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Kamar Chemicals & Industries Ltd.

BSE: 531001 Sector: Industrials
NSE: N.A. ISIN Code: INE728D01012
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Kamar Chemicals & Industries Ltd. (KAMARCHEMICALS) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the Thirty third Annual Report and theAudited Accounts of your company for the financial year ended 31st March 2015.

FINANCIAL RESULTS

The financial results for the year ended 31st March 2015 as compared with the previousyear are as follows:-

(Rs. in Lakhs)

Year ended 31-03-2015 Year ended 31-03-2014
Profit/(loss) after Depreciation but before tax (3.85) (0.81)
Provision for taxation - -
Profit/(Loss) after tax (3.85) (0.81)
Profit/(Loss) brought forward from last year (2412.06) (2411.25)
Balance Carried to Balance Sheet (2416.86) (2412.06)

OPERATIONS -

Your Company did not carry out any operation during the year.

TAKEOVER OF ASSETS BY SIPCOT

Your Company had committed default in repayment of dues to SIPCOT for an amount ofRs.10.56 Crores. Consequent to the default SIPCOT took symbolic possession of the Landand Building and Plant and Machinery of the Company under section 29 of the StateFinancial Corporation Act on 15-12-2003 and pursuant to the Order passed by the HighCourt of Madras brought it for Auction Sale for realisation of its dues on"as-is-where-is" basis and on going concern concept. 'SIPCOT invited Tenders forthe sale of the assets by Advertisements. SIPCOT had allotted the auctioned assets to aCompany "Nagoorar Enterprises Private Ltd. Chennai" who were the successfulbidder. SIPCOT vide its letter dated 07-05-2007 has intimated the said NagoorarEnterprises Private Ltd of its approval to transfer of the land measuring 8.85 acres atSIPCOT Industrial Complex Ranipet originally allotted to Kamar Chemicals &Industries Ltd and the sale of building and Plant and machinery for a total saleconsideration of Rs.285 lakhs. Further on 6th November 2007 the fixed assets includingLand of the Chemical Plant has been handed over in running /as-is-where-is condition andon going concern concept to SIPCOT which in turn was handed over to NagoorarEnterprises Private Ltd. who were the successful bidder. The liabilities of the Companywere not transferred.

BOARD OF DIRECTORS

Directors retiring bv rotation:

• Shri M.S. Sethuraman Director (DIN 02682364)retires by rotation at thisAnnual General Meeting and being eligible offers himself for reappointment.

DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8(5) OF THECOMPANIES (ACCOUNTS) RULES 2014

Extract of Annual Return:

The extract of the Annual Return in the Form MGT 9 is annexed to this Report asAnnexure I.

Number of meetings of the Board:

There were four Board meetings during the year.

Directors’ Responsibility Statement:

To the best of their knowledge and belief and according to the confirmation andexplanations obtained by them your Directors make the following statement in terms ofSection 134(5) of the Companies Act 2013.

i) That in the preparation of the Annual Accounts for the year ended 31st March 2015the applicable Accounting Standards had been followed along with proper explanation formaterial departures if any;

ii) That the selected accounting policies were applied consistently and judgements andestimates that are reasonable and prudent were made so as to give a true and fair view ofthe state of affairs of the Company as at the end of the financial year ended 31st March2015 and of the loss of the'Company for that period;

iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities;

iv) That the annual accounts for the year ended 31st March 2015 had been prepared on agoing concern basis.

v) Internal financial controls had been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and;

vi) Proper systems to ensure compliance with the provisions of all applicable laws hadbeen devised and that such systems were adequate and operating effectively.

Declaration by Independent Directors:

The Board has received the declaration from the Independent Director as per therequirement of section 149(7) of the Companies Act 2013 and the Board is satisfied thatthe Independent Director meets the criterion of independence as mentioned in section149(6) of the Companies Act 2013.

Company’s policy on Directors appointment and remuneration:

The Company has not laid down any policy for appointment of directors and theirremuneration. The Company is not paying any remuneration to its directors. There are noexecutive directors in the Company. There are no employees in the Company. Since theCompany is not carrying on any operation it has no intention to appoint any director.

Explanations or comments by the Board on every qualification reservation or adverseremark or disclaimer made in the Auditors’ Report:

The Auditors’ Report to the Shareholders for the year under review containsadverse remark made by the auditor stating that in his opinion the Company’s accountsshould not have been compiled on ‘Going Concern’ basis due to the reasonsstated in the Report.

Since the SIPCOT has taken over the Assets of the Company and sold them by Open Tenderfor recovery of its dues in full the Company is not in a position to recommence itsproduction and carry on business activity in order to earn profit. The Management isexploring the possibilities of carrying on some business in accordance with its objectclause.

During the year the Company had written off in the Profit and Loss Account Bad debtsfor an amount of Rs.23457103/- towards irrecoverable bad debts. The company had alsowritten back in the Profit & Loss account an amount of Rs.23143052/- from out ofthe amount of Rs. 77143052/- shown in the books of account as amount due to SIPCOT onaccount of the balance of interest charged by SIPCOT. As per the legal opinion of expertsthe Company deemed fit to remove liability as per law as entire assets of the company weresold by SIPCOT.

Particulars of loans guarantees or investments under section 186 of the Companies Act2013:

There are no loans made guarantees given or security provided or securities of anyother body corporate acquired during the year under section 186 of the Companies Act2013.

Particulars of contracts or arrangements with related parties:

There are no Related Party Transactions (RPT’s) made by the Company with thePromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large as per the provisions ofthe Companies Act 2013 and the Listing Agreement. There are no particulars of RPT’sto be disclosed in Form AOC-2.

The state of the Company’s affairs:

The state of the Company’s affairs is explained in the paragraph ‘operations'in the Directors’ Report.

The amount if any carried to reserves:

The Company has not transferred any amount to reserves.

The amount if any which it recommends should be paid by way of dividend:

Since the Company has accumulated losses the directors do not recommend dividend forthe year.

Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of report:

The company has allotted 30000 (thirty thousand) 15% (fifteen percent) CumulativeRedeemable Preference Shares (CRPS) of Rs. 100/-(Rupees one hundred only) each fully paidup aggregating to Rs.3000000/ - (Rupees thirty lakhs only) to Mr. Syed Meeran Directorof the Company on 29th May 2015 against the share application money pending allotmentamount of Rs. 3000000/- (Rupees thirty lakhs only). Apart from the aforesaid allotmentof CRPS there are no other material changes and commitments affecting the financialposition of the Company that have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of report viz. for theperiod from 31st March 2015 to 31s* July 2015.

Conservation of energy technology absorption foreign exchange earnings and outgo:

The information pursuant to section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies {Accounts) Rules 2014 is as follows:

a. The Company has no activity involving conservation of energy or technologyabsorption.

b. The Company does not have any foreign exchange earnings and outgo.

Risk Management Policy:

Since the Company does not carry on any business operations it has not formulated aRisk Management Policy during the year.

Statement indicating the manner in which formal annual evaluation has been made by theBoard of its own performance and that of its committees and individual directors:

Pursuant to the provisions of the Companies Act 2013 and clause 49 of the ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance and the directors individually as well as the evaluation of the working of itsCommittees.

The financial summary or highlights: .

The financial summary is given in the Paragraph ‘Financial Results’ in theDirectors’ Report.

The change in the nature of business if any:

There is no change in the nature of business. .

The details of directors or key managerial personnel who were appointed or haveresigned during the year:

Shri M.J. Saifudeen Director has resigned during the year. Shri. Abdul Raghu Mistherwas appointed as the Director of the Company (Additional Director) with effect from 4thAugust 2014

The names of companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year:

There are no companies which have become or ceased to be Subsidiaries joint venturesor associate companies during the year.

The details relating to deposits covered under Chapter V of the Companies Act 2013and details of deposits which are not in compliance with the requirements of Chapter V ofthe Companies Act 2013:

The company has not accepted any deposits covered under Chapter V of the Companies Act2013.

The details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

The details in respect of adequacy of internal financial controls with reference to theFinancial Statements:

The Company has adequate internal controls commensurate with the size of the Companyand the nature of its business operations.

ANNEXURES

The Report on Corporate Governance as per clause 49 of the Listing Agreement forms partof the Annual Report and is annexed herewith together with Auditors’ Certificate onCorporate Governance the certificate duly signed by the Directors on the FinancialStatements of the Company for the year ended 31st March 2015 as submitted to the Board ofDirectors at their meeting held on 29th May 2015 and the declaration by a Directorregarding compliance by -the Board members and senior management personnel with theCompany’s Code of Conduct.

AUDITORS

M/s S. Venkatram & Co Chartered Accountants Chennai (Firm Registration No.004656S) the Statutory Auditors of the company retire at the conclusion of the ensuingAnnual General Meeting and are eligible for re-appointment for the year 2015-2016.Certificate has been received from them to the effect that their re-appointment asstatutory auditors of the Company if made would be within the limits prescribed underSections 139 & 141 of the Companies Act 2013. They have also confirmed that they holda valid peer review certificate as prescribed under clause 41(1) (h) of the ListingAgreement. The Directors recommend their reappointment. If reappointed they will holdoffice until the conclusion of the next Annual General Meeting of the company.

STATEMENT OF EMPLOYEES'PARTICULARS

The particulars required to be furnished under Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is as follows:

During the year there are no employees drawing remuneration of Rs.60 lakhs or more perannum or Rs.5 lakhs or more per month or was in receipt of remuneration which neither inthe aggregate nor at a rate which in the aggregate is in excess of that drawn by theManaging Director or holding either by himself or along with his spouse and dependentchildren not less than 2% of the equity shares of the Company.

DISCLOSURES UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014

The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year: '

Since no director of the Company is in receipt of remuneration from the Company thereare no particulars to be furnished.

The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

There is no increase in the remuneration to the aforesaid personnel in the financialyear 2014-15.

The percentage increase in the median remuneration of employees in the financial year:

There is no increase in the median remuneration of employees in the financial year2014-15.

The number of permanent employees on the rolls of the Company:

There are no permanent employees on the rolls of the Company as at 31st March 2015.

The explanation on the relationship between average increase in remuneration andcompany performance:

There are no revenue from operations in the financial year 2014-15 and there is noremuneration during the year.

Comparison of the remuneration of the Key Managerial Personnel against the performanceof the Company:

The company did not carry out any operations during the year and no Key ManagerialPersonnel of the Company is in receipt of remuneration from the Company there are noparticulars to be furnished.

Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year viz. 2014-15 arid its comparison with thepercentile increase in the managerial remuneration:

There is no managerial remuneration paid during the financial year 2014-15. There wasno increase in the salaries of employees during the financial year 2014-15.

The key parameters for any variable component of remuneration availed by the directors:

The directors were not paid any remuneration during the financial year 2014-15.

The ratio of the remuneration of the highest paid director to that of the employees whoare not directors but receive remuneration in excess of the highest paid director duringthe year:

The directors were not paid any remuneration during the financial year 2014-15.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the continued co-operation andsupport extended by all concerned persons and authorities for the srtiooth and efficientfunctioning of the Company.

By order of the Board

Place : Chennai - 600 004 SYED MEERAN M S SETHURAMAN
Date : 29-05-2015 Director Director
DIN : 00547775 DIN : 02682364