FOR THE FINANCIAL YEAR ENDED MARCH 31 2017
Your Directors are pleased to present the 26th Annual Report togetherwith Audited Financial Statements of your Company for the Financial Year ended March 312017.
(Rs. In Lac)
|FINANCIAL RESULTS ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Profit before Depreciation ||2100.69 ||1572.09 |
|Depreciation ||67.83 ||59.90 |
|Profit before Tax ||2032.86 ||1512.19 |
|Provision for tax ||702.91 ||524.49 |
|Profit after Tax ||1329.95 ||987.69 |
|Balance brought forward from previous year ||3725.03 ||2737.33 |
|Balance carried forward to Balance Sheet ||5054.98 ||3725.03 |
During the year under review the Company reported gross revenue from operations ofRs.9648.67 lac as against Rs.7824.12 lac during the FY 2015-16. The Companyreported Profit Before Tax of Rs.2032.86 Lac and Profit After Tax of Rs.1329.95 asagainst Rs.1512.19 Lac and Rs.987.69 Lac respectively for the previous Financial Year.
The Board is optimistic about the future of the Company in light of the currentfavorable business environment in Indian market. Hence the Company has opted to investfurther in the company. However during the last 12 months the Company has benefitted fromlow raw material price due to low oil price and this has generated significant positiveimpact on the profitability of the Company but oil price remain uncertain and we need toremain cautious.
Therefore the Board proposes to plough back the funds into the Company for businessexpansion and therefore does not recommend payment of dividend for the year.
REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
The Company does not have any subsidiaries associates or Joint ventures.
Multibase S.A. (France) holds 75% of the equity shares of Multibase India Limited. Theultimate holding Company of Multibase S.A (France) was Dow Corning Corporation. DowCorning Corporation (US Corporation) (DCC) was formedas a 50:50 joint venture of CorningInc. and Dow Holdings LLC. On June 1 2016 Dow Holdings LLC gained 100% equity stake ofDCC.
Accordingly Dow Holdings LLC a subsidiary of The Dow Chemical Company (a UScorporation) became 100% holding company of DCC. By virtue of aforesaid change in theholding of DCC Multibase India Limited became an indirect subsidiary of Dow Holdings LLC.
BOARD OF DIRECTORS
During the financial year Mr. Deepak Dhanak was reappointed as the Managing Director ofthe Company for a period of 3 years w.e.f. 2nd March 2017 Pursuant tothe provisions of Section 152 of the Companies Act 2013 Ms. Suely Mori (DIN 07046468)will retire at the ensuing Annual General Meeting of the Company and being eligibleoffers herself for reappointment.
Mr. Vipul Babu (DIN: 07737345) has been appointed as an Additional Director of theCompany w.e.f. May 22 2017 and holds office as such upto the date of the ensuing AnnualGeneral Meeting of the Company pursuant to the provisions of Section 161 of the CompaniesAct 2013 read with Article 137 of Articles of Association of Company. The Company hasreceived a notice in writing from one of its members proposing the candidature of Mr.Vipul Babu for the office of Directorship pursuant to Section 160 of the Companies Act2013.
None of Directors are disqualified from being appointed/reappointed as Directors of theCompany as per the disclosure received from them pursuant to Section 164(2) of theCompanies Act 2013.
Your Board recommends the appointment/reappointment of the above Directors at theensuing Annual General Meeting.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
During the financial year under review declarations were received from all IndependentDirectors of the Company that they satisfy the "criteria of Independence" asdefined under Regulation 16(b) of SEBI Listing Regulations and Section 149(6) of theCompanies Act 2013 read with the Schedules and Rules made thereunder.
The Members at the 23rd Annual General Meeting ("AGM") hadapproved the appointment of M/s Deloitte Haskins & Sells (Firm RegistrationNo.117364W) as Statutory Auditors of your Company for a period of 3 years to hold officefrom the conclusion of the 23rd AGM until the conclusion of the 26thAGM. The term of M/s Deloitte Haskins & Sells Statutory Auditors expires at theensuing Annual General Meetingof the Company. The Company proposes to appoint M/s BSR& Co. LLP Chartered Accountants (Firm Registration no.101248W/W-100022) as theStatutory Auditors of the Company for a period of 5 years to hold office from theconclusion of the 26th Annual General Meeting until the conclusion of 31stAnnual General meeting of the Company. In terms of Section 139 of the Companies Act 2013such appointment is subject to the ratification by the Members at every Annual GeneralMeeting. M/s BSR & Co. LLP Chartered Accountants (Firm Registrationno.101248W/W-100022) have confirmed their eligibility to act as the Auditors of yourCompany.
Further as required under Regulation 33(d) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations2015 the Auditors have confirmed that they hold avalid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.
Accordingly your Directors seek the appointment of M/s BSR & Co. LLP CharteredAccountants (Firm Registration no.101248W/W-100022) as Statutory Auditors for aconsecutive term of 5 years subject to ratification of shareholders at every AnnualGeneral Meeting.
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 your Company appointed M/s DhrumilM Shah & Co Practicing Company Secretary to conduct the Secretarial Audit of yourCompany. The Secretarial Audit Report is enclosed as Annexure I' to this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
STATUTORY AUDITORS' REPORT
The Auditors' Report for the year ended March 31 2017 does not contain anyqualification reservation or adverse remark.
Pursuant to provisions of Rule 5 (1) and Rule 3 (B) of the Companies (Cost records andAudit) Rules 2014 your Company is not required to conduct Cost Audit.
However the Company is required to maintain cost records. Accordingly your Companyappointed B. F. Modi & Associates Cost Accountants for issuing the Compliance reportfor maintenance of the Cost records.
Your Directors have in compliance with the provisions of Section 177 of the CompaniesAct 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 constituted the Audit Committee of the Board. As on date the members ofthe Audit Committee are Mr. Harish Narendra Motiwalla (Chairman) Mr. Ashok Chhabra andMs. Maithilee Mistry.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2017the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 and loss of the company for that period;
c. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d. the directors had prepared the annual accounts on a going concern basis; and
e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION & ANALYSIS
A separate report on Management Discussion & Analysis is appended to this AnnualReport and forms part of this Directors' Report.
In compliance with Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a detailed Report on CorporateGovernance is enclosed as a part of this Annual Report. A certificate from a PractisingCompany Secretary regarding compliance of the conditions of Corporate Governance asstipulated under Schedule V (E) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is appended to this Annual Report and forms part of thisDirectors' Report.
The Company recognizes risk management as an integral component of good corporategovernance and fundamental in achieving its strategic and operational objectives. Itimproves decision-making defines opportunities and mitigates material events that mayimpact shareholder value.
The Board has also adopted a Risk Management Policy. The Company has adopted anenterprise wide framework that incorporates a system of risk oversight risk managementand internal control designed to identify assess monitor and manage risks consistentwith the size of the business. Multibase applies risk management in a well-definedintegrated framework that promotes awareness of risks and understanding of the company'srisk tolerances. The Risk Management Framework enables a systematic approach to riskidentification leverage of any opportunities and provides treatment strategies to managetransfer and avoid risks.
The Company continues to engage M/s. Mukund & Rohit Chartered Accountants as itsInternal Auditor. During the year the Company continued to implement their suggestionsand recommendations to improve the control environment. Their scope of work includesreview of processes for safeguarding the assets of the Company review of operationalefficiency effectiveness of systems and processes and assessing the internal controlstrengths in all areas. Internal Auditors findings are discussed with the process ownersand suitable corrective actions taken as per the directions of Audit Committee on anongoing basis to improve efficiency in operations.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Your Board of Directors has formulated the Corporate Social Responsibility (CSR) Policypursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 based on therecommendations of the CSR Committee. The CSR Policy is available on the website of theCompany http://www.multibaseindia.com/financial-result/policies.htm As on date themembers of the CSR Committee are Mr. Harish Narendra Motiwalla (Chairman) Mr. AshokChhabra and Mr. Deepak Dhanak. The other members of the Committee are Ms. Ramolla Karnaniand Ms. Ruby Thapar.
However the Company needs to plough back funds for business expansion. The Company doesnot have sufficient reserves and hence has also not paid dividend to its shareholders.Hence the Board on the recommendation of the CSR committee in its meeting held on February7 2017 has decided that the company would not spend on CSR activities till the time theCompany has sufficient reserves to pay dividend to shareholders.
A brief outline of the CSR Policy of the Company and the Annual Report on CSRactivities as required by the Companies (Corporate Social Responsibility Policy) Rules2014 are set out in Annexure II' to this Report.
CRITERIA FOR APPOINTMENT OF DIRECTORS AND RELATED MATTERS
The criteria for appointment of directors related matters andthe remuneration policyis provided in Annexure III' to this Report.
ANNUAL EVALUATION OF THE DIRECTORS AND THE BOARD
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance and the directorsindividually. The evaluation of the Chairman non-independent directors and the Board wasconducted at the Independent Directors meeting held on 7th February2017. The criteria for evaluation are provided in Annexure III' of this report.
DETAILS WITH RESPECT TO THE PROGRAMME FOR FAMILIARISATION OF INDEPENDENT DIRECTORS:
The independent directors of the Company are informed about their roles rightsresponsibilities in the company nature of the industry in which the company operates andrelated matters. The details of the familiarization programme is uploaded on the websiteof the Company www. multibaseindia.com
RELATED PARTY TRANSACTIONS
All Related Party Transactions entered by the Company during the financial year were inthe ordinary course of business and at arm's length basis. The details of material relatedparty transactions i.e. transactions exceeding 10% of the annual consolidated turnover asper the last audited financial statements are furnished in Annexure IV' and formspart of this Report.
As per the requirement of Regulation 23 under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI Regulations") approval of theAudit Committee was received for all the Related Party Transactions. As per the Regulation23(8) of the SEBI Regulations the Company seeks approval of shareholders for passingnecessary resolution at the forthcoming Annual General meeting of the Company. Incompliance with Regulation 23 of the SEBI Listing Regulations the Company has adopted apolicy to deal with related party transactions and for determining material subsidiary.The policy is on the website of the Companyhttp://www.multibaseindia.com/financial-result/policies.htm
VIGIL MECHANISM POLICY:
In compliance with the provisions of Section 177(9) of the Companies Act 2013 readwithRule 7 of the Companies (Meetings of Board and its Powers) Rules 2014 the Board ofDirectors have established the Vigil Mechanism Policy-Whistle Blower Policy for Directorsand employees to report concerns about unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct or ethics policy.
The employees of the Company have the right to report theirconcern or grievance to theChairman of the Audit Committee. The Whistle Blower Policy is available on the website ofthe Company http://www.multibaseindia.com/financial-result/ policies.htm
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year six Board Meetings and five Audit Committee Meetings were convened and held. Thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under Regulation 18 of the SEBI (ListingObligation and Disclosures Requirements) Regulations 2015.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant/material orders passed by the regulators or courts ortribunals impacting the going concern status of your Company and its operations in future.
The properties assets and inventories of your Company are adequately insured.
The Company considers human resources as its most critical asset and is putting inplace various practices to ensure healthy work environment. Industrial relations continuedto be cordial and harmonious throughout the year.
DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014
The disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules 2014have been marked as Annexure V'.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure VI' which form parts of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are enclosed as Annexure VII' to thisreport.
Your Directors place on record their appreciation for the contributions made by theemployees at all levels enabling the Company to achieve the performance during the yearunder review.
Your Directors thank the Central Government Government of Diu & Daman UnionTerritory as also the Government agencies bankers local bodies Registrar of Companiesstock exchanges depositories shareholders customers vendors associates of the Companyand other related organizations for their continuous co-operation and support in progressof the Company and also look forward to their continued confidence and trust in theCompany.
|For and on Behalf of the Board |
|H.N. Motiwalla ||Deepak Dhanak |
|Non-executive ||Managing Director |
|Chairman ||DIN: 03157491 |
|DIN: 00029835 || |
74/5-6 Daman Industrial Estate
Kadaiya Village Nani Daman
Daman and Diu Union Territory
Tel.: +91 260 6614400
Fax: +91 260 2221578
Date: 22nd May 2017