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Lords Chemicals Ltd.

BSE: 530039 Sector: Industrials
NSE: N.A. ISIN Code: INE554C01014
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Lords Chemicals Ltd. (LORDSCHEMICALS) - Director Report

Company director report

DIRECTORS

Dear Members,

Your Directors have pleasure in presenting the 19th Annual Report for the financialyear ended 31st March, 2011.

FINANCIAL HIGHLIGHTS

(Amount in Rupees)
Particulars 2010-2011 2009-2010
Total Income 46,09,36,497.32 25,10,54,561.63
Total Expenditure 42,30,94,879.19 24,24,81,646.54
Profit Before Tax 3,78,41,618.13 85,72,915.09
Profit After Tax 3,30,13,746.13 55,00,364.09
Balance brought forward from previous year 88,46,66,225.28 28,94,596.97
Profit Available for Appropriation 91,76,79,971.41 83,94,961.06
Dividend 62,65,000.00 20,20,000.00
Dividend Tax 10,16,340.00 3,35,497.00
Balance carried to Balance Sheet 91,03,98,631.41 60,39,464.06

FINANCIAL PERFORMANCE

The Company's gross income for the financial year ended 31st March, 2011 was Rs.46,09,36,497.32 as against Rs. 25,10,54,561.63 in the previous year. The Profit before Taxfor the year was Rs. 3,78,41,618.13 as against Rs. 85,72,915.09 in the previous year. TheProfit after Tax for the year was Rs. 3,30,13,746.13 as against Rs. 55,00,364.09 in theprevious year.

DIVIDEND

Your Directors have recommended a dividend of 5% (Re. 0.50 per share) on increasedcapital aggregating to Rs. 62,65,000/- for the financial year ended 31st March,2011, which, if approved at the ensuing Annual General Meeting, will be paid to

(i) all those equity shareholders whose names appear in the Register of Members ason Book Closure and

(ii) to those whose names appear as beneficial owner, in the list to be furnishedby the National Securities Depository Ltd. and Central Depository Services (India) Ltd. ason Book Closure for the purpose.

SCHEME OF AMALGAMATION

Jagati Cokes Pvt. Ltd. has been amalgamated with the Company w.e.f. 1st April, 2010.The Hon'ble High Court at Calcutta has approved the Scheme of Amalgamation by its orderdt. 17th May, 2012. The delay in approval of the Scheme by the Hon'ble High Court hasdelayed the finalisation of the Audited Account for the year ended 31st March, 2011.

DIRECTORS

The following changes have taken place amongst the Board of Directors since the date oflast Annual General Meeting -

i. Mr. Hansraj Jain was appointed as an Additional Director w.e.f. 10th February,2011 to hold office up to forthcoming AGM. But he resigned on 13th February, 2012.

ii. Mr. Raghunath Adhya resigned as Non - Executive Independent Director w.e.f.14th November, 2011 due to personal reason.

iii. Mr. Partha Majumder - Whole Time Director of the Company was re-appointedw.e.f. 1st December, 2011 by the Board of Directors at their meeting held on 14thNovember, 2011.

iv. In terms of the provision of the Companies Act, 1956, Mr. Ajay Kumar Jain -Managing Director and Mr. Navin Kumar Jain - Director of the Company, retire by rotationand being eligible offer themselves for re-appointment at the ensuing Annual GeneralMeeting. A brief resume of the Directors retiring by rotation at the ensuing AnnualGeneral Meeting, nature of their expertise in specific functional areas and names ofcompanies in which they hold directorship / membership / chairmanship of the Committees ofthe Board, as stipulated under Clause 49 of the Listing Agreement with the StockExchanges, is given in the section on Corporate Governance elsewhere in the Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENTS

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirmhaving:

• followed in preparation of the Annual Accounts, the applicable accountingstandards and that no material departures have been made from the same;

• selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your Company at the end of the financial year and the profit ofyour company for that period;

• taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act,1956 for safeguarding theaspects of your Company and for preventing and detecting fraud and other irregularities;and

• prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Directors re-affirm their commitment to the Corporate Governance Report asprescribed by Securities & Exchange Board of India (SEBI). A separate section onCorporate Governance together with Certificate from a Practicing Company Secretaryregarding compliance of the Corporate Governance requirements as stipulated under Clause49 of the Listing Agreement with the Stock Exchange(s) forms a part of the Annual Report.

FIXED DEPOSIT

Your Company has not accepted any fixed deposits from public as defined U/S 58A of theCompanies Act, 1956. As such, no amount of principal or interest is outstanding as on thebalance sheet date.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNIGS OUTGO

The details as required under Section 217(1) (e) of the Companies Act, 1956 read withCompanies (Disclosures of particulars in report of the Board of the Directors) Rules, 1988are given in the Annexure forming part of this Report.

PARTICULARS OF THE EMPLOYEES

There are no employees drawing salary exceeding the limits specified U/S 217(2A) of theCompanies Act, 1956.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management's Discussions and Analysis Report forming part of the Directors' Report forthe year under review as stipulated under Clause 49 of the Listing Agreement with theStock Exchange(s) forms a part of the Annual Report. The report provides strategicdirection and more detailed analysis on the performance of business and its outlook.

AUDITORS

M/s. P. D. Rungta & Co, Chartered Accountants, Statutory Auditors of the Companyhold office until the conclusion of the ensuing Annual General Meeting and are eligiblefor re-appointment. The Company has received letter from M/s. P. D. Rungta & Co,Chartered Accountants, to the effect that their appointment, if made, would be within theprescribed limits under Section 224(1 B) of the Companies Act, 1956, and that they are notdisqualified for such appointment within the meaning of Section 226 of the Companies Act,1956.

The Directors of the Company have proposed the re-appointment of M/s. P. D. Rungta& Co as Statutory Auditors at the ensuing Annual General Meeting.

The observations and comments given by Auditors in their report read together withnotes to Accounts are self explanatory and hence do not call for any further commentsunder Section 217 of the Companies Act, 1956.

HUMAN RESOURCES

The Human Resource function constantly endeavors on high performance. Your Company iscontinuing its emphasis on training and alignment.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the co-operation andassistance received from shareholders, bankers, regulatory bodies and other businessconstituents. Your Directors also wish to place on record their deep sense of appreciationfor the commitment displayed by all executives, officers and staff, resulting in thesuccessful performance of the Company during the year.

For and on behalf of the Board of Directors
Sd/- Sd/-
Place : Kolkata Ajay Kumar Jain Navin Kumar Jain
Date : 11th June, 2012 Managing Director Director

ANNEXURE TO DIRECTOR'S REPORT

Statutory information as required u/s 217(1)(e) of the Companies Act, 1956.

A. Conservation of Energy

The energy conservation measures undertaken by the Company ensure savings in energycosts improving operational efficiency. There are no specific additional investments orproposed investments for reduction of consumption of energy since the primary investmentsdecisions are always taken in such a way that energy is spent to the minimum level. Theefficiency of energy utilization is closely monitored to attain a high level of effectiveconservation. Some of the measures adopted by the Company are mentioned below:

(a) The boilers are run by Husk and it has saved substantial cost.

(b) The plant has optimized the process energy balance and facilitated overallenergy conservations in plant operation.

(c) This is an ongoing exercise, the benefit of which is available in the long run.

(d) Total energy consumption are as under:

2010-2011 2009-2010
Power & Fuel Consumption:
(i) Electricity Purchased
Units (in thousands) (KWH) 1161.385 1209.082
Total Amount (Rs.) 75,30,879 62,09,342
Rate / Unit (Rs.) 6.48 5.14
(ii) Fuel Purchased
Quantity (In Ltrs.) 6,70,000 8,30,000
Total Amount (Rs.) 2,11,48,832 2,26,96,508
Rate / Unit (Rs.) 31.57 27.35

B. Technology Absorption

(i) The plant is being run by continuous Rotary Kiln capacity.

(ii) No technology has been imported by your Company during the last 5 years.

C. Foreign Exchange Earnings & Outgo

(Amount in Rupees)
(a) Foreign Exchange Earnings
(i) F.O.B value of Exports Nil
(b) Foreign Exchange Outgo
(i) C.I.F value of Import :
Raw materials 1,77,67,489.20
(ii) Travelling Expenses Nil