akzo nobel chemicals india ltd Directors report

AKZO NOBEL CHEMICALS (INDIA) LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT Dear Shareholders, We have pleasure in presenting the 21st Annual Report and the Audited Statements of Accounts of your Company for the year ended 31st March 2011. FINANCIAL RESULTS This Year Previous Year (Rupees in (Rupees in Thousand) Thousand) Turnover 6,02,217 7,26,803 Other Income 80,273 70,487 Gross Profit 1,53,964 1,86,323 Less: Depreciation 11,585 12,016 Less: Provision for Taxation 54,427 59,000 Less: Deferred Tax Credit (3,103) (410) Net Profit 91,055 1,15,717 Add: Balance brought forward from previous year 10,99,115 9,83,398 Balance carryforward to next year 11,90,170 10,99,115 DIVIDEND In order to conserve the reserve position of the Company, dividend has not been recommended for the year ended 31st March 2011. COURSE OF BUSINESS In view of economic slowdown during previous year, the performance of your Company for the year 2010-11 was impacted and Net Sales were reduced by 19.75% compared to previous year. Profit before Tax is reduced by 18.32% compared to the previous year mainly due to the pressure of raw material prices and change in sales mix. Company could keep its Net Profit after Tax intact at Rs. 91.06 Million. Factory operations were safe and there was no lost time incident. Also, production efficiency was better and expenses of the Company were under control. It proves that we are benefiting from our on-going focus on customers, costs and cash. ORGANISATION AND HUMAN RESOURCES We believe the future belongs to those smart enough to challenge it. We believe that real progress belongs to those who not only think with courage, but also have the courage to deliver on the thought. Tomorrows answers, delivered today. What drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. What excites us is asking the unasked question. What inspires us is seeing the opportunity others cannot. What unites us is the intelligence to deliver where others have not. This benefits our customers because we sustain their future competitiveness and meet the consumers unspoken needs. Employees are fully involved in accomplishing the vision of the Company, which states Significantly Grow the Business by being Low Cost Producer, Market Leader and Global Player. Our employees conduct business activities with a spirited enthusiasm to achieve global standards. Our employees are motivated and perform with excellent teamwork. Information regarding employees in accordance with Section 217(2A) of the Companies Act, 1956 is given in the Annexure B of this Report. HEALTH. SAFETY AND ENVIRONMENT Safety, Health and Environment remain our top priority. Awareness training is regularly imparted to employees on Fire Fighting, First Aid and On-Site Emergency Plan. Statutory Rules and Regulations for Safety, Health and Environment are strictly observed. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO The information regarding Energy conservation measures, technology absorption and foreign exchange earnings and outgo as required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in a separate statement attached hereto (Annexure A) and forming a part of the Report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956 the Directors to their best of knowledge and belief confirm that: i. In the preparation of the Annual Accounts, the applicable accounting standards have been followed; ii. Appropriate accounting policies have been selected and applied consistently and judgements and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the financial year ended on that date; iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. The Annual Accounts have been prepared on a going concern basis. DIRECTORS Mr. Heinrich Aldenhoven resigned from the directorship of the Company w.e.f. 18th January, 2011. The Board wishes to place on record its sincere appreciation for the valuable contribution rendered by him during his tenure as a member of the Board. Mr. Paul Radlinski resigned form the directorship of the Company w.e.f. 18th January, 2011. The Board wishes to place on record its sincere appreciation for the valuable contribution rendered by him during his tenure as a member of the Board In accordance with the Articles of Association of the Company Mr Rajasekaran Guha retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. AUDITORS M/s. B S R & Co., Chartered Accountants, Pune, the Statutory Auditors of the Company will retire from the office of the Auditors and being eligible offer themselves for reappointment. Their remuneration for the current year is to je fixed by you. APPRECIATION Your Directors wish to acknowledge and thank the Central and State Governments, Bankers and Shareholders for continual support extended to the Company for better performance. The Directors also acknowledge the valuable contribution of Akzo Nobel Chemicals International B.V. through continued technological assistance. For and on behalf of Board of Directors Amit Jain Shrikant Kulkarni Rajasekaran Guha Chairman Managing Director Director Place: Gurgaon Date : 5th September 2011 ANNEXURE A TO THE DIRECTORS REPORT [Particulars as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2011] A. CONSERVATION OF ENERGY (a) Energy Conservation measures taken: Various energy saving measures have been taken by the Company at all levels. Also more emphasis was given to increase awareness towards best energy saving practices. Energy Conservation committee is working to explore potential for energy saving. Audits were conducted at site to check the efficiency of equipments and operations related to energy utilization. (b) Additional investment and proposals, if any, being implemented for saving of energy: All investments proposal at factory are evaluated taking into account the energy savings aspects as relevant. B. TECHNOLOGY ABSORPTION (a) Research & Development (1) Specific areas in which R & D is carried out by the Company : NIL (2) Benefits derived as a result of the above R&D : NIL (3) Future plan of action : NIL (4) Expenditure on R & D : NIL The technology used by the Company has be developed and upgraded from time to time by the Companys parent Akzo Nobel Chemicals BV. Hence, iiparate R&D expenditure by the Company is not considered necessary. (b) Technology Absorption, Adaptation, Innovation (1) Efforts towards technology absorption, adaptation and innovation: Process optimisation trials were taken which have shown promising results. This will result in reduction of process effluent, improving Cycle times and saving in raw materials. (2) Benefits derived as a result of above efforts: Above efforts have resulted in increase in yield, reaction efficiency, reduction of batch times and cost reduction. INFORMATION ON IMPORTED TECHNOLOGY (Imported during the last 5 years from the beginning of the financial year) (a) Technology Imported Nil (b) Year of import N.A. (c) Technology absorption N.A. C. FOREIGN EXCHANGE EARNINGS AND OUTGO 31 March 2011 31st March 2010 (Rs 000) (Rs 000) Expenditure in foreign currency 273,786 319,579 Earnings in foreign exchange 50,342 87,966 For and on behalf of Board of Directors Amit Jain Shrikant Kulkarni Rajasekaran Guha Chairman Managing Director Director Place: Gurgaon Date : 5th September 2011 FORM - A (See Rule 2) FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY A. POWER AND FUEL CONSUMPTION 2010-2011 2009-2010 ELECTRICITY a) Purchased Units (KWH) 1903830 1901161 Total Amount (Rs.) 11018820 9602230 Rate per Unit (Rs.) 5.79 5.05 b) Own Generation Through Diesel generators Units (KWH) 7023 6657 Units per Itr. of diesel oil 2 1.82 Cost per unit (Rs.) 21.94 19.25 B. CONSUMPTION PER UNIT Unit Current Previous OF PRODUCTION Year Year ELECTRICITY KWH/Ton Product: Polymerisation Initiators of Product 2033 1862.27