TO THE MEMBERS
Your Directors take pleasure in presenting the 37th Annual Report on the business andoperations of your Company together with Audited Statement of Accounts for the financialyear ended March 31 2017.
1. FINANCIAL RESULTS:
The financial performance of your Company is as summarized below for the year underreview:
| || |
| || |
Rs. In Lakhs
|Rs. In Lakhs |
|Total Revenue (including Excise & Sales tax) ||55700 ||53797 |
|Total Revenue (net of taxes) ||50164 ||48601 |
|Profit before interest depreciation & taxation ||9270 ||9341 |
|Interest & financial expenses ||562 ||803 |
|Depreciation ||1429 ||1289 |
|Profit before tax ||7279 ||7248 |
|Provision for tax ||2319 ||2263 |
|Net Profit after tax ||4961 ||4985 |
|Add: balance profit brought forward ||14041 ||11511 |
|Profit available for appropriation ||19002 ||16496 |
|Transfer to General Reserve ||0 ||0 |
|Provision for dividend/(dividend paid last year) ||1020 ||2040 |
|Tax on dividends ||207 ||415 |
|Balance profit carried to balance sheet ||17775 ||14041 |
2. PERFORMANCE HIGHLIGHTS:
During the year under review total Income (gross) marginally increased from Rs. 53797lakhs to Rs. 55700 Lakhs.
Profit before tax for the year was Rs. 7279 Lakhs compared to Rs. 7248 lakhs of theprevious year and Profit after tax was Rs. 4961 Lakhs as against Rs. 4985 lakhs of theprevious year.
Further details of operations are given in the Management Discussion and AnalysisReport annexed (Annexure 1).
Your Directors are pleased to recommend for your approval dividend of Rs. 5/- on EquityShare of Rs. 5/- each for the year ended March 31 2017 (Previous Year: Dividend of Rs.10/- per share of Rs. 5/- each). The total amount of dividend including Income tax thereonamounted to Rs. 1227 Lakhs (Previous Year Rs. 2455 Lakhs). You are requested to approvethe same.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is included in thisAnnual Report. (Annexure 1)
5. NEW PROJECTS:
Implementation of our Methylamines Plant at Dahej is in full swing. Barring unforeseencircumstances we expect to commission the Plant by the third quarter of 2017-18. We arealso planning for a new plant to produce Acetonitrile at Dahej. Our new projects alsoinclude:
a) enhancing aggregate capacity of aliphatic amine hydrochloride at various locationsand
b) enhancing DEHA capacity at Kurkumbh.
6. ASSOCIATE/SUBSIDIARY COMPANIES
a. Diamines & Chemicals Limited Vadodara:
Diamines and Chemicals Ltd. Vadodara our associate company has achieved a totalincome (net) of Rs. 3481.30 Lakhs as against Rs. 3557.64 Lakhs of the previous year. Theymade a profit after tax of Rs. 427.70 Lakhs as against Rs. 25.34 Lakhs of the previousyear. They have declared a dividend of Rs. 1.50 per equity share of Rs. 10/- each for theyear ended March 31 2017.
b. Alkyl Speciality Chemicals Limited:
Application for merger of this subsidiary company with our Company is pending withNational Company Law Tribunal. During the year 2016-17 Alkyl Speciality Chemicals Ltd.earned a profit before tax of Rs. 13.23 lakhs compared to Rs. 14.10 lakhs of the previousyear and profit after tax of Rs. 9.26 lakhs compared to Rs. 10.73 lakhs of the previousyear.
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.
7. RESPONSIBLE CARE:
Your Company is supporting Nicer Globe a Responsible Care initiative of IndianChemical Council (ICC) along with other chemical companies. Nicer Globe is all about safetransportation of chemicals and providing proper emergency response. Responsible Care isa wide-ranging voluntary initiative of International Council of Chemical Associationsbeing implemented in India by Indian Chemical Council to safely handle the products frominception in the research laboratory through manufacture and distribution to ultimatereuse recycle and disposal and to involve the public in the decision making processes.We have got our company certified for Responsible Care. Various programs and studiesrelated to safety environment and health have been taken up and are being implemented aslisted hereunder:
7.1. 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 "Annexure 2".
7.2. SAFETY HEALTH AND ENVIRONMENT:
Keeping in line with the core values of being a responsible corporate citizen anIntegrated Management System to ensure an effective Environment Management andOccupational Health Management has been established by your Company.
(a) Safety : We encourage a high level of awareness of safety issues among ouremployees and strive for continuous improvement. All incidents are analysed in safetycommittee meetings and corrective actions wherever necessary are taken immediately.Employees are trained in safe practices to be followed at workplace. Active participationis done in Mutual Aid scheme in the respective industrial areas. We are one of the leadingmembers of Local and District Crisis Group and have earned reputation amongst societyaround and statutory authorities for prompt technical support during Disaster Managementevents.
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 conducts scheduled Mock drill for emergency scenarios with the activeinvolvement of its staff and occasionally in the presence of external stakeholders. Thegaps if any are immediately addressed for closure. To strengthen the Emergency Responsethe company conducts Truncated drills and Table top exercises to assess the performance ofemergency responders. Daily tool box talks and safety talks to officers and contractorsare 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.
The Safe employee and Safe contractor awards initiated in 2015-16 were distributedaccordingly in 2016-17.
Based on Operational Hazards we have provided adequate levels of protections throughscientific safety studies.
An unfortunate incident of fire occurred in our Kurkumbh factory on November 12 2016due to which two workers were injured and one of them while undergoing treatmentsuccumbed to his injuries. The other worker was discharged after due treatment. Afterdiscussion with the deceased workman's family appropriate compensation was agreed andpaid and his relative was given employment in the factory.
(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 for our employees and contractors were done.
(c) Environment: In line with our IMS Policy we give utmost importance toEnvironment protection and adherence to pollution control norms. Environmental ManagementSystem at Patalganga and Kurkumbh are certified to ISO 14001:2004. We have successfullycompleted the surveillance 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 arevery particular 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. Capital expenditure forexpanding as well as further upgradation of the effluent treatment facility to meet longterm requirements have been cleared and are under design stage. Our Company is also amember of the CETP located at Patalganga and Kurkumbh. The ETP's at both sites areperforming satisfactorily.
iii) Solid Waste Management Solid wastes are either incinerated or disposed ofto secured 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 program in place for waste management using reduction/ recycle/reuse/ recovery techniques. These programs are continuously reviewed for monitoring theirprogress and effectiveness.
iv) Green belt Tree plantation inside and outside the factory premises is givenutmost importance and is done on a regular basis
v) Non conventional Renewable Energy and Natural Resource conservation Additional Solar Water heaters have been installed at the staff colony. Use of water fromthe Sewage Treatment Plant for gardening Rain water harvesting and number of GO GREENactivities were undertaken at the plant and staff colony.
vi) Our 2 MW Solar Power Project at Bhoom is working satisfactorily.
vii) Possibility of contaminating the storm water due to heavy rains has beeneliminated by improving the effluent collection system This arrangement of transferringof effluent through pipelines continues to work satisfactorily.
viii) A new and efficient coal fired boiler was installed and commissioned in 2016-17.This arrangement will ensure better thermal efficiency serve as an installed standby tothe existing boilers and increase number of days available for production.
8. CORPORATE SOCIAL RESPONSIBILITY:
Your Company works with a deep sense of social commitment and contributes towards thewelfare of the society that it is part of. Your Company's concerns are focused onEnvironment Sustainability & Rural Development Health/Women EmpowermentEducation/Sports and others. The Annual Report on CSR activities is annexed herewith as"Annexure 3".
Mr. Kirat Patel retires by rotation at the Annual General Meeting and being eligiblehas offered himself for re-appointment. Your Directors recommend his reappointment.
9.1 Board Evaluation
Pursuant to the provisions of Companies Act 2013 and SEBI (LODR) Regulations 2015the annual evaluation has been carried out by the Board of its own performance and that ofits Committees and individual Directors by way of individual and collective feedback fromDirectors. The Directors expressed their satisfaction with the evaluation process.
9.2 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 four 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.
9.4. 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 2017 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 2017 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.
10. 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.
11. 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.
12. 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.
13. 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.
15. 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.
16. 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.
17.1 Statutory Auditors
As per the provisions of Section 139 of the Companies Act 2013 the term of office ofM/s Bansi S. Mehta & Co. as Statutory Auditors of the Company will conclude from theclose of the forthcoming Annual General Meeting of the Company. They have been ourAuditors from inception of the Company. The Board of Directors places on record itsappreciation for the services rendered by M/s. Bansi S. Mehta & Co. as the StatutoryAuditors of the Company. Subject to the approval of the Members the Board of Directors ofthe Company has recommended the appointment of Messrs. N. M. Raiji & Co. CharteredAccountants (ICAI Firm Registration Number 108296W) as the Statutory Auditors of theCompany pursuant to Section 139 of the Companies Act 2013. Members' attention is drawn toa Resolution proposing the appointment of Messrs. N. M. Raiji & Company as StatutoryAuditors of the Company which is included at Item No. 4 of the Notice convening the AnnualGeneral Meeting
17.2 Cost Auditors
The Board of Directors has re-appointed Messrs. Hemant Shah & Associates as CostAuditor for the year 2017-18. Their reappointment as Cost Auditors for the year 2017-18 issought under Item No. 5 of the Notice convening the Annual General Meeting.
17.3 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 hadappointed Mr. V. Sundaram Practising Company Secretary to undertake the SecretarialAudit of the Company. The Report of the Secretarial Auditor is annexed herewith as"Annexure 4 ".
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 anintegral 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 AS 23 and AS 27 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
Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act and the Rules framed thereunder is enclosed as "Annexure 7"to the Board's Report. The information in respect of employees of the Company requiredpursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 will be provided upon request. In terms of Section 136 of the Companies Act2013 the Report and Accounts are being sent to the Members and others entitled theretoexcluding the aforesaid Annexure which is available for inspection by the Members at theRegistered Office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company 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 2016-17.
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 18 2017 ||Chairman & Managing Director |
| ||(DIN: 00010015) |