(Including Management Discussion and Analysis Report)
The Directors are pleased to present the Fifty-second Annual report together with theaudited accounts of the Company for the year ended 31st March 2016.
| || ||rs. in lakhs |
|FINANCIAL RESULTS ||Financial Year ended 31st March 2016 ||Financial Year ended 31stMarch 2015 (Nine Months) |
|Turnover (Excluding Excise Duty)/ ||4176.38 ||4671.04 |
|Income from operations || || |
|Gross profit / (loss) ||514.16 ||(1025.54) |
|Less: Depreciation ||131.98 ||105.53 |
|Profit / (Loss) before taxation ||646.14 ||(1131.06) |
|Provision for Taxation ||- ||- |
|Deferred Tax ||189.76 ||(151.32) |
|Excess Provision of Income Tax no longer required ||- ||(5.82) |
|Profit / (loss) after tax ||456.38 ||(973.92) |
|Balance brought forward ||(2156.76) ||(1182.84) |
|Balance carried forward ||(900.43) ||(1288.94) |
|Turnover (excluding Excise Duty)/ Income from Operations:- || || |
|Boron based products ||4144.76 ||4644.84 |
|Wind Mill Farm ||31.62 ||26.20 |
|Others ||- ||- |
|Total Turnover/Income from operations ||4176.38 ||4671.04 |
In view of the accumulated losses and losses during the current year the Directors donot recommend any dividend on the equity share capital and Preference share capital of theCompany for the Financial Year ended 31st March 2016.
MANAGEMENT DISCUSSION & ANALYSIS
Overview of operations:
The Company has achieved Sales turnover of rs. 4176.38 lacs for the Financial Yearended on 31st March 2016 as against the Sales turnover of rs. 4671.04 lacs in theprevious year ended on 31st March 2015. During the current Financial Year your Companyhas completed shifting of the operations from Ambarnath factory to Dahej factory. Duringthe transition of shifting the operations from Ambarnath factory to Dahej factory yourCompany had stopped the operations at Ambarnath but the operations at Dahej were not tothe full extent resulting in lower production and thereby lower turnover during thecurrent financial year. Your Company through its own research and Development activitiesis working on new products Development as also improve production processes for achievingcost effectiveness with increasing emphasis on cost reduction at Dahej factory. The Dahejoperations are expected to be profitable during the Current Financial Year barring theunforeseen circumstances.
Due to uneconomical and unviable operations and as approved by the Shareholdersearlier your Company has sold Four wind mills located at Thoseghar and Maloshi Dist.Satara in the State of Maharashtra. The Management is also making efforts to sell theremaining two wind mills one at Vankusavade Dist. Satara in the State of Maharashtra andthe other at Nani Sindhodi at Kutch in the State of Gujarat.
Land at Ambarnath
As approved by the Shareholders and informed earlier the Company has sold its land atAmbarnath and the necessary provisions/ adjustments have been made in the books ofaccounts arising out of the said sale.
Industry Structure and outlook
The Company is a market leader in manufacturing of Boron Chemicals in India. TheCompany is conspicuous in local and International market over 5 decades due to its widerange of quality Boron based chemicals. Your Company is catering to various businesssegments like ceramics frits steel soaps & detergent fertilisers chemicals andpolymer industries.
Your Company is focused on innovative initiatives through its own research andDevelopment activities and envisages developing and enhancing its portfolio with newcustomized and speciality products. Your companys emphasis is to enhance productionat its full installed capacities and sales of existing commodities and speciality productsat remunerative prices with a view to improve the performance of your company.
Your Company believes in its ability to develop new products and improvement in sale ofexisting products with the implementation of cost effective technologies . Barringunforeseen circumstances your Company expects to improve its financial and operationalperformance during the next few years.
Adequacy of internal controls
The Company has an established independent and adequate system of internal controlscommensurate with nature of its business and size of its operation to ensure that allassets are safeguarded and protected against loss from unauthorized use or dispositionand those transactions are authorized recorded and reported correctly. This system alsocomplies with the suggestions of the Statutory Auditors of the Company if any from timeto time. The internal control systems are supplemented by regular reviews by themanagement of the Company.
Human Resource Development
As a matter of routine the Company undertakes periodic review of its Hr policies andencourages the best performance at all times. The Company also provides regular trainingto its workforce which allows employees to keep themselves abreast of the changingenvironment as well as develop new skills.
Statements in the Management Discussion and Analysis describing the Companysobjectives projections estimates and expectation are "forward lookingstatements". Actual results might differ materially from those anticipated because ofchanging ground realities.
The Board of Directors has carried out an annual evaluation of its ownperformance Board Committees and Individual Directors pursuant to the provisions of theCompanies Act2013(the Act) and the corporate governance requirements as prescribed by theSecurities and Exchange Board of India("SEBI") under the Listing Agreement("Clause 49").
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as Board composition and structureeffectiveness of board process information and functioning etc.
The performance of the committees was evaluated by the Board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual director to the Board and Committee meetings like
Prepared ness on the issues to be discussed meaningful and constructive contributionand inputs in meetings etc. In addition the Chairman was also evaluated on the keyaspects of his role.
In a separate meeting of Independent Directors performance of non-independentdirectors performance of the Board as a whole and performance of the chairman wasevaluated taking in to account the views of non-executive directors at which theperformance of the Board its committee and individual directors were also discussed.
NOMINATION AND REMUNERATION POLICY
The Policy on Nomination and remuneration of Directors Key Managerial Personnel andother employees has evolved and has been formulated in terms of the provisions of theCompanies Act 2013 and the listing agreement with a view to pay equitable andcommensurate remuneration to the Directors Key Managerial Personnel and other employeesof the Company.
The Company had been passing through adverse financial condition which had aninevitable impact on the existing compensation and pay structure rather than thequalification experience and the industry standards.
In view of the inadequacy of profits the Directors of the Company are not being paidany remuneration/commission etc. except the normal sitting fees.
The Committee will therefore take in to consideration the various applicable factorssuch as qualification experience industry standards etc. and evolve an appropriatepolicy in course of time once the Company starts making adequate profits.
PERTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
During the financial year 2015-16 the Company has not provided any loan to any personor body corporate or given any guarantee or provided security in connection with such loanor made any investment in the securities of anybody corporate pursuant to Section 186 ofthe Companies Act 2013.
During the year under review there was not a single incident pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and redressal) Act 2013.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of Annual return is Annexed inthe prescribed Form MGT-9 which forms part of this report.
WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company(www.boraxmorarji.com).
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the 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 statement is supportedby a Certificate for the Managing Director & the CFO. The Company has developed aRelated Party Transactions Manual Standard Operating Procedures for purpose ofidentification and monitoring of such transactions.
The Policy on related Party Transactions as approved by the Board in uploaded on theCompanys website.
None of the Directors has any pecuniary relationships or transactions vis--vis theCompany.
RISK MANAGEMENT POLICY
The Company has formulated a Risk Management Policy which reflects the overall riskmanagement philosophy the Companys over all approach to risk management riskassessment risk mitigation mechanism and the roll and responsibilities for riskmanagement. risk management forms an integral part of the business planning and reviewcycle.
The Companys risk Management Policy is designed to provide reasonable assurancethat objectives are met by integrating management control into the daily operations byensuring compliance with legal requirements and by safe guarding the integrity of theCompanys financial reporting and its related disclosures.
The identification and analysis of and putting in place the process for mitigation ofthese risks is an ongoing process. The Company has also laid down procedure to inform theAudit Committee and the Board about the risk assessment and minimization procedures. Theseprocedures are periodically reviewed to ensure that executive management control risks bymeans of a properly defined frame work.
The monthly review meetings of all the functional / departmental heads interalia discussthe relative risk management issues.
In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulation2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitiveinformation the Company has adopted the code of conduct to regulate Monitor and reportTrading by Insider (" Insider Trading Code) and code of Practices andProcedures for Fair Disclosure of unpublished Price Sensitive Information (Code ofFair Disclosure).
The Insider Trading Code is intended to prevent misuse of unpublished price sensitiveinformation by insiders and connected persons and ensure that the Directors and specifiedpersons of the Company and their dependents shall not derive any benefit or assist othersto derive and benefit from access to and possession of price sensitive information aboutthe Company which is not in the public domain that is to say insider information.
The code of Fair Disclosure ensures that the affairs of the Company are managed in afair transparent and ethical manner keeping in view the need and interest of all theStakeholders.
POLLUTION & SAFETY
Stringent controls and strict monitoring of liquid effluents are carried out regularlyto restrict pollution to the minimum and keep it within the limits prescribed by thestatutory authorities
Borax Morarji (europe) GmbH is a 100% wholly owned subsidiary Company in Germany.Primarily it takes care of complying with the German regulations for exports of Specialityboron products to Germany and europe.
In terms of exemption granted by the Ministry of Corporate Affairs vide its Order No.2/2011 dated 8th February 2011 Balance Sheet of Borax Morarji (europe) GmbH Germany isnot attached to the account of the Company. However the annual accounts of the subsidiaryare available for inspection at the office of the Company and the related detailedinformation will be made available to the
Shareholders when asked for.
CONSOLIDATION OF ACCOUNTS
In pursuance of the mandatory compliance of the Accounting Standard 21 as issued bythe Institute of Chartered Accountants of India the Company has presented ConsolidatedFinancial Statements for the year under report consolidating its Accounts with theAccounts of its Wholly Owned Subsidiary Company viz. Borax Morarji (europe) GmbHGermany. A separate report of the Statutory Auditors on the Consolidated FinancialStatements also forms part of the same.
Under the Companies Act 2013 our Company is not eligible to invite and renew fixeddeposits. All the fixed deposits are being repaid according to the provision of theCompanies Act 2013.
DIRECTORS / KEY MANAGEMENT PERSONNEL
In accordance with the provisions of Companies Act and Article of Association of theCompany Ms. Mitika Laxmikumar Goculdas (DIN: 02879174) retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible offers herself forreappointment.
Mr. Bimal L. Goculdas resigned as Managing Director on 10th August 2016 however hecontinues as Non-executive Director.
Dr. Umesh R. Shetkar is being appointed as Chief Executive Officer and Manager underthe Companies Act 2013 in the ensuing Annual General Meeting.
The terms and conditions of appointment of Independent Directors are as per Schedule IVof the Act. Independent Directors have submitted declarations that each of them meets thecriteria of independence as provided in Section 149(6) of the Act and there has been nochange in the circumstances which may affect their status as independent director duringthe year.
During the year the non-executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
The Nomination and remuneration Committee at its meeting held on 10th August 2016recommended and the Board of Directors of the Company at its Board Meeting held on 10thAugust 2016 have appointed Dr. Umesh r. Shetkar subject to the approval of theshareholders by way of ordinary resolution at the ensuing Annual General Meeting as "Chief Executive Officer" and "Manager" of the Company within the meaning ofthe Companies Act 2013 for a period of three years with effect from 10th August 2016.
The proposed Remuneration and terms and conditions of appointment of Dr. Umesh R.Shetkar "Chief Executive Officer" and "Manager" of the Company are asper the provisions of the Companies Act 2013 and Schedule V thereto as given in theOrdinary resolution at item no. 4 of the accompanying Notice of the Meeting and theparticulars contained therein are in accordance with the disclosures as required as perSchedule V Part II Section II of the Companies Act 2013:
The Board recommends the resolution at Item No. 4 of the accompanying Notice forapproval by the Members of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 (hereinafter referred to as the"Act") your Directors confirm that:-
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
(b) Appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 31 2016 and Statement ofthe Profit and Loss of the Company for the year ended March 31 2016;
(c) 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) The annual accounts have been prepared on a going concern basis;
(e) Proper internal financial controls were followed by the Company and such internalfinancial controls are adequate and were operating effectively;
Messers K.S. Aiyar & Co. Chartered Accountants holding ICAI Firm registrationNumber 100186W who are the Statutory Auditors of your Company hold office until theconclusions of the 53rd Annual General Meeting of the Company to be held in the year 2017(subject to of their appointment at every AGM). It is proposed to ratify the appointmentof Messers K. S. Aiyar & Co. Chartered Accountants holding ICAI Firm registrationNumber 100186W as Statutory Auditors of the Company from the conclusion of this AGM tillthe conclusion of the 52nd AGM. Messrs K. S.Aiyar & Co. Chartered Accountantsholding ICAI Firm registration Number 100186W has under Section 141 of the Act furnisheda certificate of its eligibility for re-appointment. The Members year on year will berequested to ratify their appointment as Statutory Auditors and to authorize the Board ofDirectors to fix their remuneration.
In this connection the attention of the Members is invited to item No. 3 of theNotice.
There is no observation / qualification in the report of Auditors for the Financialyear 31st March 2016.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed Shri S. R. Padhye Fellow Member of Institute ofCompany Secretaries of India (F 4270) and holding certificate of practice No. 1559 isappointed to undertake the Secretarial Audit of the Company. The Secretarial Audit reportis Annexed- and forms integral part of this report.
There is no secretarial audit qualification for the year under review.
PARTICULARS OF EMPLOYEES
The particulars of employees as required under section 197 and rule 5 (2) and 5 (3) ofthe Companies (Appointment and remuneration of Managerial Personnel) rules 2014 have notbeen furnished as there are no employees falling within the purview of the provisions ofsaid section and the said rule during the period under review .
(CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under section 134 (3) (m) of the Companies Act 2013 readwith rule 8 of the Companies (Accounts) rules 2014 is annexed herewith.
The Company has complied with the provisions of Corporate Governance under the ListingAgreement with the Stock exchange for the year 2015 16. A separate report onCorporate Governance is sent herewith as part of the Annual report along with theAuditors Certificate on compliance.
The Directors are thankful to all the Stakeholders various Government DepartmentsFinancial Institutions Banks and employees for their valuable co-operation and assistanceduring the year.
| ||For and on behalf of the Board of Directors |
|Place: Mumbai ||L. N. Goculdas |
|Date: 10th August 2016. ||(Chairman) |