Notes to Accounts of Dujodwala Paper Chemicals Ltd.

Mar 31, 2012

Note 1 Contingent Liabilities and commitments

Particulars 31st March 2012 31st March 2011

Bills Receivable Discounted 9,90,319 60,77,522

Bank Guarantees given 35,94,022 43,15,374

Letter of Credit 1,89,74,107 13,13,69,074

Claims against the Company not acknowledged as debts in respect to Income 67,90,191 93,86,337

Tax and excise duty

Note. 2.

2.1 In the opinion of the Management and to the best of their knowledge the value of realization of current assets, loans and advances in the ordinary course of business, would not be less than the amount at which they are stated in the Balance Sheet except otherwise stated.

2.2 The balances of Sundry Debtors, Sundry Creditors, Loans and Advances, Sales Tax deferment Loan and others are as per books and are subject to confirmations and reconciliation if any.

Note. 3

Company has availed the State Incentive Package Scheme of Sales tax deferment as the Unit of the Company is situated in a state notified backward area. As per the Scheme, Company is allowed to collect the Sales Tax, which is payable to the State Government after ten years in five yearly installments. For the Financial Years 1997-1998 to 2005-2006, Company included the Sales Tax deferral aggregating to Rs. 864.17 lacs in sales of respective years subject to confirmation and final determination of liability. Pending determination of actual liability in that respect Reserves of the Company have been overstated and liability is understated to that extent.

Note 4 Employee Benefits

Company accounts for the bonus and terminal benefits to their employees on cash basis. This is not in accordance with the relevant accounting standard prescribed by Company Accounting Standard Rules 2006. Further, the Company has not ascertained the liability for the present value of defined benefits of obligation in respect of Gratuity and leave encasement benefit outstanding at the end of the year. In the absence of an actuarial valuation in respect of such defined benefit obligations as required by AS - 15 "Employee Benefit", details required to be furnished in that respect and the impact thereof on the profit for the year and net worth is not ascertained.

Note 5.

The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been furnished.

Note 6

Since the Company has only one reportable segment under Accounting Standard 17 (AS - 17) Issued by ICAI viz. Resin, no disclosures are required to comply with the said AS-17. The volumes of other segments are insignificant in this context.

Foreign Exchange Difference: -

a) The difference in foreign exchange on realignment/realizations and credited to Profit and Loss account of Rs. 3,82,225/- (Previous Year debited Rs.47,37,310/-. )

b) The Company is exposed to various financial risks, most of which relate to changes in exchange rates etc. and as such hedges risks of aforesaid nature using forward contracts. The outstanding foreign currency derivative contracts as on 31st March 2012 is NIL (Previous Year NIL)

c) As on Balance Sheet date, the Company has aggregate foreign currency payable Rs. 2,90,51,629/-/-(P.Y. Rs. 1,84,02,118.30) and Receivable Rs. 1,89,51,991/-(P.Y. Rs. 1,72,88,643.73) that is not hedged by any derivative instrument or otherwise.

Note 7 Capital Work in progress

(a) Capital work-in-progress includes pre-operative expenses Rs.l,02,42,986/-(P Y NIL) which includes borrowing cost Rs. 99,51,072 ( P Y NIL).

Note 8

Financial statements for the year ended 31st March, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have been regrouped / rearranged as necessary to make them comparable with those of the current year.

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Mar 31, 2010

1] (a) Contingent Liabilities

Particulars 31st March 31st March 2009 2010

Bills Receivable Discounted 87,13,606 NIL

Custom Duty on pending export 1,09,669 13,32,274 obligation against import of Raw Material

Bank Guarantees given 42,21,518 20,50,610

Disputed Income Tax Liabilities 41,32,135 41,32,135





(b) Capital commitments not provided for (net of advances) Rs NIL (Previous Year Rs. NIL)

2] Sales includes Rs.8497.07 lacs (Previous Year Rs. 6011.55 lacs) on account of Re-sale and Rs.814.36 lacs (Previous Year Rs. 8,09.54 lacs) on account of Exports.

3] a) In the opinion of the Management and to the best of their knowledge the value of realization of current assets, loans and advances in the ordinary course of business, would not be less than the amount at which they are stated in the Balance Sheet except otherwise stated.

b) The balances of Sundry Debtors, Sundry Creditors, Loans and Advances, Sales Tax. deferment Loan and others are as per books and are subject to confirmations and reconciliation if any.

4] Company has availed the State Incentive Package Scheme of Sales tax deferment as the Unit of the Company is situated in a state notified backward area. As per the Scheme, Company is allowed to collect the Sales Tax, which is payable to the State Government after ten years in five yearly installments. For the Financial Years 1997-1998 to 2005-2006, Company included the Sales Tax deferral aggregating to Rs. 1120.96 lacs in sales subject to confirmation and final determination of liability. Pending determination of actual liability in that respect Reserves of the Company have been overstated and liability is understated to that extent.

5] Employee Benefits

Company accounts for the bonus and terminal benefits to their employees on cash basis. This is not in accordance with the relevant accounting standard prescribed by the Institute of Chartered Accountants of India. Further, the Company has not ascertained the liability for the present value of defined benefits of obligation in respect of Gratuity and leave encasement benefit outstanding at the end of the year. In the absence of an actuarial valuation in respect of such defined benefit obligations as required by AS - 15 "Employee Benefit", details required to be furnished in that respect and the impact thereof on the profit for the year and net worth is not ascertained.

6] The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been furnished.

7] Since the Company has only one reportable segment under Accounting Standard 17 (AS -17) Issued by ICAI viz.Rosin, no disclosures are required to comply with the said AS-17. The volumes of other segments are insignificant in this context.

8] Related parties disclosure as per Accounting Standard 18.

[A] Key Management Personal (KMP).

Omprakash R. Dujodwala - Whole time Director

Vineet Omprakash Dujodwala - Whole time Director

[B] Relatives of Key Managerial personal.

Vijyalaxmi Dujodwala - Relative of Director

Komal Dujodwala - Relative of Director

[C] Companies controlled by Directors/Relatives who have the authority controlling their activities.

-Blue Orange Entertainment Private Ltd.

9] Foreign Exchange Difference: -

a) The difference in foreign exchange on realignment/realizations and debited to Profit and Loss account of Rs. 106195/- ( Previous Year 19,62,057/-.)

b) The Company is exposed to various financial risks, most of which relate to changes in exchange rates etc. and as such hedges risks of aforesaid nature using forward contracts. The outstanding foreign currency derivative contracts as on 31st March 2010 is NIL (Previous Year NIL)

c) As on Balance Sheet date, the Company has aggregate foreign currency payable Rs. 1889050.30/-/-(P.Y. Rs. 21,49,571/-) and Receivable Rs.1,44,69,128.50/-(P.Y. Rs. 2,30,14,345/-) that is not hedged by any derivative instrument or otherwise.

10] Capital Projects

(a) Capital work-in-progress includes capital advances Rs. NIL (P. Y. 86,57,177/-) and pre-operative expenses Rs.NIL/-(P Y 1,03,76,850/-) including borrowing cost Rs. NIL ( P Y 59,65,809/-).

11] Additional Information Pursuant to Part II of Schedule VI of the Companies Act 1956.

12] Interest amount of Rs. 12.07 lakhs capitalized during the year.

13] Previous years figures have been rearranged / regrouped wherever necessary to conform to the current years presentation.