JALPAC INDIA LTD.Surat - 395 001 BANKERS State Bank of India State Bank of Bikaner & Jaipur AUDITORS Lodha & Co. Chartered Accountants SHARE TRANSFER AGENTS Niche Technologies Pvt

47

JALPAC INDIA LIMITED

24th24th24th24th24thAnnual ReportAnnual ReportAnnual ReportAnnual ReportAnnual Report2009 - 20102009 - 20102009 - 20102009 - 20102009 - 2010

JALPJALPJALPJALPJALPAC INDIA LTD.AC INDIA LTD.AC INDIA LTD.AC INDIA LTD.AC INDIA LTD.

48


CONTENTS

Notice 1-3

Graphical Representation -Key Performance Parameters 4-5

Directors' Report 6-9

Management Discussion & Analysis 10-14

Corporate Governance 15-21

Auditors' Report 22-25

Balance Sheet 26

Profit & Loss Account 27

Schedules to Balance Sheet & Profit and Loss Account 28-32

Notes on Accounts & Accounting Policies 33-42

Cash Flow Statement 43

Balance Sheet Abstract & Company's General Business Profile 44

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BOARD OF DIRECTORS

AUDIT COMMITTEE

K. K. Shukla - Nominee of PICUPAnil SharmaMadhukar Jalan - Managing DirectorR. R. Malhotra - Executive Director

Anil Sharma - ChairmanK.K. ShuklaMadhukar Jalan

REGISTERED OFFICE Village TularampurP.O. Mota HalduTehsil HaldwaniDist. Nainital (Uttarakhand)Pin : 262 402

WORKS Village TularampurP.O. Mota HalduTehsil HaldwaniDist. Nainital (Uttarakhand)Pin : 262 402

CORPORATE OFFICE 903/911, Tolstoy House15 Tolstoy MargNew Delhi - 110 001

BRANCHES C/o. R. N. Enterprises27 AB, Royd StreetKolkata-700 016

307, River Palace, Wing BOpp. Bahumali (Old Court) Nanpura BuildingSurat - 395 001

BANKERS State Bank of IndiaState Bank of Bikaner & Jaipur

AUDITORS Lodha & Co.Chartered Accountants

SHARE TRANSFER AGENTS Niche Technologies Pvt. Ltd.D-511, Bagree Market,71, B.R.B.B. Road,Kolkata - 700 001

1


NOTICE

Notice is hereby given that the 24th Annual General Meeting of the Company will be held on Tuesday, the28th September, 2010 at 11.00 a.m. at the Registered Office of the company at Village : Tularampur, P.O.Mota Haldu, Tehsil Haldwani, Distt. Nainital (Uttarakhand) to transact the following business.

Ordinary Business:

1. To receive, consider, and adopt the Audited Balance Sheet as at 31st March, 2010 and Profit & Lossaccount as on that date and Reports of the Directors and Auditors thereon.

2. To appoint a Director in place of Shri K K Shukla who retires by rotation and being eligible offershimself for re-appointment.

3. To appoint Auditors and to authorise the Board of Directors to fix their remuneration.

Special Business:

4. To consider and if thought fit, to pass, with or without modification(s), the following resolutions:

As a Special Resolution:

“RESOLVED THAT pursuant to the provisions of sections 309 & 310 and all applicable provisions, if any,of the Companies Act, 1956 including any statutory modifications or re-enactments thereof and all otherstatutory provisions, if any and subject to the approvals of the Central Government if any required, andsuch other approvals as may be necessary, the consent of the Company be and is hereby accorded tothe increase in remuneration of Shri R.R. Malhotra as the Executive Director of the Company for a periodof 5 years from 26th October, 2009 to 25th October, 2014 as enumerated in the explanatory statementwith liberty to the Directors to alter and vary such terms and conditions including remuneration in suchmanner as may be agreed upon by the Directors and acceptable to Shri R.R. Malhotra.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised fromtime to time, to alter, increase or modify the terms and conditions of the appointment of Shri R.R. Malhotraincluding remuneration provided that such remuneration should not exceed the maximum limits forpayment of managerial remuneration as may be admissible within the overall limits specified in ScheduleXIII of the Companies Act, 1956, as existing or as amended, modified or re-enactment from time to timeas the Board may deem fit.”

5. To consider and if thought fit, to pass, with or without modification(s), the following resolutions:

As a Special Resolution:

“RESOLVED THAT subject to the provisions of the Companies Act, 1956, Securities Contracts(Regulation) Act, 1956, and the rules framed thereunder, listing agreement, SEBI (Delisting of EquityShares) Regulations, 2009 and such other applicable laws, rules, regulations and guidelines, and subjectto such approvals, permission and sanctions, as may be necessary, the Board of directors of thecompany be and is hereby authorised to seek voluntarily delisting of its securities from Uttar PradeshStock Exchange, Delhi Stock Exchange, Kolkata Stock Exchange and Ahmedabad Stock Exchange.

RESOLVED FURTHER THAT the securities of the company shall continue to be listed on the stockexchange having nation wide trading terminals vis the Bombay stock exchange, Mumbai and thereforeas per the said regulations issued by the Securities and Exchange Board of India, no exit opportunityneed to be given to the shareholders of the company.

RESOLVED FURTHER THAT the Board of directors of the company be and is hereby authorised to doall such acts, deeds, matters and things as it may in its absolute discretion deem necessary or desirableand to execute all such deeds and documents as may be considered necessary and expedient to giveeffect to the above said resolution.”

By Order of the Board

New Delhi R. R. MALHOTRA

19th August, 2010 Executive Director

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Notes:

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTEINSTEAD OF HIMSELF/HERSELF AND THE PROXY NEED NOT BE A MEMBER. PROXY IN ORDER TO BEEFFECTIVE, MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. ABLANK PROXY FORM IS ENCLOSED.

2. All documents referred in the accompanying Notice are open for inspection at the Registered Office of the Company duringoffice hours on all working days between 11.00 a.m. to 1.00 p.m.

3. The Register of Members and Share Transfer books of the Company shall remain closed from 20/09/2010 to 30/09/2010(both days inclusive).

4. The introduction of Section 109A by the Companies (Amendment) Act, 1999 provides for nomination by the shareholdersof the Company in the prescribed form No. 2B. The shareholders are advised to avail of this facility and submit dulycompleted form No. 2B to the Registrar & Share Transfer Agents.

5. Members who hold shares in physical form are requested to advise the Company or M/s Niche Technologies Pvt. Ltd.(Registrar & Transfer Agents of the company) immediately of any change in their addresses.

6. Members who hold shares in dematerialised form are requested to intimate details regarding change of address, etc. to theDepository Participants where they have their depository accounts.

7. An explanatory note pursuant to section 173(2) on Special Business is annexed to this notice.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

Item No. 4

The Board of Directors has increased the remuneration of Shri R.R. Malhotra as Executive Director of the Companyfor a period of 5 years effective from 26th October, 2009 to 25th October, 2014 in their meeting held on 9th October,2009 on the recommendation of the remuneration committee. Shri R.R. Malhotra’s remuneration was last revised on1st April 2003. His remuneration has remain unchanged for the last 6½ years. This increase, therefore, effectivelycovers an increase of remuneration over a period of 11½ years – 1st April, 2003 to 25th October, 2014. This translatesto an average increase of 4.82 % per year.

The remuneration to be paid is as below:

A. Salary:

Rs.1,18,750/- (Rupees One Lac Eighteen Thousand Seven Hundred & Fifty only) per month.

B. Perquisites:

1. Accomodation

Free furnished accommodation or house rent allowance in lieu thereof not exceeding 50% of the basic salary.Reimbursement of expenses in respect of Electricity, water, maintenance expenses subject to a ceiling of 20%of salary.

2. Medical Reimbursement

Reimbursement of all medical expenses incurred for self and family, subject to a limit of one month basic(Rs.1,18,750/-) per annum.

3. Leave Travel concession:

Leave Travel Concession for self and family, once in a year in accordance with Rules of the company notexceeding one month basic (Rs.1,18,750/-) per annum.

4. Gratuity

Gratuity as per Rules of the company, but shall not exceed half a month’s salary for each completed year ofservice.

5. Earned Leave

5a Earned leave on full pay and allowances as per the rules of the company. Leave can be accumulated upto6-year’s entitlement. Encashment of leave beyond one month’s entitlement only once in the year. However,encashment of entire accumulated leave at the end of the tenure.

5b. Encashment of leave at the end of tenure will not be included in the computation of the ceiling of perquisite.

6. Car And Telephone

Car for use on company’s business and telephone at residence will not be considered as perquisites. Personallong distance calls on telephone shall be billed by the company.

7. Other perquisites

The Executive Director may be given any other allowance, benefit and perquisites as the Board of Directorsmay from time to time, decide which together with perquisites mentioned in Serial No.1 above will not exceed20% of salary viz. 23,750/- per month, but excluding items at serial No. 4 and 5(b), which will not be counted inthe said ceiling.

3


The aggregate of the salary and all perquisites as enumerated above, shall at no time exceed the limits as may beprescribed from time to time under the provisions of the Companies Act, 1956, schedules thereto and rules thereunder, aswell as any other statutory provisions as may be applicable.

The Executive Director shall not be eligible for any sitting fees for attending company’s Board or Committee meetings.

The above details may please be treated as an abstract of the terms of appointment of Shri R.R. Malhotra under section302 of the Companies Act, 1956.

The Board recommends the resolution for your approval. Except Shri R.R. Malhotra, no other Director is concerned orinterested in the resolution.

Item No. 5

The Securities & Exchange Board of India (SEBI) notified guidelines for voluntary delisting of securities from the stockexchanges. As per clause 6 of SEBI (Delisting of Equity Shares) Regulations, 2009 an exit opportunity to the shareholdersneed not be given where securities of the company remain listed on the stock exchange having nation wide tradingterminal, i.e., The Stock Exchange, Mumbai, the National Stock Exchange of India and any other stock exchange that maybe specified by SEBI in this regard.

At present the equity shares of the company are listed at Bombay stock exchange, Mumbai, Uttar Pradesh Stock Exchange,Delhi Stock Exchange, Kolkata Stock Exchange and Ahmedabad Stock Exchange.

Considering the negligible volume of trading and as a part of its cost reduction measure, the consent of members is soughtfor getting its securities delisted from Uttar Pradesh Stock Exchange, Delhi Stock Exchange, Kolkata Stock Exchangeand Ahmedabad Stock Exchange as proposed in the special resolution. The securities of the company shall continue tobe listed on the Bombay Stock Exchange, Mumbai.

The Board recommends the resolution for approval of members.

None of the directors is, in any way, concerned or interested in the said resolution.

By Order of the Board

New Delhi R. R .MALHOTRA19h August, 2010 Executive Director

NOTES ON DIRECTORS SEEKING RE-APPOINTMENT AS REQUIRED UNDER CLAUSE 49 OFTHE LISTING AGREEMENT ENTERED INTO WITH THE STOCK EXCHANGES

At the ensuing Annual General Meeting, Shri K.K. Shukla PICUP nominees retire by rotation and beingeligible, offer himself for re-appointment.

Shri K.K. Shukla aged about 57 years,a Chemical Engineer from IIT Kanpur and an independentdirector, associated with the Company since 2002. Shri Shukla has a wide range of experiencein areas of project appraisal, development banking, technical and project finance. He is alsomember of the Audit Committee and remuneration committee of the Company. The otherdirectorship of Shri K.K. Shukla is as under:

1. Mahaan Proteins Limited

2. Allahabad Fertilizers Ltd.

Shri K.K. Shukla does not hold committee positions in any companies.

4


Key Performance Parameters at a Glance - Last 10 Years

Note :- 1. Though volume increased in the financial year 05-06, value declined because of a sharp compression inraw material prices.

2. Trial run quantities and values are excluded.

5


Note :- 1. Trial run quantities and values are excluded.2. Export Sales value reflects the FOB value of exports including deemed exports.

Sales Breakup - Domestic and Export

6


DIRECTORS” REPORTDIRECTORS” REPORTDIRECTORS” REPORTDIRECTORS” REPORTDIRECTORS” REPORT

To

The Members,

Your Directors present the Audited Accounts of

the company for the year ended 31st March

2010.

FINANCIAL RESULTSFINANCIAL RESULTSFINANCIAL RESULTSFINANCIAL RESULTSFINANCIAL RESULTS

(Rupees in lacs)

Year Ended Year Ended 31st March, 2010 31st March, 2009

Net Sales & Other Income 1709.68 1268.72Profit beforeInterest & Depreciation 38.82 (433.71)Profit before Depreciation 35.81 (492.10)Profit before Tax (218.78) (757.43)Add: Exceptional Items --- ---Less: Provision for FBT 0.03 2.76Profit after Tax (218.81) (760.19)Profit brought forward (4253.36) (3493.16)Balance carried forward (4472.17) (4253.35)

‘

DIVIDEND:DIVIDEND:DIVIDEND:DIVIDEND:DIVIDEND:

In view of the company being sick, the Directorsdo not recommend any dividend.

Operations:

A strategic investor has shown interest in investingin the company and a One Time Settlement offerwas made by the company on the strength ofbacking from this investor. However, since thisoffer was not acceptable to the bankers, nofinancial infusion has taken place.

As reported last year, no bank support wasavailable after September 2008. Despite thesefinancial constraints and lack of working capital,on the strength of the company’s good will andsupport from customers, we managed to continuea truncated operation. Customers have supportedby making advance payments and financing orsupplying the base substrates – film and paper.Orders were declined from customers wantingcredit or those unable to support the basesubstrate purchase.

The major focus remained on production of valueadded products. As a result of this, while sales inquantity terms grew only by 4%, sales in valueterms grew by 28%. Much cannot be read aboutthis growth as sales had plummeted significantlyfrom peak levels earlier.

Despite all odds and despite a capacity utilizationof only 14%, we are pleased to report that therewas a significant change in the financialperformance as a result of focus on value addedproducts and cost optimization.

We have been repeatedly reporting that thecompany had suffered a major setback because

of the major plain metallized film segment havingbecome unremunerative. A significant developmentthis year is that the metallizing value addition isagain showing an upward trend and valueadditions have increased to levels of Rs. 16 to 20per kg. in the current financial from Rs. 12 to 14per kg. earlier. Your company could not takeadvantage of this because of severe workingcapital constraints, though some volumes weredone for those customers who could finance thebase film purchase. This is a positive sign for thefuture of the company.

Having said that we would hasten to add that thecompany has to continue its focus on value addedproducts that film suppliers with metallizers cannotproduce. The revival strategy has to be based onthose products. Otherwise, the company will againsuffer if film producers with metallizers againcompress the value addition, if they are not able tosell their metallized film production. So while theplain metallized film segment at current levels ofvalue addition cannot be ignored, it cannot bedepended upon.

Raw Material Prices:

Polyester film is one of the major rawmaterials.There is a worldwide shortage of 190000 tonsaccording to some reports. Polyester film priceshave escalated sharply from levels of Rs. 97/kg.basic in January 2010 to Rs. 170/kg. basiccurrently. This is having a negative impact ondemand. We are trying to switch to an alternatesubstrate for one of our major coated product.Ofcourse, testing and approvals are timeconsuming even though there is a significantadvantage in terms of the alternate substratepricing.

Exports:

Since there was no L/C discounting facilityavailable, only those export orders were takenwhere customers were able to make TTremittances. Hence direct exports declined by 88%in quantity and 83% in value terms.

Deemed exports, however, increased significantly,registering a growth of 265% in both quantity andvalue terms.

Clubbed together - exports (direct and deemed)increased by 8% in quantity and 29% in valueterms.

Product development:

The company has survived on the strength ofnew product development. Efforts are on todevelop some other products. As reported lastyear, an approval was gained from a major world

7


brewer for our metallized paper for the beer labelapplication. This metallized paper has been soldin small volumes in the domestic market and thequality has been well received.

Turn around strategy and outlook:

A strategic investor was ready to infuse funds andan offer for a One Time Settlement with the bankswas made. However, this One Time Settlementoffer was not accepted by the bankers as theywanted an improved offer. Subsequently, underBIFR directions, the operating agency invited offersfor change of management. The existingpromoters were also invited to participate and thecompany has since submitted its offer along witha new co-promoter.

In last year’s report, we had indicated that thecompany could stage a financial turn around, evenwith a lower volume of niche specialty products.The improved financial result this year with acapacity utilization of only 14% supports ourassertion. However, a financial infusion will berequired before we target an increase in theproduction and sales volume, especially, valueadded products, to achieve a turn around.

Status of reference to BIFR

As reported last year, the company is a SickIndustrial Company within the section 3(1)(o) ofthe Sick Industrial Companies (Special Provisions)Act, 1985. A reference was filed with BIFR underSection 15(1) of the said Act by the company on7th June, 2004 and registered by BIFR on 21stJune, 2004. The Hon’ble BIFR in its order dated5.9.2006 had declared the Company sick andappointed the State Bank of India as the operatingagency.

A rehabilitation scheme was filed by the companyin June 2009 based on a One Time Settlementwith the secured lenders backed by a strategicinvestor. The OTS offer made by the companywith backing from a strategic investor had not beenacceptable to the lenders, as a result of which afully tied up Debt Resolution Scheme could not beput in place.

The Hon’ble BIFR in its order dtd 22.4.2010 hasdirected the Operating Agency to issue anadvertisement for Change of Management asper their guidelines and have directed theOperating Agency to submit its report and a DraftRehabilitation Scheme, if it emerges, within 4months. As per the Hon’ble BIFR’s guidelines,the existing promoters can also submit their fullytied up Draft Revival proposal with or without aco-promoter with proof of their f inancialresources for rehabi l i tat ion. As per theirguidelines, other things being equal, the proposal

from the existing promoters wil l sti l l get apreference over others.

The company has made a bid within the stipulatedperiod along with a co-promoter with proof of thefinancial resources of the co-promoter. The matternow rests with the operating agency and thelenders.

FIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITSFIXED DEPOSITS

The company has not accepted/renewed any

deposits during the year.

DIRECTORS’ RESPONSIBILITY STATEMENTAS REQUIRED UNDER SECTION 217(2AA) OFTHE COMPANIES ACT, 1956:

As required under Section 217(2AA), which wasintroduced by the Companies (Amendment) Act,

2000 your Directors confirm that :

I. In the preparation of the annual accounts, the

applicable accounting standards have been

followed alongwith proper explanation relating

to material departures;

II. The Directors have selected prudentaccounting policies;

III. The Directors have taken proper and

suff ic ient care for the maintenance of

adequate accounting records in accordance

with the provisions of this Act for

safeguarding the assets of the Company andfor preventing and detecting fraud and other

irregularities;

IV. The Directors have prepared the annual

accounts ‘on going concern basis’.

V. These financial results of the company have

been audited by M/s Lodha & Co. Chartered

Accountants. A reference may be made to theirreport dated 19th August 2010 to the members

together with Annexure ‘A’ thereto containing

information as per requirement under the

Companies (Auditor’s Report) Order, 2003

attached with these annual accounts.

CORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCE

The Company has complied with the mandatoryprovisions of Corporate Governance as

prescribed in the Listing Agreement with the Stock

Exchanges. A separate report on Corporate

Governance is included as a part of the annual

report alongwith the Auditors’ Report on this

compliance.

8


AUDITORAUDITORAUDITORAUDITORAUDITORS’ REPORT:S’ REPORT:S’ REPORT:S’ REPORT:S’ REPORT:

LISTING OF SECURITIES:

The equity shares of the company are listed atDelhi, Kolkata, Ahmedabad, Kanpur (RegionalStock Exchange) and Mumbai.

The company will pay listing fees for the financialyear 2010-2011 to all Stock Exchanges.

DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORS

Shri K.K. Shukla director retire by rotation asrequired under the Companies Act, 1956 and beingeligible, offers himself for re-appointment.

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORS

M/s Lodha & Co. Chartered Accountants, auditorsof the Company, retire at the forthcoming AnnualGeneral Meeting and being eligible, offerthemselves for reappointment.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNINGAND OUT GO:

Information in accordance with clause (e) ofsub-section (1) of section 217 of the Companies

Act, 1956 read with the Companies (Disclosure

of Particulars in the Report of the Board of

Directors) Rules, 1988 and forming part of the

Directors’ Report for the year ended 31st

March, 2010 is given in Annexure A to this

Report.

PERSONNEL:PERSONNEL:PERSONNEL:PERSONNEL:PERSONNEL:

The details as required under Section 217 (2A) of

the Companies Act, 1956 read with the

Companies (Particulars of Employees) Rules,

1975 is -NIL

ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:ACKNOWLEDGEMENTS:

The Directors wish to place on record their

appreciation of the dedication, commitment and

loyalty of the employees who have stood by the

company in its most difficult hour in embattled,

warlike conditions despite having to face personal

financial pressures.

The Directors also wish to record their

appreciation of the support and understanding

provided by the Company’s Bankers and Financial

Institutions.

9


ANNEXURE AANNEXURE AANNEXURE AANNEXURE AANNEXURE AREPORT ON CONSERVATION OF ENERGY ETC.

FORMING PART OF THE DIRECTORS’ REPORT

A. CONSERVATION OF ENERGY :

While running Metalliser 04, one rotary pump is kept off

after the metallising start up.

B. TECHNOLOGY ABSORPTION:

New product development on the basis of specialty

coatings and lamination.

C. FOREIGN EXCHANGE EARNING & OUTGO:

i. Since the company has withdrawn from the large

volume plain metallized film business because of

hardly any variable margin, exports were hit hard.

New Delhi On Behalf of the Board of Directors19th August, 2010

sd/- sd/-R.R. Malhotra Madhukar JalanExecutive Director Managing Director

Registered Office:Jalpac India LimitedMota Haldu,Haldwani, NainitalUttarakhand

ii. Total Foreign Exchange used & earned:

(Rs. in lacs)

(a) Foreign Exchange Earned 82.79

(FOB Value of Exports)

Claim received -

(b) Foreign Exchange Used

(CIF Value of Imports)

(i) Capital Goods -

(ii) Raw Materials -

(iii) Stores & Spares -

(iv) Others -

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MANAGEMENT DISCUSSION AND ANALYSISMANAGEMENT DISCUSSION AND ANALYSISMANAGEMENT DISCUSSION AND ANALYSISMANAGEMENT DISCUSSION AND ANALYSISMANAGEMENT DISCUSSION AND ANALYSIS

1. INTRODUCTION1. INTRODUCTION1. INTRODUCTION1. INTRODUCTION1. INTRODUCTION

Your Company is engaged in the manufacture of Metallized Paper/Board, Metallized and Coated Films, Metallic yarn

and Metallized films with an installed capacity of 8900 tons per annum at its plant located at Haldwani, Distt. Nainital,

Uttarakhand.

The metallized paper is used mainly in the labels and the gift-wrap segment. Metallized and coated films are used in

flexible packaging, insulation, glitter powder and metallic yarn/zari applications. Metallized films are used in the

packaging segment.

2 .2 .2 .2 .2 . INDUSTRY STRUCTURE, DEVELOPMENTS AND BACKGROUNDINDUSTRY STRUCTURE, DEVELOPMENTS AND BACKGROUNDINDUSTRY STRUCTURE, DEVELOPMENTS AND BACKGROUNDINDUSTRY STRUCTURE, DEVELOPMENTS AND BACKGROUNDINDUSTRY STRUCTURE, DEVELOPMENTS AND BACKGROUND

Traditionally, the industry had a distinct three tier structure with no backward or forward linkages:

a. Film manufacturers

b. Metallizers

c. Printing Convertors

Initially, large printing convertors had backward integrated into the metallizing area which had an impact on a reduced

market size for standalone metallizers like us. This threat at that time, was successfully countered by increasing

exports of metallized film.

As reported earlier, polyester film manufacturers who forward integrated into the metallizing business around the year

2002/2003 have continued to expand capacity continuously and now completely dominate the plain metallized

packaging segment - both domestic and exports.

This had virtually rendered the plain metallizing packaging segment unremunerative for standalone metallizers since

film manufacturers started pricing the metallized film at variable cost plus levels as they viewed the value chain, right

from DMT/PTA/chips to metallized film realization. As a result of this phenomenon, standalone metallizers and players

in the unorganized yarn segment made a foray into the coated product segment (film for metallic yarn) as a result of

which margins eroded significantly in the coated film segment also.

Both these – backward integration by our customers and forward integration by our suppliers have hit our plain

metallized film business hard which segment was given up because it became unremunerative at prices from the

integrated metallizers. The only way to ward off this challenge is to either backward integrate into film making which

entails a very huge investment, forward integrate into printing and flexible packaging or focus on specialty niche

products. Your company has chosen the latter option as production of such products does not require any major

capital investment and such products can be produced on the current equipment.

2.12.12.12.12.1 Recent Developments – improved value addition in the plain metallized film segment:Recent Developments – improved value addition in the plain metallized film segment:Recent Developments – improved value addition in the plain metallized film segment:Recent Developments – improved value addition in the plain metallized film segment:Recent Developments – improved value addition in the plain metallized film segment:

Owing to a substantial growth in the demand of metallized polyester film and perhaps because of a changing equation in

the demand/supply situation, integrated film producers with metallizers have increased their value addition. As a result of

this, the metallizing value addition is again showing an upward trend and value additions have increased to levels of Rs. 16

to 20 per kg. in the current financial year. The company could not take an advantage of this because of severe working

capital constraints, though some volumes were done for those customers who could finance the base film purchase.

While this is a positive development for standalone metallizers without a film production facility, this segment cannot

be consistently depended upon as whenever the film producers with metallizers come under pressure to sell, they can

afford to compress the value addition, since they have tremendous advantages because of the integration and in

pressure situations use metallizing as a means of selling their base film.

2.22.22.22.22.2 Advantages to polyester film manufacturers with metallizers:Advantages to polyester film manufacturers with metallizers:Advantages to polyester film manufacturers with metallizers:Advantages to polyester film manufacturers with metallizers:Advantages to polyester film manufacturers with metallizers:

A. Because of their integration, have the ability to price their product at variable cost levels and use metallization as

a means for selling their film.

B. In the export segment, Indian polyester film producers with metallizing plants have a distinct advantage in terms

of quicker delivery and freight costs, since they are now located in different parts of the world (Thailand, Dubai,

Turkey and Mexico) and are closer to the major markets.

C. Since endusers buy both plain and metallized polyester film, they prefer a single source who can supply both.

This has had a serious impact on both the domestic and export metallized film business as plain metallized film

constituted almost 90% of our metallized/coated film export business.

Rawmaterial prices:

Polyester film is one of the major rawmaterials. There is a current worldwide shortage of 1,90,000 tons according to some

reports. Polyester film prices have escalated sharply from levels of Rs. 97/kg. basic in January 2010 to Rs. 170/- kg.

basic currently. This is having a negative impact on demand. We are trying to switch to an alternate substrate for one

11


of our major coated product. Ofcourse, testing and approvals are time consuming even though there is a significant

advantage in terms of the alternate substrate pricing.

2.32.32.32.32.3 MARKET SIZE:MARKET SIZE:MARKET SIZE:MARKET SIZE:MARKET SIZE:

The world market for metallized materials is estimated at 6,24,000 tons. The Indian market size for metallized products

is estimated at around 1,20,000 tons. The approximate breakup of the world demand of metallized products is:

Europe 35%

North America 29%

Asia Pacific 19%

India 09%

South America 03%

Rest of the World 05%

—————

Total 100%

—————

The world metallized paper market is estimated at 1,35,000 tons.

2.42.42.42.42.4 GROWTHGROWTHGROWTHGROWTHGROWTH

The domestic metallized polyester and metallized BOPP market is growing exponentially at around 20% but has been

captured largely by film producers — both BOPP and polyester.

The flexible packaging market is also growing in India at a similar rate of about 20% per annum. The international

market is also growing at a rate of around 2% with entry barriers of quality and reliability.

3.3.3.3.3. Strategic vulnerability:Strategic vulnerability:Strategic vulnerability:Strategic vulnerability:Strategic vulnerability:

Way back in 1994, the company had explored possibilities of backward integration into polyester film production. This

option was dropped at that time because of investment constraints as also the much acclaimed management ‘mantra’

of sticking to core competency. Your company followed this percept and focussed on metallizing and coating and on

the strength of its quality made inroads into major global markets becoming a top exporter in this product segment.

Despite these positives, with hindsight, the vulnerability of this strategy has been exposed because of forward

integration by our suppliers and backward integration by our customers into the metallizing business. By not

integrating – forward or backward, the company’s metallized film expansion initiatives gave the desired results only till

the time that film producers had not decided to enter the metallization business. So the success of this strategy

depended on others not making a foray into the metallization business.

With radical changes in the industry and developments, it is obvious that the product mix will need a radical shift to

specialty coated products and metallized paper where there is no imminent threat from polyester film producers with

metallizers.

3.3.3.3.3. BUSINESS AND FINANCIAL PERFORMANCE:BUSINESS AND FINANCIAL PERFORMANCE:BUSINESS AND FINANCIAL PERFORMANCE:BUSINESS AND FINANCIAL PERFORMANCE:BUSINESS AND FINANCIAL PERFORMANCE:

3.1 The business performance of the Company is appended below :

Quantity

Production (Tons)

2009-10 2008-09

Metallized Film 1171 544 115%

Metallized Paper 124 637 -81%

Metallic Yarn 9 7 29%

Total 1304 1188 10%

Sales (Tons)

2009-10 2008-09

Film : Domestic 463 539 -14%

Export 688 80 735%

Paper : Domestic 112 239 -53%

: Export 6 348 -98%

Total 1249 1206 4%

Growth

Growth

12


4.4.4.4.4. FINANCIAL PERFORMANCE:FINANCIAL PERFORMANCE:FINANCIAL PERFORMANCE:FINANCIAL PERFORMANCE:FINANCIAL PERFORMANCE:

Despite a capacity utilization of 14% the financial performance, this year has been positive in EBIDTA terms.

5. OPPORTUNITIES AND THREATS5. OPPORTUNITIES AND THREATS5. OPPORTUNITIES AND THREATS5. OPPORTUNITIES AND THREATS5. OPPORTUNITIES AND THREATS

Opportunities

a) Additional investment for forward integration in select niche segments like metallic yarn and

holography.

b) Additional investment for forward integration into flexible packaging.

c) Additional investment for backward integration into film production.

d) Product and market development initiatives in paper based products.

e) Recent development of a new coated product for the insulation market.

f) A CAGR of around 20% in the beer industry which will increase the demand for metallized paper

for beer labels.

g) New product developments of specialized products.

h) Improved value addition in the hither to, unviable plain metallized film business.

Threats

a. The metallized paper market will be focussed upon by more standalone metallizing companies,

since they like us cannot compete in the plain metallizing business.

b. A standalone metallizer with coating facilities has backward integrated into polyester film production

and this may put pressure on coated polyester based products in both the domestic and export

markets.

c. Though the threat from the unorganized sector is receding because of a reduction in excise

duties which are currently at 10% and 4% respectively on film and paper, this threat still exists.

There has been a need to implement the ‘Rule of Law’ to instill fear into those not following the laws

of the land and bring such people and entities to the book, so that those following the law of the

land have an advantage rather than a disadvantage.

d. Worldwide shortage and skyrocketing prices of polyester film.

Combined Quantity

Sales (Tons)

2009-10 2008-09

Domestic 575 778 -26%

Export 674 428 57%

Total 1249 1206 4%

Value

Sales value (Rs. In lacs)

2009-10 2008-09

Film : Domestic 528 547 -3%

Export 1074 157 584%

Paper : Domestic 79 180 -56%

: Export 9 438 -98%

Total 1690 1322 28%

Combined Value

Sales value (Rs. In lacs)

2009-10 2008-09

Domestic 607 727 -17%

Export 1083 595 82%

Total 1690 1322 28%

Growth

Growth

Growth

13


6.6.6.6.6. OUTLOOKOUTLOOKOUTLOOKOUTLOOKOUTLOOK

A strategic investor is ready to infuse funds and an offer for a One Time Settlement had been made

to the banks. However, this One Time Settlement offer has not been accepted by the bankers as

they want an improved offer.

In last year’s report, we had indicated that the company could stage a financial turn around, even with

a lower volume of niche specialty products. The improved financial result this year, with a capacity

utilization of only 14%, supports our assertion. However, we have a long way to go in terms of

financial infusion and then increase in the production and sales volume of value added products to

achieve a financial turn around.

7.7.7.7.7. RISKS AND CONCERNSRISKS AND CONCERNSRISKS AND CONCERNSRISKS AND CONCERNSRISKS AND CONCERNS

The major concern is a quick resolution to the company’s financial problems through the strategic

investment/ OTS route so that the company gets a chance to bounce back on the strength of

alternate niche specialty products.

While the new products being conceived may not have an imminent threat but it is possible that down

the line some of the polyester film producers could also look at adding coating facilities.

88888 INTERNAL CONTROL AND THEIR ADEQUACYINTERNAL CONTROL AND THEIR ADEQUACYINTERNAL CONTROL AND THEIR ADEQUACYINTERNAL CONTROL AND THEIR ADEQUACYINTERNAL CONTROL AND THEIR ADEQUACY

The Company has a proper and adequate system of controls in order to ensure that all assets are

safeguarded against loss from unauthorised use or disposition and that all transactions are checked,

verified, recorded and reported correctly.

Internal Audit checks are carried out to ensure that the responsibilities are executed effectively and

that proper adequate systems are in place.

The Board of Directors has constituted an Audit Committee with its Chairman as an Independent

Director. The Committee meets periodically. The observations and recommendations of the internal

and statutory auditors are addressed in totality.

9.9.9.9.9. HUMAN RESOURCE AND INDUSTRIAL RELATIONSHUMAN RESOURCE AND INDUSTRIAL RELATIONSHUMAN RESOURCE AND INDUSTRIAL RELATIONSHUMAN RESOURCE AND INDUSTRIAL RELATIONSHUMAN RESOURCE AND INDUSTRIAL RELATIONS

In the last few years, the company has lost several employees. However, despite the difficult

situation, a core team consisting of the most dedicated and loyal employees is still intact on the

strength of which operations are being carried on. However, employees in the Management and

Supervisory categories are being continually poached by competitors.

14


AUDITORS' COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

TO THE MEMBERS OF JALPAC INDIA LIMITED

We have examined the compliance of conditions of Corporate Governance by Jalpac India Limited for the financial yearended 31st March, 2010, as stipulated in Clause 49 of the Listing Agreement of the said company with the Stock Exchangesin India.

The compliance of conditions of the Corporate Governance is the responsibility of the management. Our examination waslimited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of theconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements ofthe company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with all material respect with the conditions of Corporate Governance as stipulated in the above mentionedListing Agreement.

We state that no investor grievances are pending for a period exceeding one month against the Company as per recordsmaintained by the company, shareholders/investors grievances committee.

We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For Lodha & Co.Chartered Accountants

Firm Registration No. 301051E

New Delhi, (N.K.Lodha)Date : 19th August, 2010 Partner

Membership No.: 85155

15


CORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE REPORTIn compliance with Clause 49 of the Listing Agreement with Stock Exchanges the Company submits the report on thematters mentioned in the said Clause and practice followed by the Company:

1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE1. COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE

Corporate Governance contains a set of principles, processes and systems to be followed by Directors, managementand all employees of the Company for increasing the shareholders' value keeping in view interest of other stakeholders.Your Company believes that good Corporate Governance practices ensure accountability, transparency and compliancewith the laws in true spirit in all dealings with the Government, customers, suppliers, employees and other stakeholders.

2 .2 .2 .2 .2 . BOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORS

The Board of Directors consists of four directors as on 31st March, 2010.

Composition and category of Directors as on 31st March, 2010 is as follows:

Category Name of DirectorsPromoter/Managing Director Madhukar JalanNon Promoter Executive Director R.R. MalhotraNon Executive & Independent Directors Anil Sharma

K.K. Shukla (Nominee- PICUP)

Attendance of each director at the Board meetings, last Annual General Meeting and Number of other Directorshipsand Chairmanships/Memberships of Committee of each Director in Various companies (other than Pvt. Ltd.

* Public Limited Company

Note : None of the Directors is a member of more than 10 Board Level Committees, or a Chairman of more than five suchcommittees as required under Clause 49 of the Listing Agreement.

companies & Trusts) :Number of Board Meetings held and the dates on which held :

During the year only 2 Board meetings could be held on the following dates: 09/10/2009 and 08/03/2010.

The company didn’t hold meeting for the quarter ending Jun’09 & Sep’09. The board however continued

to function by passing necessary resolutions by circulation, wherever required.

Code of Conduct:

The board of directors of the company has laid down a code of conduct which is applicable to all its

members Directors and senior management personnel of the company. All Board Members and Senior

Management Executives have affirmed compliance with the Code of Conduct. The same has been

posted on the website www.jalpacindia.com.

3.3.3.3.3. Audit CommitteeAudit CommitteeAudit CommitteeAudit CommitteeAudit Committee

The terms of reference of the Audit Committee are in accordance with the terms listed in accordance with

the listing agreement as follows:

i. Overseeing of the Company’s financial reporting process and the disclosure of its financial informationto ensure that the financial information is correct, sufficient and credible.

ii. Recommending the appointment, reappointment and replacement/removal of statutory auditor andfixation of audit fee.

iii. Approve payment for any other services by statutory auditors.iv. Reviewing with management the annual financial statements before submission to the board, focusing

primarily on:

Mr. Madhukar Jalan Promoter 2 1 No NIL NIL NIL

Executive

Mr. K.K. Shukla Independent 2 2 No 4 NIL NIL

Non-Executive

Anil Sharma Independent 2 2 No 3 3 1

Non-Executive

Mr. R.R. Malhotra Non-Promoter 2 2 Yes NIL NIL NIL

Executive

Name of Directors Category

BoardMeetingheld

BoardMeetingattended

Attendance

At the last

AGM

Membership of

Committees of

Board

Chairmanship ofCommittees of

Board

OtherDirectorship *

16


a. Matters required to be included in the Director’s Responsibility Statement included in the report

of the Board of Directors.

b. Any changes in accounting policies and practices.

c. Major accounting entries based on exercise of judgment by management.

d. Qualifications in draft audit report.

e. Significant adjustments arising out of audit.

f. Compliance with listing and other legal requirements concerning financial statements.

g. Any material related party transactions.

v. Reviewing with the management, external and internal auditors, the adequacy of internal control

systems.

vi. Reviewing the adequacy of internal audit function, including the structure of the internal audit,

reporting structure coverage and frequency of internal audit.

vii. Discussion with internal auditors any significant findings and follow up thereon.

viii. Reviewing the findings of any internal investigations by the internal auditors into matters where

there is suspected fraud or irregularity or a failure of internal control systems of a material nature

and reporting the matter to the board.

ix. To look into the reasons for substantial defaults in the payment to the bank etc, shareholders (in

case of non-payment of dividends) and creditors.

x. Carrying out any other function as is mentioned in the terms of reference of the Audit committee.

xi. Review the following information:

a. Management Discussion and Analysis of Financial Condition and Results of Operation:

b. Internal audit reports relating to internal control weaknesses;

c. Management letters/ letters of internal control weakness issued by statutory / internal auditor.

d. Statement of significant related party transaction and

e. The appointment, removal and terms of remuneration of the internal auditor shall be subject to

review by the Audit Committee.

The Audit Committee has the following powers:

i. To investigate any activity within its terms of reference.

ii. To seek any information from any employee.

iii. To obtain outside legal and professional advice.

iv. To secure attendance of outsiders with relevant expertise, if considers it necessary.

During the year under review, two meetings of the Audit committee were held on 09/10/2009 and

08/03/2010. The company didn’t hold meeting for the quarter ending Jun’09 & Sep’09. The composition

of the committee and attendance at its meetings is given below:

The representatives of the Internal Auditors and Statutory Auditors are also invited to the meetings.

The Executive Director is the permanent invitee to the audit committee.

In the absence of a Company Secretary, there is no secretary of the Audit Committee.

Due to company’s sickness and consequential shortage of manpower, preparation of quarterly and annual results was delayed.Hence in the present financially stringent situation, there was no meaningful agenda for conducting the requisite number of AuditCommittee Meetings.

Name of the Director Category No. of No. of Meetings

Meetings held attended

Mr.Anil Sharma(Chairman) Independent Non Executive 2 2

Mr.K.K. Shukla Independent Non Executive 2 2

Mr. Madhukar Jalan Promoter/Executive 2 1

17


Details of remuneration/sitting fees paid/payable to the Directors for the year.

The aggregate value of salary and perquisites for the year ended 31st March, 2010 to Mr. R.R. Malhotra, Whole TimeDirector is as follows:

(Rs. lacs)

Salary 11.40

Other Benefits(as per I.T. Act) 3.50

Total 14.90

(excluding provision for gratuity and leave encashment, since the provision has been made for the company as a whole).

The Company pays sitting fees to all Non Executive Directors for attending the board and audit committee meetings.The details of the sitting fees paid to the Non Executive Directors during the year 2009-10 are given below:

4. REMUNERATION TO DIRECTORS (NON MANDATORY):4. REMUNERATION TO DIRECTORS (NON MANDATORY):4. REMUNERATION TO DIRECTORS (NON MANDATORY):4. REMUNERATION TO DIRECTORS (NON MANDATORY):4. REMUNERATION TO DIRECTORS (NON MANDATORY):

The Board of the Company has constituted a Remuneration Committee, comprising of the following independent directors:

Mr. Anil Sharma, Independent Non Executive Director

Mr. K.K. Shukla Independent Non Executive Director

The remuneration committee has been constituted to recommend/review the remuneration packages of Managing/WholeTime Directors, based on performance and defined criteria.

Thre was only one business transacted by the remuneration committee which was held on 09/10/2009.

Directors Sitting Fees (Rs.)

Mr. Anil Sharma 5000/-

Mr. K.K. Shukla 5000/-

Total 10000/-

5. INVESTORS'/SHAREHOLDERS' GRIEVANCE COMMITTEE5. INVESTORS'/SHAREHOLDERS' GRIEVANCE COMMITTEE5. INVESTORS'/SHAREHOLDERS' GRIEVANCE COMMITTEE5. INVESTORS'/SHAREHOLDERS' GRIEVANCE COMMITTEE5. INVESTORS'/SHAREHOLDERS' GRIEVANCE COMMITTEE

The Board of the Company has constituted an Investors'/Shareholders' Grievance committee comprising members namely Shri

Madhukar Jalan and Shri R. R. Malhotra. Shri R. R. Malhotra also acts as the Compliance Officer to oversee the investors'

grievances such as non receipt of dividend, annual report, delay in transfer of shares, issue of duplicate share certificate etc.

The Company has appointed M/s Niche Technologies Pvt. Ltd, Kolkata as the Share Transfer Agents for both physical and

demat form of shareholdings.

The Company has received five investor complaints during the year and no investor complaint was pending as on 31st March, 2010.

The Company had no share transfer requests pending as on 31st March 2010.

6. GENERAL BODY MEETINGS6. GENERAL BODY MEETINGS6. GENERAL BODY MEETINGS6. GENERAL BODY MEETINGS6. GENERAL BODY MEETINGS

Location and time of last three Annual General Meetings:

Year Date Time Location

2006-2007 29.09.2007 11.00 a.m. Village : Tularampur

P.O. Mota Haldu

Tehsil : Haldwani,

Distt Nainital, Uttarakhand

2007-2008 28.11.2008 11.00 a.m. Same as above

2008-2009 30.11.2009 11.00 a.m. Same as above

No ordinary or special resolution requiring Postal Ballot under section 192A of the Companies Act, 1956 was passed during the

year.

18


7.7.7.7.7. DISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURESDISCLOSURES

(a) Disclosures on materially significant related party transactions i.e. transactions of the Companyof material nature, with its promoters, the Directors or the Management, their subsidiaries orrelatives etc. that may have potential conflict with the interest of the Company at large-

During the year there was no material transactions with related parties which were in conflictwith the interest of the company. Suitable disclosures as required by Accounting Standard-18“Related Party Transactions” has been made in the Annual Report.

(b) Details of non-compliance by the Company, penalties, strictures imposed on the Company byStock Exchanges or SEBI, or any statutory authority on any matter related to capital markets,during the last three years.

Due to company’s sickness and consequential shortage of manpower, preparation of quarterlyand annual results was delayed. Hence in the present financially stringent situation, there wasno meaningful agenda for conducting the requisite number of Audit Committee and Board Meetings.

8.8.8.8.8. MEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATIONMEANS OF COMMUNICATION

The Quarterly, Half Yearly, Annual Report, Corporate governance Report, Financial Results andShareholders’ Pattern of the company are/shall be posted on the Electronic data Information filingand Retrieval (EDIFAR) website namely: www.sebiedifar.nic.in.

The company is also in the process of developing its own website.

An E mail ID “[email protected]” has been created and designated exclusively for thepurpose of registering complaints, if any, by investors.

Compliance with other mandatory requirements

1. Management discussion and Analysis

A Management Discussion and Analysis Report forms part of the Annual Report and includesdiscussions on various matters specified under clause 49(IV)(F) of the Listing Agreement.

2. Subsidiary Companies.

The Company did not have any subsidiary company as on 31/03/2010.

3. Disclosures

3.1 Related Party Transactions

The details of all transactions with related parties are placed before the audit committee as andwhen required.

3.2 Disclosure of Accounting Treatment

In the preparation of financial statements, the Company has followed the Accounting Standardsissued by the Institute of Chartered Accountants of India to the extent applicable.

3.3 Risk Management

The Company has laid down procedures to inform Board members about the risk assessmentand minimisation procedures. The Executive director and senior executives of the Companyperiodically reviews these procedures to ensure that executive management controls riskthrough means of a properly defined framework.

3.4 Proceeds from Public Issues, Rights Issues, the Preferential Issue etc.

No proceeds from public issue, rights issue, preferential issue etc. was received during theyear.

3.5 CEO/ CFO Certification

A certificate from the Managing Director on the financial statements of the Company was placedbefore the Board.

3.6 Review of Directors Responsibility Statement

The Board in its report have confirmed that the annual accounts for the year ended 31st March,2010 have been prepared as per applicable accounting standards and policies and that sufficientcare has been taken for maintaining adequate accounting records.

19


Auditor’s Certificate on Corporate Governance.

The Auditors Certificate on compliance of Clause 49 of the Listing Agreement relating to CorporateGovernance is published as an annexure to the Director’s Report

9.9.9.9.9. GENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATIONGENERAL SHAREHOLDER INFORMATION

9.1 Annual General Meeting (Tentative)

Date and Time : By the end of September 2010

Venue : Registered office of the Company at:

Village : Tularampur

P.O.Mota Haldu, Tehsil : Haldwani,

Distt. Nainital, Uttarkhand.

9.2 Financial Calendar (Tentative and subject to change)

Financial Reporting for 2010-11 : 1st April 2010 to 31st March, 2011

Quarter ending June, 2010 By end of September, 2010

Quarter ending September,2010 By 15th November, 2010

Quarter ending December, 2010 By 15th February, 2011

Year ending March, 2011 By end of May, 2011

The Annual General Meeting for the Financial Year 2009-10 will be held on or before 30th September,2010

9.3 Date of Book Closure : To be communicated with notice of AGM.

9.4 Dividend payment date : In view of the accumulated losses no dividend is

being recommended

9.5 Listing on Stock exchanges Kanpur (Regional Stock Exchange), Delhi,

Mumbai, Kolkata, Ahmedabad.

Listing fee to the all the stock exchanges for the year 2009-10 will be paid. In order to save costs theCompany is contemplating steps to de-list the company from Kanpur, Delhi, Kolkata, and Ahmedabad StockExchanges as per the current SEBI Guidelines and keep it listed on the Mumbai Stock Exchange only.

Stock Code : 523230 at Mumbai Stock Exchange

9.6 Demat ISIN Number in NSDL & CDSL : INE976B01011

9.7 Market Price Data

Monthly high/low prices of shares during the year 2009-10 on the Stock Exchange, Mumbai were as follows :

Month High Low(Rs.) (Rs.)

April 2009 4.12 2.69

May 2009 4.73 3.73

June 2009 4.50 3.90

July 2009 4.09 2.40

August 2009 3.18 2.29

September 2009 3.46 2.86

October 2009 2.85 2.20

November 2009 2.78 2.20

December 2009 3.21 2.38

January 2010 4.72 3.21

February 2010 4.98 3.90

March 2010 4.30 3.55

20


9.11 Shareholding Pattern (as on 31st March, 2010)

9.12 Dematerialisation of shares :

As on 31st March 2010, 87.14 % of the total equity capital of the Company was held in dematerialised form.

Outstanding GDR/ADR/Warrants or any convertible instruments, conversion date and impact on equity.

The Company has not issued any GDR/ADR/Warrants.

9.13 Plant Location: Village : Tularampur,P.O. Mota Haldu,Tehsil Haldwani,Distt. Nanital, Uttarakhand

9.14 Investor Correspondence :

(i) For any assistance regarding share transfers, transmission, change of address, non-receipt ofdividend, dematerialisation of shares etc.:

Niche Technologies Pvt. Ltd.

D-511, Bagree Market,71, B.R.B.B. Road, Kolkata- 700 001

(ii) For any query on Annual Report: The Compliance Officer

Jalpac India Ltd.

903/911, Tolstoy House, 15, Tolstoy Marg,

New Delhi - 110 001.

Category No.of Shares %

Promoters 4111872 59.679

Nationalised Banks 300 0.004

Non Resident Indians 5672 0.082

Mutual Funds and FIIs 4100 0.060

Domestic Companies 252738 3.668

General Public 2492909 36.182

Others 22409 0.325

Total 6890000 100.000

Range of shares Number of % to total holders Total face value % to totalholders (Rs) face value

9.10 Distribution of Shareholding (as on 31st March, 2009)

From To

1 500 6391 89.7108 1066243 15.4752501 1000 417 5.8535 334237 4.8510

1001 5000 255 3.5794 536085 7.7806

5001 10000 28 0.3930 205956 2.989210001 50000 27 0.3790 584838 8.488250001 100000 1 0.0140 66403 0.9347

100001 And above 5 0.0702 4098238 59.4810

Total 7124 100.0000 6890000 100.0000

9.8 Registrar and Share Transfer Agents : Niche Technologies Pvt. Ltd.D-511, Bagree Market, 71, B.R.B.B. Road, Kolkata- 700 001

9.9 Share Transfer System:

Share Transfers in physical form are generally registered within a month from the date of receipt, provided thedocuments are found to be in order. The Share transfer and Investors'/Shareholders' Grievance Committeeconsiders and approves the transfer proposals.

All requests for dematerialisation of shares, which are in order, are generally processed within 21 days and theconfirmation is given to the respective depository viz. NSDL and CDSL.

21


Declaration under Clause 49 I(D)(ii) by the Managing Director of affirmation by the Board of

Directors and Senior Management of compliance with the Code of Conduct

The Shareholders,

I, Madhukar Jalan, Managing Director of the Company, do hereby declare that all the Board Members & Senior Managementpersonnel have affirmed compliance with the Code of Conduct for the Board of Directors & Senior Management of Jalpac IndiaLtd for the year ended 31st March, 2010.

New Delhi Madhukar Jalan

19th August, 2010 Managing Director

22


AUDITORS’ REPORTAUDITORS’ REPORTAUDITORS’ REPORTAUDITORS’ REPORTAUDITORS’ REPORT

To the Members of Jalpac India Limited

We have audited the attached Balance Sheet of Jalpac IndiaLimited, as at 31st March 2010 and also the Profit and LossAccount and the Cash Flow Statement for the year ended onthat date annexed thereto. These financial statements are theresponsibility of the Company’s management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with the auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatements. An audit includes examining, on atest basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessingthe accounting principles used and significant estimates madeby management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

1. As required by the Companies (Auditors’ Report) Order,2003 (The Order) (As Amended) issued by the CentralGovernment of India in terms of Section 227 (4A) of theCompanies Act, 1956 (The Act), we enclose in theAnnexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to inParagraph 1 above, we report that:

(a) We have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purposes of ouraudit read with our comments in para 2(f) below;

(b) In our opinion, proper books of account as requiredby law have been kept by the Company so far asappears from our examination of those books, readwith our comments in para 2(a) above ;

(c) The Balance Sheet, Profit & Loss Account and CashFlow Statement dealt with by this report are inagreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit & LossAccount and Cash Flow Statement dealt with by thisreport comply with the Accounting Standardsreferred to in Section 211 (3C) of the Companies Act,1956.

(e) On the basis of written representations received fromthe directors of the company and information andexplanations given to us, we report that none of thedirectors is disqualified as on 31st March 2010 frombeing appointed as a director in terms of clause (g)of sub section (1) of section 274 of the companiesact, 1956.

(f) Attention is invited to the following notes of Schedule19A:

i. As stated in Note no.14 regarding preparation ofaccounts of the company on a going concern basis(impact unascertainable) for the reason as stated insaid note. However, its accumulated losses is inexcess of net worth of the company and the company

has become sick industrial company within themeaning of section 3(1)(o) of the Sick IndustrialCompanies (Special Provisions) Act, 1985 byHon’ble BIFR’s Order dated 05.09.2006.

ii. As stated in Note No.4 regarding non provisionagainst custom duty saved on raw materialconsumed under advance license, pendingfulfillment of export obligation and non provision ofinterest thereon (amount unascertained) as statedin the said note.

iii. As stated in Note No. 11 (a) & (b) regarding non-provision for shortfall in recovery against debtorsand loans & advances for which recovery actionhas been initiated (amount unascertainable) asstated in the said note.

iv. As stated in Note No.12 in respect of nonconfirmation/ reconciliation of balances of sundrydebtors, sundry creditors, current liabilities(including statutory dues) & provisions (read withNote no. 5 & 24), loans & advances, secured loans,unsecured loans, certain bank balances(includingFixed Deposits & Margin Money), contingentliabilities considered as ascertained by themanagement, consequential impact whereofpresently cannot be ascertained.

v. As stated in Note No. 15 (b) In respect of non paymentof certain statutory dues and non-filing of certainstatutory returns/forms w.r.t. Employee StateInsurance, Provident Fund, Tax Deducted at source,Service Tax and other taxes (includeing accountingof Penalty, Interest, etc.) (amount unascertainable)and our inability to comment thereon .

vi. As stated in Note No.10 regarding non-provision ofRs. 4.32 lacs for diminution in value of an unquotedlong-term investment.

vii. As stated in Note No. 13 regarding non-provision oflosses (impact unascertainable) on account ofimpairment of assets in use for the reason stated inthe said note and in the absence of supportive auditevidence our inability to comment thereon.

viii. As stated in Note No. 15(a) regarding the non-provision of interest of Rs.127013 thousands (asestimated, including for the current year Rs. 36300thousands) and penal interest etc. (amountunascertained).

ix. As stated in Note No. 16(a) regarding pendingappointment of Company Secretary, compilation/updation of secretarial records and other non-compliance as stated in the said note.

x. The internal control system needs to be furtherstrengthened to be made {read with note no. 12, 15and 16(b) and 16 (c)} commensurate with the size ofthe Company and the nature of its business for thepurchase of inventory and fixed assets and for thesale of goods and services.

xi. As stated in Note No. 19 regarding appointment w.e.f.26th Oct.,2009 and remuneration paid to anExecutive Director is subject to requisite approvaland also approval of the Central Government.

23


We further report that the loss for the year, balance in profit &loss account, current liabilities and Provisions, current assetsand secured loans are without considering the impact of itemsmentioned in Para “(f)” above, the impact of which could not bedetermined.

Subject to the foregoing, in our opinion and to the best of ourinformation and according to the explanations given to us, thesaid accounts read together the note no. 3 of schedule 19Aand other Notes thereon, give the information required by theAct in the manner so required and give a true and fair view inconformity with the accounting principles generally acceptedin India;

i) in the case of Balance Sheet, of the state of affairs ofthe Company as at 31st March 2010;

ii) in the case of the Profit & Loss Account, of the Lossfor the year ended on that date; and

iii) in the case of Cash Flow Statement, of the CashFlows for the year ended on that date.

For LODHA & CO.Chartered Accountants

Firm Registration No-301051E

(N. K. LODHA)New Delhi PartnerDate : 19 August, 2010 Membership No.: - 85155

24


ANNEXURE TO THE AUDITORS’ REPORT

(Referred to in paragraph (1) of our Report ofeven date of JALPAC INDIA LIMITED for theyear ended 31st March 2010)

1. (a) The Company has maintained proper records inrespect of its fixed assets showing full particularsincluding quantitative details and situation of fixedassets except in respect of certain assets where theserecords are in the process of updation in respect ofidentification, quantitative details and location/situation.

(b) As per information and explanations given to us, certainfixed assets have been physically verified by theManagement (read with note no.16 (b) of schedule19A) according to the programme of physicalverification once in every three years in phasedmanner, which in our opinion, is reasonable havingregard to the size of the Company and the nature of itsFixed Assets. The discrepancies noticed on suchphysical verification were not material.

(c) As per the records and information and explanationsgiven to us, no Fixed Asset has been disposed offduring the year except Motor Car.

2. (a) As per the records and information and explanationsgiven to us, the inventory of the company (exceptstocks lying with the third parties) has been physicallyverified by the management during the year.

(b) In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventory followed by the Managementare reasonable and adequate in relation to the size ofthe Company and nature of its business (read withnote no. 16(b) of schedule 19A).

(c) In our opinion and according to the information andexplanations given to us, the company has maintainedproper records of inventory excluding work inprogress where stocks are updated as and whenphysical verification has been carried out (read withnote no. 16(b) of schedule 19A). The discrepanciesnoticed on such physical verification of inventory ascompared to book records were not material.

3. (a) The Company has not granted any loans, secured/unsecured to companies, firms or other partiescovered in the register maintained under section 301of the Companies Act, 1956. Accordingly, theprovisions of clause 4 (iii) (b) to (d) of the Order are notapplicable to the Company.

(b) During the year Company has taken unsecured loanfrom one party covered in the register maintained undersection 301 of the Companies Act, 1956. Themaximum balance involved during the year and theyear-end balance of loan was Rs 26184 thousandsand 26184 thousands respectively.

(c) The terms and conditions on which loan has beentaken by the company are not, prima facie prejudicialto the interest of the Company.

(d) In respect of aforesaid loan, the principal is repayableon demand and Company is regular in repaying thesame as and when demanded.

4. In our opinion and according to the information andexplanations given to us, having regard to theexplanations that some of the items purchased are ofspecial nature and suitable alternative sources do notexist for obtaining comparable quotations or whereuser department has shown specific preference. Theinternal control system needs to be furtherstrengthened to be made the same {read with note no.12, 15 and 16(b) and 16 (c)} commensurate with thesize of the Company and the nature of its business forthe purchase of inventory and fixed assets and for thesale of goods and services. During the course of ouraudit, we have not observed any continuing failure tocorrect major weaknesses in internal control system.

5. According to the information and explanationsprovided by the management and based upon auditprocedures performed, there are no contracts orarrangements that needs to be entered in the registermaintained under section 301 of the Companies Act1956 (read with note no. 16(a) of schedule 19A).Accordingly, the provisions of clause 4 (v)(b) of theOrder are not applicable.

6. The Company has not accepted any deposits frompublic within the meaning of section 58A and 58AAand the rules framed there under and any other relevantprovisions of the Act with regard to deposits acceptedfrom the public. We have been informed that no orderhas been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India orany Court or any other Tribunal in this regard.

7. The Company has an internal audit system, whichneeds to be further strengthened to make itcommensurate with the size of the Company andnature of its business.

8. The Central Government has not prescribedmaintenance of cost records under Section 209(1)(d)of the Companies Act, 1956 in respect of the productsof the Company.

9. (a) According to the records and information andexplanation given to us, undisputed statutory duesincluding Service Tax, Custom Duty, and Excise Duty,have generally been regularly deposited by thecompany except Provident fund, Employee stateinsurance, T.D.S, T.C.S, Sales Tax and Fringe benefittax amounting to Rs. 2353 thousands, 74 thousands,3350 thousands, 26 thousands, 483 thousands and505 thousands respectively, which as on 31st March,2010 are outstanding for more then six months fromthe date they become payable (read with note no. 15(b) of Schedule 19A).

(b) According to the records and information andexplanation given to us, there are no dues in respectof Income Tax, Service Tax, Custom Duty, Cess andWealth Tax that have not been deposited with theappropriate authorities on account of any dispute andthe dues in respect of Sales Tax, Entry Tax and ExciseDuty that have not been deposited with the appropriateauthorities on account of dispute and the forum wherethe dispute is pending are given below (read with noteno.1 of schedule 19A): -

25


18. According to information and explanations given tous, the Company has not made any preferentialallotment of shares to any parties or companiescovered in the register maintained under section 301of Companies Act 1956.

19. No debentures have been issued/ outstanding duringthe year hence; the question of security/ chargesthereof does not arise.

20. The company has not raised any money through apublic issue during the year.

21. Based on audit procedure performed and on the basisof information and explanations provided by themanagement and to the best of our Knowledge andbelief, no meterial (read with Note no 12 of Schedule19A and our comments in para (f) (x) above) fraud onor by the company has been noticed or reported duringthe curse of our audit, nor we have been informed ofany such case by the management.

For LODHA & CO.Chartered Accountants

Firm Registration No-301051E

(N. K. LODHA)New Delhi PartnerDate: 19 August, 2010 Membership No.: - 8515510. The company’s accumulated losses at the end of the

year are more than fifty percent of its net worth and ithas also incurred cash losses during the currentfinancial year (read with our comments in para 2(f)above) and in the immediately preceding financial year.

11. On the basis of records made available and theinformation and explanation given to us the companyhas defaulted in repayment of dues to financialinstitution and banks. The amount overdue on accountof principal is Rs.272947 thousands (Rs. 263201thousands up to 31-03-2009) consisting delays of1 day to 1325 days and on account of interest Rs.127013 thousands (90713 thousands up to 31-03-2009) consisting delays of 14 days to 1325 days.Further, this is to be read with Note no 12, 14 and 15(a)of schedule 19A.

12. According to the information and explanations givento us, the company has not granted any loans andadvances on the basis of security by way of pledge ofshares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefitfund /society, therefore, the provisions of clause 4(xiii)of the said Order are not applicable to the company.

14. According to the information and explanations givento us, the Company is not dealing in or trading in shares,securities, debentures and other investments.

15. According to the information and explanations givento us, the company has not given any guarantee forloans taken by others from banks or financialinstitutions.

16. During the year no term loans were received bycompany, accordingly the provisions of clause 16 ofthe Order are not applicable to the Company.

17. On the basis of information and explanations given tous and on an overall examination of financial statementsof the company, no funds raised during the year in shortterm basis have been used for long term investment.

Nameof the Statute

Nature ofthe dues

Amt.(Rs. in‘000)

Forum where disputeis pending

Period

Central Sales Interest on 1999-00 to 77 Supreme CourtTax Act Tax 2001-02

Disallowance 2000-01,01-02 4197 Joint Commissionerof Exemptions 03-04,04-05 (Appeals), Trade Tax Noida

Disallowance 2002-03 517 Commercial Tax Tribunal,of Exemptions Noida

Non-submission 2002-03 210 Deputy Commissioner Tradeof ‘C' Forms Tax, Noida

Non-submission 2003-04 358 Jt. Commissioner Trade Tax,of ‘C' Forms Noida

Central Sales Tax 2003-04 & 980 Deputy Commissioner,2004-05 Haldwani

Central Sales Tax 2004-05, 2141 Jt. Commissioner (Appeals)2005-06 & Trade Tax Noida2006-07

Uttarakhand Trade Tax on 1997-98 8161 Trade Tax Tribunal,Sales Tax Act Stock Transfer Dehradun

U.P Sales Tax Non-submission 2002-03 & 360 Deputy Commissioner TradeAct of 3-B'Forms 2003-04 Tax, Noida

Sales Tax 2005-06 & 100 Jt. Commissioner (Appeals)2006-07 Trade Tax Noida

Uttarakhand Entry tax 2003-04 664 Jt. Commissioner (Appeals)Entry Tax Trade Tax Noida

Central Excise Related to 1995 810 CESTATAct valuation

Evaporation Boat 1998 717 High Court

Related to Valuation 1997-2000 5380 Commissioner Excise

26


BALANCE SHEETas at 31st March, 2010

SOURCE OF FUNDSSOURCE OF FUNDSSOURCE OF FUNDSSOURCE OF FUNDSSOURCE OF FUNDS

1.1.1.1.1. SHAREHOLDERS' FUNDSSHAREHOLDERS' FUNDSSHAREHOLDERS' FUNDSSHAREHOLDERS' FUNDSSHAREHOLDERS' FUNDSSHARE CAPITAL 1 149,400,000 149,400,000RESERVES & SURPLUS 2 7,156,030 7,156,030

156,556,030 156,556,030

2.2.2.2.2. LOAN FUNDSLOAN FUNDSLOAN FUNDSLOAN FUNDSLOAN FUNDSSECURED LOANS 3 399,648,172 422,704,454UNSECURED LOANS 4 26,183,755 5,902,800

425,831,927 428,607,254

TOTAL 582,387,957 585,163,284

NOTES ON ACCOUNTS & ACCOUNTING POLICIES 19

AS AT AS AT PARTICULARS SCHEDULE 31.03.2010 31.03.2009

(Rupees) (Rupees)

APPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDS

1.1.1.1.1. FIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETS 5

GROSS BLOCK 539,286,068 539, 660, 635LESS : DEPRECIATION 327, 877, 743 302, 670, 999

NET BLOCK 211, 408, 325 236, 989, 636

CAPITAL WORK IN PROGRESS - -

TOTAL 211, 408, 325 236, 989, 636

2.2.2.2.2. INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTS 6 481,540 463,265

3.3.3.3.3. CURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESINVENTORIES 7 26, 666,193 18, 345, 106SUNDRY DEBTORS 8 7, 071, 326 7, 456, 728CASH & BANK BALANCES 9 5, 668, 512 4, 907, 136LOANS & ADVANCES 10 17, 556, 824 16, 978, 797

56, 962, 855 47, 687, 767

LESS : CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES 11 125, 874, 041 118, 087, 153PROVISIONS 12 7, 808, 121 7, 226, 189

133, 682, 162 125, 313, 342

NET CURRENT ASSETS (76, 719, 307) (77, 625, 577)

4.4.4.4.4. PROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNT 447, 217, 399 425, 335, 960

Total 582, 387, 957 585, 163, 284

As per our report of even date

For Lodha & Co.Chartered AccountantsFirm Registration No. : 301051E

N.K. LodhaPartnerNew DelhiDate : 19th August, 2010

For and on behalf of the Board of Directors

R. R. Malhotra Madhukar JalanExecutive Director Managing Director

27


PROFIT & LOSS ACCOUNTfor the Year Ended 31st March, 2010

NOTES ON ACCOUNTS & ACCOUNTING POLICIES 19

EXPENDITUREEXPENDITUREEXPENDITUREEXPENDITUREEXPENDITURE

COST OF MATERIALS 15 121, 358, 969 93, 834, 364

EMPLOYMENT COST 16 21, 331, 186 20, 876, 226

MANUFACTURING & OTHER EXPENSES 17 34, 114, 398 48, 880, 947

176, 804, 553 163, 591, 537

PROFIT / (LOSS) BEFORE INTEREST & DEPRECIATION 3, 882, 335 (43, 371, 198)

INTEREST & FINANCE COST 18 300, 646 5, 839, 571

PROFIT / (LOSS) BEFORE DEPRECIATION 3, 581, 689 (49, 210, 769)

DEPRECIATION 5 25, 460, 094 26, 532, 587

PROFIT / (LOSS) BEFORE EXCEPTIONAL ITEMS AND TAX (21, 878, 405) (75, 743, 356)

EXCEPTIONAL ITEMS

LESS: PROVISION FOR CURRENT TAX ------ ------

LESS : PROVISION FOR FBT ------ 276, 163

LESS : FBT PAID FOR THE A/Y 07-08 3, 034 ------

PROFIT / (LOSS) AFTER TAX (21, 881, 439) (76, 019, 519)

ADD : BALANCE BROUGHT FORWARD (425, 335, 960) (349, 316, 441)

BALANCE CARRIED TO BALANCE SHEET (447, 217, 399) (425, 335, 960)

EARNING PER SHARE (BASIC & DILUTED) (3.34) (11.19)(NOTE NO. 23 OF SCHEDULE 19A)

FOR THE FOR THEYEAR ENDED YEAR ENDED

PARTICULARS SCHEDULE 31.03.2010 31.03.2009(Rupees) (Rupees)

INCOMEINCOMEINCOMEINCOMEINCOME

SALES 168, 958, 748 131, 887, 451

LESS : EXCISE DUTY 3, 605, 229 5, 382, 603

NET SALES 165, 353, 519 126, 504, 848

OTHER INCOME 13 5, 614, 980 367, 309

INCREASE / (DECREASE) IN STOCKS 14 9, 718, 389 (6, 651, 818)

TOTAL INCOMETOTAL INCOMETOTAL INCOMETOTAL INCOMETOTAL INCOME 180, 686, 888 120, 220, 339


For Lodha & Co.Chartered AccountantsFirm Registration No : 301051E

N.K. LodhaPartnerNew DelhiDate : 19th August, 2010



28


SCHEDULES TO BALANCE SHEETAS AT AS AT

31.03.2010 31.03.2009

(Rupees) (Rupees)

1. SHARE CAPITAL :

Authorised1,17,50,000 Equity Shares of Rs.10 each 117,500,000 117,500,000(Previous year’ 1,17,50,000 Equity Shares of Rs. 10 each)8,25,000 Preference Shares of Rs. 100 each 82,500,000 82,500,000(Previous year’ 8,25,000 Preference Shares of Rs.100 each)

200,000,000 200,000,000

Issued, Subscribed & Paid-up

6,890,000 (Previous Year 6,890,000) Equity Shares ofRs. 10 each 68,900,000 68,900,000

300,000 (Previous Year 300,000) 3% Redeemable Cumulative‘Preference Shares of Rs. 100 each are redeemable at par on02.11.2013, with an option to the company to redeem at any timeafter 36 month from 03.11.2001 30,000,000 30,000,000

5,05,000 (Previous Year 5, 05, 000) 0.10% RedeemableCumulative ’Preference Shares of Rs. 100 each are redeemable 50,500,000 50,500,000at par on 27.10.2017 with an option to the company to redeemat any time after 36 month from 28.10.2005 149,400,000 149,400,000

2. RESERVES & SURPLUS

CAPITAL RESERVES:-I) Central Subsidy 2,500,000 2,500,000II) Profit on reissue of Forfeited Shares 52,500 52,500II) Securities Premium 4,603,530 4,603,530

7,156,030 7,156,030

3. SECURED LOANSFrom Financial Institutions - Rupee Term LoansFrom Banks - Rupee Term Loans 76,395,278 76,395,278of Forfe - Foreign Currency Term Loans - -

- Deferred Payment Guarantee - -From Financial Institutions - Rupee Term Loans 110, 755, 581 110, 755, 581

- Foreign Currency Term Loans 34, 515, 470 38, 811, 264Interest Accured & Due on Term Loan (Read with note nos. 12and 15(a) of Schedule 19A 149, 082 149, 082From Banks - Cash Credit 177, 832, 761 196, 593, 249

399, 648, 172 422, 704, 454

1 Term Loans from Financial Institutions (ARCIL), outstanding Rs. 145271 Thounsands ( Previous Yr.Rs.149567 Thousands) are secured by

a first mortgage of all the company’s immovable properties both present and future ranking pari-passu inter-se and first charge by way of

hypothecation of all the company’s movables including movable plant & machinery, machinery spares, tools and ‘accessories and other

movables both present & future subject to prior charges created in favour of the company’s bankers on inventories, book debts and other

specified movables to secure borrowings for ‘working capital requirements, and also secured by personal guarantees of a Director of the

company.

2 Term Loans from Banks outstanding Rs. 48308 Thousands (Previous Yr. Rs. 48308 Thousands) are secured by pari-passu first charge on the

fixed assets and pari-passu second charge on entire current assets comprising stock of raw materials,stock - in -process,stores etc. in factory,

godown and in - transit and book - debts / ‘receivable, both present and future.

3 Term Loan from banks outstanding Rs 28237 Thousands (Previous Yr. Rs. 28237 Thousands) and Deferred Payment Guarantee are secured

by first charge on fixed assests created out of bank finance and extension of charge on current assets.

4 Cash Credit and other facilities from the Company’s bankers are secured by first hypothecation of entire current assets comprising stock of

raw materials, stocks-in-process, stores etc , in the factory, godown and in transit and book debts/receivables, both present and future and

second charge on entire fixed assets.

5 Loan at sl no. 2, 3 and 4 is also secured by personal gaurantees of two directors and charge on third parties immovable properties.

6 Loans at sl no. 1, 2, 3 and 4 are secured by the pledge of shares of promoters in the company to the extent of Rs 350 lacs (Nos. 35,00,000).

Further Lenders have the right to convert the entire outstanding dues into Equity Shares of the Company in case of default

29


6. INVESTMENTS (at cost less provision)

Long Term - Non Trade

A. UNQUOTED

9000 (P.Y. 9000) Equity Shares of USD 1 each in 432,360 432,360Americas JIL Inc.2000 Equity Shares of Rs. 10/- each* 215, 100 -(Woolworth India Ltd)

In Government Securities

N.S.C. VIII Issue 4,000 4,000(Deposited with Sales Tax Authorities)

651, 460 436,360

AS AT AS AT

31.03.2010 31.03.2009

(Rupees) (Rupees)

B.QUOTED Fully Paid

2000 Equity Shares of Rs. 5/- each 88,240 88,240(2000 of Rs. 5 each) in Ester Industries Ltd

2000 Equity Shares of Rs. 10/- each 215,100 215,100in Woolworth India Ltd*

50 Equity Shares of Rs. 10/- each 6,474 6,474in Polyplex Corporation Ltd.(Previous Year 50 Shares) 746,174 746,174

Less : Provision for diminution in Value of Investments 264,634 282,909

481,540 463,265

Total Investments 481,540 463,265

Aggregate Book Value of Unquoted Investments 436,360 436,360

Aggregate Book Value of Quoted Investment 45,180 26,905

Total Value of Investments 481,540 463,265

Aggregate Market Value of Quoted Investments 45,180 26,905

* 50 Shares pending for transfer in the name of the Company.

AS AT AS AT

31.03.2009 31.03.2010

(Rupees) (Rupees)

5. FIXED ASSETS

Vehicle includes acquired under hire purchase scheme Rs. NIL (Previous Year Rs. 13, 33, 305)/-

Gross Block Depreciation

Particulars

As at01.04.2009

Additions/Adjustments

Sale /Disposal

As at31.03.2010

Up to31.03.2009

For theYear

Adjustment /Disposal

Up to31.03.2010

Net Block

(Rupees)

As at31.03.2010

As at31.03.2009

Freehold Land

Building

Plant & Machinery

Office Equipment, Furnitureand Fixtures

Electrical Installation

Vehicle

1,496,894

37,570,544

481,676,103

9,628,829

6,147,071

3,141,194

--

--

--

--

--

385, 567

1,496,894

37,570,544

481,676,103

9,639,829

6,147,071

2,755, 627

--

15,947,288

299,570,908

8,577,589

1,940,667

1,841,291

--

1,192,914

23,524,359

240,468

291,343

211,010

--

--

--

--

--

253,350

--

14, 754, 374

276,046,549

8,337,121

1,649,324

1,883,631

1,496,894

22,816,170

205,629,554

1,291,708

4,497,747

1,257,563

1,496,894

21,623,256

182,105,195

1,062,240

4,206,404

914,336

Total 539,660,635 11, 000 539,286, 068 327,877,74325,460,094302,670,999 236,989,636211,408,325

Previous Year (31.03.2009) 539, 660, 635 -- 539,660,635 302,670,99926,532,587 --276,138,412

253,350

--

--

--

11,000

--

385, 567

-- 236,989,636 263,522,223

4.4.4.4.4. UNSECURED LOANS UNSECURED LOANS UNSECURED LOANS UNSECURED LOANS UNSECURED LOANS Interest free loan from Promoter Company 26,183,755 5,902,800

26,183,755 5,902,800

--

30


AS AT AS AT31.03.2010 31.03.2009

(Rupees) (Rupees)

7. INVENTORIES

(As valued and certified by the management)

(At lower of cost and net realisable value)

(a) Raw Material 6, 338, 614 7, 412, 858(b) Stores & Spares 6, 959, 952 7, 283, 010(c) Stock in Process 1, 885, 072 2, 428, 694(d) Finished Goods 11, 384, 205 1, 151, 212(e) Scraps F. G. (at net realisable value) 72, 130 67, 346(f) Scraps Others (at net realisable value) 26, 220 1, 986

26, 666, 193 18, 345, 106

8. SUNDRY DEBTORS

(Unsecured, considered good, unless otherwise stated )Debts Outstanding for more than Six months

- Considered good 5, 256, 278 7, 007, 823

- Considered doubtful 14, 444, 282 13, 606, 293

19, 700, 560 20, 614, 116

Other Debts - Considered good 1, 815, 048 448, 905

21, 515, 608 21, 063, 021

Less : Provision for Doubtful Debts 14, 444, 282 13, 606, 293

7, 071, 326 7, 456, 728

9. CASH AND BANK BALANCESCash in hand 1, 171, 465 762, 890With Scheduled Banks -

On Current Accounts 594, 424 156, 623On Deposit Accounts - Fixed Deposits* 67,623 67,623

- Margin Money 3, 835, 000 3, 920, 000

5, 668, 512 4, 907, 136

* Pledged with Government authorities

10. LOANS AND ADVANCES(Unsecured, considered good, unless otherwise stated)

Advance recoverable in cash or in kind or for value to be received 15, 322, 338 13,918,234Less Provision for Loans and Advances (435, 456) (435, 456)

14, 886, 882 13, 482, 778

Balance with Central Excise Authorities 920, 486 1, 924, 069Interest accrued on deposits 340, 580 206, 719Advance Tax - TDS/FBT 1, 408, 876 1, 365, 231

17, 556, 824 16, 978, 797

12. PROVISIONSProvisions for Income Tax -------- --------Provisions for FBT 1, 427, 221 1, 427, 221

Provision for Retirement Benefits 6, 380, 900 5, 798, 968

7, 808, 121 7, 226, 189

11. CURRENT LIABILITIESSundry Creditors-- Micro, Small and Medium Enterprises* -------- --------Other 75, 831, 503 81, 205, 262Other Liabilities 15, 426, 762 12, 376, 285Advance from Customers 34, 615, 776 24, 505, 606

125, 874, 041 118, 087, 153

*To the extent information available with the company, read with noteno. 24 of schedule no. 19A.

31


FOR THE FOR THE

YEAR ENDED YEAR ENDED31.03.2010 31.03.2009(Rupees) (Rupees)

SCHEDULES TO PROFIT AND LOSS ACCOUNT

13. OTHER INCOME

Dividend Income - From Long Term Investment 1,350 1, 300

Interest Income (Gross) (TDS Rs. 42016/- Previous Year Rs. NIL) 530, 239 3, 299

Sunday income 351, 275 -

Claims Received (Net)* - 86, 762

Provision for Dimunition in Investment written back 18, 275 1, 658Exchange Rate difference (Net) 4, 505, 879 6,-Miscellaneous Income 207, 962 2,74,290

5, 614, 980 367, 309

* Refer Note No.9 of Schedule 19A

14. INCREASE / (DECREASE) IN STOCKS

CLOSING STOCK

Finished Goods 11, 384, 205 1, 151, 212

Stock in Process 1, 885, 072 2, 428, 694

Scrap F.G. 72, 130 67, 346

Scrap Others 26, 220 1, 986

Sub-Total (A) 13, 367, 627 3, 649, 238

Less : OPENING STOCK

Finished Goods 1, 151, 212 4, 379, 286

Stock in Process 2, 428, 694 5, 892, 502

Scrap F.G. 67, 346 23, 333

Scrap Others 1, 986 5, 935

Sub-Total (B) 3, 649, 238 10, 301, 056

Increase / (Decrease) in Stocks (A-B) 9, 718, 389 6, 651, 818

15. COST OF MATERIAL

Opening Stock of Raw Material 7, 412, 858 9, 808, 684

Add. Purchases 120, 284, 725 91, 438, 538

Less. Closing Stock of Raw Material 6, 338, 614 7, 412, 858

Raw Material Consumption 121, 358, 969 93, 834, 364

16. EMPLOYMENT COST

Salary, Wages, Gratuity and Allowances 18, 862, 592 18, 472, 499

Staff Welfare & Other Benefits 1, 243, 449 1, 237, 859

Contribution to Provident Fund And Retirement Benefits 1, 225, 145 1, 165, 868

21, 331, 186 20, 876, 226

32


FOR THE FOR THE

YEAR ENDED YEAR ENDED31.03.2010 31.03.2009(Rupees) (Rupees)

18. INTEREST & FINANCE COST

On Term loans - 30, 149

On Others 288, 292 4, 787, 043

Finance Charges 12, 354 1, 022, 379

300, 646 5, 839, 571

17. MANUFACTURING & OTHER EXPENSES

Packing, Stores & Spares 2, 606, 338 3, 102, 198

Power & Fuel 15, 996, 131 14, 975, 898

Jobwork Charges 300, 243 775, 098

Excise Duty on Finished Goods ( Net) 1, 014, 105 (578, 997)

Repairs to - Building 774, 452 99, 005

- Plant & Machinery 264, 991 140, 715

- Others 128, 242 134, 090

Freight & Transport 1, 953, 812 5, 463, 744

Rent 3, 402, 863 5, 191, 280

Rates & Taxes 1, 313, 755 754, 192

Legal & Professional Expenses 2, 189, 147 1,132, 978

Directors' Fees 10, 000 9,000

Sundry Office Expenses 298, 407 421, 699

Travelling & Conveyance 1, 518, 176 1, 817, 233

Insurance 217, 715 1, 494, 703

Communication Expenses 487, 006 653, 550

Commission on Sales 143, 987 66, 328

Bank Charges 115, 921 994, 556

Auditors' Remuneration (including service tax)

- Audit Fees 71, 695 71, 695

- Tax Audit Fees 22, 060 22, 060

- Reimbursement of Expenses 11, 675 15, 378

Bad Debt Written off/balances W/o - 336, 177

Provision for doubtful debts 837, 989 2, 327, 515

Foreign Exchange Fluctuations Loss/(Net) - 8, 843, 925

Miscellaneous Expenses (Includes loss on sale of assets 435, 688 616, 927

Rs. 52,217/- (Previous Year Nil)). 34, 114, 398 48, 880, 947

33


SCHEDULE 19

NOTES ON ACCOUNTS & SIGNIFICANT ACCOUNTING POLICIES

A NOTES ON ACCOUNTS

1. Contingent liabilities not provided for (as estimated and certified by management):

31.03.2010 31.03.2009(Rs. In Thousands) (Rs. In Thousands)

i) Entry tax 664 664

ii) Sales Tax matters under appeal 17101 15267

iii) Excise Duty matters 16114 10712

iv) Arrears of Cumulative Preference Dividend 8973 7865

(Including Corporate Dividend Tax)

v) Provident Fund 430 Nil

vi) Service Tax 1324 Nil

vii) Claims not acknowledged as debt (Interest) 496 Nil

2. Estimated amount of contracts remaining to be executed on capital account and not provided for(net of advances) Rs. Nil (Previous Year: Nil )

3. Export obligation amounting to Rs. 196928 Thousands (Previous Year Rs. 230901 Thousands)and Rs. 4382 Thousands (Previous Year Rs. 4945Thousands) under E.P.C.G. scheme is yet to befulfilled by 17.04.2011 and 01.02.2014 respectively. The company has executed legal undertaking/bond for Rs 38251 Thousands (Previous Years: Rs. 38251 Thousands). Custom Duty saved andinterest (including penalty) if any, will be accounted for on final assessment.

4. Custom duty saved amounting to Rs. 26929 Thousands (excluding interest and penalty amountunascertained) excluding counter veiling duty on raw material consumed (previous yearRs.26225Thousands) on import of raw material under advance license/authorization, pendingfulfillment of export obligation. The company is a Sick Industrial Company and the Foreign TradePolicy allows extension period of five years or more (as per approval of BIFR) for fulfillment ofexport obligation, pending this no provision has been considered necessary for custom duty savedand interest (amount of interest & penalty etc. unascertainable). Further the Company has beenlegally advised that considering the above and on a “Going concern concept” basis, there is noneed to make any provision for customs duty saved.

5. Interest on overdue bills and claims from suppliers/customers are accounted for as and whensettled/ received, since it is not possible to ascertain the amount with reasonable certainty.

6. During the year liability for gratuity/leave encashment has been calculated and provided as per therevised AS-15 (Employee Benefits). The details in this respect are as under:

a) Defined Contribution Plan

Contribution to Defined Contribution Plan, recognized as expense for the period are as under:

Employer’s Contribution to Provident Fund Rs.1225 Thousands (Previous Year Rs. 1166Thousands)

b) Defined Benefit Plan

The employees’ gratuity fund scheme managed by a Trust is a defined benefit plan. The

present value of obligation is determined based on actuarial valuation using the Projected Unit

Credit Method, which recognizes each period of service as giving rise to additional unit of

employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized in the same manner as gratuity.

34


Gratuity

(Funded)

2009-2010

Gratuity

(Funded)

2008-2009

Leave Encashment (Unfunded) 2009-2010

Leave Encashment (Unfunded)

2008-2009

Defi ned Benefi t obligation at beginning of the period

4524 4313 1275 1214

Service Cost 331 314 82 84

Interest Cost 339 302 96 85

Actuarial (gain)/loss 265 (196) (77) (38)

Benefi ts paid (393) (209) (61) (70)

Settlement cost NIL NIL NIL NIL

Plan Amendments NIL NIL NIL NIL

Defi ned Benefi t obligation at period end 5066 4524 1315 1275

II. Reconciliation of opening and closing balances of fair value of plan assets:

(In Thousands)

Gratuity(Funded) 2009-10


Leave Encashment(Unfunded)

2009-10


2008-09

Fair value of plan assets at beginning of the period

1671 NIL NIL NIL

Expected return on plan assets 150 NIL NIL NIL

Actuarial gain/(loss) (14) NIL NIL NIL

Actual Company Contribution NIL NIL NIL NIL

Benefi ts paid (171) NIL NIL NIL

Settlement cost NIL NIL NIL NIL

Fair value of plan assets at period end 1636 NIL NIL NIL

III. Reconciliation of fair value of assets and obligations

(In Thousands)




2009-10


2008-09

Fair value of plan assets at period end 1636 NIL NIL NIL

Present value of obligation at period end

5066 4524 1314 (1275)

Funded Status [Surplus/(Defi cit)] (3429) (4524) (1314) (1275)

Net Asset/(Liability) recognized in Bal-ance Sheet

(3429) (4524) (1314) (1275)

I. Reconciliation of opening and closing balances of Defined Benefit obligation:

(In Thousands)

35





2009-10


2008-09

Current Service Cost 331 314 82 84

Interest Cost 339 302 96 85

Expected return on plan assets. (150) NIL NIL NIL

Past Service Cost NIL NIL NIL NIL

Actuarial (gain) / loss 279 (196) (77) (38)

Net Cost 799 420 101 131

Gratuity(Funded)2009-10

Gratuity(Funded)2008-09


2009-10


2008-09

Mortality Table (LIC) (1994-96) duly modifi ed

(1994-96) duly modifi ed



Discount rate (per annum) 7.50 7.00 7.50 7.00

Expected rate of return on plan assets (per annum)

9.00 NIL NIL NIL

Rate of escalation in salary (per annum)

5.00 4.50 5.00 4.50

Turnover rate Age up to 30 years- 3.00From 31-44 years- 2.00

Above 44 years- 1.00

(i) Defined Benefit Plan-

Amounts recognized as an expense and included in the Schedule 12 ‘Provisions’ & Schedule16 – ‘Employment Cost’ and Note 19 of herein below.

Item ‘Employment cost’ includes Rs. 799 Thousands (Previous Year Rs. 420 Thousands) forGratuity, Rs. 101 Thousands (Previous Year Rs. 160 Thousands) for Leave Encashment.

(ii) Defined Contribution Plans-

Amount recognized as an expense and included in the Schedule 16 – ‘Employment Cost’ of Profit& Loss Account includes Rs. 1225 Thousands (Previous Year Rs. 1166 Thousands) as Contributionto Provident and other Funds.

(iii) The estimates of rate of escalation in salary considered in actuarial valuation, take into accountinflation, seniority, promotion and other relevant factors on long term basis. The above informationis certified by the actuary.

7. Sales include (a) Job Work Income Rs.1398 Thousands (Previous Year Rs. 1958 Thousands) and(b) Export Benefits Rs 675 Thousands (Previous Year Rs 3753 Thousands).

8. Prior period expenses debited to various heads of accounts amounting to Rs.2416 Thousands(Previous Year Rs.1109 Thousands).

9. Other Income includes Claims received Rs. Nil (Previous Year Rs.87 Thousands)

IV. Expense recognized during the period

(In Thousands)

V. Investment details

All the Investments are made with Life Insurance Corporation of India.

VI. Actuarial assumptions

36


10. The company has not provided the diminution in value of unquoted long term investment in AmericasJIL Inc. (Book Value Rs. 432 Thousands, Previous year Rs. 432 Thousands) since in the opinionof Board such diminution in its value is temporary in the nature, considering the inherent value andnature of investment.

11. (a) Sundry debtors include Rs. 3535 Thousands (Previous Year Rs.3835 Thousands) againstwhich legal and/or other persuasive steps for recovery have been initiated. Since the Managementis confident that the amount is good and recoverable, hence no provision has been made.

(b) Loans & Advances of Rs. 14887 Thousands (Previous Year Rs. 290 Thousands) {(includinginsurance claims Rs.2533 Thousands (Previous Year Rs. 2533 Thousands)} against whichlegal and/ or other steps have been initiated for recovery. Since the Management is confidentthat the amount is good and recoverable, hence no provision has been considered necessary.

12. Balances of Sundry Debtors, Sundry Creditors, Current Liabilities (including StatutoryDues) & Provisions (read with Note no 5 & 24), Loans & Advances, Secured loans, UnsecuredLoans, certain Bank Balances (including Fixed Deposits & Margin Money), Contingent liabilities aresubject to confirmation/reconciliation. Adjustments, if any, will be accounted for as and whenreconciled/ confirmed. These accounts are reconciled in the usual course of business as and whentransaction is made and Management is of the opinion that there will be no material impact onconfirmation of balances.

13. In accordance with the provision of Accounting Standard on Impairment of Assets, (AS- 28), themanagement has not made assessment of assets in use. However considering the value andconsidering the business prospects related thereto, no provision is considered necessary in theseaccounts on account of Impairment of assets (impact unascertainable).

14. The accumulated losses as on 31st March 2010 (since March’ 04) are in excess of net worth. Thecompany is a Sick Industrial Company within the section 3(1)(O) of the Sick Industrial Companies(Special Provisions) Act 1985 by Hon’ble BIFR’s order dated 05.09.2006. For revival of the company,Operating Agency (SBI) has submitted a TEV report and Company has submitted DRS on16.06.2009, which was not acceptable to the Secured Creditors.

In the hearing held on 7th April,2010, Hon’ble BIFR observed that company’s reference had beenpending with the Board for the past six years and the company had neither submitted any fully tiedup DRS, nor entered into settlement with any of its secured creditors. Hence Bench issued thedirections to SBI which is acting as an Operating Agency (OA) to issue advertisement for theChange of Management (COM) of the Company. Therefore, SBI on 26th May, 2010, have issued anadvertisement inviting offers for the COM by way of Take Over/ Merger/ Amalgation/ Sale ofCompany. One of the Clause of the advertisement states that the existing promoters could alsosubmit their fully tied up Draft Revival Proposal (DRP) in response to the advertisement, with orwithout a co-promoter, with proof of their financial resources for rehabilitation.

In view of the above, the accounts have been prepared on a “Going Concern Concept “.

15. (a) The company is sick company and for the reason stated in Note 13 and 14 above no provisionfor interest as estimated by the management, on secured loans from certain banks and financialinstitution amounting to Rs.36300 Thousands for the current year (Previous year Rs.36995Thousands) and Rs.127013 Thousands up to date (Previous year Rs. 90713 Thousands) hasbeen made in the accounts, the same will be accounted for as and when settled / paid. Furtherpenal interest etc. (amount unascertained and this is to be read with note no. 12 as statedabove) if any, will be accounted for as and when paid.

(b) Due to Cash Losses and tightness of finances the company could not make payments forthe various statutory dues (TDS / TCS / PF/ ESIC/ FBT/Service Tax etc.) on time/pendingfor payment (including provident fund and employees state insurance dues of amounting toRs 3788 Thousands and TDS and others amounting to Rs 5524 Thousands). The companywill honour all the dues after the revival / availability of funds. Certain statutory returns/forms are yet to be filed. Penal interest and penalty (amount unascertained) if any, will beaccounted for as and when the same will be paid.

16. (a) The Company Secretary of the company has resigned from 09.3.2007. The company is in theprocess of appointing a Company Secretary. Certain secretarial records are in the process ofupdation/compilation. Further, no Board Meeting and Audit Committee Meeting was held during

37


the quarter ended June 2009 and Sep 2009as per the requirement of Section 285 ofthe Companies Act,1956 and Listing Agreement respectively.

(b) Company has initiated further steps to strengthen internal control w.r.t purchase,sales, fixed assets and inventory however overall controls are in place. Detailed itemswise quantitative records of Work in Progress (W.I.P) is in the process of compilation/updating as the same are updated as and when physical verification has been carriedout.

(c) In the opinion of the Board of Directors, Current Assets and Loans and Advanceshave a value on realization in the ordinary course of business, at least equal to theamount at which they are stated.

17. During the year repayment of unsecured loan of Rs.98 Thousands*,( Previous Year Rs182 Thousands) has been made and sale of car also been recorded.

18. Auditor Remuneration(Including Service tax):

2009 – 10 2008- 09(Rs. in Thousands) (Rs. in Thousands)

Statutory Audit Fees 72 72Tax Audit Fees 22 22

Certification Expenses 165 17Out of Pocket Expenses 12 15

271 126

19. Directors Remuneration Paid/Payable:

2009 – 10 2008- 09(Rs. in Thousands) (Rs. in Thousands)

Salary 1140 1140

Other benefits (as per Income Tax) 350 227

1490* 1367

[excluding provisions for gratuity and leave encashment, since the provision is made forthe Company as a whole.]

*Appointment w.e.f 26th October, 2009 and remuneration paid to an Executive Director issubject to requisite approval and also approval of the Central Government.

20. Related Party Transactions (As certified by the Management):

(a) List of Related Parties

Key Management personnel: -

Mr. M.K. Jalan -Managing DirectorMr. R.R. Malhotra - Executive Director.

(b) Detail of Transaction:-

Detail of Remuneration paid to Sh. R.R. Malhotra is given in the note no.19 as above.

21. (i) The Company is in only one line of business namely Aluminum & Lacquer Coating.

(ii) The segment Revenue in the geographical segments considered for disclosures areas follows:

(a) Revenue inside India includes sales to customers located within India.

(b) Revenue outside India includes sales to customers located outside India.

Information about geographical segments (by location of customers)

38


(Rs. In Thousands) India Outside India Total

1. External Revenue - Sales 61363 107596* 168959(76444) (55803) (132247)

2. Carrying amount of segment Assets by 265760 1684 267444location of Assets (282542) (1597) (284139)

3. Capital Expenditure 11 Nil 11(Nil) (Nil) (Nil)

(Figures in brackets represent previous year figure)

*Includes Deemed Export amounting to Rs. 98358 Thousands

22. Due to substantial carry over losses and in consonance with the recognized accounting principles of prudence nodeferred tax assets (net) has been created as per the Accounting Standard-22 “Accounting for Taxes on Income”.

23. Earnings Per Share(EPS) - The numerators and denominators used to calculate Basic and Diluted Earnings PerShare:

(Rs. in Thousands)Year Ended Year Ended

March 31,2010 March 31,2009

- Profit/ (Loss) after tax (Rs.) (21881) (76019)- Less: Cumulative Preference Dividend 1108 1112 (including Corporate Dividend Tax)- Profit/ (Loss) attributable to the (22989) (77131) Equity Shareholders - (A)

- Basic/Weighted average number of Equity Shares 68, 90, 000 68, 90, 000outstanding during the year - (B)

- Nominal value of Equity Shares (Rs.) 10.00 10.00- Basic Earnings per Shares (Rs.) - (A)/(B) (3.34) (11.19)Diluted Earnings per Shares (Rs.) - (A) / (B) (3.34) (11.19)

24. Pursuant to amendments to Schedule VI to Companies Act, 1956 vide Notification No. GSR 719 (E) dt. Nov. 16, 2007 andMicro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating toMicro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliersabout their coverage under the said Act. Since the relevant information is not readily available, hence disclosures relatingto amount unpaid as at the year end together with interest paid/payable under this Act have not been given. However, inview of the management, the impact of interest, if any, that may be payable in accordance with the provisions of this act isnot expected to be material.

25. The foreign currency exposure that are not hedged by a derivatives instrument or otherwise are as follows:

26. Payment made to employees by way of Loan and Advances in the nature of loan where there is:-Rs. in Thousands

Outstanding as on Maximum Balance outstanding31.03.2010 during the year

No Interest or Interest below section 30 63372A of Companies Act*

(Previous Year) (51) (58)

*Pertains to advances to various employees pursuant to general business practice & employee Year)

Particular Document Amount in Document Amount in RupeesCurrency Currency (in Thousands)

2009-10 2008-09 2009-10 2008-09

Long Term Loans USD 761752.00 761752.00 34515 38811

GBP NIL NIL NIL NIL

Debtors USD 7046.50 NIL 317 NIl

GBP 8539.20 9033.35 687 658

Advance to Suppliers EURO 478.10 455.00 29 29

Sundry Creditors USD 46535.10 46192.00 2092 2353

GBP 2042.20 1752.00 157 128

Advances From Customers USD 256511.57 296675.00 11776 15116

EURO 20375.00 615.00 1259 42

39


27. Quantitative InformationQuantitative InformationQuantitative InformationQuantitative InformationQuantitative Information

(i) Information regarding goods manufactured by the Company2009-10 2008-09

(a) Licensed/Regd. Capacity 4500 TPA 4500 TPAMetallized Paper & Metallized Film

(b) Installed Capacity (with product mix of 90% Film of 12micand 10% Paper of 60gsm ) (As certified byManagement being a technical matter)

Metallized Film 8240 TPA 8240 TPAor 490 Million or 490 MillionSq. Mtrs./year Sq. Mtrs./year

Metallized Paper 660 TPA 660 TPAor 11 Million or 11 MillionSq. Mtrs./year Sq. Mtrs./year

Total 8900 TPA 8900 TPAor 501 Million or 501 MillionSq.mtrs. / year Sq.mtrs. / year

(c) Actual Production :Metallized Film* 1171.197 MT 543.592 MTMetallized Paper 124.141 MT 636.653 MTYarn 8.861 MT 6.908 MT

Total 1304.199 MT 1187.153 MT

∗ Including Jobwork production of 61.899 MT (Previous Year 105.953 MT ) .

** Including Jobwork production of 00.000 MT (Previous Year 45.219 MT).

(d) Sales (net of trade discounts, rebates etc.):2009-10 2008-09

Quantity Value Quantity Value(MT)* (Rs. in ‘000) (MT)* (Rs. in ‘000)

Metallized Film 1063.855 158048 455.863 65736 Metallized Paper 118.044 8619 589.237 59374 Yarn 5.617 231 10.183 1421 Others@ 61.899 2061 151.172 5716

1249.415 168959 1206.455 132247

@ Including Jobwork of 61.899 MT, Rs 1398 Thousands .(Previous Year 151.172 MT, Rs 1958 Thousands).* Including shortage/excess, samples, etc.

(e) Stock particulars of Finished Goods :

2009-10 2008-09

Closing Stock Quantity Value Quantity Value

(MT) (Rs. in ‘000) (MT) (Rs. in ‘000)

Metallized Film 50.484 9604 5.035 346

Metallized Paper 12.175 1122 6.076 718

Yarn 5.820 730 2.575 155

11.456 1219

Opening Stock Quantity Value Quantity Value

(MT) (Rs. in ‘000) (MT) (Rs. in ‘000)

Metallized Film 5.035 346 23.259 3040

Metallized Paper 6.076 718 3.879 428

Yarn 2.575 155 5.850 934

1219 4402

40


b) Consumption of imported and indigenous raw materials, stores and spare parts and the percentage ofeach to the consumption:

i) Raw Material Consumed: 2009-10 2008-09

% of Total Value % of Total ValueConsumption (Rs. in ‘000) Consumption (Rs. in ‘000)

Imported ---- ---- ---- ----

Indigenous 100% 121359 100.00 93835

100% 121359 100.00 93835

ii) Stores and Spares Consumed: 2009-10 2008-09

% of Total Value % of Total ValueConsumption (Rs. in ‘000) Consumption (Rs. in ‘000)

Imported --- --- --- ---

Indigenous 100% 2606 100.00 3102

--- 2606 100.00 3102

29. CIF Value of Imports: 2009-10 2008-09(Rs. in ‘000) (Rs. in ‘000)

Capital Goods ---- ---- Raw Materials ---- ---- Stores & Spares ---- ----

---- ----

30. (a) Expenditure in Foreign Currency: 2009-10 2008-09(as remitted) on account of: (Rs. in ‘000) (Rs. in ‘000)

(i) Interest payment in Rupee to Banks on foreign currency DPG ---- 30(ii) Foreign Travel ---- 70(iii) Commission on Export Sale 47 ----

47 100

(b) Earnings in Foreign Exchange: 2009-10 2008-09 (on accural basis) (Rs. in ‘000) (Rs. in ‘000)

Claims Received ---- ----

F.O.B value of export of goods 8279 49740

31. Previous Year's figures have been regrouped/recasted/rearanged wherever considred necessary.

28. a) Raw Materials Consumed: #

2009-10 2008-09

Quantity Value Quantity Value

(MT) (Rs. in ‘000) (MT) (Rs. in ‘000)

Film 1078.568 96.578 428.803 48204

Paper 60.057 3386 508.003 24890

Chemicals* ---- 20070 ---- 191107

Others ---- 1325 ---- 1634

121359 93835

*Chemical consumption pertains to hetrogeneous group bearing different quantity dimensions, hence information relatingto the quantity not provided.# Raw Material consumption has been computed based upon opening stock plus purchases less closing stock.

41


B. SIGNIFICANT ACCOUNTING POLICIESB. SIGNIFICANT ACCOUNTING POLICIESB. SIGNIFICANT ACCOUNTING POLICIESB. SIGNIFICANT ACCOUNTING POLICIESB. SIGNIFICANT ACCOUNTING POLICIES

1. The company follows the Mercantile System of Accounting and recognises Income and Expenditureon Accrual basis. Accounts are prepared on historical cost basis and as a going concern. Accountingpolicies not referred to otherwise are in consonance with generally accepted accounting principles.

2. Sales are recognised when goods are dispatched from the factory and are recorded net of discounts/claims, rebates and sales tax, but include excise duty, job work, export incentives such as dutydraw-back and premium/loss on sale of D.E.P.B. credits.

3 Fixed assets are stated at cost of acquisition inclusive of freight, duties, taxes and incidentalexpenses. Where the recoverable amount of the fixed assets is lower than its carrying amount aprovision is made for the impairment loss. Post impairment depreciation is provided on the revisedcarrying value of the assets over its remaining useful life.

4 Expenditure during construction period are included under capital work-in-progress and the sameare allocated to the respective fixed assets on the completion of the construction period.Administrative and other expenses (including interest) during construction/implementation of theprojects / expansion are allocated to the different projects/centres as per allocation made by theManagement.

5 Borrowing cost incurred is charged to Profit & Loss account of the year in which it is incurred,except interest on borrowing for qualifying fixed assets which is capitalised upto the date whensuch assets are ready for its intended use.

6 Foreign currency transactions are recorded in the books by applying the exchange rate as on thedate of transaction. Monetary Assets and Liabilities related to foreign currency transactionsremaining unsettled are translated at exchange rate prevailing at year end. The difference intranslation of monetary assets and liabilities are recognized in profit & loss account.

7 Long Term Investments are stated at cost less provision for diminution in value other than temporaryin nature.

8 Inventories are valued at lower of cost and net realizable value except waste /scrap which isvalued at net realizable value. The cost is computed on weighted average basis. Finished goodsand process stock include cost of conversion and other costs incurred in bringing the inventoriesto their present location and condition.

9 Depreciation on fixed assets is provided on Straight Line Method at the rates given in Schedule XIVof the Companies Act, 1956. In respect of assets added/disposed off during the year depreciationis provided on prorata basis with reference to the month of addition/disposal. Continuous processplant as defined in Schedule XIV has been considered on technical evaluation.

10 Grants from the Government relating to fixed assets are shown as a deduction from gross valueof fixed assets and those in the nature of project capital subsidy are credited to capital reserve.Other Government grants including incentives, duty drawbacks, etc., are credited to Profit & LossAccount or deducted from related expenses.

11 Provision for income tax liability estimated to arise on the results for the year at the current rate oftax in accordance with Income Tax Act, 1961. In accordance with the Accounting Standard-22,(Accounting for Taxes on Income), as notified under the Companies (Accounting Standards)Rules, 2006, deferred tax resulting from timing differences between book and tax profits is accountedfor, at the current rate of tax, to the extent that the timing differences are expected to crystallize.

12 Deferred tax assets arising on account of brought forward losses and unabsorbed depreciationare recognized only when there is a virtual certainty supported by convincing evidence that suchassets will be realized. Deferred tax assets arising on other temporary timing differences arerecognized only if there is a reasonable certainty of realization.

13 Defined Contribution Plans: Company’s contributions paid/payable during the year to ProvidentFund is considered as defined contribution plan and the contributions are recognized in the Profitand Loss of the year when the contribution to the respective funds are due. There are no otherobligations other than the contributions payable to the respective trusts/authorities.

42


Defined Benefit Plans: Company’s liabilities towards gratuity and leave encashment are providedfor on the basis of actuarial valuation determined using the projected unit credit method as at thebalance sheet date. Liability in respect of Gratuity to workers is funded with LIC.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

14. Contingent Liabilities if material disclosed by way of notes, contingent assets are not recognizedor disclosed in the financial statements .A provision is recognised when an enterprises has apresent obligation as a result of past event(s) and it is probable that an outflow of resourcesembodying economic benefits will be required to settle the obligation (s), in respect of which areliable estimate can be made for the amount of obligation.

As per our report of even date For and on behalf of the Board of DirectorsFor Lodha & Co.,Chartered AccountantsFirm Registration No-301051E

N.K.LODHA R.R. Malhotra Madhukar JalanPartner Executive Director Managing DirectorMembership No. : 85155New Delhi

43


CASH FLOW STATEMENTYEAR ENDED YEAR ENDED

31ST MARCH 2010 31ST MARCH 2009

(RUPEES) (RUPEES)

A. CASH FLOW FROM OPERATING ACTIVITIES :PROFIT / (LOSS) BEFORE EXCEPTIONAL ITEMS AND TAX (21, 878, 405) (75, 743, 356)Adjusted for:Depreciation 25, 460, 094 26, 532, 587Interest Income (530, 239) (3, 299)Dividend Received (1, 350) (1, 300)Loss/ (Profit) on Disposal of Assets 52, 217 -Exchange Fluctuation (Net) 4, 295, 797 8, 364, 038Provision for dimunition on Long Term Investment 18, 275 1, 658Interest Expenses 288, 292 4, 817, 192

20, 954, 942 39, 707, 560

OPERATING PROFIT / (LOSS) BEFORE WORKINGCAPITAL CHANGES (923, 463) (36, 035, 796)Adjustment for :Trade and Other Receivables (192, 625) 9, 398, 387Inventories (8, 321, 087) 9, 951, 301Trade Payables 8, 368, 820 4(144, 892) 4, 382, 544 23, 732, 232

Cash Generated from Operations (1, 068, 355) - (12, 303, 564)FBT Paid ( for FY 2007-08) (3, 034) (3, 034) - -

NET CASH FROM OPERATING ACTIVITIES (1, 071, 389) (12, 303, 564)

B. CASH FLOW FROM INVESTMENT ACTIVITIES:Purchase of Fixed Assets/Advances (11, 000) -Sale of Fixed Assets 80, 000 -Interest Received 530, 239 3, 299Dividend Received 1, 350 1, 300

NET CASH FLOW FROM INVESTMENT ACTIVITIES 600, 589 4, 599

C. CASH FLOW FROM FINANCING ACTIVITIES:Increase/(Decrease) in Short Term Borrowings --- (182, 200)Proceeds from Rupee term loan --- ---Repayments of Deffered Payment Gurantee --- (2, 050, 522)Increase/(Decrease) in Unsecured Loans 20, 280, 955 ---Increase /(Dexrease) in Cash credit facilities (18, 760, 487) 18, 194, 009Hire purchase - Car Loans paid --- (307, 925)Interest Paid (288, 292) (4, 817, 192

NET CASH USED IN FINANCING ACTIVITIES 1, 232, 176 10, 836, 170

NET INCREASE/(DECREASE) IN CASH &CASH EQUIVALENTS (A+B+C) 761, 376 (1, 462, 795)

Cash & Cash Equivalents - Opening Balance 4, 907, 136 6, 369, 931

Cash & Cash Equivalents - Closing Balance 5, 668, 512 4, 907, 136

Notes:1 Cash and cash equivalents represents Cash and Bank Balances (as per Schedule 9)2 Previous Year figures have been regrouped / rearranged, wherever necessary.


For Lodha & Co.Firm Registration No. : 301051E

N.K. LodhaPartnerMembership No. : 85155New DelhiDate : 19 August, 2010



44


BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS

Registration No. : L21012UR1986PLC008002

Balance Sheet Date : 31.03.2010

State Code : 20

II. CAPITAL RAISED DURING THE YEAR (Amount Rs. in Thousands)

Public Issue : Nil

Right Issue : Nil

Bonus Issue : Nil

Private Placement : Nil

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount Rs. in Thousands)

Total Liabilities 582,388 Total Assets 582,388

Source of Funds :

Paid up capital 149,400 Reserve & Surplus 7,156

Secured Loans 399,648 Unsecured Loans 26,184

Application of Funds :

Net Fixed Assets 211,408 Investments 482

Net Current Assets (76,719) Misc. Expenditure 0

Accumulated Losses 447,217

IV. PERFORMANCE OF COMPANY (Amount Rs. in Thousands)

Turnover and Other Incomes (Net) 170,968 Total Expenditure 192,846

Profit (Loss) before Tax (+/-) (21,878) Profit (Loss) after Tax (+/-) (21,881)

Earning per Share in Rs. (3.34) Dividend Rate (%) Nil

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY

(As per monetary terms)

Item Code no. (ITC CODE) : 39206909

Product Description : Metallized Films, Metallized & Coated Films


Product Description : Metallized Paper


Product Description : Metallized Yarn


New Delhi19th August, 2010 Madhukar Jalan

Managing DirectorR. R. MalhotraExecutive Director

45


A T T E N D A N C E S L I P

24th Annual General Meeting

Regd. Folio No.

No. of Shares Held

J A L PJ A L PJ A L PJ A L PJ A L PA CA CA CA CA C

INDIAINDIAINDIAINDIAINDIA LTD.

Registered Office :Village - Tularampur, P.O. Mota Haldu,Tehsil HaldwaniDist. Nainital (Uttarakhand)

NAME OF THE SHAREHOLDER/PROXY*

ADDRESS

I hereby record my presence at the 24th Annual General Meeting of the Company held onTuesday, the 28th September, 2010 at 11.00 a.m. at the Registered Office of the Company.

*Strike out whichever is not applicable SIGNATURE OF THE SHAREHOLDER/PROXY

J A L PJ A L PJ A L PJ A L PJ A L PA CA CA CA CA C

INDIAINDIAINDIAINDIAINDIA LTD.

Registered Office :Village - Tularampur, P.O. Mota Haldu,Tehsil HaldwaniDist. Nainital (Uttarakhand)

Regd. Folio No.

PROXY

I/We

of being a member/members

of JALPAC INDIA LIMITED hereby appoint

of

of failing him

of

as my/our proxy to attend and vote for me/us and on my/our behalf at the 24th Annual GeneralMeeting of the Company to be held on Tuesday, the 28th September, 2010 at 11.00 a.m. and at anyadjournment thereof.

Signed this ................................... day of .......................... 2010 Signature

Affix 1Rupee

RevenueStamp

NOTE : This form duly completed and signed as per specimen signature registered with theCompany should be deposited at the Registered Office of the Company not less than 48 hoursbefore the time fixed for commencement of the meeting.

46

JA

LP

AC

IND

IA L

IMIT

ED

If undelivered, please return to :

Niche Technologies Pvt. Ltd.D-511, Bagree Market,

71, B.R.B.B. Road,

Kolkata - 700 001

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JALPAC INDIA LTD.Surat - 395 001 BANKERS State Bank of India State Bank of Bikaner & Jaipur AUDITORS Lodha & Co. Chartered Accountants SHARE TRANSFER AGENTS Niche Technologies Pvt