Your Directors have immense pleasure in presenting their 25th Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended March31 2017.
1. FINANCIAL RESULT
(Rs in lakhs)
| ||2016-2017 ||2015-2016 |
|Sales etc. and other income ||2697.81 ||2799.21 |
|Profit before Depreciation Interest and Tax ||507.99 ||366.50 |
|Less: Depreciation ||46.31 ||39.70 |
|Interest ||1.02 ||8.78 |
| ||47.33 ||48.48 |
|Profit before Tax ||460.66 ||318.02 |
|Provision for Tax || || |
|Current Tax ||(147.00) ||(94.00) |
|Deferred Tax ||(5.10) ||(13.82) |
|Earlier Years ||0.72 ||- |
| ||(151.38) ||(107.82) |
|Provision for Diminution in value of investment || || |
|Profit after Tax ||309.28 ||210.20 |
|Add: Balance Brought forward from the previous year ||428.38 ||315.47 |
|Profit available for Appropriation ||737.66 ||525.67 |
|Appropriation || || |
|Transfer to General Reserve ||30.00 ||25.00 |
|Proposed Dividend ||-- ||60.00 |
|Corporate Dividend Tax thereon ||-- ||12.29 |
|Balance carried forward ||707.66 ||428.38 |
| ||737.66 ||525.67 |
During the year under review your Company's Revenue from operations has declined by 4% i.e. from Rs 27.99 crores in previous year to Rs 26.98 crores. However the Company hasfocused on the sales of Products with higher margin which has resulted in 45% i.e. fromRs 318.02 lacs in previous year to Rs 460.66 lacs in current year.
The Board of Directors is pleased to recommend the final Rs 1.70/- per Equity shares ofRs 10/- each (one-time special dividend of dividend of Rs 0.50/- per equity share for theSilver Jubilee year and Rs 1.20/- for the financial year 2016-2017).
4. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and regulation 17(10) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015 the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittee. A separate meeting of the Independent Directors was convened on 10th February2017 which reviewed the performance of the Board the Non-Independent Directors and theChairman.
5. RISK MANAGEMENT POLICY
The Board has been vested with specific responsibilities in assessing of riskmanagement policy process and system. The
Board has evaluated the risks which may arise from the external factors such aseconomic conditions regulatory framework competition etc. The Executive management hasembedded risk management and critical support functions and the necessary steps are takento reduce the impact of risks. The Independent Directors expressed their satisfaction thatthe systems of risk management are defensible.
The Risk management policy is available on the website of the Company.
The Company has not accepted any deposits from the public during the year under review.As on 31st March 2017 no unclaimed deposits are lying with the Company.
7. CONSOLIDATED FINANCIAL STATEMENT
The Audited Consolidated Financial Statement for the financial year ended March 312017 based on received from associate company as approved by their respective Board ofDirectors have been prepared in accordance with Accounting Standard (AS) - 21 onConsolidated Financial Statement' read with AS-23 on Accounting forInvestments in
Associates' notified under the Act read with the Accounting Standards Rules asapplicable is forming
8. STATUTORY AUDITORS
At the Annual General Meeting held on August 21 2015 M/s. Manish Patel and CompanyChartered Accountants Mumbai were appointed as Statutory Auditors office theCompany to hold till the conclusion of the Annual General Meeting to be held in the year2019-20. As required by the provisions of the Companies Act 2013 their appointmentshould be ratified members each year at the AGM. Accordingly requisite resolution formspart of the notice convening the AGM.
The Company has received Eligibility certificate letter dated 22nd April 2017 from themto the effect that their ratification if made would be within the prescribed limitsunder Section 141(3)(g) of the Companies Act 2013 and that they are not disqualified forre-appointment.Your Directors recommend their appointment as Statutory Auditors of theCompany.
9. AUDITORS REMARKS AND OBSERVATION
The observations of the Auditors and the relevant notes on the accounts areself-explanatory and therefore do not call for any further comments. The Auditors'' Reportdoes not contain any qualification reservation or adverse remark.
Further during the year in the course of the performance of their duties as auditorno fraud were reported by them which they have reason to believe that an offence involvingfraud has been committed against the Company by officers or employees of the Company.
10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
As required under Section 134 (3) (m) of the Companies Act 2013 read together with theRule 8 of the Companies (Accounts) Rules 2014 the relevant information is given below.
Conservation of Energy and Technology Absorption
Your Company has installed a wet scrubber on boiler which will reduce the consumptionof coal and more importantly protect the environment. This will minimize the carbonparticles being released in the atmosphere. A tertiary treatment plant on line to reducethe water pollution load has also been installed.
The electrical instruments have been connected on line which has reduced the powerconsumption. Our Japanese collaborators have guided us on regular basis and there byconserve energy and reduce our waste water load.
Foreign Exchange Earnings and Outgo:
| ||( Rs in Lakhs) |
|Foreign Exchange Earnings: ||1880.34 |
|Foreign Exchange Outgo ||579.45 |
There were no changes in Board of Directors during the financial year 2016-2017
Mrs. Maithili Siswawala retires by rotation at this Annual General Meeting and beingeligible offers herself for reappointment
Declaration by Independent Director(s)
The Company has received declarations from all Independent Directors of the Companyconfirming that they criteria of independence as prescribed under section (6) of section149 of the Companies' Act 2013.
12. PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS U/S 186:
The Company has not given any loans covered under the provisions of section 186 of theCompanies Act 2013. The details of the investments made by Company are given in the notesto the financial statements.
13. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes / events occurring after balance sheet date tillthe date of the report to be stated.
14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE
During the financial year under review the Board met 4 times and Audit Committee met 4times in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
15. SUBSIDIARY / ASSOCIATE COMPANY
The Company has an Associate company namely M/s Erca Speciality Chemicals PrivateLimited.
16. RELATED PARTY TRANSACTIONS:
During the period under review the Company had not entered into any materialtransaction with any of its related parties. None of the transactions with any of therelated parties were in conflict with the Company's interest. All related partytransactions are negotiated on an arm's length basis and are intended to further theCompany's interest.
17. DETAILS OF ESTABLISHMENTOF VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES
The Company has established a Vigil Mechanism that enables the Directors and Employeesto report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguardsagainst victimization of persons who use the Vigil Mechanism; and (b) direct access to theChairperson of the Audit Committee of the Board of Directors of the Company in appropriateor exceptional cases. Details of the Vigil Mechanism policy are made available on theCompany's website www.daikaffil.com
18. NOMINATION AND REMUNERATION COMMITTEE
During the financial year under review 1 (one) meeting of the Committee was held. TheBoard has on the recommendation of the Nomination& Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management and theirremuneration.
19. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors make the Directors' Responsibility Statement in terms of Section 134(3)(c) of the Companies Act 2013 and confirm that
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give affairsof the Company at the end of true and view the state the financial year and of theprofit or loss of the Company for the year under review.
iii) The Directors have taken proper and sufficient care for the with the provisions ofthis Act for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities.
iv) The Directors have prepared the annual accounts on a going concern basis.
v) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
20. PARTICULARS OF EMPLOYEES
The Company does not have any employee whose particulars are required to be givenpursuant to Rule 5(2) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company.
Industrial relations at the Company's factory and other establishments remained cordialduring the year. We appreciate the contribution made by the employees towards achievingimproved productivity and flexibility in operation.
The Directors wish to place on record their appreciation for the continued support andco-operation by Government Authorities
Financial Institutions Banks and our valued customers along with dedicated service ofall the workers staff and the officers whose continuous support is a pillar of strengthwhich have largely contributed to the efficient management of the Company. Suffice it tosay that your co-operation as our shareholders is hereby acknowledged with gratitude.
For and on behalf of the Board of Director
DAIKAFFIL CHEMICALS INDIA LIMITED
AMIT PATEL ADITYA PATEL
Managing Director Jt. Managing Director (DIN: 00005232) (DIN: 00005276)
ANNEXURES TO THE DIRECTORS' REPORT
1) EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure A".
2) SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rule 9 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Dinesh Kumar Deora (Membership No. FCS 5683 COP No. 4119) to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Audit Report in FormMR 3 is annexed herewith as "Annexure B".
3) CORPORATE GOVERNANCE
The Company has made a Non-Mandatory disclosures in compliance with corporategovernance requirements as specified in regulation 17 to 27 and clauses (b) to (i) ofsub-regulation (2) of regulation 46 and under regulation 34(3) of the SEBI(LODR)Regulations 2015 which is forming part of annual report. The Corporate Governance are setout as separate "Annexure C" together with the Certificate from theAuditors of the Company regarding compliance with the requirements of Corporate Governanceas stipulated in Part E of Schedule V of aforesaid regulation.
4) MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Management Discussion & Analysis Report as per Part B Schedule V underregulation 34(3) of the SEBI (LODR) Regulations 2015 which form an integral part of thisReport is annexed herewith as "Annexure D".
5) DISCLOSURE ON REMUNERATION OF DIRECTORS/KMP/EMPLOYEES
The information required under Section 197 read with Rule 5(1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is annexed herewith as "Annexure E".
6) STATEMENT CONTAINING SALIENT FEATURES OF FINANCIAL STATEMENT OF ASSOCIATECOMPANY
The Statement pursuant to Section 129 (3) read with rule 5 of Companies (Accounts)Rules 2014 of the Companies Act 2013 related to Associate Company in FORM AOC-1 isannexed herewith as "Annexure F".