The Directors have pleasure to present their 29th Annual Report and theAudited Annual Accounts for the year ended 31st March 2016.
The Company's financial performance for the year ended 31st March 2016 issummarized below:
| || ||[Rs. In Lacs] |
|Particulars ||2015-16 ||2014-15 |
|Total Revenue ||33970.47 ||31966.42 |
|Profit before Depreciation Interest and Tax (PBDITA) ||4564.60 ||2975.98 |
|Interest for the year ||2417.88 ||2492.05 |
|Depreciation for the year ||931.48 ||945.20 |
|Profit/(Loss) before tax and Exceptional item ||1215.24 ||(461.27) |
|Exceptional items ||0.00 ||0.00 |
|Profit/(loss) for the year ||1215.24 ||(461.27) |
|Tax liability :- || || |
|Current Year's Tax ||270.00 ||- |
|MAT Credit ||(270.00) ||- |
|Deferred Tax Liability/(Asset) ||91.78 ||(55.57) |
|Prior period Tax Adjustment ||189.15 ||- |
|Wealth Tax ||- ||1.71 |
|Net Profit/(Loss) for the year ||934.31 ||(407.41) |
State of Company's Affairs
During the year under consideration following important developments have taken place-
- Your Company has availed Credit facilities from Consortium of banks consisting ofIDBI Bank Limited (IDBI) and State Bank of India (SBI.) In view of possible stress on cashflow of the company at the instance of the company loans granted were restructured byboth the banks and it was implemented on 31st March 2015. Main terms ofrestructuring were deferment of repayment of term loan matching with future cash flow ofthe company marginal reduction in interest rates subject to recompense for sacrifice madeif any and refund of term loan installments paid during 2014-15. Company has been regularin repaying its dues of principle as well as interest from date of restructuring tilldate without any default. SBI informed the company on 4th April 2016 that under AssetQuality Review (AQR) undertaken by Reserve Bank of India (RBI) its account has beenclassified as NPA with effect from 1st April 2014. After hectic efforts and follow upcompany was provided with the following reasons for such classification. "Perfectionof securities was done post implementation date. Hence package may not be taken asimplemented and Pledging of shares was not completed. ". AQR is an internal processof Regulator and Bank. Company has suffered on account of process lapse on the part of thebank. The Company has completely denied in writing to bank of such delay and a verydamaging action by bank in view of the fact that all dues to banks are paid till date. Astrong request has been made to bank to re-classify account as standard asset as soon aspossible. IDBI Bank continues to classify the account as standard asset.
- Net Worth of the Company is increased to Rs.8401.75 Lacs as on 31st March2016 compared to Rs.6967.44 Lacs as on 31st March 2015.
To conserve the resources your Directors have not recommended dividend during the yearunder consideration.
INVESTOR EDUCATION AND PROTECTION FUND
Company during its IPO in the year 2008 had refund orders as on 25/09/2008 from whichRs.27200/- remained unclaimed in "UNPAID REFUND ACCOUNT" which were thentransferred to "INVESTOR EDUCATION AND PROTECTION FUND" pursuant to theprovisions of Companies Act 2013 after completion of seven years on 25/ 09/2015.
Material Changes and commitments affecting financial position between the end of thefinancial year and the date of report
There have been no material changes and commitments affecting financial positionbetween the end of the Fiscal Year and the date of the report.
MANAGEMENT DISCUSSIONS AND ANALYSIS
Analysis of sector-wise performance of the Company for the fiscal year 2015-16 andfuture outlook are given hereunder. The outlook is based on the assessment of the currentbusiness scenario and Government Policies. Any deviation to the developments-future andother-may affect the variances in the outlook.
Industry Progress & Outlook
A few minor changes in the mining scenario for leasing and auction of mines has beenbrought into notice by the Central government. Minor modifications in the royalties havealso been announced. Its implementation is what is to be seen in the near future. Apartfrom that not many significant changes have been noticed or realized in the IndustrialMinerals industry that the Company operates in. This industry still predominantlyfunctions in an unorganized way wherein a limited players are trying to get their actthrough and shift their focus in an organized way segmenting them in the category in which20 Microns operates since more than few decades. India has always been a self sufficientnation with well endowed natural mineral resources in the league of larger nations of USAEurope and China. This industry falling under the larger Minerals & Mining sector isa significant contributor to India's GDP growth which is currently on the decline.
The Industrial Minerals sector provides the basic raw materials to the manufacturingsector and has always been considered as an important segment for the Indian economy. Themining sector has been reeling for few years now under a lethal mix of high borrowingcosts on one hand and environmental and regulatory policy paralysis on the part of thegovernment on the other hand. But with the new government in place who has had a briefhistory of bringing reforms in the mining industry the hope has revived in the industryto bring in some major growth oriented mining and mineral development policy reforms inthe next few years which should boost this industry to the next level.
Bulk Minerals are usually transacted in high volumes and are characterized by bulkinessin extraction transportation and consumption. The extraction of these minerals involvesshallow depth mining but with a considerable quantity of over burden removal and wastegeneration. The mining of bulk minerals is also perceived to disturb the eco-system beyondits resilience. Understandably the mines from where these minerals are extracted arelarge mines and their clearances are easily caught in the quagmire of environmentalforest and other clearances. Hence there is need for developing a wide spreadunderstanding for the strategic value of different minerals. On the other hand the demandfor these minerals is dependent on the demand of the user industry which is also producedin bulk.
Much greater emphasis is required on development of mineral deposits by way ofprospecting and zero-waste mining. The Indian government does not formally define miningas a core industrial activity. Rather it is viewed as more often as an ancillary rawmaterial industry. The mining legislation always gave accent to regulation whichemphasized management of the mines rather than on exploration and development.
The future should therefore usher in an era of mineral development with socio-economicdevelopment as the focus. A significant amount of mineral potential still lying untappedcould contribute enormously to the country's GDP if the challenges are overshadowed by ahigh flow of FDI in this sector.
The mining industry in India has however started to shape the future direction of thisengagement towards an inclusive agenda for improving livelihoods of the local populacebringing in much needed investment job wealth creation and government revenues.
The future therefore now lies on deployment of latest technologies as well asinterpretation of geological data to its best advantage for opening up of new mines. Asmineral exploration is a key to attracting investment in the mining sector separatelegislation and procedure for grant of prospecting/exploration licenses is required.
Product wise performance
COATING & CONSTRUCTION DIVISION:
The product range for CNC division includes a varied application base with the majorityshare lying with Paint Industry inclusive of Architectural Industrial and Powder Coatingsand a minor share with the Allied base of industries catering to Agrochemicals Adhesives& Sealants Construction Cosmetics Printing Inks Oil Well Drilling FoundryCeramics and many others.
The year 2015-16 was quite challenging in itself due to the overall slowdown in theindustrial segments across India and despite in such a sluggish scenario CNC divisionwas able to manage the growth of above 5 % in terms of Value and 9% in terms of volumeover the previous financial year which contributes substantial of revenue to the company'stotal sales. It's also remarkable to note that our growth pace has been consistentlymaintained in Major Paint Companies by providing them value added as well as importsubstitute products and even in the commodities segment we have introduced variouspremium products which have given them substantial cost benefits in their productformulation.
The paint industry can easily grow at 15% annually over the next few years from itscurrent size as the per capita paint consumption in India which is a little over 4 kgs isstill very low as compared to the developed western nations. Therefore as the countrydevelops and modernizes the per capita paint consumption is bound to increase.Considering this scenario major paint companies have started their new lines ofproduction during the year and also have plan to establish their newer production Units tocome up with larger capacities across the country to cater the demand being generated inTier -II & III cities especially in the segment of Decorative Paints includingexterior wall paints interior wall paints wood finishes and enamel and ancillaryproducts such as primers putties etc. Decorative paints account for over 70% of theoverall paint market in India which consumes majority of the Industrial Minerals and beinga premium supplier and having a close association with the market leader of the segmentwe expect good volumes of business in the near future which will support us to get stablegrowth in the future too.
Reports of various institutes & conducted studies show that the corporate arehopeful for a better turnaround in the Economy and improvement in Investment Climate inthe light of expected reforms in Government's Economic policies boost up theinfrastructure and housing sector as a whole which should eventually support the growth inthe Paint industries along with medium & small scale paint
Manufacturers by adopting the new process technologies to produce high-end product andexpanding their network in all segments by accepting the new products faster which helpsus to increase the volume of our specialty products.
However as with other fields some challenges also exists in this promising sectorthat can affect the growth trajectory of the paint industry if not handled accordingly.For instance the industry is highly raw material-intensive and any fluctuation in theavailability of raw material leads to substantial price fluctuation in paint productioncosts. The pressure is on the Raw material suppliers who are undergoing tremendouspressure to maintain the cost coupled with new entrants in the market which has resultedin the erosion of bottom line and the challenge is going to be similar in the comingfinancial year.
The industry expects an outperforming in 2016-17 and we anticipate outgrowing ourcustomers demand with the best possibilities of a great mix of commodity and specialtyProducts
VAD-VALUE ADDED DIVISION
In the current global scenario year 2015 -16 was full of challenges for us and theencouraging part of the story was that under such adverse situation we did well andmaintained a strong EBIDTA or bottom line. In such critical market situation our VALUEADDED DIVSION in the Year 2015-16 successfully achieved the target which itself is acommendable achievement.
The paper industry in India is more than a century old. At present there are over 850paper mills manufacturing a wide variety of items required by the consumers. In last 6065years the number of paper mills has increased from just 17 mills in 1951 to more than 850units engaged in the manufacturing of paper and paperboard. The paper industry in Indiacould be classified into 3 categories according to the raw material consumed. Wood basedAgro based & Waste paper based. The Indian Paper Industry accounts for about 1.6% ofthe world's production of paper and paperboard. The Indian Paper Industry is among the top12 Global players today with an output of more than 13.5 Million tonnes annual with anestimated turnover of Rs.35000 Crores. The mills use a variety of raw material viz. woodbamboo recycled fiber bagasse wheat straw rice husk etc.; approximately 35% are basedon chemical pulp 44% on recycled fiber and 21% on agro-residues. India is self-sufficientin manufacture of most varieties of paper and paperboards. Import is mainly related tocertain specialty papers such as light weight coated variety of paper cheque paper etc.Paper Industry in India is moving up with a strong demand push and is in expansion mode tomeet the projected demand of 20 Million tonnes by the year 2020. Thus paper industry inIndia is on the growth trajectory and is expected to touch 8.5% GDP in the coming years.Vast changes have taken place in the field of printing paper duplex boards newsprint andso forth. Modern management along with latest technological machines is used for thecompletion of various projects. Nowadays foreign investors are interested in setting upnew plants for manufacturing paper to bring forth huge revenue to the paper industry. Thepaper industry is planning to widen its horizons with the help of joint ventures and newinvestors. Also slurry business penetration with long terms contractual business with thecustomer had thrown open new segments with excellent potential for the business. Howeverthe paper industry is facing many challenges due to the shortage of raw materials and therise in population. Our special effort is towards promoting our Submicron CalciumCarbonate in Paper application which is contributing towards the positive trend in oursales pattern and contributing towards the EBIDTA. This year we have achieved growth inQuantity Value and EBIDTA against Projection.
Globally the polymer industry is expected to grow at a considerable pace & mostlucrative business is growing bigger by the day as the demand for polymer is driven bygrowth in end use markets such as agriculture packaging automotive infrastructuretransport rails and telecommunication mainly from emerging economies. Polymer iscontinuously substituting metals glass paper and other traditional materials in variousapplications due to its lightweight and strength and the design flexibility they offeralong with low-cost. Thermoplastics segment is expected to witness the highest growth overthe next few years. Increasing applications of engineered plastics in various fields suchas construction automotive and industrial manufacturing equipment is expected to drivethis market. India being relatively low in per capita consumption of plastics is expectedto triple over next decade. In-spite of drastic drop of Polymer price due to crude oilprice slump the entire year 2015 -16 saw a very volatile and uncertain trend for polymerprocessing industries forcing many industries to either shut down or cut down theirproduction activities by substantial degree. However in such adverse scenario our companyregistered fair bit of success in terms of achieving sales Quantity and EBIDTA over thisperiod.
PVC Pipe Application : The PVC Pipe application has suffered huge set back due tosevere drought in many places in India and thereby the requirement of Agriculture andIrrigation Pipes had gone down substantially. Even many of Agro Pipe manufacturers havecut down their production capacity by considerable degree. Added to that the slump inconstruction industry has reduced the requirement of Plumbing Pipes. Still we haveachieved a commendable growth in Quantity Value and EBIDTA in this application againstprojections.
PVC Cable Application : In the PVC Cable application due to the massive slow downin construction industry and also lack of government projects the requirement of Cablemanufacturing has made a nosedive. Almost all leading Cable manufacturers in India wereworking on partial capacity. In spite of all these adverse market scenario we haveachieved a commendable growth in Quantity Value and EBIDTA in this application againstprojections.
PP Master Batch Application : As PP MB application is majorly dependent onAutomotive Parts Woven Sack and Plastic carry Bags the market is severely affected by therecession in the related industry and also the restriction imposed by government inrelated to environmental hazard. In such adverse situation we also got some set back ingetting proper kind of products from our overseas unit and as a matter of fact the growthin this segment got terribly affected in the year 2015-16. In The year 2015-16 we had alsoachieved in terms of Quantity Value and EBIDTA against Projections.
Today's paradigm shifts are posing exciting challenges and favorable opportunitieswhich we are addressing effectively to optimally position ourselves to secure concentratedbusiness areas where we have clear sights of more market penetration and value addition.These efforts are kept ongoing and a separate team has been formed to promote and marketabove products on a consistent basis and we are confident of benefiting through thispolicy in the years to come. We have taken many positive steps in this direction and hasconcentrated in promoting our value added products in polymer application. We haveincreased the sale of speciality products like Sub Micron Calcium Carbonate SyntheticBarium Sulfate Desiccant Opacifier and Processing Aids. These are the products will becontributed in a positive way to our EBIDTA.
Rubber application is one of the important vertical business for the Company in therecent years. Indian Rubber industry consists of above 4600 units across the countrycomprising of 30 large scale 300 medium scale and around 4400 small and tiny scale units.Indian rubber industry has been growing along with the strength and importance as a partof India's burgeoning role in the global economy. The rubber industries products are liketyres tubes auto parts belt cables hoses etc. India is the world's largest producerand the third largest consumer of natural rubber.
During 2015-16 Rubber Industries growth marginally declined compared to previous yeardue to unfavorable market conditions main constrain was continued rate reduction ofrubber and carbon black. Even though in these conditions our Company's Rubber divisionhas achieved sales targets with increased profit as compared to previous fiscal. Severalnew products are also being developed for the partial replacement of synthetic silica andcarbon black which is widely used as filler in the segment. Also company is emphasizing tofocus more on value added products like Vaporlink (product which partially replaces carbonblack) Wax Zinkomer-100% replacement of Zinc Oxide. Rubber processing aid like PE forlubrication and Vaporoxol series use as desiccant which are high value products can boostthe sales turnover in coming future. This year we have developed new product viz. MC Wax.
As India is growing hub for Rubber Industry for automobile and other like industry andalso getting quality natural rubber Company is expecting good growth in our Rubberapplication.
20 Microns Pharma Division launched its Herbal-Ayurvedic Tablets viz."Dia-B-Microns" & "Dia-B-Microns FORTE" which is safe and reliableherbal medicine for effective management & helpful in sugar control. SinceDia-B-Microns is completely Herbal product it has no side effects. This has now beenpenetrated majorly in the States of South & North India besides Gujarat &Maharashtra in its span of about 3-4 years.
A new herbal-ayurvedic medicine is about to be launched viz. "Arthritol"which is effective for helping control Arthritis.
CONSTRUCTION CHEMICALS DIVISION
Since 1st October 2015 another landmark of the Company is the innovationof "Mirconsil 30C" and "NANOSIL" which are special mineral additivefor Construction activities by self curing internal plaster application mixed with cement& sand during dry mix.
MICRONSIL 30C-This application is suitable for Mortar and plastering. A surface likebricks stone blocks etc.. Application is user friendly similar to conventional method ofplastering. It saves 30% of the Cement consumption with added and proven major benefitslike reducing the wastage of cement besides saves potable water for curing; powerconsumption etc. It can be called A"Green plasterA"-By reducing cement up to30%.
NANOSIL-is a solvent-free high reactive Silicone based penetrating waterproof agentdeveloped to provide water repellency to porous construction materials such as cementblocks mortar plaster painted surfaces and grouts as it penetrates deep into thesurface voids and forms bonds in the voids.
This unique formula incorporates leading molecular nanotechnology; putting an end towater and moisture migration through any porous cementitious substrate.The treatedsurfaces will show no change in visual appearance from application and the surface thatwill not chip flake delaminate or breakdown with UV light exposure.
Export Opportunities in the Lead
Global economic slowdown affects all emerging markets. In value terms Export to Africaand Middle East has held up the best. However export sales of 20 Microns product sales hasgone 25% up over last year. Mineral export from India is growing spiky sharp over fewyears.
Advancement in Technology has given a great acceleration to Indian resources to competewith global Giants. YOY it has been observed that export opening has also increased due toUS dollar appreciation against Indian Rupee which becomes incitement to exporter.Environment restriction in Europe and USA for discouraging mining has actively played arole to search resources in India. Indian mineral market will have better opening sinceChina has also put limitations export quota for natural resources specially on Talc.
Since most of the International; players has their own manufacturing facilities inIndia It becomes easy for them to source and to extend approval for their global use.
Considering contemporary standing 20 Microns accomplished to sale their products in 56countries across the globe. In the year 15-16 the Company has been able to encapsulatebulk business of Calcined Kaolin in Egyptian and Ethiopian markets and anticipating toinitiate bulk contract in European countries for their major products which will give avery good value addition in year 2016-17.
Export Sales Comparison is here under :
| || ||[ Rs. In Lacs] |
|Element ||2015-16 ||2014-15 |
|CIF Value ||4006.15 ||3232.05 |
|FOB Value ||3649.10 ||2792.39 |
For Future development company has started aggressive marketing activity by way ofarranging technical meet and conference which will help to generate more customer baseacross the globe.
Company is targeting around 19% growth for year 2016-17 for export sales over lastyear.
Your Company has been a pioneer in White Industrial Minerals and possesses miningleases having sizable mineral reserves of 57.590 Lacs MT and 96.492 Lacs MT and the lifeof the mine is more than 25 years at current capacity. The reserves shown in the tablebelow are located in the potential mineral block.
Reserves in Mining Leases Status as on 31.03.2016
|Details of Mines ||Approx. Reserves (in Lacs Tons) ||Approx. Value of the Reserves (Rs. In Lacs) |
|1. China Clay-Mines Bhuj Dist. Kutchh Gujarat. Area-11.89 Hector ||25.05 ||3632.25 |
|2. Dolomite Mine Taluka-Chhota Udepur Dist. Vadodara Gujarat Area-6.25 Hector. ||13.890 ||4860.75 |
|3. Calcite Mine Dist. Sirohi Rajasthan Area-49.25 Hector. ||8.340 ||5002.52 |
|4. Limestone Mines Dist. Tirunelvelli Tamilnadu Area-4.43 Hector. ||10.310 ||4639.50 |
|TOTAL ||57.590 ||18135.02 |
Reserves in Private Owned Land Status as on 31.03.2016
|Details of Mines ||Approx. Reserves (in Lacs Tons) ||Approx. Value of the Reserves (Rs. In Lacs) |
|1. China Clay-Mamuara Village Bhuj Dist. Kutchh Gujarat. Area-25.1455 Hector ||64.122 ||9297.69 |
|2. Bentonite Mines Bhuj Gujarat Area 6.5 Hector ||32.370 ||5664.20 |
|TOTAL ||96.492 ||14961.89 |
RESEARCH AND DEVELOPMENT
Our steadfast commitment to research and development has been the force behind successof your company. Our innovative products and services add value to a variety of thingsthat touch peoples' lives every day like Paints & Coatings Plastic Paper RubberInk & Pigments Agrochemical Ceramic & Glass Adhesive & Sealant Steel &Foundry Construction Cosmetic and Water Treatment.
Our R&D is focused on energy conservation and protection of environment. We help toreduce CO2 emission by replacing TiO2 and carbon black in variousapplications with our products. The strong technical support from R&D helps yourcompany to become a non-waste producing organization. Our every by-product in some way orthe other is utilized in other processes within and outside the company.
As a world leader in mineral base specialty we have continuously improved our technicalimplementation of knowledge. We already have the following application centre under oneroof:
1. Product Development Centre
2. Paints & Coating Application Centre
3. Rubber & Plastic Application Centre
4. Paper Application Centre
We have further added new dimensions to this under the following heads:
1. Ceramic Application Centre
2. Foundry Application Centre
3. Construction Application Centre
4. Cosmetic Application Centre
Innovative Products Developed during the year 2015-16:
1. Glowtox Plus
2. Glowtox 50
3. Micronsil 30 C Plus
4. FMSIL 412 Plus
5. FMSIL 312
6. Vaporblock Plus
7. Vapormat Plus
8. Silcoat 60 SET
9. Silcoat 24 T
12. Putty Additive
Quality is a value that guides everything what we do. Quality in action is theparameter for checking performance excellence of the company. Our innovative products andservices confirm to our customer's expectations only after passing through our qualitysystem. We follow ISO 9001:2008 international standard.
In our attempt to improve the quality we have tied up with various laboratories forhigher analysis like hazardous elements (heavy metal) microbial content asbestos freerespirable crystalline silica along with our in-house analysis. Our dedicated continuousimprovement has confirmed a long term customer relationship leading to mutual growth &opportunity. Our existing customers are taken care of and we try to understand theexpectation of potential customer.
Employees at 20 MICRONS come from various walks of life this mix of people providesfor a rich mix of diversity in all its aspects-from various parts of the countrydifferent age groups varied backgrounds and with different perspectives. Our employeescherish the freedom that is provided to them at work and this will continue to be ourproposition to them and our future employees too.
At 20 MICRONS there is a highly motivated and talented team to support withconstructive feedback to ensure the success. Our integrated Talent Management Processesbuild leaders diligently. Our value based leadership approach is supportive of performanceexcellence and nurtures an intense desire to win with sensitivity sincerity and anunyielding integrity.
20 MICRONS encourages its employees to embrace a healthy lifestyle both at work and athome. Our goal is to empower employees to take personal responsibility for their health.
We believe that a healthy workforce is more energetic and productive; healthy employeesdecrease health-related costs. In addition a comprehensive health and wellness programhelps us to attract and retain a talented workforce.
20 MICRONS's comprehensive health wellness and occupational health programs operateseamlessly. This integrated approach allows us to gather population-level data abouthealth conditions that affect our workforce and tailor programs to address them.
The governing theme of our organization is the well being and satisfaction of ouremployees. The benefits that we offer to them are at par with the best available.
Our compensation package is aligned with the market and it is aimed at attracting andretaining talent. Rewards for each position are based on performance potentialcriticality and market value.
Over the years 20 MICRONS has focused its attention on developing and nurturing thetalent and skills of its employees keeping in mind the emerging challenges of acompetitive and dynamic business environment.
We make working at 20 MICRONS an enjoyable experience by providing the right balancebetween work and fun. Our initiatives like 360 degrees appraisal system and skip levelfeedback encourage a free flow of communication at all levels. An open-minded approach inall our endeavors is aimed at bringing out the best. We have created a very fair and atransparent atmosphere that decides your position only on the basis of merits and not byextraneous factors.
Every organization has its own unique culture. Most organizations don't consciouslycreate certain culture; instead it is typically created unconsciously based on the valuesof the top management or the founders of the organization. The results today are theoutcome of a large scale interactive processes under which employees get together onvarious common platforms and build 20 MICRONS together.
20 MICRONS keenly promotes an open culture that encourages feedback. It activelyresponds to and acts on inputs for continuous improvement of people practices andprocesses. Thus we have several processes that solicit feedback on weaknesses and areasof improvement on a continuous basis.
What the employees feel about always a matter of utmost concern and hence an employeeengagement survey is conducted by an external agency at regular intervals to help usunderstand employee perceptions. The feedback thus received is converted into actions toensure high level of employee satisfaction.
We strive to provide a stimulating environment backed with high levels of empowermentand recognition. In this energized atmosphere we share successes while setting newstandards of excellence.
ENVIRONMENT SAFETY & HEALTH
OCCUPATIONAL HEALTH EXAMINATION 2015-16
The Company organizes regularly the annual medical checkup at several plant locationswhich includes approx 435 staff members and contract labours.
We have covered general parameters in Occupational Health Examination such as PhysicalExamination & Medical History Vision test-Refraction & Color Vision Spiro metertest Audio meter test Blood Test etc.
VOLUNTARY BLOOD DONATION CAMP IN FACTORY PREMISES
The Company with the Friends society-Vadodara-an NGO and with the support of SSGHospital Vadodara jointly organized a Blood donation Camp on 28th April 2015at its factory premises under the corporate social activity. Company's employees andcontract labours participated. At the said Blood Donation Camp 39 Units of Bloodcollected. Hemoglobin blood pressure and other tests were also conducted by the Doctors.
CELEBRATED NATIONAL SAFETY WEEK
National Safety Day/Week is a whole week safety campaign which was celebrated at allplants of the Company from 4th of March to the 10th of March 2016.
Celebrated 45th National safety Day/Week on the Theme of "Behavior& Positive Attitude towards Safe Work Culture/Behavior Based Safety in Industry".
Our goal is to protect our people the public the property and the environment. It isa commitment that is in the best interests of our customers our employees and all otherstakeholders. It is possible to run all operations without injuries or damage to equipmentor the environment.
On occasion of National safety day/week the Company conducted variety of seminarstraining programs workshops safety pledge event display of films over SHE issues.
CELEBRATED WORLD ENVIRONMENT DAY
5th June 2015 was celebrated as the World Environment Day with the Theme of"Seven Billion Dreams. One Planet. Consume with Care". Living within planetaryboundaries is the most promising strategy for ensuring a healthy future. Human prosperityneed not cost the earth. Living sustainably is about doing more and better with less. Itis about knowing that rising rates of natural resource use and the environmental impactsthat occur are not a necessary by-product of economic growth.
On this very event of WED on the above date an environment's Poem-"tT (hhi^-htf'im" was followed which conveys about tree plantation to save the environment andon the occasion various events and practical activities were arranged like Plantation ofmore than 400 trees in the company's various locations seminar was arranged with thesubject of virtual environment inside the plant.
Statements in this Management Discussions and Analysis Report describing the Company'sobjectives estimates and expectations may be "forward looking statements"within the meaning of applicable laws and regulations. Actual results might differmaterially from those either expressed or implied.
The Company has started accepting the deposits only from the shareholders of thecompany pursuant to the provisions of Companies Act 2013 and Rules made thereunder. Thesaid Scheme was approved by you at your Extra-ordinary General Meeting held on 24thMay 2014.
As on 31.03.2016 Fixed Deposits from Shareholders stood at the total of Rs.1352.14Lacs. Deposits amounting to Rs.1206.38 lacs are due for repayment on or before 31.03.2017.The company has not made any default in repayment of deposits or interest due thereon.
The deposits accepted upto the 31st March 2014 pursuant to Companies Act1956 and interest thereon will be repaid to the depositors on the date of maturity ofrespective deposits. In this regard the Company has filed petition with Company LawBoard Mumbai (CLB) praying to allow the repayment as per maturity of respective depositonly and CLB accepted plea of the Company and vide its order no. C.A.NO.34/74(2)/CLB/MC/MAH/2015 dated 20th January 2016 directed the company torepay total outstanding principal amount as on date of order amounting to Rs.398.27Lacs on or before 31.03.2017 along with the interest due thereon. The Company repaidtotal Rs.468.76 Lacs along with the interest thereon during the FY 2015-16.
The details of outstanding amount of unsecured deposits accepted by the Company upto 31stMarch 2014 and interest thereon as per the then scheme of the Company pursuant toCompanies Act 1956 is as under -
| ||Number of Depositors ||Deposit Rs.in lacs ||Interest Rs.in lacs |
|(a) From Share Holders ||163 ||117.29 ||24.96 |
|(b) From Public ||475 ||236.97 ||29.94 |
|TOTAL ||638 ||354.26 ||54.90 |
The Company is liable to comply with the provisions relating to acceptance of depositsunder the Companies Act 2013 and Rules made there-under and any amendments made from timeto time.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS-21) on Consolidated Financial Statements the audited consolidated financialstatement is provided in the Annual Report.
SUBSIDIARIES JOINT VENTURES & ASSOCIATES
As on 31st March 2016 we have 03 subsidiaries viz. 20 Microns NanoMinerals Ltd. 20 Microns FZE 20 Microns SDN BHD. During the year the Board of Directors(the Board) reviewed the affairs of the subsidiaries. In accordance with Section 129(3) ofthe Companies Act 2013 we have prepared consolidated financial statements of the Companyand all its subsidiaries which form part of the Annual Report. Further a statement inthe prescribed format AOC-1 is appended as Annexure A to the Board's Report. The statementalso provides the details of performance financial positions of each of the subsidiaries.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.20microns.com . These documents will also be available for inspection during businesshours at our registered office in Waghodia Vadodara India.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors report that
i) In the preparation of the annual accounts for the year ended 31st March2016 the applicable accounting standards have been followed and there are no materialdepartures from the same.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2016 and ofthe profit of the Company for the year ended on that date.
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
GENERAL SHAREHOLDERS INFORMATION
General Shareholder Information is given in the Report on Corporate Governance formingpart of the Annual Report.
PARTICULARS OF EMPOYEES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure B to the Board's Report.
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 we have to state that since there are no employees falling withinthe purview of the said requirements the same has not been annexed herewith.
As required by SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Corporate Governance Report and the Auditor's Certificate regarding complianceof conditions of Corporate Governance form part of the Annual Report.
Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexureto this report. No adverse comments have been made in the said report by the PracticingCompany Secretary.
COST AUDIT COMPLIANCES
Pursuant to Sec. 209 (1)(d) of the Companies Act 1956 Cost Audit Report for thefinancial year ended 31.03.2015 was submitted to the Central Government on 24.09.2015.
RELATED PARTY TRANSACTIONS
Particulars of transactions with related parties referred to in Section 188(1) of theCompanies Act 2013 in the prescribed Form AOC-2 is annexed in Annexure C to the Board'sReport.
EXTRACTS OF ANNUAL RETURN AND OTHER DISCLOSURES UNDER COMPANIES [APPOINTMENT ANDREMUNERTION] RULES 2014
The Extract of Annual Return in form No. MGT-9 as per Section 134 (3) (a) of theCompanies Act 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 ofCompanies (Management and Administration) Rules 2014 is annexed in Annexure D hereto andforms part of this report.
PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS
Loans guarantee and investment covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGH EXCHANGE EARNINGS & OUT GO
Information as per Companies(Disclosure of particulars in the Report of Board ofDirectors) Rules 1988 relating to conservation of energy technology absorption foreignexchange earnings and outgo are given in Annexure E forming part of this report.
RISK MANAGEMENT POLICY IMPLEMENTATION
The Company has formed Risk Management Policy to ensure appropriate risk managementwithin its systems and culture. The Company operates in a competitive environment and isgenerally exposed to various risks at different times such as technological risksbusiness risks operational risks financial risks etc. The Board of Directors and AuditCommittee of the Company periodically review the Risk Management Policy of the Company sothat the Management controls the risk through properly defined network. The Company has asystem based approach to business risk management backed by strong internal controlsystems.
A range of responsibilities from strategy to the operational is specified. A strongindependent internal audit function at the corporate level carries out risk focused auditsacross all businesses enabling identification of areas where risk managements processesmay need to be improved. The Board reviews internal audit findings and provide strategicguidance on internal control monitors internal control environment within the Company andensures that Internal Audit recommendations are effectively implemented. The combinationof policies and procedures adequately addresses the various risks associated with yourcompany's businesses.
CORPORATE SOCIAL RESPONSIBILITY
The Company's main focus is on improving quality of life and engage communities throughHealth consciousness. Towards achieving this since last about 7 years through 20 MicronsFoundation Trust under which "20 Microns Diabetes Centre" was inaugurated in2008 with a specific drive to make the society aware about and cater to for Diabetesspecially. There are about 4500 registered members.
Your Company has started this year to make the rural area aware about this and our teamchecks blood sugar makes counseling to diabetic patients and satisfy their Diabetesrelated queries.
Also participated this year with our juvenile diabetic children for program scheduledby Dr. Bansi Saboo (Diabetologist) where children participated in various activities likedance drama & other activities and help them to make them happy. Also distributedFree medicines Gluco meters to needy patients.
During this year we added few more centers in Vadodara city for diabetes check-up andAwareness.
INTERNAL FINANCE CONTROL SYSTEM ADEQUACY
The Company has established proper and adequate system of internal control to ensurethat all resources are put to optimum use and are well protected against loss and alltransactions are authorized recorded and reported correctly and there is proper adherenceto policies and guidelines processes in terms of efficiencies and effectiveness. TheCompany's internal control systems are supplemented by an extensive program of internalaudit by an independent firm.
All the transactions are conducted using the IT interface and the business processesare further audited by internal auditors.
The Company's internal control systems are also periodically tested and certified bythe internal auditors. The Audit Committee constituted by the Board constantly reviews theinternal control systems.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the Articles of association of the Company Mr. Sudhir R. ParikhNon-Executive-NonIndependent Director retire by rotation at this Annual General Meetingand being eligible offers himself for re-appointment.
During the year under review the Members approved the appointment of Dr. Ajay I. Rankawho is not liable to retire by rotation. Mr. Bharat V Kanani Chief Financial Officer ofthe Company resigned from the post and he was relieved from 29th February 2016(after office hours).
The Company has set criteria for performance evaluation of Independent DirectorsBoard Committees and other individual Directors. The note on familiarization programme toIndependent Directors are put on the website of the Company www.20microns.com .
The Company has also prepared a Remuneration Policy for the Directors Key ManagerialPersonnel and Senior Management Employees which is put on the website of the Companywww.20microns.com
None of the Directors of the Company is disqualified under Section 164(2) of theCompanies act 2013. As required by law this position is also reflected in the Auditors'Report. In accordance with provisions of Section 149 of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations 2015) Mr. P. M. Shah Mr. Ram Devidayal Mr. Atul Patel Mrs. Darsha Kikaniand Dr. Ajay Ranka have given a declaration to the Company that they meet the criteria ofindependence as mentioned in Section 149(6) of the Companies Act 2013.
A. Statutory Auditors
The Company's Auditors M/s. Manubhai and Shah LLP Chartered Accountants retire at theconclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.In accordance with Section 139(1) of the Companies Act 2013 read with the Companies(Audit and Auditors) Rules 2014 it is proposed to appoint M/s. Manubhai and Shah LLP asStatutory Auditors of the Company for one year at this Annual General Meeting. The Companyhas received a certificate from the above Auditors to the effect that if they areappointed it would be in accordance with the provisions of Section 141 of the CompaniesAct 2013. This item is being included in the notice for your approval.
B. Internal Auditors
The Company has appointed M/s. N C Vaishanav and Co. M/s. P Mani and Co. and M/s.Deopura and Associates Chartered Accountants as Internal Auditors of the Company for theF.Y 2016-17 for the Western Region Eastern Region South Region and North Regionrespectively.
C. Cost Auditors
The Company has appointed M/s YS. Thakar and Co. Cost Accountants to audit its costaccounting records relating to Mining and Metallurgy of ferrous and nonferrous metals forthe Financial Year 2016-17 subject to ratification of their remuneration by shareholdersof the Company.
The Company is seeking the ratification of the Shareholders for the remunerationpayable to M/s YS. Thakar and Co. Cost Accountants as the Cost Auditors of the Companyfor the Financial Year 2016-17 vide resolution no. 4 of the Notice of AGM.
D. Secretarial Auditors
As per provisions of Section 204 of the Companies Act 2013 and rules made thereunderthe Company is required to appoint Secretarial Auditor to carry out Secretarial Audit ofthe Company. The Company has appointed M/s. J.J. Gandhi and Co. Practicing CompanySecretaries as Secretarial Auditors of the Company for the F.Y 2016-17.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulator or courts ortribunal impacting the going concern status and Company's operations in future.
DISCLOSURES CSR Committee
The CSR Committee comprises of Mr. PM. Shah Mr. Chandresh Parikh and Mr. SudhirParikh as Members of the Committee.
The Audit Committee comprises Independent Directors namely Mr. Ram Devidayal Mr. PM.Shah and Mr. Atul Patel as Members of the Committee. All the recommendations made by theAudit Committee were accepted by the Board.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement. Vigil Disclosures can be made by a whistle blower throughan email to the Chairman of the audit Committee. The policy of vigil mechanism may beaccessed on the Company's website www.20microns.com
Meeting of the Board
Ten meetings of Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance annexed to this Annual Report.
Your Directors wish to express their grateful appreciation for the co-operation andsupport received from customers vendors shareholders Financial Institutions BanksRegulatory Authorities and the Society at large.
Deep appreciation is also recorded for the dedicated efforts and contribution ofExecutives Staff and Workers of the Company.
For and on behalf of the Board of Directors
Chandresh S. Parikh
Place : Waghodia Vadodara
Date : 23rd May 2016.
Annexure E : Conservation of Energy technology absorption foreign exchange earningsand outgo
Particulars pursuant to the Companies (Accounts) Rules 2014 (A) Conservation ofEnergy-
(i) the steps taken or impact on conservation of energy: NIL
(ii) the steps taken by the company for utilizing alternate sources of energy:
The company has made significant efforts to reduce coal usage and shifted to furnaceoil. The Company has also used solar energy for drying process. These efforts were moreconcerned to health and safety of public rather to reduce the cost.
At the Bhuj plant the company has started utilizing fuel gases for reducing energyconsumption and thereby successfully reduced furnace oil consumption by apprx. 10%.
(iii) the capital investment on energy conservation equipments: NIL
(B) Technology absorption-
(i) the efforts made towards technology absorption; - NIL
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution; - NIL
(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)- NIL
(a) the details of technology imported - NIL
(b) the year of import - NIL
(c) whether the technology been fully absorbed - NIL
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof - NIL Expenditure incurred on research and development is Nil.
Foreign Exchange Earning and Outgo
Activities relating to exports; initiatives taken to increase exports; development ofnew export markets for products and services and export plans:
Total Foreign Exchange used and earned:
i. Foreign Exchange Earned: Rs.3719.49 Lacs [Previous Year : Rs.2792.39 Lacs]
ii. Foreign Exchange Used: Rs.3228.66 Lacs [Previous Year : Rs.3543.11 Lacs]
| ||For and on behalf of the Board of Directors of 20 Microns Ltd. || |
| ||(Chandresh S. Parikh) ||(Rajesh C. Parikh) |
| ||Executive Chairman ||Chief Executive Officer and |
| || ||Managing Director |
|Place : Waghodia Vadodara || || |
|Date : 23rd May 2016 || || |