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DIRECTORS' REPORT

Claro India Ltd.

GO
Market Cap. ( ₹ in Cr. ) 2.25 P/BV -0.43 Book Value ( ₹ ) -11.75
52 Week High/Low ( ₹ ) 5/4 FV/ML 10/100 P/E(X) 2.53
Book Closure 26/09/2009 EPS ( ₹ ) 1.98 Div Yield (%) 0.00
Year End :2010-03 
The Directors have pleasure in presenting their Twenty Fifth Annual Report together with the audited accounts for the financial year ended March 2010.

FINANCIAL HIGHLIGHTS

Particulars                             2009-10        2008-2009

                                    (Rs. in Lakhs)   (Rs. in Lakhs)

Turnover                                806.18           703.58

Gross Profit /(Loss)                     83.08         (169.08)

ADD / LESS : Depreciation                37.27            36.98

Net Profit / (Loss)                      45.81         (132.10)
Accumulated Losses Brought forward (1156.63) (1024.52)

Accumulated Losses Carried forward (1110.82) (1156.63)

BUSINESS OPERATIONS

The Companys turn over increased in the year by nearly 15% and together with the cost control in procurement and operation, resulted in better performance in achieving a net profit of about Rs.46 lacs for the year.

There was continuous Power Shortage / Shut Downs during the year and the Turn Over / Performance would have been better but for the same.

Concentration was given to specified product groups with better margins like Paraformaldehyde Powder for Exports and specialized Resin grades to specific end use applications and customers

The Company has been re-awarded with ISO 9001 : 2008 Certification by M/s. TUV Nord, approving our Quality Systems, which will also improve the Companys image with our special customers and better performance could be expected in the coming years.

Trading activities continued in the year, contributing to better turn over.

Research & Development efforts are being constantly made to develop new products and reduce the cost of inputs to face the competition better. The company has provided additional storage facilities forfmished products and raw materials and is constantly improving the infrastructural development. The company effectively utilized the appointed Consignee Selling Agents at strategic locations to face the competition better form the local suppliers with VAT advantages.

With various efforts being made and thrusts given, the Directors hope to sustain and improve the performance of the Company in the coming years, barring unforeseen circumstances.

DIVIDEND

Even though the Company had made profits during the year, due to the accumulated losses of the company, your

Directors are unable to recommend any dividend for this year.

LISTING OF SECURITIES

The Companys Equity shares are presently listed with Bombay Stock Exchange Limited and Madras Stock Exchange Limited.

SCHEME OF AMALGAMATION

During the Financial year 2009-2010, the Board of Director of Claro India Limited at their meeting held on 8th January, 2010 had approved the scheme of amalgamation of the Company with Kothari Phytochemicals and Industries Limited. The Company has made an application with Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE) for no objection to the said scheme and the approval for the same is awaited from the said exchanges.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Article 130 and 131 of the Articles of Association of the Company, Mr. N. Mahadevan, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. A.K. Daga, Director resigned from the Board with effect from 29th April, 2009. The Board places on record its appreciation for the valuable services rendered and contribution made by Mr. A.K. Daga During his tenure as a Director.

Details of Directors seeking re-appointment are provided in the Corporate Governance Report forming part of this Report, as required under Clause 49 of the Listing Agreement with the Stock Exchanges.

AUDITORS

M/s. Srikanth & Shanthi Associates, Chartered Accountants, Chennai, the Companys statutory auditors, retire at the conclusion of the Annual General Meeting and are eligible for reappointment.

The Board, on the recommendation of Audit Committee, has proposed that M/s. Srikanth & Shanthi Associates, Chartered Acountants, Chennai bearing Registration No.004006S be re-appointed as the Statutory Auditors of the Company and to hold office till the conclusion of the next Annual General Meeting of the Company. M/s. Srikanth & Shanthi Associates, Chartered Accountants have forwarded a Certificate to the Company, stating that their re-appointment if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956.

The financial statements have been audited by M/s. Srikanth & Shanthi Associates, Chartered Accountants, the Statutory

Auditors and their report is appended thereto.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the listing agreement, a Management Discussion & Analysis Report, Corporate Governance Report and a Certificate from CS R. Sridharan, M/s. R. Sridharan & Associates, Company Secretaries, Chennai regarding compliance of the conditions of Corporate Governance are made a part of the Annual Report

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that, to the best of their knowledge and belief.

1. In the prepartation of the Profit & Loss Account for the financial year ended March 31, 2010 and the Balance sheet as at that date ("financial statement"), applicable accounting standards have been followed;

2. Appropriate accounting policies have been selected and applied consistently and such judgments and estimates that are reasonable and prudent have been 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 and of the (PROFIT) of the company for that period.

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. To ensure this, the company has established internal control systems, consistent with its size and nature of operations. These systems are reviewed and updated on an ongoing basis. Periodic internal audits are conducted to provide reasonable assurance of compliance with these systems. The Audit commitee meets at regular intervals to review the internal audit function.

4. The financial statements have been prepared on a going concern basis.

SECRETARIAL COMPLIANCE CERTIFICATE

Pursuant to Sectio,, 383A of the Companies Act, 1956 read with the Companies (Compliance Certificate) Rules 2001 certificate issued by CS. R. Sridharan, M/s. R. Sridharan & Associates, Company Secretaries, is attached hereto.

PARTICULARS OF EMPLOYEES

Under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees Rules, 1975) as amended, there were no employees in the company drawing more than the limits as per Section 217(2A) of the Companies Act, 1956 during the financial year ended 31st March 2010.

INDUSTRIAL RELATIONS

The company maintained all its industrial relations cordially. The company has a very good team of personnel. The company has always been focused on the improvement of the quality of its human capital, good training and development programmes to achieve this.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

The Particulars required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed separately as Annexure, A which forms part of this report. HEALTH, SAFETY AND ENVIRONMENT PROTECTION

The Company has substantially complied the applicable Environmental Laws and Labour Laws. It has expended substantial resources, both financial and managerial, in complying with the relevant laws and has taken all reasonable measures to protect the environment, to ensure safety and healthy of the workers.

GENERAL

Your Director places on record their appreciation for the continued cooperation, support and assistance extended to the company by the Government of Tamil Nadu and its agencies viz., SIPCOT, TNEB, Tamil Nadu Pollution Control Board etc., the shareholders, Bankers, financial Institutions and Customers.

Your Directors also place on record their appreciation for the continued and dedicated performance and commitment by officers, staff of the Company.

                                               On behalf of the Board

                                                 Sd/-            Sd/-

Place : Chennai                            R.L.BIYANI    N. MAHADEVAN

Date 13.08.2010                              Director        Director