Lords Chloro Alkali Ltd.
|BSE: 500284||Sector: Industrials|
|NSE: MODIALKALI||ISIN Code: INE846D01012|
|BSE LIVE 15:40 | 23 Oct||42.60||
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|Mkt Cap.(Rs cr)||107|
|Mkt Cap.(Rs cr)||107.14|
Lords Chloro Alkali Ltd. (MODIALKALI) - Director Report
Company director report
Your Directors are pleased to present the 37th Annual Report together with the AuditedFinancial Statement of the Company for the financial year ended on 31st March 2016.
1. FINANCIAL PERFORMANCE
(Rs. in Lakhs)
2. Performance and state of company affairs
Your Company has increased its production capacity to 144 TPD and plans to increase thesame substantially to 207 TPD in near future. Further your Company has also carried outmajor revamp of the ASHAI and UHDE plant for making the entire production process energyefficient.
The domestic demand for Caustic Soda in 2015-16 is around 3.7 million TPA. The industryis expected to have capacity addition of approx. 1068.8 KT in 2016-17. The growth indemand for Caustic Soda is linked to GDP growth and the Indian Economy is expected to growat a healthy rate of approx. 8% in 2016-17. Further Caustic Soda Imports spurted withgrowth rate of 24% during last 5 years.
The primary growth drivers for Caustic Soda are Alumina Textiles/ Viscose Fiber Soaps& Detergents and Pulp & Paper to be used in Electrical power transmission cableshousing cans packaging auto air conditioning etc. There is excellent growth prospects ofAlumina @ 6% generating additional 0.7-0.8 million tons Caustic demand.
4 FUTURE OUTLOOK
The Chlor Alkali sector is showing continuously positive indication after few years.Since caustic soda serves as a major raw material in the refining process of aluminagrowth in the alumina industry is expected to propel the demand for caustic soda in thecoming years thus benefiting the market for chlor alkali chemicals market in the longrun.
The Company has already started Caustic Soda production of 144 TPD and shallsubsequently targeting the total installed capacity of 334 TPD by revamping the remainingfacilities in the coming years. For this purpose the Company will meet out the fundsrequirement through internal resources viz- a-viz accruals / profits and balance sourcingfrom bank loan.
As a first step your Company is setting up brand new plant having capacity of 70TPD inits endeavor to increase the production to the optimum level.
Further in the Union Budget 2016-17 basic custom duties (BCD) on electrolysersmembranes and their parts required by caustic soda/ potash units using membrane celltechnology has been reduced from 2.5% to Nil. It will help the industry to reduce the costof capacity expansion.
5. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of the Section 152 of Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of your Company Shri Yuvraj Ahuja Non-Executive Director is liable toretire by rotation at the ensuing Annual General Meeting (AGM) and being eligible hasoffered himself for reappointment. Appropriate resolution for his re-appointment is beingplaced for your approval at the ensuing AGM. The brief resume of Director and otherrelated information has been detailed in the notice convening the 37th AGM of yourCompany. Your Directors recommend his re-appointment as Non-Executive Director of theCompany.
The Independent Directors of your Company hold office upto 29th September 2017 and arenot liable to retire by rotation.
During the year under review members approved the re-appointment of Shri Alok Dhir asNon-Executive Director in the AGM held on 30th September 2015. However Shri Alok DhirDirector of the Company resigned w.e.f. 9th November 2015 & on the same date ShriMadhav Dhir was appointed as an Additional Director in the capacity of Non-ExecutiveDirector on the Board of the Company and was further appointed/ re-designated as WholeTime Director of the Company w.e.f. 1st June 2016 for a period of three years.
The Company has received the declaration from all Independent Directors of the Companyconfirming that they meet the criteria of Independence as prescribed under the CompaniesAct 2013 and SEBI (Listing Obligations and Dsiclosure Requirements) Regulations 2015.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees of Board and other individual Directors which includes criteria forperformance evaluation of the non-executive directors and executive directors.
The Company has considered the Policy for performance evaluation of IndependentDirectors Board of Directors Committees and other individual Directors and accordinglythe process of evaluation was followed by the Board for its own performance and that ofits Committees and individual Directors.
The Policy on performance evaluation of Independent Directors Board of DirectorsCommittees and other individual Directors covered the role rights responsibilities ofIndependent Director and related matters are put up on the website of the Company at thelink www.lordschloro.com.
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link www.lordschloro.com.
The following policies of the Company are attached herewith marked as Annexure A and B.
a) Policy for selection of Directors and determining Directors independence:
b) Remuneration Policy for Directors Key Managerial Personnel and other employees.
6. STATUTORY AUDITORS
At the 36th AGM of your Company the members had approved the appointment of M/s GuptaVigg & Co. Chartered Accountants as Statutory Auditors of the Company to hold officetill the conclusion of 37th AGM.
The Board of Directors of your Company at its meeting held on 27th May 2016 have onthe recommendation of Audit Committee and subject to the approval of members approved theappointment of M/s Gupta Vigg & Co. Chartered Accountants as Statutory Auditors forfive consecutive years to hold the office from conclusion of this Annual General Meetingtill the conclusion of Annual General Meeting to be held in the year 2021 subject toratification by members at every Annual General Meeting.
7. COST AUDITORS
The provisions of section 148 of the Companies Act 2013 read with Rule 4 & 5 ofthe Companies (Cost Audit and Record) Rules 2014 for maintenance of Cost Records CostAudit was not applicable to the Company for the financial year 2015-16.
The Board of Directors of your Company at its meeting held on 27th May 2016 has onthe recommendation of Audit Committee had approved the appointment of M/s Goyal Goyal& Associates Cost Accountant as Cost Auditors of your Company to conduct the audit ofcost records for the Financial Year 2016-17. The remuneration proposed to be paid to theCost Auditor subject to your ratification at the 37th AGM will be Rs. 25000 (RupeesTwenty Five Thousand) for the year Financial Year 2016-17.
8. SECRETARIAL AUDITOR
Pursuant to the provisions of section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors of the Company had appointed Shri Sundeep KumarParashar proprietor of M/s SKP & Co. Practising Company Secretary to conductSecretarial Audit of the Company for the financial year 2015-16. The Secretarial AuditReport for the financial year ended 31st March 2016 is annexed herewith marked asAnnexure C to this Report.
The Board of Directors of your Company at its meeting held on 27th May 2016 hasapproved the appointment of Shri Sundeep Kumar Parashar proprietor of M/s SKP & Co.Practising Company Secretary to conduct Secretarial Audit of the Company for thefinancial year 2016-17.
9. AUDITORS OBSERVATIONS
In reference to the Comments mentioned in the Statutory Auditors Report &Secretarial Audit Report for the year 2015-16 we wish to submit the following:
(i) All the liabilities of the Company had been restructured in 2006 as per theprovisions of the rehabilitation scheme. While the Company has received confirmationletters from various parties however we are still waiting confirmation from some of theparties therefore some balances could not be ascertained.
(ii) Company has not received all the records from old management. We are in theprocess of reconciliation the records. We shall deposit the whole amount in the InvestorEducation and Protection Fund (IEPF) as soon as records are reconciled.
During the year under review no fraud was reported by the Statutory Auditors of theCompany under section 143(12) of the Companies Act 2013.
10. SAFETY ENVIRONMENT PROTECTION & POLLUTION CONTROL
Your Company is continuously making endeavors to have safe operations by training andconducting various safety mock drills/ safety audits.
Your Company has recently commissioned a water recycling/ purifier plant which hashelped to bring down the dosing of chemicals and has also improved the process. We arealso implementing a water harvesting system to stop wastage of rain water. This is in linewith the Company's policy to safeguard the environment in and outside the factory.
11. DIVIDEND AND TRANSFER TO RESERVE
During the year the Company has earned a profit of Rs. 749.41 Lakhs however keepingin view the future needs expansion plans and other fund requirements your Board ofDirectors did not recommend any dividend for the financial year 2015-16 and Rs. 749.41Lakhs has been transferred to General Reserve.
12. PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES
The Industrial Relations scenario continued to be cordial. The Company regards itsemployees as a great asset and accords high priority to training and development ofemployees. Number of employees as on 31st March 2016 was 332.
Pursuant to the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee is getting salary more than Rupees Sixty Lakhs per annum.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the Reports andAccounts are being sent to all members of the Company excluding the information requiredin accordance with the Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Anymember interested in obtaining such information may write to the Chief Financial Officerat the registered office or the corporate office of the Company.
Disclosures pertaining to remuneration and other details of Directors and KMPs areprovided in the Extract of Annual Return annexed herewith marked as Annexure E to thisReport.
13. DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the financial year ended on 31stMarch 2016 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern' basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f ) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating.
14. ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGOING.
In compliance with provisions of clause (m) of sub-section (3) of Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 the statements givingthe required information relating to energy conservation technology absorption foreignexchange earnings and outgoings is annexed herewith marked as Annexure D to this Report.
15. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith marked as Annexure E tothis Report.
16. PUBLIC DEPOSITS
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
17. CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance and aCertificate from the Practicing Company Secretary confirming the compliance withconditions of corporate governance are annexed herewith to this Report.
Further as per the above mentioned regulation and Schedule the Report on ManagementDiscussion & Analysis is also annexed herewith to this Report.
A certificate from Managing Director and Chief Financial Officer of the Company interms of SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 inter alia confirming the correctness of financial statements andcash flow statements adequacy of internal control measures and reporting of matters wasplaced before the audit committee and the Board.
18. RiSK MANAGEMENT
The Company has constituted a Risk Management Committee which ensures that the Companyhas an appropriate and effective Enterprise Risk Management system with appropriatepolicies and processes which carries out risk assessment and ensures that risk mitigationplans are in place by validating the same at regular intervals.
Brief details about the policy are provided in the Corporate Governance Report.
19. MEETINGS OF THE BOARD
Seven meetings of the Board of Directors were held during the year. For furtherdetails please refer section of Report on Corporate Governance of this Annual Report.
20. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED
During the year there was no loan given investment made gurantees given orsecurities provided by the Company.
21. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company has not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance withapplicable laws and as per the policy of the Company on Materiality of Related PartyTransactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.lordschloro.com.
Your Directors draw attention of the members to Note 30 to the financial statementwhich sets out related party disclosures.
22. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company established a vigil mechanism for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct or Ethics Policy.
This mechanism provides adequate safeguards against victimization of director(s) /employee(s) and also provide for direct access to the Chairman of the Audit Committee inexceptional cases.
The details of establishment of such mechanism disclosed at the website of the Companywww.lordschloro.com.
23. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference tothe financial statements some of which are outlined below.
Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and of the applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and other relevantprovisions of the Companies Act 1956 to the extent applicable. These are in accordancewith generally accepted accounting principles in India.
The Management periodically reviews the financial performance of your Company againstthe approved plans across various parameters and takes necessary action wherevernecessary.
Your Directors state that during the year under review there was no case reportedpursuant to the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.
Your Directors wish to convey their deep appreciation to all the Company'semployees/workers for their dedication and hard work as well as their collectivecontribution to the Company's performance.
The Directors would also like to thanks to the Members Customers Dealers SuppliersBankers Financial Institutions Government Authorities and all other business associatesfor continued support given by them to the Company and their confidence in its management.
For and on behalf of the Board of directors Lords Chloro Alkali Limited