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Directors Report of Indokem Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the Forty Ninth Annual Report together with the Audited Accounts for the Financial Year ended 31st March, 2015.

1. Financial Results:

Rs.In lacs

PARTICULARS For the Financial For the Financial Year ended Year ended 31.03.2015 31.03.2014

Income 5667.44 3755.13

Proft/(Loss) Before Interest, Depreciation & Taxes 410.88 98.43

Less: Interest 281.56 250.14

Depreciation 46.96 59.33

Proft/(Loss) Before Tax 82.36 (211.04)

Add: Excess/ Short Provision for Tax in respect of NIL (11.84) earlier year

Profit/ (Loss) After Taxes 82.36 (222.88)

Proft/(Loss) Brought Forward from last year (3335.85) (3112.97)

Deprecation of earlier years (1.73) -

Surplus/Defcit carried to Reserves (3255.22) (3335.85)

2. Operational Performance:

During the year 2014-15, the total sales of the Company increased from 3676.65 lacs to 5554.30 lacs.

Further pursuant to Clause 49 of Listing Agreement, detailed performance of the Company is given in Management Discussion and Analysis Report which forms part of the Directors' Report.

3. Directors and Key Managerial Personnel:

Pursuant to Rule 8(5)(iii) of the Companies (Accounts) Rules, 2014, the following details relating to Director's and Key Managerial Personnel are reported:

i. Mr. Kailash Pershad (DIN: 00503603), Mr. Rajagopalan Sesha (DIN: 00289643) and Mr. B. G. Sontakke (DIN: 01225753) were ratifed as Independent Directors of the Company at the previous Annual General meeting held on 30th September, 2014, in compliance with the provisions of Section 149 (4) of the Companies Act, 2013.

ii. Mr. Mukund Ramchandra Nagpurkar was appointed as the Chief Financial Officer of the Company on 1st of August, 2014 in compliance with the provisions of Section 203 of the Companies Act, 2013.

iii. Mr. Rohan Ramchandra Gavas resigned as the Company Secretary and Compliance Office of the Company on 31st January, 2015.

iv. Ms. Sugandha Vaidya was appointed as the Company Secretary and Compliance Officer of the Company on 9th February, 2015.

v. Ms. Sugandha Vaidya resigned as the Company Secretary and Compliance Officer of the Company on 19th September, 2015.

4. Appointment of Director:

Ms. Leelabai K. Khatau, Non- Executive Director of your Company, retires by rotation and being eligible, offers herself for re–appointment. The details regarding Ms. Leelabai K. Khatau as required under clause 49 VIII E are disclosed in the notice of the Annual General Meeting. None of the other Directors are related inter se except Mr. Mahendra K. Khatau, Ms. Leelabai K. Khatau and Mrs. Asha M. Khatau who are related to each other.

5. Training and Familiarization Program me for Directors:

Pursuant to Clause 49 (II) (B) (7) of the Listing Agreement, the Company has adopted the Familiarization Program me for the Independent Directors with an aim to provide to the Independent Directors - an insight in their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc…

The Details of the Familiarization Program me for the Independent Director's are available on the website of the Company: www.indokem.co.in at link at http://www.indokem.co.in/Policies.html.

6. Remuneration of Directors and Key Managerial Personnel:

Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration of Directors and Key Managerial Personnel are as furnished in

Annexure C.

7. Particulars of Employees:

None of the employees of the Company fall under the limits laid down in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

8. Statutory Auditors:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. Sheth Doctor & Associates, Chartered Accountants, Mumbai, were appointed as the Statutory Auditors of the Company on 30th September, 2014 for a period of three years to hold office until the conclusion of the Annual General Meeting to be held in the year 2017.

M/s. Sheth Doctor & Associates have issued a Certificate of eligibility pursuant to Section 141 of the Companies Act, 2013.

The Board of Directors of your Company recommends ratification of the appointment of M/S Sheth Doctor & Associate, Chartered Accountants, Mumbai from the conclusion of the forthcoming Annual General Meeting of the Company until the conclusion of the next Annual General Meeting to be held in the year 2016.

9. Auditors' Observations:

As regards the Audit Qualification on the records and valuation of inventory at Ankles war Plant, the management is of the view of that the inventories are usable for trading operations of the Company at Mumbai.

10. Secretarial Audit Report:

Pursuant to the Provisions of Section 204 of Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Ragini Chokshi & Co., Company Secretary in Whole-Time Practice, Mumbai to undertake Secretarial Audit of the Company for the Financial Year ended 31st March, 2015. The Secretarial Audit Report issued by M/s Ragini Chokshi & Co. in the prescribed Form MR-3 is enclosed as Annexure D. There are no-qualifications, reservations or adverse remarks in the Report.

11. Disclosures:

The disclosures pursuant to Section 134(3)(a) to (q) are furnished as under:

i. Extract of Annual Return:

Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the extract of Annual Return in the prescribed Form MGT-9 is attached herewith and marked as Annexure C.

ii. Number of Board Meetings:

During the Financial year ended 31st March, 2015, the Board met five (5) times. The details of the meetings are provided in the Corporate Governance Report.

iii. Director's Responsibility Statement:

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, on the basis of information and documents made available to them, confrm that:

a. In the preparation of the Annual Accounts, the applicable accounting standards have been followed;

b. Your 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 at the end of Financial Year and of the losses of the Company for that period;

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

e. The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

f. The Director's have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

iv. Declaration by Independent Directors:

The Independent Directors at the time of their appointment have given a declaration as required under sub-Section (7) of Section 149 of the Companies Act, 2013 regarding their meeting the criteria of Independence as laid down under sub-section (6) of Section 149.

v. Policy on Nomination Remuneration and Evaluation:

The Nomination and Remuneration Committee of the Company is governed by terms of reference. The Company has formulated a combined policy on Nomination and Remuneration of Board and Senior management personnel of the Company which also includes the policy on Board's diversity, evaluation criteria of Independent Directors and criteria for determining qualifications, positive attributes, independence of a Director in compliance with clause 49 IV B of the Equity listing Agreement and Section 178 of the Companies Act, 2013. The policy is available on the website of the Company www.indokem.co.in at link at http://www.indokem.co.in/Policies.html.

vi. Particulars of loans, guarantees or investments

Pursuant to section 186 of the Companies Act, 2013, the details of loans given, investments made or guarantees given are given in note nos. 14, 19 and 13 to the financial statements for the financial year 2014-15.

The Loans, investments, guarantees and securities provided by the Company during the Financial year ended 31st March, 2015, together with the existing Loans, investments, guarantees and securities do not exceed the limits prescribed under sub-section (2) of Section 186.

vii. Related Party Transactions:

All related party transactions that were entered during the financial year were on arms' length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company in large.

The particulars of contracts and arrangements entered with related parties during the Financial year ended 31st March, 2015 are enclosed to the report in the prescribed Form AOC-2 as Annexure-B.

The Related Party Transaction Policy of the Company approved by the Board of Director's of the Company is displayed on the website of the Company www.indokem.co.in/policies.

viii. Dividend:

Considering the accumulated losses the Board of Directors of your Company do not consider it appropriate to recommend any Dividend for the Financial Year ended 31st March, 2015.

ix. Insurance:

All the properties and insurable interests of the Company including the buildings, plant and machineries and stocks have been adequately insured.

x. Material Changes and Commitments:

Your Company had fled an application with the Hon'ble High Court of Judicature at Bombay for entering into a scheme of amalgamation and arrangement with Chateau Capacitors Private Limited and Invoke Exports Limited. The requisite consent of the members was sought at the Court Convened Meeting as well as Postal Ballot held on 30th April, 2015 and the Scheme was subsequently fled with the Hon'ble High Court of Judicature at Bombay. The Bombay High Court on the 4th of September, 2015 approved the scheme fled by the Company and the certified copy of the Order dated 4th September, 2015 was fled with the Registrar of Companies on the 30th September, 2015 thereby making the scheme effective from 1st April, 2014.

The Company had a Secured Loan from Union Bank of India. After negotiations with the Bank, One Time Settlement (OTS) was arrived at for a sum of Rs. 18.50 crores.

For some time now, Company had been trying to dispose of the Company's assets held for disposal at Ankles war. The Company has entered into a Memorandum of Undertaking (MOU) with a prospective buyer and the process of due diligence is ongoing. Pending this process, the Company has received advances as part of the MOU. Out of the advances received, the Company has paid off in full, the above OTS amount of Rs. 18.50 crores due to the bank.

xi. State of Company's Affairs:

There is no change in the nature of business during the year under review.

No Order has been passed by any Regulatory Court or Tribunal, which can impact the going concern status of the Company and its Operations in future.

xii. The Conservation of Energy, Technology Absorption, Foreign exchange Earnings and Outgo:

Pursuant to Section 134(3)(m) of the Companies Act, 2013 your Company has carried out the following acts in order to:

A. Conservation of Energy:

a. Energy Conservation measures taken: i. Electrical Energy:

- Regular preventive / predictive maintenance of electrical system is carried out to ensure minimum loss of energy / power supply.

- Regular up gradation in electrical system is done so as to minimize consumption of electrical power supply.

ii. Furnace Oil / LDO Consumption:

Considering the above issue there are no major consumption of Furnace Oil / Light Diesel Oil. However, there are some processing activities carried out limiting the consumption of energy.

b. Additional investments and proposals if any, being implemented for reduction of consumption of energy:

As the Company is concentrating in trading activities, it has resulted in reduction of consumption of energy. However, as and when production will be increased, modern equipment's will be used to reduce the consumption of energy.

c. Impact of the measures at (a) and (b) for reduction of consumption of energy and consequent impact on the cost of production:

Due to negligible consumption, there is no special impact.

d. Total energy consumption and energy consumption per unit of production: As per Form – "A" forming part of Annexure A.

B. Technology Absorption:

As per Form - "B" forming part of Annexure A.

C. Foreign Exchange Earnings and Outgo:

Rs In '000

PARTICULARS 31.03.2015 31.03.2014

I. Expenditure in Foreign Exchange Currency

Value of Imports on C.I.F. on the basis of Raw 37,324 27,307 Materials

Travelling 448 1,662

Foreign Bank Charges 27 20

Consultancy charges 169 NIL

TOTAL 37,968 28,989

II. Earnings in Foreign Exchange

F.O.B. Value of Exports 1,00,930 56,247

Rs In '000

PARTICULARS 31.03.2015 31.03.2014

1. Foreign exchange earned 1,00,930 56,247 Export of goods on FOB basis

2. Outgo of Foreign exchange 37,324 27,307 CIF value of Imports

3. Expenditure in Foreign Currencies 644 1,682

xiii. Risk Management:

Your Company has a robust risk management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risk trend, exposure and potential impact analysis at a Company level as also separately for business segments. The key business risks identified by the Company and its mitigation plans are included in Management Discussion and Analysis Report.

xiv. Annual Evaluation by the Board of its own performance and that of its Committees and Individual Directors:

The Company has devised tool on the basis of Board Performance Evaluation Policy for evaluating the performance of the Independent Directors, Board Committees, Individual Directors and the Board at large which include the criteria for performance evaluation of the Non- Executive and Executive Directors.

xv. Subsidiary Company, Associate Company and Joint Venture Company:

Your Company does not have any Subsidiaries or Associates or Joint Venture Companies.

xvi. Deposits:

Your Company has not accepted any Fixed Deposit from Public or any other person during the Financial Year ended 31st March, 2015.

xvii.Internal Financial Control:

The Company has adequate policies, and standard operating procedures to ensure the accuracy of the Financial Statements and to maintain orderly and efficient conduct of its business. The Company has an effective mechanism to keep proper check on any possible instance of fraud and for safeguarding its assets. The Company follows a practical maker-checker policy to ensure every possible check on the accuracy of the Financial Reporting.

The scope and authority of the Internal Auditor have been defend by the Audit Committee from time to time. To maintain objectivity and independence, the internal auditor reports its observations to the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of the internal auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Audit observations and corrective actions thereon are presented to the Audit Committee.

xviii.Committees of Directors and Key Managerial Personnel:

The details of the Committees of the Board of Directors and Key Managerial Personnel pursuant to the Listing Agreement and the Companies Act, 2013 are laid down in the Corporate Governance Report.

12. Audit Committee:

The details pertaining to the composition of the Audit Committee constituted pursuant to sub-section (8) of Section 177 of the Companies Act, 2013 are provided in the Corporate Governance Report segment of the Annual Report. There are no instances of the Board not accepting the recommendation of the Audit Committee during the Financial Year 2014-2015.

13. Vigil Mechanism/ Whistle Blower Policy:

Pursuant to Section 177(9) and (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has established a vigil mechanism named Vigil Mechanism/Whistle Blower Policy to report genuine concerns to the Chairman of your Company and Chairman of the Audit Committee. The Whistle Blower Policy provides adequate safeguards against victimization of persons who use such mechanism and makes provisions for direct access to the Chairman of the Company and the Chairman of the Audit Committee in exceptional cases as envisaged under the Whistle Blower Policy. The details of the Whistle Blower Policy are posted on the website of the Company www.indokem.co.in/policies.

14. Policy on Prevention of Sexual Harassment:

The Company has in place a Policy on preservation of Sexual Harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women in at Workplace (Prevention, Prohibition and Redressed) Act, 2013, an Internal Complaints Committee has been constituted by the Company to redress the complaints received regarding sexual harassment.

Your Directors state that during the financial year under review, there were no cases fled pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

15. Prohibition of Insider Trading:

In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 and to preserve the confidentiality and to prevent misuse of Unpublished Price Sensitive Information (UPSI), the Company has adopted a Code of Conduct to regulate, monitor and report trading by Insiders (Invoke Limited's Prevention of Insider Trading Rules, 2015) and a Code of Practice and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) (Code of Fair Disclosure).

The Insider Trading Code and Code of Fair Disclosure are available on the website of the Company at www.Indokem.co.in/policies.

16. Corporate Social Responsibility (CSR):

The Company has not implemented any Corporate Social Responsibility initiatives as the provision of Section 135 of the Companies Act, 2013 and Rules made thereunder governing Corporate Social Responsibility are not applicable.

17. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement, a separate section forming part of this report and titled as "Corporate Governance Report" is attached herewith.

18. Acknowledgements:

Your Directors take this opportunity to place on record their sincere gratitude to the Banks, Central and State Government Departments and the Local Authorities for their guidance and support. Your Directors are also grateful to customers, suppliers and business associates of the Company for their continued co- operation and support. Your Directors express their deep appreciation for the commitment, dedication and hard work put in by the employees at all levels. Lastly, your Directors are grateful for the confdence and faith shown in them by the members of the Company.

By Order of the Board

For Indokem Limited

Place: Mumbai Mahendra K. Khatau

Date: 3rd November, 2015 Chairman and Managing Director

DIN: 00062794


Mar 31, 2014

The Members,

The Directors are pleased to present the Forty Eighth Annual Report of the Company together with its Audited profit and Loss Account for the year ended 31st March, 2014 and the Balance Sheet as on the date.

FINANCIAL RESULTS : ( Rs. in Lacs)

Particulars For the period For the period ended ended 31.03.2014 31.03.2013 (12 Months) (6 Months)

Income 3755.13 1737.85

profit / (Loss) before Interest, Depreciation & Taxes 98.43 56.74

Less-Interest 250.14 119.29

Depreciation 59.33 22.97

profit / (Loss) before Taxes (211.04) (85.52)

Add :- Excess/ Short provision for tax in respect of (11.84) NIL earlier year

profit / (Loss) After Taxes (222.88) (85.52)

profit / (Loss) brought forward from last year (3112.97) (3027.45)

Surplus / (Loss) carried to Balance Sheet (3335.85) (3112.97)

OPERATIONAL PERFORMANCE :

During the year 2013-14, the total sales of the Company are increased from Rs.1726.23 Lacs (6 months) to Rs. 3676.65 Lacs (12 Months).

Export Sales has increased from Rs.170.78 Lacs (6 Months) to Rs. 636.61 Lacs (12 Months) for 2013-2014. Exports during forthcoming year are expected to grow further because of good market trend and efforts made by the Company for increasing its share in the international market.

The total World market for dyes and textile chemicals is estimated at US$ 12 billion and is growing at about 2%. Indian market is estimated to grow at US $ 800 million and is estimated to grow at 3%. India is the second largest manufacturers of dyes and chemicals followed by China. So there is ample scope for us to increase our export and local business in near future.

Further pursuant to Clause 49 of Listing Agreement, detailed performance of the Company is given in Management Discussion Analysis which forms part of the Director''s Report.

DIVIDEND :

Your Directors do not recommend any Dividend for the year under consideration due to absence of profits.

MERGER / AMALGAMATION :

Based on the Valuation Report presented by SSPA & Co. Chartered Accountant, the fairness opinion provided by Fortress Capital Management Services Pvt. Ltd. and recommendation made by the Audit Committee of the Company, the Board of Director have considered and approved the Scheme of Amalgamation and Arrangement between Khatau Capacitors Pvt. Ltd. and Indokem Exports Limited and Indokem Limited and their respective Shareholders.

SUBSIDIARY COMPANY :

The Company has no subsidiary. Hence, the consolidated financial results are not prepared for the year ended 31st March, 2014.

FIXED DEPOSITS:

The Company has not accepted any fixed deposit during the year 2013-2014 and no amount on account of principal or interests on Fixed Deposits was outstanding as on the date of Balance Sheet.

INSURANCE:

All the properties and insurable interest of the Company, including the buildings, plant and machineries and stocks have been adequately insured.

DIRECTORS :

Mrs. Asha M. Khatau retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment which your Board recommends.

Independent Directors

In order to give effect to the applicable provisions of sections 149 & 152 of the Companies Act, 2013, it is proposed that the following directors be appointed as Independent Directors, to hold office for five consecutive years, for a term upto 31st March, 2019.

- Mr. Kailash Pershad.

- Mr. Rajagopalan Sesha.

- Mr. Bhalchandra Sontakke.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under the applicable provisions of section 149 of the Act and under Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDITORS :

M/s. Sheth Doctor & Associates, Chartered Accountants, Auditors of the Company, hold office until conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. In accordance with the provisions of section 139, 142 and other applicable provisions of the Companies Act, 2013 and of the Companies (Audit and Auditors) Rules, 2014, it is proposed to re-appoint them as the Auditors of the Company for a period of three consecutive years commencing from the conclusion of this Annual General Meeting, until the conclusion of the 51st Annual General Meeting of the Company and they are not disqualified for such reappointment within the meaning of the said Act.

AUDITORS OBSERVATIONS :

Explanation for Audit Qualification on the records and valuation of inventory and fixed assets at Ankleshwar Plant is given in Note No. 26 (Additional Information to the Financial Statements) Para No. 3 which is self explanatory.

COST AUDITOR :

Pursuant to provisions of Section 233B of the Companies Act, 1956, it is mandatory for your Company to appoint Cost Auditor. Hence Company has appointed M/s. Deodhar & Associates, Cost Accountants, Mumbai, for the financial year 1st April, 2013 to 31st March, 2014. Approval from the Central Government has been received for the above referred appointment. The Cost Audit Report in respect of the financial year 2013-2014 will be fled before due date.

CORPORATE GOVERNANCE & MANAGEMENT''S DISCUSSIONS AND ANALYSIS & CORPORATE SOCIAL RESPONSIBILITY:

Your Company has complied with all the mandatory requirements of Corporate Governance Norms as mandated by Clause 49 of the Listing Agreement with Stock Exchanges. A Separate Report on Corporate Governance and Management Discussion and Analysis Report is annexed to this Annual Report.

The requisite certifcate from M/s. Ragini Chokshi & Associates, Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed hereto as Annexure II and forms part of this report.

Further your Company is not coming under the purview of Corporate Social Responsibility as mentioned in section 135 of Companies Act, 2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

Additional Information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

PARTICULARS OF EMPLOYEES :

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

INDUSTRIAL RELATIONS:

The relations between the employees and the Management have remained cordial.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under Section 217 (2A) of the Companies Act, 1956, your Directors state that:- (a) In the preparation of the annual accounts, the applicable accounting standards have

been followed alongwith proper explanation relating to material departures in the Financial Statements.

(b) The Directors 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 for the Financial Year ended 31st March, 2014; and of the profit or loss of the Company for that period.

(c) Proper and suffcient 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.

(d) The annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT:

Your Directors place on records their appreciation for the co-operation and assistance given by Financial Institution, Banks and Government Authorities as well as Valued Customers from time to time. They also record their appreciation of the devoted services rendered by the Executives, Staff Members and Workers of the Company. The Directors also wish to place on record their gratitude to the Members for their continued support and co-operation.

For and on behalf of the Board Place: Mumbai Mahendra K. Khatau Date:14th August, 2014. Chairman & Managing Director


Mar 31, 2013

To , The Members,

The Directors are pleased to present the Forty Seventh Annual Report of the Company together with its Audited Proft and Loss Account for the year ended 31st March, 2013 and the Balance Sheet as on the date which is for 6 months (01.10.2012 to 31.03.2013):

(Rs.in Lacs)

FINANCIAL RESULTS For the period ended For the period ended 31.03.2013 30.09.2012 (6 Months) (18 Months)

Income 17,37.85 44,45.40

Proft / (Loss) before Interest, Depreciation and Taxes 56.74 (5,19.14)

Less : Interest 119.29 2,74.57

Depreciation 22.97 1,53.75

Proft / (Loss) Before tax (85.52) (9,47.46)

Add : Provision for Wealth Tax / FBT Nil Nil

Add : Excess / Short provision for tax in respect of earlier year Nil 0.10

Proft / (Loss) After Tax (85.52) (9,47.36)

Less : Amount drawn from Capital Reserve

Proft / (Loss) brought forward from last year (30,27.45) (20,80.09)

Surplus / Loss carried to Balance Sheet (31,12.97) (30,27.45)

BUSINESS OPERATIONS, FUTURE PROSPECTS & CHANGE IN FINANCIAL YEAR.

Infationary pressure on costs and economic slowdown affecting the demand continued to be a challenge during the current fnancial year also. Despite the presence of these adverse factors, your company could achieve a turnover of Rs. 1722.30 Lacs (for six months). This was possible mainly due to quality of the products and use of latest technology.

The management is hopeful of increasing the turn over both local and export during the next year by adopting effective marketing techniques The cost control measures are likely to increase the margins

Shareholders have already given their approval through Postal Ballot conducted on 18.03.2011 for disposal of whole/part of undertaking situated at Plot No.2900, GIDC Ankleshwar and Company is in the process of disposal of the same and expecting some good proposals in the near future.

EXPORTS:

The Company has achieved Export Sales of Rs. 170.78 Lacs for the Current Financial Year (for 6 months) as compared to the previous year''s sale of Rs. 817.89 Lacs (for 18 months).

DIVIDEND:

Due to absence of profts your Directors do not recommend any dividend for the year under consideration.

SUBSIDIARY COMPANY:

The Company has no subsidiary. Hence, the statement pursuant to section 212 of the Companies Act, 1956 relating to Subsidiary Companies is not given and the standalone balance sheet for the year ended 31st March, 2013 is prepared accordingly.

FIXED DEPOSITS:

The Company has not accepted any fxed deposit during the year and no amount on account of principal or interests on Fixed Deposits was outstanding as on the date of Balance Sheet.

BALANCE SHEET ABSTRACT & COMPANY''S GENERAL BUSINESS PROFILE:

Information pursuant to Ministry of Corporate Affairs Notifcation relating to the Balance Sheet Abstract and Company''s General Business Profle is given in the Annual Report for the information of the Shareholders.

INSURANCE:

All properties and insurable interest of the Company including buildings, plant and machineries, stores and spares have been adequately insured.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Company''s Articles of Association, Ms. Leela K .Khatau and Mr. S. Rajagopalan, Directors retires by rotation and are eligible for re-appointment. The Board recommends their reappointment.

Brief resume of the Directors proposed to be reappointed, nature of their expertise in specifc functional areas and names of public limited companies in which they hold directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, are provided in the Notice forming part of the Annual Report.

Further it has been approved by the Remuneration Committee and Board of Directors in their meeting held on 08.08.2013 to revise the remuneration of Mr. M. K. Khatau, Chairman and Managing Director of the Company upto Rs. 2.50 Lacs per month subject to the approval of members in ensuing Annual General Meeting. Further, disclosure required pursuant to Schedule XIII and Listing Agreement are annexed to the Notice which form part of this Annual Report.

AUDITORS:

M/s. Sheth Doctor & Associates, Chartered Accountants, Auditors of the Company, hold offce until conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(IB) of the Companies Act, 1956. The Audit Committee of the Board has recommended the re-appointment of M/s. Sheth Doctor & Associates, Chartered Accountants as Auditors of the Company.

AUDITORS OBSERVATIONS:

Explanation for Audit Qualifcation on the records and valuation of inventory and fxed assets at Ankleshwar Plant is given in Note No.26 (Additional Information to the Financial Statements) Para No. 3 which is self explanatory.

COST AUDITOR:

Pursuant to Section 233B of the Companies Act, 1956, M/s. Deodhar & Associates, Cost Accountants, Mumbai, are appointed as Cost Auditor for the fnancial year 1st April, 2013 to 31st March, 2014.

CORPORATE GOVERNANCE & MANAGEMENT''S DISCUSSIONS AND ANALYSIS:

Corporate Governance as required by Listing Agreement with the Stock Exchanges, the report on Management Discussions and Analysis, Corporate Governance as well as the Auditors Certifcate regarding compliance of conditions of Corporate Governance, from part of the Annual Report.

Disclosure under Schedule XIII, Part II, Section II, Part B (IV) is given separately in Corporate Governance Report which forms part of this annual report. Further a separate Management Discussion & Analysis Report is also enclosed with this report.

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

Pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, prescribed particulars as applicable is annexed hereto as Annexure ''A'' and forms part of this Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of expenditure and earning in foreign currencies during the period under review are as under:

000 31.03.2013(6 Months) 30.09.2012(18 Months)

I) EXPENDITURE IN FOREIGN EXCHANGE CAPITAL (01.10.12 to 31.03.13) (01.04.11 to 30.09.12)

Value of Imports on C.I.F. basis Raw Material 8,489 2,98,10

Travelling - 1,766

Foreign Bank Charges 8 51

Consultancy Charges - 66

Cash Discount 39 -

Total: 8,536 3,16,93

II) EARNINGS IN FOREIGN EXCHANGE

F.O.B. VALUE OF EXPORTS 1,54,39 7,20,49

PARTICULARS OF EMPLOYEES:

None of the employees of the Company fall under the provision of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, during the year under report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors state that:- 1) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures in the Financial Statements.

2) The Directors 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 for the Financial Year ended 31st March, 2013; and of the proft or loss of the Company for that period.

3) Proper and suffcient 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.

4) The annual accounts have been prepared on a going concern basis.

INDUSTRIAL RELATIONS:

The industrial relations remained cordial during the 6 months under review.

ACKNOWLEDGEMENT:

Your Directors place on records their appreciation for the co-operation and assistance given by Financial Institution, Banks and Government Authorities as well as Valued Customers from time to time. They also record their appreciation of the devoted services rendered by the Executives, Staff Members and Workers of the Company.

The Directors also wish to place on record their gratitude to the Members for their continued support and co -operation

For and on behalf of the Board

Place : Mumbai Mahendra K. Khatau

Date : 8th August, 2013 Chairman & Managing Director


Mar 31, 2010

The Directors have pleasure in presenting their Forty Fourth Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2010.

(Rupees in Lacs.)

FINANCIAL RESULTS For the year For the year ended ended 31.03.2010 31.03.2009

Income 50,98.59 70,13.33

Profit/ (Loss) before Interest, Depreciation and Taxes (1,50.17) 5,84.52

Less: Interest 4,76.48 5,66.63

Depreciation 3,02.07 3,09.59

Profit/(Loss) before tax (9,28.72) (2,91.70)

Add:ProvisionforWealthTax/FBT Nil (6.76)

Add:Excess/(Short)provision for tax in respect of earlier year (0.25) (2.86)

Profit/(Loss)AfterTax (9,28.97) (3,01.32)

Less .Amount drawn from Capital Reserve 1.68 1.76

Profit / (Loss) brought forward from last year (2,01.30) 98.26

Surplus/(Loss) carried to Balance Sheet (11,28.59) (2,01.30)

DIVIDEND:

In order to conserve resources, your Directors do not recommend any dividend for the year under consideration.

OPERATIONS AND FUTURE PROSPECTS:

The Company has sold its housing complex situated at Bharuch, Gujarat in September, 2009 and also a portion of the office premises situated at Khatau House, Mahim in March, 2010.

Proceeds from the sale of said properties were utilized to meet outstanding dues of Gujarat Industrial Development Corporation, Development Credit Bank Limited and other major banks. Consequently, upon payment of GIDC dues, possession of Ankleshwar factory is reverted back to the Company. However the operations at Ankleshwar factory remains suspended in view of the fact that the plant remained in-operative for a considerable time. In the current financial year Companys total sales have decreased from 69.24 Crores to 51.90 Crores as compared to previous year.

EXPORTS:

Your Companys export sales for the current financial year are lower as compared to the previous financial year, to a large extent. Fluctuations in exchange rates, scarcity of key raw materials etc. during year adversely affected our export contributions

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mrs. Leelabai K. Khatau, Director, retires by rotation and is eligible for re-appointment. The Board recommends her appointment.

The Board of Directors has re-appointed Mr. Mahendra K. Khatau as Chairman & Managing Director, subject to the approval of the members at the ensuing Annual General Meeting for a term of five years w.e.f. 01 /04/2010 to 31 /03/2015.

AUDITORS:

M/s. Sheth Doctor & Associates, Chartered Accountants, Auditors of the Company, hold office until conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1 B) of the Companies Act, 1956. The Audit Committee of the Board has recommended the re- appointment of M/s. Sheth Doctors Associates, CharteredAccountants as Auditors of the Company.

INSURANCE:

All properties and insurable interest of the Company including buildings, plant and machineries, stores and spares have been adequately insured.

SUBSIDIARY:

Pursuant to section 212 of the Companies Act, 1956, the Audited Accounts with Auditors, and Directors Reports, of your Companys subsidiaries Kapsales electricals Limited and Radio Components and Transistors Company Ltd. For the year ended 31.03.2010 are annexed hereto.

Radio Components and Transistors Ltd. Has recorded a profit of Rs. 2.47 Lacs during the year as compared to Rs 2.64 Lacs in previous year.

Kapsales Electricals Limited has recorded a loss of Rs.37.92 Lacs during the year as compared to the loss of Rs. 10.93 lacs of previous year.

FIXED DEPOSITS:

The Company has not accepted or renewed any Deposits from public during the year under review and there is no unpaid or unclaimed deposits lying with the Company.

BALANCE SHEET ABSTRACT & COMPANYS GENERAL BUSINESS PROFILE:

Information pursuant to Department of Company Affairs Notification relating to the Balance Sheet Abstract and Companys General Business Profile is given in the Annual Report for the information of the Shareholders.

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

Operations at our factory situated at Ankleshwar, Gujarat is suspended hence provisions pertaining to Conservation of Energy, Technology Absorption and Form A, and Form B (disclosure of particulars with respect to absorption) are not applicable. Particular with regard Foreign Exchange are as follows :-

FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details of expenditure and earning in foreign currencies during the period under review are as under:

Rs.OOO

I) EXPENDITURE IN FOREIGN EXCHANGE CAPITAL 31.03.2010 31.03.2009

Value of Imports on C.I.F. basis Raw Material 31,39 2,91,83

Travelling 1 3,04

Commission - -

Others 1,63 14

Total: 33,03 2,95,01

II) EARNINGS IN FOREIGN EXCHANGE

F.O.B. VALUE OF EXPORTS Total: 5,29,59 9,62,18

PARTICULARS OF EMPLOYEES:

None of the employees of the Company fall under the provision of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, during the year under report.

DIRECTORSRESPONSIBILITY STATEMENT:

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, the Directors on the Board confirm that:

1) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures wherever applicable;

2) The Directors had 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 at the end of the financial year and of the profit of the Company for the year under review;

3) The Directors had taken proper and sufficient care 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;

4) The Directors have prepared the annual accounts on a going concern basis.

INDUSTRIAL RELATIONS:

The industrial relations remained cordial during the year under review.

CORPORATE GOVERNANCE:

Corporate Governance primarily involves transparency, full disclosure, independent monitoring of the state of affairs and being fair to all stakeholders. The Company has complied with the mandatory provisions of Corporate Governance. As prescribed under the Listing Agreement of the Stock Exchanges, a separate report on Corporate Governance appears after this report. A certificate from M/s. Sheth Doctor & Associates, Chartered Accountants, with regard to compliance of the Corporate Governance Code by the Company is annexed hereto and forms part of this report. Further, a separate Management Discussion & Analysis Report is also enclosed with this report.

APPRECIATION:

The Directors wish to express their appreciation of the support and co-operation of officials of the Central and State Government and take this opportunity to thank all its Bankers, suppliers, business associates and customers who continue to repose their trust in the Company.

The Directors are also grateful to the shareowners for their continued support, confidence and the faith reposed in the Company. Your Directors also acknowledge the valuable contributions of its employees at all levels with whose dedication and committed efforts, the Company has been able to enhance its position in the market place.



For and on behalf of the Board

Mumbai Mahendra K. Khatau

Date: 13.08.2010 Chairman & Managing Director



 
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