డైరెక్టర్ల నివేదిక MK Aromatics Ltd.

Mar 31, 2011

The Directors have pleasure in placing before you the 28th Annual Report and the Audited accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

(In Rupees) PARTICULARS Current Previous year ended year ended 31.03.2011 31.03.2010

Sale Turnover (Net) 1,16,95,628 37,01,423

Other Income 13,55,223 17,29,251

"Total, 1,30,50,851 54,30,674

Total Expenditure 1,14,52,380 46,63,512

Profit/ (Loss) before Depreciation 15,98,471 7,67,162

Depreciation 89,33,961 100,59,469

Profit/ (Loss) before tax (73,35,490) (92,92,307)

Less: Provision for tax Nil Nil

Provision for FBT

Net Profit/(Loss) after tax (73,35,490) (92,92,307)

Paid up Equity Capital 4,53,11,000.00 4,53,11,000.00

DIVIDEND

As the Company has not made any profits during the year under report, your Board of Directors have not recommended any dividend.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Industry Structure and Developments

Your company is in the business of manufacturing aromatic chemicals, Hydrocarbon Derivatives and perfumes. Your company is a small-scale industry operating in the chemical industry.

B. Performance

Your company reported a total income of Rs.130.51 lakhs as against Rs 54.31 lakhs achieved during the previous year. Your company had incurred a net loss of Rs73.35 lakhs as against a net loss of Rs92.92 lakhs incurred during the previous year.

C. Segment Wise Performance

Your company operates in a single segment, i.e. Aromatic Chemicals, Hydrocarbon Derivatives, perfumes and as such segmental reporting is deemed not applicable. However, the income from sale of agricultural produce amounted to Rs.6.16 lakhs during the year (previous year Rs 12.41 lakhs).

D. Concerns

The pickup in industrial demand for the company's products still remains a concern. The Company is looking to tie up with strategic business partners to venture into allied activities which are yet to materialize.

E. Outlook

Your company is focusing on the export markets and Hydrocarbon Derivatives for increasing the Turnover and profitability. The Company is also looking at opportunities to grow aromatic/herbal plants and also in area of biotechnology. The company is trying to tie up with strategic partners to venture into allied activities.

F. Internal Control Systems

Your company had a proper and adequate system of internal controls to ensure that all asset are safeguard and protected against loss from unauthorized use or disposition.

G. Human Resources and Industrial Relations

Your company is operating with skeletal human resources. However there is adequate manpower to cater to its business requirements. The relationship with the employees of the company remained satisfactory.

PERSONNEL

During the year, there was no employee in respect of whom information as per Section 217(2A) of the Companies Act, 1956 is required to be given in the Directors' report.

DIRECTORS

Your Directors Mr. A K Merchant retire by rotation and being eligible offer himself for reappointment.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO:

Prescribed The energy consumption is as per normal requirements and your Company does not have any significant particulars to be disclosed. Your Company has not purchased any technology from outside sources and as such disclosures regarding technology absorption is not applicable. Your Company has incurred an amount of Rs 1,24,850 (previous year Rs 23,022) as expenditure in foreign currency and it has not earned any foreign exchange during the year.

RESPONSIBILITY STATEMENT

The Directors confirm:

i) that in the preparation of annual accounts for the year ended March 31, 2011, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that the accounting policies implemented by the company have been applied them consistently, judgments and estimates have been reasonable and prudent thereby giving a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period;

iii) that they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) That the annual accounts were prepared for the year ended 31st March 2011 on a going concern basis.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with Auditor's Certificate is annexed herewith.

COMPLIANCE CERTIFICATE

Your directors have appointed Mr , Company Secretary (In Wholetime

Practice) to issue a Compliance Certificate as required under section 383A of the Companies Act, 1956. The Compliance Certificate issued by him is annexed to this report.

AUDITORS

Mr. G. Sivaprakash, Chartered Accountant, Chennai will be retiring at the ensuring Annual General Meeting and being eligible offers himself for reappointment.

ACKNOWLEDGEMENT

Your Directors wish to thank all the government authorities, the bankers, the customers, suppliers, and above all those who have supported the venture of the Company at every critical juncture. Your Director also wish to place on record the dedicated services rendered by the employees of the company.

Place: Chennai For and on behalf of the Board

Date: 14.07.2011 Mahesh K Merchant

Chairman cum Managing Director