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Directors Report of Dharamsi Morarji Chemicals Company Ltd.

Mar 31, 2013

The Directors are pleased to present their Ninety Second Annual Report, together with the accounts of the Company for the financial year ended 31st March, 2013.

FINANCIAL RESULTS

Financial Year ended Financial Year ended 31st March, 2013 31st March, 2012 Rs. in lacs Rs. in lacs

Sales Turnover (Net of Excise Duty) 8559.15 8132.75

Gross Profit / (Loss) 244.27 87.73

Less: Depreciation 509.96 486.06

Add: Non recurring items 3591.07 Nil

Profit/(Loss) before Taxation 3325.38 (398.33)

Less: Provision for Taxation

Profitl(Loss) after Taxation 3325.38 (398.33)

Add: Balance brought forward (6227.11) (5828.78)

Balance carried forward (2901.73) (6227.11)

The following is the Sales Tumover (Net of Excise Duty) by group of products:

Single Superphosphate Nil Nil

Commodity Chemicals 2972.70 4138.99 Specialty. Chemicals 4478.04 3176.95

Others 1108.41 816.81

Total 8559.15 8132.75

In view of the accumulated losses, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the financial year ended 31s1 March, 2013.

CORPORATE FINANCIAL RESTRUCTURING

In furtherance to the requisite approval of the shareholders of the Company obtained on 17th August, 2010, under Section 293(1) (a) of the Companies Act, 1956, for the sale/transfer/disposal of its land, factory buildings and plant and machinery at its Ambernath Factory, steps are being taken to complete Corporate Financial Restructuring. The Management is continuing its endeavors to complete the Corporate Financial Restructuring, with a view to improve the operational and financial performance of the Company.

ADEQUACY OF INTERNAL CONTROLS

Your Company has clearly laid down policies, guidelines and procedures which form part of its internal control system. The Audit Committee of the Board periodically reviews reports of Internal Auditors, inter alia, on adherence by the operating Management of such policies and procedures and suggests changes/modifications and improvements on a continuous basis. The Company has strong, independent and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and the transactions are authorized, recorded and reported correctly. The internal control systems are supplemented''by a programme of internal audit.

HUMAN RESOURCE DEVELOPMENT

As an ongoing exercise of the restructuring and re-organisation, the Company undertakes periodic comprehensive reviews of its HR policies and amends the same suitably from time to time, to meet the emerging business requirements.

DIRECTORS/KEY MANAGEMENT PERSONNEL

Shri H.T Kapadia and Shri M.T.Ankleshwaria, Directors, are retiring by rotation under Article 135 of the Articles of Association of the Company and being eligible , offer themselves for re- appointment.

The Company continues -its operations under the leadership of the Senior Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas, Chief Executive Officer, Shri. D.T.Gokhale, Executive Vice President and Company Secretary and Shri D.K.Sundaram, Chief Finance Officer.

AUDITORS'' OBSERVATIONS

As regards the Auditors'' observation regarding the Deferred Tax Asset amounting to Rs. 2654.15 lacs as at the end of the Financial Year, ending 31s" March, 2009, it may please be noted that, thereafter, in view of the changed circumstances, the Company has not created any additional Deferred Tax Asset.

The Company''s Export Chemical business has been growing since last three years. The Company has also concentrated in R & D activity to identify and develop new products with high quality standards. The Company therefore expects to improve business growth in domestic and export markets at an increasing rate. The Company is also putting efforts in strengthening marketing strategy of the Company. In the circumstances , the Board of Directors reasonably expect, barring unforeseen circumstances, virtual certainty of realization of Deferred Tax Asset, mainly resulting from un- absolved depreciation and carried forward losses. Therefore, the said Deferred Tax Asset of Rs. 2654.15 Lacs as on 31st March, 2013 is being carried forward without any addition thereto since the Financial Year ending 31s1 March, 2009.

As regards the Auditors'' observation regarding non compliance with regard to the deposits accepted from public including non-filing of returns of Fixed Deposit, it may please be noted that the Company has not accepted or renewed any deposit from public and shareholders from the financial year 2006-2007 onwards and there is no default in respect of repayment of the matured Fixed Deposits and interest payable thereon. The Company has filed the Fixed Deposit Return on 261* June, 2013 for the Financial Year 2012-13.

The Company has also deposited all the unclaimed deposit amounts which are due for more than seven years with Investor Education and Protection Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

As per Section 217 of the Companies Act, 1956, read with The Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange are given in the prescribed format as an Annexure-I to this report.

PARTICULARS OF EMPLOYEES

During the financial year ended 31" March, 2013 there was no employee within the purview of Sec.217(2A) of the Companies Act, 1956 read with The Companies (Particulars of Employees) Rules, 1975.

PUBLIC DEPOSITS

Out of the unclaimed deposits of Rs. 1826000/-as on 31st March, 2012, the Company has transferred/paid Rs. 1265000/-to Investor Education and Protection Fund as required. In addition, Rs.50000/- have been paid to the depositors, who claimed the same during the financial year 01.04.2012 to 31.03.2013. Therefore only 38 deposits aggregating to Rs. 511000/- have remained unclaimed as on 31st March, 2013.

AUDITORS

Mis. K. S. Aiyar & Co., Chartered Accountants, the existing Auditors have, under Section 224 (1-B) of the Companies Act, 1956, furnished a Certificate of their eligibility for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed :

(i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; .

(iii) That the Directors have taken proper and sufficient 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lays strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. Your Company has also evolved a Risk Management Policy regarding risk assessment and risk mitigation mechanism, which has been approved by the Board of Directors. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors'' Certificate on its compliance.

ACKNOWLEDGMENTS

The Directors are thankful to your Company''s shareholders, customers, suppliers, contractors, various departments of Central and State Governments and Banks for their continued valuable support.

The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and the sacrifices made by them during the difficult and critical period which the company is passing through.

Management of your Company is confident that with the active co-operation from all the stake holder of the Company, the Company will be in a position to overcome this difficult phase.

For and on behalf of the Board

LAXMIKUMAR NAROTTAM GOCULDAS

Chairman

Registered Office:

Prospect Chambers,

317/21, Dr. Dadabhoy Naoroji Road,

Fort, Mumbai - 400 001.

Date : 07th August, 2013.


Mar 31, 2012

The Directors are pleased to present their Ninety First Annual Report, together with the accounts of the Company for the financial year ended 31st March, 2012. (Twelve months)

FINANCIAL RESULTS

Financial Year Financial Year ended ended 31st March, 2012 31st March, 2011 (12 Months) (9 Months) Rs. in lacs Rs. in lacs

Sales Turnover (Net of Excise Duty) 8132.75 4295.80

Gross Profit/(Loss) 87.73 7.17

Less: Depreciation & Lenders' sacrifice Amortisation 486.06 486.70

Profit/(Loss) before Taxation (398.33) (479.53)

Less: Provision for Taxation - -

Profit/(Loss) after Taxation (398.33) (479.53)

Add: Balance brought forward (5828.78) (5349.25)

Balance carried forward (6227.11) (5828.78)

The following is the Sales Turnover (Net of Excise Duty) by group of products:

Single Superphosphate - 4.50

Commodity Chemicals 4138.99 2063.83

Specialty Chemicals 3176.95 1802.12

Others 816.81 425.35

Total 8132.75 4295.80

The financial statements for the previous financial year were prepared for a period of nine months commencing from 1st July, 2010 and ending on 31st March, 2011. Therefore, the Sales Turnover for the Financial Year ended 31st March, 2012 is not comparable with the Sales Turnover for the previous Financial Year ended 31st March, 2011 (9 months).

In view of the loss during the year under review, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the financial year ended 31st March, 2012.

CORPORATE FINANCIAL RESTRUCTURING

In furtherance to the requisite approval of the shareholders of the Company obtained on 17th August, 2010, under Section 293 (1) (a) of the Companies Act, 1956, for the sale/transfer/disposal of its land, factory buildings and plant and machinery at its Ambernath Factory, steps are being taken to complete Corporate Financial Restructuring. The Management is continuing its endeavors to complete the Corporate Financial Restructuring, with a view to improve the operational and financial performance of the Company.

ADEQUACY OF INTERNAL CONTROLS

Your Company has clearly laid down policies, guidelines and procedures which form part of its internal control system. The Audit Committee of the Board periodically reviews reports of Internal Auditors, inter alia, on adherence by the operating Management of such policies and procedures and suggests changes/modifications and improvements on a continuous basis. The Company has a strong, independent and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and that transactions are authorised, recorded and reported correctly. The internal control systems are supplemented by a programme of internal audit.

HUMAN RESOURCE DEVELOPMENT

As an ongoing exercise of the restructuring and re-organisation, the Company undertakes periodic comprehensive reviews of its HR policies and amends the same suitably from time to time, to meet the emerging business requirements.

DIRECTORS/KEY MANAGEMENT PERSONNEL

The Board regrets to inform the Shareholders about the sad and sudden demise of Shri D.N. Vaze, Chief Finance Officer of the Company, on 9th August 2012. He has been associated with the Company for the last many years in various capacities. He has been guiding force to the Management and staff of the Company. The Directors, the Management and the Employees of the Company are deeply grieved at the sad and sudden demise of Shri D.N. Vaze. The Board recognises and place on record their appreciation for his deep sense of commitment, loyalty towards the Company and the valuable contribution made by him in the Management of the Company, especially during the financial crisis which the Company had undergone.

Shri Arvind W. Ketkar and Shri Shantilal T. Shah, Directors, are retiring by rotation under Article 135 of the Articles of Association of the Company and being eligible, offer themselves for re- appointment.

The Board of Directors of the Company at its meeting held on 4th November, 2011, has appointed Ms. Mitika Laxmikumar Goculdas, as an additional Director on the Board of Directors of the Company. Ms. Mitika Laxmikumar Goculdas, is MBA (Finance) from Pennsylvania State University, USA. She has total work experience of 16 years including her stint as Vice President with Merrill Lynch both at USA and Dubai. She has experience in Finance, Industry and International Trade. As per provisions of Section 260 of the Companies Act, 1956 and Article 126 of the Articles of Association of the Company, Ms. Mitika Laxmikumar Goculdas, will hold office of Director upto the date of ensuing Annual General Meeting. Appointment of Ms. Mitika Laxmikumar Goculdas, as a Director liable to retire by rotation is proposed at Sr. No. 5 of the Notice of the ensuing Annual General Meeting. Your Directors recommend the appointment of Ms. Mitika Laxmikumar Goculdas, as Director of the Company.

Subject to the approval of the Shareholders, the Board of Directors of the Company at its meeting held on 2nd April, 2012 has re- appointed Shri Bimal Lalitsingh Goculdas (who is also a Managing Director of Borax Morarji Limited) as Chief Executive Officer and "Manager" of the Company within the meaning of the Companies Act, 1956 for a period of 3 years with effect from 1st April, 2012.

AUDITORS' OBSERVATIONS

As regards the Auditors' observation regarding recognition of "Deferred Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the proposed association with a "Strategic Investor", is confident that this proposed association will result in significant additional revenue and profits.

As regards the Auditors' observation regarding Trade Receivables that could not be classified as outstanding for a period of more than six months from the due date instead of invoice date as required by the revised Schedule VI to the Companies Act, 1956, the Management is of the view that the revised classification does not have any material impact on the financial statements except for the Presentation and Disclosure of the same. However the necessary modification in the existing computer programme is being carried out and the same will be completed in due course of time during the current financial year 2012-2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

As per Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange are given in the prescribed format as an Annexure-I to this report.

PARTICULARS OF EMPLOYEES

During the financial year ended 31st March, 2012 there was no employee within the purview of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PUBLIC DEPOSITS

Out of deposits which matured during the financial year ended 31st March, 2012, 151 deposits aggregating to Rs. 18,26,000/- remained unclaimed as on 31st March, 2012, of which NH deposit amounting to Rs. Nil has since been claimed and repaid.

AUDITORS

M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors have, under Section 224 (1-B) of the Companies Act, 1956, furnished a Certificate of their eligibility for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) That the Directors have taken proper and sufficient 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lays strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. Your Company has also evolved a Risk Management Policy regarding risk assessment and risk mitigation mechanism, which has been approved by the Board of Directors. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors' Certificate on its compliance.

ACKNOWLEDGMENTS

The Directors are thankful to your Company's shareholders, customers, suppliers, contractors, various departments of Central and State Governments and Banks for their continued valuable support.

The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and the sacrifices made by them during the difficult and critical period which the company is passing through.

Management of your Company is confident that with the active co-operation from all the stake holders of the Company, the Company will be in a position to overcome this difficult phase.

For and on behalf of the Board

LAXMIKUMAR NAROTTAM GOCULDAS Chairman

Registered Office:

Prospect Chambers, 317/21, Dr. Dadabhoy Naoroji Road, Fort, Mumbai - 400 001. Date :08th August, 2012.


Mar 31, 2011

Dear Members,

The Directors are pleased to present their Ninetieth Annual Report together with the accounts of the Company for the financial year ended 31 st March, 2011 (nine months).

FINANCIAL RESULTS

Financial Year ended Financial Year ended

31s'March, 2011 301h June, 2010

(9 Months) (15 Months)

Rs. in lacs Rs. in lacs

Gross Turnover 4743.72 6584.40

Gross Profit / (Loss) 7.19 (2387.21)

Less: Depreciation & Lenders' Sacrifice Amortisation 486.70 798.84

Profit/(Loss) before Taxation (479.51) (3186.05)

Less: Provision for Taxation 0.02 0.02

Profit/(Loss) after Taxation (479.53) (3186.07)

Add: Balance brought forward (8877.89) (5691.82)

Balance carried forward (9357.42) (8877.89)

The following is the Gross turnover by group of products:

Single Superphosphate 4.50 41.15

Commodity Chemicals 2376.19 3443.30

Specialty Chemicals 1914.75 2745.13

Others 448.28 354.82

Total 4743.72 6584.40

The Company has closed the current financial year of nine months as on 31s" March, 2011 as decided by the Board of Directors of the Company. Accordingly, financial statements for the current financial year have been prepared for a period of nine months commencing from 1 st July, 2010 and ending on 31s1 March, 2011. Therefore, the Gross Turnover for the Financial Year ended 31st March, 2011 is not comparable with the Gross Turnover for the previous Financial Year ended 30th June, 2010(15 months).

In view of the loss during the year under review, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the nine months financial year ended 31st March, 2011.

DIRECTORS/KEY MANAGEMENT PERSONNEL

Shri Laxmikumar Narottam Goculdas and Shri M.T. Ankleshwaria, Directors, are retiring by rotation under Article 135 of the Articles of Association of the Company and being eligible, offer themselves for re- appointment.

Shri D. P. Goculdas, Chief Executive Officer (Agri. Business) of the Company resigned from the services of the Company with effect from 6th April, 2011. The Board places on record its appreciation for the valuable contributions made by Shri D. P. Goculdas, during his tenure of services with the Company.

The Company continues its operations under the leadership of the Senior Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas, Chief Executive Officer, Shri D. N. Vaze, Chief Finance Officer and Shri D.T.Gokhale, Vice President (Legal/ Corporate Affairs) and Company Secretary.

AUDITORS' OBSERVATIONS

As regards the Auditors' observation regarding recognition of "Deferred Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the proposed association with a "Strategic Investor", is confident that this proposed association will result in significant additional revenue and profits.

As regards the Auditors' observation regarding crediting of "Waived Dues" aggregating to Rs. 3362.76 lacs (representing only the principal amount of borrowings ) to the "Capital Reserve" of the Company, this amount has been credited to the "Capital Reserve" since these "Waived Dues" are of capital nature. Further, this treatment of crediting the "Waived Dues" to the "Capital Reserve" (instead of crediting the same to the Profit-and Loss Account) is in compliance with the applicable Accounting Standards referred to in sub-section ( 3C) of Section 211 of the Companies Act, 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

As per Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange are given in the prescribed format as an Annexure-I to this report.

PARTICULARS OF EMPLOYEES

During the nine months financial year ended 31st March, 2011 there was no employee within the purview of Sec.217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PUBLIC DEPOSITS

Out of deposits which matured during the nine months financial year ended 31 * March, 2011,171 deposits aggregating to Rs. 18,88,000/- remained unclaimed as on 31st March, 2011, of which 4 deposits amounting to Rs. 42,000/- have since been claimed and repaid.

AUDITORS

M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors have, under Section 224 (1-B) of the Companies Act, 1956, furnished a Certificate of their eligibility for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual account?, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) That the Directors have taken proper and sufficient 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lays strong emphasis on indecency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. Your Company has also evolved a Risk Management Policy regarding risk assessment and risk mitigation mechanism, which has been approved by the Board of Directors. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors' Certificate on its compliance.

ACKNOWLEDGMENTS

The Directors are thankful to your Company's shareholders, customers, suppliers, contractors, various departments of Central and State Governments and Banks for their continued valuable support.

The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and the sacrifices made by them during the difficult and critical period which the company is passing through.

Management of your Company is confident that with the active co-operation from all the stake holders of the Company, the Company will be in a position to overcome this difficult phase.

For and on behalf of the Board

Laxmikumar Narottam Goculdas

Chairman

Registered Office:

Prospect Chambers,

317/21, Dr. Dadabhoy Naoroji Road,

Fort, Mumbai - 400 001.

Date : 25th July, 2011.
















Jun 30, 2010

The Directors are pleased to present their Eighty Ninth Annual Report together with the accounts of the Company for the extended financial year ended 30th June, 2010 (fifteen months).

FMANCIAL RESULTS

Financial Year ended Financial Year ended 30th June, 2010 31st March, 2009 (15 Months) (18 Months) Rs. in lacs Rs. in lacs

Gross Turnover 6584.40 17677.35

Gross Profit/(Loss) (2387.21) (2054.57)

Less: Depreciation & Lenders sacrifice Amortisation 798.84 1158.99

PmW(Loss) before Taxation (3186.05) (3213.26)

Add: Deferred Tax Asset 0.00 505.98

Profit/(Loss) after considering Deferred Tax Asset (3186.05) (2707.28)

Less: Provision for Taxation /Fringe Benefit Tax 0.02 18.04

Profil/(Loss) after Taxation (3186.07) (2725.32)

Add: Balance brought forward (5691.82) (2966.30)

Balance carried forward (8877.89) (5691.82)

The following is the gross turnover by group of products:

Single Superphosphate 41.15 1690.68

Commodity Chemicals 3443.30 10243.66

SpeoaKtyOieiriicate 2745.13 4135.62

Others 354.82 1607.39

Total 6584.40 17677.35

The Company has extended the current financial year by three months upto 30* June, 2010 in accordance with the provisions of Sec.210 (4) of the Companies Act, 1956. Accordingly, financial statements for the current financial year have been prepared for a period of fifteen months commencing from 1st April, 2009 and ending on 30* June, 2010.

In view of the loss during the year under review, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the extended financial year ended 30* Jane, 2010.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

(a) Overview of operations

(i) The Companys fertiliser business continued to get adversely affected inter alia due to strained liquidity and shortage of Working Capital. This has forced your Company to reduce volumes of the fertiliser business, during the year under review. Consequently the turnover in respect of fertilizers during the current financial year ended 30* June, 2010 was very small.

(it) The turnover of Commodity Chemicals during the current financial year ended 30*1 June, 2010 was also lower at Rs. 34 crates as compared to the turnover of Rs. -102 crores. during the previous financial year ended 31st March, 2009 mainly due to substantial reduction in seang prices. The turnover of Speciality Chemicals during the current financial year was also lower at Rs. 27 crores, as compared to the turnover of Rs. 41 crores during the previous financial year ended 31s1 March, 2009, due to reduction in selling prices as wefl as lower volumes. The selling prices of both Commodity Chemicals and Speciality Chemicals were lower during the current financial year, mainly due to substantial reduction in the purchase prices of the main raw material viz. sulphur.

Prospects in the Industry:

Fertilisers and Chemicals

The Companys Fertilisers and Chemical businesses continue to be adversely affected by severe working capital constraints experienced by the Company, resulting in reduced capacity utilization. The Company expects to increase its capacity utilization, after completing Corporate Financial Restructuring.

Cautionary Statement

Statements in this "Management Discussion and Analysis Report" describing the Companys objectives, projections, estimates, expectations or predictions may be considered as "forward looking statements" within the meaning of applicable securities laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

CORPORATE FINANCIAL RESTRUCTURING

The Management is continuing its endeavors for Corporate Financial Restructuring, with a view to improve the operational and financial performance of the Company. Towards this end, the Company has obtained the requisite approval of its shareholders under Section 293 (1) (a) of the Companies Act, 1956 for sale/transfer/disposal of its land, factory buildings and plant and machinery at its Ambernath Factory.

ADEQUACY OF INTERNAL CONTROLS

Your Company has clearly laid down policies, guidelines and procedures which form part of its internal control system. The Audit Committee of the Board periodically reviews reports of Internal Auditors, inter alia, on adherence by the operating Management of such policies and procedures and suggests changes/modifications and improvements on a continuous basis. The Company has a strong, independent and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and that transactions are authorised, recorded and reported correctly. The internal control systems are supplemented by a programme of internal audit.

HUMAN RESOURCE DEVELOPMENT

As an ongoing exercise of the restructuring and re-organisation, the Company has undertaken periodic comprehensive reviews of its HR policies and amended the same suitably from time to time.

DIRECTORS

During the period under report, we lost the beloved Chairman of our Company, Shri Ranchhoddas Mathradas Goculdas on 9th November, 2009. He had a very long association with the Company as a Director from 6th May, 1961 and the Chairman of the Company from 8th May, 1978. He was a versatile personality with a vision. He was the guiding force and an architect of various corporate decisions and policies of the Company. The Board of Directors place on record its deep sense of appreciation for the invaluable contribution made by late Shri Ranchhoddas Mathradas Goculdas over several decades, during his long tenure with the Company. Consequent upon the sad demise of late Shri Ranchhoddas Mathradas Goculdas on 991 November, 2009, Shri Laxmikumar Narottam Goculdas (the then Vice Chairman of the Company) was elected as the Chairman of the Company as well as the Chairman of the Board of Directors of the Company, from 10th November, 2009.

During the period under review, Shri C.B. Nalawala ceased to be a Director of the Company from 10th September, 2009. Shri Kumar Bakhru a nominee Director of General Insurance Corporation of India, also ceased to be a Director of the Company from 23rd January, 2010. The Board of Directors place on record their appreciation for the valuable guidance and advise given by both of them to the Company during their long association with the Company as also the contributions made by both of them during the deliberations at the Board Meetings of the Company.

Shri H.T.Kapadia, a Director, is retiring by rotation under Article 135 of the Articles of Association of the Company and being eligible, offers himself for re-appointment.

The Board of Directors of the Company at its meeting held on 22nd January, 2010, has appointed Shri Arvind W. Ketkar as an Additional Director - on the Board of Directors of the Company. Shri Arvind W. Ketkar has in-depth knowledge in Finance and Accounting and has been in practice as a Chartered Accountant for over thirty nine years. As per provisions of Section 260 of the Companies Act, 1956 and Article 126 of the Articles of Association of the Company, Shri Arvind W. Ketkar will hold office of Director upto the date of ensuing Annual General Meeting. Appointment of Shri Arvind W. Ketkar as a Director liable to retire by rotation is proposed at Sr. No. 4 of the Notice of the ensuing Annual General Meeting. Your Directors recommend the appointment of Shri Arvind W. Ketkar, as Director of your Company.

The Board of Directors of the Company at its meeting held on 27th July, 2010, has appointed Shri Shantilal T. Shah as an Additional Director on the Board of Directors of the Company. Shri Shantilal T. Shah is in Chemical business for last 45 years and has got vast experience in marketing, finance and administration of the Chemical Industry. As per provisions of Section 260 of the Companies Act, 1956 and Article 126 of the Articles of Association of the Company, Shri Shantilal T. Shah will hold office of Director upto the date of ensuing Annual General Meeting. Appointment of Shri Shantilal T. Shah as a Director liable to retire by rotation is proposed at Sr. No. 5 of the Notice of the ensuing Annual General Meeting. Your Directors recommend the appointment of Shri Shantilal T. Shah, as Director of your Company.

AUDITORSOBSERVATION

As regards the Auditors observation regarding recognition of "Deferred Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the proposed association with a "Strategic Investor", is confident that this proposed association will result in significant additional turnover and profits.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

As per Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange are given in the prescribed format as an Annexure-I to this report.

PARTICULARS OF EMPLOYEES

During the extended financial year ended 30th June, 2010, there was no employee within the purview of Sec.217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) RuIps, 1975.

PUBLIC DEPOSITS

Out of deposits which matured during extended financial year ended 30* June, 2010,172 deposits aggregating to Rs. 21,91,000/- remained unclaimed as on 30th June, 2010, of which 1 deposit amounting to Rs. 10,000/- has since been claimed and repaid.

AUDITORS

M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors have, under Section 224 (1 -B) Of the Companies Act, 1956, furnished a Certificate of their eligibility for re-appointment.

DIRECTORSRESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies 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 the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) That the Directors have taken proper and sufficient 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lays strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. Your Company has also evolved a Risk Management Policy regarding risk assessment and risk mitigation mechanism,which has been approved by the Board of Directors. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors Certificate on its compliance.

ACKNOWLEDGMENTS

The Directors are thankful to you and your Companys customers, suppliers, contractors, various departments of Central and State Governments, Financial Institutions and Banks for their continued valuable support.

The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and sacrifices shown by them during the difficult and critical period which the company is passing through.

Management of your Company is confident that with active co-operation from all employees, the Company will be in a position to overcome this difficult phase.

For and on beharf of the Board

L. N. GOCULDAS

Chairman

Registered Office:

Prospect Chambers,

317/21, Dr. Dadabhoy Naoroji Road,

Fort, Mumbai - 400 001.

Date : 3rd November, 2010.




Mar 31, 2009

The Directors are pleased to present their Eighty Eighth Annual Report together with the accounts of the Company for the extended financial year ended 31st March, 2009 (eighteen months).

FINANCIAL RESULTS



Financial Year ended Financial Year ended

31 st March, 2009 30th September, 2007

(18 Months) (18 Months)

Rs. in lacs Rs. in lacs

Gross Turnover 17677.35 28125.53

Gross Profit / (Loss) (2054.27) (2486.15)

Less : Depreciation & Lenders sacrifice Amortisation 1158.99 1260.13

Profit/(Loss) before exceptional Item & Taxation (3213.26) (3746.28) Add: Exceptional Item

Waiver of dues by Banks /Financial Institution by One Time Settlement Nil 139.31

Profit/(Loss) after exceptional Item but before Taxation (3213.26) (3606.97)

Add: Deferred Tax Asset 505.98 2148.17

Profit/(Loss) after exceptional Item and after considering Deferred Tax Asset (2707.28) (1458.80)

Less: Provision for Taxation/ Fringe Benefit Tax 18.04 25.05

Profit/(Loss) after Taxation (2725.32) (1483.85)

Add: Balance brought forward (2966.50) (1482.65)

Balance carried forward (5691.82) (2966.50)

The following is the gross turnover by group of products:

Single Superphosphate 1690.68 8487.21

Commodity Chemicals 10243.66 11054.28

Speciality Chemicals 4135.62 7974.10

Others 1607.39 609.94

17677.35 28125.53

The Company has extended the current financial year by six months upto 31st March, 2009 in accordance with the approval received by the Company from the Registrar of Companies, Maharashtra State, Mumbai. Accordingly, financial statements for the current financial year have been prepared for a period of eighteen months commencing from 1st October, 2007 and ending on 31st March, 2009.

In view of the loss during the year under review, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the extended financial year ended 31 st March, 2009.

PROPOSAL FOR ONE TIME SETTLEMENT (O.T.S.) OF DUES TO SECURED LENDERS

The Company had submitted a proposal to its Secured Lenders to settle their dues by way of One Time Settlement (O.T.S.) As the shareholders are aware, the proposal was accepted by one of the Secured Lenders and their dues have been settled accordingly. The Companys proposal is under consideration of the remaining Secured Lenders.

ADEQUACY OF INTERNAL CONTROLS

Your Company has clearly laid down policies, guidelines and procedures which form part of its internal control system. The Audit Committee of the Board periodically reviews reports of Internal Auditors, inter alia, on adherence by the operating Management of such policies and procedures and suggests changes/modifications and improvements on a continuous basis. The Company has a strong, independent and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and that transactions are authorised, recorded and reported correctly. The internal control systems are supplemented by an extensive programme of internal audit.

HUMAN RESOURCE DEVELOPMENT

As an ongoing exercise of the restructuring and re-organisation, the Company has undertaken periodic comprehensive reviews of its HR policies and amended the same suitably from time to time.

RESEARCH & DEVELOPMENT

Inspite of heavy odds, your Company has continued its Research and Development initiatives and endeavours, keeping in view the long term perspective for growth.

SUBSIDIARY

The audited statements of accounts of DMCC Oil Terminals (Navlakhi) Limited (DOTL), a subsidiary of the Company, for the extended financial year ended 30th September, 2007, together with the reports of its Directors and Auditors are attached to the accounts of the Company, as required under Section 212 of the Companies Act, 1956.

DIRECTORS

During the year under review, Shri R. Kannan, Nominee Director of ICO Bank Ltd, resigned from the Board of Directors, effective 22nd January 2008, consequent upon the withdrawal of his nomination by ICICI Bank Ltd. Mrs. U. D. Morarji also resigned from the Board of Directors, effective 8th December 2008. The Board of Directors place on record their appreciation for the valuable guidance and advice given by both of them to the Company during their long association with the Company as also the contributions made by both of them during the deliberations at the Board meetings.

Shri OB. Nalawala, a Director, is retiring by rotation at the conclusion of the ensuing Annual General Meeting of the Company, scheduled to be held on 9th September, 2009. Although eligible, he does not offer himself for re-appointment. Shri. C. B. Nalawala was on the Board of the Company since March, 2002. The Board of Directors place on record their appreciation for the valuable guidance and advice given by him to the Company, during his long association with the Company as also the contribution made by him during the deliberations at the Board meetings and the Audit Committee meetings during his tenure as a director and Chairman of the Audit Committee, respectively.

The Board of Directors of the Company, at its meeting held on 31st July 2009, has appointed Shri M.T. Ankleshwaria as an additional Director on the Board of Directors of the Company. Shri M.T. Ankleshwaria has indepth knowledge in Finance and Accounting and has been in practice as a Chartered Accountant, for over three decades. Mr. Ankleshwaria is also the Head of Department of Accountancy at N.M.College of Commerce & Economics, Vile Parle (W), Mumbai 56. As per provisions of Section 260 of the Companies Act, 1956, and Article 126 of the Articles of Association of the Company. Shri M.T. Ankleshwaria will hold office of Director upto the date of ensuing Annual General Meeting. Appointment of Shri M.T. Ankleshwaria as a Director liable to retire by rotation is proposed at Sr.No.3 of the Notice of the ensuing Annual General meeting. Your Directors recommend the appointment of Shri M.T. Ankleshwaria, as a Director of your Company.

Shri Dilip Pratapsingh Goculdas was appointed as Managing Director (Agri Business) of the Company for a period of two years with effect from 1st April, 2007. Subject to the approval of the shareholders at the ensuing Annual General meeting, he has now been appointed as Chief Executive Officer (Agri Business) and "Manager" under the Companies Act, 1956, for a period of three years with effect from 1 st April, 2009.

Shri Bimal Lalitsingh Goculdas was appointed as Managing Director (Chemical Business) of the Company for a period of two years with effect from 1st April, 2007. Subject to the approval of the shareholders at the ensuing Annual General meeting, he has now been appointed as Chief Executive Officer (Chemical Business) and "Manager" under the Companies Act, 1956, for a period of three years with effect from 1st April, 2009.

Shri Dilipkumar Nilkanth Vaze was appointed as Executive Director (Finance) of the Company for a period of three years with effect from 1st April, 2006. He has now been appointed as Chief Finance Officer of the Company, with effect from 1st April, 2009.

AUDITORS OBSERVATIONS

1. As regards the Auditors observation regarding the non-compliance of the certain conditions of the revised Corporate Debt Restructuring (CDR) package, the Management is in the process of complying with the same, in due course of time.

2. As regards the Auditors observation regarding non-provision of interest of Rs. 785.82 lacs, the Company has not recognized this interest amount since the banks concerned have not debited the same to the respective accounts of the Company.

3. As regards the Auditors observation regarding recognition of "Deferred Tax Asset" amounting to Rs.2654.15 lacs, the Company, based on the proposed association with a "Strategic Investor", is confident that this proposed association will result in significant additional turnover and profits.

4. As regards the Auditors observation regarding preparing the Annual Accounts on a "Going Concern Basis", notwithstanding the negative net worth of the Company as on 31st March, 2009, the Managements views are as under:

Though the net worth of the Company as on 31st March, 2009 is negative, the Company has prepared Financial Statements for the year ended 31st March, 2009 (eighteen months), on a "Going Concern Basis", since the Company is confident that its profitability will improve in future, in view of the following :

a. a new activity of trading (in various fertilisers & other agri inputs) which the Company will commence in association with a " Strategic investor" after completing OTS of dues to Banks and

b. Continuing efforts by the Company for improving efficiency, restructuring/rationalisation of operations and optimisation of costs.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

As per Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange are given in the prescribed format as an Annexure-I to this report.

PARTICULARS OF EMPLOYEES

During the extended financial year ended 31st March, 2009 there was no employee within the purview of Sec.217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PUBLIC DEPOSITS

Out of deposits which matured during extended financial year ended 31st March, 2009, 173 deposits aggregating to Rs. 22,06,000/- remained unclaimed as on 31st March 2009, of which 1 deposit amounting to Rs. 15,000 has since been claimed and repaid.

AUDITORS

M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors have, under Section 224 (1-B) of the Companies Act, 1956, furnished a Certificate of their eligibility for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed :

(i) That in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) That the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of the affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) That the Directors have taken proper and sufficient 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;

(iv) That the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lays strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. Your Company has also evolved a Risk Management Policy regarding risk assessment and risk mitigation mechanism, which has been approved by the Board of Directors. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors Certificate on its compliance.

ACKNOWLEDGMENTS

The Directors are thankful to your Companys customers, suppliers, contractors, various departments of Central and State Governments, Financial Institutions and Banks for their continued valuable support.

The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and sacrifices shown by them during the difficult and critical period which the company is passing through.

Management of your Company is confident that with active co-operation from all employees, the Company will be in a position to overcome this difficult phase.

For and on behalf of the Board

R. M. GOCULDAS

Chairman

Registered Office:

Prospect Chambers, 317/21, Dr. Dadabhoy Naoroji Road, Fort, Mumbai - 400 001.

Date :31st July, 2009.

 
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