. 03.03.2003)

SHRI T. M. M. NAMBIAR Director

(w.e.f. 03.03.2003)

SHRI A. K. SRIVASTAVA Finance Director

(w.e.f. 21.01.2003)

SHRI D. S. UMALKAR Chief Executive Officer

(w.e.f. 01.05.2003)

COMPANY SECRETARY
SHRI NIRAJ B. MANKAD

BANKERS
STATE BANK OF HYDERABAD

AUDITORS
MESSRS C. C. CHOKSHI & CO.
Chartered Accountants

SOLICITORS :
MESSRS GAGRAT & CO.

REGISTERED OFFICE:
1st floor, Kalpataru Point,
Kamani Marg, Sion (East),
Mumbai 400 022

UNITS :
Navin Fluorine, Surat 395 023. (Gujarat)
Navin Fluorine, Dewas 455 022 (M.R)

REGISTRAR & SHARE TRANSFER AGENT :

Sharepro Services,
Satam Estate, 3rd Floor,
Above Blank of Baroda, Chakala,
Andherf (East), Mumbai 400 099.
POLYOLEFINS RUBBER CHEMICALS LIMITED
NOTICE
NOTICE IS HEREBY GIVEN THAT the Fifth Annual
General Meeting of the Members of the Company will be
held on Monday, SEPTEMBER 29, 2003 at 2.30 P.M. at
S.N.D.T Women's University, Patkar Hall, 1, Nathibai
Damodar Thackersey Road, Churchgate, MUMBAI 400 020
to transact the following business:
(1) To consider and adopt the Directors' Report and the
audited Profit & Loss Account for the period ended
March 31, 2003 and the Balance Sheet as at that date.
(2) To consider and, if thought fit, to pass the following
Resolution, with or without modifications, as a
SPECIAL RESOLUTION :
"RESOLVED THAT pursuant to Sections 224 and
224-A and other applicable provisions, if any, of the
Companies Act, 1956, M/s. C. C. Chokshi & Co.,
Chartered Accountants, Mumbai, be and are hereby
appointed as Auditors of the Company to hold office
from the conclusion of this meeting until the
conclusion of the next Annual General Meeting on
such remuneration as may be fixed by the Board
apart from reimbursement of out-of-pocket expenses
as may be incurred by them for the purpose of audit."
(3) To appoint Shri R N. Kapadia, who was appointed by
the Board of Directors of the Company as an
additional director on January 21, 2003 and who
holds office as such up to the date of this Annual
General Meeting under Section 260 of the Companies
Act, 1956 and in respect of whom the Company has,
as required by Section 257 of the Companies
Act, 1956, received notices in writing from Members of
the Company signifying their intention to propose him
as a candidate for the office of the Director of the
Company, liable to retire by rotation.
(4) To appoint Shri V. P Mafatlal, who was appointed by
the Board of Directors of the Company as an
additional director on January 21, 2003 and who
holds office as such up to the date of this Annual
General Meeting under Section 260 of the Companies
Act, 1956 and in respect of whom the Company has,
as required by Section 257 of the Companies Act,
1956, received notices in writing from Members of the
Company signifying their intention to propose him as
a candidate for the office of the Director of the
Company, liable to retire by rotation.
(5) To appoint Shri A. K. Puri, who was appointed by the
Board of Directors of the Company as an additional
director on January 21, 2003 and who holds office as
such up to the date of this Annual General Meeting
. under Section 260 of the Companies Act, 1956 and in
respect of whom the Company has, as required by
Section 257 of the Companies Act, 1956, received
notices in writing from Members of the Company
signifying their intention to propose him as a
candidate for the office of the Director of the
Company, liable to retire by rotation.
(6) To appoint Shri A. K. Srivastava, who was appointed
by the Board of Directors of the Company as an
additional director on January 21, 2003 and who
holds office as such up to the date of this Annual
General Meeting under Section 260 of the Companies
Act, 1956 and in respect of whom the Company has,
as required by Section 257 of the Companies Act,
1956, received notices in writing from Members of the
Company signifying their intention to propose him as
a candidate for the office of the Director of the
Company, liable to retire by rotation.
(7) To appoint Shri Sunil S. Lalbhai, who was appointed
by the Board of Directors of the Company as an
additional director on March 3, 2003 and who holds
office as such up to the date of this Annual General
Meeting under Section 260 of the Companies Act,
1956 and in respect of whom the Company has, as
required by Section 257 of the Companies Act, 1956,
received notices in writing from Members of the
Company signifying their intention to propose him as
a candidate for the office of the Director of the
Company, liable to retire by rotation.
(8) To appoint Shri T. M. M. Nambiar, who was appointed
by the Board of Directors of the Company as an
additional director on March 3, 2003 and who holds
office as such up to the date of this Annual General
Meeting under Section 260 of the Companies Act,
1956 and in respect of whom the Company has, as
required by Section 257 of the Companies Act, 1956,
received notices in writing from Members of the
Company signifying their intention to propose him as
a candidate for the office of the Director of the
Company, liable to retire by rotation.
(9) To appoint Shri D. S. Umalkar, who was appointed by
the Board of Directors of the Company as an
additional director w.e.f. May 1, 2003 and who holds
office as such up to the date of this Annual General
Meeting under Section 260 of the Companies Act,
1956 and in respect of whom the Company has, as
required by Section 257 of the Companies Act, 1956,
received notices in writing from Members of the
Company signifying their intention to propose him as
a candidate for the office of the Director of the
Company, liable to retire by rotation.
(10) To consider and, if thought fit, to pass the following
Resolution, with or without modifications, as a
SPECIAL RESOLUTION :
"RESOLVED THAT The Articles of Association of the
Company be altered in the following manner:
(I) Substitute the Article 7 by the following Article :
"Where at any time after the expiry of two years from
the formation of the Company or at any time after the
expiry of one year from the allotment of shares in the
Company made for the first time after its formation,
whichever is earlier, it is proposed to increase the
subscribed capital of the Company by allotment of
further shares either out of the un-issued capital or
out of the increased share capital then :
(a) Such further shares shall be offered to the
persons who at the date of the offer, are holders
of the equity shares of the Company, in
proportion, as near as circumstances admit, to
the capital paid up on those shares at that date.
(b) Such offer shall be made by a notice specifying
the number of shares offered and limiting a time
not less than thirty days from the date of the offer
ANNUAL REPORT 2002-2003
and the offer if not accepted, will be deemed to
have been declined.
(c) The offer aforesaid shall be deemed to include a
right exercisable by the person concerned to
renounce the shares offered to them in favour of
any other person and the notice referred to in sub
clause (b) hereof shall contain a statement of this
right' PROVIDED THAT the Directors may decline,
wfthout assigning any reason to allot any shares
to any person in whose favour any member may
renounce the shares offered to him.
(d) After expiry of the time specified in the aforesaid
notice or on receipt of earlier intimation from the
person to whom such notice is given that he
declines to accept the shares offered, the Board
of Directors may dispose off them in such
manner and to such person(6) as they may think,
in their sole discretion, fit."
(II) Insertion of Article 7A after Article 7 :
"7A Nothing in this Article shall apply to the
increase of the subscribed capital of the
Company caused by the exercise of an option
attached to the debentures issued or loans
raised by the Company :
(i) To convert such debentures or loans into
shares in the Company; or
(ii) To subscribe for shares in the company
(whether such option Is conferred in these
Articles or otherwise).
PROVIDED THAT the terms of issue of such
debentures or the terms of such loans include a
term providing for such option and such term :
' (a) Either has been approved by the Central
Government before the issue of the
debentures or the raising of the loans or is
in conformity with Rules, if any, made by
that Government in this behalf; and
(b) In the case of debentures or loans other
than debentures issued to or loans obtained
from Government or any institution
specified by the Central Government in this
behalf, has also been approved by a special
resolution passed by the Company in
General Meeting before the issue of the
debentures or raising of the loans."
(III) Substitution of Article 12 by the following
Article :
"12 SHARES AT THE DISPOSAL OF THE
DIRECTORS :
Subject to the Provisions of Section 81 of the Act
and these Articles, the shares in the capital of the
Company for the time being shall be under the
control of the Directors who may issue, allot or
otherwise dispose of the same or any of them to
such persons, in such proportion and on such
terms and conditions and either at a premium or
at par or (subject td the compliance with the
provision of Section 79 of the Act) at a discount
and at such time as they may from time to time
think fit and with the sanction of the Company in
the General Meeting to give to any person or
persons the option or right to call for any shares
either at par or premium during such time and for
such consideration as the Directors think fit, and
may issue and allot shares in the capital of the
Company on payment in full or part of any
property sold and transferred or for any services
rendered to the Company in the conduct of its
business and any shares which may so be
allotted may be issued as fully paid up shares
t; and if so issued, shall be deemed to be fully paid
' shares. Provided that option or right to call for
shares shall not be given by the' Company to any
person or persons without the sanction of the
company in the General Meeting."
(iv) Insertion of the following Article as Article 24
(a) after Article 24 :
"24 (a) LIMITATION OF TIME FOR ISSUE OF
CERTIFICATES :
Every member shall be entitled, without
payment, to any one or more certificates in
marketable lots, for all the shares of each class
or denomination registered in his name, or if the
Directors so approve (upon paying such fee as
the Directors may from time to time to
determine) to several certificates, each for one or
more of such shares and the company shall
complete and have ready for delivery such
certificates within three months from the date of
allotment, unless the conditions of issue thereof
otherwise provide, or within one month of the
receipt of application of registration of transfer,
transmission, sub-division, consolidation or
renewal of any of Its shares as the case may be.
Every certificate of shards shall be under the seal
of the Company and shall specify the number
and distinctive numbers of shares in respect of
which It is issued and amount paid-up thereon
and shall be in such form as the Directors may
prescribe or approve, provided that in respect of
a share or shares held jointly by several persons,
the company shaH not be bound to issue more
than one certificate and delivery of a certificate of
shares to one of several joint holders shall be
sufficient delivery to all such holder."
(v) Substitution of Article 25 by the following
Article :
"25 ISSUE OF NEW CERTIFICATE IN PLACE
OF ONE DEFACED, LOST OR DESTROYED :
If any certificate be worn out, defaced, mutilated
or torn or if there be no further space on the
back thereof for endorsement of transfer, then
upon production and surrender thereof to the
company a new certificate may be Issued in lieu
thereof, and if any certificate is tost or destroyed
then upon proof thereof to the satisfaction of the
Company and on execution of such indemnity as
the Company deem adequate, being given, a
new certificate in lieu thereof shall be given to
the party entitled to such lost or destroyed
certificate. Every Certificate under the Article
shall be issued without payment of fees if the
Directors so decide or on payment of such fees
POLYOLEFINS RUBBER CHEMICALS LIMITED
(not exceeding Rs. 21- for each certificate) as
the Directors shall prescribe. Provided that
no fee shall be charged for issue of new
certificates in replacement of those which are
old, defaced or worn out or where there is no
further space on the back thereof for
endorsement of transfer.
Provided that notwithstanding what is stated
above the Directors shall comply with such Rules
or Regulation or requirements of any Stock
Exchange or the Rules made under the Act or
the rules made under Securities Contracts
(Regulation) Act, 1956 or any other Act, or rules
applicable in {his behalf.
The provisions of this Article shall mutatis
mutandis apply to debentures of the Company."
(vl) Insertion of following Article 34 (a) after
Article 34 :
"34 (a) INSTRUMENT OF TRANSFER :
The instrument of transfer shall be In writing and
all provisions of Section 108 of the Companies
Act, 1956 and statutory modification thereof for
the time being shall be duly complied with in
respect of all transfer of shares and registration
thereof."
(vll) Substitution of Article 36 by the following
Article:
"36 DIRECTORS MAY REFUSE TO REGISTER
TRANSFER :
Subject to the provisions of Section 111A of the
Act, the Directors may, at their own absolute
and uncontrolled discretion and by giving
reasons, decline to register or acknowledge any
transfer of shares whether fully paid or not and
the right of refusal, shall not be affected by
the circumstances that the proposed transferee
is already a member of the Company but in
such cases, the Directors shall within one
month from the date on which the instrument
of transfer was lodged with the Company, send
to the transferee and transferor notice of the
refusal to register such transfer provided that
registration of transfer shall not be refused on
the grounds of the transferor being either
alone or jointly with any other person or
persons indebted to the Company on any
account whatsoever except when the Company
has a lien on the shares. Transfer of shares/
debentures in whatever lot shall not be
refused."
(vlli) Substitution of Article 44 by the following
Article :
"44 NO FEE ON TRANSFER OR
TRANSMISSION:
No fee shall be charged for registration of
transfer, transmission, probate, succession
Certificate and Letters of Administration
Certificate of Death or Marriage, Power of
Attorney or similar other document."
(Ix) Substitution of Article 59 by the following
Article :
"59 PAYMENT IN ANTICIPATION OF CALL MAY
CARRY INTEREST:
The Directors may, if they think fit, subject to the
provisions of Section 92 of the Act, agree to and
receive from any member willing to advance the
same whole or any part of the moneys due upon
the shares held by him beyond the sums actually
called for, and upon the amount so paid or
satisfied in advance, or so much thereof as from
time to time exceeds the amount of the calls then
made upon the shares in respect of which such
advance has been made, the Company may pay
interest at such rate, as the member paying such
sum in advance and the Directors agree upon
provided that money paid in advance of calls
shall not confer a right to participate in profits or
dividend. The Directors may at any time repay
the amount so advanced.
The members shall not be entitled to any voting
rights in respect of the moneys so paid by him
until the same- would but for such payment,
become presently payable.
The provisions of these Articles shall mutatis
mutandis apply to the calls on debentures of the
Company."
(x) Substitution of Article 73 by the following
Article:
"73 COMPANY'S UEN ON SHARE/
DEBENTURES :
The Company shall have a first and paramount
lien upon all the shares/debentures (other than
fully paid-up shares/debentures) registered in
the name of each member (whether solely or
jointly with others) and upon the proceeds of
sale thereof for all moneys (whether presently
payable or not) called or payable at a fixed time
in respect of such shares/debentures and no
equitable interest in any share shall be created
except upon the footing and condition that this
Article will have full effect. And such lien shall
extend to all dividends and bonuses from time to
time declared in respect of such shares/
debentures. Unless otherwise agreed the
registration of a transfer of shares/debentures
shall operate as a waiver of the Company's lien if
any, on such shares/debentures. The Directors
may at any time declare any shares/debentures
wholly or in part to be exempt from the
provisions of this clause."
(xij Amendment of Article 129 by Inserting sub-
clause (c) after sub-clause (b):
"(c) The Directors of the Company including
Managing or Whole Time Directors Shall be paid
commission on the net profits of the Company as
determined, in accordance with, and subject to
the provisions of Section 198 and Section 309 of
the Companies Act, 1966. The Board of Directors
of the Company wJN deeM* the quantum of
commission to be paid to Urn Directors."
ANNUAL REPORT 2002-2003
(xii) Substitution of Article 158 by the following
Article :
"158 TERMS OF ISSUE OF DEBENTURES :
Any debentures, debenture-stock or other
securities may be issued at a discount, premium
or otherwise and may be issued on condition
that they shall be convertible Into shares of any
denomination and with any privileges and
conditions as to redemption, surrender, drawing,
allotment of shares, attending (but hot voting) at
the General Meeting, appointment of Directors
and otherwise Debentures with the right to
conversion into or allotment of shares shall be
issued only with the consent of the Company in
the General Meeting by a Special Resolution."
(xlll) Substitution of Article 182 by the following
Article :
"182 UNPAID OR UNCLAIMED DIVIDEND :
Where the Company has declared a dividend but
which has not been paid or the dividend warrant
in respect thereof has not been posted within 30
days from the date of declaration to any
shareholder entitled to the payment of the
dividend, the Company shall, within 7 days from
the date of expiry of the said period of 30 days,
open a special account in that behalf in any
scheduled bank called "Unpaid Dividend
Account of Polyolefins Rubber Chemicals
Limited" and transfer to the said account, the
total amount of dividend which remains unpaid
or in relation to which no dividend warrant has
been posted.
Any money transferred to the unpaid dividend
account of the Company which remains
unpaid or unclaimed for a period of seven years
from the date of such transfer, shall be
transferred by the Company to the Investor
Education and Protection Fund of the Central
Government."
(11) To consider and, if thought fit, to pass the following
Resolution, with or without modifications, as an
ORDINARY RESOLUTION:
"RESOLVED THAT pursuant to the provisions of
Sections 198, 269, 310, 311 and Schedule Xlll and
other applicable provisions of the Companies Act,
i 1956, consent of the Company be and is hereby
granted to the appointment of Shri H. A. Mafatlal as
a Chairman and Managing Director of the Company
for a period of 5 years with effect from May 1, 2003
on the terms and conditions as to remuneration as
set out in the draft Agreement laid before the
meeting, with the liberty and powers to the Board of
Directors to increase, alter and vary the salary,
commission and perquisites and other terms in such
manner as the Board in its absolute discretion deem
fit and acceptable to Shri H. A. Mafatlal within the
limits specified in Schedule Xlll of the Companies
Act, 1956 or any amendments, modifications, re-
enactments made thereof from time to time by the
Government in this behalf."
(12) To consider and, If thought fit, to pass the following
Resolution, with or without modifications, as a
SPECIAL RESOLUTION:
"RESOLVED THAT pursuant to the provisions of
Sections 198, 269, 310, 311 and Schedule Xlll and
other applicable provisions of the Companies Act,
1956, consent of the Company be and is hereby
granted to the appointment of Shri A. K. Srtvastava as
a Whole-time Director of the Company designated as
Finance Director lor a period of 5 years with effect
from May 1, 2003 on the terms and conditions as to
remuneration as set out in the draft Agreement laid
before the meeting and initialled by the Chairman of
the meeting for the purpose of identification, with the
liberty and powers to the Board of Directors to
increase, alter and vary the salary, perquisites and
other terms in such manner as the Board in its
absolute discretion deem fit and is acceptable to
Shri A. K. Srivastava, within the limits specified In
Schedule Xlll of the Companjes Act, 1956 or any
amendments, modifications, re-enactments made
thereof from time to time by the Government in this
behalf."
(13) To consider and, if thought fit, to pass the following
Resolution, with or without modifications, as a
SPECIAL RESOLUTION:
"RESOLVED THAT pursuant to the provisions of
Sections 198, 269, 310, 311 and Schedule Xlll and
other applicable provisions of the Companies Act,
1956, consent of the Company be and is hereby
granted to the appointment of Shri D. S. Umalkar as a
Whole-time Director of the Company designated as
Chief Executive Officer for a period of 5 years with
effect from May 1, 2003 on the terms and conditions
as to remuneration as set out in the draft Agreement
laid before the meeting and initialled by the Chairman
of the meeting for the purpose of identification, with
the liberty and powers to the Board of Directors to
increase, alter and vary the salary, commission and
perquisites and other terms in such manner as the
Board in its absolute discretion deem fit and is
acceptable to Shri D. S. Umalkar, within the limits
specified in Schedule Xlll of the Companies Act, 1956
or any amendments, modifications, re-enactments
made thereof from time to time by the Government in
this behalf."
(14) To consider and, if thought fit, to pass the following
Resolution, with or without modifications, as a
SPECIAL RESOLUTION:
"RESOLVED THAT pursuant to Section 163 and other
applicable provisions, if any, of the Companies Act,
1956 the Register of Members, Index of Members,
Register and Index of Debenture Holders, if any, in
respect of the shares and debentures issued by the
Company from time to time, and copies of all Annual
Returns prepared under Sections 159 and 160,
together with the copies of certificates and
documents required to be annexed thereto under
Sections 160 and 161, be kept at the Office of the
Registrar and Share Transfer Agents of the Company,
M/s. Sharepro Services, Satam Estate, 3rd Floor,
Above Bank of Baroda, Chakala, Andheri (E),
Mumbai 400 099."
POLYOLEFINS RUBBER CHEMICALS LIMITED
(15) To consider and, if thought fit, to pass the following NOTES:
Resolution, with or without modifications, as a 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS
SPECIAL RESOLUTION: ENTITLED TO APPOINT A PROXY OR PROXIES TO
"RESOLVED THAT pursuant to Section 309 (4) of the ATTEND AND VOTE INSTEAD OF HIMSELF ON A
Companies Act, 1956, consent of the Company be POLL AND THAT A PROXY NEED NOT BE A
and is hereby accorded for the payment to the MEMBER.
Non-Executive Directors of the Company, 2. The relevant Explanatory Statement pursuant to
commission, as may be decided by the Board of Section 173 of the Companies Act, 1956, in respect of
Directors from time to time, at the rate not exceeding Item Nos. 2 to 15 mentioned in the above Notice is
1% of the net profits of the Company computed in the annexed hereto.
manner laid down in section 198(1) of the Companies
Act, 1956 for a period of five years commencing from 3. A copy of the Memorandum & Articles of Association
April 1, 2003." of the Company and the documents as mentioned in
the Explanatory Statement are open for inspection
of the Members between 2.00 RM. and 4.00 RM. on
By Order of the Board, any working day at the Registered Office of the
Company.
Regd. Office: NiraJ B. Mankad
1st floor, Kalpataru Point, Company Secretary
Kamani Marg,
Sion (East), Mumbai 400 022
Mumbai,
Dated: 31st July, 2003
ANNUAL REPORT 2002-2003
ANNEXURE TO NOTICE
Explanatory Statement as required by Section 173(2) of
the Companies Act, 1956.
In conformity with the provisions of Section 173(2) of the
Companies Act, 1956, the following Explanatory Statement
sets out all material facts in respect of Item Nos. 2 to 15
mentioned in the accompanying Notice dated 31st July,
2003.
In respect of Item No. 2
Section 224A of the Companies Act,1956, provides that in
case of a Company in which not less than 25% of the
Subscribed Share Capital is held by Public Financial
Institutions or any Government or Nationalised Banks or
other Financial Institutions referred to therein, such
appointment or re-appointment of Auditors shall be made
by a Special Resolution. As more than 25% of the
Subscribed Share Capital of the Company is held by the
Institutions as mentioned above, the Special Resolution Is
required to be passed for the re-appointment of M/s. C. C.
Chokshi & Co., Chartered Accountants, Mumbai.
The Board recommends the re-appointment of M/s. C. C.
Chokshi & Co. as the Auditors of the Company.
None of the Directors is concerned or interested in the
Resolution.
In respect of Item No. 3
Shri P. N. Kapadia is a renowned Advocate and Solicitor
having experience of more than 26 years in Legal field. He
is a partner of Gagrat & Co, Advocates & Solicitors,
Mumbai.
Shri P. N. Kapadia was appointed by the Board of
Directors of the Company as an Additional Director of the
Company with effect from January 21, 2003 under Article
127 of the Articles of Association of the Company and
under Section 260 of the Companies Act, 1956. He will
hold office as an Additional Director up to the date of the
ensuing Annual General Meeting. As required under
Section 257 of the Companies Act, 1956, notices have
been received from Members of the Company, along with
a deposit of Rs. 500/- each, signifying their intention to
propose Shri R N. Kapadia as a candidate for the office
of Director of the Company, liable to retire by rotation.
The Board recommends his appointment as a Director In
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri P. N. Kapadia is
concerned or interested in the Resolution.
In respect of Item No. 4
Shri V. R Mafatlal is an Industrialist having business
experience of more than 6 years in Textiles & Chemicals.
He is a Bachelor in Science with Economics from
University of Pennsylvania, Wharton, U.S.A.
Shri V. R Mafatlal was appointed by the Board of Directors
of the Company as an Additional Director of the Company
with effect from January 21, 2003 under Article 127 of the
Articles of Association of the Company and under Section
260 of the Companies Act, 1956. He will hold office as an
Additional Director up to the date of the ensuing Annual
General Meeting. As required under Section 257 of the
Companies Act, 1956, notices have been received from
Members of the Company, along with a deposit of
Rs. 500/- each, signifying their intention to propose
Shri V. R Mafatlal as a candidate for the office of Director of
the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri V. R Mafatlal, is
concerned or interested in the Resolution.
In respect of Item No. 5
Shri A. K. Puri holds a Masters Degree in Science and a
Bachelors' degree in Law. He is also C.A.I.I.B. He has a
vast experience of over forty years in the field of Banking &
Finance. He retired as Deputy Managing Director of State
Bank of India. He was also a Member of the Hon'ble Board
for Industrial & Financial Reconstruction, New Delhi.
Shri A. K. Puri was appointed by the Board of Directors of
the Company as an Additional Director of the Company
with effect from January 21, 2003 under Article 127 of the
Articles of Association of the Company and under Section
260 of the Companies Act,1956. He will hold office as an
Additional Director up to the date of the ensuing Annual
General Meeting. As required under Section 257 of the
Companies Act, 1956, notices have been received
from Members of the Company, along with a deposit of
Rs. 500/- each, signifying their intention to propose
Shri A. K. Puri as a candidate for the office of Director of
the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri A. K. Puri, is concerned
or interested in the Resolution.
In respect of Item No. 6
Shri A. K. Srivastava is a graduate in Science and a Fellow
Member of the Institute of Chartered Accountants of India.
He is having over 25 years of experience in the areas of
Finance, Accounting, Taxation and Commerce. He has
held senior management position in big corporates viz.
TISCO and Dunlop India Ltd. Lastly he was Senior Vtae-
* President (Finance) in Mafatlal Industries Limited.
Shri A. K. Srivastava was appointed by the Board of
Directors of the Company as an Additional Director of the
Company with effect from January 21, 2003 under Article
127 of the Articles of Association of the Company and
under Section 260 of the Companies Act, 1956. He will
hold office as an Additional Director up to the date of the
ensuing Annual General Meeting. As required under
Section 257 of the Companies Act, 1956, notices have
been received from Members of the Company along with a
deposit of Rs.500/- each, signifying their intention to
propose Shri A. K. Srivastava as a candidate for the office
of Director of the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri A. K. Srivastava, is
concerned or interested in the Resolution.
In respect of Item No. 7
Shri Sunil S. Lalbhai is an Industrialist having varied
experience of more than twenty years in Cherrrtcals and
POLYOLEFINS RUBBER CHEMICALS LIMITED
General Management. He holds a Bachelors' degree in
Science and a Masters' degree in Chemistry from U.S.A.
and also a Masters degree in (Economy Planning & Policy)
from Boston University, U.S.A. He is the Managing Director
& CEO of Atul Limited.
Shri Sunil S. Lalbhai was appointed by the Board of
Directors of the Company as an Additional Director of the
Company with effect from March 3, 2003 under Article 127
of the Articles of Association of the Company and under
Section 260 of the Companies Act, 1956. He will hold
office as an Additional Director up to the date of the
ensuing Annual General Meeting. As required under
Section 257 of the Companies Act, 1956, notices have
been received from Members of the Company, along with
a deposit of Rs. 500/- each, signifying their intention to
propose Shri Sunil S. Lalbhai as a candidate for the office
of Director of the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri Sunil S. Lalbhai, is
concerned or interested in the Resolution.
In respect of Item No. 8
Shri T. M. M. Nambiar holds a Bachelors' degree in
Commerce and is a Member of the Institute of Chartered
Accountants of India. He is having vast experience of over
40 years. He was associated as President/Chairman/
Member of the prestigious institutions like Cement
Manufacturers Association, National Council for Cement &
Building Materials, Associated Chambers of Commerce &
Industry of India, Cll, etc. He was associated for more than
26 years with Associated Cement Company Ltd. including
6 years as Managing Director.
Shri T. M. M. Nambiar was appointed by the Board of
Directors of the Company as an Additional Director of the
Company with effect from March 3, 2003 under Article 127
of the Articles of Association of the Company and under
Section 260 of the Companies Act, 1956. He will hold
office as an Additional Director up to the date of the
ensuing Annual General Meeting. As required under
Section 257 of the Companies Act, 1956, notices have
been received from Members of the Company, along with .
a deposit of Rs. 500/- each, signifying their intention to
propose Shri T. M. M. Nambiar as a candidate for the office
of Director of the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri T. M. M. Nambiar, is
concerned or interested in the Resolution.
In respect of Item No. 9
Shri D. S. Umalkar holds a Masters' degree in Chemical
Engineering. He is having over 17 years of experience in
the field of process modernisation and cost optimisation.
His expertise in Fluorochemical area has helped Navin
Fluorine to become one of the largest supplier of bulk and
Speciality Fluorine Chemicals on a global scale based on
in-house technology development. Lastly, he was
associated with Mafatal Industries Limited as Executive
Director (Chemicals Division) .
Shri D. S. Umalkar was appointed by the Board of
Directors of the Company as an Additional Director of the
Company with effect from May 1, 2003 under Article 127 of
the Articles of Association of the Company and under
Section 260 of the Companies Act, 1956. He will hold
office as an Additional Director up to the date of the
ensuing Annual General Meeting. As required under
Section 257 of the Companies Act, 1956, notices have
been received from Members of the Company along with a
deposit of Rs.. 500/- each, signifying their intention to
propose Shri D. S. Umalkar as a candidate for the office of
Director of the Company, liable to retire by rotation.
The Board recommends his appointment as a Director in
the interest of the Company, to utilise his expertise.
None of the Directors, except Shri D. S. Umalkar, is
concerned or interested in the Resolution.
In respect of Item No. 10
To conform with the requirements of the Listing
Agreements and directions given by Stock Exchanges, the
Articles of Association of the Company are required to be
altered as mentioned in the said resolution.
In order to give remuneration to the Directors by way of
commission on the net profits of the Company pursuant to
Section 198 & 309, it is desired to amend the Article 129 of
the Articles of Association of the Company.
None of the Directors is concerned or interested in the
above Resolution, except amendment of Article 129, in
which the Directors would be interested to the extent they
will be receiving remuneration by way of commission.
A copy of the Memorandum & Articles of Association of the
Company is open for inspection to Members between
2.00 P.M. and 4.00 RM. on any working day at the
Registered Office of the Company.
The Board of Directors recommend passing of Special
Resolution under Section 31 of the Companies Act, 1956
at item No. 10 of the Notice.
In respect of Item No. 11
Shri H. A. Mafatlal is overall incharge of the affairs of the
Company. He is 49 years of age and is an Industrialist
having diversified experience of more than 25 years in the
areas of Textiles, Chemicals, Petrochemicals, Financial
Services etc.
The Board of Directors of the Company at their meeting
held on April 28, 2003 appointed Shri H. A. Mafatlal as the
Chairman and Managing Director of the Company for a
period of five years from May 1, 2003 subject to the
consent of the members of the Company on the following
terms and conditions :
TERMS OF REMUNERATION
I (a) Basic Salary : Rs. 6,00,000/- per annum.
(b) Perquisites such as fully furnished house or
House Rent Allowance, expenditure
incurred on gas, electricity, water and
furnishing, medical benefits for self and
family, Leave Travel Concession, club fees,
personal accident insurance and -other
allowances not exceeding Rs. 4,50,000/-
per annum.
Perquisites shall be valued as per Income-
tax Rules, wherever applicable and in the
ANNUAL REPORT 2002-2003
absence of any such Rules perquisites shall
be valued at actual cost.
The salary and perquisites as mentioned
under I (a) and (b) hereinabove shall be
exclusive o f :
(i) contribution to provident fund,
superannuation fund or annuity fund to
the extent these either singly or put
together, are not taxable under the
Income-Tax Act, 1961.
(ii) gratuity payable at the rate not
exceeding half a month's salary for
each completed year of service and
(iii) encashment of leave at the end of the
tenure.
II. Commission on the annual net profits of the
Company as may be decided by the Board at the
end of each financial year, computed in the
manner laid down in Section 309(5) of the
Companies Act, 1956, subject to the ceiling laid
down in Section 198 and 309 of the Companies
Act, 1956 on the total remuneration.
Apart from remuneration, Shri H. A. Mafatlal shall
be entitled to
(a) free use of the Company's car with driver,
for the business of the Company.
(b) free telephone facility at residence.
(c) reimbursement of expenses actually and
properly incurred by him for the business of
the Company.
Ill In the case of absence or inadequacy of profits
in any financial year, Shri H. A. Mafatlal will be
entitled to the said salary, perquisites and other
allowances mentioned above as the minimum
remuneration.
The Board may alter or vary the above referred
terms of appointment, salary, commission and
perquisites including minimum remuneration
payable in such manner as the Board in its
absolute discretion deems fit and acceptable to
Shri H. A. Mafatlal provided that such alterations
are within the limits specified in paragraph 1 (A)
of Section II of Part II of Schedule XIII of the
Companies Act, 1956 or any amendments,
modifications or re-enactments made thereof
from time to time.
Shri H. A. Mafatlal is also the Managing Director
of Mafatlal Industries Limited (MIL) and he is
entitled to draw salary and perquisites up to
Rs. 10,50,000/- p.a. from MIL. In view of the
provisions of Section III of Part II of Schedule XIII
of the Companies Act, 1956 Shri H. A. Mafatlal
may draw remuneration from one or both the
Companies, provided that the total remuneration
drawn from both the Companies does not
exceed the higher maximum limit admissible
from any one of the Companies of which he is a
Managing Director.
Shri H. A. Mafatlal shall not be entitled to receive
sitting fees for attending the meetings of the
Board of Directors or any Committee thereof.
Shri H. A. Mafatlal shall not be liable to retire by
rotation.
Draft of the proposed Agreement to be entered
in to between the Company and Shri H. A.
Mafatlal recording the terms of his appointment
for a period of five years from May 1, 2003 and
referred to in the said resolution is available for
inspection by the Members between 2.00 p.m.
and 4.00 p.m. on any working day at the
Registered Office of the Company.
None of the Directors, except Shri H. A. Mafatlal,
is concerned or interested in the Resolution.
The Notice convening ensuing Annual General
Meeting of the members of the Company
alongwith the above Explanatory Statement may
be treated as an abstract of the terms of the
Agreement relating to the appointment of Shri H.
A. Mafatlal as Chairman and Managing Director
of the Company as required by Section 302 of
the Companies Act, 1956.
The Board of Directors recommend passing of
the Ordinary Resolution at item No. 11 of the
Notice.
In respect of Item No. 12
Shri A. K. Srivastava is incharge of the Finance function of
the Company. He is 51 years of age and is a Bachelor of
Science and a Chartered Accountant having experience of
more than 25 years in the areas of Finance, Accounts and
Taxation in big corporates.
The Board of Directors of the Company at their meeting
held on April 28, 2003 appointed Shri A. K. Srivastava as
Whole-time Director designated as Finance Director for a
period of five years from May 1, 2003 subject to the
consent of the members of the Company on the following
terms and conditions :
TERMS OF REMUNERATION
I (a) Basic Salary : Rs. 21,00,000/- per annum
(b) Perquisites :
— Fully furnished house or House Rent
Allowance in lieu thereof.
— Expenditure incurred on gas, electricity,
water, servants etc.
— Mediclaim Policy, Personal Accident
Insurance, Leave Travel Concession and
Club Fees as per the Rules of the Company.
— Allowances amounting to Rs. 2,00,000/- per
annum
Perquisites shall be valued as per Income-tax
Rules, wherever applicable and in the absence of
any such Rules perquisites shall be valued at
actual cost.
The salary and perquisites as mentioned under
I (a) and (b) hereinabove shall be exclusive o f :
(i) contribution to provident fund, super-
annuation fund or annuity fund to the
extent these either singly or put together,
9
POLYOLEFINS RUBBER CHEMICALS LIMITED
are not taxable under the Income-Tax Act,
1961.
(ii) gratuity payable at the rate not exceeding
half a month's salary for each completed
year of service and .
(iii) encashment of leave at the end of the
tenure.
II. Apart from remuneration, Shri A. K. Srivastava shall
be entitled to
(a) free use of the Company's car for the business of
the Company with reimbursement of driver's
salary.
(b) free telephone facility at residence.
(c) reimbursement of expenses actually and
properly incurred by him for the business of the
Company.
Ill In the case of absence or inadequacy of profits, in any
financial year of the Company during May 1, 2003 to
April 30, 2006, Shri A. K. Srivastava will be entitled to
salary, perquisites and other allowances as the
minimum remuneration subject to the limits
prescribed in paragraph 1 (B) of Section II of Part II of
Schedule XIII of the Companies Act, 1956.
The Board may alter or vary the above referred terms
of appointment, salary and perquisites including
minimum remuneration payable in such manner as
the Board in its absolute discretion deems fit and
acceptable to Shri A. K. Srivastava provided that such
alterations are within the limits specified in paragraph
1(B) of Section II of Part II of Schedule XIII of the
Companies Act, 1956 or any amendments,
modifications or re-enactments made thereof from
time to time.
Shri A. K. Srivastava shall not be entitled to receive
sitting fees for attending the meetings of the Board of
Directors or any Committee thereof.
Draft of the proposed Agreement to be entered in to
between the Company and Shri A. K. Srivastava
recording the terms of his appointment for a period of
five years from May 1, 2003 and referred to in the said
resolution is available for inspection by the Members
between 2.00 p.m. and 4.00 p.m. on any working day
at the Registered Office of the Company.
Other particulars pertaining to the Company which
are required to be disclosed as required under
Section II of Part II of the said Schedule XIII are given
in Annexure 'A' to this Explanatory Statement.
None of the Directors, of the Company except
Shri A. K. Srivastava, is concerned or interested in the
resolution.
The Notice convening ensuing Annual General
Meeting of the members of the Company alongwith
the above Explanatory Statement may be treated as
an abstract of the terms of the Agreement relating to
the appointment of Shri A. K. Srivastava as a Whole-
time Director of the Company as required by
Section 302 of the Companies Act, 1956.
The Board of Directors recommend passing of the
Special Resolution at item No. 12 of the Notice.
10
In respect of Item No. 13
Shri D. S. Umalkar is the Chief Executive Officer of the
Company. He is 51 years of age and holds a Masters'
degree, in Chemical Engineering and has experience of
more than 25 years in the areas of Chemicals and General
Management.
The Board of Directors of the Company at their meeting
held on April 28, 2003 appointed Shri D. S. Umalkar as
Chief Executive Officer for a period of five years from
May 1, 2003 subject to the consent of the members of the
Company on the following terms and conditions :
TERMS OF REMUNERATION
I (a) Basic Salary : Rs. 21,00,000/- per annum
(b) Perquisites :
— Fully furnished house or House Rent
Allowance in lieu thereof.
— Expenditure incurred on gas, electricity,
water and servants etc.
— Mediclaim Policy, Personal Accident
Insurance, Leave Travel Concession and
Club Fees as per the rules of the
Company.
— Allowances amounting to Rs. 86,000/- per
annum
— Annuity Policy cost of which to the
Company will not exceed Rs. 72,000/- per
annum.
Perquisites shall be valued as per Income-tax
Rules, wherever applicable and in the absence of
any such Rules perquisites shall be valued at
actual cost.
The salary and perquisites as mentioned under
l(a) and (b) hereinabove shall be exclusive o f :
(i) contribution to provident fund, super-
annuation fund or annuity fund to the extent
these either singly or put together, are not
taxable under the Income-Tax Act, 1961.
(ii) gratuity payable at the rate not exceeding
half a month's salary for each completed
year of service and
(iii) encashment of leave at the end of the
tenure.
II. Commission at the rate of 1% of the net profits of the
Company at the end of each financial year, computed
in the manner laid down in Section 309(5) of the
Companies Act, 1956, subject to the ceiling laid down
in Sections 198 and 309 of the Companies Act, 1956
on the total remuneration provided further that the
amount of such commission shall not exceed the
amount equal to two times of the annual basic salary.
Apart from remuneration, Shri D. S. Umalkar shall be
. entitled to
(») free use of the Company's car for the business
of the Company with reimbursement of driver's
salary.
(b) free telephone facility at residence.
(c) reimbursement of expenses actually and
properly incurred by him for the business of the
Company.
ANNUAL REPORT 2002-2003
III In the case of absence or inadequacy of profits, in any
financial year of the Company during May 1, 2003 to
April 30, 2006, Shri D. S. Umalkar will be entitled tp
salary, perquisites and other allowances as the
minimum remuneration subject to the limits
prescribed in paragraph 1 (B) of Section II of Part II of
Schedule XIII of the Companies Act, 1956.
The Board may alter or vary the above referred terms
of appointment, salary, commission and perquisites
including minimum remuneration payable in such
manner as the Board in its absolute discretion deems
fit and acceptable to Shri D. S. Umalkar provided that
such alterations are within the limits specified in
paragraph 1(B) of Section II of Part II of Schedule XIII
of the Companies Act, 1956 or any amendments,
modifications or re-enactments made thereof from
time to time.
Shri 0. S. Umalkar shall not be entitled to receive
sitting fees for attending the meetings of the Board of
Directors or any Committee thereof.
Draft of the Agreement proposed to be entered
between the Company and Shri D. S. Umalkar
recording the terms of his appointment for a period of
five years from May 1, 2003 and referred to in the said
resolution is available for inspection by the Members
between 2.00 p.m. and 4.00 p.m. on any working day
at the Registered Office of the Company.
Other particulars to the Company which are required
to be disclosed as required under Section II of Part II
of the said Schedule XIII are given in Annexure 'A' to
this Explanatory Statement.
None of the Directors of the Company except
Shri D. S. Umalkar is concerned/interested in the
resolution.
The Notice convening ensuing Annual General
Meeting of the members of the Company alongwith
the above Explanatory Statement may be treated as
an abstract of the terms of the Agreement relating to
the appointment of Shri D. S. Umalkar as Whole-time
Director of the Company as required by Section 302
of the companies Act, 1956.
The Board of Directors recommend passing of the
Special Resolution at item No. 13 of the Notice.
In respect of Item No. 14 :
The Register of Members, Index of Members and copies of
all Annual Returns prepared under Sections 159 and 160
together with copies of the Certificates and documents
required to be annexed thereto under Sections 160 and
161 of the Companies Act, 1956, are presently kept at the
Registered Office of the Company.
The Company has appointed M/s. Sharepro Services,
Mumbai, as the Registrar and Share Transfer Agents of the
Company with effect from February 28, 2003 to handle all
Share Department work of the Company. It is, therefore,
proposed to keep all the above mentioned documents at
their office at Satam Estate, 3rd Floor, Above Bank of
Baroda, Chakala, Andheri (East), Mumbai 400 099.
Accordingly, a Special Resolution is required to be passed
in terms of Section 163 of the Companies Act, 1956. A
copy of the proposed resolution is being forwarded in
advance to the Registrar of Companies, Maharashtra,
Mumbai, as required under the said Act.
None of the Directors is concerned or interested in the said
Resolution.
The Board of Directors recommend passing of the Special
Resolution at item No. 14 of the Notice.
In respect of Item No. 15 :
Section 309(4) of the Companies Act, 1956, provides that
in case of a Director who is neither a Managing Director
nor in the whole time employment, the Company may, by
Special Resolution, authorise the payment of commission
for a period of five years in addition to the fee for attending
the Meetings of the Board or any Committee thereof. With
a view to remunerate the non-executive directors for their
efforts and responsibilities, it is desirable to provide for
payment of commission to them. The quantum of
commission, payable shall be decided by the Board of
Directors from time to time at the rate not exceeding 1 % of
the net profits of the Company computed in the manner
laid down in Section 198(1) of the Companies Act, 1956.
The proposed resolution, therefore, seeks authority for
such payments to the Directors other than Managing and
Whole Time Directors.
All the Directors (other than Managing and whole time
Directors) of the Company are interested in the Resolution
to the extent commission is payable to them in accordance
with the proposed resolution.
The Board of Directors recommend passing of the Special
Resolution at item No. 15 of the Notice.
By Order of the Board,
Regd. Office: Niraj B. Mankad
1 st floor, Kalpataru Point, Company Secretary
Karnani Marg,
Sion (East), Mumbai 400 022
Mumbai,
Dated: 31st July, 2003
11
POLYOLEFINS RUBBER CHEMICALS LIMITED
Annexure 'A' to the 2. Past remuneration
EXPLANATORY STATEMENT Shri A. K. Srivastava had a Basic (annual) of
Rs. 6,00,000/-. He also enjoyed perqgisites such
Statement as required under Section II of Part II of as HRA, LTA, Special Allowance, P.F.,
Schedule XIII of the Companies Act, 1956 giving details Superannuation etc to the tune of Rs. 8,88,600/-.
in respect of appointment of Shri A. K. Srivastava and Shri D. S. Umalkar had a Basic (annual) of
Shri D. S. Umalkar. Rs. 15,00,000/-. He also enjoyed perquisites such
I. GENERAL INFORMATION: as HRA, LTA, Special Allowance, P.F.,
Superannuation etc to the tune of Rs. 12,60,000/-.
1. Nature of industry
Chemical Industry 3. Job profile and suitability
2. Date or expected date of commencement of Shri A. K. Srivastava is a Finance Director in
commercial production charge of the Finance function of the Company
reporting to Shri H. A. Mafatlal, the Chairman and
2002-2003 is the first year of operationalisation of
Managing Director. While with Mafatlal Industries
the Company. Pursuant to the Rehabilitation
Limited he was primarily responsible for
Scheme of Mafatlal Industries Limited (MIL)
formulating the Restructuring Package and
sanctioned by the Hon'ble BIFR vide its
Steering it through BIFR. He also interacts at
Order dated October 30, 2002 the Chemical
group level in the area of finance. Looking at the
Business of MIL vested as a going concern
overall exposure and experience of Shri A. K.
in the Company w.e.f. Appointed Date of
Srivastava in the area of finance, responsibilities
March 1,2002.
to be shouldered by him as well as his association
3. In case of new companies, expected date of with group, he is suitable for the position.
commencement of activities as per project Shri D. S. Umalkar is the Chief Executive Officer
approved by financial institutions appearing in and is incharge of the operations of the Company
the prospectus reporting to Shri H. A. Mafatlal the Chairman and
N.A. Managing Director. His expertise in Fluoro-
4. Financial performance based on given chemicals area helped Navin Fluorine, the
indicators erstwhile Chemical Division of MIL to become one
Figures are only for the current period since this is of the largest suppliers of Bulk and Speciality
the first year of operationalisation of the Fluorine Chemicals of the global scale based on
Company. in-house technology development. Looking at his
Rs. overall experience in the Chemical Industry, the
responsibilities to be shouldered by him and his
Turnover (Net) 19,453.63 lacs past association with the group, he is suitable for
Profit after Tax 958.65 lacs the position.
5. Export performance and net foreign exchange 4. Remuneration proposed
earnings As mentioned in Explanatory Statement in respect
FOB value of exports Rs. 5,176.54 lacs of ItemNos. 12&13.
5. Comparative remuneration profile with respect
Expenditure in Foreign Currency to industry, size of the company, profile of the
(a) Travelling Expenses Rs. 14.36 lacs position and person (in case of expatriates the
(b) Commission Rs. 210.00 lacs relevant details would be w.r.t. the country of
his origin)
(c) Others Rs. 122.44 lacs Considering the size of the Company, the industry
Total Rs. 346.80 lacs bench marks, experience of the appointees and
the responsibilities to be shouldered by them, the
proposed remuneration is comensurate with the
6. Foreign investments or collaborators, if any remuneration paid to similar appointees in other
NIL companies.
II INFORMATION ABOUT THE APPOINTEES: 6. Pecuniary relationship directly or Indirectly
with the Company, or relationship with the
1. Background details: managerial personnel, If any
Shri A. K. Srivastava is 51 years of age and is a Besides their proposed remuneration Shri A. K.
graduate in Science and a Fellow Member of the Srivastava and Shri D. S. Umalkar does not have
Institute of Chartered Accountants of India. He is any pecuniary relationship with the Company and
having over 25 years of experience in the areas of its Managerial Personnel.
Finance, Accounting, Taxation and Commerce. Ml. OTHER INFORMATION :
Lastly, he was associated as a Senior Vice
President Finance of Mafatlal Industries Limited. 1. Reasons of loss or inadequate profits -
N.A.
Shri D. S. Umalkar is 51 years of age and holds a 2. Steps taken or proposed to be taken for
Masters' Degree in Chemical Engineering. He is improvement
having over 17 years of experience in the field of N.A.
process modernisation and cost optimisation. 3. Expected increase in productivity and profits in
Lastly he was associated as Executive Director measurable terms
(Chemical Division of MIL). N.A.

12
ANNUAL REPORT 2002-2003
Particulars of the Directors seeking Appointment/Re-appointment at the ensuing Annual General Meeting pursuant to
Clause 49 of the Listing Agreement
Name of the Director Date of Expertise In Brief Resume Names of Companies
& Age Appointment Functional Area in which he hold* directorship/
Committee memberships

Pradip N. Kapadia 21.01.03 Advocate & Solicitor. B.A., LLB. Director in :

(52 yrs.) Experience of Hindustan Thompson Associates Ltd.
more than 26 years Fortune Communications Ltd.
in Legal field. He is a Sunanda Industries Ltd.
partner of Gagrat & Co., Chemplast Sanmar Ltd.
Advocates & Solicitors, Sumangala Investments Ltd.
Mumbai. Polyolefins Rubber Chemicals Ltd.
Committee Membership:
Audit Committee:
Polyolefins Rubber Chemicals Ltd.

Investors' Grievance Committee:

Polyolefins Rubber Chemicals Ltd., Chairman

Vishad R Mafatlal 21.01.03 Industrialist having B.Sc. Director in :

(29 yrs.) business experience (Economics) Mafatlal Services Ltd.
of more than 6 years in University of Mafatlal Burlington Industries Ltd.
Textiles & Chemicals. Pennsylvania, Sunanda Industries Ltd.
Wharton Tropical Clothing Co. Pvt. Ltd.
School, USA. Cebon Apparel Pvt. Ltd.
eyeindia.com Pvt. Ltd.
Suvin Technologies Ltd.
Suvin Technologies Pte. Ltd., Singapore
Intouch Communications Pte. Ltd.
Mafatlal Fabrics Pvt. Ltd.
Silvia Apparel Ltd.
Sarvamangala Holdings Pvt. Ltd.
eyeglobal technologies Pvt. Ltd.
Marigold International Pvt. Ltd.
Myrtle Chemtex Trading Pvt. Ltd.
Mayflower Chemtex Trading Pvt. Ltd.
Sulakshana Securities Ltd.
Polyolefins Rubber Chemicals Ltd.
Committee Membership : NIL

Ajindra Kumar Puri 21.01.03 Vast experience of M.Sc, LLB., Director in :

(68 yrs.) over 40 years in C.A.I.I.B. Ambuja Cement Eastern Ltd.
Banking & Finance. VLS Finance Ltd.
He retired as Dy. Polyolefins Rubber Chemicals Ltd.
Managing Director from Committee Membership : NIL
State Bank of India. Audit Committee:
He was also a member Ambuja Cement Eastern Ltd.
of Hon'ble Board for VLS Finance Ltd.
Industrial & Financial Polyolefins Rubber Chemicals Ltd.
Reconstruction, Remuneration Committee:
New Delhi. Ambuja Cement Eastern Ltd., Chairman
Polyolefins Rubber Chemicals Ltd., Chairman

Atul Kumar Srivastava 21.01.03 Over 25 years of B.Sc. (Hons.) Director in :

(51 yrs.) experience in large FCA Silvia Apparel Ltd.
corporates in the areas Sulakshana Securities Ltd.
of Finance, Accounting, Polyolefins Rubber Chemicals Ltd.
Taxation and Commerce Committee Membership:
Audit Committee:
Polyolefins Rubber Chemicals Ltd.

Investors' Grievance Committee :

Polyolefins Rubber Chemicals Ltd.

13
POLYOLEFINS RUBBER CHEMICALS LIMITED
Particulars of the Directors seeking Appointment/Re-appointment at the ensuing Annuai Qenerai Meeting pursuant to
Clause 49 of the Listing Agreement (Contd.)
Name of the Director Date of Expertise In
& Age Appointment Functional Area
Sunil Siddharth Lalbhai 03.03.03 Industrialist having varied
(43 yrs.) experience of more than
20 years in Chemicals &
General Management.
T. M. M. Nambiar 03.03.03 Having vast experience
(66 yrs.) of over 40 years and
was associated as
President/Chairman/
Members of the
prestigious Institutions like
Cement Manufacturers'
Association, National
Council for Cement
& Bldg. Materials and
Development Council for
Cement Industry, the
Associated Chambers of
Commerce & Industry of
India, CD, etc.
He was associated for
more than 26 years
with Associated Cement
Company Ltd. including
6 years as Managing
Director.
0. S. Umalkar 01.05.03 Over 17 years of
(51 yrs.) experience in the field of
process modernisation
and cost optimisation.
His expertise in
fluorochemical area has
helped Navin Fluorine to
become one of the
largest supplier of bulk
and Speciality Fluorine
Chemicals on a global
scale based on in-house
technology development.
14
Brief Resume Names of other Companies
in which he holds directorship/
Committee memberships
B. Sc., Director in :
M.S. (Chemisry), Amal Products Ltd.
U.S.A., M.S. Atul Ltd.
(Economy Wyeth Lederle Ltd.
Planning & Polyolefins Rubber Chemicals Ltd.
Policy), Boston, Committee Membership:
U.S.A. Share Transfer and Shareholders/
Investors' Grievance Committee:
Atul Limited
Remuneration Committee:
Polyolefins Rubber Chemicals Ltd.
Audit Committee:
Polyolefins Rubber Chemicals Ltd.
B. Com., ACA Director In :
Eternit Everest Ltd., Chairman
ION Exchange (India) Ltd.
Polyolefins Rubber Chemicals Ltd.
Committee Membership:
Share Transfer Committee:
Eternit Everest Ltd.,
Investors' Grievance Committee:
Polyolefins Rubber Chemicals Ltd.
Remuneration Committee:
Eternit Everest Ltd.
Polyolefins Rubber Chemicals Ltd.
Audit Committee:
ION Exchange (India) Ltd.
Polyolefins Rubber Chemicals Ltd., Chairman
M.Chem. Engg. Director In :
Alufloride Limited.
Polyolefins Rubber Chemicals Ltd.
Committee Membership: NIL
ANNUAL REPORT 2002-2003
DIRECTORS' REPORT allotment of 49,99,999 equity shares of Rs. 10/- each
on March 3, 2003. Since the vesting of business of
To: Chemical Division of Mafatiai Industries Limited (MIL) in
the Company is w.e.f. March 1, 2002, if this 49,99,999
The Members,
Equity Shares issued pursuant to the Sanctioned
POLYOLEFINS RUBBER CHEMICALS LIMITED
Rehabilitation Scheme of MIL are notionaliy considered
for the entire financial period, then the Earning Per
Your Directors are pleased to present 5th Annual Report Share would be lower at Rs. 19.12.
together with Audited Accounts for the period ended
March 31, 2003. The previous financial year was for a period 2. DIVIDEND:
of 11 months ending on February 28, 2002 so as to give Your Directors regret their inability to recommend any
effect to the transfer of the Chemicals Business of Mafatiai dividend at this stage.
Industries Limited (MIL) in the Company, pursuant to the
Scheme of Demerger of MIL sanctioned by the Hon'ble 3. IMPACT ON THE COMPANY OF THE CORPORATE
Board for Industrial & Financial Reconstruction (BIFR), New RESTRUCTURING OF MIL PURSUANT TO THE
Delhi w.e.f. the appointed date of March 1, 2002. The Board REHABILITATION SCHEME OF MIL :
of Directors thereafter decided to revert back to the normal
As you are aware the Board for Industrial & Financial
financial closure on March 31, 2003. Hence the present
Reconstruction (BIFR) sanctioned the Rehabilitation
Audited Accounts are for a period of 13 months i.e. from
Scheme of Mafatiai Industries Limited (MIL) under the
March 1, 2002 to March 31, 2003. This is the first year of the
provisions of Sick Industrial Companies (Special
operationalisation of the Company, and hence, the figures
Provisions) Act, 1985 vide its order dated 30.10.2002.
of previous period are not comparable.
Pursuant to the scheme, Chemical Business of MIL
comprising of the two units viz. Navin Flourine
1. FINANCIAL RESULTS : Industries (NFI), Surat and Navin Chemicals
The Financial Results of the Company are as under : Enterprises, Dewas (M.P.) stands de-merged and
Current Previous vested in the Company, as a going concern, with effect
from the appointed dated viz. March 1, 2002. A copy of
Period Period
the said BIFR Order date 30.10.2002 sanctioning the
(13 months) (11 months)
Rehabilitation Scheme of MIL has been filed with the
Rupees in Rupees in
Registrar of Companies, • Maharashtra and
Lacs Lacs
consequently the said Order has become effective.
Sales (Net of excise duty) 19,453.63
Other Income (including The salient features of the Sanctioned Rehabilitation
interest income) 699.95 Scheme of MIL, as far as the Company is concerned,
are as under:-
Gross ProfitV(Loss)
(Before Interest, Depreciation, a. Allotment of one equity share of the Company of
Extraordinary Items and Tax) 4,459.01 (0.28) Rs. 10/- each fully paid up to the shareholders of
Less: Depreciation 537.39 MIL for every share of Rs. 100/- each fully paid up
held by them in MIL as a consideration for
Interest 221.49
De-merger of Chemicals Business of MIL in the
Provision for Tax (Net of
Company.
Deferred Tax income) (654.20)
Net Proflt/(Loss) b. Infusion of Rs. 90 Crores in MIL by way of fresh
after Tax 4,354.33 (0.28) investment in a phased manner to contribute to the
Less: Provision for doubtful rehabilitation of MIL.
debts/advances 3,395.68 c. Raising of Rs. 90 Crores for infusion in MIL in the
Proflt/(Loss) after following manner :
Tax and available for
- Rs. 25 crores by way of Rights Issue.
appropriation 958.65 (0.28)
- Rs. 65 Crores by way of Long Term Debt.
Add: Transfer from Investment
Allowance (Utilised) Necessary steps to raise the funds as above, are at
Reserve 30.16 an advanced stage.
Less: Surplus/(Deficit) brought d. Execution of Corporate Guarantee in favour of the
forward from Previous Period (1.24) (0.96) Secured Term Lenders of MIL whose dues have
Surplus/(Deficit) carried to been transferred to Sulakshana Securities Limited
Balance Sheet 987.57 (1-24) (SSL) (a special purpose vehicle) to meet the
shortfall, if any, in realisation of the sale proceeds
It may be noted that Earning Per Share (basic/diluted) by the said SSL for repayment of the dues of the
of Rs. 252.12 disclosed in the Profit and Loss Account secured term lenders whose liabilities have been
for the current period* is computed on the basis of transferred to SSL.

15
POLYOLEFINS RUBBER CHEMICALS LIMITED
e. Acquisition of share capital of Rs. 1,00,000/- to be
issued by SSL to the shareholders of MIL at face
value by paying equivalent cash to the
shareholders of MIL on proportionate basis. A
further investment of Rs. 9,00,000/- in the equity
capital of SSL would have to be made at the face
value. As a result, SSL would become a subsidiary
of the Company.
4. INCREASE IN CAPITAL :
During the year under review, to comply with the
requirements of Companies Amendment Act, 2002
relating to the minimum paid up capital of Rs. 5 Lacs,
the Board of Directors of the Company allotted 49,910
equity shares of Rs. 10/- each. Accordingly the paid up
capital of the Company was increased from Rs. 900/-
to Rs. 5,00,000/-.
Further pursuant to the said Sanctioned Rehabilitation
Scheme of MIL, the Board of Directors of the Company
at their meeting held on 3rd March, 2003 allotted
49,99,999 Equity Share of Rs. 10/- fully paid up, to the
shareholders of MIL in the ratio of one share of the
Company of Rs. 10/- each for every share of
Rs. 100/- of MIL held by them. Accordingly the paid up
capital of the Company has been increased from
Rs. 5,00,000 to Rs. 5,04,99,990/- divided into 50,49,999
equity shares of Rs. 10/- each.
5. INVESTMENTS :
During the period under review, the Company has
purchased 2,36,62,762 equity shares of Rs. 10/- each
of Mafatlal Burlington Industries Limited (MBIL) and
13,71,162 equity shares of Rs. 10/- each of Molex
Mafatlal Micron Private Limited.
6. YEAR IN RETROSPECT :
Navin Fluorine has been the largest in Fluoro
Chemicals business in India right since its inception
in 1967. Navin Fluorine operates in all the important
segments of Fluoro Chemicals business such
as Bulk Chemicals, Refrigerants and Speciality
Chemicals.
Refrigerant business is undergoing metamorphosis
with the phase out of Chloro Fluoro Carbon (CFC)
gases as they were found to be Ozone depleting
substances. The phase out started in the year 2000
and would be completed in a span of 10 years
thereafter. The phase out of CFCs is causing a dent in
the business revenue of Navin Fluorine and it is
imperative that Navin Fluorine should come out with
the additional business streams to make up for this
business erosion.
Your company has prepared a road map for the
survival and growth of the organisation beyond the
extinction of CFCs. In the past two years Navin
Fluorine has given technology special thrust on the
development of Speciality Fluoro Chemicals which find
interesting applications in the area of Pharma and Agro
Chemicals.
16
Navin Fluorine has a strong in-house resource, both of
material and manpower. Its inherent strength is being
utilised for the development of Speciality business. The
in-house technology happens to be very cost effective
and that gives Navin Fluorine a competitive advantage
in the arena.
The capacity utilisation of the mother plant namely
Hydrofluoric Acid which is a precursor to all the Fluoro
Chemicals reached a level of 95% during the period
under consideration.
The Safety and Environment Management record of
both the Chemical Units was very good. The
Management, as a policy has always taken a very
progressive stance in these areas and have recorded
significant achievements/improvements.
7. ENERGY, TECHNOLOGY AND FOREIGN
EXCHANGE:
Additional information on conservation of energy,
technology absorption, foreign exchange earnings and
outgo as required to be disclosed in terms of Section
217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 is annexed hereto and
forms part of this Report.
8. PARTICULARS OF EMPLOYEES :
In compliance with the provisions of Section 217(2A) of
the Companies Act, 1956, a statement giving requisite
information is annexed hereto.
9. INDUSTRIAL RELATIONS :
The relations between the employees and the
Management have remained cordial.
10. DIRECTORATE :
Shri P. N. Kapadia, Shri Vishad P. Mafatlal, Shri A. K.
Puri, and Shri A. K. Srivastava were appointed as
Additional Directors by the Board of Directors w.e.f.
21st January, 2003. Further Shri T. M. M. Nambiar and
Shri Sunil S. Lalbhai were appointed as Additional
Directors by the Board of Directors w.e.f. 3rd March,
2003. Shri D. S. Umalkar was appointed as Additional
Director by the Board of Directors w.e.f. 1st May, 2003.
All the above Directors of the Company will hold office
upto the date of the ensuing 5th Annual General
Meeting of the Company and being eligible offer
themselves for re-appointment. Notices u/s. 257 of the
Companies Act, 1956 have been received by the
Company from the members signifying their intention
to propose the candidature of the said persons as
Directors of the Company.
Dr. N. M. Dhuldhoya, Shri V. R. Qupte, Shri C. R. Gupte
and Shri U. M. Karnik have resigned as Directors of the
Company w.e.f. 21st January, 2003. The Board records
its appreciation for the valuable contribution made by
them during their tenure as Directors of the Company.
ANNUAL REPORT 2002-2003
11. INSURANCE :
The properties and insurable interests of your
Company like buildings, plant and machinery, stocks
etc. are properly insured.
12. DIRECTORS' RESPONSIBILITY STATEMENT :
As required under the provisions of Section 217
(2AA) of the Companies Act, 1956, your Directors
report that :-
(i) In the preparation of the annual accounts, the
applicable accounting standards have been
followed along with proper explanation relating
to material departures;
(ii) the directors had selected such accounting
policies and applied them consistently and
made judgements and estimates that are
reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at
the end of the financial year and of the profit of
the Company for the period under review;
(iii) the Directors have taken proper and sufficient
care for the maintenance of adequate
accounting records in accordance with the
provisions of this Act for safeguarding the assets
of the Company and for preventing and
detecting fraud and other irregularities;
(iv) the Directors have prepared the annual
accounts on a going concern basis.
13. AUDITORS :
At the Annual General Meeting, Members are
requested to appoint Auditors for the current year
and to fix their remuneration. The specific notes
forming part of the Accounts referred to in the
Auditors' Report are self-explanatory and give
complete information.
14. REPORTS ON CORPORATE GOVERNANCE AND
MANAGEMENT DISCUSSION AND ANALYSIS :
As on March 31, 2003, the Company was not listed.
However, as a measure of good corporate practice,
Reports on "Corporate Governance" as well as
"Management Discussion and Analysis" are
voluntarily attached herewith and forms a part of the
Directors' Report.
15. APPRECIATION :
The Directors wish to place on record their
appreciation of the devoted services of the workers,
staff and the officers who have largely contributed to
the efficient management of your Company.
For and on behalf of the Board,
H. A. MAFATLAL
Chairman
Mumbai,
July 31, 2003
ANNEXURE TO THE DIRECTORS' REPORT
2002-2003
Disclosure of particulars with respect to Conservation of
Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo as required under the Companies
(Disclosure of Particulars in the Board of Directors' Report)
Rules, 1988.
(1) CONSERVATION OF ENERGY:
(A) ENERGY CONSERVATION MEASURES
TAKEN:
1. Location of main cooling tower was shifted
near to HF Plant. This reduced the pressure
drop in transporting cooling water over long
distance.
2. Old cooling tower was replaced by new
design resulting in energy conservation.
3. Variable frequency drives were introduced in
controlling the speed of motors in proportion
to process needs, thus saving the wastage of
energy.
4. New condensor was installed in ammonia
refrigeration system to improve condensing
capacity of refrigerant gases.
5. HF plant was run at full capacity. This resulted
in optimum utilisation of energy.
(B) ADDITIONAL INVESTMENTS AND PROPOSALS,
IF ANY, BEING IMPLEMENTED FOR REDUCTION
OF CONSUMPTION OF ENERGY:
A proposal to install a natural gas based 3MW
Captive Power Plant is under consideration. This
will bring down the unit cost of power
substantially and also make up for additional
requirement of steam.
(C) IMPACT OF THE MEASURES AT (A) & (B) ABOVE
FOR REDUCTION OF THE ENERGY
CONSUMPTION AND CONSEQUENT IMPACT
ON THE COST OF PRODUCTION OF GOODS:
As indicated in (A) and (B) above.
(D) TOTAL ENERGY CONSUMPTION AND ENERGY
CONSUMPTION PER UNIT OF PRODUCTION :
The above information is furnished in the
prescribed Form 'A' annexed hereto.
(2) TECHNOLOGY ABSORPTION :
Efforts made in technology absorption are furnished in
prescribed Form B annexed hereto.
(3) FOREIGN EXCHANGE EARNINGS AND OUTGO:
(A) Activity relating to export initiatives taken to
increase exports, development of new export
markets for products and services and export
plans.
Exports remained strong during the year.
(B) Total Foreign Exchange used and earned:
Total Foreign Exchange used and earned
Rs. in lacs
Current Previous
Period Period
(01.03.2002 to (01.04.2001 to
31.03.2003) 28.02.2002)
Total Foreign Exchange Used 4113.21
Total Foreign Exchange earned S176.S4
17
POLYOLEFINS RUBBER CHEMICALS LIMITED
Form A

Current Previous
Period Period
2002-03 2001-02

A. POWER AND FUEL CONSUMPTION :

1. Electricity:

(a) Purchased:
Units (KWH) 1,72,99,017
Total Cost (Rs.) 8,85,41,443
Rate/Unit (Rs.) 5.12
(b) Own Generation:
(i) Through Diesel Generator:
Units (in KWH) 7,29,198
Unit per litre of diesel oil (KWH) 2.86
Cost/Unit (Only Diesel) (Rs.) 6.45
HSD used (Ltrs.) 2,55,227
Total Cost (Rs.) 47,00,952

2. Furnace O i l :
Quantity (K. Ltrs.) 2,070.14
Total Amount (Rs.) 2,45,83,313
Average Rate (Rs./K. Ltr.) 11,875.19

3. Others/Internal Generation:
Qtn. Total Cost Rate (Separately\Specified here below)
A. High Speed Diesel (HSD)
Quantity (K. Ltrs.) 108.68
Total Cost 21,63,983
Rate/Unit (Per Tonne) 19,911.14
B. Natural Gas (Cub. Mtrs.)
Quantity , 34,46,727
Total Cost 3,05,86,288
Rate (Rs./'OOO' Cub. Mtrs.) 8.87
C. Water (K. Ltrs.)
Quantity..... 12,61,550
Total Cost 42,75,801
Rate (Rs./K. Ltrs.) 3.39
D. Light Diesel Oil (L.D.O.) (K. Ltrs.)
Quantity 252.27
Total Cost 33,11,307
Rate (Rs./K. Ltrs.) 13,126.15

B. CONSUMPTION PER UNIT OF PRODUCTION:

1. Electricity (KWH/Mt.) 964.85
2. Furnace Oil (K. Ltrs./Mt.) 0.11
3. Natural Gas (Cub. Mtrs./Mt.) 184.47
4. Others (K. Ltrs./Mt.) 67.53

18
ANNUAL REPORT 2002-2003
FORM B
(A) RESEARCH AND DEVELOPMENT: 2. Company intends to commercially exploit
1. Specific areas In which R & D carried out by the substitute refrigerant technology at appropriate
Company: time.
R&D was carried out in the following areas: 4. Expenditure on R. & D.:
1. Catalytic hydrogenation using loop reactor. Rs. in lacs
2. Process development of various speciality Current Period Previous Period
chemicals such as : 2002-2003 2001-2002
NFI NCE Total Total
(a) Fluoronitrobenzene
(b) Fluorotoluenes
(a) Capital Expenditure 8.78 — 8.78 —
(c) Fluoro benzaldehyde
(b) Recurring Expenditure 98.10 — 98.10 —
(d) Trifluoro acetic acid (c) Total 106.88 — 106.88 —
(e) Fluoro phenols (d) Total R&D Expenditure
(f) Pyrazineamide as a percentage of
(g) Process modifications in BF3 plant total turnover 0.49 —
3. Work continued for the process development of
environment friendly substitute R134a at IICT B. TECHNOLOGY ABSORPTION, ADAPTATION AND
Hyderabad. INNOVATION:
1. Efforts in brief made towards technology
2. Benefits derived as a result of the above R&D: absorption, adaptation and Innovation:
1. The following products were commercialised The Company has developed several
based on in-house R&D technology fluorochemicals as mentioned above in lab scale
(a) Trifluoro acetic acid and these technologies were scaled up on
(b) Fluoro Phenol commercial scale and fully absorbed. This resulted
(c) Pyrazine amide in commercial exploitation of R&D efforts.
2. Capacity of BF3 plant was increased 2. Benefits derived as a result of the above efforts:
3. Higher turnover of products produced by in- As above in B1.
house technology.
3. Information regarding technology imported
4. Penetration into pharma and agro applications during last 5 years:
resulted in widening of customer base.
5. Production of import substitute have resulted in (a) Technology imported N.A.
savings of foreign exchange for the country. (b) Year of Import N.A.
3. Future Plan of Action: (c) Has technology been fully absorbed N.A.
1. Process development work will continue to (d) If not fully absorbed, not taken place,
manufacture high value added fluorochemicals reasons therefor and future plans
required for pharma and agro industry. of action. N.A.

Statement of Particulars of Employees pursuant to the provision of Section 217 (2A) of the Companies Act, 1956 and
forming part of the Directors' Report for the period ended March 31, 2003 (13 months)

Name & Age Designation/ Remuneration Qualification Date of Lasi tmpioymem neia
Nature of duties (Rupees) & Experience commencement Name of Employer, Post
(Years) of employment held and period (years)

(D (2) (3) (4) (5) (6)

A. Names of Employees employed throughout the period and were in receipt of remuneration of not less than Rs. 26,00,000/-
D. S. Umalkar Executive Director Rs. 28,36,688/- M.Chem. Engg. 01/03/2002 Mafatlal Industries Limited
(50 years) (25 years) Executive Director
(Chemical Division)
(17 years)
B. Names of Employees employed for the part of the period and were in receipt of remuneration of not less than Rs. 2,00,000/- per month
NIL

NOTES:
1. Remuneration, as above, includes Salary, Dearness Allowance, Company's contribution to Provident Fun'd and
Superannuation Scheme, Leave Encashment, Holiday Travel Benefits, Reimbursement of Medical Expenses, Medical
Insurance Premium, House Rent Allowances, Additional House Rent Allowance, Compensatory Allowances, Personal
Allowance, Voluntary Retirement Benefit, where applicable, Personal Accident Insurance, Monetary value of perquisites
calculated in accordance with provision of Income tax Act, 1961 and rules made thereunder in respect of Housing,
Company's furniture and equipments etc. but does not include Company's contribution to Gratuity Fund.
2. None of the Company's employees is related to any Director of the Company.

19
POLYOLEFINS RUBBER CHEMICALS LIMITED
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
(A) Industry structure and developments:
Your Company is primarily engaged in the business
of manufacturing and selling chemicals. The target
markets can be divided into four broad categories
namely, refrigerant gases for refrigeration &
air-conditioning industry, bulk chemicals for metal
industry, specialities for agro & pharma industry and
intermediates for dyes & drugs.
The refrigerant gas business have three other
producers in India. Whereas, only one other Indian
company produces the bulk chemicals. The speciality
basket is unique for your Company. There is no other
producer in India who offers the same range of
products out of one basket. In the dye intermediate
business, your Company has competition from
two other producers from the organised sector.
(B) Opportunities and threats:
The refrigerant gases business comprises of
CFCs (Chlorofluorocarbons) and HCFCs (Hydro-
chlorofluorocarbons) and HFCs (Hydrofluoro-
carbons). As per the Montreal Protocol on phase-out
of Ozone Depleting Substances (ODS), CFCs are
required to be phased out by the year 2009. The
Original Equipment manufacturers of Refrigerators
and cooling machines, foam blowing applications
have already stopped using CFCs with effect from
December, 2002. However, the HCFCs have a longer
window for developing countries like India and the
demand for HCFCs will grow at steady rate. HFC
134a demand in India and developing nations is rising
at a fast pace as an environment friendly substitute of
R12 and your Company is trying to meet this market
demand presently through out sourcing. We can think
of investing in our own manufacturing capacity only
when our markets can justify setting up of economic
size plant.
The bulk chemicals catering to metal Industries are
presently riding the growth in the aluminium and steel
industry. There seems to be a firming up of demand
in this product segment and we are gearing ourselves
to cater to this growing demand.
In the newly introduced speciality products your
Company has been able to make inroads into the
bastions of large multinationals who had long
entrenched interests in the domestic and international
markets of these products. With emergence of India
as a global hub for supply of drugs and pharma &
agro intermediates, your Company enjoys the
advantages of being the first starter in India who
provides a wide range of fluorochemicals to this
sector. Your Company has the best R&D, technology
and human resources in this field which has enabled
it to introduce 25 new products and processes in the
past three years.
The dye intermediate business is facing a stiff
competition for the past few years and margins are
under pressure. As a counter strategy, we are shifting
away from dyestuff applications and focusing on
pharma applications. We have already set-up
country's largest plant for the production of 2 methyl
pyrazine, an intermediate of pyrazine-amide, a bulk
drug for TB.
The global business environment is still in a dormant
mode, if not regressive. Your Company is trying to
face up to these steep challenges by offering higher
derivatives in the value chain and keeping a tight
leash on it's all round cost synergies.
20
(C) Segment wise and product wise performance:
Since, the Company is primarily engaged in the
business of manufacturing and sale of chemicals, it is
considered to be operating in a single business
segment. However, the products of the Company are
sold in both the domestic and international markets.
They can be considered to be in two different
geographical segments. Appropriate segment wise
disclosures have been made in the Accounts.
(D) Business Outlook:
With the Montreal Protocol mandated CFC phase-out
the CFC business will keep declining progressively.
HCFCs and HFC however, are expected to return
steady volumes at a modest growth rate, in line with
the growth registered by the air-conditioning and
refrigeration industry.
The performance of the Company will largely depend
on it's capabilities of introducing and commercially
exploiting newer molecules for the Indian and
International pharma and agro majors. In a market,
which is price sensitive in the medium term, success
will hinge on your Company's ability to quickly move
up the value chain at competitive costs. Your
Company is also realigning itself as a provider of
process solutions in addition to providing value
added products to its customers.
The bulk chemicals are expected to bring in steady
revenues in the foreseeable future.
The dye intermediate business will remain fiercely
competitive. Growth in the traditional chemicals in this
range may come only at the expense of a price
dilution.
(E) Human Resources :
The relations between the Employees and the
Management have remained cordial.
(F) Internal control system and their adequacy:
The Company has an adequate internal audit system
commensurate with its size and the nature of its
business. An independent firm of Chartered
Accountants carries out the Internal Audit, at one of
the manufacturing facilities. At the other location the
internal audit resources are pulled out of the common
internal audit pool of the group.
The internal auditors interact with the Audit
Committee of the Board periodically to discuss the
frequency and scope of audit, significant audit
observations and remedial actions, if any.
(G) Operating Financial Performance :
Inspite of decline in the profitable CFC segment,
Company has been able to maintain its operating
profitability levels through growth in all its other
product ranges.
Cautionary Statement:
Statements in this report on Management Discussion and
Analysis describing the Company's objectives, projections,
estimates, expectations or predictions may be forward
looking statements within the meaning of applicable
security laws or regulations. These statements are based
on certain assumptions and expectation of future events.
Actual results could however differ materially from those
expressed or implied.
The Company assumes no responsibility in respect of
forward looking statements herein which may undergo
changes in future on the basis of subsequent
developments, information or events.
ANNUAL REPORT 2002-2003
CORPORATE GOVERNANCE REPORT
COMPANY PHILOSOPHY ON CORPORATE GOVERNANCE:
Company's philosophy of Corporate Governance is intended to bring about -
— transparency and professionalism in activities of the organisation.
— implementation of policies and procedures prescribed by the Company to ensure high ethical standard in all its
business activities and responsible and responsive management.
1. Board of Directors:
The Board of Directors of the Company consists of Directors having varied experience in different areas and few of
them are acknowledged as leading professionals in their respective fields. The composition of the Board is in
conformity with the provisions of Clause 49 of the Listing Agreement. The Board is headed by Shri Hrishikesh A.
Mafatlal who is the Chairman and Managing Director of the Company. The Board consists of one Executive Promoter
Director, one Non-Executive Promoter Director, two Executive Directors and four Independent Non-Executive Directors.

Sr. Name Category @No. of Whether Other No. of

No. (Executive/ Board Last AQM Directorship Committee
Non-Executive) . Meeting held on held (Including Membership/
attended 27th August, Private Chairmanship
2002 Companies) In Domestic
attended Companies

1. Mr. H. A. Mafatlal Promotor - Executive 9 Yes *20 5

2. Mr. P. N. Kapadia Independent 2 N.A. 5 2

appointed
w.e.f. 21.01.2003

3. Mr. V. P. Mafatlal Promoter 2 N.A $17 —

appointed Non-Executive
w.e.f. 21.01.2003

4. Mr. A. K. Puri Independent 2 N.A. 2 5

appointed
w.e.f. 21.01.2003

5. Mr. A. K. Srivastava Executive 2 NA 2 2

appointed
w.e.f. 21.01.2003

6. Mr. Sunil S. Lalbhai Independent 1 N.A. 3 3

appointed
w.e.f. 03.03.2003

7. Mr. T. M. M. Nambiar Independent 1 N.A. 2 6

appointed
w.e.f. 03.03.2003

8. Mr. D. S. Umalkar Executive — N.A. 1 —

appointed
w.e.f. 01.05.2003

"Out of 20 companies, 6 are private limited companies.

$Out of 17 companies, 11 are private limited companies.

All the relevant information such as Production, Sales, Exports, Financial Result Capital Expenditure proposals,
Statutory Dues position etc., are as a matter of routine, placed before the Board for their approval.

Remuneration of the Directors:

During the period under review, all the directors have been paid sitting fees of Rs. 3000/- each for attending the Board
meeting. The Directors who are appointed as Managing/Whole time Directors have not been paid any other
remuneration during the period under review as their appointment is w.e.f. May 1, 2003.
©During the period March 1, 2002 to March 31, 2003, total 9 meetings were held on viz. May 2, 2002, August 1, 2002,
November 18, 2002, December 11, 2002, December 20, 2002, January 9, 2003, January 17, 2003, January 21, 2003
and March 3, 2003. It is evident from the above that the Corporate Governance Provisions of the listing agreements
allowing four months gap between the two meetings were duly followed.

21
POLYOLEFINS RUBBER CHEMICALS LIMITED
2. Audit Committee:
In compliance with the requirements of Section 292 A of the Companies Act, 1956 read with the provisions of Clause
49 of the Listing Agreements with the Stock Exchanges, the Board has constituted Audit committee on March 3, 2003
comprising of five Directors which met on April 28, 2003 and July 31, 2003. Mr. T. M. M. Nambiar is the Chairman of
the Committee and Mr. A. K. Puri, Mr. P. N. Kapadia, Mr. Sunil S. Lalbhai and Mr. A. K. Srivastava are the other
members.
All the members attended the meeting held on April 28 and July 3 1 , 2003. The terms of reference of the Audit
Committee is as outlined in the Companies Act, 1956 and Listing Agreement.
3. Remuneration Committee:
The Remuneration Committee was constituted by the Board of Directors on March 3, 2003. Mr. A. K. Puri is the
Chairman of the Committee and Mr. T. M. M. Nambiar and Mr. Sunil S. Lalbhai are the other Members of the Committee.
The Committee is authorised to decide on the remuneration package for Executive Directors including annual
increments, pension rights, compensation payment if any. All the members attended the Remuneration Committee
meeting held on April 28, 2003.
4. Investors' Grievance Committee:
The Board has constituted Investors Grievance Committee on March 3, 2003. Mr. P. N. Kapadia is the Chairman of the
Committee and Mr. T. M. M. Nambiar and Mr. A. K. Srivastava are the other members. The scope of the Committee
is to look into redressing Investors grievances/complaints viz. non-receipt of transferred shares, non-receipt of
Dividends etc.
5. Disclosure:
(a) Disclosure on materially significant related party transactions i.e. transactions of the Company of material nature,
with its promoters, the directors or the management, their subsidiaries or relatives etc., that may have potential
conflict with the interest of the Company at large :-
None of the transactions with any of the related parties were in conflict with interest of the Company. Transactions
with the related parties are disclosed in
Note No. 17 in Schedule 18 - "Notes on Accounts" annexed to the financial statements for the period.
(t>) Details of non-compliance by the Company, penalties, strictures imposed by Stock Exchange/SEBI or any
statutory authority, on any matter related to Capital Markets, during the last three years : None.
6. General Body Meetings :
Location and time where last three Annual General Meetings (AGM) were held :

AGM Year Venue Date Time

4th 2001-02 Plot No.: C-37, Off. Thane Belapur Road, 27/08/2002 11.00 A.M.
Turbhe, Navi Mumbai 400 705

3rd 2000-01 Plot No.: C-37, Off. Thane Belapur Road, 28/09/2001 12.00 Noon
Turbhe, Navi Mumbai 400 705

2nd 1999-2000 Plot No.: C-37, Off. Thane Belapur Road, 28/09/2000 12.00 Noon
Turbhe, Navi Mumbai 400 705

Whether Special Resolution -

(a) Were put through postal ballot last year NO
Details of voting pattern N.A.
Person who conducted the postal ballot exercise N.A.
(b) Are proposed to be conducted through postal ballot this year NO
Procedure for postal ballot N.A.
7. Means of communication :
The Financial Results of the Company will be reported as mentioned below :-
- Half yearly report sent to shareholders No
- Quarterly Results proposed to be normally published in which newspaper In English - Free Press Journal
In Marathi - Navshakti
- Any website
No
- Whether it also displays official news release and the presentation
made to institutional investors or to the analylist
- whether management discussion & analylist report is a part of NO
annual report
Yes
22
ANNUAL REPORT 2002-2003
8. General Shareholders Information:
A. Fifth Annual General Meeting :
Date 29/09/2003
Time 2.30 P.M.
Venue S.N.D.T Women's University, Patkar Hall, 1, Nathibai Damodar
Thackersey Road, Churchgate, Mumbai 400 020.
B. Financial Calendar 01/04/2003 To 31/03/2004 (tentative)
First Quarterly Results — End July, 03
Second Quarterly Results (Half Yearly) — End October, 03
Third Quarterly Results — End January, 04
Audited Yearly Results — End July, 04
C. Date of Book Closure NIL
D. Dividend Payment Date N.A.
E. Listing Mumbai Stock Exchange [BSE] -
In-principle approval received
Ahmedabad Stock Exchange [ASE] -
In-principle approval received
Stock Code BSE Awaited
ASE Awaited
G. Monthly high & low
In-Principle approval for the listing of 50,49,999 equity shares of Rs.10/- of the Company have been received from
Stock Exchanges, Mumbai and Ahmedabad. The trading permission is awaited. Hence market price is not
available.
H. Registrar & Share Transfer Agents:
Sharepro Services
Satam Estate, 3rd floor,
Above Bank of Baroda,
Chakala, Andheri (E),
Mumbai 400 099.
Share Transfer System :
All the shares related work is being undertaken by our R&T Agent, Sharepro Services, Mumbai. A share transfer
committee of three Directors has been constituted to approve Transfer, Transmission, Split, Consolidation, etc. of
shares. The share transfers are registered and returned within 30 days from the date of receipt if relevant
documents are complete in all respects. The investors/shareholders grievances are also taken-up by our R&T
Agent.
J. Distribution of shareholding as on 31.03.2003

Slab No. of shareholder No. of shares

Nos. % Numbers % to share
capital

Less than 500 1,49,068 99.766% 10,80,113 21.39%

501-1000 209 0.14% 1,52,034 3.01%

1001 -2000 47 0.031% 67,544 1.34%

2001 - 3000 20 0.013% 49,787 0.99%

3001 - 4000 12 0.008% 41,829 0.83%

4001 - 5000 09 0.006% 42,741 0.84%

5001 -10000 19 0.013% 1,35,037 2.67%

10001 - above 35 0.023% 34,80,914 68.93%

TOTAL 1,49,419 100.00% 50,49,999 100.00%

23
POLYOLEFINS RUBBER CHEMICALS LIMITED
K. Shareholding pattern as on 31.03.2003:
DISTRIBUTION OF SHAREHOLDING AS ON QUARTER ENDED ON 31.03.2003

Sr.
No. Category No. of shares held % of Holding

1. Promoters Holding: 16,87,167 33.41%

2. Mutual Funds and UTI 9,89,538 19.60%

3. Banks, Financial Institutions, Insurance

Companies, Central/State Govt. Institutions 7,70,257 15.25%

4. Flls (Foreign Institutional Investors) Nil Nil

5. Private Corporate Bodies 1,53,128 3.03%

6. Indian Public 13,92,779 27.53%

7. NRIs/OCBs 57,130 1.13%

8. Any other (please specify) GDR Nil Nil

TOTAL 50,49,999 100.00%

L. Demateriafisatlon details:
The Company has entered into a Tripartite Agreement with NSOL and CDSL and Sharepro Services for the
dematerialisation of the securities. As on 31 st March, 2003 11,925 shareholders were holding 24,58,871 equity
shares in Demat form which constitutes 48.70% of the total share capital of the Company.
M. Out Standing GDR/ADR : N.A.
N. Plants/factories:
1. Navin Fluorine Industries, Bhestan, Surat - 395 023 (Gujarat)
2. Navin Fluorine Industries, Dewas-455 002 (M.P.)
O. Address for correspondence:
Polyolefins Rubber Chemicals Limited:
(a) Registered Office : 1st floor, Kalpataru Point,
Kamani Marg, Sion (East),
Mumbai 400 022.
(b) Corporate Office : Mafatlal House,
Backbay Reclamation,
Mumbai 400 020.

24
ANNUAL REPORT 2002-2003
AUDITORS' REPORT
TO THE SHAREHOLDERS
We have audited the attached Balance Sheet of Polyolefins
Rubber Chemicals Limited as at 31st March, 2003 and
also the Profit and Loss Account for the period from
1st March, 2002 to 31st March, 2003, annexed thereto.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express
an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with Auditing
Standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial
statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
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 for our opinion.
1. As required by the Manufacturing and Other
Companies (Auditors' Report) Order, 1988, issued by
the Central Government in terms of Section 227(4-A)
of the Companies Act, 1956, we enclose in the
Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to
in paragraph 1 above, we report that:
(i) We have obtained all the information and
explanations, which to the best of our knowledge
and belief were necessary for the purposes of
our audit;
(ii) In our opinion, proper books of account, as
required by law have been kept by the Company
so far as appears from our examination of those
books;
(iii) The Balance Sheet and Profit and Loss Account
dealt with by this report are in agreement with
the books of account;
(iv) In our opinion, the Balance Sheet and the Profit
and Loss Account dealt with by this report
comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
On the basis of the written representations
received from the directors, as on 31st March,
2003, and taken on record by the Board of
Directors, we report that none of the directors is
disqualified as on 31st March, 2003, from being
appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies
Act, 1956;
(vi) In our opinion and to the best of our information
and according to the explanations given to us,
the accounts read with the significant accounting
policies and notes thereon, give the information
required by the Companies Act, 1956, in the
manner so required, and give a true and fair view
in conformity with the accounting principles
generally accepted in India:
a. in case of the Balance Sheet, of the state of
affairs of the Company as at 31st March,
2003; and
b. in the case of the Profit and Loss Account,
of the profit for the period ended on that
date.
for C.C. CHOKSHI & CO.,
Chartered Accountants
A. SIDDHARTH
Partner
Mumbai, Dated: 31st July, 2003
25
POLYOLEFINS RUBBER CHEMICALS LIMITED
ANNEXURE TO THE AUDITORS' REPORT
RE: POLYOLEFINS RUBBER CHEMICALS LIMITED
(Referred to in Paragraph 1 of our Report of even date)
1. The Company has maintained proper records
showing full particulars including quantitative details
and situation of its fixed assets. All the assets have
not been physically verified by the management
during the period but there is a regular programme of
verification which, in our opinion, is reasonable having
regard to the size of the Company and the nature of
its assets. No material discrepancies were noticed on
such verification.
2. None of the fixed assets has been revalued during the
period.
3. The stocks of finished goods, stores, spare parts and
raw materials have been physically verified during the
period by the management. In our opinion, the
frequency of verification is reasonable.
4. The procedures of physical verification of stocks
followed by the management are reasonable and
adequate in relation to the size of the Company and
the nature of its business.
5. The discrepancies noticed on verification between the
physical stocks and the book records were not
material.
6. On the basis of our examination of stock records, we
are of the opinion that the valuation of stocks is fair
and proper, in accordance with the normally accepted
accounting principles. There were no closing stocks
in the preceding period.
7. The Company has not taken any loans from
companies, firms or other parties listed in the Register
maintained under Section 301 of the Companies Act,
1956. We are informed that there are no companies
under the same management within the meaning of
Section 370 (1-B) of the Companies Act, 1956.
8.. The Company has granted interest-free 'advances
against promoter's contribution' to Mafatlal Industries
Limited (MIL), a company listed in the Register
maintained under Section 301 of the Companies Act,
1956, as per the Order of the Board for Industrial &
Financial Reconstruction (BIFR) in respect of this
company. Under the circumstances, the other terms
and conditions of these advances are not, in our
opinion, prejudicial to the interest of the Company.
We are informed that there are no companies under
the same management within the meaning of Section
370 (1-B) of the Companies Act, 1956.
9. The parties, including employees, to whom loans, or
advances in the nature of loans, have been given by
the Company are repaying the principal amounts as
26
stipulated and are also regular in payment of interest,
where applicable, except in certain cases, where we
are informed that necessary steps have been taken
for recovery of the amounts due to the Company.
10. In our opinion and according to the information and
explanations given to us, there are adequate internal
control procedures commensurate with the size of the
Company and the nature of its business for purchase
of stores, raw materials including components, plant
and machinery, equipment, other assets and for sale
of goods.
11. There were no transactions of purchase of goods/
materials and sale of services made in pursuance of
contracts or arrangements entered in the Register
maintained under Section 301 of the Companies
Act, 1956, and aggregating during the period to
Rs. 50,000/- or more in respect of each party. In
respect of such transactions for sale of goods, these
have been made at prices which are reasonable
having regard to prevailing market price for such
goods or the prices at which transactions for similar
goods have been made with other parties.
12. The Company has a regular procedure for
determination of unserviceable or damaged stores,
raw materials and finished goods. Provision for loss, if
any, in respect thereof has been made in the
accounts.
13. The Company has not accepted any deposits from
the public. However, pursuant to the demerger of the
Chemical Division of MIL, deposits matured and
claimed but not paid, aggregating to Rs. 508.54 lacs
(as at 31st March, 2003, Rs. 509.65 lacs) have been
transferred to the Company with effect from the
appointed date, 1st March, 2002 (refer Note 3 of
Schedule 18). In respect of these deposits, the
provisions of Section 58A of the Companies Act, 1956
and the rules framed thereunder have not been
followed with regard to repayment of such deposits.
14. In our opinion, reasonable records have been
maintained by the Company for the sale and disposal
of realisable by-products and scrap.
15. The Company has an internal audit system, which in
our opinion is commensurate with its size and nature
of business.
16. We have broadly reviewed the books of account
maintained by the Company pursuant to the Order
made by the Central Government for maintenance of
cost records under Section 209(1 )(d) of the
Companies Act, 1956, and are of the opinion that,
prima facie, the prescribed accounts and records
have been made and maintained. We have not,
however, made a detailed examination of the records.
ANNUAL REPORT 2002-2003
17. According to the records of the Company, Provident
Fund and Employees State Insurance dues have
generally been regularly deposited during the period
with the appropriate authorities.
18. According to the information and explanations given
to us, no undisputed amounts payable in respect of
income-tax, wealth-tax, sales-tax, customs duty and
excise duty as at 31st March, 2003, were outstanding
for a period of more than six months from the date
they became payable.
19. According to the information and explanations given
to us, no personal expenses of employees or
directors have been charged to revenue account,
other than those payable under contractual
obligations or in accordance with generally accepted
business practice.
20. The Company is not a sick industrial company within
the meaning of Section 3(1 )(o) of the Sick Industrial
Companies (Special Provisions) Act, 1985.
21. In the case of trading activities of the Company,
damaged goods have not been significant.
for C.C. CHOKSHI & CO.,
Chartered Accountants
A. SIDDHARTH
Partner
Mumbai, Dated: 31st July, 2003
27
POLYOLEFINS RUBBER CHEMICALS LIMITED
Balance Sheet as at 31 st March, 2003

As at
28-2-2002
Schedule Rupees Rupees
No. in lacs in lacs
SOURCES OF FUNDS
Shareholders' Funds
Share Capital 505.00 0.01
Reserves and Surplus 12,060.91
12,565.91 0.01
Loan Funds
Secured Loans 865.59 -
Unsecured Loans 509.65
1,375.24 -
Total. 13,941.15 0.01

APPLICATION OF FUNDS
Fixed Assets
Gross Block 10,191.04 -
Less: Depreciation 3,535.74
Net Block 6,655.30
Capital Work-in-Progress 129.16 _
6,784.46 -
Investments 2,201.60
Current Assets, Loans and Advances
Inventories 7 3,560.17
Sundry Debtors 8 3,322.02
Cash and Bank Balances 9 2,626.25 0.56
Loans and Advances , 10 2,116.72
11,625.16 0.56
Less: Current Liabilities and Provisions
Current Liabilities 11 7,324.27 2.74
Provisions 12 45.80
7,370.07 2.74
Net Current Assets 4,255.09 (2.18)
Deferred Tax Asset/(Liability) (Net) 700.00
Miscellaneous Expenditure
(To the extent not written off or adjusted)
Preliminary Expenses 0.95
Profit and Loss Account 1.24
Total. 13,941.15 0.01

Significant Accounting Policies 17

Notes on Accounts 18

As per our attached Report of even date

VISHAD P. MAFATLAL
For C.C. CHOKSHI & CO., H. A. MAFATLAL D. S. UMALKAR
Chartered Accountants Chairman & Managing Director ATUL SRIVASTAVA
T. M. M. NAMBIAR Directors
A. SIDDHARTH N. B. MANKAD SUNIL LALBHAI
Partner Company Secretary A. K. PURI
P. N. KAPADIA
Mumbai, Dated: 31st July, 2003 Mumbai, Dated: 31st July, 2003

28
ANNUAL REPORT 2002-2003
Profit and Loss Account for the period from 1 st March, 2002 to 31 st March, 2003

Previous
Period
Schedule Rupees Rupees
No. in lacs in lacs
INCOME
Turnover (Gross) 21,572.94
Less: Excise Duty 2,119.31
Turnover (Net) 19,453.63 _
Other Income 13 699.95 -
Decrease in Stocks of Finished Goods and Process Stocks.. 14 (553.31) -
Total 19,600.27 -

EXPENDITURE
Purchase of Trading Goods 818.59
Manufacturing and Other Expenses 15 14,539.60 0.28
Excise Duty (216.93) -
Depreciation , 537.35 -
Depreciation on Immovable Properties 0.04 -
Interest 16 221.49 -
Total 15,900.14 0.28

Profit/(Loss) before Provision for Doubtful Debts/

Advances and Tax 3,700.13 (0.28)
Provision for Doubtful Debts/Advances 3,395.68 -
Profit/(Loss) before Tax 304.45 (0.28)

Provision for Tax

Current Tax (Including Wealth-tax, Rs. 27.50 Lacs) (45.80)
Deferred Tax 700.00 -
Proflt/(Loss) after Tax 958.65 (0.28)
Transfer from Investment Allowance (Utilised) Reserve 30.16 -
988.81 (0.28)
Deficit brought forward from Previous Period (1.24) (0.96)
Surplus/(Deficlt) carried to Balance Sheet 987.57 (1.24)

Earning per Share (Basic/Diluted) - Rs 252.12 (311.11)

(refer Note 15 of Schedule 18)
Significant Accounting Policies 17
Notes on Accounts 18

As per our attached Report of even date

VISHAD P. MAFATLAL i
For C.C. CHOKSHI & CO., H. A. MAFATLAL D. S. UMALKAR
Chartered Accountants Chairman & Managing Director ATUL SRIVASTAVA
T. M. M. NAMBIAR Directors
A. SIDDHARTH N. B. MANKAD SUNIL LALBHAI
Partner Company Secretary A. K. PURI
P. N. KAPADIA '
Mumbai, Dated: 31st July, 2003 Mumbai, Dated: 31st July, 2003

29
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts

As at
28-2-2002
Rupees Rupees
in lacs in lacs
Schedule 1
SHARE CAPITAL
Authorised
3,50,00,000 (Previous Period, 10,00,000) Equity Shares of Rs.10/- each 3,500.00 100.00
Issued, subscribed and paid-up
50,49,999 (Previous Period, 90) Equity Shares of Rs.10/- each 505.00 0.01
Total. 505.00 0.01

Note : 49,99,999 Equity Shares of Rs. 10/- each have been alloted as fully paid up to the
shareholders of Mafatlal Industries Limited (MIL) pursuant to its scheme of
demerger, without payment being received in cash (refer Note 3 of Schedule 18).

Schedule 2
RESERVES AND SURPLUS
Capital Reserve No. 1
Balance of excess of assets over liabilities and reserves taken over pursuant to the
scheme of demerger (refer Note 3 of Schedule 18) 8,035.17
Capital Reserve No. 2
Compensation received pursuant to the Montreal Protocol for phasing out production of
refrigerant gases transferred pursuant to the scheme of demerger 2,606.64
(refer Note 3 of Schedule 18)
Add: Received during the period 431.53
3,038.17
Investment Allowance (Utilised) Reserve
Transferred pursuant to the scheme of demerger (refer Note 3 of Schedule 18). 30.16
Less: Transferred to Profit and Loss Account 30.16

Surplus in Profit and Loss Account. 987.57

Total. 12,060.91

Schedule 3
SECURED LOANS Notes
Loans and Advances from a Bank
Cash Credit Accounts 1 365.59
Other Loans and Advances
From Others 2 500.00
Total. 865.59

Notes:
1. Secured by hypothecation of certain stocks and book debts of the Company, both
present and future.
2. Secured by pledge of certain investments held by another company.

Schedule 4
UNSECURED LOANS
Fixed Deposits 509.65
Total 509.65

30
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts

Schedule 5
FIXED ASSETS
(Rupees In lacs)

GROSS BLOCK DEPRECIATION NET BLOCK

As at Transferred Additions Deduc- As at Upto Transferred For the Deduc- As at At at As at
Asset category 1-3-2002 pursuant tions/ 31-3-2003 1-33002 pursuant period tions/ 31-3-2003 31-3-2003 28-2-2002
to the Adjust- to the Adjust-
scheme of ments scheme of ments
demerger* demerger*
Land 17.42 17.42 17.42
Buildings 553.17 8£7 562.04 118.43 15.63 134.06 427.98
Plant and
Machinery - 8,105.76 1,11955 5064 9,171.67 2,747.67 493.69 6.01 3,235.35 5,936.32 -
Furniture, Fittings
and Office
Equipments 307.49 36.48 15.57 327.40 11250 17.11 5.40 123.91 203.49
Vehicles 89.76 32.46 12.79 109.43 39.10 10.60 7.74 41.96 67.47
9,073.60 1,19636 82.00 10,187.96 3,017.40 537.03 19.15 3,535.28 6,652.68
Vehicles
acquired on
lease 308 3.08 0.14 0.32 0.46 2.62
Total - 9,076.68 1,196.36 82.00 10,191.04 - 3,017.54 537.35 19.15 3,535.74 6,655.30 -
Previous Period. - - - - - - - - - - -
Capital Work-in-Progress 129.16 -

Note : Buildings include Rs. 2.00 lacs being cost of ownership premises in a co-operative society, including cost of shares of the face value of Rs. 500/-, received under the
bye-laws of the Society. These are pending transfer in the Company's name pursuant to the scheme of demerger of MIL.
* Refer Note 3 of Schedule 18.

As at
28-2-2002
Rupees Rupees
in lacs in lacs
Schedule 6
INVESTMENTS (Long Term)
(a) Non-trade Investments (Unquoted)
5,60,000 (Previous Period, Nil) Equity Shares of Cebon Apparel Private Limited of
Rs. 10/- each, fully paid-up 10.50
2,36,62,762 (Previous Period, Nil) Equity Shares of Mafatlal Burlington Industries
Limited of Rs. 107- each, fully paid-up 2,070.30
13,71,162* (Previous Period, Nil) Equity Shares of Molex Mafatlal Micron Private
Limited of Rs. 10/- each, fully paid-up .'. 118.59
150* (Previous Period, Nil) 11% Corporate Bonds — Series IV of Housing
Development Finance Corporation of Rs. 1,000/- each, fully paid-up 1.50
2,200.89
(b) Immovable Properties
Transferred pursuant to the scheme of demerger (refer Note 3 of Schedule 18) 2.58
Less: Depreciation
(i) Transferred pursuant to the scheme of demerger (refer Note 3 of Schedule 18) 1.83
(ii) For the period 0.04
1L87
0.71
Total. 2,201.60
Notes:
(1) 3,500 Unsecured redeemable bonds of the State Bank of India of the face value of Rs. 1,000/- each, aggregating to
Rs. 35.00 lacs were transferred from MIL pursuant to the scheme of demerger (refer Note 3 of Schedule 18) and redeemed
during the period.
(2) Immovable properties are charged in connection with loans taken by another company.
* Pending transfer in the Company's name.

31
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts

As at
28-2-2002
Rupees Rupees
in lacs in lacs
Schedule 7
INVENTORIES
Stores and Spares 275.77
Stock-in-Trade
Raw Materials 1,678.69
Process Stocks 158.40
Finished Goods 1,306.04
Trading Goods 141.27
3,284.40
Total. 3,560.17

Schedule 8
SUNDRY DEBTORS
(Unsecured)
Debts outstanding for a period exceeding six months 971.29
Other Debts 3,120.31
4,091.60
Less: Provision 769.58
Total. 3,322.02

Note:
Considered Good 3,322.02
Considered Doubtful '. 769.58
4,091.60

Schedule 9
CASH AND BANK BALANCES
Cash in hand 6.69
Remittances-in-transit 181.78
Bank Balances with scheduled banks :
— In Current Accounts 1,042.46 0.56
— In Fixed Deposit Accounts [including interest accrued Rs. 31.66 lacs; (Previous
Period, Rs. Nil), on Fixed Deposit Receipts of Rs. 1,046.17 lacs, bank has a lien;
(Previous Period, Rs. Nil)] , 1,395.26
Post-office Savings Bank Account (Security Deposit) [maximum amount Rs. 0.06 lacs;
(Previous Period, Rs. Nil)] 0.06
2,437.78 0.56
Total 2,626.25 0.56

Note:
Certain Bank and Fixed Deposit Accounts, which have been transferred from MIL
pursuant to the scheme of demerger, are in the process of being transferred in
the Company's name.

32
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts

As at
28-2-2002
Rupees Rupees
in lacs in lacs
Schedule 10
LOANS AND ADVANCES
(Unsecured)
Advances recoverable in cash or in kind or for value to be received 1,404.70
Advances against Promoter's Contribution (refer Note 6 of Schedule 18) 3,847.26
Balances with Central Excise 2.25
Iraq Project Work-in-Progress 162.70
Advance Payment of Taxes 39.43
5,456.34
Less: Provision 3,339.62 _
Total. 2,116.72 -

Note:
Considered Good 2,116.72 -
Considered Doubtful 3,339.62
5,456.34 -

Schedule 11
CURRENT LIABILITIES
Sundry Creditors
— Total outstanding dues to small scale industrial undertakings 0.35
— Total outstanding dues to creditors other than small scale industrial undertakings . 6,927.86 2.74
6,928.21 2.74
Other Liabilities 79.49
Advance against Project Contracts 303.24
Interest accured but not due on Loans 13.33
Total 7,324.27 2.74

Schedule 12
PROVISIONS
For Tax 45.80
Total 45.80 -

Previous
Period
Rupees Rupees
in lacs in lacs
Schedule 13
OTHER INCOME
Interest
— on Bonds 1.33
—• on Others (TDS, Rs. 16.93 lacs; Previous Period, Rs. Nil) 188.80 -
190.13 _
Dividend on Long-term Investments (Non-trade) (TDS, Rs. 6.17 lacs; Previous Period, Rs. Nil) 101.58 _
Rent from Property (TDS, Rs. 2.32 lacs; Previous Period, Rs. Nil) 58.10 _
Processing Charges (TDS, Rs. 0.50 lac; Previous Period, Rs. Nil) 61.39 -
Exports Incentives 196.87 _
Insurance Claims 18.46 _
Provision for Doubtful Debts/Advances Written back 32.29 _
Miscellaneous Income 41.13 -
Total 699.95 -

33
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts

Previous
Period
Rupees Rupees
in lacs in lacs
Schedule 14
DECREASE IN STOCKS OF FINISHED GOODS AND PROCESS STOCKS
Stocks as at 31 st March, 2003
Finished Goods 1,306.04
Trading Goods 141.27
Process Stocks 158.40
1,605.71 -
Less : Stocks transferred from MIL pursuant to the demerger
Finished Goods 2,009.20 -
Process Stocks •. 149.82
2,159.02 -
Decrease. (553.31) -

Schedule 15
MANUFACTURING AND OTHER EXPENSES
Raw Materials Consumed 8,243.29
Payments to and Provisions for Employees :
Salaries, Wages and Bonus 817.38
Contribution to Provident Fund and Other Funds 207.59
Welfare Expenses 99.98
1,124.95 -
Operating and Other Expenses :
Stores, Spares and Packing Materials Consumed 1,182.26
Power and Fuel (Net) 1,527.12 -
Processing Charges 24.68 _
Rent (Net) 43.83 —
Rates and Taxes 119.94 o.oa
Repairs to Buildings 14.60 _
Repairs to Machinery 131.32 _
Insurance 65.91 _
Communication Expenses 48.86 _
Commission, Brokerage and Discount 360.26 _
Transport and Freight Charges (Net) 550.15 _
Bad Debts/Advances Written off 29.74 _
Sundry Debit Balances Written off (Net) 0.35 _
Loss on Sale of Fixed Assets (Net) 8.46 —
Capital Work-in-Progress Written off 137.12 -
Deferred Revenue Expenditure Written off 232.61 _
Preliminary Expenses Written off 0.95 _
Directors Sitting Fees 0.21 _
Miscellaneous Expenses 692.99 0.26
5,171.36 0.28
Total 14,539.60 0.28

Schedule 16
INTEREST
On Fixed Deposits 81.87
On Fixed Loans 86.79 _
On Cash Credit Accounts 28.93 -
On Others 23.90 -
Total 221.49 -

34
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts
Schedule 17
SIGNIFICANT ACCOUNTING POLICIES
1. Fixed Assets
Fixed Assets are recorded at cost of acquisition or construction. They are stated at historical cost less accumulated
depreciation.
2. Depreciation
Depreciation on Fixed Assets is provided on the straight-line basis in accordance with the Companies Act, 1956. (refer Note
5 of Schedule 18)
3. Investments
Long-term investments are carried at cost. Provision is made to recognize a decline, other than temporary, in the carrying
amount of long-term investments.
4. Inventories
Items of inventory are valued at cost or net realizable value, which ever is lower. Cost is determined on the following basis:
Stores and Spares : Weighted Average
Raw Materials : Navin Fluorine (Bhestan) -'Weighted Average
Navin Fluorine (Dewas) - FIFO
Process Stocks and Finished Goods: At material cost plus appropriate value of overheads
Trading Goods : FIFO
5. Doubtful Debts/Advances
Provision is made in the accounts for debts/advances that in the opinion of the management are considered doubtful of
recovery.
6. Retirement Benefits
Provident Fund : Liability is determined on the basis of contribution as required under the
statute/rules.
Superannuation Fund : Liability is determined on the basis of contribution as required under the rules.
Gratuity and Leave Encashment : Liability is determined on the basis of actuarial valuation made at the year end.

7. Foreign Currency Transactions

Transactions in foreign currency are recorded at the original rates of exchange in force at the time the transactions are
effected. At the year end, monetary items denominated in foreign currency are reported using the closing rates of exchange.
Exchange differences arising thereon and on realization/payment of foreign exchange are accounted in the relevant year as
income or expense except in the case of fixed assets, in which case, these are adjusted in the carrying amounts of such
assets.
8. Research and Development
Revenue expenditure on research and development is charged to Profit and Loss Account in the year in which it is incurred.
Capital expenditure on research and development is shown as an addition to fixed assets.
9. Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its
intended use. All other borrowing costs are charged to revenue.
10. Government Grants
Grants related to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to
revenue are credited to the Profit and Loss Account. Grants in the nature of promoter's contribution are treated as capital
reserve.
11. Revenue Recognition
Revenue (income) is recognized when no significant uncertainty as to determination or realization exists.
12. Taxes on Income
Tax expense comprise both current and deferred tax at the applicable enacted/substantively enacted rates. Current tax
represents the amount of income-tax payable/recoverable in respect of the taxable income/loss for the reporting period.
Deferred tax represents the effect of timing differences between taxable income and accounting income for the reporting
period that originate in one period and are capable of reversal in one or more subsequent periods.
13. Contingent Liabilities
These, if any, are disclosed in the notes on accounts. Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end till the adoption of accounts by the Board of Directors and
which have material effect on the position stated in the Balance Sheet.

35
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts
Schedule 18
NOTES ON ACCOUNTS :
Previous Period
Rupees Rupees
in lacs in lacs
Estimated amount of contracts remaining to be executed on capital account and
not provided for 463.89
2. Contingent liabilities not provided for:
(a) Bills of Exchange discounted 61.58
(b) Demands under excise, sales-tax and other proceedings disputed in appeal. 312.91
(c) Claims against the Company not acknowledged as debts 271.46
(d) Guarantee given by the Company to another company on behalf of its
employees:
— Guarantee 1.81
— Loan outstanding 1.81
(e) Demand of employees of Navin Fluorine, Bhestan for revision of wages, amount not
not admitted by the management ascertainable
(f) Pursuant to the scheme for rehabilitation ['the sanctioned scheme' (SS)] of Mafatlal Industries Limited (MIL) (refer
Note 3 below), the Company is required to give a corporate guarantee to the effect that in case the settlement amount
to certain secured term lenders of MIL along with interest for delayed period, if any, is not paid by Sulakshana Securi-
ties Limited (SSL) [a 'special purpose vehicle', that has taken over the aforementioned liabilities of secured term
lenders of MIL] within thirty months of the sanction of the SS, then the Company would make payment of the unpaid
amount to them. In case the Company is called upon to make any payment to these secured term lenders of MIL then
the Company would have all rights on the remaining assets of SSL as available to a guarantor under Section 140 and
141 of Indian Contracts Act.

3. (a) The Board for Industrial & Financial Reconstruction (BIFR) had declared MIL, a sick industrial undertaking, within
the meaning of Section 3(1 )(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 ('the Act') on
19th September, 2000, and appointed the Industrial Development Bank of India (IDBI) as the Operating Agency (OA)
under Section 17(3) of the Act for preparing a rehabilitation scheme for MIL. The BIFR sanctioned a scheme for rehabili-
tation (SS) for MIL on 30th October, 2002, issued on 15th November, 2002.
(b) Pursuant to this SS, the Chemical Division of MIL is to be demerged and vested in the Company with effect from the
Appointed Date (1st March, 2002), as a going concern. The shareholders of MIL, would receive one equity share of
Rs. 10/- each fully paid-up in the Company for every share of Rs. 100/- each fully paid-up in MIL as consideration for the
demerger, aggregating to Rs. 500.00 lacs. Accordingly, the SS of MIL has been given effect to in the accounts and Fixed
Assets (net) of Rs. 6,493.00 lacs, Investments of Rs. 47.75 lacs, Net Current Assets of Rs. 5,650.93 lacs, Deferred
Revenue Expenditure of Rs. 232.61 lacs, Loans of Rs. 1,252.32 lacs and Reserves of Rs. 2,636.80 lacs have been
transferred to the Company.
(c) The consideration of Rs. 500.00 lacs payable by the Company has since been allotted as fully paid-up equity shares of
Rs. 10/- each. The excess of assets over liabilities and reserves of Rs. 8,035.17 lacs has been credited to Capital
Reserve Account no. 1.
(d) As per the afore-mentioned SS, MIL'S liability to repay fixed deposits was transferred to the Company. By the time the BIFR
passed its Order sanctioning the Scheme, all these fixed deposits had become due. Under the SS, an indicative provision
was made for the Company to discharge the said liability equally in two financial years, viz. ended 31 st March, 2003 and
31st March, 2004. Upto 31st March, 2003, the Company has paid to MIL Rs. 160.00 lacs towards this
obligation.
MIL has confirmed that such amounts are kept in a separate bank account maintained for the purpose and
repayments to depositors are made therefrom. Till 31st July, 2003, the Company has paid MIL, amounts aggregating to
Rs. 503.05 lacs to repay these deposits and interest thereon.
Previous Period
Rupees Rupees
In lacs in lacs
4. Payment to Auditors :
Audit fees 4.00 0.25
Tax audit fees 0.25
As advisors or in any other capacity, in respect of taxation matters 0.30
In any other manner (certification work, etc.) 3.83
Service-tax 0.52 0.01
Expenses 0.05
Total 8.95 0.26

36
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts
Schedule 18 (Contd.)
NOTES ON ACCOUNTS :
5. Depreciation has been provided on all fixed assets on straight-line basis in accordance with Section 205(2) (b) of the
Companies Act, 1956, at the rates and in the manner specified in Schedule XIV of the said Act. In respect of Dimethyl Aniline,
Diethyl/ Monoethyl Aniline, Speciality Chemicals, Cryolite, Aluminium Fluoride, Refrigerant Gases, Matron -113, Halon, ABF
Plants and Fluoroaniline Plants, depreciation has been provided at the rate applicable to continuous process plants.
6. Pursuant to the BIFR Order, dated 30th October, 2002, approving the SS of MIL, the Company, inter-alia, is required to
contribute Rs. 9,000.00 lacs as part of the promoters' contribution for the rehabilitation of MIL by way of fresh infusion of
funds. Against this, the Company has given advances aggregating to Rs. 3,847.26 lacs. As per the latest audited financial
statements of MIL, as at 30th September, 2002, the accumulated losses of Rs. 48,302.94 lacs, far exceed its shareholders'
funds of Rs. 21,028.71 lacs. In view thereof, provision of Rs. 3,270.17 lacs has been made against these advances.
7. A vehicle acquired an hire purchase basis (for a period of 60 months) has been treated as asset acquired on finance lease as
per Accounting Standard on Leases (AS-19). Minimum lease rentals outstanding as on 31st March, 2003 are as under:
(Rupees in lacs)
Total Minimum
Lease Payments Present value of the
outstanding as at minimum lease
Due 31st March, 2003 Interest not due payments

Not later than 1 year 0.76 0.26 0.50

Later than 1 year and not later than 5 years .... 1.84 0.29 1.55

8. MIL was executing a Project in Iraq when hostilities broke out between Iraq and Kuwait in 1990-91, resulting in suspension of
project work. In view of the post war conditions and the sanctions imposed by the United Nations and the Government of
India, suspended operations could not be resumed. The customer's bankers have asked for extension of bank guarantees
for advance payment and performance and the State Bank of India in turn has claimed that the funds deposited with them
in respect of the aforesaid project are subject to lien. In view of the prevailing uncertain circumstances, the receipts and
payments under the contracts, transferred to the Company pursuant to the SS of MIL, continue to be carried forward and
necessary adjustments would be made on the status of the project becoming clearer.
9. (a) Pursuant to MIL'S SS, 'Income-tax Department to grant exemption from compliance of conditions contained in Section
2(19AA) of the Income-tax Act, 1961, with regard to demerger of Chemical Division'. Accordingly, as per the provisions
of Section 72A of the Income-tax Act, 1961, unabsorbed depreciation, aggregating to Rs. 3,279.03 lacs, relatable to the
Chemical Division of MIL has been set off against taxable income of the Company and the balance unabsorbed
depreciation, aggregating to Rs. 833.65 lacs, is carried forward for the purpose of income-tax. Consequently, there is no
taxable income for the period. Deferred tax asset has been recognized in respect of unabsorbed depreciation carried
forward. The Company, based on projections, expects sufficient future taxable income to utilize this deferred tax asset.
(b) Components of deferred tax assets and (liabilities) are as under:

Rupees in lacs

Depreciation (1,107.21)
Provision for doubtful debts/advances 1,474.39
Deferred revenue expenditure 32.59
Unabsorbed depreciation 293.20
Others 7.03
Total.... 700.00

10. During the period from 27th August, 1997 to 15th December, 1997, the workers of Navin Fluorine, Bhestan had been on an
illegal and unjustified strike in contravention of the Industrial Disputes Act. The Labour Commissioner of Gujarat, in his report
to the Ministry of Labour, has concurred with the decision of declaring the strike illegal and unjustified. In view thereof, no
provision has been made in the accounts for wages, etc. for the said period. The workers' reference to the Conciliation
Officer on the justification of the strike is pending with the Industrial Tribunal, Gujarat.
11. The net amount of exchange loss included in the Profit and Loss Account for the period is Rs. 40.53 lacs.
12. Research and development expenditure debited to the Profit and Loss Account by charge to relevant heads of account
amount to Rs. 98.10 lacs.
13. Names of small-scale industrial undertakings to whom the Company owed sums for more than thirty days as at 31st March,
2003 are Bordia Sales Private Limited and Misgo Udyog.

37
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts
Schedule 18 (Contd.)
NOTES ON ACCOUNTS :
14. Certain encumbered assets of the Company offered as securities by MIL for loans taken by it are in the process of being
reorganized on restructuring of those loans as per the SS of the BIFR.
15. Earnings per share is calculated by dividing the pmW(loss) attributable to the equity shareholders by the weighted average
number of equity shares outstanding during the period, as under:

Current Previous
Period Period

PmW(Loss) after tax attributable to equity shares holders Rs. in lacs 958.65 (0.28)
Weighted average number of equity shares outstanding during the period in numbers.... 380,242 90
Basic/diluted earnings per share Rs 252.12 (311.11)
Nominal value per share Rs 10/- 10/-

16. Segment information

Segment Information for primary segment reporting (by business segments)
Based on the Accounting Standard on 'Segment Reporting' (AS-17), issued by the Institute of Chartered Accountants of
India, business segment of the Company is the primary segment comprising of 'Chemicals'. As the Company operates only
in a single primary business segment, no segment information thereof is given.
Segment Information for secondary segment reporting (by geographical segments)
(Rupees In lacs)
Particulars Domestic Exports Total

Revenues 16,086.49 5,486.45 21,572.94

17. Related party transactions

Names of related parties and description of relationship:
Key management personnel
Shri Hrishikesh A. Mafatlal
Shri Vishad R Mafatlal
Enterprises over which key management personnel and their relatives are able to exercise significant influence
Mafatlal Industries Limited
Mafatlal Fabrics Private Limited
National Organic Chemical Industries Limited
Details of transactions with related parties during the period
(Rupees in lacs)
Nature of transactions Key Management Total
Personnel

Sales of finished goods 11.61 11.61

Purchase of stores, spares and packing materials . 17.36 17.36
Lease rental charge paid 0.36 0.36
Allotment of equity shares 3.33 3.33
Advances given to 2,697.26 2,697.26
Provision for doubtful advances 3,270.17 3,270.17
Provision for doubtful advances as at 31.03.2003.. 3,270.17 3,270.17
Advances due to as at 31.03.2003 5.90 5.90
Amount due from as at 31.03.2003 3,852.33 3,852.33

** Enterprises over which key management personnel and their relatives are able to exercise significant influence.

38
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts
Schedule 18 (Contd.)
NOTES ON ACCOUNTS :
18. Raw Materials consumed
Previous Period
Rupees Rupees
Unit Quantity in lacs Unit Quantity in lacs
(a) Aniline Oil tons 1,148 504.35
(b) Methanol tons 490 71.68
(c) Ethanol kilolitres 940 130.31
(d) Benzyl Chloride tons 425 144.09
(e) Meta Toluidine tons 94 56.86
(f) Sulphur tons 10,865 402.03
(g) Fluorspar tons 27,086 2,554.53
(h) Aluminium Hydrate tone 5,186 434.56
(0 Salt , torn 3,887 33.71
(j) Carbontetrachloride and Chloroform . tons 10,283 2,413.59
(k) Matron tons 227 504.37
(I) Others 993.21
Total. 8,243.29

19. Quantitative information regarding classes of goods manufactured

Previous Period
Installed Installed
Untt Capacity piuuucnon* Unit Capacity Production*
(a) Aniline based organic chemicals tons 6,720 2,203

I I
(b) Toluidine based organic chemicals tons 840 643
(c) Synthetic cryolite, aluminium fluoride
and fluorocarbon gases tons 30,658 13,759 — —

I
(d) Sodium fluoride, miscellaneous fluoride
and other fluorine based compounds... tons 1,435 2,358

I I I
(e) Hydrofluoric acid tons 11,955 10,934
(f) Sulphuric acid and oleum tons 41,167 31,581

* including production internally consumed

Note: Licenced and installed capacity (on three shift basis) as certified by the management.
Quantitative Information regarding opening and closing stocks of finished goods
Closing Stock Opening Stock*
Rupees Rupees
Unit Quantity in lacs Unit Quantity in lacs

(a) Aniline based organic chemicals tons 173 153.71

I I

I I

(b) Toluidine based organic chemicals tons 53 196.72

(c) Synthetic cryolite, aluminium fluoride
and fluorocarbon gases tons 698 522.31 —
I

(d) Sodium fluoride, miscellaneous fluoride

and other fluorine based compounds.. tons 205 389.32
I I I
I I I

(e) Hydrofluoric acid tons 66 31.96

(f) Sulphuric acid and oleum tons 785 12.02
Total... 1,306.04 —
—,—,
* Stock taken over from MIL pursuant to its scheme of demerger.

39
POLYOLEFINS RUBBER CHEMICALS LIMITED
Schedules forming part of the Accounts
Schedule 18 (Contd.)
NOTES ON ACCOUNTS :
21. Quantitative information regarding goods traded In
Opening Stock Purchase Closing Stock
Rupees Rupees Rupees
Unit - tons in lacs Unit - tons in lacs Unit - tons in lacs
(a) Matron gases — — 320 758.36 33 91.79
(b) Others 10 60.23 8 49.48
Total.... — 818.59 141.27

22. Quantitative information regarding sales turnover

Previous Period
Unit-tons Rupees in lacs Unit - tons Rupees in lacs
(a) Aniline based organic chemicals 1,728 1,494.85

I I
(b) Toluidine based organic chemicals 401 604.44
(c) Synthetic cryolite, aluminium fluoride
and fluorocarbon gases 14,723 14,882.07

I
(d) Sodium fluoride, miscellaneous fluoride
and other fluorine based compounds 2,175 2,920.16 —

I I I I I I
(e) Hydrofluoric acid 2,334 1,394.37
(f) Sulphuric acid and oleum 981 22.04
(g) By-products 18 1.28
(h) Others 253.73
Total... 21,572.94

23. Value of Imports and value of raw materials, stores, spares and packing materials consumed
Previous Period
Rupees In lacs Rupees in lacs
(a) CIF value of Imports
Raw Materials 3,680.00 —
Capital Goods 86.41
(b) Consumption of raw materials and stores, spares and packing materials
Previous Period
Percentage of Percentage of
Rupees In lacs consumption Rupees in lacs consumption
Raw Materials
Imported 4,596.19 55.76 — —
Indigenous 3,647.10 44.24
8,243.29 100.00 — —

Stores, Spares and Packing Materials

Imported 28.56 2.42 — —
Indigenous 1,153.70 97.58
1,182.26 100.00 — —

24. Expenditure in foreign currency

Previous Period
Rupees in lacs Rupees in lacs
(a) Traveling expenses 14.36
(b) Commission 210.00
(c) Others 122.44
25. Earnings In foreign exchange
FOB value of Exports 5,176.54

40
ANNUAL REPORT 2002-2003
Schedules forming part of the Accounts
Schedule 18 (Contd.)
NOTES ON ACCOUNTS :
26. Balance Sheet Abstract and Company's General Business Profile:
I. Registration Details
Registration No. 115499 State Code I 11
Balance Sheet Date 31-03-2003
II. Capital raised during the year
(Amount In Rupees Thousands)
Public Issue NIL Rights Issue | NIL
Bonus Issue NIL Private Placement | 50499~
III. Position of Mobilisation and Deployment of Funds
(Amount In Rupees Thousands)
Total Liabilities | 2131122~| Total Assets | 2131122

Sources of Funds
Paid-up Capital | 50500~| Reserves and Surplus | 1206091 I
Secured Loans | 86559~| Unsecured Loans I 50965 I

Application of Funds
Net Fixed Assets | 6784461 Investments I 220160
Net Current Assets | 49S509~| Miscellaneous Expenditure [ NIL
(including deferred tax)

Accumulated Losses NIL]

IV. Performance of the Company
(Amount In Rupees Thousands)
Turnover | 2157294~| Total Expenditure 1590014
Profit/(Loss) before Tax | 30445~| ProfitZ(Loss) after Tax 95865
Earnings per Share (Rupees) (Refer Note 15 of Schedulers) Dividend % NIL

V. Generic Names of Two Principal Products/Services of the Company (as per monetary terms)
Item Code No. (ITC Code) 290342

Product Description CHLOROFLUOROCARBONS

Item Code No. (ITC Code) | 281111
Product Description I HYDROFLUORIC ACID |
27. Figures of the current period are for 13 months while those of the previous period are for 11 months. Figures of the current
period are after incorporating the demerger of Chemical Division of MIL. Hence they are not comparable.

As per our attach Report of even date Signatures to Schedules 1 to 18

VISHAD P. MAFATLAL
For C.C. CHOKSHI & CO., H. A. MAFATLAL D. S. UMALKAR
Chartered Accountants Chairman & Managing Director ATUL SRIVASTAVA
T. M. M. NAMBIAR Directors
A. SIDDHARTH N. B. MANKAD SUNIL LALBHAI
Partner Company Secretary A. K. PURI
P. N. KAPADU

Mumbai, Dated: 31st July, 2003 Mumbai, Dated: 31st July, 2003

41
POLYOLEFINS RUBBER CHEMICALS LIMITED
Cash Flow statement for the period from 1 st March, 2002 to 31st March, 2003

Previous
Perfod
Rupees Rupees
In lacs in lacs

A. Cash Flow from Operating Activities

Profit/ (Loss) before Tax 304.45 (0.28)
Adjustments for :
Depreciation 537.39
Loss on sale of Fixed Assets (Net) 8.46
Interest Expense 221.49
Interest Income (190.13)
Dividend Income , (101.58)
Bad Debts/Advances written off 29.74
Provision for Doubtful Debts/Advances written back (32.29)
Provision for Doubtful Debts/Advances 3,395.68
Capital Work-in-Progress written off 137.12
Preliminary Expenditure written off 0.95
Expenses on integrated computer application package 39.95
Deferred Revenue Expenditure written off 232.61
Operating Proflt/(Loss) before Working Capital Changes 4,583.84 (0.28)
(Increase) in Trade Receivables (4,091.60) -
(Increase) in Inventories (3,560.17) -
(Increase) in Loans and Advances (5,446.14) -
Increase in Trade and Other Payables 7,308.20 0.53
(5,789.71) 0.53
Adjustments on Demerger 4,536.46 -
Cash Generated from Operations 3,330.59 0.25
Direct Taxes paid (39.43) -
Net Cash Generated from Operating Activities 3,291.16 0.25

B. Cash Flow from Investing Activities

Purchase of fixed Assets \ (1,028.78) _
Purchase of Investments '. (2,188.89) -
Sale of Fixed Assets , , 14.44 -
Redemption of Bonds 35.00 -
Dividend Income 101.58 -
Interest Income 157.96 -
Net Cash used In Investing Activities (2,908.69) -

C. Cash Flow from Financing Activities

Proceeds from issue of Share Capital , ; 4.99
Repayments of Long Terrri Borrowings (66.03) -
Proceeds from Other Borrowings (Net) 121.82 -
Compensation received pursuant .to. Montreal Protocol for phasing out production
of Refrigerant Gases - Capital Reserve No. 2 431.53
Interest expense , (141.03) -
Net Cash Flow Generated from Financing Activities 351.28 -

42
ANNUAL REPORT 2002-2003
Cash Flow statement for the period from 1 st March, 2002 to 31 st March, 2003 (Contd.)

Previous
Period
Rupees Rupees
in lacs in lacs
Net Increase in Cash and Cash Equivalents 733.75 0.25
Cash and Cash equivalents at the beginning of the period 0.56 0.31
Cash and Cash equivalents received from MIL pursuant to its scheme of demerger.... 1,860.28 -
Cash and Cash equivalents at the end of the period 2,594.59 0.56
Note:
Reconciliation of Cash and Cash Equivalents
As per Balance Sheet - Schedule 9 2,626.25 0.56
Less: Interest accrued on Bank Deposits 31.66 -
As per Cash-flow Statement 2,594.59 0.56

For and on behalf of the Board

H. A. MAFATLAL ATUL SRIVASTAVA

Chairman & Managing Director Director

N. B. MANKAD
Company Secretary

Mumbai, Dated: 31st July, 2003

To,
The Board of Directors,
Polyolefins Rubber Chemicals Limited

We have examined the attached Cash-flow Statement of Polyolefins Rubber Chemicals Limited for the period from
1st March, 2002 to 31st March, 2003. The Statement has been prepared by the Company in accordance with
the requirements of Accounting Standard on 'Cash Flow Statements' (AS-3) issued by the Institute of Chartered
Accountants of India, and is based on and is in agreement with the corresponding Profit and Loss Account and Balance
Sheet of the Company covered by our report of even date to the Board of Directors of the Company.

for C. C. CHOKSHI & CO.

Chartered Accountants

A. SIDDHARTH
Partner
Mumbai, Dated: 31st July, 2003

43
 FORM OF PROXY
POLYOLEFINS RUBBER CHEMICALS LIMITED
Registered office: 1st Floor, Kalpataru Point, Kamani Marg, Sion (East), Mumbai-400 022
(Folio Nos. DP ID*, Client ID* & Name of the Shareholder/Jointholders
in BLOCK LETTERS to be furnished below)

DP I D * Client ID * Folio No. of

Shares held

I/We_ .of_

being a member/members of POLYOLEFINS RUBBER CHEMICALS LIMITED hereby appoint.

.of. _or failing him
.of. _as my/our
proxy to vote for me/us and on my/our behalf at the Fifth Annual General Meeting of the Company to be held on
Monday, the 29th September, 2003 at 2.30 p.m. at S.N.D.T. Women's University, Patkar Hall, 1, Nathibai Damodar
Thackersey Road, Churchgate, Mumbai-400 020 and at any adjournment thereof.

Please
As witness my/our hand(s) this. .day of_ .2003. Affix
30 paise
Revenue
Stamp
Signature by the saicL
NOTE: The proxy must be returned so as to reach the Registered Office of the Company not less than 48 hours
before the time for holding the aforesaid meeting.
* Applicable for investors holding shares in Electronic (Demat) Form.

ATTENDANCE SLIP
POLYOLEFINS RUBBER CHEMICALS LIMITED
Registered office: 1st Floor, Kalpataru Point, Kamani Marg, Sion (East), Mumbai-400 022

PLEASE COMPLETE THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
Joint shareholders may obtain additional attendance slips on request. (Folio Nos., DP ID*, Client ID* & Name of the
Shareholder/Jointholders/Proxy in BLOCK LETTERS to be furnished below).

Shareholder DP ID * Client ID * Folio No. of

Shares held
Proxy

I hereby record my presence at the Fifth Annual General Meeting of the Company to be held on Monday, the
29th September, 2003 at 2.30 p.m. at S.N.D.T. Women's University, Patkar Hall, 1, Nathibai Damodar Thackersey
Road, Churchgate, Mumbai-400 020
SIGNATURE OF THE
SHAREHOLDER OR PROXY
NOTES:
(1) Shareholders/Proxyholders are requested to bring the Attaf^laripe. Slip with thfro wfien ttwy come to the
Meeting and hand it over at the gate after affixing their sJgruKunj'0(* ft.
(2) Shareholders are requested to advise, indicating thfilr Folio Nos. tt» ID*, Client ID*, the in their
address, if any, to the Registrar & Share Transfer AgMtent Shfregfi &§yices, Safari Estate, 3rtt r, above
J
Bank of Baroda, Chakala, Andheri (East), Mumbal-40^»9. ™'
* Applicable for investors holding shares in Electronic rt&ma
 BOOK-POST

lease return t o :
.YOLI CHEMICALS LIMITED
Kalpatai Marg, Sion (East), Mumbai-400 022

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