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Directors Report of Chromatic India Ltd.

Mar 31, 2014

Dear Shareholders,

The Company''s Directors are pleased to present the 27th Annual Report and the audited accounts of the Company for the financial year ended 31st March, 2014.

Financial Results

The summary of the financial performance of the Company for the financial year ended 31st March, 2014 compared to the previous year ended 31st March 2013 is summarized below:

(In Rupees)

Particulars 2013-2014 2012-2013

Net Sales and Other Income 285,905,382 932,907,649

Profit/ (Loss) Before Tax 2,63,460 2,743,773

Add / (Less): Deferred Tax Adjustments 61,194 (31,815)

Less: Current Income Tax 75,000 700,000

Less: Fringe Benefit Tax - -

Less: Wealth Tax - -

Profit/(Loss) after Tax 1,27,266 2,075,588

Add/(Less): Prior Year short provision for Tax - 55,172

Balance Brought Forward 8,718,382 8,239,054

Amount Available for Appropriation 8,845,648 10,314,642

Appropriations

Dividend/Interim Dividend on Equity Shares - 1,420,922

Tax on Dividend - 230,510

Surplus / Deficit Carried Forward 8,845,648 8,718,382

Review of Performance and Management discussion and Analysis

Your directors are pleased to report total income of Rs. 28.59 crores for the financial year ended 31st March, 2014 as against Rs. 93.29 crores for the financial year ended 31st March, 2013, a decrease of 69.35%. The profit before tax is Rs. 2.63 Lacs for the year ended 2013-14 compare to Rs. 27.43 Lacs for the year ended 2012-13. The Net profit after tax is Rs. 1.27 lacs for the financial year ending 2013-2014.

The Management''s Discussion and Analysis on Company''s performance – industry trends and other material changes with respect to the Company and its subsidiaries pursuant to Clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report.

Dividend

To converse the financial resources, no dividend has been recommended for the year under review and no amount are proposed to be transferred to reserves.

Internal Control System

The Company''s present Internal Control Systems are commensurate with its size. However, looking at the growth in the size of the Company and its operations it is strengthening these systems further. The Company places great emphasis on the maintenance of effective internal controls, both from the point of view of compliance with statutory requirements as well as supporting the smooth and efficient running of the business.

The Management is taking further initiatives in terms of adding more capacities, which would have significant benefit in the coming years.

Transfer to Reserve

No amount is proposed to transfer to the General Reserve Account.

Subsidiary Company

As on 31st March 2014, your Company has three wholly owned subsidiaries, namely,

1. Chromatic Ferro Alloys Limited

2. Chromatic Sponge Iron Limited

3. Chromatic International FZE

The Company had formed two 100% wholly – owned subsidiary, "Chromatic Ferro Alloys Limited" and "Chromatic Sponge Iron Limited" on 13th September, 2011 and 12th September, 2011 respectively.

In terms of Section 212 of the Companies Act, 1956, the Directors'' Report, Balance Sheet, Profit and Loss Account of its Subsidiary companies need to be attached to this Annual Report along with necessary statement under the said section. In accordance with the general circular No. 2/2011 dated 8th February, 2011, an exemption has been provided to companies from complying with Section 212, provided such companies publish the audited consolidated financial statement in the Annual Report. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available, on request, the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. These documents will also be kept open for inspection during the business hours at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

The statement pursuant to Section 212 of the Companies Act, 1956 containing the prescribed details of subsidiaries is attached to this report.

Listing of Equity Shares

The equity shares of your company are listed on Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited and the Luxembourg Stock Exchange, Luxembourg. The equity shares of the Company was listed and admitted for dealing on National Stock Exchange with effect from 29th May, 2012. The annual listing fees for the year 2014-15 yet to be paid to all Stock Exchanges.

Human Resource Development

Company encourages a culture that develops and empowers people, promotes team building and nurtures new ideas. The Company''s recruitment practice ensures that suitable candidates with merit are recruited and provided with the right opportunities to grow within the organization.

Depository System

Your Company''s equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of March, 31st March 2014, 99.63% of the Equity shares were held in demat form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization form either of the Depositories. Company''s ISIN No. is INE662C01015.

Buy-Back of Shares

During the financial year under review, Company has not announced any Buy-back of its Shares.

Share Capital

During the financial year under review, there is no change in the equity share capital of the company.

Pledge of shares

As on 31st March, 2014, 7,15,000 Equity shares from the Promoter group were pledged.

Corporate Governance Report

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report.

The requisite Certificate from M/s R. N. Gupta, Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

Director

Prior to coming into force of Section 149 of the Companies Act, 2013, three of the Companies Directors, Mr. Chirag Shah and Mr. Ajay Singh Sethi were categorized as Independent Directors in terms of the definition contained in the Equity Listing Agreement.

Ms. Diana Joshi has been appointed as an additional non-executive and Independent director of the company by the board of directors with effect from 1st September, 2014.

The provisions of Section 149 (4) of the Companies Act, 2013, pertaining to the appointment of Independent Directors have been notified by the Ministry of Corporate Affairs with effect from April 01, 2014. Pursuant to the company into force of Section 149 of the Companies Act, 2013, from April 01, 2014, the company has re-assessed the status of its Directors with a view of determining their qualifying for classification as Independent Directors in terms of Section 149 (6) of the Companies Act, 2013. Accordingly, Mr. Chirag Shah, Mr. Ajay Singh Sethi and Ms. Diana joshi fulfill the criteria laid out in Section 149 (6) of the Companies Act, 2013, in this regard.

Section 149 (10) of the Companies Act, 2013 restrict the tenure of Independent Director to two terms of up to ten years, with a single term not exceeding five years, which shall be effective from April 01, 2014. The revised Clause 49 of the Equity Listing agreement issued by Securities and Exchange Board of India (SEBI), pursuant to Circular no. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014, also contains the same provisions. Mr. Chirag Shah and Mr. Ajay Singh Sethi have offered themselves for appointment as Independent Directors of your company pursuant to the provisions of the Companies Act, 2013, to hold office for a period up to September 29, 2017 for a period of 3 years.

Ms. Diana Joshi appointed as additional Director designated as Independent director w.e.f. 1st September, 2014 and she shall hold office up to the date of ensuing Annual general Meeting.

The Company has received requisite notices in writing from members proposing Mr. Chirag shah, Mr. Ajay Singh Sethi and Ms. Diana Joshi for appointment as an independent Director.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of section 149 of the Companies Act, 2013 and under clause 49 of the listing agreement with the stock exchange.

The Board recommends their appointment at the ensuing Annual General Meeting.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, your Directors hereby confirmed that- (I) In the preparation of Annual Accounts for the year ended March 31, 2014 the applicable Accounting Standard have been followed along with proper explanation relating to material departure and there are no material departures from the same;

(II) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2014, and profit of the company for the year ended on that date;

(III) The Directors have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provision of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(IV) The Directors have prepared the Annual Accounts of the Company on a going concern basis.

Auditors and Auditors'' Report

M/s. S. K. Badjatya & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment.

The Company has received confirmation from M/s S. K. Badjatya & Co., to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) of the Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of Section 141 of the Companies Act, 2013. The Auditors has also submitted peer review certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, New Delhi as required under the listing agreement. The Board recommends their re-appointment.

Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting of the Company, at a remuneration to be decided by the Board of Directors of the Company in consultation with the Auditors.

All observation made by the Auditors in their reports are self explanatory by way of Notes on Accounts and does not require any further clarification.

Cost Audit

The Board of Directors in pursuance to the Orders issued by the Central Government under Section 148 of the Companies Act, 2013, have appointed M/s. Kishore A. Bhatia, Cost Accountants, Mumbai, for conducting the audit of the cost accounting records maintained by the Company.

Fixed Deposits

Your Company has not accepted any fixed deposits, during the year, under Section 58A of the Companies Act, 1956 and, as such, no amount on account of principal or interest on fixed deposits was outstanding during the period under review.

Consolidated Financial Results

Your Directors provides Audited Consolidated Financial Statements in this Annual Report.

Foreign Exchange Earnings and Outgo

During the year under review, Company has made following transactions in Foreign Currency.

(Rs. In Lakh)

Particular 2013-14 2012-13

Expenditure in Foreign Currency 428.61 324.57

Earning in Foreign Currency 2676.49 2035.30

Conversation of Energy, Technology Absorption & Foreign Earnings and Outgo:

Information in accordance with the provision of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in respect of the Board of Directors) Rules 1988, regarding conversation of energy and technology absorption are as per Annexure-A and forms part of this report.

Environment and Social Concern

Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources.

Particulars of Employees

There are no employees drawing remuneration beyond prescribed amount requiring disclosure under section 217(2A) of the Companies Act, 1956.

Transfer to investor education and protection fund

The following table given information relating to outstanding dividend accounts and the dates by which they need to be transferred:

Financial Year Date of Declaration of Dividend Date on which dividend will become part of IEPF

2006-07 (Final) September 29, 2007 November 5, 2014

2009-10 (Interim) January 29, 2010 March 07, 2017

2011-12 (Interim) February 08, 2012 March 16, 2019

2012-13 (Final) September 30 ,2013 November 06,2020

Acknowledgement

Your Directors take this opportunity to thank all investors, customers, vendors, banks/financial institutions, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.

By order of the Board of Directors

For Chromatic India Limited

Sd/- Sd/-

Place : Mumbai Director Whole time Director

Dated: September 2, 2014 (DIN 06583820) (DIN02586479)


Mar 31, 2013

Dear Shareholders,

The Company''s Directors are pleased to present the 26th Annual Report and the audited accounts of the Company for the financial year ended 31st March, 2013.

Operational Results

The summary of the financial performance of the Company for the financial year ended 31st March, 2013 compared to the previous year ended 31st March 2012 is summarized below:



(In Rupees)

Particulars 2012-2013 2011-2012

Net Sales and Other Income 932,907,649 1,230,389,738

Profit/ (Loss) Before Tax 2,743,773 12,532,903

Add / (Less): Deferred Tax Adjustments (31,815) 2,838

Less: Current Income Tax 700,000 (4,007,278)

Less: Fringe Benefit Tax - -

Less: Wealth Tax - -

Profit/(Loss) after Tax 2,075,588 8,522,787

Add/(Less): Prior Year short provision for Tax 55,172 6180

Balance Brought Forward 8,239,054 3,838,665

Amount Available for Appropriation 10,314,642 12,367,632

Appropriations

Dividend/Interim dividend on Equity Shares 1,420,922 3,552,305

Tax on Dividend 230,510 576,273

Surplus / Deficit Carried Forward 8,718,382 8,239,054

Review of Performance and Management discussion and Analysis

Your directors are pleased to report total income of Rs. 93.29 crores for the financial year ended 31st March, 2013 as against Rs. 123.04 crores for the financial year ended 31st March, 2012, a decrease of 24.18%. The profit before tax is Rs. 27.43 Lacs for the year ended 2012-13 compare to Rs. 1.25 crores for the year ended 2011-12. The Net profit after tax is Rs. 20.75 lacs for the financial year ending 2012- 2013.

The Management''s Discussion and Analysis on Company''s performance – industry trends and other material changes with respect to the Company and its subsidiaries pursuant to Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Internal Control System

The Company''s present Internal Control Systems are commensurate with its size. However, looking at the growth in the size of the Company and its operations it is strengthening these systems further. The Company places great emphasis on the maintenance of effective internal controls, both from the point of view of compliance with statutory requirements as well as supporting the smooth and efficient running of the business.

The Management is taking further initiatives in terms of adding more capacities, which would have significant benefit in the coming years.

Dividend

The Directors are pleased to recommend a Dividend of Rs. 0.02/- per equity share of Rs. 10/ each, to be appropriated from the profits of the financial year ended March 31, 2013 subject to the approval of the Shareholders at the ensuing Annual General Meeting. The Dividend will be paid in compliance with applicable regulations. The Dividend amount, if declared as above, would be Rs. 1,420,922.

The dividend payout for the year under review has been formulated in accordance with the Company''s policy to pay sustainable dividend linked to long term performance, keeping in view the Company''s need for capital for its growth plans and the intent to finance such plans through internal accruals to the maximum.

Transfer to Reserve

No amount is proposed to transfer to the General Reserve Account.

Subsidiary Company

As on 31st March 2013, your Company has three wholly owned subsidiaries, namely,

1. Chromatic International FZE

2. Chromatic Ferro Alloys Limited

3. Chromatic Sponge Iron Limited

The Company had formed above two 100% wholly – owned subsidiary, "Chromatic Ferro Alloys Limited" and "Chromatic Sponge Iron Limited" on 13th September, 2011 and 12th September, 2011 respectively.

In terms of Section 212 of the Companies Act, 1956, the Directors'' Report, Balance Sheet, Profit and Loss Account of its Subsidiary companies need to be attached to this Annual Report along with necessary statement under the said section. In accordance with the general circular No. 2/2011 dated 8th February, 2011, an exemption has been provided to companies from complying with Section 212, provided such companies publish the audited consolidated financial statement in the Annual Report. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available, on request, the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. These documents will also be kept open for inspection during the business hours at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

The statement pursuant to Section 212 of the Companies Act, 1956 containing the prescribed details of subsidiaries is attached to this report.

Listing of Equity Shares

The equity shares of your company are listed on Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited and the Luxembourg Stock Exchange, Luxembourg. The equity shares of the Company was listed and admitted for dealing on National Stock Exchange with effect from 29th May, 2012. The annual listing fees for the year 2013-14 have been paid to all these Stock Exchanges except to the Luxembourg Stock Exchange.

Human Resource Development

Company encourages a culture that develops and empowers people, promotes team building and nurtures new ideas. The Company''s recruitment practice ensures that suitable candidates with merit are recruited and provided with the right opportunities to grow within the organization.

Depository System

Your Company''s equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of March, 31st March 2013, 99.63% of the Equity shares were held in demat form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization form either of the Depositories. Relevant ISIN No. is INE662C01015.

Buy-Back of Shares

During the financial year under review, Company has not announced any Buy-back of its Shares.

Corporate Governance Report

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Report.

The requisite Certificate from M/s R. N. Gupta, Practicing Company Secretary on compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

Director

Mr. Ajay Singh Sethi, Director of the Company is liable to retires by rotation at the ensuing Annual General Meeting and is eligible for re- appointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

Mr. Chirag Shah, who was appointed as Additional Director of the Company under section 260 of the Companies Act, 1956 on 29th May, 2013. In terms of the provisions of Section 260 of the Companies Act, 1956, Mr. Chirag Shah holds office up to the conclusion of the forthcoming Annual General Meeting (AGM) of the Company and is eligible for appointment. The Company has received notice from a member of the Company pursuant to section 257 of the Companies Act, 1956, proposing his candidature for the office of Director. Mr. Chirag Shah is liable to retire by rotation. The Board recommends his appointment as Director.

Mr. Nitin Sethi, Non Executive and Independent Director of the Company, resigned as the director with effect from 5th July, 2013. The Board places on record their gratitude and appreciation for the contribution of the said directors during their tenure as Director of the Company.

Company Secretary & Compliance Officer

The present Company Secretary and Compliance Officer of the company Ms. Priyanka Chauhan has resigned due to her personal reasons with effect from 31st March, 2013. Mr. Nidhi Nair has been appointed, by the Board of Directors of the Company, as Company Secretary and Compliance Office of the Company with effect from 19th July, 2013.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, your Directors hereby confirmed that- (I) In the preparation of Annual Accounts for the year ended March 31, 2013 the applicable Accounting Standard have been followed along with proper explanation relating to material departure and there are no material departures from the same;

(II) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2013, and profit of the company for the year ended on that date;

(III) The Directors have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provision of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(IV) The Directors have prepared the Annual Accounts of the Company on a going concern basis.

Auditors and Auditors'' Report

M/s. S. K. Badjatya & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment.

The Company has received confirmation from M/s S. K. Badjatya & Co., to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956. The Auditors has also submitted peer review certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, New Delhi as required under the listing agreement. The Board recommends their re- appointment.

Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of this AGM until the conclusion of next AGM of the Company, at a remuneration to be decided by the Board of Directors of the Company in consultation with the Auditors.

All observation made by the Auditors in their reports are self explanatory by way of Notes on Accounts and does not require any further clarification.

Cost Audit

The Board of Directors in pursuance to the Orders issued by the Central Government under Section 233B of the Companies Act, 1956, have appointed M/s. Kishore A. Bhatia, Cost Accountants, Mumbai, for conducting the audit of the cost accounting records maintained by the Company.

Fixed Deposits

Your Company has not accepted any fixed deposits, during the year, under Section 58A of the Companies Act, 1956 and, as such, no amount on account of principal or interest on fixed deposits was outstanding during the period under review.

Consolidated Financial Results

Your Directors provides Audited Consolidated Financial Statements in this Annual Report.

Foreign Exchange Earnings and Outgo

During the year under review, Company has made following transactions in Foreign Currency.

(Rs. In Lakh)

Particular 2012-13 2011-12

Expenditure in Foreign Currency 202.03 117.36

Earning in Foreign Currency 2035.13 1473.33

Conversation of Energy, Technology Absorption & Foreign Earnings and Outgo:

Information in accordance with the provision of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in respect of the Board of Directors) Rules 1988, regarding conversation of energy and technology absorption are as per Annexure-A and forms part of this report.

Environment and Social Concern

Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources.

Particulars of Employees

There are no employees drawing remuneration beyond prescribed amount requiring disclosure under section 217(2A) of the Companies Act, 1956.

Transfer to investor education and protection fund

The following table given information relating to outstanding dividend accounts and the dates by which they need to be transferred:

Financial Year Date of Declaration of Dividend Date on which dividend will become part of IEPF

2005-06 (Final) November 10, 2006 December 17, 2013

2006-07 (Final) September 29, 2007 November 5, 2014

2009-10 (Interim) January 29, 2010 March 07, 2017

2011-12 (Interim) February 08, 2012 March 16, 2019

Acknowledgement

Your Directors take this opportunity to thank all investors, customers, vendors, banks/financial institutions, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry.



By order of the Board of Directors

For Chromatic India Limited

Sd/- Sd/-

Director Whole time Director

Place : Mumbai

Dated : 14th August, 2013


Mar 31, 2012

The are pleased to present the 25th Annual Report and the audited accounts of the Company for the financial year ended 31st March, 2012.

Operational Results

The summary of the financial performance of the Company for the financial year ended 31st March, 2012 compared to the previous year ended 31st March 2011 is summarized below:

(In Rupees)

Particulars 2011-2012 2010-2011

Net Sales and Other Income 1,230,389,738 1,104,112,194

Profit/ (Loss) Before Tax 12,532,903 11,747,107

Add / (Less): Deferred Tax Adjustments 2,838 (292,403)

Less: Current Income Tax (4,007,278) (2,300,000)

Less: Fringe Benefit Tax - -

Less: Wealth Tax - -

Profit/(Loss) after Tax 8,522,787 9,154,704

Add/(Less): Prior Year short provision for Tax 6180 (40,865)

Balance Brought Forward 3,838,665 (5,275,174)

Amount Available for Appropriation 12,367,632 3,838,665

Appropriations

Interim Dividend on Equity Shares 3,552,305 -

Tax on Dividend 576,273 -

Surplus / Deficit Carried Forward 8,239,054 3,838,665

Review of Performance and Management discussion and Analysis

Your directors are pleased to report total income of Rs. 123.04 crores for the year ended 2011-12 as against Rs. 110.41 crores for the year ended 2010-11, an increase of 10.26%. The profit before tax is Rs. 1.25 crores for the year ended 2011- 12 compare to Rs. 1.17 crores for the year ended 2010-11. The Net profit after tax is Rs. 85.22 lacs for the financial year ending 2011-2012. The Management Discussion and Analysis is the part of this Annual Report.

Internal Control System

The Company's present Internal Control Systems are commensurate with its size. However, looking at the growth in the size of the Company and its operations it is strengthening these systems further. The Company places great emphasis on the maintenance of effective internal controls, both from the point of view of compliance with statutory requirements as well as supporting the smooth and efficient running of the business.

The Management is taking further initiatives in terms of adding more capacities, which would have significant benefit in the coming years.

Dividend

During the year under review, your Company has declared and paid an interim dividend of Rs. 0.05 per equity share in the month of February, 2012 aggregating to Rs. 3552305/- on 71046100 equity shares of nominal value of Rs. 10/- each. The dividend distribution will result in a cash outgo of Rs. 4128578/- (including tax on dividend of Rs. 576273/-).

Transfer to Reserve

No amount is proposed to transfer to the General Reserve Account.

Subsidiary Company

As on 31st March 2012, your Company has three wholly owned subsidiaries, namely,

1. Chromatic International FZE

2. Chromatic Ferro Alloys Limited

3. Chromatic Sponge Iron Limited

The Company has formed two 100% wholly - owned subsidiary, "Chromatic Ferro Alloys Limited" and "Chromatic Sponge Iron Limited" on 13th September, 2011 and 12th September, 2011 respectively. The Company has not subscribed the Shares of the Subsidiaries till 31st March, 2012.

In terms of Section 212 of the Companies Act, 1956, the Directors' Report, Balance Sheet, Profit and Loss Account of its Subsidiary companies are attached to this Annual Report along with necessary statement under the said section. In accordance with the general circular No. 2/2011 dated 8th February, 2011, an exemption has been provided to companies from complying with Section 212, provided such companies publish the audited consolidated financial statement in the Annual Report. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. These documents will also be kept open for inspection during the business hours at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies.

The statement pursuant to Section 212 of the Companies Act, 1956 containing the prescribed details of subsidiaries is attached to this report.

Listing of Equity Shares

The equity shares of your company are listed on Bombay Stock Exchange Limited (BSE) and the Luxembourg Stock Exchange, Luxembourg. The annual listing fees for the year 2012-13 have been paid to all these Stock Exchanges.

Your Company has got listed on National Stock Exchange of India Limited vide NSE letter dated 25th May, 2012. The Equity Shares of the Company has been listed and admitted to dealings on the Exchange with effect from May 29, 2012. The Symbol of our securities on National Stock Exchange is CHROMATIC.

Human Resource Development

Company encourages a culture that develops and empowers people, promotes team building and nurtures new ideas. The Company's recruitment practice ensures that suitable candidates with merit are recruited and provided with the right opportunities to grow within the organization.

Depository System

Your Company's equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of March, 31st March 2012, 99.61% of the Equity shares were held in demat form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization form either of the Depositories. Relevant ISIN No. is INE662C01015.

Buy-Back of Shares

During the financial year under review, Company has not announced any Buy-back of its Shares.

Corporate Governance Report

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with a certificate from the practicing Company Secretary confirming the compliance of conditions of corporate governance under clause 49 of the Listing Agreement is also attached to this Report.

Directors

Mr. Ajay Singh Sethi, Director of the Company is liable to retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

Mr. Balkishan Kalia, who was the Director of the Company have, ceased to be director, due to his death, with effect from 14th March, 2012. The Board expressed their deep condolences at untimely and sad demise of Mr. Balkishan Kalia and may his soul rest in peace. The Board placed on record a deep appreciation for the valuable services rendered by Mr. Balkishan Kalia during his tenure as a director of the Company.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the companies Act, 1956, with respect to Directors' Responsibility Statement, your Directors hereby confirmed that-

(I) In the preparation of Annual Accounts for the year ended March 31, 2012 the applicable Accounting Standard have been followed along with proper explanation relating to material departure and there are no material departures from the same;

(II) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2012, and profit of the company for the year ended on that date;

(III) The Directors have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provision of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(IV) The Directors have prepared the Annual Accounts of the Company on a going concern basis.

Auditors and Auditors' Report

M/s. S. K. Badjatya & Co., Chartered Accountants, Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and being eligible for re-appointment.

The Company has received confirmation from M/s S. K. Badjatya & Co., to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956. The Auditors has also submitted peer review certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, New Delhi as required under the listing agreement. The Board recommends their re-appointment.

Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of this AGM until the conclusion of next AGM of the Company, at a remuneration to be decided by the Board of Directors of the Company in consultation with the Auditors.

All observation made by the Auditors in their reports are self explanatory by way of Notes on Accounts and does not require any further clarification.

Cost Audit

The Board of Directors in pursuance to the Orders issued by the Central Government under Section 233B of the Companies Act, 1956, have appointed M/s. Kishore A. Bhatia, Cost Accountants, Mumbai, for conducting the audit of the cost accounting records maintained by the Company.

Fixed Deposits

The Company had neither invited nor accepted any public deposits, during the year, under Section 58A of the Companies Act, 1956 and, as such, no amount on account of principal or interest on public deposits was outstanding during the period under review.

Consolidated Financial Results

Your Directors provides Audited Consolidated Financial Statements in the Annual Report.

Foreign Exchange Earnings and Outgo

During the year under review, Company has made following transactions in Foreign Currency.

(Rs. In Lakh)

Particular 2011-12 2010-11

Expenditure in Foreign Currency 117.36 147.27

Earning in Foreign Currency 1473.33 1800.88

Conversation of Energy, Technology Absorption & Foreign Earnings and Outgo:

Information in accordance with the provision of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in respect of the Board of Directors) Rules 1988, regarding conversation of energy and technology absorption are as per Annexure-A and forms part of this report

Environment and Social Concern

Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources. Particulars of Employees

There are no employees drawing remuneration beyond prescribed amount requiring disclosure under section 217(2A) of the Companies Act, 1956.

Pledge of Shares

During the year under review, the promoters of the Company M/s Cheetah Multitrade Private Limited have pledged 715000 equity shares with financial institution.

Transfer to investor education and protection fund

The following table given information relating to outstanding dividend accounts and the dates by which they need to be transferred:

Financial Year Date of Declaration of Dividend Date on which dividend will become part of IEPF

2004-05 (Final) September 30, 2005 November 06, 2012

2005-06 (Final) November 10, 2006 December 17, 2013

2006-07 (Final) September 29, 2007 November 5, 2014

2009-10 (Interim) January 29, 2010 March 07, 2017

2011-12 (Interim) February 08, 2012 March 16, 2019

Acknowledgement

Yours Directors place on record their appreciation of co-operation and support extended by the Bankers, Government agencies and other institution and look forward to their continued support. Your Directors wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the Company.

By order of the Board of Directors

For Chromatic India Limited

Sd/- Sd/-

Director Whole time Director

Place :Mumbai

Dated :13th August, 2012


Mar 31, 2011

The Members,

We are pleased to present the 24th Annual Report and the audited accounts of the Company for the financial year ended 31st March, 2011.

Operational Results

The summary of the financial performance of the Company for the financial year ended 31st March, 2011 compared to the previous year ended 31st March 2010 is summarized below:

(In Rupees)

Particulars 2010-2011 2009-2010

Net Sales and Other Income 1,104,112,194 166,533,978

Profit/(Loss) Before Tax 11,747,107 1,331,152

Add / (Less): Deferred Tax Adjustments (292,403) 262,407

Less: Current Income Tax (2,300,000) -

Less: Fringe Benefit Tax - -

Less: Wealth Tax - -

Profit/(Loss) after Tax 9,154,704 1,593,559

Less: Prior Year short provision for Tax

Balance Brought Forward (5,275,174) (5,299,771)

Amount Available for Appropriation 3,838,665 (3,706,212)

Appropriations

Interim Dividend on Equity Shares - 1,341,050

Tax on Dividend - 227,912

Surplus / Deficit Carried Forward 3,838,665 (5,275,174)

Dividend

To converse the financial resources, no dividend has been recommended for the year under review and no amount are proposed to be transferred to reserves.

Share Capital

During the year under review, the authorized share capital has been increased from Rs. 250,000,000 to Rs. 1,250,000,000 divided into 125,000,000 equity shares of Rs.10/- each vide resolutions passed at 20th September 2010, at the previous annual general meeting.

a) Conversion of warrants

During the year under review, with the authority of the members of the Company by way of Postal Ballot, of which the result were declared on 10th March, 2010, the Board of Directors, at their meeting held on June 15, 2010, based on the request received from warrant holders converted 1500000 warrants into equal number of Equity Shares of Rs. 10/- each. The above shares were listed on the Indian Stock Exchanges.

b) Allotment of Equity Shares on Preferential Basis

During the Year under review, under authority of special resolution passed by the members of the Company at the Annual General Meeting held on 20th September, 2010, the Company has issued 22,500,000 Equity shares of Rs. 10/- each on Preferential Basis.

The Board of Directors, at their meeting held on 7th October, 2010 allotted 22,500,000 equity shares of Rs. 10/- each at a price of Rs. 39/- including premium of Rs. 29/- per equity share. The above shares were listed on the Indian Stock Exchanges.

c) Global depository receipts (GDRs)

On 22nd October 2010, under authority of special resolution passed by the members of the Company by way of postal ballot, of which the result was declared on 10th March 2010, the Company allotted 37,800,000 equity shares of Rs. 10/ - each at a premium of Rs. 32/- per equity share underlying 42,00,000 Global Depository Receipts (GDRs). Each GDR represents nine equity shares raising a total US$ 35.78 million. With effect from 27th October 2010, the Company's Global Depository Receipts (GDRs) are listed with Luxembourg Stock Exchange.

Subsidiary Company

As on 31st March 2011, your Company has two wholly owned subsidiaries, namely,

1. Arcoiris SA

2. Chromatic International FZE

The Company has formed a wholly-owned subsidiary, "Chromatic International FZE" in UAE on 21st October, 2010.

In terms of Section 212 of the Companies Act, 1956, the Directors' Report, Balance Sheet, Profit and Loss Account of its Subsidiary companies are attached to this Annual Report along with necessary statement under the said section. There was no material change in the nature of the business of the subsidiaries.

The statement pursuant to Section 212 of the Companies Act, 1956 containing the prescribed details of subsidiaries is attached to this report.

Listing / Delisting of Equity Shares

The equity shares of your company are listed on Bombay Stock Exchange Limited (BSE) and the Luxembourg Stock Exchange, Luxembourg. The annual listing fees for the year 2010-11 have been paid to all these Stock Exchanges. Company, during the year under review, with the authority of the members of the Company at the Annual General Meeting held on 20th September, 2010, had, submitted application for voluntarily delisting of Company's equity shares from the Ahmedabad Stock Exchange.

The Ahmedabad Stock Exchange has granted delisting permission vide their letter dated 7th June, 2011 and the shares are delisted with effect from 8th June, 2011 from the Ahmedabad Stock Exchange.

Human Resource Development

Company encourages a culture that develops and empowers people, promotes team building and nurtures new ideas. The Company's recruitment practice ensures that suitable candidates with merit are recruited and provided vvith the right opportunities to grow within the organization. The percentage of employees turnover is almost nil in the Company.

Depository System

Yours Company's equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of 31st March 2011, 99.43% of the Equity shares were held in demat form. Relevant ISIN No. is INE662C01015

Buy-Back of Shares

During the financial year under review, Company has not announced any Buy-back of its Shares.

Corporate Governance Report

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as part of the Annual Report along with practicing Company Secretary certificate for the compliance.

Directors

Mr. B. K. Kalia was appointed as Additional Director of the Company, under Section 260 of the Companies Act, 1956, in the Board of Directors meeting held on 4th October, 2010. In terms of the provisions of Section 260 of the Companies Act, 1956, Mr. B. K. Kalia holds office up to the conclusion of the forthcoming Annual General Meeting (AGM) of the Company and is eligible for appointment as Director. The Company has received notice from a member of the Company pursuant to Section 257 of the Companies Act, 1956, proposing his candidature for the office of Director. Mr. B. K. Kalia shall be liable to retire by rotation. The Board recommends his appointment as Director.

Mr. Nitin Sethi, Director of the Company retires by rotation at the ensuing Annual General Meeting and is eligible for re- appointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

Mr. Vipin SFiarma, who was the Director of the Company had resigned with effect from September 29, 2010. The Board places on record their gratitude and appreciations for the contribution by the director during the tenure as Director of the Company.

Directors Responsibility Statement

Pursuant to Section 217(2AA) of the companies Act, 1956, your Directors state that-

(I) In the preparation of Annual Accounts for the year ended 2010-11, the applicable Accounting Standard have been followed along with proper explanation relating to material departure and there are no material departures from the same;

(II) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2011, and profit of the company for the year ended on that date;

(III) The Directors have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provision of Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(iv) The Directors have prepared the Annual Accounts on a going concern basis.

Auditors

M/s. S. K. Badjatya & Co., Chartered Accountants, retires at the conclusion of the forthcoming AGM and is eligible for re- appointment. Members are requested to consider their reappointment as Statutory Auditors of the Company from the conclusion of this AGM until the conclusion of next AGM of the Company, at a remuneration to be decided by the Board of Directors of the Company in consultation with the Auditors.

The Company received confirmation from M/s S. K. Badjatya & Co., to the effect that their appointment if made, would be within the prescribed limits under Section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for such re- appointment within the meaning of Section 226 of the Companies Act, 1956. The Board recommends their re-appointment.

Cost Auditors

The Board has appointed M/s Kishore A. Bhatia, Cost Accountants, Mumbai as Cost Auditors under section 233B of the Companies Act, 1956 for the financial year 2011-12.

Auditor's Report

All observation made by the Auditors in their reports are self explanatory by way of Notes on Accounts and does not require any further clarification.

Fixed Deposits

The Company had neither invited nor accepted any public deposits, during the year, under Section 58A of the Companies Act, 1956 and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

Foreign Exchange Earnings and Outgo

During the year under review, Company has made following transactions in Foreign Currency.

(Rs. In Lakh)

Particular 2010-11 2009-10

Expenditure in Foreign Currency 147.27 159.94

Earning in Foreign Currency 1800.88 1607.57

Unclaimed / Unpaid Dividend

The following table given information relating to outstanding dividend accounts and the dates by which they need to be transferred:

Financial Year Date of Declaration Date of payment Date on which dividend will become part of IEPF

2004-05 September 03, 2005 September 30, 2005 September 02, 2012

2005-06 August 06, 2006 November 10, 2006 August 05, 2013

2006-07 August 29, 2007 September 29, 2007 August 28, 2014

2009-10 January 29, 2010 February 12, 2010 January 28, 2017

After seven years if the amount remains unclaimed then it will be credited to the Investor Education and Protection Fund established by the Central Government pursuant to section 205C of the Companies Act, 1956.

Conversation of Energy, Technology Absorption & Foreign Earnings and Outgo:

Information in accordance with the provision of section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in respect of the Board of Directors) Rules 1988, regarding conversation of energy and technology absorption are as per Annexure-A and forms part of this report

Environment and Social Concern

Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources.

Particulars of Employees

There are no employees drawing remuneration beyond prescribed amount requiring disclosure under section 217(2A) of the Companies Act, 1956.

Acknowledgement

Yours Directors place on record their appreciation of co-operation and support extended by the Bankers, Government agencies and other institution and look forward to their continued support. Your Directors wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the Company.

By order of the Board of Directors

For Chromatic India Limited

Sd/- Sd/- Mr. B. K. Kalia Vinod Kaushik Director (Whole time Director)

Place : Mumbai

Dated: 12th August, 2011

 
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