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. () - Director Report

Company director report


Your Directors are pleased to present the Annual Report of your Company together withthe Audited Statement of Accounts and the Auditors’ Report for the financial yearended 31st March 2014. The summarized financial results for the Financial Yearare as under:


Particulars For the Year Ended
31st March 2014 31st March2013
Rs. in lakhs Rs. in lakhs
Profit before Interest and Depreciation 3116 4151
Less: Interest 14 0
Profit Before Depreciation 3102 4151
Less: Depreciation 627 668
Profit before Tax 2475 3483
Tax 736 1212
Deferred Tax 94 -77
Net Profit For the Year 1645 2348
Balance brought forward from
Previous Year 7929 6354
Balance available for Appropriation 9574 8702
Transferred to General Reserve 165 240
Interim Dividend Paid 0 459
Proposed Dividend 115 0
Dividend Tax 19 74
Balance carried to Balance Sheet 9275 7929


During the year under review the Company achieved net sales of Rs.11206/- Lakhs asagainst Rs.11524/- Lakhs in the previous year and made Profit Before Tax (PBT) ofRs.2475/- Lakhs as against Rs.3483/- Lakhs in the previous year. The fall in PBT wasmainly due to the steep increase in the cost of power coupled with the rise in the costof other raw materials. The Company is taking all possible steps to control itsmanufacturing costs.


Your Directors recommend payment of Dividend of Rs.1.25 per share (25%) for the yearended 31st March 2014 absorbing a sum of Rs.11464621/- subject to theapproval of the Members at the ensuing Annual General Meeting.


The Company has taken up a Project for improving process technology and modernizing itsPlant. A sum of Rs. 618486060/- net of Cenvat credit was incurred on the Project duringthe current Financial Year out of which Rs. 54012393/- is capitalised and Rs.564473667/- is shown in the Balance Sheet as part of Capital Work in Progress. Thecompletion and commissioning of the Project is pending subject to the requisite regulatoryclearances.


The Company had proposed expansion of its existing manufacturing capacity and in thisconnection has filed an appeal with the National Green Tribunal for grant of the necessaryNOC. The directions from the Hon’ble Bench in this regard are awaited.

In the meantime a Public Interest Litigation was initiated against the Company by thePuducherry Environment Protection Association (PEPA) a Non-Government Organizationbefore the National Green Tribunal (NGT) on the plea that the Company was carrying on itsoperations even after the expiry of the period of consent issued by the PuducherryPollution Control Committee (PPCC). The PEPA obtained an ex parte Order from theNGT restraining the Company from carrying on any construction activities and expansion ofproduction capacity. In response the Company objected to the baseless allegations andplaced all the attendant facts before the NGT including the information that the Companyhad applied for the renewal of the consent order well in time and this application wasunder the active consideration of the PPCC. Therefore the Company submitted to the NGTthat the question of carrying on any activity without the Consent Order did not arise.Subsequently upon the Company receiving the Consent Order from PPCC the NGT was soinformed and at the hearing held on the 2nd April 2014 the ex parteInterim Stay was vacated.


During the year under review the Company did not raise funds by way of fixed depositsfrom the public.


In accordance with Sections 255 and 256 of the Companies Act 1956 and theCompany’s Articles of Association the following Directors retire by rotation andbeing eligible offer themselves for re-appointment at the ensuing General Meeting.

1. Shri J. Venkataraman

2. Shri Suresh Krishnamurthi Rao

The details as required under Clause 49 of the Listing Agreement regarding the aboveDirectors are set out in the Corporate Governance Report forming part of this AnnualReport.


The current Statutory Auditors of the Company M/s Deloitte Haskins & SellsChartered Accountants retire at the ensuing Annual General Meeting. They were firstappointed as Statutory Auditors for the year 2005-06 and as such the year ended 31stMarch 2014 is their Ninth year as Auditors of the Company. Under the provisions ofSection 139 of the Companies Act 2013 and the Rules framed thereunder which came intoeffect from 1st April 2014 it is proposed to appoint M/s Deloitte Haskins& Sells as Auditors of the Company for one more year that is for the year ending 31stMarch 2015. The consent of M/s Deloitte Haskins & Sells and their consent confirmingthat their appointment if made will be in accordance with the prescribed conditionshave been received by the Company. The Directors recommend the re-appointment ofM/s.Deloitte Haskins & Sells as the Statutory Auditors of the Company for the yearending 31st March 2015.


In conformity with the directives of the Central Government the Company has appointedShri.A.Madhavan Cost Accountant Chennai as the Cost Auditor for the audit of costaccounts for the chemicals manufactured by the Company for the year ending 31stMarch 2015.


The Company has no employees attracting the provisions of Section 217(2A) of theCompanies Act 1956 read with the Companies (Particulars of Employees) Rules 1975.


As required under Section 217 [2AA] of the Companies Act 1956 the Board of Directorshereby confirm:-

(i) That in the preparation of the Annual Accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of the affairs of the Company at the end of theFinancial Year and of the profit of the Company for that year;

(iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;and (iv) That the Directors had prepared the Annual Accounts on a going-concern basis.


Earnings: Rs. 7313358/-

Outgo : Rs. 11523368/-


Particulars For the Year Ended
31st March 2014 31st March 2013
Rs. in lakhs Rs. in lakhs
1. Electricity Purchased:
- Units 94703550 99481672
- Total Amount / Rs in Lakhs. 5047 4372
Rate Per Unit [Gross] Rs. 5.33 4.40
II. Furnace Oil
[A] Purchased:
- Quantity [KL] 580 490
- Total Amount / Rs in Lakhs. 253 204
- Average Rate per KL / Rs. 43642 41713
[B] Consumption:
- Furnace Oil [KL] 586 479
- Amount / Rs in Lakhs. 255 200
- Amount per KL / Rs. 43485 41747


The Company has an in-house Research Development Department where the main areas offocus are Energy Conservation Process Upgradation and Environmental Preservation. TheMinistry of Science and Technology Department of Scientific and Industrial ResearchGovernment of India has recognized the Company’s in-house R & D facilitieswhich is valid upto 31st March 2017. The Company has a sophisticated QualityAssurance (QA) Laboratory recognised by DuPont USA for the analysis of Chlor- Alkalibrine. The Brine from various Chlor- Alkali Industries in India is being analysed atCAL-QA Laboratory.

The Company continues to take all possible steps to conserve energy in every area ofits operations.


Pursuant to Clause 49 of the Listing Agreement the Company has been following theCorporate Governance norms prescribed by the Securities and Exchange Board of India[SEBI]. The Report on the status of the Compliance of Corporate Governance Guidelines ofSEBI together with the Auditors’ Certificate is attached as an Annexure to thisAnnual Report.


A Management Discussion and Analysis Report is attached in terms of Clause 49 of theListing Agreement entered into with the Stock Exchanges and it forms part of this AnnualReport.


The Compliance Certificate issued by a Practicing Company Secretary is attached.


Industrial relations continue to remain cordial.


The Directors thank all the Shareholders customers dealers suppliers bankersfinancial institutions and all the other business associates for their continued supportto the Company and the confidence reposed in its Management. The Directors also thank theGovernment authorities for their understanding and co-operation. The Directors wish torecord their sincere appreciation of the significant contribution made by the employees ofthe Company at all levels to its profitable and successful operations.

For and on behalf of Board of Directors of
Place : Chennai Suresh Krishnamurthi Rao
Dated : 11th April 2014 Chairman