Your Directors take pleasure in presenting the 36th Annual Report on the business andoperations of your Company together with Audited Statement of Accounts for the financialyear ended March 31 2016.
1. FINANCIAL RESULTS:
The financial performance of your Company is as summarized below for the year underreview:
| ||2015-16 ||2014-15 |
| ||Rs. In Lakhs ||Rs. In Lakhs |
|Total Revenue (including Excise & Sales tax) ||53651 ||53011 |
|Total Revenue (net of taxes) ||48455 ||47822 |
|Profit before interest depreciation & taxation ||9340 ||8849 |
|Interest & financial expenses ||803 ||1023 |
|Depreciation ||1289 ||1135 |
|Profit before tax ||7248 ||6691 |
|Provision for tax ||2263 ||2149 |
|Net Profit after tax ||4985 ||4542 |
|Add: balance profit brought forward ||11511 ||8405 |
|Profit available for appropriation ||16496 ||12947 |
|Transfer to General Reserve ||0 ||454 |
|Interim Equity Dividend paid which is being treated as final dividend ||2040 ||816 |
|Tax on dividends ||415 ||166 |
|Balance profit carried to balance sheet ||14041 ||11511 |
2. PERFORMANCE HIGHLIGHTS:
During the year under review total Income (gross) increased to Rs.53651 Lakhs fromRs.53011 Lakhs of the previous year which is an increase of 1.2%. However compared to theprevious year total sales in volume increased by 12%.
Profit before tax registered an increase from Rs.6691 Lakhs to Rs.7248 Lakhs and Profitafter tax increased from Rs.4542 Lakhs to Rs.4985 Lakhs.
Further details of operations are given in the Management Discussion and AnalysisReport annexed (Annexure 1).
Your Directors have in March 2016 declared and paid interim dividend of Rs.10/- onEquity Share of Rs.5/- each for the year ended March 31 2016 (Previous Year: finaldividend of Rs.4/- per share of Rs.5/- each). The total amount of dividend includingIncome tax thereon amounted to Rs.2455 Lakhs (Previous Year Rs.982 Lakhs). You arerequested to approve the same as final dividend. No further dividend is being recommended.
4. NEW PROJECTS:
4.1 Project at Kurkumbh (Maharashtra) :
We had applied for environment clearance for the second phase of Acetonitrile expansionand also for enhancement of DMAHCL production capacity at Kurkumbh. We have received theEnvironment Clearance and Consent to Establish. We expect to get the Consent to operateshortly.
4.2 New Project at Dahej (Gujarat):
As already reported we have taken possession of land at Dahej and have also paidcontribution charges for water supply. We have received Consent to Establish and also theEnvironment Clearance. We have started engineering work which is expected to be completedby June 2016.
4.3 Solar Project at Bhoom Dist. Osmanabad (Maharashtra)
The 2 MW solar project has been completed and commissioned and is in regular operationsince July 2015. This investment is helping us to save electricity costs and contributetowards our efforts for sustainable green energy to protect environment.
5. ASSOCIATE/SUBSIDIARY COMPANIES
a. Diamines & Chemicals Limited Vadodara:
Diamines and Chemicals Ltd. Vadodara our associate company has achieved a totalincome (net) of Rs.3593.60 Lakhs as against Rs.3927.64 Lakhs of the previous year. Theymade a profit after tax of Rs.25.34 Lakhs as against net of loss of Rs.155.40 Lakhs of theprevious year.
b. Alkyl Speciality Chemicals Limited:
This company was earlier engaged in marketing of speciality chemicals. This companyachieved a total income of Rs.14.61 Lakhs (Previous Year: Rs.31.35 Lakhs) and a profitafter tax of Rs.10.73 Lakhs as against Rs.19.88 Lakhs of the previous year. Your Directorshave decided to merge the subsidiary company with the holding company.
Pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountantsof India Consolidated Financial Statements presented by the Company include the financialinformation of Diamines & Chemicals Limited and Alkyl Speciality Chemicals Limited.
The Annual Accounts of the Subsidiary company - Alkyl Speciality Chemicals Limited areavailable for inspection by any member at the registered office during business hours. TheCompany will send copies thereof to the shareholders who may if required write to thecompany.
6. RESPONSIBLE CARE:
Your Company has conceptualized and is developing and supporting Nicer Globe aResponsible Care initiative of Indian Chemical Council (ICC) along with other chemicalcompanies. Nicer Globe is all about safe transportation of chemicals and providing properemergency response. Responsible Care is a wide-ranging voluntary initiative ofInternational Council of Chemical Associations being implemented in India by IndianChemical Council to safely handle the products from inception in the research laboratorythrough manufacture and distribution to ultimate reuse recycle and disposal and toinvolve the public in the decision making processes. We have got our company certified forResponsible Care. Various programs and studies related to safety environment and healthhave been taken up and are being implemented as listed hereunder:
6.1. Energy Conservation and Technology Absorption:
The information on conservation of energy technology absorption and other detailsstipulated under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of TheCompanies (Accounts) Rules 2014 is annexed herewith in Rs.Annexure 2".
6.2. Safety Health and Environment:
Keeping in line with the core values of being a responsible corporate citizen anIntegrated Management System to ensure effective Occupational Health Management has beenestablished by your Company.
(a) Safety :
We encourage a high level of awareness of safety issues among our employees and strivefor continuous improvement. All incidents are analysed in safety committee meetings andcorrective actions wherever necessary are taken immediately. Employees are trained insafe practices to be followed at workplace. Active participation is done in Mutual Aidscheme in the respective industrial areas. We are one of the leading members of Local andDistrict Crisis Group and have earned reputation amongst society around and statutoryauthorities for prompt technical support during Disaster Management events.
External safety audit is carried out by outside agencies and the audit recommendationsare being implemented.
Safety promotional activities such as celebration of national safety week worldenvironment day fire service day and participation in regional safety competition aredone regularly.
The Company conducted Mock drill for onsite emergency scenario in presence of Observersfrom Directorate of Industrial Safety and Health and experts from other industries. Thesystematic mitigation actions were appreciated by the observers. To strengthen theEmergency Response the company has conducted Truncated drills and Table top exercises andassessed performance of emergency responders. Daily tool box talks safety talks toofficers and contractors are done by the company staff.
The Company has a Disaster Management Plan within the Company and for surroundingindustry either in the form of providing risk information to the community or respondingin case of any emergency as a part of its social responsibility.
Online deviation reporting system has been installed with access to all employeesincluding contract employees. The deviations recorded are promptly corrected by Areain-charge and closed. Employees are rewarded for good suggestions. This system encouragesinvolvement of employees at all levels.
In addition to the above we have introduced an award for Safe employee and Safecontractor of the year in 2015/16. The awards were distributed accordingly and thepractice will be continued.
Based on Operational Hazards we have provided adequate levels of protections throughscientific safety studies.
(b) Health : Health of employees is of utmost importance. Periodic check up of allemployees is done to monitor their health. Regular work area monitoring to checkconcentration of chemicals noise level and quality of ambient air is done. We also havewell equipped Occupation Health Centers with a full time Doctor appropriate staff and ownAMBULANCE Vehicle at both manufacturing sites at Patalganga and Kurkumbh. We have team ofemployees trained as FIRST AIDERS who contribute their skills while on duty as well asaway from duties to serve the society. Occupational Health and Safety issues arecontinuous focus points for your Company. Both sites are certified to OHSAS 18001:2007.
New employees undergo medical check up before they join duty. Training programs arearranged on lifestyle diseases by eminent doctors. Health camps (including blood donationcamps) are arranged. Drivers are provided training on health issues. Occupational healthCentres have been upgraded and modern equipments are provided. Health promotionalactivities such as celebrating International Yoga day at all our sites and conductingYoga training of all our employees and contractors were done.
In line with our IMS Policy we give utmost importance to Environment protection andadherence to pollution control norms. Environmental Management System at Patalganga andKurkumbh has been certified to ISO 14001:2004. We have successfully completed thesurveillance audits that take place from time to time.
Environment protection and adherence to pollution control norms is of high concern forour company.
i) Air Emissions - We monitor regularly emissions from various sources and are veryparticular about compliance with statutory requirement. Projects are undertaken forreduction of emissions.
ii) Liquid Waste Treatment - We have integrated Effluent Treatment Plants and wemaintain outlet standards within the prescribed limits. Continuous efforts are made byimproving the internal processes to minimize the quantity of effluent generated andfeasibility of recycling of treated effluent is being studied. The company has plannedsubstantial investment for expanding as well as upgrading its effluent treatment capacityto meet long term requirements. Our Company is also a member of the CETP located atPatalganga and Kurkumbh. Pilot Plant trials of RO system were conducted to confirm thesuitability of RO process for recovering water from treated effluent and recycle it forprocess use. The ETP has been up-graded and is performing satisfactorily.
iii) Solid Waste Management - Solid wastes are either incinerated or disposed of tosecured landfill. The manufacturing sites at Patalganga and Kurkumbh are members of theAuthorized Common Hazardous Waste Transport Storage & Disposal Facility namely;Mumbai Waste Management Limited Taloja and Maharashtra Enviro Power Limited Ranjangaonrespectively. We have a programme in place for waste management usingreduction/recycle/reused/recovery techniques. These programes are continuously reviewedfor monitoring their progress and effectiveness.
iv) Green belt - Tree plantation inside and outside the factory premises is givenutmost importance. So far we have planted nearly 8320 trees in and around our plant sites.
v) Non conventional Renewable Energy and Natural Resource conservation - We use SolarWater heaters at the staff colony. Measures like gravitational water supply Sewage watergardening Rain water harvesting and number of GO GREEN activities are also undertaken atthe staff colony.
vi) Our 2MW Solar Power Project at Bhoom has been commissioned and is workingsatisfactorily
vii) Possibility of contaminating the storm water due to heavy rains has beeneliminated by improving the effluent collection system. Transfer of effluent throughpipelines has been implemented.
viii) Turbo Ventilators have been installed in all warehouses to minimize exposures andmaintain fresh air at the work place.
7. CORPORATE SOCIAL RESPONSIBILITY:
Your Company works with a deep sense of social commitment and contributes generouslytowards the welfare of the society that it is part of. Your Company's concerns arefocussed on Environment Sustainability & Rural Development Health/Women EmpowermentEducation/Sports and others. The Annual Report on CSR activities is annexed herewith asRs.Annexure 3".
We are sad to report that Mr. K.R.V. Subrahmanian who was an Independent Director andChairman of Audit Committee expired on 5.2.2016. Your Directors wish to place on recordtheir appreciation of the valuable advice and guidance the Company had received from Mr.Subrahmanian during his tenure. The Company has the requisite number of independentdirectors on the Board.
Mr. Hemendra Kothari retires by rotation at the Annual General Meeting and beingeligible has offered himself for re-appointment. Your Directors recommend hisreappointment.
8.1 Board Evaluation
Pursuant to the provisions of Companies Act 2013 and SEBI (LODR) Regulations 2015the formal annual evaluation has been carried out by the Board of its own performance andthat of its Committees and individual Directors through collective feedback.
8.2 Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy can be viewed on the company's website.
During the year five Board Meetings and four Audit Committee Meetings were convened andheld the details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
8.4. Directors ' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in Note 1 of the Notes to the FinancialStatements have been selected and applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2016 and of the profit of the Company for theyear ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
9. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were atan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained on a quarterlybasis for the transactions which are of a foreseen and repetitive nature. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's length basis form AOC-2 is not applicable to theCompany.
10. CODE OF CONDUCT:
The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management which is available on the company's website. All BoardMembers and Senior Management personnel have affirmed compliance with the code of conduct.
11. INSIDER TRADING POLICY:
As required under the new Insider Trading Policy Regulations of SEBI your Directorshave framed new Insider Trading Regulations and Code of Internal Procedures and Conductfor Regulating Monitoring and Reporting of Trading by Insiders. For details please referto the company's website.
12. FIXED DEPOSITS:
The Company has not accepted any fixed deposits from the public within the meaning ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014.
The Properties and Assets of the Company are adequately insured.
14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 wherever applicable are given in the notes to financialstatements.
16.1 Statutory Auditors
The Company's Auditors Messrs. Bansi S. Mehta & Co. Chartered Accountants Mumbaiwho retire at the ensuing Annual General Meeting of the Company are eligible forre-appointment. They have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules framed thereunder for reappointment as Auditors of the Company.The auditors have also confirmed that they hold a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India.
16.2 Cost Auditors
The Board of Directors has re-appointed Messrs. Hemant Shah & Associates as CostAuditor for the year 2016-17. Their reappointment as Cost Auditors for the year 2016-17 issought under Item No. 5 of the Notice convening the Annual General Meeting.
16.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Messrs V. Sundaram & Co. Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Report of the Secretarial Auditor is annexedherewith as Rs.Annexure 4 ".
17. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.
Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
18. CORPORATE GOVERNANCE
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section (Annexure 5) on corporate governance practices followed by the Companytogether with a certificate from the Company's Auditors confirming compliance forms anintergal part of this Report.
19. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 and AS 23 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
20. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure 6".
21. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company forms part of this report which will be provided upon request. In terms ofSection 136 of the Act the Report and Accounts are being sent to the Members and othersentitled thereto excluding the information on employees Rs.particulars which is availablefor inspection by the Members at the Registered Office of the Company during businesshours on working days of the Company up to the date of the ensuing Annual General Meeting.If any Member is interested in obtaining a copy thereof such Member may write to theCompany Secretary in this regard.
22. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
In line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has set up ComplaintsCommittees at its workplaces. No complaints have been received during the year 2015-16.
23. CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in Government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
The Directors wish to place on record their appreciation of the continuous supportreceived by the Company from the investors participating Financial Institutions BanksCentral/State Government Departments its Customers and Suppliers.
| ||For and on behalf of the Board |
|Place: Mumbai ||YOGESH M. KOTHARI |
|Dated: May 20 2016 ||Chairman & Managing Director |
| ||(DIN: 00010015) |
(Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The Companies Act2013).
(A) ENERGY CONSERVATION:
Energy conservation continues to be an active focus area for your Company since it isnot only a major cost in the manufacturing process but more importantly a significantpart of your Company's corporate social responsibilities. Your Company has taken severalinitiatives at each plant level in order to conserve energy which is in line with ourpolicy of conservation of natural resources.
Our company has taken various measures for conservation of energy. These include thefollowing:
a) (i) Improved steam condensate recovery by installing new design of traps andmonitoring trap performance.
(ii) Connecting all steam traps open to atmosphere into a closed system.
(iii) Collecting the condensate and pumping into the boiler.
(iv) Recovering the heat from high pressure condensate by generating low pressure steamand reusing in the process.
b) (i) Reduction in consumption of steam electricity and water bydebottlenecking/installling additional equipment in various plants.
(ii) Improvement in yields and planned increase in throughput in methyl aminesethylamines and acetonitrile plants.
c) Utilization of by-product steam.
d) Installed instruments to measure oxygen content in the flue gas and improve thesteam to fuel ratio.
e) Schemes for optimum utilization of Turbine power have been implemented.
f) Replacing conventional lighting with LED improved lighting to achieve reduction inpower consumption.
g) Replacing old air-conditioners with new ones with five star rating.
h) Replacing motors of high rating by high efficiency motors and thereby improvingenergy efficiency.
j) Monitoring cooling tower performance to increase cycles of concentration and thussaving water reducing usage and reducing effluent generation.
k) Installed VFD for boiler FD fans
l) Recycling pump seal cooling water to cooling tower make up saving 14m3/day.
m) We have firm plans to install solar water heaters in our colony and canteens forsaving electricity. This is planned in 2016/17.
(B) TECHNOLOGY ABSORPTION:
1. Specific areas in which R & D carried out by the company
a) Development of continuous process for aliphatic amines.
b) Development of batch processes for several new mixed amine derivatives.
c) Development of process for an ecofriendly solvent used for several applications.
d) Improvement in existing processes for commercialized product based on latesttechnology
2. Benefits derived as a result of the above R & D
a) Developed processes for four new products.
b) In order to add value addition to the waste stream developed a new product usingwaste and commercialized it successfully.
c) As per the customer requirement two existing processes are modified and products aresuccessfully delivered.
3. Future plans of action
a) Scale up trials for the products developed in previous year
b) Development of new processes for new products
c) Development of the catalysts required for continuous processes.
4. Expenditure incurred on Research & Development
|a) Revenue Expenditure ||Rs.443.01 Lakhs |
|b) Capital Expenditure ||Rs.112.69 Lakhs |
|Total ||Rs.555.70 Lakhs |
|Total R&D expenditure as a percentage of Total turnover ||1.15% |
(C) FOREIGN EXCHANGE EARNINGS & OUTGO
| ||2015-16 ||2014-15 |
|Foreign Exchange earned ||Rs.9372.98 Lakhs ||Rs.8497.06 Lakhs |
|Foreign Exchange used ||Rs.1314.41 Lakhs ||Rs.1428.20 Lakhs |