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Directors Report of TCP Ltd.

Mar 31, 2014

THE MEMBERS

The Directors have pleasure in presenting the forty second Annual Report and the Audited Accounts of your company for the financial year ended 31st March 2014.

FINANCIAL RESULTS

The Financial Results for the year ended 31st March 2014 is as follows:

Year ended Year ended 31st March 2014 31st March 2013

(Rs. in Lakhs)

Sales - Net of Excise Duty 37,393.18 32,632.65

Other operating revenue 1,371.23 1,003.73

Other income 124.7 111.78

Total revenue 38,889.11 33,748.16

Profit before Interest & Depreciation 6,101.48 4,807.69

Less: Interest 919 1,365.76

Depreciation 1,263.90 2,182.90 1,378.26 2,744.02

Profit before tax 3,918.58 2,063.67

Less: Current tax (Net of MAT credit) 1,360.00 900

Deferred tax (Net) (-) 160.06 (-) 352.68

Wealth Tax 4.34 3.71

Tax relating to earlier years 19.22 0.05

Profit after tax 2,695.08 1,512.59

Add: Surplus brought forward from previous year 11,673.05 10,718.94

Available for appropriations 14,368.13 12,231.53

Dividend 10% (2012-13: 10%) 50.32 50.32

Corporate Dividend Tax 8.55 8.16

Transfer to General Reserve 500 500

Surplus carried forward to Balance Sheet 13,809.26 11,673.05

Company''s Key Financial Ratios 2014 2013 Rs. Rs.

Earnings per share 53 30

Dividend per share 1 1

Return on Net worth 8% 5%

DIVIDEND

Your Directors have pleasure in recommending a dividend of 10% on the Equity Shares. The quantum of dividend outgo on this account is Rs. 50.32 lakhs representing 1.87% of profit after tax.

SEGMENTWISE / PRODUCTWISE PERFORMANCE PRODUCTION

I. CHEMICALS Sodium Hydrosulphite

During the year your company had produced 13,881 MT of Sodium Hydrosulphite as against

II, 484 MT in the previous year, an increase by about 20%.

Liquid Sulphur Dioxide

During the year your Company had produced 13,378 MT of Liquid Sulphur Dioxide as against 11,217 MT in the previous year, an increase by about 19 %.

Sulphoxylate

The production of Sulphoxylates was 62 MT during the year as against 163 MT in the previous year.

II. RECOVERY SALTS

The trisalt production was 3,805 MT as against 4,099 MT in the previous year.

III. ELECTRIC POWER Electric Power Generation

Your company had generated 5,212 lakh units of electricity as against 4,985 lakh units last year from the Thermal Power Plant. The average Plant Load Factor during the year under review was 93.31%. The Biomass based power plant had generated 235 lakh units of electricity as against 244 lakh units in the previous year. The Wind Mills had generated 306 lakh units of electricity as against 291 lakh units in the previous year. The Average Plant Load Factor for Power Plant was 93.31% and for the Biomass Power Plant 79.49%.

SALES

I. CHEMICALS Sodium Hydrosulphite

During the year your company had made sale of 13,768 MT of Sodium Hydrosulphite as against

II, 269 MT in the previous year. The domestic sales increased by about 20% during the year when compared with the previous year. Your company is preparing to expand its market base in the current year. There is increase in demand from textiles, paper and pharma industries which may favour us with maximum market share during the current year.

Liquid Sulphur Dioxide

The sale of Liquid Sulphur Dioxide during the year was 1,496 MT as against 1,242 MT in the previous year. During the year the sales has increased by about 20%. The sales can be augmented in the coming years too, as we foresee a good demand for the product.

Sulphoxylates

The sale of Sulphoxylates was 77 MT as against 153 MT in the previous year. The production and sales were affected during the year due to volatility in the raw material price.

Recovery salts

The sale of Recovery salts was 1,346 MT during the year as against 3,008 MT in the previous year. There was less demand during the year. The company has planned to focus on western and eastern India and Kanpur markets during the current year to increase the sales.

II. POWER

During the year your Company had sold 4,763 lakh units of electricity as against 4,546 lakh units in the previous year from the Thermal Power Plant. The Biomass based Power plant had sold 192 lakh units of electricity as against 209 lakh units in the previous year. The Wind mills had exported 233 lakh units of electricity as against 220 lakh units in the previous year.

The Captive Power Purchase Agreement (CPP Agreement) that was entered into with the erstwhile Tamil Nadu Electricity Board (TNEB) now Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) which provided for purchase of surplus power generated by the Company, after captive consumption by the Company, by the TANGEDCO, at the rates specified in the CPP Agreement, provided for such purchase arrangement up to 28th January 2014.

After the CPP Agreement ceased to be in force, the Company made arrangements to sell the power generated up to 38 MW to Group Captive Consumers, power generated up to 20 MW was sold to TANGEDCO and the balance power generated was towards captive consumption. The Group Captive Consumers arrangement Rules stipulate that the Group Captive Consumers should hold at least 26% share holding in the Company. Accordingly, the present Group Captive Consumers hold about 26% equity shareholding in the Company. The Group Captive Power Sale Agreement entered into with the Group Captive Consumers is in effect up to 28th January 2015. As at 31st March 2014 there were 26 Group Captive Consumers.

EXPORTS

During the year, your Company had exported 3,537 MTs of Sodium Hydrosulphite as against 2,787 MTs during the previous year, an increase by about 27% over the previous year. The exports during the year were an all-time high and a new record for the Company. This is the first time that the Company''s exports of Sodium Hydrosulphite has crossed the 3,000 MT mark. Exports were about 25% of the total sales quantity and production quantity during the year.

The highlight of this year''s performance is that exports to the Turkey were the highest in terms of volume of exports - Country wise, contributing about 30% of the overall volume of exports. Exports to the United States of America were the next highest contributing about 20% of the overall volume of exports. These two countries together contributed about 50% of the exports.

As in the previous year, this year also Sodium Hydrosulphite was exported to 12 countries spread across all the regions like the United States of America, Europe, Far East, South Asia, Latin America and Africa. The exports to the European countries were the highest. This year we have made a reentry into the Nigerian and South Korean markets. Diversification of markets and identification of new buyers in the existing markets were a major achievement during the year under review.

At present, the international market is favourable to the Company. But there is still a stiff competition from China, the world''s largest producer and exporter of Sodium Hydrosulphite. In the current year too our focus would be on retaining the existing markets, identifying new buyers in the existing markets and penetrating into new markets.

Company'' performance

Considering the difficult macro- economic conditions and challenging business environment, the Company''s performance during the year under review was satisfactory.

FUTURE PLANS

The Company has plans to increase the production capacity of Sodium Hydrosulphite from 12,000 Metric Tons to 15,000 Metric Tons during the current year 2014-15. The Company also has plans to modernize its Liquid Sulphur di oxide plant to increase its production capacity. The Liquid Sulphur di oxide so produced would be used for captive consumption to produce Sodium Hydrosulphite. The company will focus on the domestic market sales in the current year in respect of the products of the Chemical division. With the textile industry showing signs of recovery, due to the measures adopted / proposed to be adopted by the Textile Ministry, it is expected that the sale of Sodium Hydrosulphite to the textile industry will improve in the current year. The Company has plans to increase its market share in the Paper and Pharma industries. Since the company has expanded the sale of its recovery salts to the pharma and paper industries, it is expected that the sale of trisalt, during the current year, will improve. The Company also has plans to focus on markets in eastern India, western India and Kanpur for maximizing the sale.

The company''s exports are expected to show an upward trend with focus being made on the USA market. The Company is hopeful that the exchange rate in the year would be advantageous to exports and with increased production your Company would be in a position to regain its presence in the European markets which has been, traditionally, our major markets. The Company is also taking all efforts to identify and develop new markets and at the same time continuing to focus on the existing markets, where price realisation is relatively higher. In the global market, our Sodium Hydrosulphite has built up a good brand image for its quality and delivery.

CREDIT RATING

The Credit rating assigned to the Company as at 31st March 2014 are as follows:

Credit Rating Agency Credit facilities Rating

CRISIL Bank borrowings - Long term CRISIL BBB / Stable

CRISIL Bank borrowings - Short term CRISIL A2

CRISIL Fixed Deposits FA-/ Stable

ECONOMIC AND BUSINESS ENVIRONMENT

The new Government, since assuming office in May 2014, has taken a slew of steps to attack price rise. Besides restrictions on exports of certain food items such as onions and potatoes, the Centre also announced in early July 2014 that hoarding of essential commodities could be made a non-bailable offence.

The inflation estimate in the Budget, however, shows that the Finance Ministry is not confident that these measures will effectively cool prices. One reason for this could be the uncertainty around global crude prices following the Iraq crisis, something that the Budget documents mention as potential spoiler for its estimates. Another could be the possibility of a drought.

Let us look at this table:

Budget Estimate 2014-15 2013-14

Nominal GDP Growth 13.4% 12.3%

Real GDP Growth 5.4% to 5.9% 4.7%

Inflation 7.5% to 8% 7.6%

The documents reveal that the Budget estimates the nominal GDP growth for the current fiscal to be 13.4%. The GDP is estimated at Rs.1,28,76,653 crores. The budget documents as well as the Economic Survey tabled in the Parliament project the Real GDP growth to be in the range of 5.4% to 5.9%. The rate of inflation is thus projected to be in the range of 7.5% to 8% as in Economic Theory the Real GDP is the difference between the Nominal GDP and inflation. The inflation worries persist and could be a dampener to economic growth. In times of high inflation consumption gets affected as people find it difficult to afford. When inflation moderates people start consuming. Increased consumption boosts demand and spurs economic growth.

OUTLOOK AND OPPORTUNITIES

Your directors expect that with stable government in the Centre, estimates of better GDP growth rate, the Company''s strong business model, innovative fund management and marketing techniques, continued confidence and support of the lending institutions to the Company''s fund mobilization activities on account of good track record of debt servicing, continued confidence and support of the customers and suppliers, your Company should achieve better performance in the year 2014-15.

FIXED DEPOSITS

As at 31st March 2014, there are 3,631 fixed deposits and 1,029 cumulative deposits aggregating to 4,660 deposits for an amount of Rs.3,231.66 lakhs that have not yet matured for repayment. There are 86 fixed deposits and 9 cumulative deposits aggregating to 95 deposits for an amount of Rs. 27.15 lakhs that have matured but remained unclaimed. The total amount of deposits matured during the year under review was Rs. 770.17 lakhs and the total amount of deposits that will be maturing as at 31st March 2015 will be Rs.1,316.81 lakhs. The total amount of deposits repaid during the year under review was Rs.206.06 lakhs. The total amount of deposits accepted or renewed during the year was Rs.873.85 lakhs. There were no deposits, which were claimed but not paid by the Company. Appropriate steps are being taken continuously to obtain the depositors'' instructions so as to ensure renewal/repayment of the matured deposits in time.

The Company has stopped accepting fresh deposits and renewal of existing deposits from 1st April 2014, in order to comply with the provisions of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, which has been notified to come into effect from 1st April 2014. The Company has been repaying existing deposits on their maturity date in accordance with the terms of acceptance of those deposits.

Chapter V of the Companies Act, 2013, containing sections 73 to 76, provides for the new provisions for acceptance of deposits by Companies - other than a Banking Company and a Non-Banking Financial Company, as defined in the Reserve Bank of India Act, 1934, and such other Companies as may be notified by the Central Government - from its members and the Public.

Section 76 of the Companies Act, 2013, read with Rule 2 (1)(e) of the Companies (Acceptance of Deposits) Rules 2014, provides that such a Company can accept deposits from the Public only if its Net Worth is not less than Rs.100 crores or its turnover is not less than Rs.500 crores. These companies are defined as ''Eligible Company'' in the Companies (Acceptance of Deposits) Rules 2014.

The Net worth of TCP Ltd is more than Rs.300 crores. As such, TCP Ltd is an ''Eligible Company'' and can continue to accept deposits from its members and the Public.

These provisions inter alia provide that the Company should pass an ordinary resolution in a general meeting for accepting deposits from the public and also file the said resolution with the Registrar of Companies before making any invitation to the public in the form of Advertisement for acceptance of deposits. It also provides that the Company should obtain a rating from a recognised credit rating agency for its deposits and inform the public of the rating given to the Company at the time of invitation of deposits from the public which ensures adequate safety and the rating shall be obtained for every year during the tenure of deposits. It also provides that such Companies shall provide Deposit Insurance cover in the manner specified in Rule 5 of the Companies (Acceptance of Deposits) Rules 2014.

Members'' approval is being sought for continuance of acceptance of deposits by the Company at the ensuing 42nd Annual General Meeting to be held on 26th September 2014, by passing of an ordinary resolution vide agenda item no.10 of the Notice of the meeting.

As per Section 76 of the Companies Act, 2013, the credit rating agency CRISIL Limited has assigned a rating of ''CRISIL FA-/Stable'' (pronounced "F A minus rating with stable outlook") for the Fixed Deposits accepted by the Company, indicating ''Adequate Safety''. This rating indicates that the degree of safety regarding timely payment of interest and principal is satisfactory. This rating shall remain valid until 31st March 2015 and the Company will accept deposits based on this rating for the current year 2014-15.

The Ministry of Corporate Affairs vide Notification No. G.S.R. 386(E) dated 6th June 2014 has provided that the companies may accept the deposits without deposit insurance contract till 31st March 2015. The Company will obtain insurance contract for its deposits as per the requirements of section 73 (2) (d) of the Companies Act, 2013 read with Rule 5 of the Companies (Acceptance of Deposits) Rules, 2014, as and when it becomes applicable.

The company has deposited with the Indian Overseas Bank, in a separate bank account, called as Deposit Repayment Reserve Account, an amount of not less than 15% of the amount of its deposits maturing during the financial years 2014-15 and 2015-16 in accordance with the requirements of section 73(2) (c) of the Companies Act, 2013 read with Rule 13 of the Companies (Acceptance of Deposits) Rules, 2014.

The Company will comply with the requirements of advertisement inviting deposits as provided in Rule 4 of the Companies (Acceptance of Deposits) Rules, 2014.

The Company''s outstanding deposits are within the limits laid down in Rule 3(4) of the Companies (Acceptance of Deposits) Rules, 2014 viz., 10% of the aggregate of the paid up share capital and free reserves of the Company as at 31st March 2014 in the case of deposits accepted from the members and 25% of the aggregate of the paid up share capital and free reserves of the Company as at 31st March 2014 in the case of deposits accepted from the public. The Company will accept deposits within the aforesaid limits.

The company will accept deposits from its members and the public as unsecured deposits.

Since the Company meets the eligibility norms for acceptance of deposits it proposes to continue to accept deposits from the members and the Public in accordance with the new provisions, after obtaining the consent of the members and after complying with the rules.

SUBSIDIARY COMPANY

The Company has one Subsidiary Company viz., TCP Hotels Private Limited. This Subsidiary Company is a non-material Indian unlisted subsidiary of the Company. The Company holds 96% equity shareholding in its subsidiary company.

TCP Hotels Private Ltd:

TCP Hotels Private Ltd derives rental income from letting out its property and this is the only source of income for the company for the year ended 31st March 2014. For the year ended 31st March 2014, the company has earned income of Rs.6 lakhs and had reported Net profit of Rs.1,50,307.

The Company has not attached in this Annual Report the Balance Sheet, the Profit and Loss Account, the Directors'' Report, the Auditors'' Report and the Statement showing holding company''s interest in its subsidiary company as required under section 212 of the Companies Act, 1956, in respect of the subsidiary company viz., TCP Hotels Private Ltd for the year ended 31st March 2014, pursuant to the general exemption granted to the holding companies from the applicability of section 212 of the Companies Act, 1956, by the Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 8th February 2011. The company has fulfilled the conditions laid down in the aforesaid Circular No.2/2011 dated 8th February 2011.

The Board of Directors of the company, at the Board Meeting held on 30th May 2014, has passed resolution, giving consent for not attaching the Balance sheet of the subsidiary company viz., TCP Hotels Private Ltd to its Annual Report for the financial year ended 31st March 2014.

The annual reports and annual accounts of the subsidiary company viz., TCP Hotels Private Ltd for the financial year ended 31st March 2014 and the related detailed information shall be made available to shareholders of the holding and subsidiary company seeking such information. The annual accounts of the subsidiary company shall also be kept for inspection by shareholders at the Registered Office of the company and the Subsidiary Company. The annual accounts of the subsidiary company shall be available on the website of the Company viz., www.tcpindia.com.

Consolidated Financial Statements

The consolidated financial statements of the Company, which consolidates and presents the results of the Company with its subsidiary company as a single economic entity prepared in compliance with the applicable Accounting Standards and Listing Agreement is attached to the Annual Report. The aforesaid consolidated financial statements form part of this Annual Report.

BOARD OF DIRECTORS

Resignation of Directors:

Shri M. Nandagopal, Director, opted for not getting reappointed at the 41st Annual General Meeting, held on 27th September 2013, and hence had ceased to be a director of the Company with effect from 27th September 2013.

Shri M. Ethiraj and Shri E. Shanmugam, Directors, have submitted their resignation from the Board and consequently ceased to be directors from 28th September 2013.

Shri Natarajan Nandagopal, Director, submitted his resignation from the Board and consequently ceased to be director from 9th January 2014.

Shri Arvind Nandagopal, Director, submitted his resignation from the Board and consequently ceased to be director from 14th March 2014.

Directors retiring by rotation:

Shri V. Sengutuvan (holding DIN 00053629), Director, is retiring by rotation at this Annual General Meeting and he is eligible for re-appointment.

Appointment of Directors:

The Board of Directors appointed Shri S. Varatharajan as Additional Director of the Company, in the category of Non-Executive, Independent Director, Shri M. Parthasarathi as Additional Director of the Company, in the category of Non-Executive, Independent Director, Shri R. Ravi Krishnan as Additional Director of the Company, in the category of Non-Executive, Independent Director,

Shri N. Jaiganesh as Additional Director of the Company, in the category of Non-Executive, Independent Director and Smt Nidhya R. Guhan as Additional Director of the Company, in the category of Non-Executive, Independent Director Woman Director.

The aforesaid Additional Directors shall hold office up the date of the ensuing Annual General Meeting. These Directors are seeking approval of the members at the ensuing Annual General Meeting to continue as Non-Executive, Independent Directors for a term of 5 years.

The details of their age, experience and their directorship in other Companies, as required under the listing agreement, are mentioned in the Report on Corporate Governance which forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

i) That in the preparation of the Annual Accounts, for the year ended 31st March 2014, the applicable Accounting Standards have been followed along with proper explanations for material departures, if any;

ii) That the selected accounting policies were applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March 2014 and of the profit of the Company for that period;

iii) That 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 safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) That the annual accounts for the year ended 31st March 2014 has been prepared on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to section 135 of the Companies Act, 2013, the Board of directors in its meeting held on 30th May 2014, has constituted Corporate Social Responsibility Committee of three directors.

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the society. Your company and its dedicated employees continue to contribute towards several worthwhile causes. Your company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

Your company and its dedicated employees have participated in several welfare activities in and around Karaikudi and Gummidipoondi areas. They have associated themselves in cultural, educational and health care schemes for the communities to promote their welfare and live in amity.

ANNEXURES

Vide General Circular 08/2014 dated 4-4-2014, the Ministry of Corporate Affairs (MCA) has clarified that the financial statements (and documents required to be attached thereto), auditors report and Board''s report in respect of financial years that commenced earlier than 1st April 2014, shall be governed by the relevant provisions/Schedules/rules of the Companies Act, 1956.

Following Reports are attached to this Report pursuant to the provisions of the Listing Agreement with the Stock Exchange:

i) The Management Discussion & Analysis Report as per clause 49 of the Listing Agreement is given as a separate Report forming part of the Annual Report; and

ii) The Report on Corporate Governance as per clause 49 of the Listing Agreement forms part of the Annual Report, and is annexed herewith together with Auditors'' Certificate on Corporate Governance, the certificate duly signed by the Managing Director on the Financial Statements of the Company for the year ended 31st March 2014 as submitted to the Board of Directors at their meeting held on 30th May 2014 and the declaration by the Managing Director regarding compliance by the Board members and senior management personnel with the Company''s Code of Conduct.

AUDITORS

M/s T. Selvaraj & Co., Chartered Accountants, Chennai, the Statutory Auditors of the company, retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment for the year 2014-2015. Certificate has been received from them to the effect that their re- appointment as statutory auditors of the Company, if made, would be within the limits prescribed under Sections 139 & 141 of the Companies Act, 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under clause 41(1) (h) of the Listing Agreement. The Directors recommend their reappointment. If reappointed they will hold office until the conclusion of the Forty-third Annual General Meeting of the company.

COST AUDITORS

Shri M. Kannan, Cost Accountant in practice, has been appointed as the Cost Auditor of the company for the year 2014-15, with the consent of the Central Government, for the audit of the cost accounts maintained by the Company for the Chemical Division Power Division, Biomass Division and Windmill Division.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars required under sec. 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are furnished in the Annexure 1 to this Report.

STATEMENT OF EMPLOYEES'' PARTICULARS

Particulars of the employees drawing remuneration of Rs.60 lakhs or more per annum or Rs.5 lakhs or more per month, during the year, as required to be furnished under sec 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are furnished in the Annexure 2 to this Report.

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the continued co-operation and performance extended by all employees of the Company. The Directors also place on record their appreciation for the unstinted support given by the shareholders, suppliers, customers, the Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) and accredited agents, who have been instrumental in the company''s continued satisfactory performance. The Directors also acknowledge, with deep sense of gratitude, the timely financial assistance provided by the Company''s Bankers viz., Indian Overseas Bank, State Bank of India, IDBI Bank and HDFC Bank, for smooth and efficient functioning of the Company. For and on behalf of the Board

V.R. Venkataachalam

Chairman

Place: Chennai: 600 004 Date : 31st July 2014


Mar 31, 2013

TO THE MEMBERS

The Directors have pleasure in presenting the Forty first Annual Report and the Audited Accounts of your company for the financial year ended 31st March 2013.

FINANCIAL RESULTS

The Financial Results for the year ended 31st March 2013 is as follows:

Year ended Year ended 31st March 2013 31st March 2012 (Rs. in Lakhs)

Revenue from Operations (Net) 33,636.38 29,606.05

Gross Profit before Interest & Depreciation 4,807.69 5,226.59

Less: Interest 1,365.76 1,330.05

Depreciation 1,378.26 2,744.02 1,572.03 2,902.08

Profit before tax 2,063.67 2,324.51

Less: Current tax (Net of MAT credit) 900 919

Deferred tax (Net) (-) 352.68 (-) 213.77

Wealth Tax 3.71 0.6

Tax relating to earlier years 0.05 (-) 41.85

Profit after tax 1,512.59 1,660.53

Add: Surplus brought forward from previous year 10,718.94 9,616.89

Available for appropriations 12,231.53 11,277.42

Dividend 10% (2011-12: 10%) 50.32 50.32

Corporate Dividend Tax 8.16 8.16

Transfer to General Reserve 500 500

Surplus carried forward to Balance Sheet 11,673.05 10,718.94

Company''s Key Financial Ratios 2013 2012

Rs. Rs.

Earnings per share 30 33

Dividend per share 1 1

Return on Net worth 5% 5.76%

DIVIDEND

Your Directors have pleasure in recommending a dividend of 10% on the Equity Shares. The quantum of dividend outgo on this account is Rs. 50.32 lakhs representing 3.11% of profit after tax.

SEGMENTWISE / PRODUCTWISE PERFORMANCE PRODUCTION

I. CHEMICALS Sodium Hydrosulphite

During the year your company had produced 11,484 MT of Sodium Hydrosulphite as against 11,740 MT in the previous year, a marginal decrease by about 2%.

Liquid Sulphur Dioxide

During the year your Company had produced 11,217 MT of Liquid Sulphur Dioxide as against 11,660 MT in the previous year, an increase by about 4 %.

Sulphoxylate

The production of Sulphoxylates was 163 MT during the year as against 365 MT in the previous year.

II. RECOVERY SALTS

The trisalt production was 4,099 MT as against 3,427 MT in the previous year.

III. ELECTRIC POWER Electric Power Generation

Your company had generated 4,985 lakh units of electricity as against 4,995 lakh units last year. The average Plant Load Factor during the year under review was 89.29%. The Biomass based power plant had generated 244 lakh units of electricity as against 126 lakh units in the previous year. The Wind Mills had generated 291 lakh units of electricity as against 291 lakh units in the previous year.

SALES

I. CHEMICALS Sodium Hydrosulphite

During the year your company had made sale of 11,269 MT of Sodium Hydrosulphite as against 11,963 MT in the previous year. The domestic sales decreased by about 10% during the year when compared with the previous year. Your Company has increased its market share in the Pharma Sector during the year. The continuation of fixed anti-dumping duty against imports from China had greatly helped in protecting the market share.

Liquid Sulphur Dioxide

The sale of Liquid Sulphur Dioxide during the year was 1,242 MT as against 1, 296 MT in the previous year. The sales can be augmented in the coming years too, as we foresee a good demand for the product.

Sulphoxylates

The sale of Sulphoxylates was 153 MT as against 374 MT in the previous year.

Recovery salts

The sale of Recovery salts was 3,008 MT during the year as against 3,478 MT in the previous year.

II. POWER

During the year your Company had exported to the Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) 4,546 lakh units of electricity as against 4,503 lakh units in the previous year. The Biomass Power plant had sold 209 lakh units of electricity as against 105 lakh units in the previous year. The Wind mills had exported 220 lakh units of electricity as against 228 lakh units in the previous year.

EXPORTS

During the year, your Company had exported 2,787 MTs of Sodium Hydrosulphite as against 2,490 MTs during the previous year, an increase of 12% over the previous year. The exports during the year were an all-time high and a new record for the Company. This is just the third time that the Company''s exports of Sodium Hydrosulphite has crossed the 2,000 MT mark after 2008- 09 and 2011-12 and this is the first time this has happened in two consecutive years. Exports are about 25% of the total sales quantity.

As in the previous year, this year also Sodium Hydrosulphite was exported to 12 countries spread across all the regions like the United States of America, Europe, Far East, South Asia, Latin America and Africa. This year we have made a reentry into the Bangladesh market. Diversification of markets was a major achievement during the year under review.

At present, the international market is favourable to the Company. We were able to increase our selling prices in the overseas markets. But there is still a stiff competition from China, the world''s largest producer and exporter of Sodium Hydrosulphite. In the current year too our focus would be on penetrating new markets.

PROFITABILITY

Even though the Net sales have increased by about 13% when compared with the previous year, the Net Profit after tax has reduced by about 9% when compared with the previous year. This is mainly due to an abnormal increase in the cost of materials consumed, which has increased by about 23% when compared with the previous year. With the production and sales remaining at the previous year''s levels, the increase in selling price obtained had been more than offset by the increased cost of materials consumed. All the divisions of the Company, except Biomass division, have made profits during the year.

FUTURE PLANS

The company will focus on the domestic market sales in the current year in respect of the products of the Chemical division. With the textile industry showing signs of recovery, due to the measures adopted / proposed to be adopted by the Textile Ministry, it is expected that the sale of Sodium Hydrosulphite to the textile industry will improve in the current year. Since the company has expanded the sale of its recovery salts to the pharma and paper industries, it is expected that the sale of trisalt, during the current year, will improve. Since an increased demand is expected in the current year for the Liquid Sulphur Di Oxide, its sales also would improve in the current year.

The company''s exports are expected to show an upward trend with focus being made on the USA market. The Company is hopeful that the exchange rate in the year would be advantageous to exports and with increased production your Company would be in a position to regain its presence in the European markets which has been, traditionally, our major markets. The Company is also taking all efforts to identify and develop new markets and at the same time continuing to focus on the existing markets, where price realisation is relatively higher. In the global market, our Sodium Hydrosulphite has built up a good brand image for its quality and delivery.

ENVIRONMENTAL PROTECTION

The Environmental Policy of your company is maintaining clean and green environment and eco friendly atmosphere. Your company has been complying with applicable environmental regulations and preventing pollution in all operations. Your company continues to strive for energy saving and conservation of natural reserves. Your company has been awarded ISO 14000 and ISO 2400 certification for maintaining ecological balances.

CORPORATE SOCIAL RESPONSIBILITY

Good governance demands adherence of social responsibility coupled with creation of value in the larger interest of the society. Your company and its dedicated employees continue to contribute towards several worthwhile causes. Your company aims to enhance the quality of life of the community in general and has a strong sense of social responsibility.

Your company and its dedicated employees have participated in several welfare activities in and around Karaikudi and Gummidipoondi areas. They have associated themselves in cultural, educational and health care schemes for the communities to promote their welfare and live in amity.

FIXED DEPOSITS

The outstanding deposits as on 31st March 2013 were Rs.2563.87 lakhs (including unclaimed deposits of Rs.24.30 lakhs). The total amount of deposits matured during the year under review was Rs. 705.71 lakhs and the total amount of deposits that will be maturing as at 31st March 2014 will be Rs.770.17 lakhs. The total deposits repaid during the year under review were Rs.200.10 lakhs.

SUBSIDIARY COMPANY

The Company has one Subsidiary Company viz., TCP Hotels Private Limited. This Subsidiary Company is a non-material Indian unlisted subsidiary of the Company.

TCP Hotels Private Ltd:

TCP Hotels Private Ltd derives rental income from letting out its property and this is the only source of income for the company for the year ended 31st March 2013. For the year ended 31st March 2013, the company has earned income of Rs.6 lakhs and had reported Net Loss of Rs.79,048.

The Company has not attached in this Annual Report the Balance Sheet, the Profit and Loss Account, the Directors'' Report, the Auditors'' Report and the Statement showing holding company''s interest in its subsidiary company as required under section 212 of the Companies Act, 1956, in respect of the subsidiary company viz., TCP Hotels Private Ltd for the year ended 31st March 2013, pursuant to the general exemption granted to the holding companies from the applicability of section 212 of the Companies Act, 1956, by the Ministry of Corporate Affairs vide its General Circular No.2/2011 dated 8th February 2011. The company has fulfilled the conditions laid down in the aforesaid Circular No.2/2011 dated 8th February 2011.

The Board of Directors of the company, at the Board Meeting held on 29th May 2013, has passed resolution, giving consent for not attaching the Balance sheet of the subsidiary company viz., TCP Hotels Private Ltd to its Annual Report for the financial year ended 31st March 2013.

The holding company viz., TCP Ltd hereby undertakes that annual accounts of the subsidiary company viz., TCP Hotels Private Ltd for the financial year ended 31st March 2013 and the related detailed information shall be made available to shareholders of the holding and subsidiary company seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept for inspection by any shareholder in the Registered Office of the company.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors are pleased to enclose the consolidated financial statements of the Company, which consolidates and presents the results of the Company with its subsidiary company as a single economic entity prepared in accordance with the Accounting Standards. The aforesaid consolidated financial statements form part of this Annual Report.

DIRECTORS

Directors'' retirement by rotation

1. Shri M. Nandagopal, Director, is retiring by rotation at this Annual General Meeting and he is eligible for re-appointment.

2. Shri A.S. Thillainayagam, Director, is retiring by rotation at this Annual General Meeting and he is eligible for re-appointment.

The details of their age, experience and their directorship in other Companies, as required under the listing agreement, are mentioned in the Report on Corporate Governance which forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

i) That in the preparation of the Annual Accounts, for the year ended 31st March 2013, the applicable Accounting Standards have been followed along with proper explanations for material departures, if any;

ii) That the selected accounting policies were applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March 2013 and of the profit of the Company for that period;

iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956,

iv) for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

v) That the annual accounts for the year ended 31st March 2013 has been prepared on a going concern basis.

AUDITORS

M/s T. Selvaraj & Co., Chartered Accountants, Chennai, the Statutory Auditors of the company, retire at the conclusion of this Annual General Meeting and are eligible for re-appointment for the year 2013-2014. Certificate has been received from them to the effect that their re-appointment as statutory auditors of the Company, if made, would be within the limits prescribed under Section 224(1) (B) of the Companies Act, 1956. They have also confirmed that they hold a valid peer review certificate as prescribed under clause 41(1) (h) of the Listing Agreement. The Directors recommend their reappointment. If reappointed they will hold office until the conclusion of the Forty-second Annual General Meeting of the company.

COST AUDITORS

Shri M. Kannan, Cost Accountant in practice, has been appointed as the Cost Auditor of the company for the year 2013-14, with the consent of the Central Government, for the audit of the cost accounts maintained by the Company for the Chemical Division Power Division, Biomass Division and Windmill Division.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars required under sec. 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are furnished in the Annexure 1 to this Report.

STATEMENT OF EMPLOYEES'' PARTICULARS

Particulars of the employees drawing remuneration of Rs.60 lakhs or more per annum or Rs.5 lakhs or more per month, during the year, as required to be furnished under sec 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are furnished in the Annexure 2 to this Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance Report forms part of this Annual Report.

A certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreement is attached to this Report.

CEO CERTIFICATION OF FINANCIAL STATEMENTS

Shri V.R. Venkataachalam, Managing Director, has furnished the certificate as required under clause 49 of the Listing Agreement.

CAUTIONARY STATEMENT

The statements, forming part of the Directors'' Report, may contain certain forward looking statements within the meaning of applicable securities, laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the continued co-operation and performance extended by all employees of the Company. The Directors also place on record their appreciation for the unstinted support given by the shareholders, suppliers, customers, the Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO) and accredited agents, who have been instrumental in the company''s continued satisfactory performance. The Directors also acknowledge, with deep sense of gratitude, the timely financial assistance provided by the Company''s Bankers viz., Indian Overseas Bank, State Bank of India, IDBI Bank and HDFC Bank, for smooth and efficient functioning of the Company.

For and on behalf of the Board

M. Ethiraj

Chairman

Date : 29th May 2013

Place: Chennai 600 004


Mar 31, 2009

The Directors have pleasure in presenting the Thirty Seventh Annual Report and the Audited Accounts of your company for the financial year ended 31st March 2009.

FINANCIAL RESULTS

The Financial Results for the year ended 31st March 2009 is as follows:

(Rs in Lakhs)

Year Year ended ended 31st March, 31st March. 2009 2008

Gross Sales 29,260.80 19,948.93

Profit before Interest & Depreciation 8,472.53 3,887 59

Less: Interest 1,240.96 1,246.12

Depreciation 1.178.24 2,419.20 1,260,65

Profit before Sax 6,053.33 1,380.82

Less: Current tax (Net of MAT credit) 159.92 138.89

Deferred tax (Net) (161.12) (98.66)

Fringe Benefit Tax 11.09 13.15

Wealth Tax " 0.44 0.35

Profit after tax 6,043.00 1.327.09 Less: MAT Tax Credit entitlement for earlier year 45.74 -

Less: Tax related to earlier years 0.12 21.38

Balance for the year 5,997.14 1,305.71

Add : Surplus brought forward from previous year 1,450.74 921.64

Available for appropriations 7,447.88 2,227.35

Dividend 30% (2007-08: 30%) 150.96 150.96

Corporate Dividend Tax 25,66 25.65

Transfer to General Reserve 600.00 600.00

Surplus carried forward to Balance Sheet 6,671.26 1,450 74

Companys Key Financial Ratios 2009 2008

Rs. Rs.

Earnings per share 119 26

Dividend per share 3 3

Return on Net worth 26% 7,57%

DIVIDEND

Your Directors have pleasure in recommending a dividend of Rs.3 per share (30%) on the Equity Shares. The quantum of dividend outgo on this account is Rs. 150.96 lakhs,

SEGMENTWISE/PRODUCTWISE PERFORMANCE

PRODUCTION

I. CHEMICALS

Sodium Hydrosulphite

During the year your company had produced 10,826 MTs of Sodium Hydrosulphite as against 9,681 MTs last year, an increase by about 12 %.

Liquid Sulphur Dioxide

During the year you; Company had produced 9.647 MTs of Liquid Sulphur Dioxide as against 8.644 MTs last year representing ah increase by about 11 %.

Sulphoxylates

The production of Sulphoxylates was suspended during the year due to unprecedented hike in Zinc prices. the main raw material, and the market price not matching the increased cost of production.

II.RECOVERY SALTS

The trisalt production has increased from 3,809 MTs to 4,240 MTs thereby registering an increase of 11%.

III. ELECTRIC POWER

Electric Power Generation

Your company had generated 5,203 lakh units of electricity as against 5,272 lakh units last year. The average Plant Load Factor during the year under review was 93.17 %. The Biomass based power plant had generated 110 lakh units of electricity as against 70 lakh units in the previous year. The Wind Mills had generated 161.10 lakh units of electricity as against 185.74 lakh units in the previous year.

SALES

I.CHEMICALS

Sodium Hydrosulphite

During the year your company had made a record sale of 10,406 MTs of Sodium Hydrasulphite as against 10,376 MTs in the previous year, an increase by about 0.3%. This is mainly due to good demand in exports due to reduced production of Sodium Hydrasulphite in China, the worlds largest producerof Sodium Hydrosulphite, Anticipating an acute shortage of the material, many new buyers bought the material from the company. Due to this increased demand, which continued till the second quarter of the year, the sale of Sodium Hydrosulphite increased considerably during the year.

Liquid Sulphur Dioxide

The sale of Liquid Sulphur Dioxide during the year was 805 MTs as against 632 MTs in the previous year and has registered an increase of 27% due to increased production of Sodium Hydrosulphite and also increased sales of Liquid Sulphur Dioxide, An increased demand is expected for the product in the current year.

Sulphoxylates

Due to slackening market and unremunerative price only 5 MTs of Sulphoxylates was sold during the year as against 15 MTs in the previous year.

Recovery salts

The sale of Recovery salts was 4659 MTs during the year as against 3,373 MTs in the previous year, recording an increase of 38%. This is due to expanding the sale of our products to pharma and paper industries.

II.POWER

During the year your Company had exported to the Tamil Nadu Electricity Board (TNEB) 4701 lakh units of electricity as against 4.732 lakh units in the previous year. The Biomass Power plant had exported 99 lakh units of electricity to the TNEB as against 61 lakh units in the previous year.

Your company has been exporting Power to the TNEB in terms of the Purchase Power Agreement dated 29" January 1999 at the Tariff rates prescribed therein for a period of ten years which was up to 31 -3-2008. The Agreement further stated that the rates from 1 -4-2008 will be fixed after review. Since the company and the TNEB could not mutually agree to arrive at a rate for power purchase from 1 -4-2008 the company was advised to approach the Tamil Nadu Electricity Regulatory Commission (TNERC) under section 96(1 )(b) of the Electricity Act, 2O03 for fixing the rate from 1 -4-2008.

Based on the petition filed by the company before the TNERC for the revision of tariff rate. TNERC finalised the tariff rate till the agreement up to 2014 with effect from 1st April 2008.

The company had also filed another petition before the TNERC claiming a sum of Rs.44,62,67,537/- being the arrears from 2005-06,2006-07 and 2007-08 for non-adherence of agreed tariff rate as per power purchase agreement for the aforesaid years. The petition has been finally heard by the TNERC and orders awaited and the company is fairly confident of realising the amount from the TNEB,

EXPORTS

During the year, your Company had exported a record 2732 MTs of Sodium Hydrosulphite as against 1,278 MTs during the previous year recording an increase of 114%. The company has been exporting, continuously, from 1987-88 onwards and it is in this year that the company has achieved the highest export of Sodium Hydrosulphite.

The China market is once again witnessing a competitive situation. Consequently, prices are falling and we had to reduce prices in line with the competitors offers and demand and supply position. However, the supply to the Chinese markets has helped us to identify new buyers and supply our products thereby we could establish the quality of our products, also our credibility, reliability and on strict adherence to delivery schedules. _

PROFITABILITY

The after tax profitability of the Company has increased steeply when compared with the previous year. The increase in profit was mainly due to getting an enhanced rate and realization of arrears for the power sold to the TNEB. increased sales in all divisions and.due to over all cost reduction strategies adopted in the operations.

FUTURE PLANS

Your Companys 6 MW Bio Mass Power Plant at its Factory at Karaikudi wilt be generating more revenue this year due to arrangements made for the third party sate of the power generated by the Biomass Power plant duly approved by the TNEB for such third party sale.

With an enhanced rate fixed for the power sold to the TNEB during 2009-10. the Power division would generate more revenue this year. With the cost reduction strategies adopted by the company it is expected that the Power Division wilt make better profits this year.

The company will focus on the domestic market sales in the current year in respect of the products of the Chemical division. With the textile industry showing signs of recovery, due to the measures adopted / proposed to be adopted by the Textile Ministry, it is expected that the sale of Sodium Hydrosulphite to the textile industry will improve in the current year. Since the company has expanded the sale of its recovery salts to the pharma and paper industries, it is expected that the sale of trisait, during the current year, will improve. Since an increased demand is expected in the current year for the Liquid Sulphur Di Oxide, its sales also would improve in the current year.

The companys exports are showing an upward trend with major exports being made to the USA. We are also taking all efforts to identify and develop new markets. At the same time we will continue to focus on the existing markets, where price realisation is relatively higher. In the global market, our Sodium Hydrosulphite has carved a niche for itself due to its quality and delivery.

As part of further backward integration, the company has plans to install at Sambavar Vadakarai, Shencottah Taluk, Thirunelveli District, six windmills of 600 KW capacity each, aggregating to 3.6 MW, for generation of electricity, at a project cost of about Rs.20 crores, which shall be funded from out of internal accruals,

DIRECTORS

Directors retirement by rotation

1. Shri M.E. Shanmugam. Director, is retiring by rotation at this Annua! General Meeting and he is eligible for re-appointment.

2. Shri M. Nandagopal, Director, is retiring by rotation at this Annual General Meeting and he is eligible for re-appointment.

The details of their age. experience and their directorship in other Companies, as required under the listing agreement, are mentioned in the Report on Corporate Governance which forms part of this Annua! Report.

Shri V. Sengutuvan was appointed as a director to fill the casual vacancy caused by the resignation of Smt. Radha Venkataachalam, He will hold office as director until the term up to which Smt, Radha Venkataachalam would have held office if she had not resigned.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

ij That in the preparation of the Annual Accounts, for the year ended 31st March 2009, the applicable Accounting Standards have been followed along with proper explanations for material departures, if any;

ii) That the seIected accounting poIicies were applied consistently and judgements and estimates that are reasonable and prudent were made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March 2009 and of the profit of the Company for that period;

iii) That 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 safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) That the annual accounts for the year ended 31st March 2009 has been prepared on a going concern basis.

AUDITORS

M/s T Selvaraj & Co., Chartered Accountants, Chennai. the Statutory Auditors of the company, retire at the conclusion of this Annual General Meeting and are seeking reappointment for the year 2009-2010. The Directors recommend their reappointment. If reappointed they will hold office until the conclusion of the Thirty eighth Annual Genera! Meeting of the company.

COST AUDITORS

Pursuant to the order of the Cost Audit Branch, Department of Company Affairs, Shri M. Kannan, Cost Accountant, has been appointed as the Cost Auditor of the company for the year 2008-2009.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

The Particulars required ureter sec. 217(1 )(e) of the Companies Act, 1956. read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are furnished in the

Annexure 1 to this Report,

STATEMENT OF EMPLOYEES PARTICULARS

Particulars of the employees drawing remuneration of Rs.24 lakhs or more per annum or Rs.2 lakhs or more per month, during the year, as required to be furnished under sec 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, are furnished in the

Annexure 2 to this Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report and Corporate Governance Report forms part of this Annual Report, A certificate from the auditors of the company regarding compliance of the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreement is attached to this Report.

CEO CERTIFICATION OF FINANCIAL STATEMENTS

Shri V.R. Venkataachalam. Managing Director, has furnished the certificate as required under clause 49 of the Listing Agreement.

CAUTIONARY STATEMENT

The statements, forming part of the Directors Report, may contain certain forward looking statements within the meaning of applicable securities, laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.

ACKNOWLEDGEMENT

The Directors place on record their appreciation for the continued co-operation and performance extended by all employees of the Company. The Directors also place on record their appreciation for the unstinted support given by the shareholders, suppliers, customers, the Tamil Nadu Electricity Board and accredited agents, who have been instrumental in the companys continued satisfactory performance. The Directors also acknowledge, with deep sense of gratitude, the timely financial assistance provided by the Companys Bankers viz., Indian Overseas Bank, State Bank of india and HDFC Bank, tor smooth and efficient functioning of the Company.

For and on behalf of the Board M. Ethurajan Chairman Place : Chennai: 600 004 Date : 26th August 2009


Mar 31, 2003

The Directors have pleasure in presenting their Annual Report and Audited Accounts for the year ended 31.3.2003.

FINANCIAL HIGHLIGHTS

The Financial Results for the year ended March 31, 2003 are as follows:-

(Rs in Lakhs)

Year Year ended ended March 31, March 31, 2003 2002

Sales 18,895.24 15,942.70

Gross Profit before interest & Depreciation 6,311.63 4,160.69

Less: Interest 1154.01

Depreciation 4184.62 5,338.63 2,108.33

Profit before tax 973.00 2,052.36

Less: Current tax 135.00

Deferred tax (1192.91) (1,057.91) 230.31

Profit after tax 2,030.91 1,822.05

Less: Tax relating to earlier year - 1.41

2,030.91 1,820.64

Add: Surplus brought forward from previous year 587.67 892.82

Available for appropriations 2,618.58 2,713.46

Less:

Dividend 99% (Equity) 498.16

Provision for Corporate Dividend Tax 51.06

Transfer to General

Reserve 1500.00 2,049.22 2,125.80

Surplus carried forward to Balance Sheet 569.36 587.66

Companys Key Financial Ratios

2003 2002

Rs. Rs.

Earnings per share 40.36 36.18

Dividend per share 9.90 2.50

Return on Networth 30.14% 34.64%

DIVIDEND

The Directors have pleasure in recommend- ing a dividend of 99% on Equity Shares. The quantum of dividend outgo on this account is Rs. 498.16 lakhs representing 24.52% of profit after tax.

FIXED DEPOSITS

The total deposits upto the year under review was Rs.451.10 lacs. The total amount of deposits matured during the year under review was Rs.124.12 lacs and the unclaimed deposit was Rs.4.41 lacs. The total deposits repaid during the year under review was Rs.40.83 lacs.

DIRECTORS

Directors retirement by rotation

1. Shri M Nandagopal, Director is retiring by rotation at this Annual General Meeting and he is eligible for re-election.

2. Shri A.S. Thillainayagam, Director is retiring by rotation at this Annual General Meeting and he is eligible for re-election.

The details of their age, experience and their directorships in other Companies as required under the Listing Agreement is mentioned in the agenda notice seeking their re- appointment.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956.

i) that in the preparation of the Annual Accounts for the year ended 31st March 2003, the applicable accounting standards have been followed along with proper explanations in case of material departures;

ii) that such accounting policies as mentioned in item 23 of Schedule 15 of the Annual Accounts have been applied consistently and judgement and estimates that are reasonable and prudent made 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 2003 and of the profit of the Company for that period;

iii) that 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 safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) that the annual accounts for the year ended 31st March 2003 have been prepared on a going concern basis.

AUDITORS

The Directors recommend the reappointment of M/s T. Selvaraj & Co. Chartered Accountants as Statutory Auditors for the year ending 31.3.2004, who will hold office until the conclusion of the forthcoming Annual General Meeting.

COST AUDITORS

As directed by the Company Law Board, we applied to Ministry of Law, Justice & Company Affairs, Cost Audit Branch, New Delhi seeking approval for reappointment of Shri M. Kannan, B.Sc., ACA, AICWA as Cost Auditor for the year ending 31.3.2004, which has been approved by the Company Law Board.

CORPORATE GOVERNANCE

Your Company is committed to bench marking itself with Global Standards in all areas including incorporation of appropriate standards for good corporate governance. Towards this end, and in line with the guidelines recommended by Securities and Exchange Board of India (SEBI) Committee on Corporate Governance, adequate steps have been taken to ensure that all mandatory provisions of Clause 49 of the Listing

Agreement are duly complied and forms part of the Annexure to Annual Report.

INFORMATION TECHNOLOGY

Your Company continues to upgrade the information system in order to support our operational needs of challenging demand as and when it arises and the system is tuned to give the required management information from time to time. Further, the employees are also trained in such information technology which could be applied to the day-to-day operation of the Company.

GENERAL

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo and particulars of the employees required to be furnished under Sec. 217(2A) of the Companies Act, 1956 are set out in Appendix I and II respectively.

CAUTIONARY STATEMENT

The statement forming part of the Directors Report may contain certain forward looking statements within the meaning of applicable securities, laws and regulations. Many factors could cause the actual results, performances or achievements of the

Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements.

ACKNOWLEDGEMENT

The Directors place on record their deep sense of appreciation for the continued co-operation and performance by all its Employees of the Company. The Directors also place on record their appreciation of the unstinted support by shareholders, suppliers, customers and accredited agents who have been instrumental in no small measure in companys satisfactory performance. The Directors also acknowledge with gratitude the financial institutions viz., ICICI, IDBI and Companys Bankers viz., Indian Overseas Bank, State Bank of India and Allahabad Bank who have been responsible for the timely financial assistance for smooth and efficient functioning of the Company.

For and on behalf of the Board

M. Ethurajan Chairman

Chennai: 600004 Date: 25th July 2003

 
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