Your Directors have pleasure in presenting their 24th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2016.
1. FINANCIAL RESULT
| ||2015-2016 ||2014-2015 |
| ||(Rupees) ||(Rupees) |
|Sales etc. and other income ||279921280 ||343070013 |
|Profit before Depreciation Interest and Tax ||36650232 ||27727908 |
|Less: Depreciation ||3970152 ||4173426 |
|Interest ||877661 ||1971586 |
| ||4847813 ||6145012 |
|Profit before Tax ||31802419 ||21582896 |
|Provision for Tax || || |
|Current Tax ||(9400000) ||(6800000) |
|Deferred Tax ||(1382634) ||267307 |
|Earlier Years ||- ||493385 |
| ||(10782634) ||(6039308) |
|Provision for Diminution in value of investment ||- ||(26436) |
|Profit after Tax ||21019785 ||15517152 |
|Add: Balance Brought forward from the previous year ||31546996 ||26184944 |
|Profit available for Appropriation ||52566781 ||41702096 |
|Appropriation || || |
|Transfer to General Reserve ||2500000 ||2500000 |
|Proposed Dividend ||6000000 ||4800000 |
|Corporate Dividend Tax thereon ||1228800 ||983040 |
|Effect of revision of life of fixed assets ||- ||1872060 |
|Balance carried forward ||42837981 ||31546996 |
| ||52566781 ||41702096 |
During the year under review your Companys Revenue from operations has declinedby 20% i.e. from Rs. 34.30 crores in previous year to Rs. 27.99 crores. However theCompany has focused on the sales of Products with higher margin which has resulted in 47%i.e. from Rs. 215.82 lacs in previous year to Rs.318.02 lacs in current year.
The Board of Directors is pleased to recommend the dividend of Rs. 1/- per Equity share(on the face value of Rs. 10/- each) for the financial year ended 31st March 2016.
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 itsAudit and Nomination and Remuneration Committee. A separate meeting of the IndependentDirectors was convened which reviewed the performance of the Board the Non-IndependentDirectors and the Chairman.
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 arisefrom the external factors such as economic conditions regulatory framework competitionetc. The Executive management has embedded risk management and critical support functionsand the necessary steps are taken to reduce the impact of risks. The Independent Directorsexpressed their satisfaction that the systems of risk management are defensible.
The Company has not accepted any deposits from the public during the year under review.As on 31st March 2016 no unclaimed deposits are lying with the Company.
7. CONSOLIDATED FINANCIAL STATEMENT
The Audited Consolidated Financial Statement for the financialyear ended 31st March2016 based on the financialstatement received from associate Company as approved bytheir respective Board of Directors have been prepared in accordance with AccountingStandard (AS) - 21 on Consolidated Financial Statement read with AS-23 onAccounting for Investments in Associates notified under the Act read withthe Accounting Standards Rules as applicable is forming part of Annual Report.
8. STATUTORY AUDITORS
At the Annual General Meeting held on 21 August 2015 M/s. Manish Patel and CompanyChartered Accountants Mumbai were appointed as Statutory Auditors of the Company to holdoffice held in the year 2019-20. As required by the provisions of the Companies Act 2013their appointment should be ratified by members each year at the AGM. Accordinglyrequisite resolution forms part of the notice convening the AGM.
The Company has received letters from them to the effect that their ratification ifmade would be within the prescribed limits under Section 141(3)(g) of the Companies Act2013 and that they are not disqualified for re-appointment. Your Directors recommend theirappointment as Statutory Auditors of the Company.
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. TheAuditors Report does not contain any qualification reservation or adverseremark.
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 Lacs) |
|Foreign Exchange Earnings: ||1705.09 |
|Foreign Exchange Outgo ||588.75 |
There were no changes in Board of Directors during the financial year 2015-2016
Mr. Aditya Patel retires by rotation at this Annual General Meetinf and being eligibleoffers himself for reappointment
Declaration by Independent Director(s)
The Company has received declarations from all Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed under section(6) of section 149 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. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within 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 conflictwith the Companys interest. All related partytransactions are negotiated on an arms length basis and are intended to further theCompanys interest.
17. DETAILS OF ESTABLISHMENT OF 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 theCompanys 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 Section134(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 a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and 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 Companys factory and other establishments remainedcordial during the year. We appreciate the contribution made by the employees towardsachieving improved 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 valuedcustomers along with dedicated service of all the workers staff and the officers whosecontinuous support is a pillar of strength which have largely contributed to the efficientmanagement of the Company. Suffice it to say that your co-operation as our shareholdersis hereby acknowledged with gratitude.
| ||For and On Behalf of the Board of Director || |
| ||DAIKAFFIL CHEMICALS INDIA LIMITED || |
| ||AMIT PATEL ||ADITYA PATEL |
|Date: May 13 2016 ||Managing Director ||Jt. Managing Director |
|Place: Mumbai ||(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 / 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 STATEMET OF ASSOCIATE COMPANY
The Statement pursuant to Section 129 (3) read with rule 5 of Companies (Accounts)Rules 2014 of the Companies 2013 related to Associate Company in FORM AOC-1 is annexedherewith as "Annexure F"