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Directors Report of Axel Polymers Ltd.

Mar 31, 2010

The directors are pleased to present herewith the Eighteenth Annual Accounts of your Company for the financial year ended March 31, 2010.

PART I

FINANCIALS

Rupees

PARTICULARS 2009-2010 2008-2009

Sales and other income 37374062 256400303

Expenditure 34297746 258615471

Depreciation&W/off 4594433 4458123

Profit before Interest, W/off&Depreciation 6235814 775988

Profit before Tax -1518117 -6673291

(Short)/Excess ProvisionofCurrent Tax of earlier year 155775 0

Provision for Taxation :

Current tax 0 0

Deferred Tax Liability/Asset 1925440 -3619491

Fringe benefit Tax 0 74896 Profit after Tax 563098 -3128696

Cash Profit after Tax 5157531 1329427

PERFORMANCE

Almost every business, every individual has been impacted in these times and your company is no exception to it. This is the time for us to show our strength and what we can achieve. We have worked harder and smarter now more than ever. The true spirit is founded on our enthusiasm, cost consciencness, willingness to assume responsibility and the Will to ensure that we succeed. Your company backed by a list of Multinationals and Indian Corporate Giants and remarkable processing talents was able to face those challenges by bolstering talent and cost effective plans across the company.

Your Directors have to state that during the year ended March 31, 2010 your Company has not been able to maintain its growth history. The World Economic Crisis and the slump in the global market had put the Industry in a very bad situation. Your directors have to further state that in spite of the slump in global market, the Indian scenario was a shade better. In these difficult times your Company managed to float and avert the crisis to the best ability of your Directors. Our main customers are related to the Automobile and Electrical Industry. Both these sectors were in the red since the global and the domestic market was low. There was panic in the Industry too. The company managed to control the overheads to offset the lower revenue, increase in prices of electricity & labour costs.

FUTURE GROWTH OPPORTUNITIES - DIVERSIFICATION

The current business scenario of Toll Compounding of Engineering Polymers is still quite good; however the returns are disproportionate. We are one of the oldest Companies in the field of Engineering Polymers. Our Processing facilities and capabilities are state-of-the-art; so as to produce Quality material.

Thus as a business decision, we have identified 2 lines of activity.

Engineering Polymers Mosquito Bed Nets – ITNs & Untreated

You will be happy to note that on a detailed analysis, all the relevant factors are in our favour thus justifying our decision.

With this proposed line of business activity, your Directors are hopeful and optimistic of generating additional revenues at a higher rate than the existing line of activity. Moreover, the demand for this product will never be in slump due to the sheer size of the Market. Moreover, the domestic Market itself is quite large.

The existing expanded scale of our operations, future developments, low overheads, and qualities of products matching with International Standards are our inherent strengths. This in turn continues to give us unparalleled platform to be more competitive. We are focused to deliver superior values to customers, ensuring International qualities for all the products and services.

PART II

CORPORATE GOVERNANCE

Your Company has maintained highest standards of Corporate Governance since its inception, even before any guidelines were mandated. Your Company believes that good corporate governance practices enable the management to direct and control the affairs of the Company in an efficient manner and to achieve the goal of achieving excellence aimed at maximising value for all shareholders and understands the right to information of its shareholders with respect to the performance of the Company. Company will continue to focus its resources, strengths and strategies to achieve its vision of widening its customer base, while upholding the core values of transparencies, integrity, honesty and accountability, which are fundamentals.

Your Board has implemented the necessary actions as per the Report annexed herewith (Annexure I). The Auditors have examined the Compliance and have certified the same as required by Clauses of the Listing Agreement. The Certificate is also annexed herewith (Annexure II)

Management Discussion and Analysis Report covering a wide range of issues relating to outlook, performance & prospects is annexed herewith (Annexure III).

SECRETARIAL AUDIT

As directed by SEBI, Secretarial Audit is being carried out at the specified periodicity by the Statutory Auditors. The findings of the Audit were entirely satisfactory.

ISO CERTIFICATION

Company has obtained the ISO 9001-2008 Certification.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to requirement under Section 217(2AA) of the Companies act, 1956, it is hereby confirmed that:

In the preparation of the annual accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanations relating to material departures.

The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit for the year under review.

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

The Directors had prepared the Annual Accounts on a going concern basis.

AUDITORS

M/s Shah & Bhandari, Chartered Accountants, Baroda, the present Auditors retire at the conclusion of the ensuing Annual General Meeting. Being eligible, they have offered themselves for reappointment.

AUDITORS’ REPORT

With reference to the Auditors’ Report, the Notes to the Account are self explanatory and therefore do not call for any further comments under section 217 (3) of the Companies Act, 1956.

DIRECTORS

Reappointment

. In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. B.B.Patel retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for reappointment. Your Directors recommend his reappointment

. In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. A.G.Thakore retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for reappointment. Your Directors recommend his reappointment

FIXED DEPOSITS

The company did not invite / accept / renew any fixed deposits during the year under review.

DIVIDEND

Your Directors do not recommend any Dividend in the current year in view of brought forward losses.

INSURANCE

All the Assets of the Company are adequately insured against Fire, Floods, Riots and natural calamities. The sum insured are adequate as per the current norms.

TAXATION

Pursuant to the provisions of Sec. 43B of the Income Tax Act, 1961 the Company is required to provide for Deferred Tax Liability. As per the revised provisions of Sec. 43B, the deferred tax liability for the year has reduced and the same is adjusted in the Profit & Loss Account.

COMPLIANCES

The Company is generally regular in making all Statutory Compliances.

INVESTOR RELATIONS

All Investor complains received during the year have been suitably disposed off. There were no Investor grievances pending as at date.

PARTICULARS OF EMPLOYEES

The Industrial relations in the Plant and Office continues to be cordial, harmonious and peaceful.

Your directors like to place on record their appreciation of contribution made by the employees at all levels, their steadfastness, solidarity, co-operation and support have made it possible for the company to grow. Employees continue to remain our major asset, in our continuing endeavour in the pursuit for excellence.

Information required under Section 217 (2A) of the Companies Act 1956 read with the Companies (Particulars of employees) Rules 1975, has not been given as the same is not applicable.

FOREIGN EXCHANGE EARNING

The Company has not earned any Income on Revenue or Capital Account during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING & OUTGO

During the year, your Directors have focused their approach on the efficiency in Consumption of Power.

The particulars prescribed under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 are as under:



Power&Fuel Consumption - Electricity 2009-2010 2008-2009

Purchased Quantity units 697669 611336

Amount Rs. 4017053 3579270

Rate / unit Rs. 5.76 5.85

Production Quantity M.T. 1801.561 1786.031

Total Power Cost Rs. 4031048 3579720

Power Cost per Kg. of Production Rs. 2.24 2.00

The Power cost per kg of Production has increased from Rs. 2.00 to Rs. 2.24 due to increase in Basic Rate per unit of Power.

ACKNOWLEDGEMENT

Your Directors would like to express their gratitude & appreciation for the assistance and co-operation received from Bank of Baroda, Government Authorities, Business Associates, and Share Holders during the year under review.

Your directors wish to place on record the deep sense of appreciation for the devoted services of the Executives, Staff and Workers of the Company for its success. The Company believes that the Employees are its biggest assets.

For and on Behalf of the Board



Place: Mokshi B.K.BODHANWALA

Dated: 01.08.2010 CHAIRMAN

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