claro india ltd Directors report

CLARO INDIA LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT TO THE MEMBERS Your Directors have pleasure in presenting their Twenty Fifth Annual Report together with the audited accounts for the financial year ended March 2010. FINANCIAL HIGHLIGHTS: Particulars 2009-10 2008-2009 (Rs. in Lakhs) (Rs. in Lakhs) Turnover 806.18 703.58 Gross Profit / (Loss) 83.08 (169.08) ADD / LESS : Depreciation 37.27 36.98 Net Profit / (Loss) 45.81 (132.10) Accumulated Losses Brought forward (1156.63) (1024.52) Accumulated Losses Carried forward (1110.82) (1156.63) BUSINESS OPERATIONS: The Companys turn over increased in the year by nearly 15% and together with the cost control in procurement and operation, resulted in better performance in achieving a net profit of about Rs.46 lacs for the year. There was continuous Power Shortage / Shut Downs during the year and the Turn Over / Performance would have been better but for the same. Concentration was given to specified product groups with better margins like Paraformaldehyde Powder for Exports and specialized Resin grades to specific end use applications and customers The Company has been re-awarded with ISO 9001 : 2008 Certification by M/s. TUV Nord, approving our Quality Systems, which will also improve the Companys image with our special customers and better performance could be expected in the coming years. Trading activities continued in the year, contributing to better turn over. Research & Development efforts are being constantly made to develop new products and reduce the cost of inputs to face the competition better. The company has provided additional storage facilities for finished products and raw materials and is constantly improving the infrastructural development. The company effectively utilized the appointed Consignee Selling Agents at strategic locations to face the competition better form the local suppliers with VAT advantages. With various efforts being made and thrusts given, the Directors hope to sustain and improve the performance of the Company in the coming years, barring unforeseen circumstances. DIVIDEND: Even though the Company had made profits during the year, due to the accumulated losses of the company, your Directors are unable to recommend any dividend for this year. LISTING OF SECURITIES: The Companys Equity shares are presently listed with Bombay Stock Exchange Limited and Madras Stock Exchange Limited. SCHEME OF AMALGAMATION: During the Financial year 2009-2010, the Board of Director of Claro India Limited at their meeting held on 8th January, 2010 had approved the scheme of amalgamation of the Company with Kothari Phytochemicals and Industries Limited. The Company has made an application with Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE) for no objection to the said scheme and the approval for the same is awaited from the said exchanges. DIRECTORS: In accordance with the provisions of the Companies Act, 1956 and Article 130 and 131 of the Articles of Association of the Company, Mr. N. Mahadevan, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Mr. A.K. Daga, Director resigned from the Board with effect from 29th April, 2009. The Board places on record its appreciation for the valuable services rendered and contribution made by Mr. A.K. Daga During his tenure as a Director. Details of Directors seeking re-appointment are provided in the Corporate Governance Report forming part of this Report, as required under Clause 49 of the Listing Agreement with the Stock Exchanges. AUDITORS: M/s. Srikanth & Shanthi Associates, Chartered Accountants, Chennai, the Companys statutory auditors, retire at the conclusion of the Annual General Meeting and are eligible for reappointment. The Board, on the recommendation of Audit Committee, has proposed that M/s. Srikanth & Shanthi Associates, Chartered Accountants, Chennai bearing Registration No.004006S be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Srikanth & Shanthi Associates, Chartered Accountants have forwarded a Certificate to the Company, stating that their re-appointment if made, will be within the limit specified in that behalf in Sub-section (1 B) of Section 224 of the Companies Act, 1956. The financial statements have been audited by M/s. Srikanth & Shanthi Associates, Chartered Accountants, the Statutory Auditors and their report is appended thereto. PUBLIC DEPOSITS: The Company has not accepted any deposits from the public. CORPORATE GOVERNANCE: Pursuant to Clause 49 of the listing agreement, a Management Discussion & Analysis Report, Corporate Governance Report and a Certificate from C.S.R. Sridharan, M/s. R. Sridharan & Associates, Company Secretaries, Chennai regarding compliance of the conditions of Corporate Governance are made a part of the Annual Report DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief. 1. in the preparation of the Profit & Loss Account for the financial year ended March 31, 2010 and the Balance sheet as at that date (financial statement), applicable accounting standards have been followed; 2. Appropriate accounting policies have been selected and applied consistently and such judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the company as at the end of the financial year and of the (PROFIT) of the company for that period. 3. 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. To ensure this, the company has established internal control systems, consistent with its size and nature of operations. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit committee meets at regular intervals to review the internal audit function. 4. The financial statements have been prepared on a going concern basis. SECRETARIAL COMPLIANCE CERTIFICATE: Pursuant to Section 383A of the Companies Act, 1956 read with the Companies (Compliance Certificate) Rules 2001 certificate issued by C.S.R. Sridharan, M/s. R. Sridharan &Associates, Company Secretaries, is attached hereto. PARTICULARS OF EMPLOYEES: Under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees Rules, 1975) as amended, there were no employees in the company drawing more than the limits as per Section 217(2A) of the Companies Act, 1956 during the financial year ended 31st March 2010. INDUSTRIAL RELATIONS: The company maintained all its industrial relations cordially. The company has a very good team of personnel. The company has always been focused on the improvement of the quality of its human capital, good training and development programmes to achieve this. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The Particulars required under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed separately as Annexure, A which forms part of this report. HEALTH, SAFETY AND ENVIRONMENT PROTECTION: The Company has substantially complied the applicable Environmental Laws and Labour Laws. It has expended substantial resources, both financial and managerial, in complying with the relevant laws and has taken all reasonable measures to protect the environment, to ensure safety and healthy of the workers. GENERAL: Your Director places on record their appreciation for the continued cooperation, support and assistance extended to the company by the Government of Tamil Nadu and its agencies viz., SIPCOT, TNEB, Tamil Nadu Pollution Control Board etc., the shareholders, Bankers, financial Institutions and Customers. Your Directors also place on record their appreciation for the continued and dedicated performance and commitment by officers, staff of the Company. On behalf of the Board Sd/- Sd/- Place : Chennai R.L. BIYANI N. MAHADEVAN Date : 13.08.2010. Director Director ANNEXURE A: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The Company is taking continuous steps in evolving energy conservation by analyzing consumption data of various process equipments. Continuous efforts are being made to improve the energy utilization. We are upgrading the technology employed by making continuous interactions with the technicians of the Company. Energy conservation measures are implemented and constantly monitored for reduction of energy consumption. Form A as per Rule 2 of Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is as follows: POWER AND FUEL CONSUMPTION: 1. ELECTRICITY CONSUMED: Particulars 2009-2010 2008-2009 Purchased: Normal Units (KWH) 2,11,826 2,36,098 Peak Hr Units (KWH) 31,150 49,086 Amount paid for units consumed (in Rs.) 11,96,470 1,42,7158 Normal Rate per Unit (Average) 3.50 3.5 Peak hr Rate per Unit (Average) 0.7 0.7 Demand Charges (Amount in Rs.) 3,92,712 4,76,973 Electricity Tax (Amount in Rs.) 49,268 56,475 Meter Rent (Amount in Rs.) 24,000 24,000 2. DIESEL: Particulars 2009-2010 2008-2009 (a) Quantity (K.Ltrs) 1983 721 Total Amount (in Rs.) 70,162 26,324 Average Rate (in Rs.) 35.38 36.51 3. FIREWOOD: Particulars 2009-2010 2008-2009 (a) Quantity (M.Tons) 28,260 - Total Amount (in Rs.) 67824 - Average Rate (in Rs.) 2400 - 4. FURNANCE OIL: Particulars 2009-2010 2008-2009 (a) Quantity (M.Tons) 73,447 51733 Total Amount (in Rs.) 1,79,3874 1,422,554 Average Rate (in Rs.) 24.42 27.49 5. THERMINAL NOSS: Particulars 2009-2010 2008-2009 (a) Quantity (M.Tons) 416 416 Total Amount (in Rs.) 43,542 41,960 Average Rate (in Rs.) 10,467 10,080 COMPLIANCE CERTIFICATE: Name of the Company : CLARO INDIA LIMITED Registration No. (CIN No.) : L93090TNI994PLC027571 Authorized Capital : Rs. 10,00,00,000/- Paid-up Capital : Rs. 4,50,00,000/- TO The Members of MESSRS. CLARO INDIA LIMITED B-7, SIPCOT INDUSTRIAL COMPLEX, GUMMIDIPOONDI, CHENNAI - 601 201. We have examined the registers, records, books and papers of MESSRS CLARO INDIA LIMITED (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the rules made there under and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March 2010. In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its officers and agents, we certify that in respect of the aloresaid financial year. 1. The Company has kept and maintained all registers as stated in ANNEXURE A to this certificate, as per the provisions of the Act and the rules made there under and all entries therein have been recorded. 2. The Company has filed the forms and returns as stated in ANNEXURE B to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities prescribed tinder the Act and the rules made there under. 3. The Company is a Public limited Company and has the minimum prescribed paid up capital. The Company is a listed company and the shares are listed with Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE). 4. The Board of Directors met SEVEN (7) times on 30th April 2009, 30th May, 2009, 30th June, 2009, 31st July 2009, 30th October 2009, 8th January, 2010 and 30th January 2010 in respect of which meetings notices were given and proceedings were recorded and signed in the Minutes Book maintained for the purpose, 5. The Company closed its Register of Members from 23rd September, 2009 to 26th September, 2009 (both days inclusive) and necessary compliance of Section 154 of the Act has been made. 6. The Twenty Fourth Annual General Meeting for the financial year ended 31st March, 2009 was held on 26th September, 2009 after giving notice to the members of the Company and the resolutions passed thereat were recorded in the Minutes Book maintained for the purpose. 7. No Extra-Ordinary General Meeting was held during the financial year. 8. The Company has not advanced any loans or given any guarantees or provided any securities to its directors or persons or firms or Companies referred under Section 295 of the Act. 9. The Company has not entered into any contract falling within the purview of Section 297 of the Act. 10. During the financial year, the Company has not entered into any contracts failing within the purview of Sections 297 and 299 of the Act, However, the transactions entered into with companies listed in the register maintained under Section 301(3) of the Act have been entered in the register maintained under Section 301 of the Act. 11. As there were no instances failing within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of directors, Members or Central Government. 12. The Company has not issued any duplicate share certificates during the financial year. 13. The Company: (i) has delivered all the certificates on lodgment thereof for transfer and transmission of securities in accordance with the provisions of the Act during the financial year. (ii) has not effected any allotment of Securities during the financial year (iii) has not deposited any amount in a separate Bank Account as no dividend was declared for the financial year. (iv) was not required to post warrants to any member of the Company as no dividend was declared during the financial year. (v) has not declared any dividend, issued any shares or debentures and has not accepted any deposits hence, the question of transfer of dividend to unpaid dividend account, application money due for refund, matured debentures, deposits and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund does not arise. (vi) has complied with the provisions of Section 217 of the Act. 14. The Board of Directors of the Company is constituted. Mr. A.K.Daga resigned as Director of the Company with effect from 29th May, 2009. There was no appointment of director or alternate director or director to fill casual vacancy during the financial year. 15. The Company has not appointed any Managing Director / Wholetime Director / Manager during the financial year, 16. The Company has not appointed any sole selling agents during the financial year. 17. (a) The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar and / or such authorities prescribed under the various provisions of the Act during the financial year. (b) The Company had made an application to Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE) for No Objection to the Scheme of Amalgamation of M/s. Claro India limited with M/s. Kothari Phytochemicals and Industries Limited and the approval for the same is awaited from the said exchanges. 18. The directors have disclosed their interest in other firms / Companies to the Board of Directors pursuant to the provisions of the Act and the rules made there under. 19. The Company has not issued any shares, debentures or other securities during the financial year. 20.The Company has not bought back any shares during the financial year and hence the question of complying with the buy back provisions does not arise. 21. The Company has not issued preference shares or debentures and hence, the question of redemption of preference shares / debentures during the financial year under review does not arise. 22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited / accepted any deposits including any unsecured loans falling within the purview of Section 58A during the financial year. 24. The Company has not borrowed any funds from banks and others during the financial year. 25. The Company has not made any investments or made any loans or advances or given guarantees or provided securities to other bodies corporate and consequently no entries have been made in the register kept for the purpose. 26. The Company has not altered the provisions of the Memorandum of Association with respect to situation of the Companys registered office from one State to another during the financial year. 27. The Company has not altered the provisions of the Memorandum of Association with respect to the objects of the Company during the financial year. 28. The Company has not altered the provisions of the Memorandum of Association with respect to name of the Company during the financial year. 29. The Company has not altered the provisions of the Memorandum of Association with respect to share capital of the Company during the financial year. 30. The Company has not altered its Articles of Association during the financial year. 31. There was no prosecution initiated against or show cause notices received by the Company and no fines or penalties or any other punishment was imposed on the Company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the financial year. 33. As per the information and explanations furnished to us, the Company has deposited both employees and employers contribution to Provident Fund with prescribed authorities pursuant to provisions of Section 418 of the Act. Place : Chennai For R. SRIDHARAN & ASSOCIATES Date : 5th August 2010 COMPANY SECRETARIES CS. R. SRIDHARAN C.P.No 3239 FCS No 4775 ANNEXURE A: Name of the Company : CLARO INDIA LIMITED Registration No. (CIN No.) : L93090TN1994PLC027571 Authorized Capital : Rs. 10,00,00,000/- Paid-up Capital : Rs. 4,50,00,000/- REGISTERS AS MAINTAINED BY THE COMPANY: Section Number Name of the Register 1. 108 Share Transfer Register 2. 143 Register of Charges 3. 150 Register of Members 4. 151 Index of Members 5. 193 Minutes of the Meetings of Board of Directors 6. 193 Minutes of the Meetings of the Members 7. 193 Minutes of the Committee Meetings 8. 301 Register of Contracts 9. 303 Register of Directors 10. 307 Register of Directors Shareholding 11. 372A Register of Investments / Loans / Guarantees and Securities 12. Board Meeting Attendance Register 13. General Meeting Attendance Register Place : Chennai For R. SRIDHARAN & ASSOCIATES Date : 5th Aug 2010 COMPANY SECRETARIES C.S.R. SRIDHARAN C.P.No 3239 FCS No 4775 ANNEXURE B: Name of the Company : CLARO INDIA LIMITED Registration No. (CIN No.) : L93090TN1994PLC027571 Authorized Capital : Rs. 10,00,00,000/- Paid-up Capital : Rs. 4,50,00,000/- Returns / Documents / Forms filed with the Registrar of companies, Regional Director, Central Government or other authorities during the financial year ended 31st March 2010: FOR THE FINANCIAL YEAR 2009-2010 (01.04.2009 TO 31.03.2010): REGISTRAR OF COMPANIES: Form Relevant Description Date of A B C Section filing 1. 32 303 Resignation of 29.06.2009 YES N.A. A64375124 Mr. A.K. Daga as a Rs.500/- Director with (N) effect from 29th May 2009. 2. 66 383A Compliance 01.10.2009 YES N.A. P35165547 Certificate issued Rs. 500/- by Mr. R. Sridharan, (N) M/s. R. Sridharan & Associates, Company Secretaries, Chennai for the year ended 31st March 2009. 3. 23AC 220 Balance Sheet for 03.10.2009 YES N.A. P35243815 23ACA the financial year Rs.500/- & ended 31st (N) Sch VI March, 2009. 4. 32 303 Appointment of 03.10.2009 YES N.A. A70237474 Mr. R.L. Biyani Rs. 500/- and Mr. N. (N) Mahadevan as Directors of the company at the Annual General Meeting held on 26th September, 2009. 5. 20B 159 Annual Return 16.11.2009 YES N.A. P41045360 & made upto 26th Rs. 500/- Sch V September 2009 (N) (Date of 24th AGM) A = Whether filed within the prescribed time Yes/No B = If delay in filing whether requisite additional fees paid Yes/No C = Remarks (SRN No. Amount Paid) REGIONAL DIRECTOR, CENTRAL GOVERNMENT & OTHER AUTHORITIES : NIL OTHER AUTHORITIES: The Company had made an application to Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE) for No Objection to the Scheme of Amalgamation of M/s,Claro India Limited with M/s.Kothari Phytochemicals & Industries Limited and the approval for the said application is awaited from the respective stock exchanges. Place : Chennai For R. SRIDHARAN & ASSOCIATES Date : 5th Aug 2010 COMPANY SECRETARIES CS. R. SRIDHARAN C.P.No 3239 FCS No 4775 MANAGEMENT DISCUSSION & ANALYSIS REPORT: 1. INDUSTRY STRUCTURE AND DEVELOPMENTS: Regular production and sales of PF Resins liquid and powder have been established. However, due to various reasons including disadvantages of VAT benefits and higher Freight costs, our sales volumes have been affected in the all India market. The prices of inputs this year has steadily gone up and corresponding increase in the prices a of finished products were not readily possible from the customers. However, there has been steady progress in the development of bringing in new customers for the Resins. Competition from Import with much lesser customs duty has affected sales volume of Paraformaldehyde. However, regular customers continued to take the product. 2. OPPORTUNITIES AND THREATS: Presently, there is a good boom for Automobile Sector and Foundries in turn are also showing good progress. The demand for our products suitable for Foundaries, Brake Linings, Abrasives etc, would very much improve in the future. Due to locational disadvantages and tax benefit constraints, prices of products had suffered in the competition. 3. PRODUCT WISE PERFORMANCE: After establishing the products, namely Phenolic, liquid and powder resins, concentration was given to choosing proper customer profiles and this would affect comparative performance. However this strategy would benefit in the future. 4. OUTLOOK: Outlook for phenolic resin is bright. It may also require increasing the production capacity to meet the demand as expected, in view of the bright future for automobile sector. 5. RISK & CONCERNS: The high fluctuations in the input prices, different tax rates of sales tax, locational disadvantageous for raw materials and finished products, long approval times for validation of products and highly credit oriented market are risk factors to he considered. 6. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: The company follows a systematic and adequate system of internal control in all areas of its operation. The company also has appointed the Internal auditors, a firm of chartered accountants, with periodic audit systems with regular reports, corrective measures etc. The company is under the process of obtaining ISO 9001 - 2000 Certificate for all its manufacturing and selling activities, confirming its systematic way of working. 7. MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS: Employee relations remained very satisfactory through out the year. Various steps are being taken for training the employees to improve their levels in all respect. 8. CAUTIONARY STATEMENT: Statements in this Management discussion and analysis, describing the companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. On behalf of the Board of Directors Sd/- Sd/- Place : Chennai R.L. BIYANI N. MAHADEVAN Date : 13.08.2010 Director Director