Your Directors have pleasure in presenting the 41st Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2016.
| || ||(Rs. in Lakhs) |
|FINANCIAL RESULTS ||For the year ended 31.03.2016 ||For the year ended 31.03.2015 |
|Total Income ||26104.86 ||30085.69 |
|Profit before Interest Depreciation and Taxes ||2388.87 ||2311.19 |
|Less : Interest ||754.78 ||978.09 |
|Depreciation ||198.19 ||181.78 |
|Profit before Tax ||1435.90 ||1151.32 |
|Provision for taxation ||457.03 ||382.61 |
|Profit after Tax ||978.87 ||768.71 |
|Balance of profit brought forward from the previous year ||3223.92 ||2550.72 |
|Final / Interim Dividend Paid :- || || |
|Equity Shares ||110.04 ||55.02 |
|Corporate Dividend Tax ||18.70 ||9.35 |
|Bonus shares issued during the year ||550.20 ||- |
|Transfer to Debenture Redemption Reserve ||33.40 ||- |
|Deferred Tax ||- ||8.15 |
|Adjustments to Fixed Assets ||- ||22.99 |
|Tax Provisions for earlier years ||11.53 ||- |
|Balance of Profit carried to Balance Sheet ||3478.92 ||3223.92 |
The Board of Directors of the Company had declared an Interim Dividend of 10% (i.e. Rs.0.20 per share on Equity Shares of the face value of Rs. 2/- each) on the IncreasedCapital after the issue of Bonus Shares for the Financial Year ended March 31 2016. Totaloutgo on the Interim Dividend was Rs. 128.74 Lakhs (including Dividend Tax of Rs. 18.70Lakhs) as against Rs. 64.37 Lakhs (including Dividend Tax of Rs. 9.35 Lakhs) in theprevious year. The above outgo constitutes a payout ratio of 13.15% of annual profits asagainst 8.37 % in the previous year. The Board has not proposed any Final Dividend andaccordingly the Interim Dividend paid during the year shall be treated as Final Dividendfor the Financial Year ended March 31 2016.
During the year under review the Company had declared and issued Bonus Equity shares inthe ratio 1:1 to its existing shareholders. Accordingly the paid up share capital of theCompany increased from Rs. 550.02 Lakhs to Rs. 110.04 Lakhs divided into 55020000 Equityshares of Rs. 2/- each. The paid up share capital of the Company as on 31st March 2016was Rs. 110040000/- (Rupees Eleven Crores and Forty Thousand only). During the yearunder review the Company has not issued shares with differential voting rights nor hasgranted any stock options or sweat equity. As on 31st March 2016 none of the Directorsof the Company hold instruments convertible into equity shares of the Company.
OPERATIONS AND FUTURE PROSPECTS:
The financial performance highlights for the year ended 31st March 2016 are asfollows:
The Total Revenue of the Company during the year under review was Rs. 26104.86Lakhs as compared to Rs. 30085.69 Lakhs in the previous year. The decline in total revenuewas due to fall in prices of finished goods worldwide. However in Quantitative valueterms there is no decline reported in the Turnover.
The Total Expenses of the Company reduced to Rs. 24668.96 Lakhs as compared toRs. 28934.37 Lakhs during the previous year due to reduction in input cost and financialexpenses.
Revenue from Domestic Operations was Rs. 16674.42 Lakhs during the year underreview as compared to Rs.17185.79 Lakhs in the previous year.
Profit before Tax increased by nearly 25% from Rs. 1151.32 Lakhs in the previousyear to Rs. 1435.90 Lakhs during the current year.
Net Profit increased from Rs. 768.71 Lakhs to Rs. 978.87 Lakhs there byregistering a growth of over 27%.
The total revenue on consolidated basis of the Company was Rs. 26263.69/- Lakhs whichincludes revenue from services of Rs. 182.40 Lakhs.
During the year ended 31st March 2016 your Companys export earning was Rs.9313.40 Lakhs as compared to Rs. 12798.03 Lakhs. This was primarily due to uncertainty inGlobal Markets slowdown of industry and reduction in prices.
SUBSIDIARY COMPANIES: APL INFOTECH LTD:
As reported earlier APL Infotech Ltds Pipe leak detection software has beencustomized and is in the process of being made operational. The Company is continuing itsarrangement with a Software Company for marketing this software package. Also the Companyis exploring other marketing opportunities on its own and is making steady progress withvarious prospective customers.
APL ENGINEERING SERVICES PVT LTD :
Wholly owned Subsidiary:
The amalgamation of APL Engineering Services Private Limited wholly owned subsidiaryof the Company is in its final stages. The proposed Amalgamation would result in businesssynergy and consolidation of business activities of both the companies.
The Mumbai High Court has vide its Order dated 03rd July 2015 confirmed theAmalgamation of APL Engineering Services Pvt Ltd with your Company. The Company has takennecessary steps to expedite the same at the Guwahati High Court.
AMINES AND PLASTICIZERS FZE UAE:
Wholly owned Subsidiary:
The Company is contemplating expansion of its business operations in the Middle Eastand Europe. Keeping in view the said expansion your Company has formed a wholly ownedsubsidiary Amines and Plasticizers FZE in Ras Al Khamaih United Arab Emirates fordealing in Specialty Chemicals and other Alkanolamines products and may opt formanufacturing at an appropriate time.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT 9 as requiredunder section 92 of the Companies Act 2013 is included in this Report as Annexure I andforms and integral part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of section 152 of the Companies Act 2013(theAct) and Companys Articles of Association Ms. Nimisha Minesh Dutia retires byrotation and being eligible has offered herself for re-appointment. The Board recommendsher re-appointment for the consideration of the Members of the Company at the ensuingAnnual General Meeting of the Company.
The Board of Directors has re-appointed Mr. Hemant Kumar Ruia as Chairman &Managing Director at a revised remuneration as detailed in the Notice subject to theapproval of the members for a term of Three years w.e.f. 01/04/2016 to 31/03/2019.
Pursuant to the provisions of section 203 of the Act the Company has three KeyManagerial Personnel viz. Shri Hemant Kumar Ruia as the Chairman & Managing DirectorShri Ajay Puranik as the Sr. Vice President (Corporate Affairs) & Company Secretaryand Shri Pramod Sharma as the Chief Financial Officer.
Declaration by Independent Directors:
The Company has received declaration of Independence from all the Independent Directorsas required under Section 149(7) of the Companies Act 2013 confirming that they meet thecriteria of independence under Section 149(6) of the Companies Act 2013.
Number of meetings of the Board:
The Board met seven times during the Financial Year 2015-16 i.e on 29th May 2015August 7 2015 August 27 2015 October 12 2015 November 6 2015 February 10 2016 andMarch 16 2016.
COMMITTEES OF THE BOARD:
The Board has the following Committees :
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their composition number of meetings areprovided in the Corporate Governance Report.
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations aquestionnaire was prepared after taking into consideration various aspects of thefunctioning of the Board its Committees and its culture execution and performance ofspecific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and Non Independent Director was carried out by the IndependentDirectors. The Board of Directors expressed their satisfaction over the evaluationprocess.
CONSOLIDATED FINANCIAL STATEMENTS:
During the year the Board of Directors (the Board) reviewed the affairs ofthe subsidiaries. In accordance with section 129(3) of the Companies Act 2013consolidated financial statements of the Company and all its subsidiaries are prepared.Further a statement containing the salient features of the financial statement ofSubsidiaries in the prescribed format AOC 1 is appended as Annexure II to theBoards Report. The statement also provides the details of performance financialpositions of each of the subsidiary.
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 theCompanys website www.amines.com. These documents will also be available forinspection during the business hours on every working day at the Registered Office inGuwahati Assam India till the date of the Annual General Meeting of the Company.
In accordance with the provisions of the Companies Act 2013 (the Act) andAccounting Standard AS-21 on Consolidated Financial Statements your Directors provide theAudited Consolidated Financial Statements in the Annual Report. Though only a part of yourCompanys business is conducted through its subsidiaries your Directors believe thatthe consolidated accounts provide a more accurate representation of the performance ofyour Company:
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY:
Details of Loans Guarantees and Investments covered under the provisions of section186 of the Companies Act 2013 are given in detail in the Notes to Financial Statements.
The Company has not accepted or renewed any Deposits during the year under review andthere is no unpaid or unclaimed deposits lying with the Company.
13% SECURED REDEEMABLE NON CONVERTIBLE DEBENTURES (NCD):
As reported earlier the Company had issued 1335 13% Secured Redeemable NonConvertible Debentures of Rs. 100000/- (Rupees One Lakh) each on a private placementbasis. The said debentures were secured by creating charge over Companies properties. TheNCDs have a term of 10 years with call and put option at the end of every twelve monthsfrom the date of issue. Total amount raised through the said issue was Rupees ThirteenCrores and Thirty-Five Lakhs. The Company has appointed SBICAP Trustee Company Ltd.Mumbai as the "Debenture Trustee" for the said issue. The Debenture Trust deedwas registered on 27th April 2015 with the Sub-Registrar Khalapur Maharashtra. Duringthe year under review no Call and Put options were exercised.
RELATED PARTY TRANSACTIONS (RPTS):
Pursuant to Section 188 of the Companies Act 2013 and Regulation 23 of SEBI (LODR)Regulations 2015 all RPTs for the Financial Year 2015-16 were placed before the AuditCommittee for its prior / omnibus approval. There were no material related partytransactions entered into by the Company during the financial year which attracted theprovisions of Section 188 of the Companies Act 2013.
The requisite disclosure in Form AOC 2 is furnished in Annexure III.
M/s Bhandari Dastur Gupta & Associates Chartered Accountants (Firm RegistrationNo. 119739W) Mumbai Auditors of the Company hold office until the conclusion of the42nd Annual General Meeting subject to ratification in the Annual General Meeting held inrespective years. During the year the Firm name of the Statutory Auditors have changed to"B D G & Associates" and accordingly ratification of appointment as approvedin the 39th Annual General Meeting is proposed with the said new name. The requisitecertificate as required under section 139(1) of the Companies Act 2013 has been receivedfrom them.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company has beencarrying out audit of cost records of the Company every year.
The Board of Directors on the recommendation of the Audit Committee has appointed M/sA.G.Anikhindi & Co. Cost Accountants Kolhapur as Cost Auditors to audit the costaccounts of the Company for the financial year 2016-2017 at a remuneration of Rs.215000/- per annum plus service tax as applicable and reimbursement of out of pocketexpenses. As required under the Companies Act 2013 a resolution seeking membersapproval for the remuneration payable to the Cost Auditor forms a part of the Noticeconvening the 41st Annual General Meeting of the Company. The Cost Audit Report for thefinancial year 2014-15 was filed with Ministry of Corporate Affairs on 20th October 2015.
Pursuant to the provisions of section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s SK Makhija & Associates Practising CompanySecretaries (CP No. 13322) Mumbai to carry out the Secretarial Audit of the Company. TheSecretarial Audit Report is included as Annexure IV and forms an integral part of thisReport. There is no secretarial audit qualification for the year under review.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Companys Financial Statements are prepared on the basis of the SignificantAccounting Policies that are carefully selected by the Management and approved by theAudit Committee and the Board. These Accounting Policies are reviewed from time to time.The Systems Standard Operating Procedures and Controls are reviewed by the Management.The Audit Committee of the Board of Directors Statutory Auditors and Business Heads areperiodically apprised of the internal audit finding and corrective actions are taken.Audit plays a key role in providing assurance to the Board of Directors. In order tomaintain its objectivity and independence the Internal Auditor reports to the Chairman ofthe Audit Committee. Internal Financial control audit has also been undertaken by theStatutory Auditors. For the year ended 31st March 2016 the Board is of the opinion thatthe Company has sound IFC commensurate with the nature and size of its businessoperations wherein controls are in place to continuously monitor the existing controlsand indentify gaps if any and implement new and/ or improved controls wherever theeffect of such gaps would have a material effect on the Companys operation.
The Credit Rating remained constant with short term credit rating A3 (A Three) and longterm rating as BBB- (Triple B Minus) to the financial facilities availed by the Companyduring the year under review from both the Agencies i.e Credit Analysis and Research Ltd.(CARE) and Brickwork Ratings India Pvt Ltd(Brickwork Ratings). The rating are under reviewfor upgradation. Further Dun & Bradstreet has recently assigned Rating of 4A2 to theCompany.
The Company has an ISO 9001:2008 certification which is valid up to 15th September2018. Recertification Audit has been conducted by Det Norske Veritas (DNV). QMS (QualityManagement System) is focusing on continual improvement by implementing the strategictools for business to gain competitive advantage through products and services that aresafe reliable and trustworthy.
Besides QMS (Quality Management System) APL has IMS (Integrated Management System) forISO 14001:2004 and OHSAS 18001:2007 certifications. ISO 14001:2004 certification is validup to 15th September 2018 whereas OHSAS 18001:2007 certification is valid up to 08thApril 2019. Recertification Audit for IMS (Integrated Management System) has beenconducted by Det Norske Veritas (DNV).
ISO 14001:2004 (Environmental Management System) certifications relates to conservationof natural resources resulting in maintaining clean environment safe work place safeoperations commitment to compliance and healthy atmosphere. As such the Company iscommitted to ensure minimum impact to environment through its operations.
OHSAS 18001:2007 (Occupational Health and Safety Assessment Series) certificationrelates to safety and health of working people by making hazards and Risk Analysis ofvarious activities and adopting effective control methods to minimize the Risk. Variousmeasures have been taken by the Company in order to ensure compliance in its true spirit.
RS (Responsible Sourcing): APL has become a Member in SEDEX website since 4th December2013 after going through SMETA 4-Pillar Audit conducted by DNV. The Membership is renewedfor continuation of SEDEX. SEDEX is an online database that enables suppliers to shareinformation with their customers on their responsible trading practices (Health SafetyLabor Standards Environment and Business Ethics).
The Company has complied with Reach Compliances and Pre-Registration of 24 productsdone having good export potential to Europe.
All properties and insurable interest of the Company including buildings plant andmachineries stores and spares have been adequately insured.
The industrial relations remained cordial during the year under review.
DIRECTORS RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statement in terms of Section 134 (3)(c) ofthe Companies Act 2013:
a. that in the preparation of the annual accounts for the year ended March 31 2016the applicable accounting standards had been followed along with proper explanationrelating to material departures wherever applicable;
b. The Directors had 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 at the end of the financial year and ofthe profit of the Company for the year under review;
c. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. The Directors have prepared the annual accounts on a going concern basis.
e. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
f. That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Pursuant to the provisions of Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 prescribed particulars as applicable is annexedhereto as Annexure V and forms part of this Report.
PARTICULARS OF EMPLOYEES:
None of the employees of the Company attract the provisions of Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 during theyear under report. The Statement containing information as required under Section 197(12)of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure VI and forms anintegral part of this Report.
DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints regarding sexual harassment if any.
All employees (permanent contractual temporary trainees) are covered under thispolicy. The following is summary of sexual harassment complaints received and disposed offduring each Calendar year:
No. of Complaints received : Nil
No. of Complaints disposed off : NA
The process of identification and evaluation of various risks is inherent in thebusiness environment and the operations of the Company. The Company has in place properorganization structure resulting in initiation of appropriate measures for prevention and/ or mitigating of the same being dealt by the concerned operational Heads under theoverall supervision of the Chairman & Managing Director of the Company. The auditCommittee periodically reviews the adequacy and efficacy of the overall risk managementsystem thus keeping a check on overall effectiveness of the risk management of theCompany.
ESTABLISHMENT OF VIGIL MECHANISM:
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policyhas been in force. This Policy inter alia enables any employee who observes any unethicaland improper practices or alleged wrongful conduct can approach the Department Head or incase it involves Managerial Personnel to the Managing Director through E-mail. After dueinvestigation the matter shall be dealt as per the procedure prescribed in the Policy.
CORPORATE SOCIAL RESPONSIBILITY:
As a part of its initiative pursuant to section 135 of the Companies Act 2013 andrelevant Rules the Board has constituted the CSR Committee and has identified a projectto build Examination Centre and Hall thus encouraging promotion of education for studentsfrom rural areas. The said project is in accordance with the Schedule VII of the CompaniesAct 2013 and the Companys CSR Policy. The Report on CSR Activities as requiredunder the Companies (Corporate Social Responsibility Policy) Rules 2014 is set out asAnnexure VII forming a part of this Report.
NOMINATION AND REMUNERATION POLICY:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy is explained in Corporate Governance Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
The merger of APL Engineering Services Pvt Ltd. with the Company is in its advancedstage and APL Engineering Services Pvt Ltd has received final Order from the Mumbai HighCourt in the merger matter. Minutes of the Order has been uploaded on the website of theCompany. A petition of the Transferee Company for confirmation of the merger has also beenadmitted in the Gauhati High Court Assam.
APPOINTMENT OF M/S SHAREX DYNAMIC (INDIA) PVT. LTD. AS THE REGISTRAR & SHARETRANSFER AGENT OF YOUR COMPANY:
The Securities and Exchange Board of India ("SEBI")had vide its Interim orderdated 22nd March 2016 inter alia advised clients of Sharepro Services (India) Pvt Ltd("Sharepro") to carry out/ switchover their activities related to registrar toan issue and share transfer agent either in house or through another Registrar to anissue and share transfer agent registered with the SEBI. In view of the above the Boardof Directors of your Company at its meeting held on 27th April 2016 decided to appointM/s Sharex Dynamic (India) Pvt. Ltd. Mumbai as the Registrar & Share Transfer Agents.Accordingly an intimation letter dated 18th July 2016 was sent to all shareholdersthrough E-mail or post as the case may be.
As prescribed under Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section on CorporateGovernance practices followed by the Company together with a certificate from practisingCompany Secretary confirming compliance forms an integral part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the year under review as stipulated inthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presentedin a separate section forming part of the Annual Report.
Your Directors take this opportunity to thank all its employees at all levels for theircontinued participation and support in the growth of the organization and also to all itsCustomers Collaborators Government Agencies Financial Institutions Bankers DebentureTrustees Suppliers Shareholders Debenture holders and other Associates for reposingtheir continued trust and confidence in the Company.
| ||For and on behalf of the Board |
|Place: Mumbai ||HEMANT KUMAR RUIA |
|Date: 05.08.2016 ||Chairman & Managing Director |