Your Directors are pleased to present the Annual Report of your Company together withthe Audited Statement of Accounts and the Auditors Report for the Financial Yearended 31st March 2016. The summarized financial results for the Financial
|Particulars ||For the Year Ended |
| ||31stMarch 2016 ||31stMarch2015 |
| || |
Rs. in lakhs
Rs. in lakhs
|Profit Before Finance cost and ||2619 ||2673 |
|Depreciation || || |
|Less: Finance cost ||153 ||71 |
|Profit Before Depreciation ||2466 ||2602 |
|Less: Depreciation ||1129 ||1015 |
|Profit Before Tax ||1337 ||1586 |
|Tax ||455 ||298 |
|Deferred Tax Liability ||16 ||265 |
|Net Profit For the Year ||866 ||1023 |
|Balance Brought Forward from ||10120 ||9235 |
|Previous Year || || |
|Balance Available For Appropriation ||10986 ||10258 |
|Appropriations: || || |
|Transferred to General Reserve ||0 ||0 |
|Interim Dividend Paid ||0 ||0 |
|Proposed Dividend ||115 ||115 |
|Dividend Tax ||23 ||23 |
|Balance Carried to Balance Sheet ||10848 ||10120 |
State of Companys Affairs:
During the year under review the Company achieved net revenue from operations of Rs10131/- Lakhs as against Rs 11039/- Lakhs in the previous year and made Profit Lakhs asagainst Rs 1586/- Lakhs in the previous year. The PBT was affected due to marginaldecline in sales volume and realization during the Financial Year 2015-16 as compared tothe previous year due to market conditions as well as Floods in Tamil Nadu/ Puducherry.Further additional provision towards capital work in progress accelerated depreciationand exchange fluctuations had an adverse effect on the profitability of the Company.However improvement in power consumption and reduction in raw material cost had apositive impact on the
Directors & Key Managerial Personnel:
The details of Directors and Key Managerial Personnel (KMP) as on 31.03.2016 were asfollows:
|S. No ||Name of Directors ||Desig- nation ||Date of appointment ||Date of resignation |
|1 ||Mr. Ganga Ram Nilacanta Iyer ||Director ||04.07.2009 ||- |
|2 ||Mr. Cittur Sundar Rao Ramesh ||Director ||16.06.1983 ||- |
|3 ||Mr. Suresh Krishnamurthi Rao ||Director ||30.09.1996 ||- |
|4 ||Mr. Tyagarajan Ramabadran ||Director ||23.08.2006 ||- |
|5 ||Mrs. Sujatha Jayarajan ||Director ||30.03.2015 ||- |
|S. No ||Name of KMP ||Designation ||Date of appointment ||Date of resignation |
|1 ||Mr. Nitin S Cowlagi ||CFO ||11.04.2014 ||- |
|2 ||Mr. V.M. Srinivasan ||CEO ||30.03.2015 ||- |
|3 ||Mr. G. Somasundaram ||CS ||13.05.2015 ||- |
Director Mr. Suresh Krishnamurthi Rao retires by rotation and being eligible offershimself for re-appointment. The Directors recommend Mr. Suresh Krishnamurthi Rao forre-appointment.
Subsidiaries Joint Ventures or Associate Companies:
Your Company had no Subsidiaries Joint Ventures or Associates during the year 2015-16.
During the year under review the Company did not raise funds by way of fixed depositsfrom the public.
Your Directors recommend payment of Dividend of Rs. 1.25 per share (25%) for the yearended 31st March 2016 absorbing a sum of Rs. 11464621/- subject to theapproval of the Members at the ensuing Annual General Meeting.
Code of Conduct for prevention of Insider Trading:
The Company has a policy viz. "Code of Conduct for prevention of InsiderTrading" and the same has been posted in its website www.chemfabalkalis.com.
Development and Implementation of a Risk Management Policy:
Before Tax (PBT) of Rs.1337/-
The main objective of Risk Management is risk reduction and mitigation includingidentification of the risks faced by the business to optimize the risk managementstrategies. The Company has put in place a well-defined Risk Management framework.
The Company has constituted a Risk Management Committee on its own though constitutionof Risk Management Committee is mandatory only for the top 100 listed Companies as per theListing Regulations. The Risk Management Committee assists the Board in drawing upimplementing monitoring and reviewing the Risk Management Plan. The Committee lays downthe Risk Assessment . and Minimization Procedures and it reviews the Proceduresperiodically to ensure that the Executive Management controls the risks through properlydefined framework.
The composition of the Risk Management Committee as on 31st March 2016 wasas under:
|S. No. ||Name of the Member ||Category |
|1 ||Mr. T. Ramabadran ||Chairman Non executive Independent Director |
|2 ||Mr. C.S. Ramesh ||Member Non executive Non Independent Director |
|3 ||Mr. N. Ganga Ram ||Member Non executive Independent Director |
|4 ||Mrs Sujatha Jayarajan ||Member Non executive Independent Director |
|5 ||Mr. V.R. Raguraman ||Member Executive |
|6 ||Mr. N .Kalyanasundaram ||Member Executive |
|7 ||Mr. V M Srinivasan ||Member Executive |
The Company has obtained certification for ISO 14001 and OHSAS 18001 systems to takecare of critical operational areas. It also utilizes the services of professional bodieslike Central Leather Research Institute (CLRI) / The Energy and Resources Institute (TERI)/ National Environmental Engineering Research Institute (NEERI) as also Consultants tocontinuously analyze and upgrade its operations. This year the Company has alsoimplemented Process Safety Management (PSM) to further improve our safety parameters.
Details of significant and material orders passed by the regulators/ courts/ tribunalsimpacting the going concern status and companys operations in future:
During the year there were no instances of significant and material orders passed bythe regulators courts or tribunals on the Company.
Internal Financial Control:
Your Company has well defined and adequate internal controls and procedurescommensurate with its size and nature of its operations. This is further strengthened bythe Internal Audit done concurrently. During the year the Company got its internalcontrols over financial reporting and risk management process evaluated by independentConsultants.
Besides the Company has an Audit Committee comprising Independent and Non-ExecutiveDirectors which monitors systems control financial management and operations of theCompany.
The Audit Committee at its meeting held on 18.05.2016 has evaluated the internalfinancial accordingly and found them adequate.
Extract of the Annual Return:
An extract of the Annual Return as prescribed under sub-section (3) of Section 92 ofthe Companies Act 2013 ("Act") is given in Annexure 1 formingpart of this Report.
Number of Board Meetings held during the year along with the dates of the meetings:
During the Financial Year 2015-2016 the Board met five times as under:
|S. No. ||Dates of meeting of the Board ||Quarter ||No of directors on the date of meeting ||Total no of directors attended ||Remarks |
|1. ||27/04/2015 ||First ||5 ||4 || |
|2. ||30/07/2015 ||Second ||5 ||5 || |
|3. ||29/10/2015 ||Third ||5 ||4 || |
|4. ||29/01/2016 ||Fourth ||5 ||5 || |
|5. ||24/03/2016 ||Fourth ||5 ||4 || |
The meetings of the Board were held periodically with not more than one hundred twentydays intervening between two consecutive meetings of the Board as prescribed underSection 173(1) of the Companies Act 2013.
Directors Responsibility Statement:
As required under Section 134 (5) of the Companies Act 2013 the Board of Directorshereby confirm:-
(i) That in the preparation of the Annual Accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of the affairs of the Company at the end of theFinancial Year and of the profit of the Company for that Financial Year;
(iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) That the Directors had prepared the Annual Accounts on a going-concern basis;
(v) That the Directors had laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and
(vi) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Particulars of contracts or arrangements with related parties:
The contracts or arrangements entered into with related parties along withjustification for entering referred to in sub-section (1) of section 188 of The CompaniesAct 2013 in the prescribed form no. AOC 2 is as per Annexure 2.
Technology absorption Conservation of energy and Research and development:
The Company has an in-house Research Development Department where the main areas offocus are Energy Conservation Process Upgradation and Environmental Preservation. TheMinistry of Science and Technology Department of Scientific and Industrial ResearchGovernment of India has recognized the Companys in-house R & D facilitieswhich is valid upto 31st March 2017. The Company has a sophisticated QualityAssurance (QA) Laboratory recognized by DuPont USA for the analysis of Chlor- Alkalibrine. The Brine from various Chlor- Alkali Industries in India is being analyzed atCAL-QA Laboratory.
The Company continues to take all possible steps to conserve energy in every area ofits operations. Brief details on Conservation of Energy and Technology Absorption aregiven in Annexure 3.
Annual Evaluation made by the Board of its own performance and that of its Committeesand Individual Directors
The Board of Directors at its meeting held on 18.05.2016 has evaluated the performanceof the Board its Committees and the Individual Directors as per the Nomination andRemuneration Policy disclosed in Annexure 1 to Corporate Governance Report.
Declaration by Independent Directors as required under Section 149(7) of the CompaniesAct 2013
Mr. T. Ramabadran Mr. N. Ganga Ram and Mrs. Sujatha Jayarajan Independent Directorsof the Company have given their statement of declaration under Section 149(7) of theCompanies Act 2013 (the Act") that they meet the criteria of independence asprovided in Section 149 (6) of the Act and their Declarations have been taken on record.
The current Statutory Auditors of the Company M/s Deloitte Haskins & SellsChartered Accountants were first appointed as Statutory Auditors of the Company for theyear 2005-06. Under the provisions of Section 139 of the Companies Act 2013 and the Rulesframed thereunder which came into effect from 1st April 2014 they were re-appointed fortwo consecutive Financial Years 2015-16 and 2016-17 from the conclusion of the AnnualGeneral Meeting held on 30th July 2015 upto the conclusion of the AnnualGeneral Meeting to be held in the calendar year 2017 subject to ratification by theMembers at the Annual General Meeting to be held in the calendar year 2016 on the termsof remuneration to be fixed by the Board of Directors. Now the ratification by theMembers at their ensuing Annual General Meeting is required for their re-appointment fromthe conclusion of the ensuing Annual General Meeting upto the conclusion of Annual GeneralMeeting to be held in the calendar year 2017. The consent of M/s Deloitte Haskins &Sells and their confirmation that the ratification of their appointment if made will bein accordance with the prescribed conditions have been received by the Company. TheDirectors recommend the ratification of re-appointment of M/s. Deloitte Haskins &Sells as the Statutory Auditors of the Company for the year ending 31st March2017.
In conformity with the provisions of the Companies Act 2013 the Company has appointedMr. A. Madhavan Cost Accountant in practice Chennai as the Cost Auditor for the auditof cost accounts for the chemicals manufactured by the Company for the year ending 31stMarch 2017. The remuneration paid to him is being ratified at this Annual General meeting.
Secretarial Audit Report:
Mr. B. Ravi Company Secretary was appointed as Secretarial Auditor of your Company bythe Board. The Secretarial Audit Report as required under section 204 of the Act for theperiod 2015-16 is attached to the Annual Report.
Particulars of loans guarantees or investments u/s 186 of the Companies Act 2013:
Particulars of investments made by the Company during the Financial Year 2015-16 aregiven below and they are within the prescribed limits under Section 186 of the CompaniesAct 2013:
|S. No ||Loans Guarantees & Investments made in ||Amount (In Rs) ||60% of Paid up capital and Free Reserves ||Remarks |
|1. ||Teamec Chlorates Limited ||114632838 ||818687846 ||Inter Corporate Deposit given |
|2. ||Titanium Equipment and Anode Manufacturing Company Limited ||9500000 ||818687846 ||Guarantees given |
The Company has established a vigil mechanism also called the Whistle Blower Policywhich has been adopted by the Board for Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of the Companys Code ofConduct or Ethics Policy. It provides for adequate safeguards against victimization ofpersons who use such mechanism and makes provision for direct access to the Chairperson ofthe Audit Committee in appropriate or exceptional cases. Confidentiality of Whistle Blowershall be maintained to the greatest extent possible. Details of the vigil mechanism areposted in the Companys website.
The composition of the Audit Committee constituted by the Board in terms of Section 177of the Companies Act 2013 and Clause 49 (III) of the erstwhile Listing Agreement enteredin to with the Stock Exchanges and in terms of Regulation 18 of The SEBI (LODR)Regulations 2015 is as under:
|S. No ||Name of the Member ||Category |
|1 ||Mr. T. Ramabadran ||Chairman Non-Executive Independent Director |
|2 ||Mr. C.S. Ramesh ||Member Non-Executive Non-Independent Director |
|3 ||Mr. N. Ganga Ram ||Member Non-Executive Independent Director |
|4 ||Mrs. Sujatha Jayarajan ||Member Non-Executive Independent Director |
The Audit Committee acts in accordance with the terms of reference specified by theBoard of Directors in terms of Section 177(4) of the Act and in terms of Regulation 18 ofThe SEBI (LODR) Regulations 2015 . It also oversees the vigil mechanism and is obliged totake suitable action against the Directors or employees concerned when necessary.
Nomination and Remuneration Committee:
In terms of Section 178 of the Companies Act 2013 and the Rules prescribed thereunderyour Company is mandatorily required to constitute a Nomination and RemunerationCommittee.
Accordingly the Company has set up a Nomination and Remuneration Committee which hasformulated criteria for attributes and independence of determining qualifications aDirector and for ensuring that:
1) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
2) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
3) Remuneration to Directors key managerial personnel and senior management involves abalance between fixed and initiative pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.
The Nomination and Remuneration Policy of your Company is set out in Annexure 1 to theReport on Corporate Governance forming part of this Report.
Corporate Social Responsibility (CSR):
According to Section 135 of the Companies Act 2013 ("the Act") a Companyhaving Net Worth of Rs. 500 Crores or more or Turnover of Rs. 1000 Crores or more orNet Profit of Rs. 5 Crores or more during any financial year shall constitute a CorporateSocial Responsibility (CSR) Committee of the Board consisting of three or more directorsof which at least one shall be an Independent Director.
As your Companys Net Profit is more than Rs 5 Crores the Board has constitutedCorporate Social Responsibility Committee in accordance with Section 135 of the Act. TheCompany is committed to operating in a socially responsible manner in terms of protectingthe environment and conserving water resources andenergy.contribution made Details of theCSR Policy drawn up by the Company and of CSR expenditure and initiatives taken during theyear 2015-16 are given in Annexure 4 to this Report.
Remuneration details of Directors and Employees:
The details of remuneration paid to the Directors and employees of your Company are setout in Annexure 5
Employees Stock Option Scheme:
The Shareholders of the Company approved the Employees Stock Option Scheme titledas "CAESOS 2015 through Postal Ballot on 05th March 2016. CAESOS-2015 isin compliance with The SEBI (Share Based Employee Benefits) Regulations 2014. The detailsare available on our website www.chemfabalkalis.com. The purpose of the Scheme is:
i) to attract retain and motivate talented and critical employees.
ii) to encourage employees to align Individual performance with CompanysObjectives; and
iii) reward employee performance with ownership.
The details of CAESOS 2015 form part of the Notes to Accounts of the FinancialStatements in this Annual Report.
|Shares issued under Employee Stock Option Scheme (ESOS) ||: ||Nil |
|Equity Shares with differential voting rights ||: ||NA |
|Sweat Equity Shares ||: ||NA |
|Details of Voting rights not exercised ||: ||NA |
The Directors thank all the Shareholders customers dealers suppliers bankersfinancial institutions and all the otherbusiness associates for their continued support tothe Company and the confidence reposed in its Management. The Directors also thank theGovernment authorities for their understanding and co-operation. The Directors wish torecord their sincere appreciation of the by the employees of the Company significant atall levels to its profitable and successful operations
| ||For and on behalf of Board of Directors of |
|Place: Chennai ||CHEMFAB ALKALIS LTD |
|Date: 18th May 2016 ||Suresh Krishnamurthi Rao |
| ||Chairman |
| ||DIN No: 00127809 |