SANMAR Annual Report 2004 - Morningstar, Inc.

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SANMAR

Annual Report 2004

CHEMPLAST SANMAR LIMITED


Chemplast Sanmar Limited SANMAR

CHAIRMAN - EMERITUS

K.S. Narayanan

BOARD OF DIRECTORS

N. Sankar, ChairmanN. Kumar, Vice ChairmanP.S. Jayaraman, Managing DirectorAdit JainP.M. KapadiaM.K. KumarC.H. MahadevanV. NarayananVijay SankarN. Srinivasan

REGISTERED OFFICE

9, Cathedral RoadChennai 600 086

MANUFACTURING LOCATIONS

Mettur Dam PVC

Chlorochemicals:Caustic Soda, Chlorine,Chlorinated Solvents,Refrigerant Gases andSilicon Wafers

Krishnagiri & Panruti Industrial Alcohol

Vedaranyam Industrial Salt

Karaikal Caustic Soda and Chlorine

BANKERS

Indian Overseas BankState Bank of IndiaStandard Chartered Bank

AUDITORS

Price Waterhouse & Co.Chartered AccountantsChennai


Chemplast Sanmar Limited

CONTENTSPage

Board of Directors 1

Directors' Report 3

Annexure to the Directors' Report 9

Corporate Governance 1.1

Auditors' Report 21

Five Year Summary 23

Profit and Loss Account 24

Balance Sheet 25

Schedules forming part of the Accounts 26

Cash Flow Statement 44

Information Regarding Listed Securities as required under Clause 32 of the Listing Agreement

NAME AND ADDRESS OF THE STOCK EXCHANGES DETAILS OF SECURITIES LISTED

1) Madras Stock Exchange Limited Equity SharesExchange Building,11 Second Line Beach,Chennai 600 001

2) The Stock Exchange, Mumbai Equity SharesPhiroze Jeejeebhoy Towers, Dalai Street,Fort, Mumbai 400 001

3) National Stock Exchange of India Limited Equity SharesExchange Plaza, 5th Floor,Plot No. C/1, G Block,Bandra-Kurla Complex,Bandra (E), Mumbai 400 051

The Listing fees to these Stock Exchanges have been paid.

The company is yet to receive approvals for delisting the Equity Shares of the company from the following Stock Exchanges.

1) Vadodara Stock Exchange Limited Equity SharesFortune Towers, Sayajigunj,Vadodara 390 005

2) The Calcutta Stock Exchange Association Limited Equity Shares7 Lyons Range, Calcutta 700 001


Directors' Report

The Directors have pleasure in presenting their report along with the accounts for the year ended 31st March2004.

Corporate Results

2003-04 2002-03Rs.Crores Rs.Crores

Sales and other income 582.08 540.78

Profit before interest, depreciation and taxes 76.30 78.01

Interest 35.41 31.82

Depreciation 32.67 21.74

Profit before tax • 8.22 24.45

Provision for tax

- current tax (1.90) (4.81)

- deferred tax (1.70) 0.99

Profit after tax 4.62 20.63

Profit brought forward 19.95 6.03

Balance of profit and loss account of amalgamating company 27.24

Transfer from Debenture Redemption Reserve 26.13 7.22

77.94 33.88

Appropriations:

Capital Redemption Reserve 2.00 7.00

Equity Dividend - 3.52

Preference Dividend 2.13 2.96

Tax on Dividend 0.27 ' 0.45

Profit carried to Balance Sheet 73.54 19.95

Sales and other income registered an' increase of 8% over the previous year. Despite this, the high cost of.inputs and intermediates eroded margins, resulting in a drop in profits. With a view to conserving resources,the Directors do not recommend payment of dividend on equity shares for the year 2003-04.

MANAGEMENT DISCUSSION AND ANALYSIS

Your company is passing through a difficult period. The high cost of intermediates following internationalprice trends, increase in price of industrial alcohol consequent on the Gasohol programme of the Governmentof India, drop in import duties for finished products without a corresponding reduction in duty rates ofintermediates/ raw materials, have all contributed to the cost pressures during the year.



Notwithstanding this, the management has initiated several proactive steps, re-establishing its faith in thefortunes of this highly cyclical business. The acquisition of the Caustic Soda facility at Karaikal in the UnionTerritory of Pondicherry with the objective of producing low-cost feedstock for PVC is a major move. Thiswill start yielding results from the last quarter of 2004-05. The innovative Scheme of Arrangement betweenthe company, Sanmar Properties and Investments Limited and Sanmar Holdings Limited as approved by theHigh Court of Madras has resulted in enhancement of equity resources of the company, thereby improvingthe gearing. Using this and the favourable liquidity conditions in the market, the company has retired high-cost debt, which will bring significant savings in interest cost in future.

PVC BUSINESS

As one of the pioneers in the PVC business, the company operates a fully integrated manufacturingat Mettur Dam. Of the PVC manufacturers in India, only your company has the ability to manufacture fourmajor product groups in PVC. This strength has stood the company in good stead over the last severaldecades.

Suspension Resin:

Thanks to healthy demand growth, the country's consumption of suspension resin has crossed the 900,000MT mark necessitating imports close to 100,000 MT. Pipes and Fittings continue to drive demand, especiallywith water supply, irrigation and construction activities increasing. Further, PVC is consumed in sectors likecables, packaging, footwear etc. The increase in demand for products in these sectors should keep up thegrowth momentum for suspension PVC.

Paste Grade Resin:

After a lull, domestic demand for Paste Resin has picked up. This is expected to increase further on thestrength of a surge in demand for automobile and household upholstery, shoes and fashion footwear, luggage,handbags etc. Your company makes three grades of paste grade speciality resin widely used in the manufactureof leather cloth, conveyor belts, automotive sealants etc. Many customers consider the company's resin tobe the best in its class, comparable to leading international suppliers. The focus is on continuing to expandthe customer base and markets for the resin.

Battery Separator Resin (BSR):

Demand is steady and in the region of around 6000 MT per year, contributed essentially by the replacementbattery segment. As the only Indian manufacturer of BSR, your company enjoys a good market' share.

Copolymer Resin:

Here again, your company is the only manufacturer of Copolymer Resin in South Asia. The demand is steadywith growth in the inks and adhesives segments, though the flooring segment has not shown improvement.

Raw materials and Intermediates:

The main feedstock for manufacture of PVC is Ethylenc Di-Chloride (EDC). Though the company has anintegrated facility to manufacture 75% of the EDC required, the high cost of industrial alcohol and boughtout chlorine has moved up the manufacturing cost of EDC. Increase in the cost of industrial alcohol is the .result of the introduction of the 'Gasohol' programme - a mixture of 5% ethanol with petrol - by theGovernment of India. The dismal sugarcane season has also led to the high cost of molasses and in turnalcohol. The company is also faced with the problem of the high international price of EDC.


ASANIVIAR

With a view to protecting the PVC business from the above difficult feedstock situation, a project tomanufacture EDC at the recently acquired Caustic soda facility at Karaikal is under implementation. It isproposed to manufacture EDC here initially from imported alcohol and later from imported Ethylene.Production is expected to commence in the last quarter of 2004-05. This facility will further add toflexibility of operations and enable manufacture of EDC at an economical cost. In the meantime, theacquisition of the Karaikal facility has already begun yielding returns, as the low cost chlorine availablein this facility has substituted to a large extent market purchase of chlorine at high cost.

Risks and concerns:

Reduction of import duty for PVC, without a corresponding drop in duty rates for the feedstock and rawmaterials, is a matter of concern for the industry. The rapid appreciation in the Rupee in terms of USD isalso bringing down the landed cost of PVC imported into the country. These factors impose continuous strainon the margins.

Review of operations 2003-04:

The company could achieve full capacity utilisation in its PVC division. This was possible due to timelyimport of EDC whenever the price came down in the international market. In line with international trends,resin prices firmed up in the second half of the year. However, margins were under pressure due to the highcost of inputs and intermediates.

Chlorochemicals Business

Caustic Soda:

Ever since the revival in caustic soda prices in the last quarter of 2002-03, realisations have remained more'or less stable with only minor fluctuations. The aluminium sector continued to procure caustic soda fromdomestic sources instead of imports and this factor also contributed to price stability.

So /vents:

Demand for Chloromethane solvents registered a nominal growth in the absence of strong demand from thepharma sector. The provisional Anti Dumping Duty imposed in the previous year on imports of Methylene ,Chloride from the European Union was confirmed as definitive duty during the year. However, during thelatter part of the year, substantial imports from the USA at very competitive prices eroded domestic realisations.

The Multilateral Fund decided in )uly 2003 the quantum of compensation for India for phasing out CarbonTetrachloride (CTC) for non-feedstock applications under Montreal Protocol. However, the Government ofIndia is yet to decide on the sharing of the compensation between the CTC production and consumptionsectors.

Mettron:

While the production volume came down during the year in line with the Montreal Protocol phase-outschedule, international prices of R-11 and R-12 (CFCs) went up due to reduced availability worldwide.International prices of R-22 continue to be unremunerative on account of aggressive marketing efforts by theChinese producers.

Metkem Silicon:

The international photovoltaic market continues to grow at a healthy pace. However, this growth has beenachieved with a substantial fall in module and cell prices. This is putting enormous pressure on wafer pricesinternationally and has affected the realisation of wafers in the domestic market.



The indigenous demand for photovoltaic wafers suffered due to large imports of cells and modules atattractive prices.

Risks and concerns:

The Government is unlikely to permit mercury cell units manufacturing caustic soda to operate beyond 2012.This is a matter of concern since conversion to membrane cell technology will require substantial investment.

Operations of the chlorochemical business could be impacted by the highly volatile international prices ofmethanol, a major raw material. Further, the cost of captive power depends on the price of fuel i.e., LowSulphur High Stock (LSHS) which also continues to stay at a high level due to increase in international crudeprices. Sales volumes of both CFCs and the raw material CTC are shrinking due to the continuing phase-outschedule of CFCs under the Montreal Protocol. In addition, the proposed phase out schedule of CTC for non-feedstock use would also affect the production and sale of CTC adversely.

The business outlook for Metkem Silicon does not look bright on account of high raw material prices andreduction in the price of the end product i.e., photovoltaic wafers.

Review of operations 2003-04:

The major businesses viz., chloromethane solvents and caustic soda, operated at full capacity with improvementin efficiencies. Better price realisation in these businesses helped to increase the contribution of chlorochemica!products. There was continuous focus on rationalising maintenance expenses and cutting overheads. Thecompany, having successfully outsourced Drum manufacturing, is evaluating other manufacturing activitiesthat can be profitably outsourced.

Environment

The company has over the years made impressive strides towards pollution abatement through the variousinitiatives it has undertaken. It has constantly upgraded its infrastructure to conform to stringent environmentpreservation requirements. These efforts have helped the company to meet the challenge posed by presentday awareness of the role of industry in protecting the environment. The company has developed a large areaas a Green Belt around its manufacturing facilities. Provision of clean drinking water and street lighting tothe community around the factory area and imparting education and health care have been among the effortsthat highlight the company's commitment to being a good corporate citizen.

Personnel

The company considers people as its principal asset and attaches utmost priority to its development. Thefocus has been to prepare employees to meet the challenges of change and growth. The Sanmar Group hasclearly enunciated its "Management Philosophy", its "People Philosophy" and its "Ethics Policy".-There is aconstant drive to inculcate these policies in all employees.

Internal Control Systems

The company has in place adequate internal control procedures commensurate with the size and nature ofits operations. An Audit Committee consisting of three non-executive Directors is functioning effectively.Internal Audit for the year 2003-04 was carried out by Deloitte Haskins & Sells covering all areas ofoperations. All significant audit observations are discussed in the audit committee meetings, which met fourtimes during the year under review.

Cabot Sanmar Limited

For the year ended 31st March 2004, the company registered sales and other income of about Rs.18.69 croreand a profit before tax of about Rs.4.50 crore. The performance of the company has been satisfactory. Theproject to produce 200 TPA of treated fumed silica was completed on schedule without any cost overrun.


SANMAB

PROJECTS

The company is in the process of obtaining necessary.approvals and clearances for setting up a green fieldPVC plant at a shore-based location.

FINANCE

Fitch Ratings India Private Limited (Fitch), an international credit rating agency, has given a credit rating ofA+(lnd) in respect of the Secured Non-Convertible Debentures of Rs.125 crore already issued. However,during the year 2003-04, the company prepaid Rs.104.50 crore of these debentures to bring down theinterest cost.

Your company continues to enjoy the confidence of its bankers and financial institutions. Taking advantageof the fall in interest rates, the company replaced some of its high cost debt and achieved interest reduction.

The Madras High Court accorded its approval on 3rd March 2004 for the Scheme of Arrangement betweenSanmar Properties and Investments Limited (SPIL), Sanmar Holdings Limited and your company, in termsof which SPIL merged with your company effective 2nd November 2003. This scheme has helped to enlargethe equity resources of the company.

As the company's equity shares were not traded at Delhi, Vadodra and Calcutta stock exchanges, thecompany sought delisting of its share from these Stock Exchanges. While the shares have been delisted fromDelhi Stock Exchange, the company's application is pending with the Vadodra and Calcutta Stock Exchanges.The company's shares will continue to be listed on the Mumbai and Madras Stock Exchanges and theNational Stock Exchange.

DIRECTORS

Mr.N.Kumar, Mr.Vijay Sankar and Mr.N.Srinivasan, Directors, retire by rotation at the ensuing Annual GeneralMeeting and are eligible for reappointment.

Mr.Adit Jain, who was appointed in a casual vacancy holds office upto the date of the ensuing AnnualGeneral Meeting. Notice under Section 257 of the Companies Act, 1956 has been received from a memberproposing the appointment of Mr.Adit Jain and the Directors commend this proposal to the shareholders. -

AUDITORS

Price Waterhouse & Co., Chartered Accountants, Chennai, retire and are eligible for re-appointment.

STATUTORY INFORMATION

Information in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) Rules, 1975, as amended regarding employees, is given inAnnexure 'B' to the Directors' Report. However, as per the provisions of Section 219 of the CompaniesAct, 1956, the Report and Accounts are being sent to all shareholders of the company, excluding theaforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretaryat the Registered Office of the company.

Particulars under Section 217 (1) (e) relating to energy conservation and technology absorption are furnishedin a separate statement annexed to, and forming part of this report.

A Cash Flow statement, as required by Clause 32 of the listing agreement, is annexed.



DIRECTORS' RESPONSIBILITY STATEMENT

(a) In the preparation of the annual accounts for ,the year ended 31st March 2004, the applicableaccounting standards have been followed by the company.

(b) The Directors have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company as at 31st March 2004 and of the profit of the company for the yearended that date.

(c) The Directors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities.

(d) The accounts of the company have been prepared on a going concern basis.

CAUTIONARY STATEMENT

Statements made in this Report, including those stated under the caption "Management Discussion andAnalysis" describing the company's plans, projections and expectations may constitute "forward lookingstatements" within the meaning of applicable laws and regulations. Actual results may differ materially fromthose either expressed or implied.

For and on behalf of the BoardChennai N. SANKARApril 27, 2004 Chairman


ASANMAR

Annexure to the Directors' ReportInformation under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosureof particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors'Report for the year ended March 31, 2004.

1. CONSERVATION OF ENERGY

a. Measures taken:

The company continues to accord high priority to conservation of energy. Details of some of themeasures undertaken to optimise energy conservation are:

1. Reduction in power consumption by 187 Kwh/ MT of Caustic Soda has been achieved bycarrying out re-membraning of electrolyser at a cost of Rs.171 lacs at our Karaikal facility.

2. Steam traps in PVC driers were changed from bucket type to ball float type. This has resultedin reduction of steam consumption in drying of PVC resins.

3. Steam generation by waste heat recovery boiler was increased by completely burning the EDCvent from Monomer.

4. Internal consumption of steam was brought down in oxy chiorination plant and incinerator byusage of hot water from main de-aerator.

b. Additional investment proposals

Recoating of anode and cathode elements at our Caustic Soda Plant at Karaikal is being plannedat an investment of Rs.215 lacs. This will result in reduction of power consumption.

c. Impact of measures taken under (a) above:Substitution/ Savings in

Reduction in energy rost ofconsumption productionper annum (Rs. Lacs)

1. Reduction in power consumption due tore-membraning of electrolysers Power 12.43 lac Kwh 38.78

2. Reduction in steam consumption bychanging steam traps in PVC driers Steam 5352 MT 45.49

3. Increase in steam generation from wasteheat recovery boiler Steam 1000 MT , 8.50 •

4. Reduction in steam consumption due tousage of hot water from main de-aerator. Steam 1250 MT 10.63

d. Total energy consumption and energy consumption per unit of production - Annexure - I

2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATIONTechnology has been fully absorbed.

RESEARCH AND DEVELOPMENT (R&D)

The company's R & D laboratory is engaged in carrying out process/ product improvement programmes.In particular the areas of focus have been on import substitution, optimising the utilisation of availableresources, evolving alternative and more economic processes for the existing range of products andenvironment conservation.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO(Rs. Lacs)

a) Foreign exchange outgo 9305.09

b) Foreign exchange earnings 2369.41

For and on behalf of the BoardChennai N. SANKARApril 27, 2004 Chairman



Annexure 1

A. POWER AND FUEL CONSUMPTION 31-03-2004 31 03 20031) Electricity

(a) PurchasedUnits - lacs kwh 518.69 111.12Amount - Rs. lacs 1,744.14 392.27Rate per unit - Rs. 3.36 3.53

(b) Own Generation1) Through generators

Units - lacs kwh 2,486.28 2,525.01Units per KG of LSHS or equivalent 4.33 4.29Cost per unit - Rs. 2.77 2.74

2) Through turbinesSteam turbineUnits - lacs kwh 29.82 21.62Windmill power

' Units - lacs kwh 124.90 124.492) Furnace oil

Quantity - KL 10,672.72 9,028.16Amount - Rs. lacs 1,138.30 967.63Average - Rs./ KL 10,666 10,718

3) DieselQuantity - KL 215.27 181.67Amount - Rs. lacs 48.14 36.15Average - Rs./ KL 22,363 -19,899

4) LSHSQuantity - MT 74,402.54 77,014.68Amount - Rs. lacs 8,622.09 8,945.91Average - Rs./MT 11,588 11,616

5) Superior keroseneQuantity - KL 9,051.72 9,032.74Amount - Rs. lacs 1,279.16 1,124.13Average - Rs./KL 14,132 12,445

6) Others - Internal generationMethane gas - lac MJ 36.58 41.68Hydrogen - MT 650 642

B. CONSUMPTION PER UNIT OF PRODUCTION1) PVC resin

Electricity - (kwh) 1,134 1,215Superior kerosene - (Itr) 140 146Furnace oil - (kg) 350 407

2) Caustic sodaElectricity - (kwh) - Mercury cell plant 3,248 3,237Electricity - (kwh) - Membrane cell plant 2,703

3) ChloromethanesElectricity - (kwh) 422 422LSHS - (kg) 233 227

4) TrichloroethyleneElectricity - (kwh) 403 383LSHS - (kg) 203 197

Note:Electricity for caustic soda is for electrolysis. LSHS denotes the LSHS equivalent of steam consumption.

10


SANIVIAR

Corporate Governance

The Securities and Exchange Board of India (SEBI) has introduced a code of corporate governance for listedcompanies which is implemented through the Listing Agreements with the Exchanges with which the companyis listed. The company has complied in all material respects with the corporate governance requirements setout in Clause 49 of the Listing Agreement.

1. Brief statement on company's philosophy on code of governance

The company believes that good corporate governance leads to corporate growth and long term gainin shareholder value. The company is committed to maintaining the highest standards of corporategovernance in its conduct towards shareholders, employees, customers, suppliers and other stakeholders.

2. Board of Directors

Composition

The Board of Directors consists of eight Non-Executive Directors, of whom five are independent,and two executive directors. The composition of the Board is in conformity with the Listing Agreement.

Board Meetings

During the year 2003-04, the Board met five times on 21st April 2003, 25th July 2003, 10thSeptember 2003, 25th November 2003 and 12th January 2004.

The following table gives details of the Directors, attendance of the Directors at the Board Meetingsand at the last Annual General Meeting, number of memberships held by Directors in Board/Committees of various companies as on 31.03.2004:

Name

Mr N Sankar

Mr N Kumar

Mr P S Jayaraman

Mr Adit Jain @

Mr P N Kapadia

Mr M K Kumar @

Mr C H Mahadevan*

Mr V Narayanan

Mr N Srinivasan

Mr Vijay Sankar

Category

Chairman, Executive, Promoter

Vice Chairman, Non-Executive, Promoter

Managing Director, Executive

Non-Executive, Independent

Non-Executive





Non-Executive, Promoter

AttendanceParticulars

BoardMeetings

5

4

5

5

5

3

5

5

2

5

LastACM

held on10.09.2003

Yes

No

Yes

Yes

Yes

No

Yes

Yes

No

Yes

Number of other directorships inpublic companies and CommitteeMemberships/ Chairmanships

OtherDirector-

ships

11

10

4

-

3

2

-

13

14

13

CommitteeMember-

ships

2

5

2

1

2

3

1

10

6

2

CommitteeChairman-

ships

2 " '

3

-

-

1

2

-

5.

3

-

@ Mr Adit Jain was appointed an alternate director to Mr M K Kumar for the Board and AuditCommittee meetings on 25th November 2003.

* Represents Life Insurance Corporation of India, a shareholder of the company.

11



I Board Procedure

The Board meets at least once a quarter and the interval between two meetings was not more thanfour months.

The Board is presented with extensive information on vital matters affecting the working of thecompany. Among others, this includes- Operating plans, capital budgets,

quarterly results of the company and its business segments,minutes of meeting of audit committee and other committees,details of any joint venture or collaboration agreement,

- significant developments in the industrial and human relations front,- materially important show cause, demand and penalty notices and prosecution,- materially relevant defaults in financial obligations to and by the company or substantial non

payment for goods sold by the company,- materially significant effluent or pollution problems,

any Issue which involves possible public or product liability claims of a substantial nature,foreign exchange exposure and steps taken by management to limit the risks of adverse exchangerate movement,proposals for diversification, investment, disinvestments and restructuring, and

- non compliance of any regulatory or statutory provision or listing requirements as well asshareholder services.

3. Audit Committee

The company's Audit Committee consists of three Non-Executive Directors - two of them beingindependent. All members of the Committee have financial and accounting knowledge.

The members of the Committee are Mr V Narayanan (Chairman), Mr M K Kumar and Mr N Kumar.Mr Adit Jain was appointed as the alternate director for Mr M K Kumar for the Audit Committeemeeting held on 25th November 2003.

During 2003-04, the Audit Committee met four times -21 st April 2003, 25th July 2003, 25th November2003 and 22nd March 2004. All the members/ alternate director attended the meetings.

The Audit Committee adheres to the SEBI guidelines in terms of quorum for its meetings, functioning,role and powers as also those set out in the Companies Act, 1956.

4. Remuneration Committee

The Board of Directors constituted a Remuneration Committee consisting of three Non-Executiveindependent Directors, namely, Mr M K Kumar (Chairman), Mr N Srinivasan and Mr Adit Jain.

The scope/ role of the Remuneration Committee is to recommend to the Board of Directors theremuneration payable to the Wholetime Directors of the company as and when they come for review.

Remuneration of Directors

The compensation of the wholetime directors comprises of a fixed component and commission. Thewholetime directors are not paid sitting fees for any Board/ Committee meetings attended by them.

Non-Executive Directors are paid a sitting fee of Rs.5,000 for every meeting of the Board orCommittee attended by them, other than Share & Debenture Committee for which the sitting feeis Rs.500.

The Remuneration Committee, during the year 2003-04, met twice on 24th July 2003 and 12thJanuary 2004. Mr M K Kumar and Mr Adit Jain attended both the meetings and Mr N Srinivasanattended one meeting. The committee recommended the commission payable to Mr N Sankar,Chairman for the financial year 2002-03 and revision in Mr P S Jayaraman, Managing Director'sremuneration.

12


ASAIMMAR

Details of remuneration paid or payable to Directors for the year ended 31st March 2004:

Director

Mr N SankarMr N KumarMr P S JayaramanMr Adit JainMr P N KapadiaMr M K KumarMr C H MahadevanMr V NarayananMr Vijay SankarMr N Srinivasan

Sitting Fees

Rs.Nil

50,500Nil

45,00025,00045,00030,00050,00025,00015,000

Salary

Rs.40,80,000

Nil24,02,695

NilNilNilNilNilNilNil

RetirementBenefits

Rs.3,57,692

Nil3,18,692


Perquisites

Rs.7,20,000

Nil20,629


Commission

Rs.NilNilNilNilNilNilNilNilNilNil

Total

Rs.51,57,692

50,50027,42,016

45,00025,00045,00030,00050,00025,00015,000

Shareholders/ Investors Grievance CommitteeThe Board' of Directors has constituted a Shareholders/ Investors Grievance Committee consisting ofthree Non-Executive Directors and the Managing Director, which looks into shareholders and investorsgrievances. The members of the Committee are Mr M K Kumar, Mr N Kumar, Mr C H Mahadevan andMr P S Jayaraman, Managing Director. Mr M K Kumar is the Chairman of the Committee.The Compliance officer is Mr P U Aravind, Secretary.During the year 2003-04, the Shareholders/ Investors Grievance Committee met once on 12th January2004 and all the four members attended the meeting.During the year 2003-04, the company received 30 complaints from the investors and all of them wereresolved to the satisfaction of the investors concerned. As on 31.3.2004 there were no investorgrievances pending for a period exceeding one month and no transfers were pending for approval-.

General Body MeetingsThe last three Annual General Meetings of the company were held as under:

Year

2000-01

2001-02

2002-03

Location

Sathguru Gnanananda Hall,Narada Gana Sabha Trust Complex,314 TTK Road, Chennai 600 018Sathguru Gnanananda Hall,Narada Gana Sabha Trust Complex,314 TTK Road, Chennai 600 018Sathguru Gnanananda Hall,Narada Gana Sabha Trust Complex,314 TTK Road, Chennai 600 018

Date

27.09.2001

18.09.2002

10.09.2003

Time

3.00 PM

1 0.00 AM

10.00 AM

Number of specialresolutions passed

' 1

2

3

All special resolutions were passed by show of hands. (Of the 6 special resolutions, 2 related toappointment of auditors).At the Annual General Meeting held on 10th September 2003, one special resolution for grant ofloans/ extension of guarantees/ provision of securities on behalf of Chemplast Chlorochemicals Limitedwas approved by the shareholders through a postal ballot. The voting pattern was as follows:

No. of shares PercentageIn favour of the resolution 2,64,78,074 99.74%Against the resolution 68,449 0.26%

Mr P H Arvindh Pandian was the Scrutiniser. Mr P S Jayaraman, Managing Director andMr R Sukumaran, Secretary, were severally responsible for the entire ballot poll process.At the forthcoming Annual General Meeting, there is no item on the Agenda that needs approval bypostal ballot.

13



Disclosures

Related party transactions during the year have been disclosed as required under Accounting Standard18 issued by the Institute of Chartered Accountants of India. These transactions are not likely to haveany conflict with the company's interest.

No strictures/ penalties have been imposed on the company by the Stock Exchanges orSEBI or anystatutory authority on any matters related to the capital market during the last 3 years.

Information pursuant to Clause 49 VI (A)(c) of the Listing Agreement: A brief resume and name ofthe companies in which Directors, who are being re-appointed, hold Directorships/ CommitteeMemberships are given below:

a) [Mr N Kumar,| 54, B.E. (Electronics & Communications), is the Chairman of Indchem SoftwareTechnologies Limited and Vice Chairman of The Sanmar Group. Indchem Software has set up amodern high-tech software development facility in Chennai in the areas of web, enterpriseapplications integration and extended enterprises. He was the President of Confederation of IndianIndustry, a leading industrial body, and has participated in various apex bodies. He is associatedwith numerous business, social and cultural organisations.

Mr N Kumar holds Directorships/ Committee Memberships in the following public companies inaddition to his Directorship in Chemplast Sanmar Limited.

1. Indchem Software Technologies Limited

2. AMP Sanmar Life Insurance Company Limited

3. SilkRoute Indchem Limited

4. The India Cements Limited

5. MRF Limited

6. Bharti Tele-Ventures Limited

7. Ennore Port Limited

8. Indchem Software Technologies (India) Limited

1. Bharti Tele-Ventures Limited


3. Chemplast Sanmar Limited

Executive Chairman

Director

Director

Director

Director

Director

Director

Director

Committee Position

Audit Committee - Chairman

Audit Committee - ChairmanRemuneration Committee - Chairman

Audit Committee - MemberShareholders/ Investors GrievanceCommittee - Member

b) Mr Vijay Sankar, 31, holds a Masters in Business Administration from the JL Kellogg-GraduateSchool of Management, Northwestern University and is a qualified Chartered Accountant. He isalso associated with sports organisations.

Mr Vijay Sankar holds Directorships/ Committee Memberships in the following public companiesin addition to his Directorship in Chemplast Sanmar Limited.

1. SHL Securities (Alpha) Limited

2. Sanmar Holdings Limited

3. Sanmar Engineering Corporation Limited

4 AMP Sanmar Life Insurance Company Limited

5. SilkRoute Indchem Limited


Director

Director

Director

Director

Director

Committee position

Audit Committee - MemberRemuneration Committee - Member

14


SANMAR

c)

9.

Mr N Srinivasan, 59, a Post Graduate in Chemical Engineering from the Illinois Institute of Technology,USA is the Vice Chairman & Managing Director of The India Cements Limited (ICL). 1CL is one ofthe major players in the Cement Industry with a turnover of around Rs.1200 Crores. Mr Srinivasanhas served as the President of Cement Manufacturers' Association, Chairman of the Board ofGovernors of the National Council for Cement Industry, the President of The Madras Chamber ofCommerce and Industry, and is a member of the Prime Minister's Council on Trade and Industry.He is associated with numerous business, social, cultural and sports organisations.

Mr N Srinivasan holds Directorships/ Committee Memberships in the following public companiesin addition to his Directorship in Chemplast Sanmar Limited.1.2.3.4.5.6.7.8.9.10:11.12.13.14.

The India Cements Limited Vice Chairman & Managing DirectorAndhra Pradesh Gas Power Corporation Limited DirectorCeat LimitedCoromandel Electric Company LimitedEWS Finance & Investments LimitedICL International LimitedICL Securities LimitedICL Shipping LimitedICL Sugars LimitedIndia Cements Capital & Finance LimitedM M Forgings LimitedRaasi Cement LimitedSpencer & Co. LimitedVisaka Cement Industry Limited

1. The India Cements Limited

2. ICL Sugars Limited3. Visaka Cement Industry Limited4. India Cements Capital & Finance Limited

5. MM Forgings Limited

DirectorChairman & Managing DirectorChairmanChairmanChairmanChairmanChairmanChairmanDirectorChairmanDirectorChairman

Committee positionShareholders/ Investors GrievanceCommittee - MemberAudit Committee - ChairmanAudit Committee - ChairmanAudit Committee - MemberShareholders/ InvestorsGrievance Committee - ChairmanAudit Committee - Member

Mr Adit Jain, 43, B.E. (Mechanical Engineering) from the Birla Institute of Technology and a Master.in Business Administration from Henley Management College, UK, is the Managing Director of IMAIndia, an associate firm of The Economist Group Asia Pacific. Previously Mr Jain worked withLazard India, an Investment bank as Vice President & Head, Corporate Advisory Services, and wasresponsible for the mergers and acquisitions business. In his current role Mr Jain has advised severalcorporations towards the development of their India strategy. He has successfully handled assignmentsin the areas of policy amendments, entry strategy planning, competitor analysis, scenario planning,joint ventures etc.Mr Adit Jain does not hold Directorship in any public companies. He is a member of the followingcommittee:Chemplast Sanmar Limited Remuneration Committee

Means of communicationThe quarterly/ half yearly/ annual results are published in the New Indian Express, Financial Expressand Daily Thanthi. The financial results of the company are posted on Website - www.sanmargroup.com.As per Clause 51 of the Listing Agreement financial results and shareholding pattern are filed on theElectronic Data Information Filing and Retrieval (EDIFAR) website maintained by National InformationCentre. These are not sent individually to the shareholders.There has been no presentation to analysts.Management Discussion and Analysis highlighting individual businesses has been included in theDirectors' Report.

15



10. General Shareholders Information

Registered Office

Annual General Meeting

Day

Date

Time

Venue

Tentative Financial Calendar

Annual General Meeting

Financial reporting for the firstquarter ending 30th June 2004

Audited Financial Results for thesix months ending 30th September 2004

Financial reporting for the quarterending 31st December 2004

Audited Results for the year ending31st March 2005

Date of Book Closure

9 Cathedral Road, Chennai 600 086Web : www.sanmargroup.come-mail : [email protected]

Tuesday

08.06.2004

10.30A.M.

Sathguru Gnanananda Hall,Narada Gana Sabha Trust Complex,314 TTK Road, Chennai 600018.

08.06.2004

Last week of July 2004

Last week of November 2004

Last week of January 2005

Last week of June 2005

The Register of Members of the company will be closed from Thursday, the 3rd June 2004 to Tuesday,the 8th June 2004, both days inclusive, for the purpose of Annual General Meeting.

Listing of Equity shares on Stock Exchanges

(D Madras Stock Exchange LimitedExchange Building11 Second Line Beach, Chennai 600 001

The Stock Exchange, MumbaiP J Towers, Dalai Street, Fort,Mumbai 400 001

(3)

Stock Code

Chemplast

506355

Chemplast EQNational Stock Exchange of India LimitedExchange Plaza, 5th FloorBandra Kurla Complex, Bandra (East), Mumbai 400 051

The listing fee has been paid upto date to these Stock Exchanges.

The company is yet to receive approvals from The Calcutta Stock Exchange Association Limited (StockCode 13078) and Vadodara Stock Exchange Limited (Stock Code 6355) for delisting the Equity Sharesof the company.

The Equity Shares of the company were delisted from The Delhi Stock Exchange Association Limitedon 10th December 2003.

16


SANMAR

Market Price Data

Month

April 2003

May 2003

June 2003

July 2003August 2003

September 2003October 2003

November 2003

December 2003January 2004

February 2004

March 2004

Bombay Stock Exchange

High(Rs.)

29.1032.0034.00

34.50

30.90

34.00

29.9033.50

46.00

43.50

31.9529.00

Low(Rs.)

26.05

27.5030.1027.05

25.1525.55

26.00

25.6031.9530.80

25.55

20.80

National Stock Exchange

High(Rs.)

29.50

31.7534.00

36.50

32.20

30.95

30.00

34.9045.80

43.45

31.9028.00

Low(Rs.)

25.55

27.00

30.25

28.0027.05

25.60

23.80

23.6031.1030.75

26.50

20.05

225 I

200

175

150

$ 125

c 1 00 •

75

50

25

Relative Performance of Chemplast Share Price vsBSE Sensex & NSE Nifty

»i.

^ •— •

^J&K*^^ 5MI

_^~- *\*"^-̂a-*-**̂ — -*_ r̂"" "x*^_"*• *" *-—-*

Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 |an-04 Feb-04

-*- Chemplast ~s- BSE Sensex -*- NSE Nifty

Chemplast Share Price 100= 27.75

BSE Sensex 100 = 2959.79

NSE Nifty 100 = 934.05

Code of conduct for prevention of Insider Trading

Mar-04

The company has framed a Code of Conduct for Prevention of Insider Trading based on SEBI (InsiderTrading) Regulations, 1992. This code is applicable to all Directors and designated employees. Thecode ensures the prevention of dealing in shares by persons having access to unpublished pricesensitive information.

Registrar and Transfer Agents

Integrated Enterprises (India) Limited,2nd Floor, Kences Towers, 1 Ramakrishna Street,North Usman Road, T Nagar, Chennai 600 01 7Telephone : 28140801-03 Fax : 28142479Contact person: K Suresh Babu, Deputy General Manager.

17



Share Transfer System

A Committee of Board approves share transfers in the physical form on a monthly basis. In compliancewith the directions of SEBI, the company immediately on transfer of shares, has sent letters to theinvestors in the prescribed format informing them about the simultaneous dematerialisation optionavailable for shares transferred in their names.

Pursuant to the Scheme of Arrangement between Chemplast Sanmar Limited, Sanmar Properties andInvestments Limited (SPIL) and Sanmar Holdings Limited approved by the High Court of Judicature atMadras on 3rd March 2004 in terms of which SPIL was amalgamated with the company effective 2ndNovember 2003, 1,27,99,730 equity shares of the company were allotted to the shareholders of SPILon 20th April 2004. Permission has been sought to list these shares on the Stock Exchange, Mumbai,National Stock Exchange of India Limited and Madras Stock Exchange Limited. The distribution ofshareholding and shareholding pattern after such allotment are given below:

Distribution of Shareholding

SharesUp to . 500501 - 10001001 - 20002001 - 30003001 - 40004001 - 50005001 - 100001 0001 & aboveTOTAL

Shareholders20804

1140473

115

44

27

38

3622677 @

%

91.7415.0272.0860.5070.1940.1190.1680.158

100.000

No. of shares held20,62,069

8,37,1466,68,2572,84,2461,52,2071,27,9892,62,688

• 4,35,87,3424,79,81,944 ,

%

4.2981.7451.3930.592 .0.3170.2670.547

90.8411 00.000

(@ Prior to consolidation of multiple folios)

Shareholding pattern

Category

A. Promoters' holding1 . Indian Promoters

Foreign Promoters2. Persons acting in concert

Sub-total

B. Non Promoters' holding3. Institutional Investors

a) Mutual Funds & UTIb) Banks, Financial Institutions,

Insurance Companiesc) Foreign Institutional InvestorsSub-total

4. Othersa) Private Corporate Bodiesb) Indian Publicc) NRIs/ OCBsd) Foreign NationalsSub-total

GRAND TOTAL

No. of shares held

3,68,89,189-_

3,68,89,189

1 6,06262,68,990

2,26062,87,312

2,96,57144,44,376

59,0205,476

48,05,4434,79,81,944

Percentage ofshareholding

76.88%,

_

76.88%

0.03%13.07%

-

13.10%

0.62%9.27%0.12%,0.01%

10.02%

100.00%

18


Dematerialisation of shares

The shares of the company are compulsorily traded in dematerialised form. The Code Number allottedby National Securities Depository Limited and Central Depository Services (India) Limited isINE488A01019.

Outstanding CDRs/ ADRs/ Warrants or Convertible Bonds

There are no outstanding convertible warrants/ instruments.

Plant Locations

Mettur Dam, Tamil Nadu

Krishnagiri & Panruti,Tamil Nadu

Vedaranyam, Tamil Nadu

Karaikal

PVC

Chlorochemicals:Caustic Soda, Chlorine,Chlorinated Solvents,Refrigerant Gases andSilicon Wafers

Industrial Alcohol

Industrial Salt

Caustic Soda and Chlorine.

Investor Correspondence

(i) For all matters relating to shares,dividends, annual report

(ii) For any other general mattersor in case of any difficulties/grievances.

Integrated Enterprises (India) Ltd.2nd Floor, Kences Towers,1, Ramakrishna Street,North Usman Road, T Nagar,Chennai 600 017Telephone : 28140801-03Fax : 28142479E-mail : [email protected] person: K Suresh Babu,Deputy General Manager.

The SecretaryChemplast Sanmar Limited,9, Cathedral Road, Chennai 600 086Telephone : 28118500/28118120

28118102/ 2811812328118124/ 28118119

Fax : 28112627E-mail : [email protected] (or)

pual ©sanmargroup.com

19



Auditors' Certificate on compliance with the conditions of Corporate Governanceunder Clause 49 of the listing agreements

1. We have examined the compliance with the conditions of Corporate Governance by ChemplastSanmar Limited (the company) for the year ended March 31, 2004 with the relevant, records anddocuments maintained by the company and furnished to us for our examination and the report onCorporate Governance as approved by the Board of Directors.

2. The compliance with conditions of Corporate Governance is the responsibility of the management.Our examination was limited to procedures and implementation thereof, adopted by the company forensuring the compliance with the conditions of the Corporate Governance. It is neither an audit noran expression of opinion on the financial statements of the company.

3. Based on the aforesaid examination and according to information and explanations given to us wecertify that the company has complied with the conditions of Corporate Governance as stipulated inClause 49 of the Listing Agreements with the Stock Exchanges.

4. We state that no investor grievances are pending for a period exceeding one month against thecompany as per the records maintained by the Shareholder/ Investors Grievance Committee.

5. We further state that such compliance is neither an assurance as to the future viability of the companynor the efficiency or effectiveness with which the management has conducted the affairs of thecompany.

S.DATTAPartner

(Membership No.F14128)For and on behalf of

Chennai PRICE WATERHOUSE & CO.April 27, 2004 Chartered Accountants

20


SANMAR

Auditors' Report

To the Members ofCHEMPLAST SANMAR LIMITED

1. We have audited the attached Balance Sheet of Chemplast Sanmar Limited as at March 31, 2004 andthe relative Profit and Loss Account and Cash Flow Statement for the year ended on that date, whichwe have signed under reference to this report. These financial statements are the responsibility of thecompany's management. Our responsibility is to express an opinion on these financial statementsbased on our audit.

2. We have 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 aboutwhether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Government of Indiain terms of Section 227(4A) of the Companies Act, 1956 of India (the Act) and on the basis of suchchecks as we considered appropriate and according to the information and explanations given tous, we set out in the Annexure a statement on the matters specified in paragraphs 4 and 5 of thesaid Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that :

(a) we have obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

(b) in our opinion, proper books of account as required by law have been kept by the companyso far as appears from our examination of those books.

(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this reportare in agreement with the books of account.

(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt withby this report have been prepared, in all material respects, in compliance with the applicableaccounting standards referred to in Section 211 (3C) of the Act.

(e) on the basis of written representations received from the directors and taken on record by theBoard of Directors, none of the directors is disqualified as on March 31, 2004 from beingappointed as a director in terms of Section 274 (1)(g) of the Act.

(f) in our opinion and to the best of our information and according to the explanations given tous, the Balance Sheet and Profit and Loss Account together with the notes thereon and attachedthereto give in the prescribed manner the information required by the Act and together with theCash Flow Statement also give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2004;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

S. DATTAPartner


Chennai Price Waterhouse & Co.April 27, 2004 Chartered Accountants

21



Annexure to the Auditors' Report(Referred to in paragraph 3 of our report of even date to the members of Chemplast Sanmar Limited)(i) (a) The company has maintained proper records to-show full particulars including quantitative details and

situation of its fixed assets.(b) The fixed assets of the company have been physically verified during the year by the management and no

material discrepancies between the book records and the physical inventory have been noticed.(c) No substantial part of fixed assets of the company has been disposed of during the year.

(ii) (a) The inventories of the company at all its locations have been physically verified by the management duringthe year.

(b) In our opinion, the procedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and nature of its business.

(c) The company has maintained proper records of inventories and the discrepancies between the physicalinventories and the book records which have been properly dealt with in the books of account were notmaterial.

The company has neither granted nor taken any loans, secured or unsecured, to/ from companies, firms or otherparties covered in the register maintained under Section 301 of the Act.In our opinion, there is an adequate internal control procedure commensurate with the size of the company andthe nature of its business for purchase of inventories and fixed assets and for the sale of goods.(a) In our opinion, the transactions that need to be entered in the register maintained under Section 301 of the

Act have been so entered.(b) In our opinion, the aforesaid transactions have been made at prices which are reasonable having regard to

the prevailing market prices.The company has not accepted any deposits from the public.In our opinion, the company's present internal audit system is commensurate with its size and nature of itsbusiness.On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accountsprescribed by the Government of India under Section 209 (1)(d) of the Act in respect of industrial alcohol,ethylene di chloride, caustic soda and chloromethanes have been maintained. However, we are not required toand have not carried out any detailed examination of such accounts and records.(a) The company has been regular in depositing undisputed statutory dues including Provident Fund, Investor

Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, CustomsDuty, Excise Duty, Cess and other statutory dues with the appropriate authorities in India.

(b) At the end of the financial year there were no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax,Excise Duty and Cess which have not been deposited on account of any dispute except as followsName of the Statute

Tamil Nadu General SalesTax Act, 1955Central Sales Tax Act, 1956Central Excise Act, 1944Central Excise Act, 1944Central Excise Act, 1944Central Excise Act, 1944

Nature of the Amountdues Rs. lacsSales Tax/ Penalty

Sales Tax/ PenaltyExcise DutyExcise DutyExcise DutyExcise Duty

126

112203

1962

Forum where dispute is pending

Sales Tax Appellate Tribunal

Sales Tax Appellate TribunalCustoms, Excise and Service Tax TribunalCommissioner of Central ExciseMadras High CourtAssistant Commissioner of Central Excise

The company did not have any accumulated losses at the end of the financial year, nor had it incurred any cashloss during the financial year or in the immediately preceding financial year.According to the records produced, the company nas not defaulted in repayment of its dues to any financialinstitution or bank or debenture holders during the year.The company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.In our opinion, the terms and conditions in respect of the guarantees given by the company for loans taken byothers from banks and financial institutions are not prima facie prejudicial to the interest of the company.On the basis of review of utilisation of funds on an overall basis, in our opinion, the term loans taken by thecompany were applied for the purposes for which the loans were obtained.

(xv) On the oasis of review of utilisation of funds on an overall basis, in our opinion, the funds raised on short termbasis have not been used for long term investment or vice versa during the year.The company has not made any preferential allotment of shares during the year to parties and companiescovered in the register maintained under Section 301 of the Act.The company has created securities as per debenture trust deed in respect of debentures issued.During the course of our examination of the books of account carried out in accordance with the generallyaccepted auditing practices in India, we have not come across any instance of fraud on or by the company norhave we been informed by the management of any such instance being noticed or reported during the year.Clauses (xiii), (xiv) and (xx) of the aforesaid Order are not applicable to the company.

S. DATTAPartner


Chennai Price Waterhouse & Co.April 27, 2004 Chartered Accountants

22


ASANIVIAR

Five Year Summary

(Rs. Crores)

Particulars

Results for the year

Sales, freight earnings and other income

Profit for the year

Profit after tax

Dividend (Equity and Preference)

Year end position

Capital Employed

Fixed assets .

Net current assets

Sources of funds

Shareholders' funds

Equity share capital

Preference share capital

Reserves

Deferred tax liability - Net

Borrowed funds

Equity share statistics

Face value

Earnings

Dividend

Book value

2003-04

582.0.8

8.22

4.62

2.13

361.16

87.92

449.08

47.98

20.50

117.21

185.69

49.00

214.39

449.08

10.00

0.55

-

34.43

2002-03

540.78

24.45

20.63

6.48

350.74

67.18

417.92

35.18

22.50

78.86

136.54

47.30

234.08

417.92

10.00

5.02

1.00

32.42

2001-02

513.28

33.55

20.82

17.64

252.05

163.15

415.20

35.18

29.50

61.92

126.60

48.29

240.31

415.20

10.00

4.80

4.00

27.60

2000-01

443.39

18.19

16.45

7.64

265.22

204.30

469.52

35.18

32.00

95.25

162.43

-

307.09

469.52

(Rs.

10.00

3.24

1.00

37.07

1 999-00

446.09

39.09

30.15

13.45

233.37

165.12

398.49

35.18

35,00

80.32

150.50 '

-

247.99

398.49

per share)

10.00

7.10

2.50

32.83

Note:

Figures have been regrouped where required.

23



Profit and Loss Account for the year ended March 31, 2004

INCOMESalesLess: Excise duty

Other income

EXPENDITURECost of goods soldSalaries, wages and amenities to staffRepairs and maintenanceOther expensesInterest and finance chargesDepreciation

Profit before taxProvision for current taxProvision for deferred taxProfit after tax

Profit brought forwardBalance of Profit and Loss Account of amalgamating company(Note 3 in Schedule 21)

Transfer from Debenture Redemption Reserve

Transfer to Capital Redemption Reserve

Interim Dividend- Preference dividend (previous year - subject to tax)- Tax on dividend

Proposed final dividend- Equity dividend- Tax on dividend

Profit carried to Balance Sheet

Earnings per shareNotes on Accounts 21

Schedules referred to above form an integral part of these accounts.

This is the Profit and Loss Account referred to in our report of even date

edule

1

2

34567

31.03.2004Rs.Lacs

57360.897465.85

49895.04847.16

50742.20

33369.374537.502234.942970.603540.533266.85

49919.79

822.41(190.00)(170.00)462.41

1995.292724.24

5181.942612.507794.44(200.00)

(212.80)(27.26)

31.03.2003Rs.Lacs

53404.696770.10

46634.59673.73

47308.32

29852.434797.141892.222965.903181.542173.73

44862.96

2445.36(481.00)

99.002063.36

602-.64

2666.00722.17

3388.17(700.00)

(295.98)

S. DATTAPartner(Membership No. F14128)For and on behalf ofPRICE WATERHOUSE & Co.Chartered AccountantsChennaiApril 27, 2004

N. SANKARChairman

P.S. JAYARAMANManaging Director

P.U. ARAVINDSecretary

7354.38

Rs. 0.55

(351.82)(45.08)

1995.29

Rs. 5:02

N. KUMARVice Chairman

ADIT JAINP.N. KAPADIAM.K. KUMAR

C.H. MAHADEVANV. NARAYANAN

VIJAY SANKARDirectors

24


SANMAR

Balance Sheet as at March 31, 2004Schedule

SOURCES OF FUNDSSHAREHOLDERS' FUNDSCapitalReserves and surplus

Deferred tax liability-NetLOAN FUNDSSecured loansUnsecured loans

APPLICATION OF FUNDSFIXED ASSETSGross blockLess: Depreciation

Net blockCapital work in progress

INVESTMENTSCURRENT ASSETS,LOANS AND ADVANCES

InventoriesSundry debtorsCash and bank balancesOther current assetsLoans and advances

Less: CURRENT LIABILITIESAND PROVISIONS

LiabilitiesProvisions

NET CURRENT ASSETSMISCELLANEOUS EXPENDITURETO THE EXTENT NOT WRITTENOFF OR ADJUSTED(Note 17 in Schedule 21)

14151617

1920

31.03.2004Rs.Lacs Rs.Lacs


89

1011

12

13

6848.1911838.73

17811.803626.85

55722.0420498.88

35223.16892.84

18686.92

4900.00

21438.65

45025.57

36116.00

433.74

5768.227907.69

20542.982864.61

52399.8517444.81

34955.04118.71

13675.91

4730.00

23407.59

41813.50

35073.75

566.23

5057.476262.47445.41

10.413757.85

15533.61

5824.721350.59

7175.31

4061.936215.60

, 661.5758.35

3505.13

14502.58

6222.372128.21

8350.588358.30

117.53

45025.57Notes on Accounts 21Schedules referred to above form an integral part of these accounts.This is the Balance Sheet referred to in our report of even date.

N. SANKARChairman

S. DATTAPartner(Membership No. F14128) P.S. JAYARAMANFor and on behalf of Managing DirectorPRICE WATERHOUSE & Co.Chartered AccountantsChennai P.U. ARAVINDApril 27, 2004 Secretary

6152.00

- 21.52

41813.50

N, KUMARVice Chairman




25



Schedules forming part of the Accounts for the year ended March 31, 2004

SCHEDULE 1

SALES

Polyvinyl chloride

Caustic soda

Chloromethanes

Trichloroethylene

Chlorine

Hydrochloric acid

Refrigerant gases

Ethyl silicate

Hydrogen gas

Silicon wafers (in '000 Nos)

Bromine

Others

Ship earnings

SCHEDULE 2

OTHER INCOME

Dividends from non-trade long term investments *

Share of income from partnership firm

Montreal Protocol compensation

Profit on sale of fixed assets

Commission

Liabilities provided for no longer required written back

Miscellaneous income

Includes tax deducted at source

31.03

QuantityMT

62815

59808

31861

3549

63

73864

1202

382

93

846

117

.2004

ValueRs.Lacs

32752.79

7437.45

10144.99

1630.14

7.32

1244.67

1797.28

375.00

93.29

987.90

78.98

811.08

57360.89

-

57360.89

16.74

6.51

193.61

39.58

61.46

280.55

248.71

847.16

31.03.2003

Quantity ValueMT Rs.Lacs

60962 31794.85

45825 4559.19

30890 8830.05

3372 1461.42

53 5.97

75524 1561.95

1959 2354.98

381 363.32

75 74.04

1548 1464.79

85 50.63

753.30

53274.49

130.20

53404.69

18.23

. 1 7.42

54.97

191.27

47.48

56.49

287.87

673.73

1.91

26


ASANiVfAR



SCHEDULE 3

COST OF GOODS SOLD

Materials

Opening stock

Raw materials

Intermediates

Work in process

Finished goods

Add: Purchases

Raw materials

Intermediates

Less: Closing stock

Raw materials

Intermediates

Work in process

Finished goods

Excise duty on closing stock of finished goods

Less: Excise duty on opening stock offinished goods

Power and fuel

Stores

SCHEDULE 4

SALARIES, WAGES AND AMENITIES TO STAFF

Salaries, wages and bonus

Contribution to provident and other funds

Staff welfare expenses

656.03

1743.72

104.00

462'56 2966 31

5661.18

13222.28 1SS8o16

624.66

2723.32

132.38

459.20 9̂39.56)

679.89

3139.54

79.50

416.84

4816.45

9600.77

656.03

1743.72

104.00

462.56

111.03

137.21(26.18)

17884.03

13992.81

1492.53

33369.37

3943.93

316.08

277.49

4537.50

137.21

115.42

4315.77

14417.22

(2966.31)

21.79

15788.47

12544.30

'1519.66

29852.43

3897.69

594.46

304.99

4797.14

27



31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

SCHEDULE 5

REPAIRS AND MAINTENANCE

Machinery

Buildings

Others

1710.46

231.45

293.03

2234.94

1569.55

129.93

192.74

1892.22

SCHEDULE 6

OTHER EXPENSES

Rent (net of recovery Rs.182.76 lacs; previous year Rs.148.60 lacs)

Insurance

Rates and taxes

Travelling, conveyance and vehicle maintenance

Sales commission

Freight and handling

Miscellaneous expenses

82.73

357.40

489.03

237.00

64.45

784.00

955.99

2970.60

50.56

392.46

335.30

,191.63

95.20

863.71

1037.04

2965.90

SCHEDULE 7

INTEREST AND FINANCE CHARGES

Interest (net of interest on deposits etc. * Rs.55.29 lacs;Previous year Rs.185.08 lacs)

- On fixed loans (including Rs.1225.43 lacs on Debentures;Previous year Rs.1761.05 lacs)

- Others

Lease rent

Difference in exchange (net)

Finance charges

* Includes tax deducted at source

2350.92 2402.25

566.88

247.75

110.79

264.19

3540.53

254.90

247.75

55.67

220.97

3181.54

1.37 30.73

28


SANMAR

SCHEDULE 8

CAPITAL

AUTHORISED

7,50,00,000 Equity shares of Rs.10/- each

35,00,000 Cumulative redeemable preference shares of Rs.100/- each

31.03.2004Rs.Lacs

7500.00

3500.00

11000.00

31.03.2003Rs.Lacs

7500.00

3500.00

11000.00

2050.00

6848.19

3518.22

200.00

760.00

ISSUED, SUBSCRIBED AND FULLY PAID UP

4,79,81,944 (previous year 3,51,82,214) Equity shares of Rs.10/- each 4798.19

2,00,000 - 11.5% Cumulative redeemable preference shares of Rs.100/- eachallotted on 30-03-01 redeemable at par at the end of three years from the dateof allotment.

7,60,000 - 10.5% Cumulative redeemable preference shares of Rs.100/- eachallotted on 31-08-2000 and 28-09-2000 redeemable at par within 36 monthsfrom the date of allotment, *

7,50,000 - 8% Cumulative redeemable preference shares of Rs.100/- eachallotted on 20-05-02 redeemable at par at the end of five years from the dateof allotment subject to put and call option at the end of the 36th month. * - 750.00

5,40,000 - 8% Cumulative redeemable preference shares of Rs.100/- eachallotted on 28-09-02 redeemable at par at the end of three years from the dateof allotment subject to put and call option at the end of every year. * - 540.00

20,50,000 - 9.5% Cumulative redeemable preference shares of Rs.100/- eachredeemable at par on 29-08-06. ( * consequent on revision in terms of allotment)

, 5768.22

Note:

Of the above

(a) Number of equity shares issued and allotted as fully paid up pursuantto schemes of amalgamation without payment being received in cash 2,16,72,615 88,72,885

(b) Number of equity shares allotted as bonus shares by way of capitalisationof Reserves (Rs.443.64 lacs) and from share premium account(Rs.1407.29 lacs) .1,85,09,329 1,85,09,329

(c) Number of equity shares held by Sanmar Holdings Limited, the holdingcompany and its subsidiaries. 3,67,68,115 2,63,07,207

76.63% 74.77%

29



As at31.03.2003 Additions

Rs.Lacs Rs.Lacs

As atDeductions 31.03.2004

Rs.Lacs Rs.Lacs

SCHEDULE 9

RESERVES AND SURPLUS

General Reserve

Capital Redemption Reserve

Debenture Redemption Reserve

Profit and Loss Account

Additions include transfers referred to in Note 3 in Schedule 21

1327.40

1460.00

3125.00

1995.29

7907.69

981.50

202.95

-

7354.38

8538.83

-

.

2612.50

1995.29

4607.79

2308.90

1662.95

512.50

7354.38

11838.73

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

SCHEDULE 10

SECURED LOANS

Debentures

Term loans from

Bank

Financial institution

Others

Cash credit and working capital demand loan from banks

For nature of security and redemption particulars refer Note 12 in Schedule 21

SCHEDULE 11

UNSECURED LOANS

Short term loans from banks

Commercial papers *

* Maximum amount raised at any time during the year

2050.00

6171.97

7500.00

2089.83

17811.80

3626.85

3626.85

1000.00

12500.00

2000.12

775.95

4000.00

1266.91

20542.98

1864.61

1000.00

2864.61

2000.00

30


ASANIVIAR

SCHEDULE 12

FIXED ASSETSRs. Lacs

CROSS BLOCK DEPRECIATION NET

Land

Buildings

Plant andmachinery

Furniture andoffice equipment

Vehicles

Previous year

Capital work in

As at31.03.2003 Additions

3181.99 128.44

4304.94 139.15

43632.19 3082.09

1038.11 115.43

242.62 75.38

52399.85 3540.49

41755.51 13135.58

progress

As at For the Upto As atDeletions 31.03.2004 year 31.03.2004 31.03.2004

3310.43 - 25.76 3284.67

2.11 4441.98 166.68 948.97 3493.01

170.82 46543.46 2861.93 18411.91 28131.55

9.05 1144.49 193.47 938.26 206.23

36.32 281.68 44.77 173.98 107.70

218.30 55722.04 3266.85 20498.88 35223.16

2491.24 52399.85 2395.57 17444.81

892.84

36116.00

BLOCK

As at31.03.2003

3156.23

3520.54

27912.32

284.89

81.06

34955.04

118.71

35073.75

Refer Note 2 in Schedule 21 for details of revaluation of certain freed assets

31.03.2004 31.03.2003"Rs.Lacs Rs.Lacs

SCHEDULE 13

INVESTMENTS

Long term investments (non trade - unquoted)

i) In shares of bodies corporate

ii) In a partnership firm (Rs.100)

iii) In units of UTI

iv) In Government securities

SCHEDULE 14

INVENTORIES

Stores and spares

Raw materials

Intermediates

Work in process

Finished goods

433.51

0.23

433.74

1117.91

624.66

2723.32

132.38

459.20

5057.47

431.00

135.00

0.23

566.23

1095.62

656.03

1743.72

104.00

462.56

4061.93

31



31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

SCHEDULE 15

SUNDRY DEBTORS(Unsecured, considered good)

Debts outstanding for a period of less than six months

SCHEDULE 16

CASH AND BANK BALANCES

Cash, cheques and stamps on hand

Balances with scheduled banks

on current accounts

on deposit accounts

Balance in Post Office Savings Bank Account

SCHEDULE 17

OTHER CURRENT ASSETS(Unsecured, considered good)

Interest accrued on deposits etc.

Claims receivable

SCHEDULE 18

LOANS AND ADVANCES(Unsecured, considered good)

Advances recoverable in cash or in kind or for value to be received

Deposits

Balances with customs and excise authorities

6262.47

6262.47

17.52

422.84

4.090.96

445.41

1.96

8.45

10.41

1518.60

1772.68

466.57

3757.85

SCHEDULE 19

LIABILITIES

Sundry creditors

Small scale industrial undertakings (SSls)

Others

Unclaimed dividends

Unclaimed matured deposits

Interest on unclaimed matured deposits

Interest accrued but not due on loans

Note:

There is no amount due to be credited to Investor Education and Protection Fund.

25.92

5624.75

39.70

2.87

0.31

131.17

5824.72

6215.60

6215.60

174.91

482.60

2.99

1.07

661.57

58.35

58.35

1710.31

1268.71

526.11

3505.13

41.86

5735.95

30.32

7.31

0.88

406.05

6222.37

32


ASANiVIAR

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

SCHEDULE 20

PROVISIONS

Provision for taxation (Current) 1429.67 1701.87

Less: Advance income tax and tax deducted at source (1329.08) (1610.56)

100.59 91.31

Provision for contingencies - 390.00

Provision for asset impairment 1250.00 1250.00

Proposed dividend - 351.82

Tax on dividend - 45.08

1350.59 2128.21

SCHEDULE 21

NOTES ON ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES:

1.1 Revenue recognition:

a) Sales are recognised on despatch of products to customers, which generally coincides with transferof ownership. Sales are net of returns, trade discounts and allowances.

b) Dividends are accounted when the right to receive is established.

1.2 Valuation of assets:

a) Inventories

Stores and spares : At weighted average cost

Raw materials : At weighted average cost

Intermediates

- Purchased : At weighted average cost

- Own manufactured : At cost

Work in process : At cost

Finished goods : At lower of cost and net realisable value

b) Fixed assets

- Revalued Land, Buildingsand Plant and Machineryof PVC division : At revalued value

- Others : At cost

c) Investments

Long term : At cost or lower of cost where there is any diminutionin value, other than temporary

1.3 Depreciation:

Depreciation on fixed assets is provided on a straight line basis at the rates (other than the assets statedbelow) specified in Schedule XIV of the Companies Act, 1956:

i) On all assets whose actual cost does not exceed Rs.5,000/- - 100%,

ii) On computers and peripherals and motor cars - 33.33%.

iii) On furniture and office equipment - 20%iv) On revalued buildings and plant and machinery - on the respective revalued amounts over the

balance useful life as determined by the valuers.

33



In the event the useful life of any fixed asset being assessed to be lower than the life derived fromSchedule XIV rates, the book value of such assets is charged off as depreciation.

1.4 New project expenses/ Borrowing costs

Salaries and related costs, travel and other direct costs relating to new projects incurred prior to theircommencement of operation which are in the process of implementation are capitalised.

Borrowing costs that are directly attributable to the acquisition, construction or production of aqualifying asset are capitalised as part of the cost of the asset.

1.5 Retirement benefits

Contributions to the Provident Fund are paid to funds maintained by the Commissioners and EmployeesProvident Fund Trusts and charged off to revenue.

The company has covered its gratuity and superannuation liabilities with Life Insurance Corporationof India (LIC) and the contributions to LIC are charged off to revenue. The contribution towards gratuityis based on actuarial valuation.

1.6 Foreign currency transactions

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of therespective transactions.

Foreign currency assets and liabilities are converted at contracted/ year end rates as applicable.

Exchange differences on settlement/ conversion are adjusted to:

i) Cost of fixed assets, if the foreign currency liability relates to fixed assets.

ii) Profit and Loss Account in other cases. Wherever forward contracts are entered into, the exchangedifference is dealt with in the Profit and Loss Account over the period of the contracts.

Realised gains or losses on cancellation of forward contracts are recognised in the Profit and LossAccount of the year in which they are cancelled except in case of forward exchange contracts relatingto liabilities incurred for acquiring fixed assets, in which case the gain or loss is adjusted to thecarrying cost of such assets.

1.7 Income tax

Provision for Income tax is made for both current and deferred taxes. Provision for current income taxis made on the assessable income at the tax rate applicable to the relevant assessment year. Deferredtax is accounted for by computing the tax effect of the timing difference which arise during the yearand reverse out in the subsequent periods. Deferred tax is calculated at currently applicable tax rates.Deferred tax assets are recognised only if there is virtual certainty that they will be realised.

1.8 Research and Development

Revenue expenditure on research and development is charged as an expense for the period in whichit is incurred.

2. Revaluation of fixed assets

Land, Buildings and Plant and Machinery of the PVC division (other than certain buildings andmachinery) were revalued as at October 1, 2002 on the governing principles of current cost afterconsidering depreciation upto the date of revaluation as per the valuer's report and the net increasein the book value arising from such revaluation aggregated to Rs.11 780.60 lacs.

Depreciation charge for the year ended March 31, 2003 is net of Rs.221.84 lacs adjusted againstrevaluation reserve.

34


ASASWVIAR

3. Scheme of Arrangement

3.1 Pursuant to the Scheme of Arrangement (Scheme) between the company, Sanmar Properties andInvestments Limited (SPIL), Sanmar Holdings Limited (SHL) and their respective shareholders asapproved by the shareholders of the company at their meeting held on February 6, 2004 andas approved by the High Court of Judicature at Madras vide its Order dated March 3, 2004, SPILwas amalgamated with the company with effect from November 2, 2003 (the Effective Date).Prior to the amalgamation SPIL was carrying on the business of investment in shares andsecurities. The amalgamation has been accounted under the "pooling of interest" method.

3.2 As per the Scheme the entire business of the properties, assets, investments and liabilities of SPIL(other than the investment and shipping business which was demerged into SHL with effect fromNovember 1, 2003 under the Scheme), rights, liberties, privileges and powers, investments,inventories, assets, stocks, securities and all assets of whatsoever nature, the amount requiredto be paid by SHL to SPIL in terms of the Scheme, benefits of all contracts, deeds and instruments,licences, trademarks, agreements and all other instruments of whatsoever kind, nature ordescription of SPIL and all debts, liabilities, duties and obligations of SPIL (other than thoserelating to the investment and shipping businesses as mentioned aforesaid) without any furtheract or deed have been transferred to and vested in the company at the values appearing in thebooks of accounts of SPIL, on the Effective Date.

3.3

3.4

The assets, liabilities and reserves of SPIL transferred to and vested in the company as set Outbelow have been dealt with in accordance with the Court Order.

Assets

Accounts receivable

Bank balance - Unpaid dividend account

Advance payment of tax and tax deducted at source

Liabilities

Unclaimed dividend

Provision for taxation

Net Assets

Represented by

(i) Issue and allotment of 1,27,99,730 equity shares ofRs.10 each as fully paid up to the shareholders of SPILin the proportion of one equity share in the companyfor every one equity share held by them in SPIL.

(ii) Reserves and Surplus

Capital Redemption Reserve

General Reserve

Profit and Loss Account

Rs.Lacs Rs.Lacs

5000.00

13.86

326.77 5340.63

13.86

338.11 351.97

4988.66

1279.97

2.95

981.50

2724.24 3708.69

4988.66

Although the allotment of shares under the Scheme was made only on April 20, 2004 the effectof the allotment has been reflected in these Accounts as the Effective Date of amalgamationunder the Scheme is November 2, 2003. The new equity shares allotted rank pari passu in allrespects with the existing equity shares of the company.

35



4. Information in respect of each class of goods manufactured:

CLASS

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

Notes:

1.

2.

3.

5.

OF GOODS

Caustic soda

Chlorine

Chloromethanes

Trichloroethylene

Polyvinyl chloride

Refrigerant gases

Hydrogen gas

Silicon ingots (Kgs.)

Silicon wafers ('000 Nos.)

Ethyl silicate

Bromine

Polysilicon (Kgs.)

Silicon tetrachloride

Installed Production Captive Opening OpeningCapacity Consumption/ Stock Stock

Samples etc ValueMT MT MT MT Rs.Lacs

66000(46200)

58400(40980)

22000(22000)

5000(5000)

60000(60000)

2500(2500)

1155(1155)

12000(12000)

2000(2000)

600(600)

120(120)

25000(25000)

600(600)

Licensed capacity is not applicable

Installed capacities are

Figures for the previous

as certified

63073(49799)

56153(43956)

33762(33822)

3517(3350)

62719(60812)

1176(1963)

1413(1064)

39663(22274)

920(1564)

341(401)

119(85)

(-)

518(552)

to any

by the

year are shown in

3594(3213)

55956(43951)

1848(2935)

7(15)

2(2)

10(24)

1320(989)

44705(18422)

_

(-)

(-)

_

(-)

(-)

524(538)

of the goods

management.

brackets.

1136(375)

107(155)

60(63)

77(114)

212(364)

66(86)

(-)

7698(3846)

38(22)

57(37)

_

(-)

(-)

31(17)

manufactured

123(42)

9(7)

13(11)

36(38)

107(150)

68(102)

(-)

242(120)

31(20)

55(31)

__

(-)

(-)

12(4)

by the

31

Closing ClosingStock Stock

ValueMT Rs.Lacs

807(1136)

241(107)

113(60)

38(77)

114(212)

30(66)

(-)

2656(7698)

110(38)

35(57)

2

(-)

W

25(31)

company.

.03.2004Rs.Lacs

94(123)

12(9)

32(13)

20(36)

59(107)

39(68)

(-)

107(242)

101(31)'

34(55)

2

(-)

(-) '

11(12)

31.03.2003Rs.Lacs

Value of imports on GIF basis:

Raw materials/ Intermediates

Components and spare

Capital goods

parts

8066.86

432.92

713.78

9213.56

4195.79

170.38

46.38

4412.55

36


SANMAB

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

6. Expenditure in foreign currency (on payment basis)

Interest

Commission

Others (travelling, subscription, membership etc.)

Value of raw materials and purchased intermediates consumed:

(a) Raw materials/ Purchased intermediates

Imported - C I F

- Duty etc.

Indigenous

(b) Consumption of raw materials and purchased

Molasses

Alcohol

Calcium carbide

Ethylene di chloride

Methanol

Chlorine

Emulsifiers

Anhydrous hydrofluoric acid

Polysilicon (Kgs.)

Burnt lime

Other raw materials

Earnings in foreign exchange:

FOB value of exports

Commission

31.03.2004Rs. % of

Lacs consumption

7650.90 42%

2204.89 12%

8566.64 46%

18422.43 100%

intermediates:

31.03.2004Quantity AmountMT/KL Rs.Lacs

85672 817.07

29400 3731.18

2772 629.87

43945 6906.66

11592 1842.36

19808 1512.95

926 355.24

508 267.21

22599 303.99

2258 90.40

1965.50

18422.43

52.60

55.58 46.12

35.95 1 7.49

91.53 116.21

31.03.2003Rs. % of

Lacs consumption

5458.41 34%

1237.95 8%

9118.10 58%

15814.46 100%

31.03.2003Quantity AmountMT/KL Rs.Lacs

74927 734.91

32860 3492.65

2561 553.60

35575 4103.48

11353 1327.22

32609' 2843.27

997 400.89

769 376.43

34678 ' 440.00

2337 94.75

1447.26

15814.46

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

2369.19 2965.37

0.22 0.20

2369.41 2965.57

37



31.03.2004Rs.Lacs

9. Computation of net profit in accordance with Section 349read with Section 198 of the Companies Act, 1956 andDirectors' remuneration

Profit before tax as per profit and loss account 822.41

Add: Directors' remuneration 79.00

Directors' sitting fees 2.86 81.86

904.27Less: Capital profit on sale of fixed assets as per Section 349 28.47

Profit under Section 349 of the Companies Act, 1956 875.80

Maximum managerial remuneration to Wholetime Directorspermitted under the Companies Act, 1956 87.58

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

Directors' remuneration for the year

'Salary 64.83 58.04

Commission - 36.00

Contribution to provident and other funds 6.76 6.20

Perquisites 7.41 7.50

79.00 107.74

10. Auditors' remuneration and expenses:

For statutory audit 13.00 11.50'

For tax audit 2.50 2.25

For other services 7.50 5.50

Service tax 1.84 0.96

Expenses 0.25 0.30

25.09 20.51

11. Sitting fees paid to Directors 2.86 2.72

12. Security/ Redemption particulars:

A. Debenturesi) 410 - 12.50% Secured redeemable non-convertible debentures - XIII Series of Rs.5,00,000

each aggregating to Rs.2050 lacs are redeemable at par in three annual instalments of Rs.300lacs, Rs.750 lacs and Rs.1000 lacs commencing from 30th April 2004.

ii) The above debentures are secured by first pari passu charge on land, buildings, plant andmachinery subject to prior charge on assets referred to in C below.

iii) Debentures aggregating to Rs.10450 lacs were redeemed during the year.

B. Term loans from banksi) Loan amounting to Rs.1500 lacs is secured by second charge on land, buildings, plant and

machinery,ii) Loan amounting to Rs.2500 lacs is secured by way of guarantee given by another bank which

in turn is secured by first pari passu charge on land, buildings, plant and machinery subject toprior charge on assets referred to in C below,

iii) Loans amounting to Rs.2171.97 lacs are secured by first pari passu charge on land, buildings,plant and machinery subject to prior charge on assets referred to in C below.

38


ASANIVIAR

C. Term loans from others are secured by equitable mortgage of specific land and buildings.

D. Cash credit and working capital demand loans from banks are secured by a first charge oninventories and book debts.

13. Details of investments:

3T.03.2004Face value No. ofper share shares Amount

Rs. Rs.Lacs

31.03.2003Face value No. ofper share shares Amount

Rs. Rs.Lacs

A. Investment in shares ofbodies corporate (unquoted)

Fully paid up equity shares

Chemplast Chlorochemicals Limited


B. Investment in capital of a Partnership

Partners' Name

Asco (India) Limited

BS&B Safety Systems (India) Limited



Fisher Sanmar Limited

Flowserve Sanmar Limited

Sanmar Engineering Services Limited

Sanmar Foundries Limited

Sanmar Shipping Limited

Sanmar Speciality Chemicals Limited

Sanmar Weighing Systems Limited

Sensortronics Sanmar Limited

Tyco Sanmar Limited

Xomox Sanmar Limited

C. Investment in units

Units of Unit Trust of India

Institutional Investors Special fundUnit scheme 98

D. Investment in Government securitiesNational Defence/ savings certificate

10 25,000

10 43,10,000

2.51

431.00

433.51

10 43,10,000 431.00

431.00

firm:- Cathedral Corporate Finance

Profit sharing ratio

Profits are shared

by partners with

positive aggregate

daily balances in

the proportion of

such balances.

Losses are

shared equally by

partners.

AmountRs.

100

100

100

100

100

100

100

100

100

100

100

100

100

100

1400

0.23

433.74

10 13,50,000 135.00

0.23

566.23

Note:

25,000 Equity Shares of Rs.10 each in Chemplast Chlorochemicals Limited were purchased and sold during the year.

39



14.

15.

16.

17.

18.

19.

20.

21.

22.

Contingent liabilities

(a) Claims against the company not acknowledged as debts

(b) In respect of guarantees to banks and financial institutionsfor loans/ obligations granted by them to associate companies

Future lease commitments

Estimated amount of contracts remaining to be executedon capital account and not provided for

Details of miscellaneous expenditure and basis of amortisation

(a) Revenue expenditure on implementation of ERP

(b) Ancillary costs related to borrowings

(c) Others

Basis of amortisation

(a) Over a period of three years.

(b) Over the currency of the borrowing commencing from thefirst withdrawal of amount borrowed.

Deferred taxation

Deferred tax liability is on account of:

- Timing difference relating to depreciation

- Others

31.03.2004 31.03.2003Rs.Lacs Rs.Lacs

549.00

147.41

80.00

1450.00

19.82

97.71

117.53

5224.00

(324.00)

4900.00

1540.11

9471.96

143.87

51.00

21.52

21.52

5277.00

(547.00)

4730.00

There are no SSIs in respect of whom the company's dues are outstanding for more than 30 days. Thisinformation and that disclosed in Schedule 19 have been determined to the extent such parties havebeen identified on the basis of information available with the company.

Expenses deferred to be recognised in subsequent accounting periodin respect of forward exchange contracts

Interest on fixed loans is net of Rs.8.83 lacs(previous year - Nil) being interest capitalised.

Earnings per share

Profit after taxation as per Profit and Loss Account

Less: Preference dividend and tax thereon

31.03.2004Rs.Lacs

13.55

31,03.2003Rs.Lacs

.55.28

462.41240.06

Adjusted profit

Weighted average number of EquityShares outstanding

Earnings per share (In Rupees)

(A)

(B)

(A)/ (B)

222.35

4,04,62,977

0.55

2063.36

295.98

1767.38

3,51,82,214

5.02

40


23. Segment Reporting

The company has considered business segment as the primary segment. Segments have been identifiedtaking into account the nature of the products, the differing risks and returns, the organisation structureand internal reporting system.

The company caters mainly to the needs of the domestic market. The export sales is not significantin the context of total sales. As such there are no reportable geographical segments.

Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respectiveamounts identifiable to each of the segments as also amount allocated on a reasonable basis.

Assets and Liabilities that cannot be allocated between the segments are shown as part of unallocatedcorporate assets and liabilities respectively.

Inter segment transfer pricing policy - all inter segment transfers are at cost.

INFORMATION ABOUT THE PRIMARY BUSINESS SEGMENTS

Rs.Lacs

REVENUE

External Sales(Net of excise duty)

Add: Inter Segment Sales

Total Segment Revenue

Segment Result(Profit before interest and tax)

Interest and finance charges

Profit before tax

Provision for tax

Current

Deferred

Profit after tax

OTHER INFORMATION

Segment Assets

Unallocated Corporate Assets

Total Assets

Segment Liabilities

Unallocated Corporate Liabilities

Total Liabilities

Capita] Expenditure

Depreciation

PVC

2003-04

30687.84

259.61

30947.45

2122.55

35940.26

3211.44

4144.38

1760.83

2002-03

28585.02

162.32

28747.34

3753.57

31415.85

3114.86

1044.02

1195.37

Chlorochemicals

2003-04

19207.20

552.75

19759.95

2217.14

15383.82

3689.23

170.24

1506.02

2002-03

17919.37

477.11

1 8396.48

1710.58

17631.11

4302.94

227.00

975.26

Others

2003-04

_

-

-

23.25

433.74

-

-

2002-03

130.20

-

130.20

162.75

566.23

-

3.10

Total

2003-04

49895.04

4362.94

3540.53

822.41

190.00

170.00

462.41

51757.82

443.06

52200.88

6900.67

26613.29

33513.96

4314.62

3266.85

2002-03

" 46634.59

5626,90

3181.54

2445.36

481.00

(•99.00)

2063.36

49613.19,

550.88

50164.07

7417.80

29070.36

36488.16

1271.02

2173.73

41



24. Related party disclosures

(a) List of parties where control existsN SankarSanmar Holdings LimitedCabot Sanmar Limited

Also Key Management PersonnelHolding CompanyThis company holds 50% of equity capital of CabotSanmar Limited

(b) Associates/ Fellow SubsidiariesAMP Sanmar Life Insurance Company LimitedAsco (India) LimitedBS&B Safety Systems (India) LimitedCathedral Corporate FinanceChemplast Chlorochemicals LimitedFisher Sanmar LimitedFlowserve Sanmar LimitedFortis Investments (Beta) LimitedIndchem Software Technologies LimitedKalamkriya Limited

(c) Key Management PersonnelP S Jayaraman

(d) Relatives of Key Management PersonnelN Kumar - Brother of N SankarVijay Sankar - Son of N Sankar

(e) List of transactions with related parties

Sanmar Foundries LimitedSanmar Group Corporate FinanceSanmar Properties and Investments LimitedSanmar Realty LimitedSanmar Shipping LimitedSanmar Speciality Chemicals LimitedSanmar Weighing Systems LimitedTyco Sanmar LimitedXomox Sanmar Limited

Rs.Lacs

Description

Transactions during the yearPurchasesSalesShip earningsCommission receivedShare of income frompartnership firmInterest received/ (paid)Expenses recoveredRent received/ (paid)Lease rent paidFinance Charges paidSale/ (Purchase) of SharesDeposits made/ (received)Advances given/ (received)RemunerationSitting FeesGuarantees given/ (withdrawn)

Balances as at end of the yearLoans and AdvancesSundry DebtorsSundry CreditorsGuarantees outstanding

Parties wherecontrol exists

31.03.2004

-

373.25-

61.25

-

(21.79)2.10

10.90--2.51-

-51.58-

-

0.328.12-

-

31.03.2003

0.89373.42

-46.75

-

140.42

-10.63-

---

(2500.00)87.02--

-

55.56-

-

Associates/ FellowSubsidiaries

31.03.2004

191.33107.31

--

6.51

-88.00

(73.97)

247.7515.51(5.00)

18.11

--

-

(9324.55)

959.71

3.34101.19147.41

31.03.2003

194.10120.31130.20-

17.42

-45.29

4.87247.75

22.62-

(20.98)

--

-(5828.04)

1156.2013.2084.13

9471.96

Key ManagementPersonnel

and Relatives

31.03.2004

--

--

-

---7.20

---

-27.42

0.76

-

--

-

-

31.03.2003

--

--

-

-- -

-6.90----

20.720.81-

--

-

-

Also refer Note 3 for adjustment arising from Scheme.


ASANMAR

25.Balance Sheet abstract and company's general business profileI

V

Registration DetailsRegistration No.Balance Sheet DateCapital raised during the year (Amount in Rs.Thousands)

State Code[T8~

Rights Issue

Private Placement *I 1 2 7 9 9 7 I

* Refer Note 3Position of Mobilisation and Deployment of Funds(Amount in Rs.Thousands)

Total Liabi l i t ies

Sources of Funds

Total Assets

Application of Funds

Paid up Capital

Secured Loans

Deferred Tax LiabiIity

Net Fixed Assets

Net Current Assets

Accumulated Losses

IV Performance of the company (Amount in Rs.Thousands)Turnover (including other income)

+/ - Profit/ Loss Before Tax

Earning per equity share in Rs.

+/ - Profit/ Loss After Tax

390410

Generic Names of Three Principal Products/ Services of company(As per monetary terms)Item Code No. (ITC Code)Product DescriptionItem Code No. (ITC Code)Product DescriptionItem Code No. (ITC Code)

PVC resins290311

Chloromethanes291510

Product Description Caustic soda26. Previous year's figures have been regrouped wherever necessary.

(Signatories to Schedules 1 to 21)N. SANKAR

Chairman

P.S. JAYARAMANManaging Director

ChennaiApril 27, 2004

P.U. ARAVINDSecretary





43



Cash Flow Statement for the year ended March 31, 2004

A. CASH FLOW FROM OPERATING ACTIVITIES:NET PROFIT BEFORE TAX

Adjustments for:Add: Depreciation

Interest and finance chargesLoss on sale of assets/ Investments

Less: Profit on sale of assets/ InvestmentsInterest/ Dividend/ Share of profit

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGESAdjustments for changes in

Trade and other receivablesInventoriesTrade and other payables

Compensation received from Multilateral Fund (directlycredited to Special reserve)

CASH GENERATED FROM OPERATIONSDirect taxes paid (Net)Deferred revenue expenditure (Net)

NET CASH FROM OPERATING ACTIVITIESB. CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of fixed assetsSale of investmentsPurchase of investmentsSale of fixed assetsInterest received/ Share of profitDividend received

NET CASH USED IN INVESTING ACTIVITIESC. CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from issue of preference sharesRedemption of preference shares(Increase)/ decrease in dues from subsidiaryProceeds from long term borrowingsRepayment of long term borrowingsProceeds/ (Repayment) of short term borrowings (Net)Interest and finance charges paidDividends/ Tax on dividends paid

NET CASH USED IN FINANCING ACTIVITIESD. Accounts receivable taken over on amalgamation, realised

(Refer Note 3 in Schedule 21)NET INCREASE IN CASH AND CASH EQUIVALENTS (A + B + C + D)

Cash and cash equivalents at the beginning of the yearCash and cash equivalents at the end of the year

Note: Figures in brackets indicate cash outflowThis is the Cash Flow Statement referred to in our report of even date

N. SANKARChairman

S. DATTAPartner(Membership No. F14128) P.S. JAYARAMANFor and on behalf of Managing DirectorPRICE WATERHOUSE & Co.Chartered AccountantsChennai P.U. ARAVINDApril 27, 2004 Secretary

31.03.2004Rs.Lacs

822.41

3266.853595.82

0.227685.30

39.5878.54

7567.18

(262.57)(995.54)(493.47)

5815.60(189.85)(117.53)

5508.22

(4314.62)137.52

(5.03), 44.91

72.7116.74

(4047.77)

(200.00)

8250.10(11304.08)

1085.03(3870.70)

(636.96)

5000.00

(216.16)661.57445.41(216.16)

31.03.2003Rs.Lacs

2445.36

2173.733366.62

7.377993.08

191.27220.73

7581.08

3332.121682.14

(1052.65)112.27

11654.96(391.78)(211.06)

11052.12

(1271.02)

-202.86185.08 •

18.23(864.85)

1290.00(1990.00)(3977.40)4000.00(5078.55)

454.79(3407.95)(1703.27)

(6676.61) (10412.38)

(225.11)886.68661.57(225.11)


ADIT JAINP.N. KAPADIAM.K. KUMAR.



44


Chemplast Sanmar Limited SANIVIAR

Notice of Annual General Meeting

The Twentieth Annual General Meeting of Chemplast Sanmar Limited will be held on Tuesday, the 8th June 2004at 10.30 A.M at Sathguru Gnanananda Hall, Narada Gana Sabha Trust Complex, 314 T T K Road, Chennai600 018 to transact the following :

ORDINARY BUSINESS

I . To receive, consider and adopt the Directors' Report, the audited Balance Sheet as at 31st March 2004, theProfit and Loss Account for the year ended 31st March 2004 and the Auditors' Report thereon.

2. To declare Preference Dividend.

3. To appoint a Director in the place of Mr N Kumar who retires at this meeting and is eligible for reappointment.

4. To appoint a Director in the place of Mr Vijay Sankar who retires at this meeting and is eligible forreappointment.

5. To appoint a Director in the place of Mr N Srinivasan who retires at this meeting and is eligible forreappointment.

6. To appoint Auditors and fix their remuneration.

Price Waterhouse & Co., Chartered Accountants, Chennai are the retiring auditors and are eligible forreappointment.

SPECIAL BUSINESS:

7. To appoint Mr Adit Jain as a Director of the company liable to retire by rotation and to consider and if thoughtfit, to pass the following resolution, of which notice has been received from a member under Section 257of the Companies Act, 1 956, as an ordinary resolution, with or without modification:

"RESOLVED that Mr Adit Jain be and is hereby appointed a Director of the company liable to retire byrotation."

8. To consider and if thought fit, to pass the following resolution as a special resolution with or withoutmodification:

"RESOLVED that pursuant to the provisions of Sections 198, 309 and 310 read with Schedule XIII of theCompanies Act, 1956 and other applicable provisions, if any, of the said Act and in partial modification ofthe resolution passed in the Annual General Meeting of the company held on 29th August 2000 approvingthe appointment and remuneration of Mr P S Jayaraman, in the event of loss or inadequacy of profits, in anyfinancial year, the Board of Directors of the company be and are hereby authorised to determine theremuneration payable to Mr PS Jayaraman, Managing Director, with effect from 1st April 2003 till the expiryof his present term of office (i.e. till 31 st August 2005) subject to maximum limits prescribed in ScheduleXIII of the Companies Act, 1956."

"RESOLVED FURTHER that the Board of Directors of the company be and they are hereby authorised todecide on any issue arising out of or incidental thereto in implementing the above resolution."

Notes:

a) The relative Explanatory Statement pursuant to Section 1 73 of the Companies Act, 1956 in respect ofitems No.7 and 8 is annexed hereto.

b) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY AND VOTEINSTEAD OF HIMSELF. A PROXY NEED NOT BE A MEMBER. THE PROXY FORM DULY COMPLETEDMUST BE RETURNED SO AS TO REACH THE REGISTERED OFFICE OF THE COMPANY NOT LESSTHAN 48 HOURS BEFORE THE TIME OF THE COMMENCEMENT OF THE AFORESAID MEETING.



c) The Register of Members of the company will remain closed from Thursday, the 3rd June 2004 toTuesday, the 8th June 2004, both days inclusive.

d) The company has appointed Integrated Enterprises (India) Limited as Registrar and Share TransferAgent. Shareholders are requested to send all requests for transfer of shares, dematerialisation of shares,change in address, etc to the company's Registrar and Transfer Agent at the following address:

Integrated Enterprises (India) LimitedSecond Floor, Kences Towers1 Ramakrishna Street, North Usman RoadT Nagar, Chennai 600 017Phone No.28140801 - 03 ; Fax No.28142479E-mail: [email protected]

Registered Office:9, Cathedral Road (By order of the Board)Chennai 600 086 P.U. ARAVINDApril 27, 2004 Secretary


ASANiViAR

Annexure to NoticeExplanatory Statement annexed to the Notice of the,Twentieth Annual General Meeting of the company asrequired under Section 1 73(2) of the Companies Act, 1956.

Item No.7Mr Adit Jain who was appointed as a director in casual vacancy caused by the resignation of Mr DeepakM Satwaiekar holds office upto this Annual General Meeting and is eligible for appointment.Notice under Section 257 of the Companies Act, 1956 has been received from a member proposing theappointment of Mr Adit Jain as a director of the company. Accordingly, resolution under Item No.7 of the Noticeis submitted for the approval of the Shareholders.Mr Adit Jain is interested in the resolution.

Item No.8At the Annual General Meeting of the company held on 29th August 2000, the company approved appointmentof Mr P S Jayaraman, Managing Director for a period of five years from 1 st September 2000 on the remunerationand other terms set out in the said resolution. By the said resolution the Board of Directors was also authorisedto modify the remuneration as may be permissible under Schedule XIII of the Companies Act, 1956. The Boardof Directors at its meeting held on 12th January 2004, approved the company determining the minimumremuneration payable to him in the event of loss or inadequacy of profits with effect from 1st April 2003 inaccordance with Schedule XIII of the Companies Act, 1956.In view of amendments to Schedule XIII with effect from 16th January 2002, it is proposed to obtain approvalof the shareholders by passing a special resolution authorising the Board of Directors to decide remunerationpayable to Mr P S Jayaraman in the event of absence or inadequacy of profit.The current monthly remuneration of Mr PS Jayaraman is Rs. 1,00,000 and perquisites applicable to other seniormanagement employees of the company, along with commission on profits to be decided from year to year bythe Board of Directors of the company.Mr PS Jayaraman is interested in the resolution as it relates to payment of remuneration to him. None of the otherDirectors of the company is in any way concerned or interested in the resolution.This explanatory statement together with the accompanying notice may be treated as an abstract of the changesto the remuneration payable to Mr P S Jayaraman and Memorandum of interest under Section 302 (7) of theCompanies Act, 1956.Mr Jayaraman holds directorships/committee memberships in the following public companies in addition to hisdirectorship in Chemplast Sanmar Limited.

1. Cabot Sanmar Limited Director2. Chemplast Chlorochemicals Limited Director3. Mercury Infrastructure Limited Director

Committee Position

1. Chemplast Sanmar Limited Committee of Directors - MemberShareholders/ Investors/Grievance Committee - Member

2. Cabot Sanmar Limited Audit Committee - Member

Information required under Clause (iv) of proviso to paragraph 1(B) of Section 2 of Part II ofSchedule XIII of the Companies Act, 1956.1. General Information(1) Nature of Industry

The company is engaged in the manufacture and sale of Poly Vinyl Chloride and Chlorochemicals.

(2) Date or expected date of commencement of commercial production.The company/ its predecessors have been in business for over 30 years.

(3) In case of new companies, expected date of commencement of activities.Not applicable, as the company is an existing company.



(4) Financial performance based on given indicators(Rs. Crores)

Sales (Gross)Profit before taxProfit after taxShareholders' fundsRate of dividend (%)Net profit as computed under Section 1 98

31.03.2002507

33

21

129

40

33

31.03.2003534

24

21

137

10

. 24

31.03.2004574

8

5

187-

9

(5)

(6)

(1)

(2)

(3)

(4)

(5)

(7)

III.

Export performance and net foreign exchange collaborations

The FOB Value of the company's exports was Rs.25 crores in 2001 -02; Rs.30 crores in 2002-03 and Rs.24crores in 2003-04.

Foreign investments or collaborators, if any

The company in collaboration with Cabot Corporation, USA has established a 50/50 Joint Venture-CabotSanmar Limited which manufactures Fumed Silica. The company Cabot Sanmar Limited commencedcommercial operations in June 1998 and is a profit making company.

Information about the appointee:

Background details:

Mr P S Jayaraman, 54, a Chartered Accountant with over 30 years of industrial experience in variedcapacities. He has been with Sanmar Group over the past eight years and has been the Managing Directorof Chemplast Sanmar Limited since 1st September 2000.

Past remuneration

For the financial year 2003-04 Mr Jayaraman's total remuneration was Rs.27.42 Lacs.

Recognition or awards/Job profile and his suitability

Mr Jayaraman managed the company ably over the last 4 years, despite the cyclically of the business inwhich the company is engaged. He is currently spearheading the expansion programs of the company. Inthe opinion of the Board, he is eminently suited for the position he holds.

Remuneration proposed

The remuneration of Mr Jayaraman is set out above.

Comparative remuneration profile with respect to industry, size of the company, profile of the position andperson. "

The substantive remuneration of Mr Jayaraman is not out of tune with the remuneration in similar sizedindustries in same segment of business.

Pecuniary relationship directly or indirectly with the company, or relationship with managerial personnel,if any.

Other than the remuneration stated above, Mr Jayaraman has no other pecuniary relationship directly orindirectly with the company.

Other information

The business that the company is engaged in is highly cyclical. Despite the cyclically, the company hasbeen earning reasonable profits over the last 25 years. The company's current expansion programs areexpected to result in an increase in long term shareholder value.

Registered Office:9 Cathedral RoadChennai 600 086April 27, 2004

(By order of the Board)P.U. ARAVIND

Secretary


SAIMMAR Chemplast Sanmar LimitedRegistered Office : 9, Cathedral Road, Chennai 600 086

ATTENDANCE SLIP

PLEASE COMPLETE THIS ATTENDANCE SLIP BEFORE YOU COME TO THE MEETING AND HAND IT OVER AT THE

ENTRANCE OF THE MEETING HALL.

1. Name of the attending Member

(In Block Letters)

2. Register Folio No./ Client ID No. : D.P. ID No.: ...

3. Name of Proxy (In Block Letters)

(To he filled if the Proxy

attends instead of the member)

No.of Shares held...

I hereby record my presence at the Twentieth Annual General Meeting at Sathguru Gnanananda Hall, Narada Gana Sabha Trust

Complex, 314, T.T.K. Road, Chennai - 600 018 on Tuesday, the 8th June 2004 at 10.30 a.m.

Member's/ Proxy's Signature

SANMAR Chemplast Sanmar LimitedRegistered Office : 9, Cathedral Road, Chennai 600 086

PROXY FORM

I/ We of

being a member/ members of CHEMPLAST SANMAR LIMITED do hereby appoint

of (or fail ing him

of ) as my/our

proxy and to vote for me/ us on my/ our behalf at the Annual General Meeting of the company to be held on Tuesday,

the 8th June 2004 at 10.30 a.m. and at any adjournment thereof.

Signed this day of 2004

Signature .

Folio Number/ Client ID No.:

D.P. ID No.:

Affix15 P.

RevenueStamp

Note : The proxy form duly completed 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. A member entitled to attend and vote at the meeting is entitledto appoint a proxy to attend and vote instead of himself and the proxy need not be a member.

SANMAR Annual Report 2004 - Morningstar, Inc.

Documents

Transcript of SANMAR Annual Report 2004 - Morningstar, Inc.