Apar Industries Limited

17th Annual Report 2005-2006

BOARD OF DIRECTORS
Dr. N. D. Desai Chairman
Mr. V. A. Gore
Dr. N. K. Thingalaya
Mr. F. B. Virani
Mr. M. N. Kamat Nominee of IDBI
Mr. Kushal N. Desai Managing Director
Mr. C. N. Desai Joint Managing Director
Mr. M. M. Patel Director (Polymers)
Mr. H. N. Shah
Mr. Richard Owen Pyvis
Ms. Josephine Price Alternate to
Mr. Richard Owen Pyvis

AUDIT COMMITTEE
Mr. V. A. Gore Chairman
Dr. N. K. Thingalaya
Mr. F. B. Virani
Mr. Richard Owen Pyvis

COMPANY SECRETARY
Mr. D. C. Patel
CONTENTS Page No.
AUDITORS
M/s. RSM & Company Financial Highlights .................... 2
Chartered Accountants,
Mumbai Notice ......................................... 3
Directors' Report ........................ 7
BANKERS
Corporate Governance Report ... 16
Union Bank of India
Syndicate Bank Auditors' Report ......................... 22
ING-Vysya Bank Ltd.
The Dhanlakshmi Bank Ltd. Balance Sheet ............................ 24
Indian Bank Profit & Loss Account ................ 25
IDBI Limited
ICICI Bank Ltd. Schedules to Accounts .............. 26
State Bank of India Cash Flow Statement................. 47
REGISTERED OFFICE Information about Subsidiary....... 48
301, Panorama Complex, Consolidated Accounts :
R. C. Dutt Road,
Vadodara - 390 007. Auditors' Report ......................... 49
Balance Sheet ............................ 49
CORPORATE OFFICE
Apar House, Corporate Park, Profit & Loss Account ................ 50
Sion - Trombay Road, Chembur, Schedules to Accounts .............. 50
Mumbai - 400 071.
Apar Industries Limited
Financial Highlights for last Five Years
(Rupees in Millions)

Particulars 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002

PROFIT AND LOSS ACCOUNT DATA :

Sales (Net of Excise) 10,910 8,367 6,394 5,560 5,299

% of Growth 30 31 15 5 —
Exports 1,742 1,282 1,503 1,509 1,595
Materials, Operating and other cost 10,246 7,705 6,167 4,980 4,694
Employee cost 153 149 159 147 148
Depreciation 86 86 84 83 75
Interest and finance charges 202 141 150 158 186
Exchange Rate difference (Net) Debit/(Credit) 79 (9) (99) (25) 29
Profit before tax & exceptional items 523 341 318 194 173
% of Growth 53 7 64 12 –
Taxation 106 27 23 40 58
Exceptional items 17 12 – – –
Profit after tax (PAT) 400 302 295 154 115
% of Growth 32 2 92 34 –

BALANCE SHEET DATA :

Share Capital 846 239 263 386 536

Reserves & Surplus 960 675 448 287 212
Net worth 1,806 914 711 673 748
Loan Funds 1,056 1,454 1,526 1,436 1,417
Deferred Tax (Net) 135 134 146 166 167
Total Liabilities 2,997 2,502 2,383 2,275 2,332
Gross Block 1,880 1,639 1,571 1,532 1,435
Net Block 1,149 961 889 904 885
Investments 6 15 6 2 –
Net Current assets 1,790 1,493 1,473 1,272 1,324
Miscellaneous Expenditure 52 33 15 97 123
(to the extent not written off or adjusted)

Total Assets 2,997 2,502 2,383 2,275 2,332

KEY RATIOS :

PAT to Sales (%) 3.67 3.61 4.61 2.77 2.17

Return on Net Worth (%) 22.80 34.28 42.38 26.74 18.40
Asset Turns (Revenue to total Assets) 3.64 3.34 2.68 2.44 2.27
Return on Capital Employed (%) 27.90 20.60 22.20 18.00 18.90
Debt to Equity Ratio 0.33 0.84 1.28 0.87 1.01
Earning per Equity Share (Basic) Rs. 17.66 14.43 13.86 6.47 3.97
Rate of dividend % p.a. 35.00% 30.00% 22.50% 15.00% 10.00%
Book value per Equity Share Rs. 53.66 42.39 33.44 27.72 30.04
Share Price as on 31st March (BSE) Rs. 245.90 119.85 40.00 15.00 10.35

2
 17th Annual Report 2005-2006
NOTICE
NOTICE is hereby given that the SEVENTEENTH Annual General The company will also pay for utilities like power, gas,
Meeting of the Equity Shareholders of APAR INDUSTRIES LIMITED water, staff, etc., used/availed by the said adviser at
will be held at the Auditorium of the Vanijya Bhavan, Central Gujarat his residence.
Chamber of Commerce, Race Course Circle, Vadodara - (b) The Company shall incur all expenses relating to his
390 007 on Thursday, the 10th August, 2006 at 10.30 A.M. to travel etc., for his rendering professional services to
transact the following business : the Company.
ORDINARY BUSINESS : (c) The facility of Company maintained Motor Car with driver
1. To receive, consider and adopt Balance Sheet as at 31st March, will be provided to him for use in connection with
2006 and Profit and Loss Account for the year ended on that rendering professional services to the Company. For
date together with Reports of Directors and Auditors thereon. possible use of the said vehicle for private or personal
2. To confirm declaration of Interim Dividends on Equity Shares and purposes, the Company will recover from him a sum of
Participating Preference Shares and declare dividend / final dividend Rs. 2,200/- per month.
on Participating Preference Shares and Equity Shares of the (d) The Company will provide telephone connections at his
Company. residence - Personal long distance telephone calls for
3. To appoint a Director in place of Dr. N. K. Thingalaya, who retires private purposes would be recovered from him.
by rotation and being eligible, offers himself for re-appointment. 9. To consider and if thought fit, to pass with or without modification,
4. To appoint a Director in place of Mr. F. B. Virani, who retires by the following Resolution as a Special Resolution :
rotation and being eligible, offers himself for re-appointment. “RESOLVED THAT pursuant to provisions of Section 198 and 309
5. To appoint a Director in place of Mr. Kushal N. Desai, who retires of the Companies Act, 1956 and Article 140(b) of the Articles of
by rotation and being eligible, offers himself for re-appointment. Association of the Company, the consent of the Shareholders be
and is hereby accorded for payment of Commission to Dr. N. D.
6. To appoint Auditors of the Company and to fix their remuneration. Desai, Non-Executive Chairman of the Company, w.e.f. 1st
SPECIAL BUSINESS : February, 2006 for a period of five years, for each financial year
commencing from 2005-06 at a rate not exceeding 1% of Net
7. To consider and if thought fit, to pass with or without modification,
Profits of the Company, as computed under Section 198 of the
the following Resolution as an Ordinary Resolution :
Companies Act, and he will separately be eligible to receive the
“RESOLVED THAT pursuant to the provisions of Section 260 of remuneration and facilities for the professional services rendered
the Companies Act, 1956, Mr. Richard Owen Pyvis be and is hereby / to be rendered by him to the Company as Technical Advisor /
appointed as a Director of the Company, liable to retire by rotation.” Management Consultant and also the sitting fees for attending the
8. To consider and if thought fit, to pass with or without modification, Meetings of the Board of Directors of the Company or any Committee
the following Resolution as a Special Resolution : thereof.”

“RESOLVED THAT pursuant to the provisions of Sections 309, 10. To consider and if thought fit, to pass with or without modification,
314 and other applicable provisions, if any, of the Companies Act, the following Resolution as an Ordinary Resolution :
1956, Dr. N. D. Desai, a Technocrat and Non-Executive Chairman “RESOLVED THAT in supersession of Resolution passed at the
of the Company who possesses the requisite qualifications for Extra-Ordinary General Meeting of the Members of the Company
practice of the profession, be and is hereby appointed as Technical held on 8th June, 1999, the consent of the Company be and is
Advisor / Management Consultant of the Company w.e.f. 1 st hereby accorded in terms of Section 293(1)(d) and other applicable
February, 2006 for a period of five years and he be paid provisions, if any, of the Companies Act, 1956 to the Board of
remuneration and provided facilities for his professional services Directors of the Company for borrowing in Indian Rupees and / or
rendered / to be rendered to the Company as Technical Advisor / foreign currencies for the purposes of business of the Company
Management Consultant, w.e.f. 1st February, 2006, in the manner from time to time, any sum or sums of money which together with
as laid down below: the monies already borrowed by the Company (apart from
temporary loans obtained or to be obtained from the Company’s
i) Consultancy Fee : bankers in the ordinary course of business) may exceed the
(a) Fixed Fees of Rs. 25,00,000/- per annum payable in aggregate of the paid-up capital and free reserves of the Company,
monthly equal installments for consultancy with such that is to say, reserves not set apart for any specific purpose,
rise as may be decided by the Board of Directors from provided that the total amount so borrowed by the Board shall not
time to time. at any time, exceed the sum of Rs. 300 Crores ( Three Hundred
(b) Such further fees as the Board may sanction for specific Crores) only.”
professional assignment, which he may accept as per 11. To consider and if thought fit, to pass with or without modification,
the Company’s requirement. the following Resolution as an Ordinary Resolution :
ii) Facilities: In addition to the above fees, he will be provided
“RESOLVED THAT the consent of the Company be and is
the following facilities which shall be revised by the Board of
hereby accorded in terms of Section 293(1)(a) and other applicable
Directors from time to time for facilitating him in the performance
provisions, if any, of the Companies Act, 1956, to the Board of
of professional services to the Company :
Directors of the Company for creating mortgages, charges and
(a) He will be provided suitable residential accommodation hypothecations in addition to the existing mortgages, charges and
and the expenditure for taxes, levies, repairs, hypothecations created by the Company, as may be necessary
maintenance, society charges, security charges etc., on all or such of the assets / properties of the Company both
will be incurred by the Company. present and future, in such manner as the Board may decide,

3
Apar Industries Limited
together with power to take over the management of the Company Depository Participant (DP). Members are also requested to furnish
in certain events, to or in favour of the Indian or foreign Financial the bank account details along with MICR code of their bank to
Institutions, Investment Institutions and their subsidiaries, Banks, their Depository Participant so as to enable the Company to ensure
Mutual Funds, Trusts and other bodies corporate, (hereinafter payment of dividend through Electronic Clearing Service (ECS).
referred to as the "Lending Agencies"), Trustees for the holders 6. The details of Directors seeking appointment / re-appointment at
of debentures / bonds and / or other instruments which may be the ensuing Annual General Meeting as required in terms of Clause
issued on private placement basis or otherwise, to secure rupee 49 of the Listing Agreement of the Stock Exchanges is also annexed
term loans / foreign currency loans, financial assistance / facilities, hereto and forming part of the Notice.
debentures, bonds and other instruments together with interest
thereon at the agreed rates, further interest, liquidated damages, 7. Consequent upon the introduction of Section 205C by the
premium on pre-payment or on redemption, costs, charges, Companies (Amendment) Act, 1999, the amount of dividend
expenses and all other moneys payable by the Company to the remaining unpaid or unclaimed for a period of seven years from
Trustees under the Trust Deed and to the Lending Agencies under the date of its transfer to the unpaid Dividend Account of the
their respective Agreements/Loan Agreements/ Debenture Trust Company is required to be transferred to the Investor Education
Deeds to be entered into by the Company in respect of the said and Protection Fund set up by the Government of India and no
borrowings from time to time. payment shall be made in respect of any such claims by the Fund.
FURTHER RESOLVED THAT the Board of Directors of the Company The unpaid / unclaimed dividend of the Company for the years
be and is hereby authorised to finalise with the Lending Agencies 1997-98 and 1998-99 is due for transfer to the said fund in the
/ Trustees, the documents for creating the aforesaid mortgages, month of July, 2006 and November, 2006 respectively.
charges, and/or hypothecations and to accept any modifications Members who have not yet encashed their warrant(s) are
to, or to modify, alter or vary, the terms and conditions of the requested to make their claims to the Company without any delay.
aforesaid documents and to do all such acts, deeds and things
8 (a) As stated in Para No. 11(b) of the Directors’ Report, the
and to execute all such documents from time to time as may be
Company has received an approval under Section 212(8) of
necessary for giving effect to the above Resolution.”
the Companies Act, 1956 from the Ministry of Company Affairs,
Registered Office : By Order of the Board Government of India vide its letter dated 23rd February, 2006,
301, Panorama Complex, D. C. Patel exempting the Company from attaching the Annual Accounts,
R. C. Dutt Road, Company Secretary Reports and other Statements pursuant to Section 212(1) of
Vadodara 390 007. the Act, in respect of Company’s Wholly-owned Subsidiary,
Place : Mumbai Petroleum Specialities Pte. Ltd., Singapore with the Annual
Date : 27th June, 2006. Report of the Company for the financial year ended 31st March,
2006. Therefore, the accounts and reports of the said
NOTES : subsidiary Company are not attached herewith.

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ALSO ENTITLED (b) However, a Statement showing information in aggregate of
TO APPOINT A PROXY OR PROXIES TO ATTEND AND VOTE the said subsidiary Company in compliance with the aforesaid
INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A approval letter dated 23rd February, 2006 of Ministry of
MEMBER. THE PROXY FORM DULY COMPLETED AND SIGNED Company Affairs has been attached with the consolidated
SHOULD REACHTHE COMPANY’S REGISTERED OFFICEATLEAST financial statements.
48 HOURS BEFORE THE TIMEAPPOINTED FOR THE MEETING. (c) The Company shall provide a copy of the Annual Accounts
2. The Register of Members and Share Transfer Books for the Equity and related information / reports for the year 2005-2006 of
Shares of the Company shall remain closed from Friday, the 4th the subsidiary Company as required under Section 212 of
August, 2006 to Thursday, the 10th August, 2006, both days the Act to the shareholders on their request, free of cost, at
inclusive, for the purpose of ascertaining the eligibility of any point of time. Further, the annual accounts of subsidiary
shareholders to receive final dividend on Equity Shares / Company shall be available for inspection at the Registered
Participating Preference Shares for the financial year 2005-2006. Office and Corporate Office of the Company and that of the
subsidiary Company.
3. Final Dividend on Equity Shares as recommended by the Board of
9. The required Explanatory Statement pursuant to Section 173 (2) of
Directors for the Financial Year ended 31 st March, 2006, when
the Companies Act, 1956 in respect of Special Business is annexed
declared at the Annual General Meeting will be paid to all those
hereto and forming part of the Notice.
Members whose names appear on the Register of Members of the
Company and Statement of Beneficial Ownership furnished by the
National Securities Depository Limited (NSDL) and the Central
ANNEXURE TO NOTICE
Depository Services (India) Limited (CDSL). EXPLANATORY STATEMENT PURSUANT TO
4. Members desirous of obtaining information / details about the SECTION 173 (2) OF THE COMPANIES ACT, 1956.
accounts, are requested to write to the Company at least one
ITEM NO. 7 :
week before the meeting, so that proper information can be made
available at the time of meeting. The agenda item no. 7 of the Notice relates to the appointment of Mr.
Richard Owen Pyvis as a Director liable to retire by rotation.
5. Members holding shares in dematerialised form, may please note
that while opening a depository account with Depository Participant In terms of Clause 7.1 of the Investment Agreement dated 5th September,
2005 entered into between the Company and M/s. Shinny Limited, the
(DP), they have given their bank account details, which will be
allottee of 34,45,978 - 5.40 % Cumulative Compulsorily Convertible
printed on their dividend warrants. However, if any member Preference Shares of Rs. 185/- each, the said M/s. Shinny Limited is
wants to change / correct the bank account details, he / she entitled to nominate a person as Investor Director on the Board of
should communicate the same immediately to the concerned Directors of the Company.

4
 17th Annual Report 2005-2006
The Company had therefore appointed Mr. Richard Owen Pyvis as an development and other technical / management matters. The Company
Additional Director on the Board of the Company w.e.f. 28th October, has a history of continuous expansion year after year. Considering the
2005 pursuant to the provisions of Section 260 of the Companies Act, nature and volume of business and its continuous expansion activities,
1956 and Article No. 136 of the Articles of Association of the Company. the Executive / Whole Time Directors of the Company need expert
In terms of Section 260 of the Companies Act, 1956, Mr. Richard Owen technical and management support. Therefore, it would be in the interest
Pyvis shall hold office of Director upto the date of ensuing Annual of the Company to avail Dr. N. D. Desai’s professional services by
General Meeting (AGM). The Company has received valid notice and appointing him as Technical Advisor / Management Consultant of the
requisite deposit from a member of the Company under Section 257 of Company.
the said Act, proposing the candidature of Mr. Richard Owen Pyvis for The opinion of the Central Government under Section 309 of the
the office of Director. Companies Act has been received with regard to Dr. Desai possessing
Considering the expertise and experience of Mr. Richard Owen Pyvis in the requisite qualifications for rendering such service. A copy of Central
the field of economics, it will be in the interest of the Company to Government opinion is available for inspection at the Registered Office
continue / appoint him as a Director of the Company retirable by rotation. of the Company on all working days during office hours of the Company.
The Board, therefore, commends the Resolution for approval by the Considering the competence of Dr. Desai and present levels of
Members. The copy of Investment Agreement is available for inspection professional fees / charges being charged by the reputed experienced
at the Registered Office of the Company on all working days during professionals like Technical Advisor / Management Consultant, for the
office hours of the Company. expert services / advice, the remuneration / fees as proposed in the
None of the Directors of the Company except Mr. Richard Owen Pyvis resolution is reasonable. Besides the payment of remuneration in the
is in any way concerned and interested in the resolution. professional capacity, he shall be entitled to receive usual sitting fees
for attending the meetings of Board of Directors and committees thereof.
ITEM NO. 8 :
Dr. N. D. Desai is holding directorship in other Group Companies of Apar
The agenda item no. 8 of the Notice relates to the approval for and he is related to Mr. Kushal N. Desai, Managing Director and Mr. C. N.
appointment and payment of fees / remuneration and providing facilities Desai, Joint Managing Director of the Company. Further he holds
to Dr. N. D. Desai (Non-Executive Chairman / Director), for the 5,050,598 equity shares (24.27 % of equity capital ) of the Company.
professional services rendered / to be rendered to the Company.
The Board, therefore, commends the Special Resolution under Section
The shareholders had approved the appointment and payment of 314 of the Companies Act, 1956 for the approval by members as to
remuneration to Dr. N. D. Desai for a period of 5 years from 1st January, holding of office or place of profit by Dr. N. D. Desai as Technical
2002 to 31st December, 2006 at their 13th Annual General Meeting held Advisor / Management Consultant.
on 27th September, 2002. Dr. N. D. Desai has relinquished the office of
the Executive Chairman w.e.f. 1st February, 2006 and accepted the The above explanatory statement, read along with the resolution, sets
request of directors to render his professional services to the Company out the material terms of remuneration as payable to Dr. N. D. Desai
as Technical Advisor / Management Consultant. as Non-Executive Chairman / Director for the professional services to
be rendered by him, which may also be treated as an abstract and
Accordingly, the Board of Directors of the Company at its Meeting held Memorandum of interest, under Section 302 of the Companies Act,
on 25th January, 2006 has approved Dr. N. D. Desai continuing as Non- 1956.
Executive Chairman / Director only. The Board has also decided at their
said meeting to continue the availing of his professional services as Except Dr. N. D. Desai, Mr. Kushal N. Desai and Mr. C. N. Desai, none
Technical Advisor / Management Consultant and pay remuneration for of the Directors of the Company is concerned or interested in the
his professional services, w.e.f. 1st February, 2006 for a period of 5 Resolution.
years. ITEM NO. 9 :
Dr. Narendra D. Desai is an Engineer with Honors Degree from the The agenda item no. 9 of the Notice relates to the approval for payment
University of London and Masters and Ph. D. from U.S.A. He did his of commission to Dr. N. D. Desai as Non-Executive Chairman / Director
Wharton School Cost Accounting with Business Management credits, of the Company.
which went towards his Ph. D. Degree. Briefly, he is qualified as The rich experience of Dr. N. D. Desai plays the crucial role in laying
B.Sc.(Hons.), London, M.S.Ele.Engg., PH.D., Penn., USA, Sigma XI, down policies and providing guidelines for conduct of Company’s
A.A.M.I.E.E. business at the Board level. He has been contributing immensely to the
Besides being Chairman / Director of the Companies of Apar Group in success of the Company through his active participation in the Board /
India since 1964, he was also Chairman of Apar Infotech, USA and Committee Meetings. The rich experience of Dr. N. D. Desai in business
Ness Technologies (India) Ltd. He is past President of ELCOMA (Electrical management and administration has led to sound decisions. The Board
has therefore recommended to continue the payment of commission to
Lamp and Component Manufacturers Association), AMPS (Association
Dr. N. D. Desai upto 1 % of the net profits of the Company w.e.f. 1st
of Manufacturers of Petroleum Specialities), etc. He is currently the February, 2006 for a period of five years, for each financial year
President of Association of Domestic Industries Affected by Dumping. commencing from Financial Year 2005-06.
Dr. Desai is the Managing Trustee of Dharmsinh Desai Institute of
Technology, Nadiad (University), having an MBA Programme linked with The shareholders had approved the appointment and payment of
IIM, Ahmedabad. For the last 25 years, Dr. Desai has often been visiting remuneration to Dr. N. D. Desai for a period of 5 years from 1st January,
speaker at various institutions in India and abroad such as Carnegie 2002 to 31st December, 2006 at their 13th Annual General Meeting held
Melon, USA, etc. The Company has been immensely benefitted by the on 27th September, 2002. Accordingly, he is entitled to receive
valuable professional advice rendered by Dr. N. D. Desai from time to Commission upto 1.00 % of net profit of the Company till 31st December,
time. 2006. However, as an abundant caution, shareholders' approval is
sought for payment of commission for the financial year 2005-06 and
The present Executive / Whole Time Directors of the Company are hard also for a period of five years commencing from 2005-06.
pressed with variety of functions relating to day to day management of
the Company’s existing business and they would not be able to give In accordance with the provisions of Section 309(4)(b) of the Companies
concentrated attention to the expansion projects of the Company, product Act, 1956, remuneration by way of commission up to 1% of the net

5
Apar Industries Limited
profits may be paid to the Non-Executive Directors subject to the approval of funds, from time to time, it is required to authorise the Board under
of shareholders by way of Special Resolution. Section 293 (1) (d) of the Companies Act, 1956 to borrow for the
Company in excess of paid up capital and free reserves of the Company
Dr. N. D. Desai is holding directorship in other Group Companies of Apar
but not exceeding upto Rs. 300 crores at any time (apart from temporary
and he is related to Mr. Kushal N. Desai, Managing Director and Mr. C. N. loans obtained or to be obtained from Company’s bankers in the ordinary
Desai, Joint Managing Director of the Company. Further he holds
course of business).
5,050,598 equity shares (24.27 % of equity capital ) of the Company.
Item No. 11 relates to authorising the Board of Directors of the Company
The Board, therefore, commends the Special Resolution under Section
to mortgage / charge the movable / immovable properties of the Company
309 of the Companies Act, 1956 for the approval by members for under Section 293 (1) (a) of the Companies Act, 1956. As stated above,
payment of commission to Dr. N. D. Desai for a period of 5 years w.e.f.
the Company shall borrow the required funds for working capital
1st February, 2006. requirements as well as for modernisation and expansion projects
The above explanatory statement, read along with the resolution, may from banks, financial institutions and other bodies. As usual, the lending
also be treated as an abstract and Memorandum of interest, under institutions (banks and financial institutions) lend the monies on a security
Section 302 of the Companies Act, 1956. of mortgage / charge of movable/immovable properties of the Company
Except Dr. N. D. Desai, Mr. Kushal N. Desai and Mr. C. N. Desai, none with power to take over the management of the Company in certain
of the Directors of the Company is concerned or interested in the events of defaults. As per the provision of Section 293(1)(a) of the Act,
Resolution. the Company cannot sale, lease or otherwise dispose of the whole or
substantially the whole of the undertaking of the Company without
ITEM NOS. 10 & 11 : prior consent of Members at a General Meeting. Since the creation of
Item No. 10 relates to authorising the Board of Directors of the Company mortgage of all the properties of the Company with power to take over
to borrow monies apart from temporary loans obtained or to be obtained the management of the Company in favour of banks / financial institutions
from Company’s bankers in the ordinary course of business in excess may amount to disposal of whole or substantially whole of the
of Paid up Share Capital and Free Reserves of the Company. undertaking of the Company, members’ approval under Section 293(1)(a)
of the Act is required for authorising the Board to create mortgage over
The Members at their General Meeting held on 8th June, 1999 had
the properties of the Company from time to time.
passed a resolution authorising the Board to borrow in excess of paid
up capital and free reserves but not exceeding a sum of Rs. 150 The Board, therefore, commends both the resolutions for approval of
crores at any time and to create security by way of mortgage / charge the Members.
of properties of the Company from time to time. None of the Directors of the Company is concerned or interested in the
With the expansion of Industrial activities and the increased business resolution.
operations, the Company will require higher amount of various types Registered Office : By Order of the Board
of financial facilities including working capital by way of Cash Credit, 301, Panorama Complex, D. C. Patel
Bills Discounting, Letters of Credit, Bank Guarantee etc. for day to day R. C. Dutt Road, Company Secretary
operations and term loans and other financial facilities to meet with the Vadodara 390 007.
on-going modernisation programmes and expansion of various projects. Place : Mumbai
In order to enable the Board of Directors to meet with the requirements Date : 27th June, 2006.

Details of Directors seeking appointment / re-appointment at the Annual General Meeting

(Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges)
Name of Director Dr. N. K. Thingalaya Mr. F. B. Virani Mr. Kushal N. Desai Mr. Richard Owen Pyvis
Date of Birth 04.11.1937 26.06.1945 21.02.1967 24.06.1949
Date of Appointment 27.07.2001 27.07.2001 24.03.1999 28.10.2005
Expertise in specific Banking Chemical Electrical - Expertise in Economics
functional areas Engineering Engineering with focus on Asia
- Corporate Governance
issues
Qualifications Ph.D. (Economics) B.E.(Chem. Engg.) B.Sc. (Hons.), Degrees in Economics
M.S.(Chem. Engg.) (Elec. Engg.) U.S.A. at the University of
(USA) M.B.A. (USA) B.S.Eco. ( Hons.), Western Australia,
(Wharton), USA. IMI and Insead
List of other Public 1. Canbank Investment None 1. Apar Masat 1. Havell's India Ltd.
Companies in which Management Conductors Ltd. 2. VLCC Health Care Ltd.
Directorship held Services Ltd. 3. Jyothy Laboratories Ltd.
as on 31.03.2006. 2. Lamina Foundries Limited
Chairman / Member 1. Lamina Foundries Limited None None None
of the Committee of - Remuneration
other Public Companies Committee
on which he is a
Director as on
31.03.2006.
No. of Shares held in
the Company Nil 5,500 4,678,163 Nil

6
 17th Annual Report 2005-2006
DIRECTORS’ REPORT
Your Directors have pleasure in submitting the 17th Annual Report of the Company together with the audited Annual
Accounts showing the financial position of the Company for the year ended on 31st March, 2006 :
1. FINANCIAL RESULTS : (Rs. in Millions)
PARTICULARS *Consolidated Company
Increase over 2005-06 2004-05 Increase over 2005-06 2004-05
Previous Year Previous Year
Sales turnover (after deduction of excise duty
amount Rs. 1450.85 millions for 2005-06 and
Rs. 1139.66 millions for 2004-05) 27 % 11,123.60 8,740.90 30 % 10910.28 8367.49
Other Income 45.00 65.34 44.93 65.34
Profit for the year before interest, exchange rate
difference, depreciation / amortization, taxation
and exceptional items 58 % 925.24 583.96 60 % 890.97 558.36
Deducting therefrom :
- Depreciation / Amortisation 86.40 85.64 86.35 85.59
- Interest & discounting charges 44 % 209.42 145.66 43 % 202.35 141.04
- Exchange Rate Difference (gain)/loss 83.91 (5.78) 79.18 (8.85)
Profit before Taxation and Exceptional Items 52 % 545.51 358.44 54 % 523.09 340.58
Exceptional items 17.43 12.03 17.43 12.03
Profit before Taxation for the year 52 % 528.08 346.41 54 % 505.66 328.55
Deducting therefrom :
- Provision for Taxation 158 % 79.98 31.05 186 % 76.47 26.71
Net Profit after taxation but before tax
provision for earlier years 42 % 448.10 315.36 42 % 429.19 301.84
Deducting therefrom :
- Provision for Taxation for earlier years ** 29.50 — 29.50 —
Net Profit after Taxation for the year 33 % 418.60 315.36 32 % 399.69 301.84
Adjusting therein (debit) / credit :
- Balance of Profit brought forward from
previous year 242.07 89.68 228.56 89.68
- Transfer from / (to):-
(a) Debenture Redemption Reserve 45.00 (15.00) 45.00 (15.00)
(b) Capital Redemption Reserve (31.36) (23.51) (31.36) (23.51)
(c) Exchange Fluctuation Reserve — 50.00 — 50.00
Amount available for appropriations 674.31 416.52 641.89 403.01
Appropriations made by the Board of Directors:
- General Reserve 100.00 100.00 100.00 100.00
- Dividends on Equity and Preference Shares:
- Interim Dividend (paid) 42.44 39.55 42.44 39.55
- Final Dividend 58.66 26.01 58.66 26.01
- Income-tax on dividends 14.18 8.90 14.18 8.90
- Leaving balance of Profit carried to
Balance Sheet 459.03 242.06 426.61 228.55
Earnings per Equity Share (EPS) : -
Basic
(i) On profit before tax provisions for earlier years 33% 19.99 15.08 32% 19.08 14.43
(ii) On profit after tax provisions for earlier years 23% 18.57 15.08 22% 17.66 14.43
Diluted
(i) On profit before tax provisions for earlier years 32% 19.98 15.08 33% 19.13 14.43
(ii) On profit after tax provisions for earlier years 24% 18.66 15.08 23% 17.82 14.43
* Consolidated Results include the results of Petroleum Specialities Pte. Ltd., Singapore, a Wholly Owned Subsidiary (WOS) of the Company.
** The Company has made a one-time tax provision on account of Company’s claim for deduction of certain items in earlier years being not in
accordance with subsequent Supreme Court judgements in cases of other companies.

7
Apar Industries Limited
2. Dividend : Company which grew from Rs. 4,230.12 millions
a. The Company has paid the following two interim to Rs. 5,151.09 millions, representing 22 % of
dividends for the financial year 2005-2006: growth. Due to frequent changes in prices of
base oils, and weakness of the rupee, operating
On 20,806,045 Equity Shares : margin stood at Rs. 464.91 millions as against
- @ Re. 0.75 per share on the face value of Rs. 481.06 millions of the previous year.
Rs. 10/- amounting to Rs. 15,604,534/- Increase in revenue can be attributed to increase
and in per unit sale price and increase in volume of
- @ Re. 1.00 per share on the face value of sales of Transformer Oils and other Speciality
Rs. 10/- amounting to Rs. 20,806,045/-. Oils from 1,25,858 KL to 1,35,639 KL.

On 3,445,978 - 5.40 % Cumulative Convertible The Company continues to grow its Transformer
Preference Shares carrying participating rights as Oil business where it is India’s market leader.
equity shareholders : It is also largest exporter of Transformer Oil.
Export and Overseas Revenue grew from Rs.
- @ Re. 0.75 per share amounting to 785.35 millions to Rs. 1,096.26 millions,
Rs. 2,584,484/- and representing a growth of 40 %.
- @ Re. 1.00 per share amounting to The Company concentrates its efforts to focus
Rs. 3,445,978/-. and grow in niche segments where a significant
The members are requested to confirm the above technology input and technical services are
interim dividends at the ensuing Annual General required to market the oil. Several new products
Meeting (AGM) of the Company. have been introduced during the financial year
b. Considering the improved financial results achieved 2005-06 covering Transformer Oils made to new
during the year under review as compared to the enhanced specifications, Rubber Process Oils
previous year, the Board of Directors has made to most stringent environmental friendly
recommended the following dividend / final dividend standards and new grades of Industrial Oil and
for the financial year 2005-2006 out of the net profit Process Oil.
available for distribution : The Company continues to expect growth of
On 20,806,045 Equity Shares @ Rs. 1.75 per share this division as investment in the power
which together with aforesaid two interim dividends infrastructure in the country is being increased.
aggregate to Rs. 3.50 (Previous year total dividend There is also a substantial growth in various
@ Rs. 3.00) per share. industries where the Company supplies its
Process Oil and Lubricants. The Company
On 3,445,978 - 5.40 % Cumulative Convertible
continues to maintain long term supply
Preference Shares :
arrangement with producers of high quality
(i) Preference Dividend @ 5.40 %, pro rata for Paraphinic base oil and Naphthenic type oils.
the period from 11th October, 2005 to 31st March,
Risk and Concerns :
2006 and
The prices of crude oil continue to be very
(ii) Equity Dividend as converted basis @ Rs. 1.75
volatile. There is also tightening in the availability
per share.
of base oil due to which increase in price of
The above dividend / final dividend is subject to base oil exceeded the corresponding increase
shareholders’ approval at the ensuing Annual in the price of crude oil and as a consequence,
General Meeting (AGM) and therefore you are there has been very frequent price change in
requested to declare the same. the finished products. Frequent price changes
3. Management Discussion & Analysis : result in the opportunity for the competitors to
enter established accounts of the Company
(a) Industry Structure, Development, Opportu-
with short term lower prices. Since the majority
nities, Threats, Outlook and Risk & Concerns :
of base oils are imported, the Company is
(i) Transformer Oil and Speciality Oils Division : exposed to the movements in the foreign
The Company produces over 300 grades of exchange.
Speciality Oils and Lubricants, catering to (ii) Conductor Division :
various requirements of power industries and As per the re-structuring plan, the
other industries in general. This division manufacturing capacity of Conductor Division
contributes 47 % of total revenue of the was expanded at Silvassa during the financial

8
 17th Annual Report 2005-2006
year 2005-06. This has helped in reducing the Some of the contracts are in different foreign
operating cost. During the year 2005-06, the currencies; hence, the volatility in currencies
orders have been executed at better margins could affect the profitability. Wherever possible,
and reduced risk levels on account of price the Company covers its risk of volatility in prices
variation formula. of aluminium and foreign exchange by hedge
This division has contributed roughly 40 per cent contracts.
of the total revenues of the Company for the (iii) Polymers Division :
year under review. It is amongst the largest The Company’s Polymers Division contributed
players in the country. about 13 per cent of the total revenue of the
During the past several years, there has been Company. The Company holds more than 50
a mismatch in the investment made in Power per cent market share in Nitrile Butadiene
Generation and Transmission, resulting in large Rubber (NBR), which finds its applications in
bottlenecks in the Transmission infrastructure auto components and rice roller for de-husking.
in the country. Through projects being The other products viz. High Styrene Rubber
implemented either directly by Power Grid, or (HSR), which finds its application in the
through joint ventures with other turnkey footwear industry was hit because of the intense
operators, the transmission and distribution competition. Now, the Company will de-
bottleneck the plant so as to make it a swing
infrastructure is likely to be augmented
plant (providing flexibility as per demand) for
considerably. The Company, being one of the
these Synthetic Rubbers.
larger players in this sector should have a good
business opportunity over the next 5-7 years The margins were squeezed due to intense
as this infrastructure of over $150 billion is being competition in NBR and HSR. HSR demand
built. dropped significantly as customers went for
alternative cheaper inputs. Therefore, the
The Company has an order book of about
division’s contribution was dipped. Nonetheless,
Rs. 500 crores. There are several tenders that
with value-added extensions of NBR, which
are due from Power Grid etc. in the near future.
Based on this, the order inflow is expected to would bring in higher margins on account of
remain strong. In addition to the domestic the in-house R & D effort, this segment of
market, the Company continues to focus on business should see better growth prospects
getting 30% of its business from overseas going forward.
markets. The Company is well positioned with Risk and Concerns :
Global EPC contractors that build projects in
The cost of raw materials and the prices of the
the Middle East, South East Asia and Africa.
competitors’ products are the most important
Hence it is expected that the exports and
overseas business will also grow at over 25% drivers of the profitability. Any dis-proportionate
per annum. The Company has also made change in the spread between the costs of the
investments to improve the productivity and raw materials and the selling prices would be a
capacity of making Alloy Conductors. The risk for the Company’s business. The Company
usage of Alloy Conductors is increasing is making all efforts in its negotiation with
worldwide due to the system cost being lower suppliers and customers to maintain a
when a transmission project is built with Alloy reasonable spread.
rather than ACSR conductors. (b) Financial Highlights and Segment-wise
Risk and Concerns : Performance :
The orders with some of the customers have (1) Financial Highlights : (Rs. in Millions)
firm delivery schedules, which if not abided by Consolidated Company
the customers can result in change in 2005-06 2004-05 2005-06 2004-05

profitability. The Company is dealing with Balance Sheet :

parties only after doing a due diligence of their 1. Share Capital :

Equity 208.06 208.05 208.06 208.05
capabilities. Preference 637.50 31.27 637.50 31.27
The volatility of the input costs is a risk, which 845.56 239.32 845.56 239.32
needs to be managed wherever possible. The 2. Reserves & Surplus 992.37 688.96 959.95 675.45
risk of volatility of the main raw materials is 3. Loans (Secured & Unsecured) 1056.44 1465.45 1056.44 1453.68
4. Deferred Taxation (Net) 135.92 134.49 135.31 133.89
largely passed on to the customers through 5. Net fixed Assets 1149.14 961.23 1148.92 961.03
price variation formulas. 6. Net Current Assets 1825.94 1521.37 1790.48 1493.03

9
Apar Industries Limited
Consolidated Company against Rs. 47.13 millions in the previous year
2005-06 2004-05 2005-06 2004-05 representing growth of 34 %. The operating profit
Profit and Loss Account : for the segment was Rs. 82.25 millions as against
1. Sales (Net of Excise duty) 11123.60 8740.90 10910.28 8367.49 Rs. 172.22 millions of the previous year.
2. Other Income 45.00 65.34 44.93 65.34
3. Profit before tax (c) Internal Control Systems & their adequacy :
& exceptional items 545.50 358.44 523.09 340.58
4. Net Profit after tax The Company has established adequate Internal
for the year 418.60 315.36 399.69 301.84 Control Systems (ICS) in respect of major areas of
operations of all the three divisions of the Company.
(2) Results of Operations :
The ICS are aimed at promoting operational
Margins from the manufacturing activities during the efficiencies and achieving saving in cost and
year were improved to Rs. 890.97 millions as overheads at all ends of the business operations.
against Rs. 558.36 millions in the previous year.
The System cum Internal Audit Reports of the
(i) Transformer & other Speciality Oils Division : Internal Auditors are discussed at the Audit
The Company’s Oil division has achieved higher Committee Meetings and appropriate corrective
volume of production of various grades of Transformer steps have been taken.
and Industrial oils. The oil division was able to sell
Further, each Business Segment prepares its annual
its production at competitive rates.
budget, which are reviewed along with performance
The gross revenue grew from Rs. 4,230.12 millions at regular interval.
to Rs. 5,151.09 millions, representing a 22 %
(d) Development of Human Resources :
growth. Exports registered at Rs. 882.10 millions
as against Rs. 411.93 millions in the previous The Company promotes open and transparent
year representing growth of 114 %. Operating profit working environment to enhance teamwork and build
for the segment stood at Rs. 464.91 millions as business focus. The Company equally gives
against Rs. 481.06 millions. importance to the development of Human Resource
(HR). It updates its HR policy in line with the
(ii) Conductor Division : changing HR culture in the industry as a whole. In
During the year under review, the Conductor order to foster excellence and reward those
division has also achieved higher volume of employees who perform well, the Company
production of conductors. The gross revenue of practices Performance / Production linked Incentive
Conductors was at Rs. 4,392.23 millions as against Schemes. The main object of the Scheme is to
Rs. 2,732.71 millions in the previous year, create and maintain optimum performance level and
representing growth of 61 %. Exports of Conductors profit driven culture and improve productivity.
during the year was Rs. 797.20 millions as against
The Company also takes adequate steps for in-
Rs. 823.08 millions in the previous year. Operating
house training of employees and maintaining safety
profit for the segment was Rs. 348.45 millions as
and healthy environment for workers working within
against Rs. 1.38 millions of the previous year,
the factory premises.
showing impressive turn around and significant
achievement of strong financial performance of the (e) Cautionary Statement :
division. The statements made in the Management
(iii) Polymers Division : Discussion & Analysis section, describing the
Company’s goals, expectations, or predictions etc.
The production and turnover were maintained at the are the forward looking view of the management.
expense of low selling prices due to market forces. The actual performance of the Company is
The operations of the division were affected by high influenced or is dependent on several important
prices of monomers and less than proportionate factors viz. growth of Indian economy, continuation
increase in the finished product prices. With the of industrial reforms, applicable laws, regulations,
introduction of more grades, better market access tax structure, domestic / international industry
and continuation of Anti-dumping duties, the scenario, movement in international prices of raw
operations of the division are expected to weather materials, economic developments within the
the difficult market situation. country etc.
The gross revenue of Polymers Division was
4. Expansion / Development Plan :
Rs. 1,416.03 millions as against Rs. 1,469.44
millions in the previous year. Exports of Polymers (i) Transformer & other Speciality Oils Division :
Division during the year was Rs. 63.16 millions as With the installation of additional storage facilities

10
 17th Annual Report 2005-2006
and balancing equipments in phased manner at Mauritius, a part of CLSA Group in terms of the
Silvassa unit, the division would get leverage to Investment Agreement entered into between the
increase its production. Efforts are continuously Company and the said Investor on 5th September,
made to increase the export by exploring the 2005. In terms of the Investment Agreement, on
international market. expiry of one year, the said Preference Shares shall
(ii) Conductor Division : be compulsorily converted into an equal number of
Equity Shares i.e. 3,445,978 Equity Shares of
The Company has embarked on a modernization Rs. 10/- each at a premium of Rs. 175/- per share.
programme at its Silvassa plant with state-of-the-
art machinery which would further improve The Company has deployed the said fund in the
productivity and quality of products. manner as it was envisaged at the time of issue of
the said preference shares.
With the increase in production, cost efficiency and
improved productivity at Silvassa unit, the Company b) The Company has fully redeemed 7,838,785 - 10
expects to continue improved profitability of its % Redeemable Cumulative Preference Shares
(Series I) of Rs. 10/- each by making payment of
Conductor Division for the financial year 2006-07
final (3rd) installment of redemption of Rs. 4/- per
and onwards.
share due on 1st April, 2005.
In order to capture growth opportunities in conductor
c) During the year under review, the Company has
business, the Company is in process of setting up made early redemption in full of 250,000 - 10 %
of a manufacturing facility of 15,000 MT at Nalagarh Secured Non-Convertible Debentures of Rs.1,000/-
in Himachal Pradesh which would be fully each aggregating to Rs. 250,000,000/-.
operational by second half of the financial year
2006-07. 6. Directors :

(iii) Polymers Division : a) Mr. Richard Owen Pyvis was appointed as Additional
Director and Ms. Josephine Price as an Alternate
The manufacturing facility of the polymers division Director of the Company w.e.f. 28th October, 2005.
would be re-structured so that the capacity is They have been nominated as Director by M/s.
increased with better flexibility of timely producing Shinny Limited, in terms of Clause 7 of the
the grades in demand. This re-structuring is also Investment Agreement entered into by the Company
expected to reduce cost and improve the possibility with the said M/s. Shinny Limited. In pursuance of
of introducing newer grades with higher margins.
the provisions of Section 260 of the Companies Act,
In order to strengthen the Company’s market 1956, Mr. Richard Owen Pyvis will hold office as
position and to remain competitive, the expansion director upto the date of ensuing Annual General
of existing Synthetic Rubbers manufacturing Meeting. The Company has received a Notice under
capacity and up-gradation of R & D Centre at Valia Section 257 of the Companies Act, 1956, proposing
are in full swing. his candidature as Director, liable to retire by rotation.
5. Share Capital / Debentures : The Board recommends his appointment.
a) During the year under review, the Authorised Share b) Dr. N. D. Desai resigned as Executive Chairman of
Capital of the Company was increased / revised. the Company and continued as Non-Executive
The Authorised Share Capital was increased from Chairman. His rich experience and expertise will
Rs.750,000,000/- to Rs. 919,987,500/- and the be available as the Company has appointed him as
enhanced capital was divided as under : Technical Advisor / Management Consultant for
availing his professional services.
26,000,000 Equity Shares of
Rs.10/- each Rs. 260,000,000/- c) Shri M. N. Kamat was substituted as Nominee
3,567,500 Preference Shares Director by Industrial Development Bank of India
of Rs. 185/- each. Rs. 659,987,500/- Limited (IDBI) in place of Shri V. D. Shinde w.e.f.
20th December, 2005.
Total Rs. 919,987,500/-
d) Dr. N. K. Thingalaya, Shri F. B. Virani and Shri
During the year under review, the Company has Kushal N. Desai, directors shall retire by rotation
raised the fund of Rs. 637,505,930/- for retirement at the ensuing Annual General Meeting of the
of long term debts and to meet with capital Company and they being eligible offer themselves
expenditure for expansion projects. Accordingly, it for reappointment. The Board recommends the
has issued and allotted on 11th October, 2005, reappointment of these directors.
3,445,978 - 5.40 % Cumulative Compulsorily
7. Directors' Responsibility Statement :
Convertible Preference Shares of Rs. 185/- each
on preferential basis to M/s. Shinny Limited, Pursuant to the requirement under Section 217(2AA) of

11
Apar Industries Limited
the Companies Act, 1956 with regard to Directors’ out the cost audit of Company’s Conductors Division
Responsibility Statement, it is hereby confirmed that : and Polymers Division.
i. in the preparation of the Annual Accounts for the 12. Other Information :
financial year ended 31st March, 2006, the applicable
a. Attached to and forming part of this report are the
accounting standards had been followed along with
following :-
proper explanation relating to material departures,
if any. (i) Particulars relating to conservation of energy,
technology absorption and foreign exchange
ii. appropriate accounting policies have been selected
earnings and outgo.
and applied consistently and judgements and
estimates have been made that are reasonable and (ii) Information in respect of certain directors /
prudent so as to give a true and fair view of the employees.
state of affairs of the Company at the end of the (iii) Report on Corporate Governance and Auditors’
financial year and of the Profit of the Company for Certificate regarding compliance of conditions
the financial year under review. of Corporate Governance.
iii. proper and sufficient care has been taken for the b. The Company has been granted exemption for the
maintenance of adequate accounting records in year ended 31st March, 2006 by the Ministry of
accordance with the provisions of the Companies Company Affairs vide its letter dated 23rd February,
Act, 1956, for safeguarding the assets of the 2006, (“Exemption Letter”), from attaching to its
Company and for preventing and detecting fraud and Balance Sheet, the Annual Report of Company’s
other irregularities. wholly owned foreign subsidiary, Petroleum
iv. the annual accounts have been prepared on a going Specialities Pte. Ltd., Singapore. As per the terms
concern basis. of the Exemption Letter, a statement containing brief
financial details of the Company’s Subsidiary for
8. Corporate Governance :
the year ended 31st March, 2006 is included in
Pursuant to the Clause 49 of listing agreement with the the Annual Report. The annual accounts of the
Stock Exchanges with regard to Corporate Governance subsidiary and the related information will be made
Code, the points, which are required to be covered under available to any member of the Company seeking
the head “Management Discussion & Analysis” are such information at any point of time and are also
covered herein above vide para Sr. no. 3. available for inspection by any member of the
9. Corporate Social Responsibility : Company at the Registered Office of the Company
/ Subsidiary.
As a Corporate Citizen of India, the Company regularly
provides financial assistance in the form of donations However as required under Clause No. 32 of Listing
to various charitable and welfare institutions, educational Agreement of the Stock Exchanges, the Company
trusts / other bodies which undertake benevolent has presented herewith the audited consolidated
activities for the common cause of public. annual accounts for the year 2005-06.

10. Auditors : c. As on 31st March, 2006, there was no unclaimed

deposits from depositor.
The Notes to the Accounts as referred in the attached
Auditors’ Report are self explanatory and therefore do 13. Acknowledgement :
not call for any further comments or explanations. Your directors wish to place on record their sincere
M/s. RSM & Co., Chartered Accountants, Mumbai, appreciation for continuous co-operation, support and
Statutory Auditors of the Company shall be retiring at assistance provided by stakeholders, shareholders,
the ensuing Annual General Meeting, and they being financial institutions, banks, government bodies,
eligible, offer themselves for reappointment. The Audit technical collaborators, customers, dealers and
Committee of directors at its meeting held today suppliers of the Company. Your directors also wish to
has recommended to continue the appointment of place on record their appreciation for the dedicated
M/s. RSM & Co. as statutory auditors of the Company. services rendered by the loyal employees of the
Company.
11. Cost Auditor :
For and on behalf of the Board
As per the Central Government orders, the Board has Place : Mumbai (Dr. N. D. Desai)
re-appointed Mr. B. C. Desai, Cost Accountant to carry Date : 27th June, 2006 Chairman

12
 17th Annual Report 2005-2006
ANNEXURE I TO THE DIRECTORS’ REPORT (A) Power and Fuel Consumption:
2005-2006 2004-2005
Information as per Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of (i) Electricity :
particulars in the Report of Board of Directors) Rules, (a) Purchased units 17,106,623 13,395,264
1988 and forming part of the Directors’ Report for the Total Amount
(Rs./millions) 63.61 56.32
year ended 31st March, 2006.
Rate/Unit (Rs.) 3.72 4.20
I. CONSERVATION OF ENERGY : (b) Own Generation :
Through Diesel
1) Energy Conservation measures taken and Generator (Units) 710,205 612,616
continuing on regular basis: Average Units generated
per liter of diesel oil - 2.66 2.64
Polymers Division: Average Cost of Unit (Rs.) 12.50 8.65
(i) Replacement of 100 watt, 240 volt GLS Lamp Through Wind Mill (Units) 1,558,465 2,077,445
fitting with 60 Watt, 24 Volt respectively to Through Co-generation
reduce the power consumption. Power Plant (Units) 8,496,729 9,000,898
(ii) Furnace Oil :
(ii) Introduction of Variable Frequency Drive to save
Quantity (Kls) 4,017 3,053
the energy during no-load / partial load Total Amount
condition. (Rs./millions) 61.53 34.94
(iii) Introduction of 200 KVAR APFC panel with grid Average Rate/Kls (Rs.) 15,320 11,443
supply to optimize the power factor near unity. (iii) Others :
(iv) Introduction of Soft starter / Autotransformer Natural Gas Quantity (M3) 1,176,718 1,337,045
Total Amount
starter to maintain the required starting torque
(Rs./millions) 10.68 11.69
and subsequent saving in power consumption. Rate/M3 (Rs.) 9.06 8.75
(v) Installation of star-delta cyclic converter in less Light Diesel Oil
loaded motors to reduce the power Quantity (KL) — 124.79
consumption. Total Amount
(Rs. / Millions) — 2.40
Special Oils Refinery Division : Rate / KL (Rs.) — 19,205
(i) Steam Condensate recycling process (B) Consumption per unit of production (Average per
implemented at Rabale Plant. unit consumption on total production of each
division is included in the table below):
2) Additional Investment proposals, if any, being
2005-2006 2004-2005
implemented for reduction of consumption of
Elec- Furnace Light Natural Electri- Furnace Light Natural
energy : tricity Oil Diesel Gas city Oil Diesel Gas
(units) (litres) Oil (M3) (units) (litres) Oil (M3)
Polymers Division : (ltrs.) (ltrs.)
(i) Refinery
(i) To install Variable Frequency Drive (VFD) in 200 Division:
HP Expeller motor to reduce the power Per KL
output of Oil 10.6 2.31 -- -- 9.1 1.50 0.77 --
consumption.
(ii) Properzi and
(ii) To install local APFC Panel direct to ETP MCC AAC/ACSR
Conductors
to compensate the system voltage drop, Division :
Per MT of
improvement in PF and subsequent saving in Aluminium
power consumption of motors. Conductors 214 62 – – 229 70 – –
(iii) Polymers
Special Oils Refinery Division : Division :
Per MT output
(i) To convert 250 Watts lighting to 150 Watts, of all
Synthetic
GLF lamps fitting in the Warehouse at Rabale Rubber 914 134 – 127 891 121 – 135
Blending plant. Reasons for Change in consumption :
3) Impact of measures at (1) and (2) above : Electricity :
- Low operating cost of equipments / Oil : Change in Product mix.
machineries. Conductors : Improved Productivity.
Polymers : Marginal increase due to change in
- Power saving. product mix.
- Smooth operation of motors.
Furnace Oil & LDO :
4) Total Energy Consumption and Energy Oil : Change in product mix.
Conductors : Improved productivity.
Consumption per unit of production:
Polymers : Change in product mix.

13
Apar Industries Limited
II. TECHNOLOGY ABSORPTION AND RESEARCH & 2. Improved technology for manufacture of LP and
DEVELOPMENT : LLP. Formulated additional grades of industrial
1. RESEARCH AND DEVELOPMENT (R&D) : and speciality products.

(i) Specific areas in which R & D is carried out by (ii) Benefits derived as a result of the efforts :
the Company :
1. Quality of various grades of NBR and
Polymers Division : Transformer Oil produced by the Company have
Development of new types of dry-polymers, received consumers acceptance in India and
polyblends and powders. Improvement in quality of Foreign countries.
existing products and in manufacturing processes 2. Quality of Oil produced received customer
to enhance productivity. acceptance and cost reduction.
(ii) Benefits derived as a result of the above R&D :
(iii) (a) Technology imported : Technical know-how
a) Increase in Exports of NBR Polymers. Powders for manufacture of
and Polyblends. NBR & Latexes
b) Business increase in domestic market. (b) Year of Import : 1989 to 1992
c) Global acceptance of all products.
(c) Has technology been
d) Improvement of Process /quality / productivity. fully absorbed : Yes
(iii) Future plan of action : III. FOREIGN EXCHANGE EARNINGS AND OUTGO :
Polymers Division :
1. Activities related to exports :
a) Development of new grades of lattices and
(i) Efforts are continuing to increase exports of all
Rubbers, Powders, Lattices and Polyblends
products.
etc. as per the market requirements.
b) Setting up a separate R & D Centre dedicated 2. Total Foreign Exchange used and earned :
to Research & Development of Synthetic (Rs. in millions)
Elastomers / Polymers, vendor developments,
process improvement. (i) Total foreign exchange used :
c) Reduction in reaction cycle time of Polymers.
d) Improvement in quality of existing Rubber 2005-06 2004-05
Grades.
(a) Raw Materials (CIF) 5,915.00 3,594.76
(iv) Expenditure on R&D (Polymers Division) :
(b) Stores & Spares 3.19 7.19
(Rs. in millions)
(c) Capital Goods 2.47 4.93
2005-06 2004-05 (d) Others 149.89 89.55
a. Capital Nil 0.16 6,070.55 3,696.43
b. Recurring 1.34 1.85
c. Total 1.34 2.01 (ii) Total foreign exchange earned :

d. Total R&D Expenditure as (a) Physical Exports 1,742.46 1,282.14

a percentage of turnover 0.14% 0.20% (FOB)
(b) Deemed Exports
2. TECHNOLOGY ABSORPTION, ADAPTATION AND
(eligible for export
INNOVATION :
incentives) 414.68 228.44
(i) Efforts in brief, made towards technology
adaptation and innovation: (c) Others 75.18 54.61
1. NBR and Transformer Oil manufacturing 2,232.32 1,565.19
technologies have been absorbed.

14
 17th Annual Report 2005-2006
ANNEXURE - II TO THE DIRECTORS’ REPORT
Information pursuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of
Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2006.
Employed through out / part of the Financial Year under review and was in receipt of the Remuneration in aggregate of not
less than Rs. 2,400,000/- per annum.

Age Design- Experience Remune- Date of Comm- Last Employ-

Names (Years) ation / Qualifications (Years) ration encement of ment and
Nature (Rs.) Employment Designation
of Duty
Dr. N. D. Desai 66 Chairman B.Sc.(Hons), London 48 7,416,542 28.09.1989 —
M.S. Ele.Eng.,Ph.D., (Refer note 2)
Penn., U.S.A., Sigma XI,
A.A.M.I.E.E.
Mr. Kushal N. Desai 39 Managing B.Sc. (Hons.) 17 7,471,339 24.03.1999 GE Lighting
Director (Ele.Engg.) U.S.A., (India) Ltd.
B.S.Eco.(Hons.) - President
(Wharton) U.S.A.
Mr. C. N. Desai 34 Joint B.Sc. (Hons.) 12 7,433,683 29.05.1993 —
Managing (Chem. Engg.) U.S.A.
Director B.S. Eco. (Hons.),
(Wharton) U.S.A.

NOTES :
1. The Remuneration includes salary, allowances, commission paid to Directors, reimbursement of leave travel and medical
expenses / benefits, company's contribution to provident fund, leave encashment and other perquisites in respect of motor
car, accomodation, telephone etc.
2. Dr. N. D. Desai, Chairman of the Company ceased to be whole-time director of the Company w.e.f. 1st February, 2006.
3. Above directors are related to each other. None of the employees of the Company is related to any of the Directors.
4. All appointments are contractual and terminable by notice on either side.

15
Apar Industries Limited
CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE PHILOSOPHY : Ms. Josephine Price was appointed as Alternate
Director to Mr. Richard Owen Pyvis w.e.f. 28th
Apar Industries Limited (“the Company”) believes in
October, 2005.
conducting its affairs in a fair, transparent and professional
manner and maintaining the good ethical standards in its b) Shri M. N. Kamat was substituted as Nominee
dealings with all its constituents. Director by Industrial Development Bank of India
Limited (IDBI) in place of Shri V. D. Shinde w.e.f.
The Company is committed to follow good Corporate
20th December, 2005.
Governance practices, which include having professional
Directors on the Board, adopting pragmatic policies and c) Dr. N. D. Desai, Executive Chairman of the Company
effective systems and procedures and subjecting business gave up his executive functions w.e.f. 1st February,
processes to audits and checks measuring upto required 2006 and continued as Non-Executive Chairman of
standards. the Company. Dr. N. D. Desai was appointed as
Technical Advisor / Management Consultant from
The driving force behind the Company’s management is the said date, subject to shareholders approval at
“Tomorrow’s Progress Today” and backed by “A culture the ensuing Annual General Meeting and in
of High - Tech and Quality”. Apar’s quality policy for ISO accordance with the opinion of the Central
- 9001 is “To satisfy customer needs and retain leadership Government obtained under Section 309(1) of the
by manufacturing and supplying quality products and Companies Act, 1956.
services through continuous improvement by motivated
employees”. 4. The composition of the Board of Directors and details
with regard to them is as follow :-
The policies and actions of the Company are in terms of
applicable guidelines on Corporate Governance with endeavor Name of Category No. of No. of
Directors Director- Committee
to enhance shareholders’ value. Pursuant to Clause 49 of ships in Memberships
the Listing Agreement of Stock Exchanges, the following other public in other public
details are presented : Companies Companies

BOARD OF DIRECTORS : Dr. N. D. Desai Chairman 1 —

(Non-
1. The Board of Directors has more than 50% Non-
Executive)
executive Directors and half of the Board was comprising
Mr. V. A. Gore Non-Executive 2 2
of independent directors till 31st January, 2006. With
& Independent
the Chairman becoming Non-Executive Director effective
Dr. N. K. Thingalaya Non-Executive 2 2
from 1st February, 2006, more than one-third of the total
& Independent
number of directors are independent directors. None of
Mr. F. B. Virani Non-Executive — —
the directors on the Board is a member on more than
& Independent
10 Committees and Chairman of more than 5
Committees as specified in Clause 49 across all Mr. V. D. Shinde Non-Executive — —
(Upto - 20.12.2005) & Independent
companies in which they are directors. All the members (Nominee Director
of the Board are eminent persons with excellent of IDBI)
qualifications; professional expertise and extensive Mr. M. N. Kamat Non-Executive — —
experience and they have made outstanding (w.e.f. 20.12.2005) & Independent
contributions to the industry. (Nominee Director
of IDBI)
2. The Board of Directors meets atleast once in a quarter
to review the Company’s performance and financial Mr. Kushal N. Desai Managing
Director 1 —
results and more often, if considered necessary.
Mr. C. N. Desai Joint Managing 1 —
3. During the year under review, the following changes were Director
made in respect of Directors of the Company.
Mr. M. M. Patel Director — —
a) Mr. Richard Owen Pyvis was appointed as an (Polymers)
Additional Director on the Board of the Company
Mr. H. N. Shah Non-Executive — —
w.e.f. 28th October, 2005. He has been nominated
as Director by M/s. Shinny Limited, the allottee of Mr. Richard Owen Non-Executive 3 —
Pyvis
3,445,978 - 5.40 % Cumulative Compulsorily
Convertible Preference Shares of Rs. 185/- each in Ms. Josephine Price Non-Executive 3 —
terms of Clause 7 of the Investment Agreement -Alternate Director
to Mr. Richard
entered into by the Company with the said Owen Pyvis
M/s. Shinny Limited. In terms of the same Clause,

16
 17th Annual Report 2005-2006
5. During the financial year 2005-2006, eight Board
Name of Directors No. of Board No. of Last
Meetings were held. The dates on which the Board meetings Board AGM
meetings were held are as follows : held during meetings attended
25th April, 2005, 17th June, 2005, 1st August, 2005, the tenure attended
of the
30th September, 2005, 11th October, 2005, 28th
Directors
October, 2005, 25th January, 2006 and 28th March,
2006. Mr. M. N. Kamat 2 2 *No
GENERAL MEETINGS : (w.e.f. 20.12.2005)
(Nominee Director
(a) The last Annual General Meeting (16th AGM) was of IDBI)
held on 30th September, 2005 at 10.30 A.M. at
Mr. Kushal N. Desai 8 8 Yes
Auditorium of the Vanijya Bhavan, Central Gujarat
Chamber of Commerce, Near GEB Head Office, Mr. C. N. Desai 8 6 Yes
Race Course, Vadodara - 390 007. Mr. M. M. Patel 8 5 Yes
(b) An Extra-Ordinary General Meeting (EOGM) of Mr. H. N. Shah 8 8 Yes
Shareholders was also held on 30th September,
Mr. Richard Owen 2 – *No
2005 at the above place at Vadodara after the Pyvis
conclusion of Annual General Meeting. The following w.e.f. 28.10.2005
Special Resolutions were passed at the said EOGM:
Ms. Josephine Price 2 2 *No
i. Increase in the Authorised Share Capital of the - Alternate Director
Company under Section 94,*
ii. Alteration of Clause V of the Memorandum of * Director appointed after the AGM.
Association under Section 16, *
iii. Alteration of Article 5(a) of the Articles of AUDIT COMMITTEE :
Association under Section 31 * and 1. The Company has constituted an Audit Committee of
iv. Allotment of Shares on Preferential basis under Directors in accordance with the requirements of Section
Section 81(1A). * 292A of the Companies Act, 1956 read with Clause 49
* of the Companies Act, 1956. of the Listing Agreement. The Audit Committee consists
of four independent Directors. The broad terms of
(c) Another Extra-Ordinary General Meeting (EOGM)
reference of the Audit Committee include, reviewing
of Shareholders was held on 23rd December, 2005
with management , the quarterly and annual financial
at Corporate Head Office of the Company at
results / statements, adequacy of internal control
Mumbai and Special Resolution to adopt and
systems and internal audit functions, overseeing the
substitute new set of Articles of Association of the
Company’s financial reporting process, recommending
Company was passed.
the appointment and removal of external and internal
(d) No Postal Ballot was conducted during the year. auditors, etc.
Following are the details of attendance of Directors at 2. The composition of the Audit Committee and attendance
the aforesaid Board Meetings and AGM held during of Directors at the meetings are given hereunder :
the financial year.
During the financial year 2005-2006, the Audit
Name of Directors No. of Board No. of Last
meetings Board AGM Committee met on 17th June, 2005, 1st August, 2005,
held during meetings attended 28th October, 2005, 25th January, 2006 and 28th March,
the tenure attended 2006.
of the
Directors
Name of Category No. of No. of
Dr. N. D. Desai 8 8 Yes
Directors meetings meetings
Mr. V. A. Gore 8 8 Yes held during attended
the tenure
Dr. N. K. Thingalaya 8 7 Yes
of the
Mr. F. B. Virani 8 8 Yes Directors
Mr. V. D. Shinde 6 4 No Mr. V. A. Gore Independent
(Nominee Director Chairman & Non-Executive 5 5
of IDBI Upto - Dr. N. K. Independent
20.12.2005) Thingalaya & Non-Executive 5 4

17
Apar Industries Limited
Name of Category No. of No. of 3. In terms of Section 309(1) of the Companies Act, 1956,
Directors meetings meetings Dr. N. D. Desai, a Non-Executive Chairman has been
held during attended paid for his professional services to the Company Rs.
the tenure 540,176/- towards his fees including monetary value of
of the facilities during the period from 1st February, 2006 to
Directors 31st March, 2006.
Mr. F. B.Virani Independent & 5 5
Non-Executive
4. In terms of Section 309(1) of the Companies Act, 1956,
Shri H. N. Shah, a Non-executive Professional Director
Mr. Richard Owen Non-Executive 1 1
Pyvis / has been paid for his professional services to the
Ms. Josephine Company Rs. 1,491,600/- towards his fees including
Price -Alternate monetary value of facilities during the period from 1st
Director April, 2005 to 31st March, 2006.
w.e.f. 25.01.2006
The professional fees of above two directors have been
DETAILS OF REMUNERATION PAID TO ALL THE fixed by the Board after considering their professional
DIRECTORS : expertise and experience in the respective fields, loyalty
1. During the year under review, as authorized by the and professional fees structure prevalent in the industry.
shareholders vide Resolution passed at the Extra- 5. Remuneration paid to Non-Executive Directors for
Ordinary General Meeting held on 27th September, attending the meetings of Board of Directors and
2002, the remuneration in the form of fees for Committees is as given below :
Professional services rendered by Shri H. N. Shah,
Director was revised by the Board of Directors of the Name of Directors Sitting No. of Equity
Company. Fees Shares held in
(Rs.) the Company
2. Further, during the year under review, as authorized by
the shareholders vide Resolution passed at the 15th Mr. V. A. Gore 1,07,500 —
Annual General Meeting held on 23rd July, 2004, the Dr. N. K.Thingalaya 72,500 —
remuneration payable to Shri M. M. Patel, Whole-time Mr. F. B. Virani 85,000 5,500
Director (Polymers) was revised by the Board of Directors
of the Company. Mr. V. D. Shinde / 45,000 —
Mr. M. N. Kamat
3. The non-executive directors receive the sitting fees for (Nominee of IDBI) *
attending the Board and Committee meetings, as the
case may be. Mr. H. N.Shah 67,500 2,220

4. The break up of remuneration paid / payable to the Dr. N. D. Desai 7,500 5,050,598
Managing Directors and the Whole-time Directors for Ms. Josephine Price 7,500 —
the financial year 2005-2006 are as under :
* Being a Nominee Director of IDBI, sitting fees are paid
Name of Director Dr. N. D. Mr. Kushal Mr. C. N. Mr. M. M. to IDBI as per the terms of nomination.
Desai N. Desai Desai Patel
Position Chairman* Managing Joint Director
SHARE TRANSFER & SHAREHOLDERS’ GRIEVANCE
Director Managing (Polymers) COMMITTEE :
Director
1. The Board of Directors of the Company has constituted
Salary (Rs.) 1,008,000 1,313,883 1,238,081 1,463,395 Share Transfer & Shareholders’ Grievance Committee
Commission (Rs.) 5,283,844 5,283,843 5,283,843 — of Directors in order to meet the requirement of Clause
Perquisites / 49 of the Listing Agreements of the stock exchanges.
Allowances (Rs.) 1,124,698 873,613 911,759 312,289 This Committee has been constituted with the objective
Total (Rs.) 7,416,542 7,471,339 7,433,683 1,775,684 of overseeing redressal of investors’ complaints
Stock Option pertaining to share transfers / transmission of shares,
Granted (Nos.) Nil Nil Nil Nil non-receipt of dividend / interest, dematerialisation
Service Contract Upto 5 years 5 years 5 years (Demat) of shares and other related matters.
31/01/2006 from from from
01/01/2002 01/01/2002 01/04/2004 2. Share Transfer & Shareholders’ Grievance Committee
to to to met three times during the financial year, i.e. on 17th
31/12/2006 31/12/2006 31/03/2009 June, 2005, 30th September, 2005 and 25th January,
Notice Period — 1 Month 1 Month 1 Month 2006.
* ceased to be Whole-time Director w.e.f. 1st February, The composition of Committee and attendance of
2006. Directors at their meetings are given below :

18
 17th Annual Report 2005-2006
Name of Category No. of No. of b) Related Party transactions :
Directors meetings meetings The relevant details of all transactions with related parties
held during attended given in Note No. 11 of Schedule No. 23 of the audited
the year Accounts for the financial year 2005-2006, form a part
of this report also. There are no materially significant
Mr. V. A. Gore Independent 3 3
related party transactions of the Company which have
Chairman Non- Executive
potential conflict with the interests of the Company at
Dr. N. D. Desai Non- Executive 3 3 large.
Director
c) The Company has complied with the requirements of
Mr. C. N. Desai Executive 3 3 regulatory authorities on capital markets and no
Director penalties or strictures have been imposed against it.
SHARE TRANSFER SYSTEM : d) The statutory financial statements of the Company are
1. The Board of Directors has delegated the power of unqualified.
approval of share transfers to the Company Secretary e) Means of Communication :
and Deputy Secretary of the Company jointly, who Quarterly / Half Yearly / Yearly Financial Results :
approve the share transfers regularly on fortnight basis, Generally published in Gujarat and Mumbai edition of
and gist of transfers are placed before the Share Transfer “The Business Standard”, English daily newspaper and
& Shareholders’ Grievance Committee. “Financial Express” - Gujarati daily newspaper.
Compliance Mr. D.C. Patel, Company Secretary, Financial Results of the Company are displayed on the
Officer: Apar Industries Limited, Company’s website : www.apar.com
301, Panorama Complex, Pursuant to Clause No. 51 of the Listing Agreement of
R.C. Dutt Road, Vadodara 390 007. Stock Exchanges, the Company has also been
2. Status of complaints for the period 1st April, 2005 to registered for EDIFAR filing and the login ID of Company
31st March, 2006. is “APARIND”. Shareholders can login EDIFAR section
1 No. of complaints received 64 of web-site - www.sebi.gov.in for the information relating
to Quarterly / Annual Financial Results, Quarterly
2 No. of complaints resolved 64 Shareholding Patterns etc.
3 No. of complaints not solved to the Nil f) Management Discussion & Analysis is covered under
satisfaction of the investors as at Nil the separate head of the Directors’ Report of 2005-2006.
31st March, 2006
g) The Company has complied with mandatory requirement
4 Complaints pending as at Nil of Corporate Governance provisions and has not adopted
31st March, 2006 non-mandatory requirements except that the Non-
5 No. of share transfers pending for Nil executive Chairman is entitled to maintain Chairman’s
approval as at 31st March, 2006 Office at Company’s expense and allowed re-
imbursement of expenses incurred in performance of
DISCLOSURES : his duties.
a) General Body Meeting : h) Secretarial Audit :
The details of last three Annual General Meetings (AGM) A qualified Practicing Company Secretary carried out
of shareholders of the Company held are as under : on quarterly basis, a secretarial audit to reconcile the
total dematted Share Capital with National Securities
Date AGM Location Time Depository Limited (NSDL) and Central Depository
30th September, 16 th
The Auditorium, 10.30 Services (India) Limited (CDSL) and physical Share
2005 AGM Vanijya Bhavan, A.M. Capital with the total issued and listed share capital.
Central Gujarat The secretarial audit report confirms that the total issued
Chamber of Commerce, / paid up capital is in agreement with the total number
Race Course, of shares in physical form and the total number of
Vadodara - 390 007. dematerialized shares held with NSDL and CDSL.
23rd July, 2004 15th — As above — 11.00 GENERAL INFORMATION :
AGM A.M. 1. Annual General Meeting
30th September, 14th — As above — 10.00 Day, Date and Time : Thursday, 10th August,
2003 AGM A.M. 2006 at 10.30 A.M. at The
Auditorium, Vanijya Bhavan,

19
Apar Industries Limited
Central Gujarat Chamber of 8. Stock Performance :
Commerce, Race Course,
Vadodara 390 007.
The performance / movement of price of the Company’s
Equity Share as compare to BSE Sensitive Index is
2. Financial Calendar for given in the chart below :
2006-2007 :
Financial year ending : 31st March
First Quarter Results
(June, 2006) : On or before
31st July, 2006
Half Yearly Results
(September, 2006) : On or before
31st October, 2006
Third Quarter Results
(December, 2006) : On or before
31st January, 2007
Approval of Annual
Accounts (2006-07) : On or before
30th June, 2007.
3. Book Closure Dates : 4th August, 2006 to
10th August, 2006 9. Registrar for Share MCS Limited
(both days inclusive) Transfer and Neelam Apartment,
4. Dividend Payment : Dividend warrants will be Depository : 88, Sampatrao Colony,
dispatched after the AGM, B/H.Standard Chartered Bank,
but before the expiry of Alkapuri, Vadodara - 390 007.
statutory period of 30 days Ph. Nos. (0265) 2339397, 2350490
from the date of AGM. Fax No. (0265) 2341639
5. Registered Office : 301, Panorama Complex, E-mail: [email protected]
R. C. Dutt Road,
Vadodara - 390 007. 10. Distribution of Shareholding as at 31st March, 2006:
6. Listing of Shares on the Range No. of % of No. of % of
Stock Exchanges : The Equity Shares of the of Equity Equity Equity Equity Share-
Company are listed on :
Shares Share- Share- Shares holding
Bombay Stock Exchange National Stock Exchange of
Limited, Mumbai (BSE). India Limited (NSE), holders holders held
Phiroze Jeejeebhoy Towers “Exchange Plaza”, 1 - 500 16,049 95.88 7,98,865 3.84
Dalal Street, Fort, Bandra- Kurla Complex,
Mumbai - 400 023. Bandra (E), Mumbai-400 051. 501 - 1000 331 1.98 2,71,717 1.31
Scrip Code No. 532259 Scrip Code - APARINDS 1001 - 2000 163 0.97 2,48,372 1.19
The Company has paid due listing fees of both the Stock 2001 - 3000 60 0.36 1,54,221 0.74
Exchanges. 3001 - 4000 21 0.13 77,986 0.37
7. Stock Price Data for the financial year April, 2005 to 4001 - 5000 27 0.16 1,26,036 0.61
March, 2006 prevailed at the Bombay Stock Exchange 5001 - 10000 36 0.22 2,50,311 1.20
Ltd. (BSE) and National Stock Exchange of India Ltd. Above 10000 50 0.30 1,88,78,537 90.74
(NSE):
Total 16,737 100.00 2,08,06,045 100.00
Year Month BSE NSE
11. Outstanding Convertible Preference Shares :
High Low Monthly High Low Monthly
(Rs.) (Rs.) Volume (Rs.) (Rs.) Volume The Company has issued and allotted 3,445,978 - 5.40
2005 April 132.45 117.50 2,40,580 131.75 117.00 1,14,261
% Cumulative Compulsorily Convertible Preference
May 144.95 115.60 2,23,623 145.15 115.30 2,29,101 Shares of Rs. 185/- each to M/s. Shinny Limited,
June 150.75 137.80 3,48,311 150.95 138.75 4,96,102
July 175.00 150.60 4,87,131 175.25 152.25 5,38,155
Mauritius on 11th October, 2005. As per the terms of its
August 195.20 168.30 6,95,850 194.90 167.50 5,66,044 issue, these shares are fully convertible into 3,445,978
September 242.55 195.55 7,05,425 241.90 196.00 4,69,721 Equity Shares of Rs. 10/- each at a premium of Rs.
October 225.00 207.30 3,98,317 225.00 208.30 1,93,221
November 229.95 214.75 3,42,682 230.30 214.00 3,19,256 175/- per share on expiry of 12 months from the date of
December 235.55 210.20 3,42,923 236.95 210.35 2,21,746 its allotment.
2006 January 217.45 198.40 98,405 218.85 199.50 96,429
February 224.25 189.60 2,22,457 224.90 190.25 2,47,715 Upon aforesaid conversion of Preference Shares on 11th
March 254.80 210.05 4,06,643 254.30 210.05 3,08,897
October, 2006, the issued Equity Share Capital of the

20
 17th Annual Report 2005-2006
Company shall increase from Rs. 208,060,450/- to DECLARATION REGARDING COMPLIANCE BY BOARD
Rs. 242,520,230/-. MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH
THE COMPANY’S CODE OF CONDUCT
12. Shareholding pattern as at 31st March, 2006 :
Category Existing Equity Post-Conversion This is to confirm that the Company has adopted a Code of
Shareholding Equity Shareholding Conduct for its employees and directors. The said Code is
(See note below) available on the Company’s web site.
No. of % No. of %
Equity Holding Equity Holding I confirm that the Company has in respect of the financial year
Shares held Shares held
ended 31st March, 2006, received from the senior management
Promoters / Persons team of the Company and the members of the Board, a
Acting in concert 1,45,45,081 69.91 1,45,45,081 59.97 declaration of compliance with the Code of Conduct as
Banks, Financial
Institutions and
applicable to them.
Insurance Companies 16,504 0.08 16,504 0.07
Mutual funds 17,65,533 8.49 17,65,533 7.28 For the purpose of this declaration, Senior Management Team
Foreign Institutional means, the Chief Financial Officer, the Company Secretary and
Investors 7,61,371 3.66 7,61,371 3.14 all Vice Presidents and Functional Heads of the Company as
NRIs / OCBs 53,559 0.26 53,559 0.22
Corporate Bodies 10,45,235 5.01 10,45,235 4.31
on 31st March, 2006.
Resident Individuals 26,18,762 12.59 26,18,762 10.80
Foreign Investor Place : Mumbai (Kushal N. Desai)
(Shinny Limited, Date : 27th June, 2006 Managing Director & CEO
Mauritius) – – 34,45,978 14.21
Total 2,08,06,045 100.00 2,42,52,023 100.00
Note : Certificate of Compliance of Corporate
As stated in para no.11, M/s. Shinny Limited shall be entitled Governance as per clause 49 of the Listing
to receive 34,45,978 Equity Shares of Rs. 10/- each on Agreement with Stock Exchanges.
conversion of their Preference Shares on 11th October, 2006.
Therefore the Shareholding pattern on post conversion basis To
is presented considering the shareholding of existing equity The Members of Apar Industries Ltd.
shareholders as on 31st March, 2006.
We have examined the compliance of conditions of corporate
13. Dematerialization of Shares & Liquidity : governance by Apar Industries Limited for the year ended on
As at 31st March, 2006, approx. 98% of total Equity March 31, 2006 as stipulated in Clause 49 of the Listing
Share Capital is held in electronic form with National Agreement of the said Company with the Stock Exchanges.
Securities Depository Ltd. (NSDL) and Central The compliance of conditions of corporate governance is the
Depository Services Ltd. (CDSL). The Company’s equity responsibility of the management. Our examination was limited
shares are compulsorily traded in the electronic form at to procedures and implementation thereof, adopted by the
the Stock Exchanges. Requests for dematerialisation Company for ensuring the compliance of the conditions of
of shares are processed and confirmed to NSDL or CDSL Corporate Governance. It is neither an audit nor an expression
by the Registrar, MCS Limited. The Equity Share ISIN of opinion on the financial statements of the Company.
No. is INE372A01015. In our opinion and to the best of our information and according
14. Plant Locations : to the explanations given to us and representation made by the
Directors and the management, we certify that the Company
Division Locations has complied with the conditions of Corporate Governance as
a) Polymers Division a) Valia (Gujarat) and Trombay stipulated in Clause 49 of the Listing Agreement.
b) Special Oils b) Trombay, Rabale We state that no investor grievance is pending for a period
Refinery Division and *Silvassa exceeding one month as on March 31, 2006 against the
c) Conductors Division c) *Silvassa and Nalagarh (H.P.) Company as per the records maintained by the Shareholders’
* Union Territory of Dadra & Nagar Haveli Committee.
15. Address for Communication : We further state that such compliance is neither an assurance
as to future viability of the Company nor the efficiency or
Shareholders’ correspondence should be addressed
effectiveness with which the management has conducted the
to the Company at the Registered Office of the affairs of the Company.
Company at 301, Panorama Complex, R.C. Dutt Road,
Vadodara-390 007. For RSM & Co.
Chartered Accountants
Ph. (0265) 2331935,2323175, Fax (0265) 2330309. Place : Mumbai Vijay N. Bhatt
E-mail: [email protected] / [email protected] Date : 27th June, 2006 Partner (F - 36647)

21
Apar Industries Limited
Auditors’ Report iii. in case of the Cash Flow Statement, of the cash flows
of the Company for the year ended on that date.
To the members of For RSM & Co.
Apar Industries Limited Chartered Accountants
Place : Mumbai Vijay N. Bhatt
1. We have audited the attached Balance Sheet of Apar Industries Date : 27th June, 2006 Partner (F-36647)
Limited (‘the Company’) as at March 31, 2006 and also the Profit
and Loss Account and the Cash Flow Statement of the Company Annexure to Auditors’ Report
for the year ended on that date, annexed thereto (all together [Referred to in our Report of even date to the members of Apar Industries
referred to as ‘financial statements’). These financial statements Limited on the financial statements for the year ended on March 31,
are the responsibility of the Company’s management. Our 2006]
responsibility is to express an opinion on these financial statements
based on our audit. (i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
2. We conducted our audit in accordance with auditing standards fixed assets.
generally accepted in India. These Standards require that we plan
and perform the audit to obtain reasonable assurance about (b) The Company has a regular programme of physical
verification of its fixed assets over a period of three years,
whether the financial statements are free of material misstatement.
which in our opinion is reasonable having regard to the
An audit includes examining, on a test basis, evidence supporting size of the Company and the nature of its assets. In
the amounts and disclosures in the financial statements. An audit accordance with this programme, the management
also includes assessing the accounting principles used and conducted physical verification of certain fixed assets
significant estimates made by management, as well as evaluating during the year. We are informed that no material
the overall financial statement presentation. We believe that our discrepancies were noticed on such verification.
audit provides a reasonable basis for our opinion.
(c) The Company has not disposed off a substantial part of
3. As required by the Companies (Auditor’s Report) Order, 2003 fixed assets during the year under report, and accordingly,
issued by the Central Government of India in terms of Section 227 the going concern assumption is not affected.
(4A) of the Companies Act, 1956 (‘the Act’), and on the basis of
(ii) (a) As explained to us, the management has conducted
such checks of the books and records as we considered
physical verification of inventory at reasonable intervals
necessary and appropriate and according to the information and
during the year, and also as at the balance sheet date. In
explanations given to us during the course of the audit, we enclose
respect of inventory in the custody of third parties as at
in the Annexure, a statement on the matters specified in paragraphs
the balance sheet date, the Company has received written
4 and 5 of the said Order.
confirmations of holding from the parties for a substantial
4. Further to our comments in the Annexure referred to above, we portion of such inventories.
report that:
(b) In our opinion, and according to the information and
a. We have obtained all the information and explanations which explanations given to us, the procedures for physical
to the best of our knowledge and belief were necessary for verification of inventory, followed by the management are
the purposes of our audit; reasonable and adequate in relation to the size of the
b. In our opinion, proper books of account as required by law Company and nature of its business.
have been kept by the Company, so far as appears from our (c) In our opinion, and according to the information and
examination of those books; explanations given to us, the Company has maintained
proper records of its inventory, and the discrepancies
c. The Balance Sheet, Profit and Loss Account and Cash Flow noticed on physical verification of inventory as compared
Statement dealt with by this report are in agreement with the to the book records were not of a material nature and have
books of account; been properly dealt with in the books of account.
d. In our opinion, the Balance Sheet, Profit and Loss Account (iii) (a) The Company has not granted any loans, secured or
and Cash Flow Statement dealt with by this report, comply unsecured, to companies, firms or other parties covered
with the accounting standards referred to in Section 211(3C) in the register maintained under Section 301 of the Act.
of the Act; Accordingly, the provisions of clauses (iii)(b), (iii)(c) and
e. On the basis of the written representations received by the (iii)(d) of paragraph 4 of the Order are not applicable.
Company from its directors, and taken on record by the Board (b) The Company has availed secured and unsecured loans
of Directors, we report that none of the directors are from eight parties covered in the register maintained under
disqualified as at the Balance Sheet date from being appointed Section 301 of the Act. The aggregate of the maximum
as a director under Section 274(1)(g) of the Act; amount of the loans outstanding during the year, and the
aggregate of the year-end balances of such loans was
f. In our opinion, and to the best of our information and according Rs.726,106,785 and Rs. 370,165,666 respectively.
to the explanations given to us, the said financial statements,
read with the notes thereon, give the information required by (c) In our opinion, and based on the information and
the Act in the manner so required and, give a true and fair explanations given to us, the rate of interest and other
terms and conditions of the loans availed by the Company
view in conformity with the accounting principles generally
are, prima facie, not prejudicial to the interests of the
accepted in India : Company.
i. in the case of the Balance Sheet, of the state of affairs (d) In our opinion, and according to the information and
of the Company as at March 31, 2006; explanations given to us, the Company is regular in
repayment of principal and interest in cases where
ii. in the case of the Profit and Loss Account, of the profit stipulations have been made. In cases where there are no
of the Company for the year ended on that date; stipulations, and repayment of both principal and interest
is stated to be at call, as the same has been paid as and
and when demanded by the parties, in our opinion, the Company
is regular in the payment of principal and interest.

22
 17th Annual Report 2005-2006
(iv) In our opinion, and according to the information and explanations Nature of Nature of Amount Period to which Forum where
given to us, the Company has an adequate internal control system the of dues under the amount dispute is
commensurate with the size of the Company and nature of its Statute dispute & relates pending
business for the purchase of inventory and fixed assets and unpaid (Rs.)
for the sale of goods and services. During the course of our
2,781,493 November 2003 Commissioner-
audit, we have not observed any continuing failure to correct to March 2005 Appellate
major weaknesses in the internal control system.
Customs Customs 20,127,980 April 1998 to Tribunal
(v) (a) To the best of our knowledge and belief, and according to Act, 1962 Duty March 1999
the information and explanations given to us, and on the Central Sales Sales Tax 2,055,462 1993 to 2005 Tribunal
basis of the audit procedures applied by us, the particulars Tax Act and
of contracts or arrangements referred to in Section 301 of Local Sales 1,909,678 1998 to 2002 Assistant
the Act, have been entered into the register required to be Acts Commissioner -
maintained pursuant to that section. Appellate
(b) In our opinion and according to the information and * includes Rs. 174,721,592 disclosed in note 1(d)(i) in Schedule 23 to the financial
explanations given to us, transactions (other than those statements.
already dealt with in paragraph (iii) above) made in (x) The Company does not have any accumulated losses as at
pursuance of contracts or arrangements referred to in March 31, 2006 and has not incurred cash losses in the financial
Section 301 of the Act have been made at prices which year ended on that date, or in the immediately preceding financial
are reasonable having regard to the prevailing market prices year.
at the relevant times.
(xi) According to the records of the Company examined by us and
(vi) In our opinion and according to the information and explanations the information and explanations given to us, the Company has
given to us, the Company has accepted deposits from the public, not defaulted in repayment of dues to financial institutions, banks
and in this regard, has complied with the directives issued by or its debenture holders as at the balance sheet date.
the Reserve Bank of India and the provisions of Sections 58A,
58AA and other relevant provisions of the Act and the rules (xii) The Company has not granted any loans or advances on the
framed there under. basis of security by way of pledge of shares, debentures and
other securities, accordingly the provisions of clause (xii) of
(vii) In our opinion, the Company has an internal audit system, the paragraph 4 of the Order are not applicable.
scope and coverage of which is being further strengthened to
make it commensurate with the size and nature of its business. (xiii) The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund / societies, is not applicable to the
(viii) We have broadly reviewed the cost records maintained by the
Company.
Company in respect of its Oil, Polymer and Conductor businesses
pursuant to the rules made by the Central Government for the (xiv) In our opinion, the Company is not a dealer or trader in shares,
maintenance of cost records under Section 209(1)(d) of the securities, debentures and other investments.
Act, and we are of the opinion that, prima facie, the prescribed (xv) According to the information and explanations given to us, the
records have been made and maintained. We have not, however, Company has given a guarantee in respect of credit facilities
made a detailed examination of the records with a view to availed by its wholly owned subsidiary from a bank, the terms
determining whether they are accurate or complete. and conditions whereof, in our opinion, are prima facie not
(ix) (a) In our opinion, and according to the information and prejudicial to the interests of the Company.
explanations given to us, the Company was generally (xvi) In our opinion and according to the information and explanations
regular during the year in depositing undisputed statutory given to us, on an overall basis, the term loans availed during
dues including Provident Fund, Investor Education and the year by the Company were applied for the purposes for
Protection Fund, Employees’ State Insurance, Income-tax, which they were obtained, including temporary deployment
Sales-tax, Wealth-tax, Service-tax, Customs duty, Excise pending such application.
duty, cess and other material statutory dues, with (xvii) In our opinion, and on the basis of an overall examination of the
appropriate authorities. In respect of contractors retained balance sheet of the Company and according to the information
by the Company, the management has represented to us and explanations given to us, there are no funds raised on a
that the relevant dues have been regularly deducted and short term basis which have been used for long term investment.
deposited by the contractors with appropriate authorities. (xviii) The Company has not made any preferential allotment of shares
As regards sales-tax dues relating to sales effected to parties and companies covered in the Register maintained
through the Company’s consignment agents, which are under Section 301 of the Act during the year.
recognized in the books of the agents, the management (xix) As per the information and explanations given to us, security
has represented to us that the agents are regular in has been created in respect of debentures outstanding during
depositing the same, and as at the balance sheet date the year.
there are no undisputed dues that remain unpaid. (xx) The Company has not raised any money by public issue during
(b) As at the balance sheet date, the following amounts of the year; accordingly the provisions of clause (xx) of paragraph
specified dues have not been deposited by the Company 4 of the Order are not applicable.
on account of disputes pending before authorities: (xxi) During the course of our examination of books and records,
Nature of Nature of Amount Period to which Forum where and according to the information and explanations given to us,
the of dues under the amount dispute is during the year, no fraud by the Company or on the Company
Statute dispute & relates pending
unpaid (Rs.) has been noticed or reported other than a fraud on the Company
representing encashment of Company’s letter of credit of
The Central Excise 71,293,908 August 2000 to High Court Rs.73.64 lacs against fraudulent documents by a foreign supplier
Excise Act, Duty* January 2002 (Andhra
1944 Pradesh)
for supply of goods (refer note 7 of Schedule 23).
103,527,688 July 2000 to Tribunal For RSM & Co.
February 2002 Chartered Accountants
39,401,977 September 1995 Tribunal Place : Mumbai Vijay N. Bhatt
to August 2004 Date : 27th June, 2006 Partner (F-36647)

23
Apar Industries Limited
BALANCE SHEET AS AT 31ST MARCH, 2006

As at 31st As at 31st
Schedule March, 2006 March, 2005
No. Rupees Rupees Rupees
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS :
Share capital 1 845,566,380 239,319,912
Reserves and surplus 2 959,945,832 675,446,143
1,805,512,212 914,766,055
LOAN FUNDS :
Secured loans 3 554,013,777 1,133,735,988
Unsecured loans 4 502,422,241 319,940,785
1,056,436,018 1,453,676,773
Deferred taxation liability (Net) 5 135,307,083 133,886,462
TOTAL 2,997,255,313 2,502,329,290
APPLICATION OF FUNDS
FIXED ASSETS : 6
Gross block 1,879,935,733 1,639,274,222
Less: Depreciation 853,973,537 781,225,323
Net block 1,025,962,196 858,048,899
Capital work-in-progress/advances 122,962,311 102,977,414
1,148,924,507 961,026,313
INVESTMENTS 7 6,326,393 15,388,945
CURRENT ASSETS, LOANS AND ADVANCES :
Inventories 8 2,333,143,322 1,144,089,475
Sundry debtors 9 2,606,404,754 1,956,550,856
Cash and bank balances 10 1,465,708,622 700,887,271
Other current assets 11 731,928 731,928
Loans and advances 12 539,757,645 499,247,435
6,945,746,271 4,301,506,965
Less: CURRENT LIABILITIES AND PROVISIONS :
Current liabilities 13 5,076,032,203 2,767,321,862
Provisions 14 79,237,764 41,150,634
5,155,269,967 2,808,472,496
NET CURRENT ASSETS 1,790,476,304 1,493,034,469
Miscellaneous expenditure (to the extent 15 51,528,109 32,879,563
not written off or adjusted)
TOTAL 2,997,255,313 2,502,329,290
SIGNIFICANT ACCOUNTING POLICIES 22
NOTES TO ACCOUNTS 23

As per our report of even date attached

For RSM & Co. For and on behalf of the Board of Directors
Chartered Accountants
Vijay N. Bhatt Kushal N. Desai V. A. Gore D. C. Patel V. C. Diwadkar
(Partner - F 36647) Managing Director Director Company Secretary Chief Financial Officer
& CEO
Dated : 27th June, 2006 Dated : 27th June, 2006
Place : Mumbai Place : Mumbai

24
 17th Annual Report 2005-2006
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2006
Schedule 2005-06 2004-05
No. Rupees Rupees
INCOME :
Sale of Goods, Services and related recoveries (net of excise) 16 10,910,281,227 8,367,489,452
Other Income 17 44,934,625 65,340,166
10,955,215,852 8,432,829,618
EXPENDITURE :
Operating and Other expenses 18 10,399,602,553 7,853,846,588
Decrease / (Increase) in Stocks 19 (335,359,150) 20,614,367
Depreciation 86,353,148 85,594,138
Interest and Discounting Charges 20 202,351,087 141,037,245
Exchange Rate Difference (Net) 79,180,365 (8,846,043)
10,432,128,002 8,092,246,295
PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS 523,087,849 340,583,323
Exceptional items 21 17,428,794 12,029,059
PROFIT BEFORE TAXATION FOR THE YEAR 505,659,055 328,554,264
Provision for taxation :
Current tax 71,000,000 38,500,000
Deferred tax 1,420,620 (11,991,481)
Fringe benefit Tax 3,850,000 –
Wealth tax 200,000 200,000
PROFIT AFTER TAXATION BUT BEFORE TAX PROVISION FOR EARLIER YEARS 429,188,435 301,845,745
Tax Provisions for earlier years (29,500,000) –
NET PROFIT AFTER TAXATION FOR THE YEAR 399,688,435 301,845,745
Balance of profit brought forward 228,558,365 89,683,257
Transfer (to) / from Debenture Redemption Reserve 45,000,000 (15,000,000)
Capital Redemption Reserve (31,355,140) (23,516,355)
Exchange Fluctuation Reserve – 50,000,000
AMOUNT AVAILABLE FOR APPROPRIATIONS 641,891,660 403,012,647
Appropriated as under :
- Transfer to General Reserve (100,000,000) (100,000,000)
- Interim Dividend on Equity Shares aggregating to
Rs.1.75 per share (Previous year Re.1.75 per share) (36,410,579) (36,410,579)
- Interim Dividend on Redeemable Preference Shares @
Re. Nil per share (Previous year Re.0.40 per share) – (3,135,514)
- Interim Dividend on 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights (as converted)
@ Re.1.75 per share (Previous year Nil). (6,030,461) –
- Proposed Dividend :
- On equity shares @ Rs.1.75 per share (previous year Rs. 1.25 per share) (36,410,579) (26,007,556)
- On 5.40% Cumulative Compulsorily Convertible Preference Shares with
participating rights :
- pro rata (16,222,435) –
- @ Rs. 1.75 per share (as converted) (6,030,461) –
- Tax on Dividends (14,179,909) (8,900,632)
BALANCE CARRIED TO BALANCE SHEET 426,607,236 228,558,366
SIGNIFICANT ACCOUNTING POLICIES 22
NOTES TO ACCOUNTS 23
Earnings Per Share (See note 13 of Schedule 23) face value of Rs. 10/- on :
Basic :
(i) On Profit before tax provisions for earlier years 19.08 14.43
(ii) On Profit after tax provisions for earlier years 17.66 14.43
Diluted :
(i) On Profit before tax provisions for earlier years 19.13 14.43
(ii) On Profit after tax provisions for earlier years 17.82 14.43
As per our report of even date attached
For RSM & Co. For and on behalf of the Board of Directors
Chartered Accountants
Vijay N. Bhatt Kushal N. Desai V. A. Gore D. C. Patel V. C. Diwadkar
(Partner - F 36647) Managing Director Director Company Secretary Chief Financial Officer
& CEO
Dated : 27th June, 2006 Dated : 27th June, 2006
Place : Mumbai Place : Mumbai

25
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006

As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees

SCHEDULE “1” - SHARE CAPITAL

(A) Authorised :
26,000,000 Equity Shares of Rs.10/- each 260,000,000 260,000,000
3,567,500 Preference Shares of Rs. 185/- each 659,987,500 –
49,000,000 Redeemable Preference Shares of Rs. 10/- each – 490,000,000
919,987,500 750,000,000
(B) Issued, Subscribed and Fully Paid Up :
i) 20,806,045 Equity Shares of Rs.10/- each 208,060,450 208,060,450
Less: Calls unpaid – 11,481
208,060,450 208,048,969
ii) 3,445,978 - 5.40% Cumulative Compulsorily
Convertible Preference Shares of Rs. 185/- each
with participating rights (Convertible on 11th October,
2006 into 3,445,978 equity shars of Rs. 10/- each
at premium of Rs. 175/- per share). 637,505,930 –
iii) 7,838,785 - 10% Redeemable Cumulative
Preference Shares (Series I) of Rs, 4/- each
(Redeemed on 1st April, 2005). – 31,355,140
Less: Calls unpaid – 84,197
– 31,270,943
TOTAL 845,566,380 239,319,912

SCHEDULE “2” - RESERVES AND SURPLUS

CAPITAL RESERVE :
As per last balance sheet 4,855,067 4,824,718
Add:- Share Premium received / adjusted during the year * 95,679 30,349
4,950,746 4,855,067
CAPITAL REDEMPTION RESERVE :
As per last Balance Sheet 197,032,710 173,516,355
Add: Transfer from Profit and Loss Account 31,355,140 23,516,355
228,387,850 197,032,710
DEBENTURE REDEMPTION RESERVE :
As per last balance sheet 45,000,000 30,000,000
(Less) /Add: Transfer (to)/from Profit and Loss Account (45,000,000) 15,000,000
– 45,000,000
EXCHANGE FLUCTUATION RESERVE :
As per last balance sheet – 50,000,000
Less: Transfer (to)/from Profit and Loss Account – (50,000,000)
– –
GENERAL RESERVE :
As per last balance sheet 200,000,000 100,000,000
Add :- Transfer from Profit and Loss Account 100,000,000 100,000,000
300,000,000 200,000,000
SURPLUS IN PROFIT AND LOSS ACCOUNT 426,607,236 228,558,366
TOTAL 959,945,832 675,446,143
* Unpaid share premium on calls unpaid as on 31.3.2006 Rs. Nil. (previous year Rs. 95,679).

26
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “3” - SECURED LOANS
(1) Debentures :
250,000 - 10% Non-Convertible Debentures of Rs. 1,000/- each – 250,000,000
Redeemable at par in five equal annual installments
commencing from 31st March, 2007. (Refer note ‘a’ below)
(2) From Banks :
(i) Cash Credit/Working Capital Demand Loans 453,726,226 689,448,228
(ii) Term Loan 66,930,000 131,372,000
(3) From a Financial Institution :
Term Loan 26,581,726 55,967,625
(4) Other Loans 91,330 263,640
(5) Sales Tax Deferment Loan 6,684,495 6,684,495
TOTAL 554,013,777 1,133,735,988
Notes :
a) Debentures (prepaid during the year ) were secured by way of mortgage of specified properties and charge on movables and current assets
of the Company ranking third in priority of charge.
b) The Cash Credit/Working Capital Demand Loans from banks are secured by:
(i) hypothecation of specified stocks and specified book debts.
(ii) joint mortgage of specified fixed assets ranking second and subsequent in point of priority to the mortgage created in favour of financial
institutions for term loans.
c) Term Loans from Bank amounting to Rs.66,930,000 are secured by an exclusive charge by way of hypothecation of certain items of plant &
machinery procured/to be procured from the proceeds of the said loan.
d) Term Loans from Financial Institutions are secured by :
(i) first charge* by way of equitable mortgage of the Company’s specified immovable properties both present and future and first charge*
by way of hypothecation of the Company’s specified movable properties (save and except book debts) including movable machineries,
spares and tools and accessories, present and future, subject to prior charges * in favour of Company’s bankers on specified movables
for securing borrowings for working capital requirements.
(ii) first charge* by way of hypothecation of all movable properties acquired out of the proceeds of the concerned loans.
e) Term Loans from Financial Institutions / Cash Credit / Working Capital Demand Loans referred to in (b) & (d) above are further secured by
certain immovable properties of Apar Corporation Private Limited.
f) Loans amounting to Rs.547,237,950 at item No. (2) and (3) are, in addition to the securities specified above, secured by personal guarantee
of one or more Directors.
g) Other loans represent loan from banks for purchase of cars, against the security of cars purchased.
h) The first charge in respect of loans referred to in Note(b), (c) and (d) above will not extend to specific items of machinery purchased by the
Company under the proceeds of “Other loans” referred to at (g) above.
i) The Sales Tax Deferment loan represents sales tax collected on sales and not paid pursuant to the Sales Tax Deferment facility. This loan is
secured by joint mortgage of specified fixed assets ranking on pari pasu basis with charges created as per (b) above and is repayable in 6
annual installments commencing from 30th May, 2006.
j) Loans under item 2(ii), 3, 4 and 5 include amounts repayable within a year Rs.23,909,013 (Previous year Rs.166,970,010)
* denotes charge created / to be created.
SCHEDULE “4” - UNSECURED LOANS
(1) Fixed Deposits :
(a) From public 88,260,000 81,190,000
(b) From directors 38,500,000 38,500,000
126,760,000 119,690,000
(2) Short term loans and advances
From a Bank (Refer note 2 below) 50,000,000 -
(3) Sales Tax Deferment loan 12,382,075 18,044,000
(Refer Note 3 below)
(4) Loans from Directors 280,000,000 137,500,000
(5) Inter Corporate Deposits 33,280,166 44,706,785
313,280,166 182,206,785
TOTAL 502,422,241 319,940,785
Notes :
1) Loans indicated at 1, 2 and 3 above includes amount of Rs. 138,215,000 (previous year Rs. 78,141,000) payable within a year. Loans at 4
and 5 are repayable at call.
2) Loans indicated at 2 above are secured by personal guarantee of one or more Directors.
3) This represents Sales tax collected on sales and not paid pursuant to the sales tax deferment facility. This loan is secured by personal
guarantee of one or more directors and is payable in May, 2006 (since paid).

27
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006

As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “5” - DEFERRED TAX LIABILITY (NET)
Deferred tax liability arising on account of timing difference in :
Book and Tax depreciation 147,873,173 146,937,277
Less: Deferred tax asset arising on account of timing differences in :
(i) Provision for doubtful debts and advances 8,620,207 8,913,021
(ii) Provision for gratuity and leave salary 3,812,298 3,870,541
(iii) Amortisation of technical know-how fees 133,585 267,253
12,566,090 13,050,815
TOTAL 135,307,083 133,886,462

SCHEDULE “6” - FIXED ASSETS

GROSS BLOCK DEPRECIATION WRITTEN DOWN VALUE

As at 1st As at 31st As at 1st Deductions/ For the As at 31st As at 31st As at 31st
April, 2005 Additions Deductions March,2006 April, 2005 adjustments year March,2006 March,2006 March,2005
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

Land
Freehold 23,021,531 11,805,814 – 34,827,345 – – – – 34,827,345 23,021,531
Leasehold 43,460,011 – – 43,460,011 4,693,042 – 621,544 5,314,586 38,145,425 38,766,969
(Refer Note
1 below)
Buildings
(Refer Note
2 & 3 below) 299,253,077 51,630,760 – 350,883,837 54,289,708 – 7,803,273 62,092,981 288,790,856 244,963,368
Plant and
Machinery
(Refer Note
4 below) 1,072,218,473 179,015,915 (11,985,741) 1,239,248,647 555,410,776 (11,043,772) 68,190,399 612,557,403 626,691,244 516,807,696
Wind Farm 96,970,140 – – 96,970,140 90,820,551 – 1,301,082 92,121,633 4,848,507 6,149,592
Furniture,
fixture and
equipments 78,424,072 6,824,573 (405,887) 84,842,758 61,117,409 (299,429) 4,930,078 65,748,058 19,094,700 17,306,663
Motor
Vehicles 25,926,918 6,768,300 (2,992,223) 29,702,995 14,893,837 (2,261,734) 3,506,772 16,138,876 13,564,119 11,033,080

TOTAL (RS.) 1,639,274,222 256,045,362 (15,383,851) 1,879,935,733 781,225,323 (13,604,935) 86,353,148 853,973,537 1,025,962,196 858,048,899

Previous
year 1,570,795,444 75,228,110 (6,749,332) 1,639,274,222 699,475,025 (3,843,840) 85,594,138 781,225,323

Capital work-in-progress including advances on capital account. 122,962,311 102,977,414

1,148,924,507 961,026,313

Notes :
1. Cost of leasehold land at GIDC, Valia includes Rs. 2,108,762 (Previous year Rs 2,108,762) being the cost fixed on tentative basis.
2. Buildings include:
(i) ownership flats in Co-operative Housing Societies which are registered in the name of directors (as nominee) Cost Rs.2,084,450
(previous year Rs. 2,084,450) (includes Rs.750 being cost of 15 shares of Rs.50 each) in a Co-Operative Housing Society. The
beneficial interest therein vests in the Company.
(ii) Rs 2,000 being cost of 20 shares of Rs 50/- each and 10 shares of Rs.100/- each in Co-operative Premises Societies in the name of
the Company.
(iii) an ownership flat to be registered in the name of the Company.
3. Buildings (gross block) include renovation of rented premises of Rs. 3,857,077 (previous year Rs.3,857,077) which is being depreciated at
prescribed rates.
4. The ownership of assets acquired under hire purchase will rest with owners till the payment of final instalments.

28
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “7” - INVESTMENTS - (At Cost)
I. Long-term, non-trade and unquoted, unless otherwise stated
A. Government of India Securities :
(i) 7 Year National Savings Certificates (including Rs. 6,000) (previous
year Rs.6,000) held as security by Government Departments 10,240 10,240
(ii) 12 Year National Defence Certificates 6,000 6,000
(iii) Kisan Vikaspatra (pledged with Maharashtra Water & Sewage Board) 1,000 1,000
(iv) 6 Year National Savings Certificates (held as security by
Government Departments) 7,000 7,000
24,240 24,240
B. In Equity Shares :
Trade :
(i) 247,500 shares (previous year 247,500) of Bharuch Eco-
Aqua Infrastructure Limited of Rs. 10/- each, fully paid up 2,475,000 2,475,000
(ii) 1,751 shares (previous year 1,751) of Bharuch Enviro
Infrastructure Limited of Rs. 10/- each fully paid up. 17,510 17,510
(iii) Investment in Subsidiary
100,000 (previous year 100,000) Ordinary Shares of S$ 1/- 2,643,645 2,643,645
each fully paid in Petroleum Specialities Pte Limited, Singapore
Non Trade :
4,200 Shares of Natpur Co-operative Bank Limited of Rs. 50 each 210,000 210,000
5,346,155 5,346,155
II. Current Investments
Units of Mutual Fund :
(i) 3,532 Units of Rs. 10/- each (previous year Nil units) in 35,353 –
ING Vysya Liquid Fund Institutional-Daily dividend option
(ii) 18,062 Units of Rs. 10/- each (previous year Nil units) in 197,900 –
LICMF Liquid Fund Dividend Plan
(iii) 66,473 Units of Rs. 10/- each (previous year Nil units) in 722,745 –
Principal Floating rate fund SMP - Institutional option growth plan
(iv) Nil Units of Rs. 10/- each (previous year 3,985 units) in – 18,550
IDBI - PRINCIPAL Cash Management Fund
(Liquid Option Growth Plan) - current
(v) Nil Units of Rs. 10/- (previous year 843,878 unis) in – 10,000,000
Prudential ICICI Liquid Plan Institutional Plus -
(Daily Dividend Option )
955,998 10,018,550
TOTAL 6,326,393 15,388,945
Note : Movements in investments in Mutual Funds during the year is as follows :

Units Units
Purchased Sold
ING Vysya Liquid Fund Institutional - Daily dividend option 3,999,416 3,995,884
LICMF Liquid Fund Dividend plan 11,199,661 11,181,599
Principal Floating Rate Fund SMP - Institutional option growth plan 44,159,339 44,092,866
IDBI - Principal Cash Management Fund – 3,985
Prudential ICICI Liquid Plan Institutional Plus – 843,878

29
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006

As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “8” - INVENTORIES
As valued and certified by the Management :
Stores and spare parts 39,496,232 34,889,331
Raw materials and components# 1,691,522,560 842,434,764
Work-in-progress 152,887,799 54,190,334
Finished goods* 448,873,646 212,231,706
Scrap 363,085 343,340
TOTAL 2,333,143,322 1,144,089,475

# Including Raw materials in transit Rs.618,798,240 (previous year Rs.131,492,112)

* Including stock of traded goods Rs.8,463,721 (previous year Rs.4,881,759)
SCHEDULE “9” - SUNDRY DEBTORS
Debts outstanding for a period exceeding six months
Secured : Considered good 6,710,649 6,933,790
Unsecured : Considered good 203,092,517 162,207,268
Considered doubtful 25,609,646 26,471,700
235,412,812 195,612,758
Other debts - Considered good
Secured 3,970,456 5,197,303
Unsecured 2,392,631,131 1,782,212,495
2,396,601,587 1,787,409,798
Less: Provision for doubtful debts 25,609,645 26,471,700
TOTAL 2,606,404,754 1,956,550,856

SCHEDULE “10” - CASH AND BANK BALANCES

Cash on hand 698,281 865,779
Cheques / Demand drafts on hand 32,786,365 -
Balances with Scheduled Banks :
In current accounts 215,508,913 209,437,207
In deposit accounts 18,750,490 14,321,196
In margin money accounts # 1,197,964,573 476,263,089
1,432,223,976 700,021,492
TOTAL 1,465,708,622 700,887,271

# includes deposits of Rs. 805,000,000 pledged as security for

Letters of Credit aggregating Rs. 783,470,197 rolled over.

SCHEDULE “11” - OTHER CURRENT ASSETS

Fixed Assets intended for sale/disposal
(At lower of cost and estimated net realisable value)

Land 35,715 35,715

Building 196,213 196,213
Plant and Machinery 500,000 500,000
TOTAL 731,928 731,928

30
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “12” - LOANS AND ADVANCES
Unsecured, considered good, unless otherwise stated :
a) Advances recoverable from subsidiary company
Considered good 3,437,607 3,251,333
b) Advances recoverable in cash or in
kind or for value to be received *
Considered good 502,240,138 444,123,048
Considered doubtful 1,000,000 1,000,000
503,240,138 445,123,048
Less:- Provision for doubtful advances 1,000,000 1,000,000
502,240,138 444,123,048
c) Balances with Excise Department :
In current account 589,101 4,186,720
d) Advance payments of tax less provisions 11,143,149 43,052,272
e) Interest accrued but not due on deposits 22,347,650 4,634,062
TOTAL 539,757,645 499,247,435

* Includes Rs.11,978,187 being Excise Duty paid under protest

(previous year Rs.10,339,463)
* Includes Rs.6,110,417 being Sales Tax paid under protest (previous year Rs.Nil)

SCHEDULE “13” - CURRENT LIABILITIES

Acceptances 101,860,263 175,301,841
Sundry creditors (Refer Note 6 of Schedule ‘23’) 4,236,678,930 2,179,042,757
(Includes due to subsidiary company Rs. Nil
[previous year Rs. 46,094,987])
Other liabilities 655,794,092 322,506,508
Unpaid redemption amount of preference shares
(Refer note 8 of Schedule ‘23’) 64,784 –
Unclaimed dividend (to be credited to Investor
Education and Protection Fund when due) 8,080,671 4,250,576
Interim dividends *
Equity Shares 20,806,045 20,806,045
Preference Shares 3,445,978 3,135,514
Book overdraft 2,952,340 49,125,028
Interest accrued but not due on loans 46,349,100 13,153,593
TOTAL 5,076,032,203 2,767,321,862
Sundry Creditors include Rs. 783,470,197 (Previous year Rs. 441,417,063)
being Letters of Credit rolled over.
* since paid
SCHEDULE “14” - PROVISIONS
For Gratuity (In respect of Directors) 915,000 2,942,500
For Accumulated and unavailed leave 11,431,736 8,553,018
For proposed dividend :
Preference Shares 22,252,896 -
Equity Shares 36,410,579 26,007,556
For tax on proposed dividends 8,227,553 3,647,560
TOTAL 79,237,764 41,150,634

31
Apar Industries Limited
SCHEDULE ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees Rupees
SCHEDULE “15” - MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
A) Voluntary Retirement Compensation
Opening Balance 32,879,563 14,985,285
Add: Incurred during the year 17,920,000 29,923,337
50,799,563 44,908,622
Less: Amortized during the year 15,613,061 12,029,059

Balance 35,186,502 32,879,563

B) Share Issue Expenses
Opening Balance – –
Add: Incurred during the year 18,157,341
18,157,341
Less: Amortized during the year 1,815,734
Balance 16,341,607 –
TOTAL 51,528,109 32,879,563

SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2006
2005-2006 2004-2005
Rupees Rupees Rupees
SCHEDULE “16” - SALE OF GOODS, SERVICES AND RELATED
RECOVERIES (NET OF EXCISE)
Sales 11,674,133,711 8,849,354,659
Less: Excise duty (1,450,848,908) (1,139,665,147)
10,223,284,803 7,709,689,512
Sale of traded goods 23,993,936 15,003,353
Sale of raw materials 174,413,654 165,715,426
Scrap sales 29,825,347 27,369,457
Export benefits [ Includes prior period Rs. Nil 33,974,407 109,170,091
(Previous year Rs. 6,698,979) ]
Rebate/refund of excise duty on deemed/physical exports 113,913,950 110,777,230
Transport charges recovered 266,327,740 197,016,894
Processing and other service charges 44,547,390 32,747,489
TOTAL 10,910,281,227 8,367,489,452

SCHEDULE “17” - OTHER INCOME

Value of power generated by Wind Mill 10,289,195 9,902,269
Commission 1,745,376 1,314,952
Rent 60,000 968,220
Profit on sale/disposal of fixed assets (net) 2,244,057 684,020
Excess provision for expenses written back 7,137,377 6,030,456
Provision for doubtful debts written back 1,825,245 16,135,861
Sundry Balances Written back 1,360,672 -
Profit on sale of current investments 789,928 -
Dividend on current investments 206,672 41,696
Sundry Income 19,276,103 30,262,692
TOTAL 44,934,625 65,340,166

32
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2006
2005-2006 2004-2005
Rupees Rupees Rupees
SCHEDULE “18” - OPERATING AND OTHER EXPENSES
Raw materials and components consumed 8,846,185,360 6,557,936,457
Purchase of traded goods 23,510,036 12,764,856
Excise duty adjustment of finished goods stock 14,463,287 1,914,116
Power, electricity and fuel 184,888,338 147,586,879
Stores, spare parts and packing materials (Refer note below) 355,461,929 304,097,201
Storage charges 13,475,546 13,978,792
Processing charges 3,516,444 1,515,878
Repairs and maintenance :
Buildings 2,918,461 2,361,432
Plant and machinery 12,852,293 15,837,882
Others 6,917,693 5,507,910
22,688,447 23,707,224
Insurance 22,645,585 17,655,286
Rent 1,598,590 2,034,574
Rates and taxes 8,531,906 11,774,324
Payment to and provision for employees :
Salaries, wages and bonus (Refer Note 5(A) of Schedule “23” ) 106,236,749 111,353,653
Contribution to provident and 14,802,650 13,079,263
other funds (including unquantified gratuity in respect of a director)
Provision for gratuity in respect 87,500 260,000
of directors (Refer Note 5(A) (b) of Schedule “23”)
Workmen and staff welfare expenses 16,543,705 14,121,281
137,670,604 138,814,197
Directors’ sitting fees 392,500 257,500
Commission to Chairman, Managing Director 15,851,530 10,446,129
and Joint Managing Director
Lease rentals 198,720 150,390
Freight outward 389,281,961 288,969,946
Commission on sales 53,325,105 47,542,578
Discounts and rebates [ Includes prior period Rs. Nil 14,645,263 24,048,328
(Previous year Rs. 7,900,900) ]
Advertisement expenses 1,652,175 1,520,886
Donations 630,501 1,572,592
Legal and Professional fees 19,697,418 22,386,900
Miscellaneous expenses [ Includes prior period Rs. Nil 135,868,377 118,645,961
(Previous year Rs. 766,583) ]
Bad debts and advances written off (Refer note no. 7 of Schedule 23 ) 35,984,995 9,287,909
Less: Provision for doubtful debts utilised (14,124,036) (279,800)
21,860,959 9,008,109
Provision for doubtful debts 15,087,227 14,591,886
Bank charges and commission 96,474,745 80,925,599
TOTAL 10,399,602,553 7,853,846,588
Note:- Stores and Spares consumed include expenses in respect of repairs
and maintenance of plant and machinery for which amounts have not
been separately ascertained.

SCHEDULE “19” - DECREASE/(INCREASE) IN STOCKS

Opening stock of finished goods, work-in-progress and scrap 266,765,380 287,379,747
Closing stock of finished goods, work-in-progress and scrap 602,124,530 266,765,380
(335,359,150) 20,614,367
TOTAL (335,359,150) 20,614,367

33
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2006
2005-2006 2004-2005
Rupees Rupees Rupees
SCHEDULE “20” - INTEREST AND DISCOUNTING CHARGES
On loans for fixed periods 46,419,209 52,456,170
On other loans / borrowings 218,145,881 132,204,186
264,565,090 184,660,356
Less: Interest earned- gross (Tax deducted at source
Rs.10,775,926 (Previous year Rs. 7,171,484) :
On bank deposits (50,901,075) (34,630,088)
Others (11,312,928) (8,993,023)
(62,214,003) (43,623,111)
TOTAL 202,351,087 141,037,245

SCHEDULE “21” - EXCEPTIONAL ITEMS

Amortisation of VRS compensation 15,613,060 12,029,059

Amortisation of Share issue expenses 1,815,734 –
TOTAL 17,428,794 12,029,059

SIGNIFICANT ACCOUNTING POLICIES

SCHEDULE “22”
1. Significant Accounting Policies followed (General):-
The financial statements are prepared on accrual basis under the historical cost convention and comply in all material
aspects with the Accounting Standards issued by the Institute of Chartered Accountants of India, the provisions of the Companies
Act, 1956 and the generally accepted accounting principles in India.
2. Significant Accounting Policies followed (Specific): -
(A) Fixed Assets, Depreciation and Amortization:-
(i) Fixed assets are stated at cost of acquisition / construction (net of CENVAT) less accumulated depreciation. Cost
includes purchase price and other costs attributable to acquisition / construction of fixed assets.
(ii) Depreciation on assets is provided at the rates and in the manner prescribed under Schedule XIV of the Companies
Act, 1956 (except as stated in (iii) below)
(a) in respect of assets of Polymers Division at Valia, on straight line method, and;
(b) in respect of assets of other Divisions, on written down value method except in respect of building and plant and
machinery purchased after 30.4.1987, which are depreciated on straight line method.
Certain items of plant and machinery which have been considered to be continuous process plant by the
management are depreciated at the prescribed rates.
(iii) In the cases where the estimated useful life of the asset is less as compared to useful life estimated in Schedule XIV
of the Companies Act, 1956, such assets are depreciated at rates higher than those prescribed under Schedule XIV
of the Companies Act, 1956.
(iv) No depreciation is provided in the year of disposal. However, this has no impact on the profits for the year as the
corresponding effect is reflected in the items of profit or loss on sale / disposal of fixed assets.
(v) In respect of assets costing less than Rs.5,000 each and temporary structures, 100% depreciation is provided in the
year of addition.
(vi) Capital Expenditure in respect of which ownership does not vest with the Company is amortized over a period of five
years. Leasehold land is amortized over the period of lease.
(vii) Borrowing costs attributable to acquisition/construction of qualifying assets within the meaning of the Accounting
Standard 16 on “borrowing costs” are capitalised as a part of the cost of fixed assets.

34
 17th Annual Report 2005-2006
SCHEDULE “22” (Contd.)
(B) Impairment of assets : -
Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the
carrying amount of the Company’s assets. If any indication exists, the recoverable amount of such assets is estimated.
An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount. The
recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value, based on an appropriate discounting factor. Impairment losses are
recognized in the profit and loss account.
(C) Investments : -
All long term investments are stated at cost. Provision for diminution in value of long term investments is made if it is of
permanent nature. Current investments are valued at lower of cost and market value.
(D) Inventories : -
Inventories are valued at lower of cost and net realisable value (cost of finished goods includes material cost, cost of
labour and attributable manufacturing overheads) on the basis of full absorption costing. Cost of materials is arrived at on
FIFO basis. Inventory of scrap is valued at estimated realisable value. Inventories of Finished Goods include excise duty
as applicable.
(E) Government Grants :-
(i) Government grants are recognised in the financial statements when they are received and there is reasonable
assurance that the Company will comply with the conditions attached to them.
(ii) Government grants, which are in the nature of refundable interest free loans received from government/semi-
government authorities, are credited to secured/unsecured loans.
(iii) Government grants which are in the nature of subsidies received from government/semi-government authorities and
which are non-refundable are credited to reserves.
(F) Voluntary Retirement Schemes :-
Compensation paid under voluntary retirement schemes is amortized over a period of 5 years.
(G) Share Issue Expenses :-
Share issue expenses are written off against share premium account, if any or amortized over a period of 5 years.
(H) Revenue recognition :-
(i) Sale of goods is recognised on despatch to customers and on date of shipment in case of exports. Sales exclude
amounts recovered towards sales tax and excise duty and is net of returns.
(ii) Price variation claims are accounted in accordance with the terms of contract and/or upon admittance by customers.
(iii) Dividend income on investment is recognised when the right to receive payment is established.
(iv) In respect of service activities, income is recognised as and when services are rendered.
(I) Retirement benefits : -
Retirement benefits to employees are provided for by payments to provident funds and in respect of certain employees
also by contribution to superannuation fund. The gratuity liability in respect of employees is determined on the basis of
an actuarial valuation and is funded with a trust. The gratuity liability in respect of all the Whole-time Directors of the
Company, except one director, (See note 5(A)(b) of Schedule ‘23’) is ascertained on an arithmetical basis and is not
funded.
Liability on account of accumulated unavailed leave salary is provided on the basis of an actuarial valuation.
(J) Translation of foreign currency :-
(i) The Company translates foreign currency transactions during the year, at the conversion rates notified by the custom
authorities.
(ii) Monetary items remaining unsettled at the year end are translated/reported at the year end rate. Exchange differences
arising on such revaluation are recognised in the Profit and Loss Account except exchange differences pertaining to
acquisition of fixed assets, which are adjusted in the carrying cost of the fixed assets.
(iii) Non-Monetary items (other than fixed assets) are reported at the exchange rate at which they are accounted.
(iv) In case of forward contracts, the difference between the forward rate and the exchange rate prevailing on the date of
the transaction is recognised as income or expense over the life of the contract, except in respect of liabilities incurred
for acquiring fixed assets where the difference is adjusted in the carrying cost of the fixed asset.

35
Apar Industries Limited
SCHEDULE “22” (Contd.)

(K) Hedging transactions (Aluminium) :-

All gains or losses in respect of hedging transactions are recognised in the financial statements on settlement/squaring
off. Commission etc. in respect of such transactions is accounted on accrual basis.
(L) Export benefits/Incentives : -
The Company accounts for excise duty rebate on deemed and physical exports and duty entitlements on physical exports
on accrual basis. Premium on special import licence is credited in the accounts as and when realised. The benefits in the
form of entitlements to Advance Licenses for duty free import of raw materials in respect of exports made are accounted
when such imports are made.
(M) Claims against the Company not acknowledged as debts : -
The demands under disputed showcause notices / orders of statutory authorities are provided in the accounts on the
basis of management’s estimate and the balance, if any are included in contingent liability.
(N) Taxes on income :-
Provision for taxation is made for both current and deferred taxes. Provision for current tax is made, at current rate of tax,
based on assessable income. Deferred tax resulting from timing differences between the book profits and the tax profits
is accounted for to the extent that the timing differences are expected to crystallise.
Deferred tax assets are not recognised on unabsorbed depreciation and carry forward losses unless there is virtual
certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised.

NOTES TO ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2006

SCHEDULE “23”
As at As at
31st March, 2006 31st March, 2005
Rupees Rupees
1. Contingent liabilities not provided for :
(a) Bills of exchange discounted 383,170,710 81,492,278
(b) Taxation:
Disputed demands of income tax 9,937,439 18,958,959
(c) Guaranteee given by the Company for credit facilities enjoyed by
the Wholly Owned Subsidiary 222,600,000 218,950,000
(d) Claims against the Company not acknowledged as debts -
(i) Demand/Show cause-cum-demand notices received and
contested by the Company with relevant appellate authorities:
Excise Duty (also refer note below) 43,998,152 30,523,994
Custom duty 23,830,496 3,870,357
Sales tax (including amount deposited Rs. 1,291,455) 6,886,937 1,100,000
Note : The Company had executed certain deemed export orders of Conductors
in respect of which the Company availed duty exemption on the basis of
eligibility certificates issued by project authorities. The central excise
authorities have subsequently raised demands aggregating
Rs.179,721,592 (previous year Rs. 179,721,592) (against which Rs.50
lacs has been deposited under protest) disputing the eligibility for
exemption. The Company has preferred appeals against these demands
before the appellate authorities. In case of these demands becoming
payable, the same would be either settled by the customer or would be
recoverable. Thus, it would be revenue neutral for the Company.
Accordingly, such demands are not considered as contingent liabilities
and hence not included above.
(ii) Demand/charges levied by the Local Authorities 19,406,618 18,073,928
(iii) Labour matters 19,531,439 4,375,620
2. Estimated amount of contracts remaining to be executed on
capital account and not provided for (Net of advances) 77,307,256 50,349,610

36
 17th Annual Report 2005-2006
SCHEDULE “23” (Contd.)
As at As at
31st March, 2006 31st March, 2005
Rupees Rupees
3. Premium in case of forward contracts not
expired and pertaining to the future period. 3,163,441 1,246,082
4. (A) Auditors’ remuneration :
i) For Audit fees 1,600,000 1,400,000
ii) Other services 500,000 453,200
iii) Out of pocket expenses 22,680 29,130
2,122,680 1,882,330
(B) Cost auditors’ remuneration :
i) For Audit fees 52,550 50,000
ii) Out of pocket expenses 1,532 2,372
54,082 52,372
5. Payment to directors :
A. Remuneration to directors
Directors’ sitting fees 392,500 257,500
Salaries and other benefits/amenitties 7,920,333 8,886,449
Provision for gratuity (ascertained on arithmetical basis) - see note (b) below 412,885 260,000
Commission as per item B below 15,851,530 10,446,129
24,577,248 19,850,078
NOTES :
(a) In the case of personal use of Company’s cars, recoveries have been made
from the Directors on the basis of the Income-tax Rules, 1962, which the Company
considers as adequate and reasonable.
(b) In case of a director, gratuity amount is included in the actuarial valuation carried
out for the Company as a whole and hence not ascertainable.
B. Computation of Net Profit under Section 198 of the Companies Act, 1956 and
commission payable to the directors :
Net profit before tax as per Profit and Loss Account 505,659,055 328,554,264
Add :
Depreciation charged in accounts 86,353,148 85,594,138
Directors’ remuneration (other than commission) 8,725,718 9,403,949
Provision for bad debts / advances net of bad debts provision (862,054) (1,823,775)
utilised and bad debts provision written back during the year
Directors’ commission 15,851,530 10,446,129
110,068,343 103,620,441
615,727,398 432,174,705
Less :
Depreciation as per Section 350 86,353,148 85,594,138
Wealth-tax for the year 200,000 200,000
Profit on sale of Investments 789,928 -
87,343,076 85,794,138
Net profit as per Section 198 of the Companies Act, 1956 528,384,321 346,380,567
Commission @ 1% each for Chairman, Managing Director
and Joint Managing Director 15,851,530 10,391,416
6. (a) Sundry Creditors include amounts due to Small Scale Industrial
Undertakings. 4,581,215 1,347,168
(b) Names of Small Scale Undertakings to whom the Company owes a
sum outstanding for more than 30 days :
1. M/s Core Chemicals Pvt. Ltd
2. M/s Perfect Speciality Product

37
Apar Industries Limited
SCHEDULE “23” (Contd.)

3. M/s Shefjo Plastics 6. M/s Krishna Antioxidents Pvt. Ltd.

4. M/s Vibha Chem Products Ltd. 7. M/s Nikita Transphases Pvt. Ltd.
5. M/s Caliber Chemicals Pvt. Ltd. 8. M/s Thakkar Polypack Industries.
The above disclosure is based on the information/documents available with the Company.
7. During the year, the Company contracted with a foreign supplier for supply of Aluminum Ingots. The Company received
shipping documents and the Company’s letter of credit of Rs. 73.64 Lacs was encashed against the fraudulent documents
of supply. The detailed investigation carried out by the Company confirmed that there was no supply of goods. The Company
has written off the said amount as bad debts / advances in the books. There have been no other dealings by the Company with
the supplier.
8. The Company redeemed the last tranche of 10% Redeemable Preference Shares of Rs. 4/- each on April 1, 2005 in terms of
the issue. In accordance with the requirement of Section 80 of The Companies Act, 1956, capital redemption reserve for the
full amount of the Preference Share has been created out of the profits of the Company. Above redemption did not include
some Preference Shares having calls in arrears on 1st April, 2005. The said calls have been received during the year and the
amount payable on redemption of these Prererence Shares after adjusting other moneys due from holders of these shares
is transferred to ‘Unpaid Redemption Amount on Preference Shares Account'.
9. The summary of utilisation of the amount of Rs. 6,375.06 Lacs raised by issue of 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights is as under:

(Rs. Lacs)
Envisaged Actually used
Use upto 31.03.2006
Expansion Projects (Capital Expenditure) 3,875.06 1,389.66
Redemption of Non-convertible Debentures 2,500.00 2,500.00
TOTAL 6,375.06 3,889.66
10. (I) Category wise quantitative data about derivative instruments
oustanding as at 31st March, 2006
Type of Instrument Nos. Amount
(a) In respect of Commodity (Aluminum) :
Futures at London Metal Exchange 22 $1,109,592
(b) In respect of Foreign Currency :
Forward contracts 9 $20,450,000
Options 7 $3,500,000
Currency and Interest SWAP 1 $570,000
(II) All the derivative instruments entered by the Company during the year were for
hedging purpose and not for any speculative purpose.
(III) Unhedged foreign currency exposure as at 31st March, 2006
In US $ 53,780,000
In Euro 830,000
11. Related Party Disclosures :
A. List of Related Parties :
a) Subsidiary Company :
Petroleum Specialities Pte. Ltd., Singapore
b) Key Managerial Personnel :
Dr. N. D. Desai - Non Executive Chairman (was an Executive Chairman till 31st January, 2006).
Mr. K. N. Desai - Managing Director
Mr. C. N. Desai - Jt. Managing Director
Mr. M. M. Patel - Director (Polymers)
c) Relatives of Key Managerial Personnel :
Mrs. Noopor Kushal Desai
Mrs. Vineeta R Srivastava
Mr. Rishabh K Desai
Ms. Gaurangi K Desai
Ms. Krishnangi R Srivastava

38
 17th Annual Report 2005-2006
SCHEDULE “23” (Contd.)

d) Entities over which key management personnel excercise significant influence:

Apar Corporation Private Limited Scope Private Limited
Consumers Services Private Limited Ceom Private Limited
Dr. N. D. Desai HUF Kushal N. Desai Family Trust
Kushal Chaitanya Desai Family Trust Chaitanya N. Desai Family Trust
Apar Masat Conductors Ltd.( No transactions during the year) Apar Investments (Singapore) Pte. Ltd. and its
subsidiaries (No transactions during the year).
(i) Subsidiary Company :
Sr. Transactions 2005-2006 2004-2005
No.
1 Purchase of Raw Material 808,387,239 323,853,412
2 Sales of Finished Goods 841,163 -
3 Reimbursement (received) of expenses 2,150,690 3,251,333
4 Guarantees given by the Company on behalf of the subsidiary 222,600,000 218,950,000
5 Balances outstanding as on Balance Sheet date -
payable to subsidiary for supply of raw materials - 46,094,967
6 Balances outstanding as on Balance Sheet date - receivable
from subsidiary Company 3,437,607 3,251,333
7 Acquisition of Shares / Investment - 2,643,645
(ii) Key Managerial Personnel :
Sr. Transactions 2005-2006 2004-2005
No.
1 Interest paid 23,550,825 21,843,288
2 Directors’ remuneration 24,577,248 19,592,578
3 Redemption of Preference Shares 9,080,072 6,810,054
4 Redemption of Debentures 115,000,000 -
5 Dividends paid (payment basis) 43,019,963 32,116,534
6 Legal and Professional Fees 540,243 -
7 Outstanding as on 31.03.2006
Loans and Deposits 318,500,000 176,000,000
Debentures - 115,000,000
Refer note (f) of Schedule 3 and note no. 2 and 3 of Schedule 4 for
details of undertaking/ security given by key management personnel in
connection with the Company’s borrowings.
(iii) Relatives of Key Managerial Personnel :
Sr. Transactions 2005-2006 2004-2005
No.
1 Redemption of Preference Shares 469,920 352,440
2 Dividends paid (payment basis) 112,452 76,115

(iv) Entities over which key management personnel exercise significant influence :

Sr. Transactions 2005-2006 2004-2005

No.
1 Interest paid 14,590,374 25,949,311
2 Purchase of raw material - 111,151,788
3 Rent paid 2,540,986 1,238,000
4 Rent received 120,000 674,500
5 Redemption of Preference Shares 1,260,520 945,390
6 Redemption of Debentures 135,000,000 -
7 Dividends paid (payment basis) 1,641,935 1,166,664
8 Use of Logo 1,000 -
9 Outstanding (credit balances) as on 31.03.2006 :
Loans and Deposits 51,280,166 62,706,785
Debentures - 135,000,000
For supply of raw materials 1,182,182 1,540,819
Refer note (e) of Schedule 3 for details of undertakings/ security
given by entities in connection with the Company’s borrowings.

39
Apar Industries Limited
SCHEDULE “23” (Contd.)

12. The Company’s operations predominantly relate to manufacture of Polymers, Conductors and Transformer/Speciality Oils
which businesses have been identified as primary segments based on the Company’s risk profile and internal reporting
structure.
a. Business Segments (Rupees in lacs)

Particulars Conductor Transformer & Polymers Eliminations Consolidated

Speciality Oils Total
2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

REVENUE
External Sales 43,850.81 27,044.27 51,234.98 42,043.35 14,017.02 14,587.28 – – 109,102.81 83,674.90
Other Income 71.47 282.88 220.37 221.00 143.31 107.14 – – 435.15 611.02
Inter-Segment Sales – – 55.54 36.85 – – (55.54) (36.85) – –

Total Revenue 43,922.28 27,327.15 51,510.89 42,301.20 14,160.33 14,694.42 (55.54) (36.85) 109,537.97 84,285.91

RESULT

Segment result 3,484.50 13.84 4,649.15 4,810.63 822.49 1,722.16 – – 8,956.13 6,546.62
Unallocable Corporate/
Other expenses (net
of miscellaneous
income) – – – – – – – – (1,876.03) (1,850.72)
Operating Profit – – – – – – – – 7,080.10 4,695.90
Interest Expense – – – – – – – – (2,645.65) (1,846.60)
Interest Income – – – – – – – – 622.14 436.23
Profit before taxes – – – – – – – – 5,056.59 3,285.53

Income tax

Current tax – – – – – – – – (750.50) (387.00)

Deferred tax – – – – – – – – (14.21) 119.91
Profit after tax – – – – – – – – 4,291.88 3,018.44

OTHER INFORMATION

Segment assets 26,971.05 13,397.51 35,992.53 25,015.58 13,342.61 9,649.94 – – 76,306.19 48,063.03

Unallocable Corporate
and Other assets – – – – – – – – 4,703.78 4,716.19

Total Assets 81,009.97 52,779.22

Segment liabilities 16,917.88 5,260.60 28,249.10 18,760.14 4,917.85 2,466.36 – – 50,084.83 26,487.10
Unallocable Corporate
and other liabilities – – – – – – – – 1,467.87 1,597.63

Total liabilities 51,552.70 28,084.73

Capital expenditure 1,439.94 435.90 283.67 619.55 812.60 535.71 – – 2,536.21 1,591.16

Capital expenditure -
unallocable – – – – – – – – 224.09 14.06
Depreciation 235.60 239.54 209.97 169.35 350.68 378.19 – – 796.24 787.08
Depreciation on -
unallocable – – – – – – – – 67.30 68.86
Non-cash expenses
other than depreciation 87.29 51.45 – – – – – – 87.29 51.45
Non-cash expenses
other than depreciation -
unallocable – – – – – – – – 87.00 68.84

40
 17th Annual Report 2005-2006
SCHEDULE “23” (Contd.)

b. Geographical Segments
i) Revenue by geographical market :
(Rupees in lacs)

Conductor Transformer & Polymers Total

Speciality Oils

2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

Outside India 7,971.95 8,230.78 8,821.01 4,119.33 631.62 471.33 17,424.58 12,821.44
In India* 35,878.86 18,813.49 42,413.97 37,924.02 13,385.40 14,115.95 91,678.23 70,853.46
Total 43,850.81 27,044.27 51,234.98 42,043.35 14,017.02 14,587.28 109,102.81 83,674.90

*Include deemed exports Rs. 4,146.77 Lacs (previous year Rs. 2,884.41 lacs).
ii) The Company’s tangible fixed assets are located entirely in India.
iii) Carrying amount of Segment Assets :
(Rupees in lacs)

Conductor Transformer & Polymers Unallocated Total

Speciality Oils
2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

Outside India 3,101.25 2,269.87 1,630.96 733.31 146.47 22.34 – – 4,878.68 3,025.52
In India 20,775.81 9,225.69 31,599.08 21,585.98 8,876.49 5,768.05 3,390.67 3,563.73 64,642.05 40,143.44
Total 23,877.06 11,495.56 33,230.04 22,319.29 9,022.96 5,790.39 3,390.67 3,563.73 69,520.73 43,168.96

iv) The Company’s fixed assets are located entirely in India.

Segment Revenue and Result
The expenses which are not directly attributable to the business segment are shown as unallocable corporate/other
expenses (net of miscellaneous income).
Segment Assets and Liabilites
Segment assets include all operating assets used by the business segment and consist principally of fixed assets,
debtors and inventories. Segment liabilites primarily include creditors and other liabilities. Assets and liabilites that
cannot be allocated between the segments are shown as a part of unallocable corporate assets and liabilites respectively.
13. Particulars of earnings per share

Year ended Year ended

Sr. Particulars 31st March, 31st March,
No. 2006 2005
1.
A) Profit After Tax (excluding tax provisions for earlier years) and exceptional
items excluding prior preiod items Rs. Nil (previous year 4,291.88 3,038.14
Rs. 19.68 Lacs)-Rs.Lacs
B) Profit After Tax and exceptional items excluding prior period items Rs. Nil 3,996.88 3,038.14
(previous year Rs. 19.68 Lacs)-Rs.Lacs
2. Preference and participating dividend to compulsorily convertible participating
preference shares (Previous year Redeemable Cumulative Preference Shares) :
(a) Dividend paid on Redeemable Cumulative Preference Shares – (31.36)
(b) Tax on Dividend paid on Redeemable Cumulative Preference Shares – (4.10)
(c) Preference Dividend on 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights (162.22) –

41
Apar Industries Limited
SCHEDULE “23” (Contd.)

Year ended Year ended

31st March, 31st March,
Sr. No. 2 (Contd.) 2006 2005
(d) Tax on Preference Dividend on 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights (22.75) –
(e) Participating dividend paid on 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights (120.61) –
(f) Tax on participating dividend paid on 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights (16.92) –
TOTAL (322.50) (35.46)
3. Profit after preference and participating dividend to Cumulative Compulsorily
Convertible Preference Shares with Participating rights (previous year Redeemable
cumulative preference shares)
A) 1A- 2 3,969.38 3,002.68
B) 1 B -2 3,674.38 3,002.68

4. Weighted Number of Equity Shares outstanding during the year 20,806,045 20,806,045
5. Nominal Value of Equity Shares Rs. 10 10
6. Weighted Average Number of 5.40% Cumulative Compulsorily Convertible
Preference Shares with participating rights outstanding during the year 1,623,858 –
7. Nominal Value of 5.40% Cumulative Compulsorily Convertible Preference
Shares with participating rights 185 –
8. Weighted Average of total Number of Shares during the year (4 +6) 22,429,903 20,806,045
9. Earnings per share - Rs.
A) Basic :
(I) On Profit before tax provisions for earlier years (3A) / 4 19.08 14.43
(ii) On Profit after tax provisions for earlier years (3B) / 4 17.66 14.43
B) Diluted :
(I) On Profit before tax provisions for earlier years (1A) / 8 (previous year 3A/8) 19.13 14.43
(ii) On Profit after tax provisions for earlier years (1B) / 8 (previous year 3B/8) 17.82 14.43

14. For additional information required by Part II of Schedule VI to the Companies Act, 1956, see Schedule “24” annexed.
15. Previous year figures have been regrouped, where necessary, to conform to current year’s classification.
16. Information required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached.

42
 SCHEDULE ANNEXED TO AND FORMING PART OF NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2006
ADDITIONAL INFORMATION REQUIRED BY PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956
SCHEDULE - ‘‘24’’
1. Information for class of goods manufactured during the year :
Licensed Installed Actual Stock
Capacity Capacity Produc-
Class of goods (see notes (b) (see notes (a) tion (see Turnover
and (d) below) and (b) below) note (c) (Gross of Excise) Opening Closing
below)
Unit Quan- No. of Quan- No. of Quan- Quan- Value Quan- Value Quan- Value
tity Shifts tity Shifts tity tity Rupees tity Rupees tity Rupees
i) Transformer Oils MT 99,500 -do- 155,000 2 84,887 76,453 2,585,122,232 1,844 50,190,079 1,053 37,866,629
(see note (f)) (99,500) (155,000) (78,006) (70,726) (2,105,685,557) (1,798) (46,278,556) (1,844) (50,190,079)
**KL 117,978 for various
(117,978) types of oils
covered in
(ii) and for
other oils for
which the
company is
holding
registration
Refrigeration/Electric Oils MT 2,000* -do- – – – – – – –
(2,000) (–) (–) (–) (–) (–) (–) (–)
43

Special Grade MT 22,250* -do- 28,009 28,003 857,545,791 580 15,117,595 551 17,953,499
Pharmaceutical Oils (22,250) (32,113) (32,336) (845,180,003) (809) (20,455,324) (580) (15,117,595)
**KL 26,807 – – – – – – –
(26,807) (–) (–) (–) (–) (–) (–) (–)

17th Annual Report 2005-2006

Textile Oils MT 1,000* -do- – – – – – – –
(1,000) (–) (–) (–) (–) (–) (–) (–)
**KL 1,163 – – – – – – –
(1,163) (–) (–) (–) (–) (–) (–) (–)
Rolling Mill Oils MT 1,000* -do- – – – – – – –
(1,000) (–) (–) (–) (–) (–) (–) (–)
**KL 1,227 – – – – – – –
(1,227) (–) (–) (–) (–) (–) (–) (–)
Other Specialities Oils MT 159,115* -do- 61,310 59,186 1,892,175,718 428 14,878,341 521 23,146,685
(including R.P.Oils) (159,115) (56,384) (55,132) (1,429,244,997) (444) (15,001,308) (428) (14,878,341)
ii) AAC, AAAC and ACSR MT 124,800 Maximum 53,525 3 43,695 42,434 4,758,921,967 291 28,535,603 1,552 143,611,025
Conductors (61,000) Utilisation (54,820) (28,725) (29,219) (2,862,352,846) (785) (63,133,695) (291) (28,535,603)
iii) Aluminium rods suitable MT 96,000 Maximum 37,800 3 26,957 – – $ $ $ $
for further manufacture of (24,800) Utilisation (31,200) (20,148) (–) (–) ($) ($) ($) ($)
ACSR/AAC/AAAC
iv) Synthetic Rubber MT 55,000 Not men- 17,950 3 17,179 14,599 1,580,368,003 1,031 98,628,329 2,501 217,832,087
(NBR / HSR), (27,000) tioned (18,400) (17,199) (16,185) (1,606,891,256) (843) (66,489,426) (1,031) (98,628,329)
Lattices and Polyblend
11,674,133,711 207,349,947 440,409,925
(8,849,354,659) (211,358,307) (207,349,947)
Apar Industries Limited
SCHEDULE - ‘‘24’’ (Contd.)

* Company’s application for manufacture has been taken on record and registered by the concerned Government authorities.
** Equivalent to MT.
$ Opening and Closing Stock is included in work-in-process as the same is for captive consumption.

Notes :
a) Installed capacities are certified by a director and not verified by the auditors as this is a technical matter.
b) In cases where installed capacities exceed the licensed capacities, the Company’s applications to the Government for
regularisation of the same have been accepted in part only or are pending with the Government.
c) Includes :
(A) Conversion by the Company on customers’ account, captive consumption, and sample for testing.
2005-2006 2004-2005
Unit Quantity Quantity
i) Synthetic Rubber, Lattices and Polyblend MT 1,110 826
ii) Transformer Oils KL 9,224 7,234
iii) Special Grade Pharmaceutical Oils KL 35 6
iv) Textile Oils KL – –
v) Other Specialities Oils KL 2,032 1,268
vi) AAC, AAAC, ACSR Conductors MT – –
vii) Aluminium Rods suitable for further manufacture of ACSR/AAC MT 26,957 20,148
(B) Other Specialities Oil manufactured by a third party on behalf of the Company. KL 668 1,020
(C) Processed by third parties -
i) Aluminium Wire Rods MT – –
ii) Aluminium Conductors MT 876 205
d) In some of the classes of goods listed above, the licences are available in terms of more than one unit. In such cases, the
quantitative information is expressed in terms of the units in which the items are sold. Further, in the cases where the licensed
capacity has also been shown in the units in which the goods are sold (alongwith the units in which the licence has been
issued), the conversion has been relied on by the auditors without verification as this is a technical matter.
e) Figures in brackets pertain to the previous year.
f) In respect of item (ii), the quantities stated against production, turnover and stock of goods produced are in KL, except one
product i.e. Flex Oil A-Super included under the head “Other Specialities Oils”.
2. Information for class of goods traded during the year :
Purchase Stock Turnover
Opening Closing
Class of goods Unit Quantity Value Quantity Value Quantity Value Quantity Value
Rs. Rs. Rs. Rs.
Thermoplastic MT 129 23,510,036 22 4,881,759 43 8,463,721 108 23,993,936
Elastomers (67) (12,764,856) (26) (5,676,063) (22) (4,881,759) (71) (15,003,353)
23,510,036 4,881,759 8,463,721 23,993,936
(12,764,856) (5,676,063) (4,881,759) (15,003,353)
Notes:-
(i) Purchases and closing stock includes stock in transit 3.5 M.T. (previous year Nil M.T.) for Rs. 663,722 (previous year Rs. Nil).
(ii) Figures in brackets pertain to the previous year.
3. Consumption of raw materials and components :
2005-2006 2004-2005
Unit Quantity Rupees Quantity Rupees
Non-ferrous metals MT 35,120 3,239,093,930 22,621 2,058,173,941
Ferrous metals MT 9,822 374,319,771 6,931 229,871,299
Chemicals MT 3,041 104,416,590 2,650 73,128,677
Base Oils KL 172,888 4,074,020,243 158,790 3,140,110,623
Monomers MT 16,148 933,141,798 18,379 947,685,751
Others 121,193,028 108,966,166
8,846,185,360 6,557,936,457
Note : Consumption includes handling losses and differences found on physical verification of stock.

44
 17th Annual Report 2005-2006
SCHEDULE - ‘‘24’’ (Contd.)

4. Consumption of raw materials and components :

(including cost of sales of raw materials, handling losses
and differences found on physical verification of stock)
2005-2006 2004-2005
% Rupees % Rupees
Imported at landed cost
(including duty and clearing charges incurred in India) 68 5,982,271,944 64 4,167,613,898
Indigenous 32 2,863,913,416 36 2,390,322,559
100 8,846,185,360 100 6,557,936,457
Note : Imports through canalising agencies and items of foreign
origin purchased locally are shown as part of indigenous
consumption.
5. Value of imports on CIF basis :
2005-2006 2004-2005
Rupees Rupees
Raw materials and Components 5,914,999,788 3,594,760,171
Stores and spare parts (including packing materials) 3,188,098 7,197,314
Capital goods 2,470,553 4,934,933
5,920,658,439 3,606,892,418

Notes : Imports through canalising agencies and items of foreign

origin purchased locally are excluded.
6. Expenditure in foreign currency on account of :
Professional Fees 1,143,822 1,840,892
Interest and Bank charges 132,376,696 72,479,770
Others 16,369,255 15,233,128
149,889,773 89,553,790
7. Remittance in Foreign Currency for Dividends :
a) No of shareholders 1 –
b) No. of shares held 3,445,978 –
c) Year of dividend 2005-2006 –
d) Amount remitted - Rs. 2,584,484 –
8. Earnings in foreign exchange :
Claims & Commission received 3,465,510 1,532,814
Export of goods calculated on FOB basis 1,742,457,729 1,282,145,630
Deemed exports 414,676,946 228,440,683
Others (Freight & Insurance) 71,718,327 53,077,357
2,232,318,512 1,565,196,484
9. Consumption of stores and spare parts including packing materials :
(including handling losses and differences found on physical
verification of stocks).

2005-2006 2004-2005
% Rupees % Rupees
Imported at landed cost 1.25 4,441,952 1.05 3,184,249
Indigenous 98.75 351,019,977 98.95 300,912,952
100.00 355,461,929 100.00 304,097,201

Note : Imports through canalising agencies and items of foreign origin

purchased locally are shown as part of indigenous consumption.

45
Apar Industries Limited
SCHEDULE - ‘‘24’’ (Contd.)

10. Sale of raw materials and stores and spares :

2005-2006 2004-2005
Unit Quantity Rupees Unit Quantity Rupees

Monomers MT 1 133,554 MT 460 18,317,227

Base Oils KL 5,599 172,683,890 KL 6,719 142,124,790
Ferrous Metals MT – – MT 5 3,260,334
Non Ferrous Metals MT – – MT 77 569,391
Others 1,596,210 1,443,684
174,413,654 165,715,426

Signatures to Schedules ‘1’ TO ‘24’ For and on behalf of the Board of Directors
Kushal N. Desai V. A. Gore D. C. Patel V. C. Diwadkar
Managing Director Director Company Secretary Chief Financial Officer
& CEO
Dated : 27th June, 2006
Place : Mumbai

Information referred to in Note 16 in Schedule 23 to the Accounts for the year ended 31st March, 2006

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

(PART IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956 (As amended))
1. Registration Details :
Registration No. 12802 State Code 04
Balance Sheet Date 31.03.2006 CIN No. L91110GJ1989PLC012802

2. Capital raised during the year (Rs. in Thousands) :

Public Issue Nil Right Issue Nil
Bonus Issue Nil Private Placement 637,506

3. Position of Mobilisation and Deployment of funds (Rs. in Thousands) :

Total Liabilities 2,997,255 Total Assets 2,997,255

Sources of Funds
Paid up Capital 845,566 Secured Loans 554,014
Reserves and Surplus 959,946 Unsecured Loans 502,422
Deferred Tax Liability (Net) 135,307

Application of Funds
Net Fixed Assets 1,148,925 Investments 6,326
Net Current Assets 1,790,476 Misc. Expenditure 51,528

4. Performance of the Company (Rs. in Thousands) :

Turnover (Net of Excise) 10,955,216 Total Expenditure 10,449,557
Profit Before Tax 505,659 Profit After Tax 399,688
E.P.S. in Rs. 17.66 Dividend rate % 35

5. Generic names of three Principal Products/Services of Company (as per monetary terms) :
Item Code No. (ITC Code) 2710.90 Product Description Transformer & Speciality Oils
Item Code No. (ITC Code) 7614.90 Product Description AAC/ACSR Conductors
Item Code No. (ITC Code) 4002.59 Product Description Acrylonitrile Butadiene Rubber

46
 17th Annual Report 2005-2006
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2006
2005-2006 2004-2005
(Rupees) (Rupees)
Cash flow from Operating Activities :
Net Profit before taxation adjusted for: 505,659,055 328,554,264
Depreciation/Amortisation 86,353,148 85,594,138
(Profit)/Loss on Sale of Fixed Assets(Net) (2,244,057) (684,020)
Miscellaneous expenditure amortized 17,428,794 12,029,059
Interest income (62,214,003) (43,623,111)
Interest expense 264,565,090 184,660,356
303,888,972 237,976,422
Operating profit before working capital changes in : 809,548,027 566,530,686
Trade and other receivables (704,559,643) (221,652,055)
Inventories (1,189,053,847) (38,084,374)
Trade and other payables 2,265,102,613 115,246,061
371,489,123 (144,490,368)
Compensation Under Voluntary Retirement
Scheme incurred during the year (17,920,000) (29,923,337)
Share issue expenses incurred during the year (18,117,341) —
Cash generated from operations 1,144,999,809 392,116,981
Income Taxes paid (including fringe benefit tax) (net of refunds) (72,640,877) (62,635,889)
Net cash from operating activities 1,072,358,932 329,481,092
Cash flow from investing activities :
Purchase of Fixed Assets (268,947,379) (158,353,632)
Sale of Fixed Assets 4,022,973 3,589,512
Purchase of Investments (633,416,872) (131,708,422)
Sale of Investments 642,479,424 122,064,777
Interest received 44,500,415 44,325,304
Net cash used in investing activities (211,361,439) (120,082,461)
Cash flow from financing activities :
Proceeds from Unpaid calls/Share Premium 191,357 52,106
Proceeds of Cumulative Compulsorily Convertible
Preference Share Capital with participating rights issued 637,505,930 –
Repayments of Preference Share Capital (31,355,140) (23,516,355)
Proceeds from fixed deposits (net) 7,070,000 25,440,000
Proceeds/(repayments) from/of bank borrowings (net) (235,722,002) 77,477,573
Repayment of Debentures (250,000,000) –
Proceeds from short term borrowings 181,073,383 302,660,000
Repayments of long term borrowings (99,662,134) (477,497,481)
Interest Paid (231,369,583) (180,577,746)
Dividend Paid (64,308,037) (45,644,922)
Tax on Dividends (9,599,916) (9,482,734)
Net cash used in financing activities (96,176,142) (331,089,559)
Net Increase/(Decrease) in cash and cash equivalents 764,821,351 (121,690,928)
Cash and cash equivalents, beginning of year 700,887,271 822,578,199
Cash and cash equivalents, end of year 1,465,708,622 700,887,271
Notes :
1) Previous year figures have been regrouped/restated where necessary to conform to the current year presentation.
2) Refer Schedule 10 of financial statements for composition of cash and bank balances.

As per our report of even date attached

For RSM & Co. For and on behalf of the Board of Directors
Chartered Accountants
Vijay N. Bhatt Kushal N. Desai V. A. Gore D. C. Patel V. C. Diwadkar
(Partner - F 36647) Managing Director Director Company Secretary Chief Financial Officer
& CEO
Dated : 27th June, 2006 Dated : 27th June, 2006
Place : Mumbai Place : Mumbai

47
Apar Industries Limited
INFORMATION ABOUT WHOLLY OWNED SUBSIDIARY COMPANY
VIZ. PETROLEUM SPECIALITIES PTE. LTD., SINGAPORE
2005-2006 2004-2005
US$ Exchange Indian Indian
Rate Rupees Rupees

A) FOR THE YEAR ENDED 31st MARCH, 2006

(a) Turnover 23,098,797 44.12 1,019,076,801 697,269,809
(b) Profit before Taxation 510,468 43.91 22,417,145 18,124,477
(c) Profit after Taxation 431,715 43.81 18,911,864 4,343,749
(d) Proposed Dividend Nil Nil Nil
B) AS AT 31st MARCH, 2006
(a) OWN FUNDS :
Share Capital 59,101 44.73 2,643,645 2,643,645
Reserves & surplus 750,377 43.21 32,422,591 13,780,728
809,478 35,066,236 16,424,373

(b) TOTAL ASSETS 1,080,899 43.64 47,175,614 154,740,999

(Includes receivable from Holding Company
Nil (Previous year US$ 1,052,637 - Rs. 46,094,987)
(c) TOTAL LIABILITIES 271,420 44.61 12,109,378 138,316,626
(Includes payable to related parties
US$ 139,408 - Rs. 6,220,385 (Previous
year US$ 2,263,838 - Rs, 99,133,466) )
(d) INVESTMENTS Nil Nil Nil
C) INDIAN RUPEE EQUIVALENT HAVE BEEN CALCULATED AS UNDER :
(a) Revenue items at the average exchange rate that prevailed during each month.
(b) Assets and Liabilities at rate that prevailed at the end of the year.
(c) Share Capital / Fixed Assets at rates that prevailed on the date of transaction.

Statement pursuant to Section 212 of the Companies Act, 1956

1. Name of the Subsidiary Company Petroleum Specialities Pte. Ltd., Singapore

2. Financial Year ending of the Subsidiary 31.03.2006
3. Number of Equity Shares Held 59,101
4. Extent of holding 100 %
5. For the financial year of the Subsidiary :
a. Profit/(Losses) so far it concerns the members of the
holding company and not dealt with in the books of
account of the holding company (except to the
extent dealt with in col. 5(b)) (Rs. in Lacs) –
b. Profit/(Losses) so far it concerns the members of the
holding company and dealt with in the books of
account of the holding company (Rs. in Lacs) 189.12
6. For the previous financial years since it became a Subsidiary :
a. Profit/(Losses) so far it concerns the members of the
holding company and not dealt with in the books of
account of the holding company (except to the
extent dealt with in col. 6(b)) (Rs. in Lacs) –
b. Profit/(Losses) so far it concerns the members of the
holding company and dealt with in the books of
account of the holding company (Rs. in Lacs) 137.81

48
 17th Annual Report 2005-2006
Auditors’ Report CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2006
Sche- As at 31st As at 31st
To the Board of Directors of dule March, 2006 March, 2005
Apar Industries Limited No. Rupees Rupees
SOURCES OF FUNDS
1. We have audited the attached Consolidated Balance Sheet of
Apar Industries Limited (‘the Company’), and its subsidiary company, SHAREHOLDERS' FUND :
Petroleum Specialties Pte. Limited (together constituting ‘the Group’) Share capital 1 845,566,380 239,319,912
as at March 31, 2006 and also the Consolidated Profit and Loss Reserves and surplus 2 992,368,420 688,956,869
Account and the Consolidated Cash Flow Statement for the year 1,837,934,800 928,276,781
ended on that date, annexed thereto (all together referred to as
the ‘financial statements’). These financial statements are the LOAN FUNDS :
responsibility of the Company’s management and have been Secured loans 3 554,013,777 1,145,510,681
prepared by the management on the basis of separate financial Unsecured loans 4 502,422,241 319,940,785
statements and other financial information regarding components.
Our responsibility is to express an opinion on these financial 1,056,436,018 1,465,451,466
statements based on our audit. Deferred taxation liability (Net) 5 135,925,245 134,494,486
TOTAL 3,030,296,063 2,528,222,733
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan APPLICATION OF FUNDS
and perform the audit to obtain reasonable assurance about FIXED ASSETS : 6
whether the financial statements are free of material misstatement. Gross block 1,880,250,512 1,639,526,046
An audit includes examining, on a test basis, evidence supporting Less: Depreciation 854,067,760 781,274,449
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and Net block 1,026,182,752 858,251,597
significant estimates made by management, as well as evaluating Capital work-in-progress/advances 122,962,311 102,977,414
the overall financial statement presentation. We believe that our
1,149,145,063 961,229,011
audit provides a reasonable basis for our opinion.
INVESTMENTS 7 3,682,748 12,745,300
3. We did not audit the financial statements of the subsidiary company,
whose financial statements reflect the Group’s share of total CURRENT ASSETS, LOANS
assets(net) of Rs. 392.01 Lacs as at March 31, 2006 and the AND ADVANCES :
Group’s share of total revenue of Rs. 2142.33 Lacs and net cash Inventories 8 2,332,193,079 1,143,819,475
inflows aggregating Rs. 316.97 Lacs for the year then ended. Sundry debtors 9 2,606,404,754 2,043,825,015
These financial statements and other financial information of the Cash and bank balances 10 1,513,503,380 716,984,597
subsidiary have been audited by another auditor whose report Other current assets 11 731,928 731,928
has been furnished to us, and our opinion, in so far as it relates to Loans and advances 12 533,796,933 498,580,846
the amounts included in respect of the subsidiary, is based solely 6,986,630,074 4,403,941,861
on the report of the other auditor.
Less: CURRENT LIABILITIES
AND PROVISIONS :
4 (a) We report that the Consolidated Financial Statements have
been prepared by the Company’s management in accordance Current liabilities 13 5,081,452,166 2,841,422,368
with the requirements of Accounting Standard 21 - Provisions 14 79,237,764 41,150,634
‘Consolidated Financial Statements’, issued by the Institute of 5,160,689,930 2,882,573,002
Chartered Accountants of India.
NET CURRENT ASSETS 1,825,940,144 1,521,368,860
(b) Based on our audit, and on consideration of the report of the Miscellaneous Expenditure
other auditor on the separate financial statements of the (to the extent not written
subsidiary and other financial information of its components, off or adjusted) 15 51,528,109 32,879,563
in our opinion and to the best of our information and according TOTAL 3,030,296,063 2,528,222,733
to the explanations given to us, the attached Consolidated
Financial Statements give a true and fair view in conformity SIGNIFICANT ACCOUNTING
with the accounting principles generally accepted in India: POLICIES 22
NOTES TO ACCOUNTS 23
(i) in the case of the Consolidated Balance Sheet, of the
state of affairs of the Group as at March 31, 2006; As per our report of For and on behalf of the
(ii) in the case of the Consolidated Profit and Loss account, even date attached Board of Directors
of the profit of the Group for the year ended on that For RSM & Co. Kushal N. Desai
date; Chartered Accountants Managing Director & CEO
and Vijay N. Bhatt V. A. Gore
(Partner-F36647) Director
(iii) in case of the Consolidated Cash Flow Statement, of
the cash flows of the Group for the year ended on that D. C. Patel
date. Company Secretary
V. C. Diwadkar
For RSM & Co.
Chief Financial Officer
Chartered Accountants
Place : Mumbai Vijay N. Bhatt Dated : 27th June, 2006 Dated : 27th June, 2006
Date : 27th June, 2006 Partner (F-36647) Place : Mumbai Place : Mumbai

49
Apar Industries Limited
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH, 2006

Sche- 2005-2006 2004-2005 Sche- 2005-2006 2004-2005

dule Rupees Rupees dule Rupees Rupees
No. No.
INCOME : - On 5.40% Cumulative Compulsorily
Sale of Goods, Services Convertible Preference Shares
and related recoveries 16 11,123,601,902 8,740,905,849 with participating rights :
(net of excise) - pro rata (16,222,435) –
Other Income 17 45,005,315 65,340,166 - @ Rs. 1.75 Per share
11,168,607,216 8,806,246,015 (as converted) (6,030,461) –
EXPENDITURE : - Tax on Dividends (14,179,909) (8,900,632)
Operating and Other BALANCE CARRIED TO
expenses 18 10,578,732,979 8,201,675,601 BALANCE SHEET 459,029,824 242,069,092
Decrease / (Increase)
in Stocks 19 (335,359,150) 20,614,367 SIGNIFICANT ACCOUN-
Depreciation 86,398,246 85,643,264 TING POLICIES 22
Interest and Discounting NOTES TO ACCOUNTS 23
Charges 20 209,419,865 145,660,553
Exchange Rate Difference Earnings Per Share :
(Net) 83,910,287 (5,785,568) on face value of Rs. 10/-.
(See note 12 of Schedule 23)
10,623,102,226 8,447,808,217 Basic :
Profit before taxation and (i) On Profit before tax
exceptional items 545,504,990 358,437,798 provisions for earlier years 19.99 15.08
(ii) On Profit after tax provisions
Exceptional items 21 17,428,794 12,029,059 for earlier years 18.57 15.08
Profit before taxation Diluted :
for the year 528,076,196 346,408,739 (i) On Profit before tax provisions for
earlier years 19.98 15.08
Provision for taxation : (ii) On Profit after tax provisions for
Current tax 74,505,280 42,235,725 earlier years 18.66 15.08
Deferred tax 1,420,620 (11,383,457)
Fringe benefit Tax 3,850,000 – As per our report of For and on behalf of the
Wealth tax 200,000 200,000 even date attached Board of Directors
Profit after taxation but before tax 448,100,296 315,356,471 For RSM & Co. Kushal N. Desai
provision for earlier years Chartered Accountants Managing Director & CEO
Tax Provisions for earlier years (29,500,000) – Vijay N. Bhatt V. A. Gore
Net Profit after Taxation (Partner-F36647) Director
for the year 418,600,296 315,356,471 D. C. Patel
Balance of profit brought forward 242,069,091 89,683,257 Company Secretary
Transfer (to) / from V. C. Diwadkar
Debenture Redemption Reserve 45,000,000 (15,000,000) Chief Financial Officer
Capital Redemption Reserve (31,355,140) (23,516,355)
Dated : 27th June, 2006 Dated : 27th June, 2006
Exchange Fluctuation Reserve – 50,000,000
Place : Mumbai Place : Mumbai
Amount available for
SCHEDULES ANNEXED TO AND FORMING PART OF THE
appropriations 674,314,248 416,523,373
CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2006
Appropriated as under : As at 31st As at 31st
March, 2006 March, 2005
- Transfer to General Reserve (100,000,000) (100,000,000)
Rupees Rupees
- Interim Dividend on Equity Shares
aggregating to Rs.1.75 per share SCHEDULE "1" - SHARE CAPITAL
(Previous year Rs.1.75 per share) (36,410,579) (36,410,579) (A) Authorised :
- Interim Dividend on Redeemable 26,000,000 Equity Shares of
Preference Shares @ Re. Nil per Rs.10/- each 260,000,000 260,000,000
share (Previous year Re.0.40 per 3,567,500 Preference Shares
share) – (3,135,514) of Rs. 185/- each 49,000,000 659,987,500 –
- Interim Dividend on 5.40% Cumulative Redeemable Preference
Compulsorily Convertible Preference shares of Rs. 10/- each – 490,000,000
Shares with participating rights
919,987,500 750,000,000
(as converted) @ Rs.1.75 per
share (Previous year Rs. Nil) (6,030,461) – (B) Issued, Subscribed and
- Proposed Dividend: Fully Paid Up :
- On equity shares Rs. 1.75 per i) 20,806,045 Equity Shares
share (Previous year Rs. 1.25 of Rs.10/- each 208,060,450 208,060,450
per share) (36,410,579) (26,007,556) Less: Calls unpaid – 11,481
208,060,450 208,048,969

50
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st As at 31st As at 31st
March, 2006 March, 2005 March, 2006 March, 2005
Rupees Rupees Rupees Rupees
SCHEDULE "1" - SHARE CAPITAL (Contd.) SCHEDULE "3" - SECURED LOANS
ii) 3,445,978 - 5.40% (1) Debentures :
Cumulative Compulsorily 250,000 - 10% Non-Convertible
Convertible Preference Debentures of Rs. 1,000/- each
Shares of Rs. 185/- each Redeemable at par in five equal
with participating rights annual installments commencing
(Convertible on 11th October, from 31st March, 2007 – 250,000,000
2006 into 3,445,978 equity shares (Refer note ‘a’ below)
of Rs. 10/- each at premium of
(2) From Banks :
Rs. 175/- per share) 637,505,930 –
(i) Cash Credit/Working
iii) 7,838,785 - 10% Redeemable Capital Demand Loans 453,726,226 701,222,921
Cumulative Preference Shares
(ii) Term Loan 66,930,000 131,372,000
(Series I) of Rs. 4/- each
(Redeemed on 1st April, 2005) – 31,355,140 (3) From a Financial Institution :
Less: Calls unpaid – 84,197 Term Loan 26,581,726 55,967,625
– 31,270,943 (4) Other Loans 91,330 263,640
TOTAL 845,566,380 239,319,912 (5) Sales Tax Deferment Loan 6,684,495 6,684,495
TOTAL 554,013,777 1,145,510,681
SCHEDULE "2" - RESERVES AND SURPLUS Notes :
CAPITAL RESERVE : a) Debentures (prepaid during the year ) were secured by way of mortgage of
specified properties and charge on movables and current assets of the
As per last balance sheet 4,855,067 4,824,718 Company ranking third in priority of charge.
Add:- Share Premium received / b) The Cash Credit/Working Capital Demand Loans from banks are secured by
adjusted during the year* 95,679 30,349 (i) hypothecation of specified stocks and specified book debts.
(ii) joint mortgage of specified fixed assets ranking second and subsequent
4,950,746 4,855,067 in point of priority to the mortgage created in favour of financial
institutions for term loans.
CAPITAL REDEMPTION RESERVE : c) Term Loans from Bank amounting to Rs.66,930,000 are secured by an
As per last Balance Sheet 197,032,710 173,516,355 exclusive charge by way of hypothecation of certain items of plant &
Add: Transfer from machinery procured/to be procured from the proceeds of the said loan.
Profit and Loss Account 31,355,140 23,516,355 d) Term Loans from Financial Institutions are secured by :
(i) first charge* by way of equitable mortgage of the Company’s specified
228,387,850 197,032,710 immovable properties both present and future and first charge* by
way of hypothecation of the Company’s specified movable properties
DEBENTURE REDEMPTION RESERVE : (save and except book debts) including movable machineries, spares
As per last balance sheet 45,000,000 30,000,000 and tools and accessories, present and future, subject to prior charges
(Less) /Add: Transfer (to)/from * in favour of Company’s bankers on specified movables for securing
Profit and Loss Account (45,000,000) 15,000,000 borrowings for working capital requirements.
(ii) first charge* by way of hypothecation of all movable properties acquired
– 45,000,000 out of the proceeds of the concerned loans.
e) Term Loans from Financial Institutions / Cash Credit / Working Capital
Demand Loans referred to in (b) & (d) above are further secured by certain
EXCHANGE FLUCTUATION RESERVE :
immovable properties of Apar Corporation Private Limited.
As per last balance sheet – 50,000,000 f) Loans amounting to Rs.547,237,950 at item No. (2) and (3) are, in addition
Less: Transfer (to)/from to the securities specified above, secured by personal guarantee of one or
more Directors.
Profit and Loss Account – (50,000,000) g) Other loans represent loan from banks for purchase of cars, against the
– – security of cars purchased.
h) The first charge in respect of loans referred to in Note(b), (c) and (d) above
GENERAL RESERVE : will not extend to specific items of machinery purchased by the Company
As per last balance sheet 200,000,000 100,000,000 under the proceeds of “Other loans” referred to at (g) above.
Add :- Transfer from i) The Sales Tax Deferment loan represents sales tax collected on sales and
not paid pursuant to the Sales Tax Deferment facility. This loan is secured
Profit and Loss Account 100,000,000 100,000,000 by joint mortgage of specified fixed assets ranking on pari pasu basis with
300,000,000 200,000,000 charges created as per (b) above and is repayable in 6 annual installments
commencing from 30th May, 2006.
SURPLUS IN PROFIT AND j) Loans under item 2(ii), 3, 4 and 5 include amounts repayable within a year
LOSS ACCOUNT 459,029,824 242,069,092 Rs.23,909,013 (Previous year Rs.166,970,010).
* denotes charge created / to be created.
TOTAL 992,368,420 688,956,869 As at 31st As at 31st
March, 2006 March, 2005
Rupees Rupees
* Unpaid share premium on calls unpaid as on 31.3.2006 Rs. Nil.
(previous year Rs. 95,679). SCHEDULE "4" - UNSECURED LOANS
(1) Fixed Deposits :
(a) From public 88,260,000 81,190,000
(b) From directors 38,500,000 38,500,000
126,760,000 119,690,000

51
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2006

As at 31st As at 31st As at 31st As at 31st

March, 2006 March, 2005 March, 2006 March, 2005
Rupees Rupees Rupees Rupees
SCHEDULE "4" - UNSECURED
LOANS (Contd.) SCHEDULE "5" - DEFERRED
TAX LIABILITY (NET)
(2) Short term loans and advances
From a Bank (Refer note 2 below) 50,000,000 – Deferred tax liability arising on
account of timing difference in:
(3) Sales Tax Deferment loan 12,382,075 18,044,000
(Refer Note 3 below) Book and Tax depreciation 148,491,335 146,976,600

(4) Loans from Directors 280,000,000 137,500,000 Less: Deferred tax asset arising on
account of timing differences in :
(5) Inter Corporate Deposits 33,280,166 44,706,785
(i) Provision for doubtful debts
313,280,166 182,206,785 and advances 8,620,207 8,913,021
TOTAL 502,422,241 319,940,785
Notes: (ii) Provision for gratuity and
1) Loans indicated at 1, 2 and 3 above includes amount of leave encashment 3,812,298 3,870,541
Rs. 138,215,000 (previous year Rs. 78,141,000) payable within a
(iii) Amortisation of technical
year. Loans at 4 and 5 are repayable at call.
know-how fees 133,585 267,253
2) Loans indicated at 2 above are secured by personal guarantee of
one or more Directors. (iv) Provision for expenses – (568,701)
3) This represents Sales tax collected on sales and not paid pursuant
to the sales tax deferment facility. This loan is secured by personal 12,566,090 12,482,114
guarantee of one or more directors and is payable in May, 2006 TOTAL 135,925,245 134,494,486
(since paid).

SCHEDULE “6” - FIXED ASSETS

GROSS BLOCK DEPRECIATION WRITTEN

DOWN VALUE
As at 1st As at 31st As at 1st Deductions/ For the As at 31st As at 31st As at 31st
April, 2005 Additions Deductions March,2006 April, 2005 adjustments year March, 2006 March,2006 March,2005
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

Land
Freehold 23,021,531 11,805,814 - 34,827,345 - - - - 34,827,345 23,021,531
Leasehold 43,460,011 - - 43,460,011 4,693,042 - 621,544 5,314,586 38,145,425 38,766,969
(Refer Note 1 below)

Buildings
(Refer Note 2 & 3 below) 299,253,077 51,630,760 - 350,883,837 54,289,708 - 7,803,273 62,092,981 288,790,856 244,963,368

Plant and Machinery

(Refer Note 4 below) 1,072,218,473 179,015,915 (11,985,741) 1,239,248,647 555,410,776 (11,043,772) 68,190,399 612,557,403 626,691,244 516,807,696

Wind Farm 96,970,140 - - 96,970,140 90,820,551 - 1,301,082 92,121,633 4,848,507 6,149,592

Furniture, fixture and 78,675,895 6,887,528 (405,887) 85,157,536 61,166,534 (299,429) 4,975,176 65,842,281 19,315,255 17,509,361
equipments

Motor Vehicles 25,926,918 6,768,300 (2,992,223) 29,702,995 14,893,837 (2,261,734) 3,506,772 16,138,876 13,564,119 11,033,080

1,639,526,045 256,108,317 (15,383,851) 1,880,250,512 781,274,449 (13,604,935) 86,398,246 854,067,760 1,026,182,752 858,251,597

Previous year 1,570,795,444 75,479,934 (6,749,332) 1,639,526,046 699,475,025 (3,843,840) 85,643,264 781,274,449

Capital work-in-progress including advances on capital account. 122,962,311 102,977,414

1,149,145,063 961,229,011

Notes:
1. Cost of leasehold land at GIDC, Valia includes Rs. 2,108,762 (Previous year Rs 2,108,762) being the cost fixed on tentative basis.
2. Buildings include :
(i) ownership flats in Co-operative Housing Societies which are registered in the name of directors (as nominee) Cost Rs.2,084,450 (previous year
Rs. 2,084,450) (includes Rs.750 being cost of 15 shares of Rs.50 each) in a Co- Operative Housing Society. The beneficial interest therein vests in the
Company.
(ii) Rs 2,000 being cost of 20 shares of Rs 50/- each and 10 shares of Rs.100/- each in Co-operative Premises Societies in the name of the Company.
(iii) an ownership flat to be registered in the name of the Company.
3. Buildings (gross block) include renovation of rented premises of Rs. 3,857,077 (previous year Rs.3,857,077) which is being depreciated at prescribed rates.
4. The ownership of assets acquired under hire purchase will rest with owners till the payment of final instalments.

52
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st Note : Movements in investments in Mutual Funds during the year
March, 2006 March, 2005 is as follows :
Rupees Rupees Units Units
Purchased Sold
SCHEDULE “7” - INVESTMENTS - (At Cost)
I. Long-term, non-trade and unquoted, ING Vysya Liquid Fund Institutional -
unless otherwise stated Daily dividend option 3,999,416 3,995,884
A. Government of India Securities : LICMF Liquid Fund Dividend plan 11,199,661 11,181,599
(i) 7 Year National Savings Principal floating rate fund SMP -
Certificates (including institutional option growth plan 44,159,339 44,092,866
Rs. 6,000) (previous year
Rs.6,000) held as security IDBI - Principal Cash
by Government Departments 10,240 10,240 Management Fund – 3,985

(ii) 12 Year National Defence Prudential ICICI Liquid Plan

Certificates 6,000 6,000 Institutional Plus – 843,878

(iii) Kisan Vikaspatra (pledged As at 31st As at 31st

with Maharashtra Water March, 2006 March, 2005
& Sewage Board) 1,000 1,000 Rupees Rupees
(iv) 6 Year National Savings SCHEDULE “8” - INVENTORIES
Certificates (held as security As valued and certified by
by Government Departments) 7,000 7,000
the Management :
24,240 24,240 Stores and spare parts 39,496,232 34,889,331
B. In Equity Shares : Raw materials and
Trade : components# 1,690,572,317 842,164,764
(i) 247,500 shares (previous Work-in-progress 152,887,799 54,190,334
year 247,500) of Bharuch Finished goods* 448,873,646 212,231,706
Eco- Aqua Infrastructure Scrap 363,085 343,340
Limited of Rs. 10/- each,
fully paid up 2,475,000 2,475,000 TOTAL 2,332,193,079 1,143,819,475
(ii) 1,751 shares (previous # Including Raw materials in transit Rs.618,798,240 (previous year
year 1,751) of Bharuch Rs.131,492,112)
Enviro Infrastructure * Including stock of traded goods Rs.8,463,721 (previous year
Limited of Rs. 10/- each Rs.4,881,759)
fully paid up. 17,510 17,510
SCHEDULE “9” - SUNDRY DEBTORS
Non Trade :
4,200 Shares of Natpur Debts outstanding for a period
Co-operative Bank Limited of exceeding six months
Rs. 50 each 210,000 210,000 Secured
2,702,510 2,702,510 Considered good 6,710,649 6,933,790
II. Current Investments Unsecured
Units of Mutual Fund : Considered good 203,092,517 162,207,268
(i) 3,532 Units of Rs. 10/- each Considered doubtful 25,609,646 26,471,700
(previous year Nil units) in 235,412,812 195,612,758
ING Vysya Liquid Fund 35,353 –
Institutional-Daily dividend option Other debts -
Considered good
(ii) 18,062 Units of Rs. 10/- each Secured 3,970,456 5,197,303
(previous year Nil units) in LICMF Unsecured 2,392,631,131 1,869,486,654
Liquid Fund Dividend Plan 197,900 –
2,396,601,587 1,874,683,957
(iii) 66,473 Units of Rs. 10/- each Less: Provision for doubtful
(previous year Nil units) in debts 25,609,645 26,471,700
Principal Floating rate fund SMP -
Institutional option growth plan 722,745 – TOTAL 2,606,404,754 2,043,825,015
(iv) Nil Units of Rs. 10/- each
(previous year 3,985 units) in SCHEDULE “10” - CASH AND BANK BALANCES
IDBI - PRINCIPAL Cash Management
Fund (Liquid Option Cash on hand 698,281 865,779
Growth Plan) - current – 18,550 Cheques / Demand drafts on hand 32,786,365 –
Balances with Scheduled Banks :
(v) Nil Units of Rs. 10/- (previous year In current accounts 263,303,671 225,534,533
843,878 unis) in Prudential ICICI In deposit accounts 18,750,490 14,321,196
Liquid Plan Institutional Plus - In margin money accounts # 1,197,964,573 476,263,089
(Daily Dividend Option ) – 10,000,000 1,480,018,734 716,118,818
955,998 10,018,550 TOTAL 1,513,503,380 716,984,597
TOTAL 3,682,748 12,745,300
# includes deposits of Rs. 805,000,000 pledged as security for
Letters of Credit aggregating Rs. 783,470,197 rolled over.

53
Apar Industries Limited
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2006
As at 31st As at 31st As at 31st As at 31st
March, 2006 March, 2005 March, 2006 March, 2005
Rupees Rupees Rupees Rupees
SCHEDULE “11” - OTHER CURRENT ASSETS SCHEDULE “15” - MISCELLANEOUS EXPENDITURE
Fixed Assets intended for sale/disposal (to the extent not written off or adjusted)
(At lower of cost and estimated net A) Voluntary Retirement Compensation
realisable value) Opening Balance 32,879,563 14,985,285
Land 35,715 35,715 Add: Incurred during the year 17,920,000 29,923,337
Building 196,213 196,213
Plant and Machinery 500,000 500,000 50,799,563 44,908,622
TOTAL 731,928 731,928 Less: Amortized during the year 15,613,061 12,029,059
Balance 35,186,502 32,879,563
SCHEDULE “12” - LOANS AND ADVANCES
B) Share Issue Expenses
Unsecured, considered good, Opening Balance – –
unless otherwise stated :
a) Advances recoverable in cash or Add: Incurred during the year 18,157,341 –
in kind or for value to be received * 18,157,341 –
Considered good 503,646,404 450,443,517 Less: Amortized during the year 1,815,734 –
Considered doubtful 1,000,000 1,000,000
Balance 16,341,607 –
504,646,404 451,443,517
Less:- Provision for TOTAL 51,528,109 32,879,563
doubtful advances 1,000,000 1,000,000
503,646,404 450,443,517
SCHEDULES ANNEXED TO AND FORMING PART OF THE
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR
b) Balances with Excise Department : ENDED 31ST MARCH, 2006
in current account 589,101 4,186,720
c) Advance payments of tax less SCHEDULE “16” - SALE OF GOODS, SERVICES
provisions 7,213,778 39,316,547 AND RELATED RECOVERIES
d) Interest accrued but not 2005-2006 2004-2005
due on deposits 22,347,650 4,634,062 Rupees Rupees
TOTAL 533,796,933 498,580,846 Sales 11,887,454,386 8,849,354,659
* Includes Rs.11,978,187 being excise duty Less: Excise duty (1,450,848,908) (1,139,665,147)
paid under protest (previous year Rs.10,339,463) 10,436,605,478 7,709,689,512
Includes Rs.6,110,417 being sales tax paid under
protest (previous year Rs.Nil) Sale of traded goods 23,993,936 388,419,750
SCHEDULE “13” - CURRENT LIABILITIES Sale of raw materials 174,413,654 165,715,426
Scrap sales 29,825,347 27,369,457
Acceptances 421,393,313 175,301,841 Export benefits [ Includes prior period
Sundry creditors (Refer Note 7 Rs. Nil (Previous year Rs. 6,698,979) ] 33,974,407 109,170,091
of Schedule ‘23’) 3,917,387,177 2,179,279,573 Rebate/refund of excise duty on
Other liabilities 660,972,758 396,370,197 deemed/physical exports 113,913,950 110,777,230
Unpaid redemption amount of preference Transport charges recovered 266,327,740 197,016,894
shares (Refer note 6 of schedule ‘23’) 64,784 – Processing and other service charges 44,547,390 32,747,489
Unclaimed dividend (to be credited to TOTAL 11,123,601,902 8,740,905,849
Investor Education and SCHEDULE “17” - OTHER INCOME
Protection Fund when due) 8,080,671 4,250,576
Value of power generated by Wind Mill 10,289,195 9,902,269
Interim dividends*
Commission 1,745,376 1,314,952
Equity shares 20,806,045 20,806,045
Rent 60,000 968,220
Preference shares 3,445,978 3,135,514
Book overdraft 2,952,340 49,125,028 Profit on sale/disposal of fixed
Interest accrued but not assets (net) 2,244,057 684,020
due on loans 46,349,100 13,153,593 Excess provision for expenses
written back 7,137,377 6,030,456
TOTAL 5,081,452,166 2,841,422,368 Provision for doubtful debts written back 1,825,245 16,135,861
Sundry creditors include Rs. 783,470,197 (Previous Sundry Balances Written back 1,360,672 –
year 441,417,063) being Letters of Credit rolled over. Profit on sale of current investments 789,928 –
* since paid Dividend on current investments 206,672 41,696
SCHEDULE “14” - PROVISIONS Sundry Income 19,346,793 30,262,692
For gratuity (In respect of Directors) 915,000 2,942,500 TOTAL 45,005,315 65,340,166
For accumulated and unavailed leave 11,431,736 8,553,018
For proposed dividend : SCHEDULE “18” - OPERATING AND OTHER EXPENSES
Preference shares 22,252,896 – Raw materials and components
Equity shares 36,410,579 26,007,556 consumed 8,831,558,557 6,556,159,189
For tax on proposed dividends 8,227,553 3,647,560 Purchase of traded goods 214,092,828 354,237,656
Excise duty adjustment of
TOTAL 79,237,764 41,150,634
finished goods stock 14,463,287 1,914,116

54
 17th Annual Report 2005-2006
SCHEDULES ANNEXED TO AND FORMING PART OF THE CONSOLIDATED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2005
2005-2006 2004-2005 2005-2006 2004-2005
Rupees Rupees Rupees Rupees
SCHEDULE “18” - (Contd.)
SCHEDULE “20” - INTEREST AND
Power, electricity and fuel 184,888,338 147,586,879 DISCOUNTING CHARGES
Stores, spare parts and packing
materials (Refer note below) 355,461,929 304,097,201 On loans for fixed periods 46,419,209 52,456,170
Storage charges 13,475,546 13,978,792 On other loans / borrowings 225,344,034 136,827,494
Processing charges 3,516,444 1,515,878
271,763,243 189,283,664
Repairs and maintenance : Less: Interest earned- gross (tax
Buildings 2,918,461 2,361,432 deducted at source Rs.10,775,926
Plant and machinery 12,852,293 15,837,882 (Previous year Rs. 7,171,484)
Others 6,917,693 5,507,910 On bank deposits (50,901,075) (34,630,088)
22,688,447 23,707,224 Others (11,442,303) (8,993,023)
Insurance 22,645,585 17,655,286 (62,343,378) (43,623,111)
Rent 1,758,146 2,034,574
Rates and taxes 8,531,906 11,774,324 TOTAL 209,419,865 145,660,553
Payment to and provision for
employees : SCHEDULE “21” - EXCEPTIONAL ITEMS
Salaries, wages and bonus 106,849,023 111,618,966
Contribution to provident and Amortisation of VRS compensation 15,613,060 12,029,059
other funds (including unquantified Amortisation of Share issue expenses 1,815,734 –
gratuity in respect of a director) 14,802,650 13,079,263
Provision for gratuity in respect of TOTAL 17,428,794 12,029,059
Directors (Refer note 4 (b) of
schedule ‘23’) 87,500 260,000
Workmen and staff welfare expenses 16,543,705 14,121,281
138,282,878 139,079,510
Directors’ sitting fees 392,500 257,500 SIGNIFICANT ACCOUNTING POLICIES
Commission to Chairman, Managing
Director and Joint Managing Director 15,851,530 10,446,129 SCHEDULE “22”
Lease rentals 198,720 150,390 1. Significant accounting policies followed (General) :-
Freight outward 389,281,961 288,969,946
Commission on sales 53,325,105 47,542,578 The financial statements are prepared on accrual basis under the
Discounts and rebates [ Includes historical cost convention and comply in all material aspects with
prior period Rs. Nil the Accounting Standards issued by the Institute of Chartered
(Previous year Rs. 7,900,900) ] 14,645,263 24,048,328 Accountants of India and the generally accepted accounting
Advertisement expenses 1,652,175 1,520,886 principles in India.
Donations 630,501 1,572,592
Legal and Professional fees 19,780,511 22,405,535 2. Significant accounting policies followed (Specific) : -
Miscellaneous expenses
[ Includes prior period Rs. Nil (A) Basis of preparation and principles of consolidation : -
(Previous year Rs. 766,583) ] 134,292,640 123,795,115 The Consolidated Financial Statements relate to Apar Industries
Bad debts and advances written Limited (‘the Company’) and its wholly owned subsidiary
off (Refer note no 5 of schedule 23) 35,984,995 9,287,909 company, Petroleum Specialities Pte. Ltd., a company
Less: Provision for doubtful
incorporated in Singapore.
debts utilised (14,124,036) (279,800)
21,860,959 9,008,109 The Consolidated Financial Statements have been prepared
Provision for doubtful debts 15,087,227 14,591,886 on the following basis:
Bank charges and commission 100,369,996 83,625,977
a) The financial statements of the Company and its
TOTAL 10,578,732,979 8,201,675,601 subsidiary company have been combined on a line-by-
line basis by adding together the book values of like
Note:- Stores and spares consumed include expenses in respect of items of assets, liabilities, incomes and expenses, after
repairs and maintenance of plant and machinery for which eliminating intra group balances, intra group transactions
amounts have not been separately ascertained.
and also resulting unrealized profits or losses. The
SCHEDULE “19” - DECREASE/(INCREASE) IN STOCKS consolidation procedures are in accordance with the
2005-2006 2004-2005 requirements of Accounting Standard 21 - ‘Consolidated
Rupees Rupees Financial Statements’, issued by the Institute of
Chartered Accountants of India.
Opening stock of finished goods,
work-in-progress and scrap 266,765,380 287,379,747 b) In case of foreign subsidiary, revenue items are
Closing stock of finished goods, consolidated at the average exchange rates that
work-in-progress and scrap 602,124,530 266,765,380 prevailed during each month of the year. All assets and
(335,359,150) 20,614,367 liabilities are converted at the rates prevailing at the end
of the year. Exchange gains and losses arising on
TOTAL (335,359,150) 20,614,367 conversion are recognized in the Consolidated Profit

55
Apar Industries Limited
SCHEDULE “22” (Contd.)

and Loss Account as the subsidiary is classified as an recoverable amount is greater of the net selling price and
integral operation. value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value, based on
c) The financial statements of the subsidiary considered an appropriate discounting factor. Impairment losses are
for consolidation, are drawn up to the same reporting recognized in the profit and loss account.
date as that of the Company.
(D) Investments : -
d) The Consolidated Financial Statements are prepared
using uniform accounting policies for like transactions All long term investments are stated at cost. Provision for
and other events in similar circumstances and are diminution in value of long term investments is made if it is of
presented to the extent possible, in the same manner as permanent nature. Current investments are valued at lower
the Company’s stand alone financial statements. of cost and market value.

(B) Fixed assets, Depreciation and Amortization :- (E) Inventories :-

(i) Fixed assets are stated at cost of acquisition /
Inventories are valued at lower of cost and net realisable
construction (net of CENVAT) less accumulated
value (cost of finished goods includes material cost, cost of
depreciation. Cost includes purchase price and other
labour and attributable manufacturing overheads) on the basis
costs attributable to acquisition / construction of fixed
of full absorption costing. Cost of materials is arrived at on
assets.
FIFO basis. Inventory of scrap is valued at estimated realisable
(ii) Depreciation on assets is provided at the rates and in value. Inventories of Finished Goods include excise duty as
the manner prescribed under Schedule XIV of the applicable.
Companies Act, 1956 (except as stated in (iii) below) :
(F) Government Grants : -
(a) in respect of assets of Polymers Division at Valia,
on straight line method, and; (i) Government grants are recognised in the financial
statements when they are received and there is
(b) in respect of assets of other Divisions, on written reasonable assurance that the Company will comply
down value method except in respect of building with the conditions attached to them.
and plant and machinery purchased after
30.4.1987, which are depreciated on straight line (ii) Government grants, which are in the nature of refundable
method. interest free loans received from government/semi-
government authorities, are credited to secured/
Certain items of plant and machinery which have unsecured loans.
been considered to be continuous process plant
by the management are depreciated at the (iii) Government grants which are in the nature of subsidies
prescribed rates. received from government/semi-government authorities
and which are non-refundable are credited to reserves.
(iii) In the cases where the estimated useful life of the asset
is less as compared to useful life estimated in Schedule (G) Voluntary Retirement Schemes :-
XIV of the Companies Act, 1956, such assets are
Compensation paid under voluntary retirement schemes is
depreciated at rates higher than those prescribed under
amortized over a period of 5 years.
Schedule XIV of the Companies Act, 1956.
(H) Share Issue Expenses :-
(iv) No depreciation is provided in the year of disposal.
However, this has no impact on the profits for the year Share issue expenses are written off against share premium
as the corresponding effect is reflected in the items of account if any or amortized over a period of 5 years.
profit or loss on sale / disposal of fixed assets.
(I) Revenue recognition : -
(v) In respect of assets costing less than Rs.5,000 each
and temporary structures, 100% depreciation is provided (i) Sale of goods is recognised on despatch to customers
in the year of addition. and on date of shipment in case of exports. Sales
exclude amounts recovered towards sales tax and
(vi) Capital Expenditure in respect of which ownership does excise duty and is net of returns.
not vest with the Company is amortized over a period of
five years. Leasehold land is amortized over the period (ii) Price variation claims are accounted in accordance with
of lease. the terms of contract and/or upon admittance by
customers.
(vii) Borrowing costs attributable to acquisition/construction
of qualifying assets within the meaning of the accounting (iii) Dividend income on investment is recognised when the
standard 16 on “borrowing costs” are capitalised as a right to receive payment is established.
part of the cost of fixed assets. (iv) In respect of service activities, income is recognised as
(C) Impairment of assets : - and when services are rendered.

Consideration is given at each balance sheet date to determine (J) Retirement benefits : -
whether there is any indication of impairment of the carrying Retirement benefits to employees are provided for by
amount of the Company’s assets. If any indication exists, the payments to provident funds and in respect of certain
recoverable amount of such assets is estimated. An employees also by contribution to superannuation fund. The
impairment loss is recognized wherever the carrying amount gratuity liability in respect of employees is determined on the
of the assets exceeds its recoverable amount. The basis of an actuarial valuation and is funded with a trust. The

56
 17th Annual Report 2005-2006
gratuity liability in respect of all the Whole-time Directors of NOTES TO CONSOLIDATED ACCOUNTS FOR THE
the Company, except one director, (See note 4 (b) of Schedule YEAR ENDED 31ST MARCH, 2006
‘23’) is ascertained on an arithmetical basis and is not funded. SCHEDULE “23”
As at 31st As at 31st
Liability on account of accumulated unavailed leave salary is March, 2006 March, 2005
provided on the basis of an actuarial valuation. Rupees Rupees
(K) Translation of foreign currency :- 1. Contingent liabilities not
provided for :
(i) The Company translates foreign currency transactions (a) Bills of exchange
during the year, at the conversion rates notified by the discounted 383,170,710 81,492,278
custom authorities. (b) Taxation:
Disputed demands
(ii) Monetary items remaining unsettled at the year end are of income tax 9,937,439 18,958,959
translated/reported at the year end rate. Exchange (c) Claims against the
differences arising on such revaluation are recognised Company not
in the Profit and Loss Account except exchange acknowledged as debts -
differences pertaining to acquisition of fixed assets, (i) Demand/Show
which are adjusted in the carrying cost of the fixed cause-cum-demand
assets. notices received
and contested by
(iii) Non-Monetary items (other than fixed assets) are
the Company with
reported at the exchange rate at which they are
relevant appellate
accounted.
authorities:
(iv) In case of forward contracts, the difference between Excise Duty (also
the forward rate and the exchange rate prevailing on refer note below) 43,998,152 30,523,994
the date of the transaction is recognised as income or Custom duty 23,830,496 3,870,357
expense over the life of the contract, except in respect Sales tax (including
of liabilities incurred for acquiring fixed assets where amount deposited
the difference is adjusted in the carrying cost of the Rs. 1,291,455) 6,886,937 1,100,000
fixed asset.
Note: The Company had executed certain deemed export orders of
(L) Hedging transactions (Aluminium) :- conductors in respect of which the Company availed duty exemption
on basis of eligibility certificates issued by project authorities. The central
All gains or losses in respect of hedging transactions are excise authorities have subsequently raised demands aggregating Rs.
recognised in the financial statements on settlement/squaring 179,721,592 (previous year Rs. 179,721,592) (against which Rs. 50
off. Commission etc. in respect of such transactions is lacs has been deposited under protest) disputing the eligibility for
accounted on accrual basis. exemption. The Company has preferred appeals against these demands
before the appellate authorities. In case of these demands becoming
(M) Export benefits/Incentives : - payable, the same would be either settled by the customer or would be
recoverable. Thus, it would be revenue neutral for the Company.
The Company accounts for excise duty rebate on deemed Accordingly, such demands are not considered as contingent liabilities
and physical exports and duty entitlements on physical and hence not included above.
exports on accrual basis. Premium on special import licence
is credited in the accounts as and when realised. The benefits (ii) Demand/charges
in the form of entitlements to Advance Licenses for duty free levied by the Local
import of raw materials in respect of exports made are Authorities 19,406,618 18,073,928
accounted when such imports are made.
(iii) Labour matters 19,531,439 4,375,620
(N) Claims against the Company not acknowledged as 2. Estimated amount of contracts
debts : - remaining to be executed on
capital account and not provided
The demands under disputed showcause notices / orders of
for (Net of advances) 77,307,256 50,349,610
statutory authorities are provided in the accounts on the basis
of management’s estimate and the balance, if any are included 3. Premium in case of forward
in contingent liability. contracts not expired and
pertaining to the future period 3,163,441 1,246,082
(O) Taxes on income :-
4. Payment to directors :
Provision for taxation is made for both current and deferred
Remuneration to directors :
taxes. Provision for current tax is made, at current rate of
Directors’ sitting fees 392,500 257,500
tax, based on assessable income. Deferred tax resulting
from timing differences between the book profits and the tax Salaries and other benefits /
profits is accounted for to the extent that the timing differences amenities 8,187,453 9,151,762
are expected to crystallise. Provision for gratuity
Deferred tax assets are not recognised on unabsorbed (ascertained on arithmetical
depreciation and carry forward losses unless there is virtual basis) - see note (b) below 412,885 260,000
certainty that sufficient future taxable income will be available Commission 15,851,530 10,446,129
against which such deferred tax assets will be realised.
24,844,368 20,115,391

57
Apar Industries Limited
SCHEDULE “23” (Contd.)

NOTES : 9. (I) Category wise quantitative data about derivative instruments

(a) In the case of personal use of Company’s cars, recoveries oustanding at 31st March, 2006
have been made from the Directors on the basis of the Type of Instrument Nos. Amount
Income-tax Rules, 1962, which the Company considers as
adequate and reasonable. (a) In respect of Commodity
(b) In case of a director, gratuity amount is included in the actuarial (Aluminum) Futures at London
valuation carried out for the company as a whole and hence Metal Exchange 22 $1,109,592
not ascertainable. (b) In respect of Foreign currency
5. During the year, the Company contracted with a foreign supplier Forward contracts 9 $20,450,000
for supply of Aluminum Ingots. The Company received shipping Options 7 $3,500,000
documents and the Company’s letter of credit of Rs. 73.64 Lacs Currency and Interest SWAP 1 $570,000
was encashed against the fraudulent documents of supply. The
detailed investigation carried out by the Company confirmed that (II) All the derivative instruments
there was no supply of goods. The Company has written off the entered by the company during
said amount as bad debts / advances in the books. There have the year were for hedging
been no other dealings by the Company with the supplier. purpose and not for any
speculative purpose.
6. The Company redeemed the last tranche of 10% redeemable
preference shares of Rs. 4/- each on April 1, 2005 in terms of the
(III) Unhedged foreign currency
issue. In accordance with the requirement of Section 80 of the
exposure as at 31st March, 2006
Companies Act, 1956, capital redemption reserve for the full amount
In US$ 53,780,000
of the preference shares has been created out of the profits of
In Euro 830,000
the Company.
10. Related Party Disclosures :
Above redemption did not include some preference shares having A. List of Related Parties :
calls in arrears on 1st April, 2005. The said calls have been received a) Key Managerial Personnel:
during the year and the amount payable on redemption of these
preference shares after adjusting other moneys due from holders Dr. N. D. Desai - Non Executive
of these shares is transferred to 'Unpaid Redemption Amount on chairman (was an executive
Preference Shares Account'. chairman till 31st January, 2006).
As at 31st As at 31st Mr. K. N. Desai - Managing Director
March, 2006 March, 2005 Mr. C. N. Desai - Jt. Managing Director
Rupees Rupees Mr. M. M. Patel - Director (Polymers)
Mr. G. S. Sudhakar - Director
7. (a) Sundry Creditors include b) Relatives of Key Managerial Personnel:
amounts due to small
scale industrial undertakings. 4,581,215 1,347,168 Mrs. Noopor Kushal Desai
Mrs. Vineeta R Srivastava
(b) Names of Small Scale Mr. Rishabh K Desai
Undertakings to whom the Ms. Gaurangi K Desai
Company owes a sum out- Ms. Krishnangi R Srivastava
standing for more than 30 days.
c) Entities over which key management
1. M/s Core Chemicals Pvt. Ltd personnel exercise significant influence:
2. M/s Perfect Speciality Product
3. M/s Shefjo Plastics Apar Corporation Private Limited
4. M/s Vibha Chem Products Ltd. Scope Private Limited
5. M/s Caliber Chemicals Pvt. Ltd. Consumers Services Private Limited
6. M/s Krishna Antioxidents Pvt. Ltd. Ceom Private Limited
7. M/s Nikita Transphases Pvt. Ltd. Dr. N. D. Desai, HUF
8. M/s Thakkar Polypack Industries Kushal N Desai Family Trust
Kushal Chaitanya Desai Family Trust
The above disclosure is based on the information/documents Chaitanya N Desai Family Trust
available with the Company. Apar Masat Conductors Ltd.
8. The summary of utilisation of the amount of Rs. 6,375.06 Lacs (No transactions during the year)
raised by issue of 5.40% Cumulative Compulsorily Convertible Apar Investments (Singapore) Pte. Ltd.
Preference Shares with participating rights is as under: and its subsidiaries (No transactions
during the year).
(Rs. Lacs)
B. (i) Key Managerial Personnel :
Envisaged Actually
Use used upto
Sr. Transactions 2005-2006 2004-2005
31.03.2006
No.
Expansion Projects
(Capital Expenditure) 3,875.06 1,389.66 1 Interest paid 23,550,825 21,843,288
Redemption of Non convertible 2 Directors’ remuneration - 19,592,578
Debentures 2,500.00 2,500.00 3 Redemption of
Preference Shares 9,080,072 6,810,054
TOTAL 6,375.06 3,889.66

58
 17th Annual Report 2005-2006
SCHEDULE “23” (Contd.)
(iii) Entities over which key management personnel
Sr. Transactions 2005-2006 2004-2005 exercise significant influence:
No.
Sr. Transactions 2005-2006 2004-2005
4 Redemption of
No.
Debentures 115,000,000 –
5 Dividends paid 1 Interest paid 19,677,533 25,949,311
(payment basis) 43,019,963 32,116,534 2 Purchase of raw material – 111,151,788
6 Legal and 3 Rent paid 2,540,986 1,238,000
Professional Fees 540,243 – 4 Rent received 120,000 674,500
7 Outstanding as on 5 Redemption of Preference
31.03.2006 : Shares 1,260,520 945,390
Loans and Deposits 318,500,000 176,000,000
Debentures – 115,000,000 6 Redemption of
Debentures 135,000,000 –
Refer note (f) of schedule
7 Dividends paid
3 and note no. 2 and 3 of
(payment basis) 1,641,935 1,166,664
schedule 4 for details of
undertaking/ security 8 Use of Logo 1,000 –
given by key management 9 Outstanding
persnnel in connection (credit balances)
with the Company’s as on 31.03.2006
borrowings. Loans and Deposits 55,358,657 62,706,785
Debentures – 135,000,000
(ii) Relatives of Key Managerial Personnel : For supply of raw
materials 1,182,182 1,540,819
Sr. Transactions 2005-2006 2004-2005
No. Refer note (e) of
schedule 3 for details of
1 Redemption of undertakings/ security
Preference Shares 469,920 352,440 given by entities in
2 Dividends paid connection with the
(payment basis) 112,452 76,115 Company’s borrowings.

11. The Company’s operations predominantly relate to manufacture of Polymers, Conductors and Transformer/Speciality Oils which businesses
have been identified as primary segments based on the Company’s risk profile and internal reporting structure.

a. Business Segments (Rupees in Lacs)

Particulars Conductor Transformer & Polymers Eliminations Consolidated

Speciality Oils Total
2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

REVENUE
External Sales 43,850.81 27,044.27 53,368.19 45,777.52 14,017.02 14,587.27 – – 111,236.02 87,409.06
Other Income 71.47 282.88 221.07 221.00 143.31 107.14 – – 435.85 611.02
Inter-Segment Sales – – 55.54 36.85 – – (55.54) (36.85) – –
Total Revenue 43,922.28 27,327.15 53,644.80 46,035.37 14,160.33 14,694.41 (55.54) (36.85) 111,671.88 88,020.08
RESULT
Segment result 3,484.50 13.84 4,944.01 5,035.41 822.49 1,722.16 – – 9,250.99 6,771.41
Unallocable Corporate/Other
expenses (net of
miscellaneous income) – – – – – – – – (1,876.03) (1,850.72)
Operating Profit – – – – – – – – 7,374.96 4,920.69
Interest Expense – – – – – – – – (2,717.63) (1,892.84)
Interest Income – – – – – – – – 623.43 436.23
Profit before taxes – – – – – – – – 5,280.76 3,464.08
INCOME TAX
Current tax – – – – – – – – (785.55) (424.36)
Deferred tax – – – – – – – – (14.21) 113.83
Profit after tax – – – – – – – – 4,481.00 3,153.55
OTHER INFORMATION
Segment assets 26,971.05 13,397.51 36,398.55 26,035.55 13,342.61 9,649.94 – – 76,712.22 49,083.00
Unallocable Corporate and
Other assets – – – – – – – – 4,682.36 4,696.16
Total Assets – – – – – – – – 81,394.58 53,779.16
Segment liabilities 16,917.88 5,260.60 28,303.29 19,501.14 4,917.85 2,466.36 – – 50,139.03 27,228.10
Unallocable Corporate and
other liabilities – – – – – – – – 1,467.87 1,597.63

59
Apar Industries Limited
SCHEDULE “23” (Contd.)

a. Business Segments (Contd.) (Rupees in Lacs)

Particulars Conductor Transformer & Polymers Eliminations Consolidated

Speciality Oils Total

2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

TOTAL LIABILITIES – – – – – – – – 51,606.90 28,825.73

Capital expenditure 1,439.94 435.90 284.30 622.07 812.60 535.71 – – 2,536.84 1,593.68

Capital expenditure -
unallocable – – – – – – – – 224.09 14.06

Depreciation 235.60 239.54 210.42 169.84 350.68 378.19 – – 796.68 787.57

Depreciation on -
unallocable – – – – – – – – 67.30 68.86

Non-cash expenses other

than depreciation 87.29 51.45 – – – – – – 87.29 51.45

Non-cash expenses other

than depreciation -
unallocable – – – – – – – – 87.00 68.84

b. Geographical Segments

i) Revenue by geographical Market: (Rupees in Lacs)

Particulars Conductor Transformer & Polymers Total

Speciality Oils

2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

Outside India 7,971.95 8,230.78 8,829.50 4,119.33 631.62 471.33 17,433.07 12,821.44

In India* 35,878.86 18,813.49 44,538.69 41,658.19 13,385.40 14,115.94 93,802.95 74,587.62

Total 43,850.81 27,044.27 53,368.19 45,777.52 14,017.02 14,587.27 111,236.02 87,409.06

* Include deemed exports Rs. 4,146.77 Lacs (previous year Rs. 2,884.41 lacs).

ii) Carrying amount of Segment Assets: (Rupees in Lacs)

Particulars Conductor Transformer & Polymers Unallocated Total

Speciality Oils

2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05 2005-06 2004-05

Outside India 3,101.25 2,269.87 1,630.96 733.31 146.47 22.34 – – 4,878.68 3,025.52

In India* 20,775.81 9,225.69 32,002.90 22,603.92 8,876.49 5,768.05 3,390.67 3,543.70 65,045.87 41,141.35

Total 23,877.06 11,495.56 33,633.86 23,337.23 9,022.96 5,790.39 3,390.67 3,543.70 69,924.55 44,166.87

60
 17th Annual Report 2005-2006
SCHEDULE “23” (Contd.)
iii) The Company’s fixed assets are located entirely in Sr. Particulars Year Year
India. No. ended ended
31st March, 31st March,
Segment Revenue and Result 2006 2005
The expenses which are not directly attributable to the (f) Tax on participating dividend
business segment are shown as unallocable corporate/other paid on 5.40% Cumulative
expenses (net of miscellaneous income). Compulsorily Convertible Preference
Shares with participating rights (16.92) –
Segment assets and liabilites
Segment assets include all operating assets used by the TOTAL (322.50) (35.46)
business segment and consist principally of fixed assets, 3 Profit after preference and
debtors and inventores. Segment liabilites primarily include participating dividend to Cumulative
creditors and other liabilities. Assets and liabilites that cannot Compulsorily Convertible Preference
be allocated between the segments are shown as a part of Shares with Participating rights
unallocable corporate assets and liabilites respectively. (previousyear Redeemable
cumulative preference shares)
12 Particulars of earnings per share
A) 1 A - 2 4,158.50 3,137.78
Sr. Particulars Year Year B) 1 B -2 3,863.50 3,137.78
No. ended ended 4 Weighted Number of Equity Shares
31st March, 31st March, outstanding during the year 20,806,045 20,806,045
2006 2005
1 5 Nominal Value of Equity
A) Profit After Tax (excluding tax Shares Rs. 10 10
provisions for earlier years) and
6 Weighted Average Number of
exceptional items excluding prior
5.40% Cumulative Compulsorily
preiod items Rs. Nil (previous year
Convertible Preference Shares
Rs. 19.68 Lacs)-Rs.Lacs 4,481.00 3,173.24
with participating rights
outstanding during the year 1,623,858 –
B) Profit After Tax and exceptional
items excluding prior period items 7 Nominal Value of Preference
Rs. Nil (previous year Shares Rs. 185 –
Rs. 19.68 Lacs)-Rs.Lacs 4,186.00 3,173.24
8 Weighted Average of total
2 Preference and participating Number of Shares
dividend to compulsorily convertible during the year (4 +6) 22,429,903 20,806,045
participating Preference shares
(Previous year Redeemable 9 Earnings per share - Rs.
Cumulative Preference Shares) : A) Basic :
(i) On Profit before tax
(a) Dividend paid on Redeemable
provisions for earlier
Cumulative Preference Shares – (31.36)
years (3A) / 4 19.99 15.08
(b) Tax on Dividend paid on
(ii) On Profit after tax
Redeemable Cumulative
provisions for earlier
Preference Shares – (4.10)
years (3B) / 4 18.57 15.08
(c) Preference Dividend on 5.40%
B) Diluted :
Cumulative Compulsorily
(i) On Profit before tax
Convertible Preference Shares
provisions for earlier
with participating rights (162.22) –
years (1A) / 8 (previous
(d) Tax on Preference Dividend on
year 3A/8) 19.98 15.08
5.40% Cumulative Compulsorily
(ii) On Profit after tax
Convertible Preference Shares
provisions for earlier
with participating rights (22.75) –
years (1B) / 8
(e) Participating dividend paid on
(previous year 3B/8) 18.66 15.08
5.40% Cumulative Compulsorily
Convertible Preference Shares 13. Previous year figures have been regrouped, where necessary, to
with participating rights (120.61) – conform to current year’s classification.

61
Apar Industries Limited
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2006

2005-2006 2004-2005
(Rupees) (Rupees)
Cash flow from Operating Activities :
Net Profit before taxation adjusted for: 528,076,196 346,408,739
Depreciation/Amortisation 86,398,246 85,643,264
Foreign Exchange 10,136 –
(Profit)/Loss on Sale of Fixed Assets(Net) (2,244,057) (684,020)
Miscellaneous expenditure amortized 17,428,794 12,029,059
Interest income (62,343,378) (43,623,111)
Interest expense 271,763,243 189,283,664
311,012,984 242,648,856
Operating profit before working capital changes in : 839,089,180 589,057,595
Trade and other receivables (612,185,007) (311,995,350)
Inventories (1,188,373,604) (37,814,374)
Trade and other payables 2,196,422,071 189,346,566
395,863,460 (160,463,158)
Compensation Under Voluntary Retirement
Scheme incurred during the year (17,920,000) (29,923,337)
Share issue expenses incurred during the year (18,117,341) –
Cash generated from operations 1,198,915,299 398,671,100
Income Tax paid (including fringe benefit tax) (net of refunds) (75,952,511) (62,635,889)
Net cash from operating activities 1,122,962,788 336,035,211
Cash flow from investing activities :
Purchase of Fixed Assets (269,010,334) (158,605,456)
Sale of Fixed Assets 4,022,973 3,589,512
Purchase of Investments (633,416,872) (129,064,777)
Sale of Investments 642,479,424 122,064,777
Interest received 44,629,790 44,325,304
Net cash used in investing activities (211,295,019) (117,690,640)
Cash flow from financing activities :
Proceeds from Unpaid calls/Share Premium 191,357 52,106
Proceeds from Compulsorily convertible Pref. Share Capital 637,505,930 –
Repayments of Preference Share Capital (31,355,140) (23,516,355)
Proceeds from fixed deposits (net) 7,070,000 25,440,000
Proceeds/(repayments) from/of bank borrowings (net) (247,496,695) 89,252,266
Repayment of Debentures (250,000,000) –
Proceeds from short term borrowings 181,073,386 302,660,000
Repayments of long term borrowings (99,662,134) (477,497,481)
Interest Paid (238,567,736) (185,201,053)
Dividend Paid (64,308,037) (45,644,922)
Tax on Dividends (9,599,916) (9,482,734)
Net cash used in financing activities (115,148,986) (323,938,173)
Net Increase/(Decrease) in cash and cash equivalents 796,518,783 (105,593,602)
Cash and cash equivalents, beginning of year 716,984,597 822,578,199
Cash and cash equivalents, end of year 1,513,503,380 716,984,597

Notes :
1) Previous year figures have been regrouped/restated where necessary to conform to the current year presentation.
2) Refer Schedule 10 of financial statements for composition of cash and bank balances.

As per our report of even date attached

For RSM & Co. For and on behalf of the Board of Directors
Chartered Accountants
Vijay N. Bhatt Kushal N. Desai V. A. Gore D. C. Patel V. C. Diwadkar
(Partner - F 36647) Managing Director Director Company Secretary Chief Financial Officer
& CEO
Dated : 27th June, 2006 Dated : 27th June, 2006
Place : Mumbai Place : Mumbai

62
 FORM OF PROXY

FOLIO NO. : NO. OF EQUITY SHARES :

CLIENT ID NO. :
DP ID NO. :

I/We,
of
being
Equity Shareholder(s) of Apar Industries Limited hereby appoint
of
or failing him
of
or failing him of
as my/our Proxy to attend and vote for me/us and on my/our behalf at the Seventeenth Annual
General Meeting of the Equity Shareholders of the Company to be held on Thursday,
10th August, 2006 at Vadodara and at any adjournment thereof.
As witness my/our hand(s) this day of 2006.

Affix a
Signed by the said Re. 1
Revenue
Stamp

N.B. This Proxy Form must be deposited at the Registered Office of the Company not later than 48
hours before the time for holding the meeting. The Proxy need not be a Shareholder of the
Company.