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Directors Report of Mysore Petro Chemicals Ltd.

Mar 31, 2015

Dear Members,

The Directors hereby present the Forty Fifth Annual Report alongwith Audited Financial Statements of the Company for the financial year ended 31st March, 2015.

1. Financial Results

Rs. in Lacs 2014-2015 2013-2014

Revenue from Operations (Gross) 3,696.73 4,474.78

Less: Excise duty 409.99 482.26

Revenue from Operations (Net) 3,286.74 3,992.52

Other Income 94.94 6.35

Total Revenue 3,381.68 3,998.87

Gross Profit 1,642.31 1,041.60

Less:

Finance Cost 135.14 246.30

Depreciation and Amortisation expenses 273.98 352.59

Profit/(Loss) before Tax 1,233.19 442.71

Tax Expenses:

- Current Tax 462.00 68.55

- Deferred Tax 49.65 36.84

Profit for the year 721.54 337.32

Less: Appropriations

Transfer to General Reserve 200.00 100.00

Proposed Final Equity Dividend @20% 131.67 98.75

Tax on Proposed Dividend / earlier year 27.56 16.02

Balance brought forward from previous year 1,153.54 1,030.99

Balance carried forward to Balance Sheet 1,515.85 1,153.54

2. Operational Review

The Company's Maleic Anhydride (MA) Plant at Taloja, Maharashtra operated uninterruptedly during most part of the year. The Net Sales Turnover was Rs. 3,286.74 lacs during the year as against Rs. 3,992.52 lacs during the previous year 2013-2014. Inspite of rise in production, the sales turnover was less due to fall in sale price of MA during the third quarter of the year as a result of the steep fall in the international crude oil prices, due to which there was equal fall in the prices of the downstream petro products including MA. The production was affected during October 2014 due to less Wash Water available from M/s. I G Petrochemicals Limited (IGPL) due to stoppage of one of its Plant for change of Catalyst. However the Net Profit for the year was substantially higher at Rs. 721.54 lacs as against Rs. 337.32 lacs in the previous year 2013-2014. This was on account of better realization on sales and reduction in Finance and other costs and minimum overheads of the closed Phthalic Anhydride (PA) Unit at Raichur, Karnataka.

3. Dividend

Your Directors are pleased to recommend dividend of Rs. 2/- (20%) per equity share of Rs. 10/- each. The total outgo on account of dividend for the current year amounts to Rs. 159.23 lacs,( including dividend distribution tax) as against Rs. 114.77 lacs (including dividend distribution tax).

4. Share Capital

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 658.76 lacs. During the year under review, the Company has neither issued any shares nor granted any stock options or sweat equity. The Promoter shareholding as on 31st March, 2015 is 72.99%.

5. Particulars of Loans, Guarantees or Investments

Details of the Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

7. Fixed Deposits

The Company has not accepted any Fixed Deposits during the year. However in view of the repayment of the Working Capital loan of The Saraswat Co-operative Bank Ltd. certain loans by the relatives of Directors were considered as deposits amounting to Rs. 499.50 lacs and were repaid in full before the stipulated period of one year as per the provisions of Section 74(b) of the Companies Act, 2013.

8. Risk Management

The Company manufactures a single product MA which is recovered from the Wash Water made available by IGPL. Hence there are only the general business risks which are inherent to any business. The Board of Directors do a periodic assessment of risks through properly defined frame work and its mitigation resulting in minimization of risks.

The key business risks identified by the Company and its mitigation plans are as under:

a. Technical/Operational risk

During the year under review the MA-1/2/3 Plants operations were smooth except on certain occasions due to minor technical problems and less availability of Wash Water from IGPL. The maintenance department at Taloja Plant takes care of the day to day maintenance. The Company's Plants are adequately insured viz. Fire Policy, Loss of Profit Policy etc.

b. Exchange Rate risk ( Procurement of Raw material and sale of finished goods)

Wash Water is supplied from IGPL Plants for recovery of MA and the product is sold locally. Hence there is no exchange rate risk for the product. There are no forex transactions and hence there is no exchange rate risk.

c. Interest rate risk

The Company does not have any secured debts from Banks/Institutions. There are only unsecured debts from group Companies. Interest as per Bank rates is paid regularly to the Companies from whom inter-corporate loans are accepted. The Company reviews the position on regular basis and keeps the loan/interest cost at minimum level.

d. Economic and Geo Political risk

The political situation and the Government policies viz. import duty, taxes etc. and the international situation have an impact on the overall corporate growth. There was a steep fall in the international crude oil price from a high of about 115 US$ to 45 US$ during the the period September 2014 to January 2015 due to which all the downstream petro products witnessed a sharp fall in the prices. The Company keeps abreast with the domestic and international economic developments and works on the strategies favourable to the Company. The Company maintains minimum inventory levels of finished goods in order to minimize the loss due to external factors.

9. Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

10. Directors

The Board of Directors of the Company, pursuant to the recommendations of the Nomination and Remuneration Committee, in its meeting held on 17th July, 2015 revised the remuneration payable to Shri M M Dhanuka w.e.f. 1st July, 2015 and also modified the term of his appointment to expire on 30th June, 2018 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

Based on the recommendation of the Nomination and Remuneration Committee the Board of Directors appointed Smt. Uma Acharya (DIN 07165976) as Additional Independent Director effective 25th May, 2015. She has given declaration that she meets the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 ("the Act") and Clause 49 of the Listing Agreement. In terms of sections 149, 152, 161, Schedule IV and applicable provisions, if any, of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of your Company and are not liable to retire by rotation. Accordingly it is proposed to appoint Smt. Uma Acharya as Independent Director of your Company up to five (5) consecutive years i.e. upto 24th May, 2020.

All Independent Directors have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Shri. S N Maheshwari, Director retires by rotation and being eligible has offered himself for re-appointment.

10.1 Board Evaluation

Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the working of the Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

10.2 Remuneration Policy

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and determination of their remuneration. The Remuneration Policy forms part of the Corporate Governance Report.

10.3 Meetings

During the year four Board Meetings and equal number of Audit Committee Meetings were convened and held. The details of the same are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Act.

11. Directors' responsibility statement.

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Companies Act, 2013 we state:

a) that in the preparation of the annual financial statements for the year ended 31st March 2015, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have 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 ended 31st March 2015 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken 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/detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

12. Related Party Transactions

The Company has certain long term related party transactions which are on arm's length basis and in the ordinary course of business. During the year under review, there were no related party transactions within the meaning of Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of the Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. The Board has framed a policy on Related Party Transactions which is hosted on the Company's website www.igpetro.com.

13. Auditors

13.1 Statutory Auditors

The Company's Auditors, M/s. Hariharan and Company, Chartered Accountants, Bengaluru (Firm's Registration No. 001083S) retire at the ensuing Annual General Meeting and are eligible for re-appointment for the financial year 2015-2016. As per the requirement of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Hariharan and Company that their appointment, if made, would be in conformity with the limits specified in the said section. Also they have confirmed their eligibility under Section 141 of the said Act and the Rules framed there under for re-appointment as Auditors of the Company. As required under Clause 49 of the listing agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Your Directors recommend their re-appointment as the Statutory Auditors to hold office for a term of two consecutive years from the conclusion of this Annual General Meeting (AGM) until the conclusion of the 47th AGM of the Company to be held in the year 2017 subject to the ratification of their appointment at the next AGM to be held in the year 2016.

13.2 Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, ("Said Rules") 2014, the cost records by the Company in respect of Maleic Anhydride is required to be maintained. However Cost Audit is not required as per the said Rules from the financial year 2014-15.

The Cost Audit Report for the financial year 2013-2014 was filed with the Ministry of Corporate affairs in the stipulated time on 25.09.2014.

13.3 Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Makarand M Joshi and Associates, a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for the Financial Year 2014-15. The said Report is annexed herewith as "Annexure A".

The Company has appointed a Woman Director on Board w.e.f. 25.5.2015 and hence the Observations made by the Secretarial Auditors in this regard is resolved.

14. Listing of Shares

Your Company's shares are listed on BSE Limited (BSE) under Scrip Code No. 506734. The ISIN code is INE741A01011.

15. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

16. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure B".

17. Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual return in Form MGT-9 is annexed herewith as "Annexure C".

18. Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office/Corporate Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

19. Acknowledgements

Your Directors sincerely thank the various Central and State Government Departments and various Organizations for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for their excellent support. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board

M M Dhanuka Mumbai Chairman & Managing Director 17th July, 2015


Mar 31, 2014

Dear Members,

The Directors hereby present the Forty Fourth Annual Report alongwith audited Accounts of the Company for the financial year ended 31st March 2014.

1. Financial Results

Rs. in Lacs

2013-2014 2012-2013

Revenue from Operations (Gross) 4,474.78 14,922.52

Less: Excise Duty 482.26 1,648.17

Revenue from Operations (Net) 3,992.52 13,274.35

Other Income 6.35 23.69

3,998.87 13,298.04

Gross Profit 1,041.60 943.93

Less:

Finance Cost 246.30 319.64

Depreciation and Amortisation Expenses 352.59 318.49

Profit / (Loss) before Tax 442.71 305.80

Tax Expenses:

- Current Tax 68.55 92.39

- Deferred Tax 36.84 9.19

Profit/(Loss) for the year 337.32 204.22

Less: Appropriations -

Transfer to General Reserve 100.00 —

Proposed Final Equity Dividend 98.75 —

Tax on Proposed Dividend 16.02 —

Balance brought forward from previous year 1,030.99 826.77

Balance carried forward to Balance sheet 1,153.54 1,030.99

2. Financial Performance

The Phthalic Anhydride (PA) Plant at Raichur, Karnataka operated for a few days during April 2013 with a production of 480 MT. The Plant was permanently closed down w.e.f. 16th July 2013.

The Maleic Anhydride (MA) Plant at Taloja, Maharashtra operated uninterruptedly during most part of the year. The production was 2916 MT. during the year 2013-2014 as against 2486 MT. in the previous year 2012-2013.

The Net Sales turnover was Rs. 3,992.52 Lacs during the year as against Rs. 13,274.35 Lacs (including PA sales) during the previous year 2012-2013. The reduction in sales was due to closure of PA Plant at Raichur during July 2013.

Profit Before Interest & Tax (PBIT) was Rs. 689.01 Lacs as against Rs. 625.44 Lacs and after accounting for interest and tax there was a Net Profit of Rs. 337.32 Lacs as against Rs. 204.22 Lacs in the previous year 2012-2013.

3. Dividend

The Directors are pleased to declare a dividend of Rs. 1.50 per share (15 %) (Previous year Rs. Nil) for the year under review. The total dividend payout for 2014 is Rs. 98.75 Lacs. The Dividend Distribution Tax borne by the Company will amount to Rs. 16.02 Lacs.

4. Directors'' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts, all the applicable accounting standards have been followed;

b) appropriate accounting policies have been selected and applied consistently and have made judgements 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 of the profit of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities;

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

5. Fixed Deposits

Fixed Deposits amounting to Rs. 1 (one) Crore was repaid during June 2013 alongwith interest.

6. Directors

Shri Nikunj Dhanuka retires by rotation and being eligible has offered himself for reappointment.

In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent directors can hold office for a term of up to five (5) consecutive years on the Board of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Shri Shrikant Somani, Shri M M Jayakar and Shri Anil Kochar as Independent Directors of your Company up to five (5) consecutive years for the term up to the conclusion of the 49th Annual General Meeting of the Company in the calendar year 2019.

7. Particulars of Employees

There is no employee drawing the requisite remuneration, in terms of Section 217(2A) of the Companies Act, 1956.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars with respect to conservation of energy etc. required as per 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 are annexed hereto.

9. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate Section on Corporate Governance practices followed by the Company, together with a certificate from the Company''s Auditors confirming compliance, is set out in the Annexure forming part of this Report.

10. Auditors and Audit Report

The Company''s Auditors, M/s. Hariharan & Co., Chartered Accountants, Bengaluru retire at the ensuing Annual General Meeting and are eligible for reappointment for the financial year 2014-15. As per the requirement of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s. Hariharan & Co. that their appointment, if made, would be in conformity with the limits specified in the said Section. Your Directors commend their appointment for the ensuing year.

11. Cost Auditors

As per the requirements with the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956 your Company has been carrying out an audit of cost records relating to Phthalic Anhydride and Maleic Anhydride every year.

The Company has appointed M/s. Krishna S & Associates, Cost Accountants, Mumbai, as Cost Auditors to audit the cost accounts of the Company''s Maleic Anhydride Plant for the financial year 2014-15.

The Cost Audit Report for the financial year 2012-13 was filed with the Ministry of Corporate Affairs on 27th September 2013.

12. Acknowledgement

The Directors express their appreciation for the contribution made by the employees in the operations of the Company and for the support received from all other stakeholders, including shareholders, customers, suppliers and business partners.

For and on behalf of the Board

M M Dhanuka Mumbai Chairman & Managing Director 23rd May, 2014


Mar 31, 2012

The Directors hereby present the Forty Second Annual Report along with audited Accounts of the Company for the financial year ended 31 March 2012.

1. Financial Results

Rs.in lacs

2011-2012 2010-2011

Revenue from Operations (Gross) 8,109.18 8,560.64

Less: Excise Duty 767.16 800.87

Revenue from Operations (Net) 7,342.02 7,759.77

Other Income 74.37 26.09

7,416.39 7,785.86

Profit Before Finance Cost, Depreciation and Tax Expenses 425.73 370.68

Less:

Finance Cost 274.49 279.07

Depreciation and Amortization Expenses 443.07 472.16

Profit/(Loss) before Taxation (291.83) (380.55)

Tax Expenses

- Deferred Tax 134.27 -

Profit / (Loss) after Taxation (426.10) (380.55)

2. Financial Performance

The production of Ophthalmic Anhydride (PA) at Raichur, Karnataka for the year was 6498 MT at 54.15% as against 9452 MT at 78.76% during the previous year 2010-2011. The production was severely affected due to stoppage of PA Plant on a few occasions during June-July 2011 for change of Catalyst and further during November 2011 to mid February 2012 due to certain technical faults at Plant and adverse market conditions. The production of Malefic Anhydride at Taloja, Maharashtra was 2636 MT as against 2756 MT during the previous year 2010-2011. The Net Sales Turnover of the Company was lower at Rs.7,342.02 lacs as against Rs. 7,759.77 lacs during the previous year 2010-2011. Profit/(Loss) before Interest and tax was Rs.(17.34) lacs as against Loss of Rs.(101.48) lacs during the previous year. After taking into account the Interest and provision for tax there was a Net Loss of Rs. (426.10) lacs as against Loss of Rs.(380.55) lacs in the previous year.

4. Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts, all the applicable accounting standards have been followed ;

b) appropriate accounting policies have been selected and applied consistently and have 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 31 st March 2012 and of the loss of the Company for the year ended on that date.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities.

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

5. Fixed Deposits

Fixed Deposit amounting to Rs 1 crore from private sources matured on 22nd November 2011 and have been renewed for a further period of one year.

6. Directors

Shri Nikunj Dhanuka and Shri M M Jayakar, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

7. Particulars of Employees

There is no employee drawing the requisite remuneration, in terms of section 217(2A) of the Companies Act, 1956.

8. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Particulars with respect to conservation of energy etc. required as per 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 are annexed hereto.

9. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report together with the Auditors' Certificate on compliance of the conditions of Corporate Governance form part of this Annual Report.

10. Auditors

The Company's Auditors, M/s. Hariharan & Company, Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors commend their appointment for the ensuing year.

11. Cost Auditors

As per the requirement of the Central Government and pursuant to Section 233B of the Companies Act, 1956. your company carries out an audit of cost records relating to Phthalic Anhydride/Malefic Anhydride every year. Subject to the approval of the Central Government, the Company has appointed M/s. S. K. Agarwal & Associates, Cost Accountants, as Cost Auditors to audit the cost accounts of the Company for the financial year 2011-12.

The Cost Audit report for the Financial year 2010-2011 was filed with the Ministry of Corporate Affairs within the stipulated time.

12. Acknowledgement

Your Directors wish to thank the Government Authorities, Financial Institutions, Shareholders and Bankers for their continued support. They wish to place on record their appreciation for the dedicated Seneca of the employees at all levels.

For and on behalf of the Board

M M Dhanuka

Mumbai Chairman & Managing Director

15th May, 2012


Mar 31, 2011

Dear Members,

The Directors hereby present the Forty-first Annual Report along with audited Accounts of the Company for the financial year ended 31 March, 2011.

1. Financial Results

Rs in'000

2010-2011 2009-2010

Gross Sales 856,029 893,036

Less : Excise Duty 80,087 69,372

Net Sales 775,942 823,664

Other Income 2,644 6,278

778,586 829,942

Gross Proft 37,068 71,178 Less :

Interest & Finance Charges 27,907 23,016

Depreciation/Amortisation 47,216 46,695

Proft/(Loss) before Taxation (38,055) 1,467 Provision for Taxation

- Current Tax (MAT) - 229

- Excess provision of Fringe Benefit Tax written back - (14)

Profit after Taxation (38,055) 1252

Balance Brought Forward 163,342 162,090

Amount available for Appropriations 125,287 163,342

2. Financial Performance

The production of Phthalic Anhydride (PA) at Raichur, Karnataka, for the year was 9452 MT at 78.76% as against 12072 MT at 100.60% during the previous year 2009-2010. The production was less due to stoppage of Plant during the year due to breakdown and free in the Plant and also for routine maintenance work on one occasion. The Maleic Anhydride (MA) production at Taloja, Maharashtra, was 2756 MT as against 2553 MT during the previous year. The Net Sales Turnover of the Company was Rs. 775,942 thousand as against Rs. 823,664 thousand during the previous year. Profit/(Loss) before Interest and tax was at (Rs.10,148) thousand as against Rs. 24,483 thousand during the previous year. After taking into account the Interest and provision for tax there was a Net Loss of (Rs. 38,055) thousand as against Net Profit of Rs. 1,252 thousand in the previous year.

3. Dividend

Your Directors do not recommend any dividend for the year under review.

4. Sale of Synthetic Industrial Diamonds Division

The Company has sold the property admeasuring 5399 square meters at Panoli, Gujarat which was a non-operational unit for manufacture of Synthetic Industrial Diamonds.

6. Group

Pursuant to intimation from the Promoter(s) and in accordance with Regulation 3(1)(e) of the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997 regarding identifcation of persons constituting "Group" (within the meaning as defned in the Monopolies and Restrictive Trade Practices Act, 1969) are disclosed in this Annual report as separate disclosure.

7. Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that -

a) in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed and there are no material departures from the same;

b) appropriate accounting policies have been selected and applied consistently and have 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 of the loss of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing/ detecting fraud and other irregularities; and

d) the annual accounts of the Company have been prepared on a going concern basis.

8. Fixed Deposits

The Company had accepted fixed deposits of 1 crore from private resources at 9 % interest for one year which would mature on 22nd November 2011. The Company has maintained 15% of the matured amount in liquid assets as per the Companies (Fixed Deposit) Rules, 1988.

9. Directors

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Anil Kochar and Shri Shrikant Somani, Directors retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

10. Particulars of Employees

None of the employees of the Company was in receipt of monthly remuneration of Rs. 500,000/- or more. Hence the provisions of Section 217 (2A) of the Companies Act, 1956 are not applicable.

11. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Particulars with respect to conservation of energy etc. required as per 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 are annexed hereto.

12. Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, Corporate Governance Report together with the Auditors' Certificate on compliance of the conditions of Corporate Governance form part of this Annual Report.

13. Auditors and Audit Report

The Company's Auditors, M/s. Hariharan & Co., Chartered Accountants, Bangalore retire at the ensuing Annual General Meeting and are eligible for reappointment. Your Directors commend their appointment for the ensuing year. Observations made in paragraphs 4(e) of the Auditors Report have been fully explained in Note No. 3 of Schedule 18.

14. Cost Auditors

In terms of the Order issued by the Central Government under Section 233B of the Companies Act, 1956, the Company was required to appoint cost auditors to get the audit of the cost records of the Company done by a Cost accountant for the year 2010-2011 and thereafter. Accordingly the Company has appointed Mr. Sushil Kumar Agarwal, Practising Cost Accountant, an associate member of the Cost and Works Accountants of India (ICWAI). The Cost Audit Report for the year 2010-2011 has been submitted on 4th August 2011.

For the financial year 2011-2012 too, the Company has appointed Mr. Sushil Kumar Agarwal as the cost auditor. He would be required to submit the report by 30th September, 2012.

15. Acknowledgement

Your Directors wish to thank the Government Authorities, Financial Institutions, Banks, customers, vendors and members for their continued support and co-operation. Your Directors also wish to place on record their appreciation for the contribution of the employees at all levels for their dedicated service.

For and on behalf of the Board

M M Dhanuka

Mumbai Chairman & Managing Director

4th August, 2011

 
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