Directors Report of Dujodwala Paper Chemicals Ltd.

Mar 31, 2010

The Directors have pleasure in presenting the 23rd Annual Report together with the Audited Accounts for the year ended 31st March, 2010.

(Rs. In Lacs) 2009-10 2008-09

FINANCIAL RESULTS

Gross Sales 12818.23 10554.38

Other Income 19.24 24.21

Gross Profit before Interest, Depreciation 728.44 701.86

and Taxation

Interest 410.61 452.14

Depreciation 190.90 169.75

Provision for Taxation & FBT 18.98 42.14

Deferred Tax lncome/(Expense) 3.71 3.50

Net Profit for the year 104.24 41.34

Add:-

Surplus brought forward from previous year 1594.14 1552.80

Balance available for Appropriation 1698.39 1594.13

Appropriations:

Balance carried forward to Balance Sheet 1698.38 1594.13

DIVIDEND:

To meet the requirement of funds for working capital and its expansion programme, the Directors have decided not to recommend any dividend for the year under review

MANAGEMENTS DISCUSSION & ANALYSIS :

Overview:

The company is engaged in the manufacturing and selling of Rosin and Rosin Size, Synthetic Resins and other Terpene Chemicals and its products at its unit located at Atkargaon, Taluka Khalapur, Khopoli., Dist. Raigad, Maharashtra.

Industrial Structure and Developments

There was a huge volatility in the price of critical raw-materials alongwith a recessionary trend in the Western part of the World to save all slow down in the growth of economic programme.

The same had a huge impact on the purchasing price of critical Raw Material which eventually effected the profitability.

In order to mitigate the impact created by the volatility in the prices, the Company made a concerted effort for shifting to alternate technologies in manufacturing.

Opportunities and Threats

The Company caters to the units of Paints, Rubbers, Papers, Tyres etc. which is showing a good sign of growth. The same should also result in the Company growing as the demand for its product rises.

The Company is aware of the threat and is gearing up for the same.

Outlook:

The Company is continuously implementing means to innovate, reduce cost, be environment friendly.

The Company has a positive outlook towards the future with the industries being catered to showing good signs of growth

Risk & Concern

There is unhealthy competition from internal and external market forces, which could affect the profitability of the Company.

Internal control systems and its Adequacy:

The Company has put in place necessary internal control systems commensurate with its operations. Periodical checks are conducted and necessary remedial measures are adopted.

Discussion on Financial Performance with respect to Operational Performance:

During the year under review, the company has achieved sales of Rs. 12960.42 Lacs as against Rs.10554.38 Lacs during the previous year resulting an increase of 22.80%.

Fixed Deposits:

The Company has not accepted any Fixed Deposits during the year under review.

Human resources / industrial relations & particulars of employees.

The Industrial relations in the manufacturing unit of the Company continued to be cordial.

During the year there was no employee whose particulars are required to be given under Sub-section 2A of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Pollution and Environment Control.

The Company has always paid highest importance to ensure that the environment remains relatively pollution free. The work force is continuously trained and coached in safety and are provided appropriate safety equipment.

Adequate pollution control facilities are installed at the plant as per Guidelines of Pollution Control authority and are run as per set norms.

DIRECTORS

Mr. Rajendra agarwal, Director retires by rotation and he seeks re-election and therefore he is to be reappointed in the ensuing Annual General Meeting.

CONSERVATION OF ENERGY:

To conserve energy, internal checks are carried out periodically and suitable measures are adopted wherever necessary.

The particulars are given in Annexure A attached herewith.

TECHNOLOGY ABSORPTION:

The Companys manufacturing process for its Products is based on in-house technology which has been successfully absorbed. The Company has been constantly making efforts for improvement of quality and for marketing new range of products.

FOREIGN EXCHANGE EARNING AND OUTGO:

The Company has spent Rs.466.42 lacs against Rs.993.87 lacs during the previous year on import of raw materials and expenses. During the year under review, the Companys foreign exchange earnings amounted to Rs.814.36 lacs as against Rs. 809.54 lacs during the previous year on account of export.

AUDITORS

M/S. A. P. Sanzgiri & Co., Chartered Accountants, the Auditors of the Company will retire from office of the Auditors and being eligible offer themselves for re- appointment.

AUDITORS REPORT

The Auditors have given some remarks in their Audit Report which have been explained in the Notes of Accounts attached with the Balance Sheet and we want to further clarify that,

1) As per Accounting Standard AS-15, Company is required to make provision of Employee benefits viz. Gratuity, Leave Salary, Bonus on actuarial basis, calculation of which is very cumbersome and therefore the company could not calculate the liability and also could not obtain services of any outside person for this work in time. The company is making payments of all these on cash basis and accounting the same at that time.

DIRECTORS RESPONSIBILITY STATEMENT :

A Directors Responsibility Statement as required Under Section 217(2AA) of the Companies Action 1956 is given below:-

1) Directors have followed the applicable accounting standards in the preparation of the Annual Accounts and proper explanation relating to material departures have been given in Schedule 15 of Notes on Accounts forming part of the accompanying Accounts.

2) Directors have selected the Accounting Policies as given in Schedule 15 of Notes on Accounts and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profits of the Company for the year ended on that date.

3) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities.

4) Directors have prepared the Annual Accounts for the year ended 31st March, 2010 on a Going Concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with Auditors certificate on compliance has been annexed hereto.

ACKNOWLEDGEMENT:

The Directors wish to take this opportunity to thank the State Bank of India, State and Central Government Departments, the Shareholders for their valuable co-operation and support to the Company.

CONCLUSION:

The Directors wish to take this opportunity to thank all employees of the Company for the services rendered by them to the Company.

For & on behalf of Board of Directors

(Omprakash Dujodwala) (Vineet Dujodwala) WHOLE TIME DIRECTORS

Date:- 30-08-2009 Place:- Mumbai.