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Black Rose Industries Ltd.

BSE: 514183 Sector: Industrials
NSE: N.A. ISIN Code: INE761G01016
BSE LIVE 15:21 | 09 Dec 25.40 0.20
(0.79%)
OPEN

25.95

HIGH

26.00

LOW

25.25

NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 25.95
PREVIOUS CLOSE 25.20
VOLUME 10265
52-Week high 28.30
52-Week low 14.40
P/E 32.15
Mkt Cap.(Rs cr) 129.54
Buy Price 25.40
Buy Qty 150.00
Sell Price 25.90
Sell Qty 645.00
OPEN 25.95
CLOSE 25.20
VOLUME 10265
52-Week high 28.30
52-Week low 14.40
P/E 32.15
Mkt Cap.(Rs cr) 129.54
Buy Price 25.40
Buy Qty 150.00
Sell Price 25.90
Sell Qty 645.00

Black Rose Industries Ltd. (BLACKROSEINDUS) - Director Report

Company director report

(Including Management Discussion and Analysis Report)

Dear Members

Your Directors are pleased to present this 26th Annual Report together withthe Audited Financial Accounts of the company for the year ended 31st March2016.

Financial Results

The company's standalone and consolidated performance during the financial year ended31st March 2016 as compared to the previous financial year is summarisedbelow:

Consolidated

Standalone

Particulars

Year ended

Year ended

31.03.2016 31.03.2015 31.03.2016 31.03.2015
Revenue from Operations and Other Income 17772.16 19654.37 12919.23 14758.88
Earnings Before Interest Depreciation Tax and Amortisation (EBIDTA) 968.12 695.62 965.40 697.96
Less: Finance Cost 446.97 486.70 446.97 486.70
Profit before Depreciation and Tax (PBDT) 521.15 208.92 518.43 211.26
Less: Depreciation 272.57 277.86 272.57 277.86
Profit before Tax 248.58 (68.94) 245.86 (66.60)
Less: Provision for Tax 84.20 (121.68) 84.20 (121.68)
Profit after Tax 164.38 52.74 161.66 55.08

Nature of Business

The company is primarily in the business of chemical distribution and chemicalmanufacturing as well as textile manufacturing and renewable energy generation.

The chemical distribution business consists mainly of import and sales of specialty andperformance chemicals manufactured by overseas and domestic principals. Chemicalmanufacturing is currently focused on the production of a single product acrylamide. Thetextile business is engaged in the manufacture of fabrics and industrial made-ups such assafety gloves and the renewable energy activity supplies the State Electricity Boards ofRajasthan and Gujarat with wind-generated power.

Operational Performance

The year 2015 - 2016 saw a fall in costs accompanied by a reduction in sales price ofmany of the company's distribution products as well as of acrylamide. This resulted inlower turnovers (reduction of 9.6%) despite volume growth. Acrylamide sales posted stronggrowth and the company reached 100% capacity utilisation during Q4. The performance ofour subsidiary in Japan was mostly unchanged over the previous year. Profitability wasimproved due to the higher operation rate of the acrylamide plant and the company endedthe year with a rise in EBIDTA of 39% bringing the standalone EBIDTA margin to 7.5%.Profit after tax increased to Rs. 164.38 as compared to a profit of Rs. 52.74lacs in the previous year.

A detailed analysis of the company's operations is provided later in the ManagementDiscussion and Analysis Report.

Dividend

Your Directors are unable to recommend payment of a dividend for the financial year2015 - 2016 as the company intends to conserve funds for its working.

Business Scenario

The global economic scenario did not improve during the 2015 - 2016 fiscal year.Despite the continuing slowdown in most of the world's major economies the US economyslowly but steadily strengthened and the Federal Reserve raised interest rates inDecember 2015. This resulted in a sudden and steep depreciation of the Indian rupee toalmost Rs. 69 per US dollar. In addition to this oil prices fell to below US$30per barrel in February 2016 with high production and reduced demand pulling down pricesof chemicals and other products. In India poor market liquidity and high interest ratescontinued to plague industry as it did in the previous year.

The business scenario is discussed later in more detail in the Management Discussionand Analysis Report.

Acrylamide Plant at Jhagadia Gujarat

The company's acrylamide plant steadily increased its capacity utilisation during theyear and achieved 100% capacity utilization at the end of the year. An in-depthexplanation about the plant operations is given in the Management Discussion andAnalysis Report.

Subsidiary - B.R. Chemicals Co. Ltd. Japan

During the year under review the turnover of the company's wholly owned subsidiaryincorporated in Japan marginally decreased as compared to previous year reporting close toRs. 49 crores. The subsidiary showed a small profit of around Rs. 3 lacs.

The nature of business of the subsidiary company remained unchanged during the year.

The performance and financial position of company's subsidiary B.R. Chemicals Co. Ltd.for the year ended 31st March 2016 is attached to the financial statementshereto.

Material Changes and Commitments

There have been no material changes and commitment affecting the financial position ofthe Company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report.

Directors

Mr. Atmaram Jatia (DIN 00293154) resigned as Director of the Company on November 32015. Your Directors place on record their appreciation of the valuable services renderedby Mr. Jatia during his tenure as Director of the Company.

Pursuant to section 152 of the Companies Act 2013 Mr. Anup Jatia (DIN 00351425)Executive Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. Further shareholders attheir 25th Annual General Meeting appointed Mr. Anup Jatia as ExecutiveDirector of the Company with effect from May 1 2016 for a period of five years.

Pursuant to the Companies Act 2013 and the Listing Regulations all the fourIndependent Directors Mr. Shivhari Halan Mr. Sujay Sheth Mr. Basant Kumar Goenka andMrs. Garima Tibrawalla continue to act as Independent Directors not liable to retire byrotation.

Pursuant to the provisions of Section 149(7) of the Companies Act 2013 and the rulesmade thereunder the company has received individual declarations from all the IndependentDirectors confirming that they fulfill the criteria of independence as specified inSection 149(6) of the Companies Act 2013.

Key Managerial Personnel

As on date Mr. Anup Jatia Executive Director Mr. Chiranjilal P Vyas CompanySecretary and Mr. Ratan Kumar Agrawal Chief Financial Officer of the Company are the KeyManagerial Personnel as per the provisions of the Companies Act 2013.

Corporate Social Responsibility

Although the company is not governed by the provisions of Section 135 of the CompaniesAct 2013 Corporate Social Responsibility forms an integral part of overall businesspolicy and is aligned with its business goals.

DirectorS' Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors to the best oftheir knowledge and belief confirm the following:

i) 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;

ii) that such accounting policies as mentioned in note 1 of the Notes to the FinancialStatements have been selected and applied consistently and judgment 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 profits of the company for theyear ended on that date;

iii) 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;

iv) that the annual financial statements have been prepared on a going concern basis;

v) that proper internal financial controls were in place and that the financialcontrols were adequate and were operative satisfactorily however as this reportingrequirement is in a evolving stage the management is in a process of establishingeffective implementation with the help of internal and external consultations andconfident that the same will be fully implemented within few months.

vi) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.

Deposits

During the year under review the company did not accept any deposits in terms ofSection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit)Rules 2014.

Consolidated Financial Statements

Pursuant to Clause 32 of the Listing Agreement the company has prepared ConsolidatedFinancial Statements in accordance with Accounting Standards (AS) viz. AS 21 AS 23 and AS27 issued by The Institute of Chartered Accountants of India. The Consolidated FinancialStatements form part of this Annual Report.

Extract of Annual Return

Pursuant to the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act2013 an extract of the Annual Return for the financial year ended 31st March2016 in the prescribed format is given in Annexure I and forms part of this AnnualReport.

Board Meetings Committees and Policies Board Meetings

The Board of Directors met six times during the financial year ended 31stMarch 2016 in accordance with the provisions of Companies Act 2013 and rules madethereunder and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (the Listing Regulations).

Committees

Pursuant to Section 177 and 178 of the Companies Act 2013 and the rules madethereunder and in accordance with Listing Regulations your Board of Directors hasconstituted three committees namely Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship Committee.

The company has been employing women employees in various grades within its offices andfactory premises. The company has constituted an Internal Compliant Committee as requiredunder Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 to redress any complaints received from employee(s) of the Company. The Company isstrongly opposed to sexual harassment and all the employees are made aware about theconsequences of such acts and the constitution of the Internal Compliant Committee.

During the year there was no complaint received from any employee and hence nocompliant is outstanding as on 31st March 2016.

Evaluations

Pursuant to the provisions of Companies Act 2013 and rules made thereunder the Boardhas carried out an annual performance evaluation of its own performance and of theDirectors individually as well as evaluation of the working of its Audit CommitteeStakeholders Relationship Committee and Nomination and Remuneration Committee.

Further the Independent Directors at their exclusive meeting held during the yearreviewed the performance of the Board its Chairman and Non-Executive Directors and otheritems as stipulated under the Listing Regulations.

Policies

In line with the new Listing Regulations the Board of Directors of the Company hasformulated Policy on Determination of Materiality of Any Events or Information andDocument Retention and Archival Policy.

The above policies have been uploaded on the company's website and forms part of thisreport.

Particulars of Employees

The Statement containing particulars of employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable as none of theemployees of the company is covered under the provisions of the said rules.

The ratio of the remuneration of each Director to the median employees remuneration andother details in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed herewith as Annexure IV and forms part of this Annual Report.

Listing Agreement

Your company has entered into new Listing Agreement with BSE Limited in compliancewith Regulation 109 of Securities and Exchange Board of India (Issue of Capital andDisclosures Requirements) Regulations 2008 as amended by SEBI.

Internal Financial Controls

The company has a proper and adequate Internal Financial Control System that isexercised through documented policies guidelines and procedures. It is supplemented by anextensive program of internal audits conducted by trained personnel appointed by the Boardon the recommendation by the Audit Committee. The audit observations and corrective actiontaken thereon are periodically reviewed by the Audit Committee to ensure effectiveness ofthe Internal Financial Control System. The Internal Financial Control is designed toensure that the financial and other records are reliable for preparing financialstatements and other data and for maintaining accountability of persons.

Loans Guarantees and Investments

The particulars of loans guarantees and investments given/made during the financialyear under review and governed by the provisions of Section 186 of the Companies Act 2013have been furnished in Annexure II which forms part of this Annual Report.

Contracts and Arrangements with Related Parties

All the contracts arrangements and transactions entered by the company during thefinancial year with related parties were in the ordinary course of business and are onarm's length basis hence Section 188(1) is not applicable and consequently no particularsin Form AOC - 2 are required to be furnished. During the year the company had not enteredinto any contract arrangements or transactions with related parties which could beconsidered material. All the contracts arrangements and transactions with related partiesare placed before the Audit Committee as also the Board as may be required for approval.

Orders passed by Regulators or Courts or Tribunals

No significant and material orders have been passed by any regulators or courts ortribunals which can have an impact on the going concern status of the Company and itsfuture operations.

Reporting of Frauds

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and/or Board under Section 143(12) ofthe Act and Rules framed thereunder.

Auditors and their Reports

Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Karnavat & Co. Chartered Accountants theStatutory Auditors of the Company hold office up to the conclusion of the 27thAnnual General Meeting. However their appointment as Statutory Auditors of the company issubject to ratification by the members at every Annual General Meeting. The Company hasreceived a certificate from the said Auditors that they are eligible to hold office as theAuditors of the Company and are not disqualified for being so appointed.

The resolution for ratification of appointment of the said Auditors is included in theNotice of Annual General Meeting for seeking approval of members.

The independent statutory aUDITORS' report does not contain any qualificationreservation or adverse remark on the accounts for the year ended 31st March2016 except a disclaimer of opinion on Internal Financial Controls.

Management note on disclaimer of opinion on Internal Financial Controls is statedbelow:

As the system of Internal Financial Controls over financial reporting is a newrequirement the management is in a process of establishing effective implementation withthe help of internal and external consultations and confident that the same will be fullyimplemented within few months.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Board of Directors had appointed M/s. ND & Associates CompanySecretary in Whole - Time Practice as Secretarial Auditor to undertake the SecretarialAudit of the Company.

As required under provisions of Section 204 of the Companies Act 2013 the report inrespect of the Secretarial Audit carried out by M/s. ND & Associates CompanySecretary in Whole - Time Practice in Form MR - 3 for the FY 2015 - 16 forms part to thisreport. The said report does not contain any adverse observation or qualificationrequiring explanation or comments from the Board under Section 134(3) of the CompaniesAct 2013.

Cost Auditors

In terms of the provisions of Section 148 of the Companies Act 2016 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Board of Directors on therecommendation of the Audit Committee have approved the appointment of M/s. S.Poddar& Co. Cost Accountants as the Cost Auditors of the Company to conduct audit ofcost accounting records maintained by the Company for the year ending March 31 2016 on aremuneration as mentioned in the Notice of 26th Annual General Meeting forconducting the audit of the cost records maintained by the Company.

A certificate from M/s. S. Poddar& Co. Cost Accountants has been received to theeffect that their appointment as Cost Auditor of the Company if made would be inaccordance with the limits specified under Section 141 of the Act and rules framedthereunder.

A resolution seeking Member's ratification for the remuneration payable to Cost Auditorforms part of the 26th Annual General Meeting of the Company and same isrecommended for Member's consideration and approval.

Listing

The company's shares are listed on the Bombay Stock Exchange Limited and the applicablelisting fees have been paid.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withrules made thereunder is annexed herewith as Annexure III and forms part of thisAnnual Report.

Service of Documents through Electronic Means

All documents including the Notice and Annual Report shall be sent through electronictransmission in respect of members whose e-mail IDs are registered in their demat accountor are otherwise provided by the members. A member shall be entitled to request forphysical copy of any such documents.

Acknowledgement

The Board of Directors greatly values the support and cooperation received during theyear from the company's bankers statutory authorities and all organisations connectedwith the company's business. The directors also take pleasure in commending the valuablecontributions made by the company's employees at all levels during the year under review.

Cautionary Statement

Certain statements in this DirectorS' Report and in the Management Discussion andAnalysis Report describing the company's objectives estimates and projections may beforward-looking statements and are based on certain expectations. Actual results couldhowever differ materially from those expressed or implied. Important factors that couldmake a difference in the company's operations include the availability of rawmaterial/product cost of raw material/product changes in demand from customersfluctuations in exchange rates changes in government policies and regulations changes intax structure economic developments within India and the countries in which business isconducted and various other incidental factors. We cannot guarantee that these forward -looking statements will be realised although we believe we have been prudent in makingany assumptions. We undertake no obligation to publicly update any forward - lookingstatements whether as a result of new information future events or otherwise.

For and on behalf of the Board

Shivhari Halan Anup Jatia
Director Executive Director
Place: Mumbai
Dated: May 23 2016

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