i) LCL has received demand notice from Sales Tax Authority of Rs.22,95,247.00 (previous year Rs.20,66,665.00) for the financial year 2003-2004, 2004-2005 & 2006-2007. LCL has filed the appeal before the Appellate Authorities.

ii) LCL has received demand notice from Central Excise Authority of Rs.9,03,120.00 (previous year Rs.9,03,092.00) for the year 2006-2007. LCL has filed an appeal before the CESTAT.

2. Disclosure of Amalgamation under Accounting Standard - 14 of ICAI :

(a) The Hon'ble Calcutta High Court has vide its order dated 17th May, 2012 approved the merger of Lords Chemicals Limited (Transferee Company) with Jagati Cokes Private Limited (Transferor Company) effective from 1st April, 2010 (appointed date).

(b) The approved scheme is an amalgamation in the nature of Merger and

accounting has been done on the basis of "the Pooling of Interest Method" as prescribed by AS-14 of ICAI. All assets, liabilities and other transactions of transferor Company with effect from 1st April, 2010 has been incorporated in the books of transferee company at book value as a going concern on line by line basis except its subscribed, issued and paid-up capital of Rs. 6,93,00,000/- which has been accounted as under in the financial statement as per approved scheme:

(i) As per the approved scheme, the Authorized Share capital of the Transferor Company has been added to the Authorized Share Capital of the Transferee Company and forms part of the Authorized Share Capital of the Transferee Company without any further act or deed.

(ii) Pending allotment formalities, a total amount of Rs. 6,93,00,000/- representing 6930000 fully paid equity shares of Rs. 10/- each of the Transferee Company to be issued to the Shareholders of Transferor Company (exchange ratio being 1:1) has been shown as the Share Capital Suspense Account.

3. Secured Loans :

The Working Capital Loans are secured by:

First charge on the entire current assets of the Company,

Equitable Mortgage of the Factory Land & Building being assets of Transferor Company, Hypothecation of Plant & Machinery being assets of Transferor Company, Personal guarantee by directors of the Company.

4. Managerial Remuneration :

(a) The company has paid remuneration by way of salary to its Managing Director and Director within the limit specified under Schedule XIII and approved by the board and shareholders of the Company. The details of remuneration paid during the year are as follows.

5. Deferred Tax Liability :

In terms of Accounting Standard - 22, net Deferred Tax liability of Rs. 29,62,090.00 has been recognized in the books of accounts. The component of the deferred tax liability at respective balance sheet date is as follows:-

6. Sundry creditors include Rs. Nil due to micro, small & medium enterprises to the extent such parties have been identified from the available documents /information.

7. Excise duty on finished goods is neither provided nor the same is considered for valuation of closing stock. This has no impact on the profit for the year.

8. The balances in various accounts in sundry creditors, sundry debtors and loans & advances are subject to confirmation and reconciliation. Company has shown the figures as per values appearing in the books of accounts.

9. Segment Information :

The Company's business activity primarily falls within a single reportable segment i.e. Chemical Products, which are subject to similar risk and returns. Hence, there is no separate segment reporting which is in conformity with the Accounting Standard-17 issued by The Institute of Chartered Accountants of India.

* (As certified by the Management and on which Auditors have placed reliance, this being a technical matter)

Note: - i) The above figures are inclusive of transit losses and shortages,

ii) The above figure also net of discount.

10. Additional information as required under Part IV of Schedule VI of the Companies Act, 1956 is annexed.

11. Figures of the previous year have been regrouped /rearranged wherever necessary. The current year figures are not comparable with the previous year figures owing to the scheme of amalgamation.