The Members of
SADHANA NITRO CHEM LIMITED
Your Directors take pleasure in presenting the 44th Annual Report together with AuditedFinancial Statements for the Financial Year ended 31st March 2017.
1. FINANCIAL RESULTS
|PARTICULARS || |
| ||2016-17 ||2015-16 ||2016-17 ||201 5-16 |
|Revenue from operations (Net) & Other Income ||577 6 ||3524 ||5565 ||3603 |
|Profit before Finance Cost Depreciation Exceptional item and Tax (EBIDTA) ||900 ||223 ||863 ||215 |
|Finance Cost ||(482) ||(507) ||488 ||(509) |
|Depreciation ||(192) ||(200) ||192 ||(200) |
|Profit/(Loss) before exceptional item and taxation ||226 ||(484) ||183 ||(494) |
|Exceptional Items ||- ||- ||- ||- |
|Tax Expense ||- ||- ||- ||- |
|Profit/(Loss) after tax ||226 ||(484) ||183 ||(494) |
In view of the inadequate profit your Directors do not recommend any dividend for theFY2016- 17. There is no unclaimed dividend which remains to be transferred to InvestorEducation & Protection Fund (IEPF).
3. REVIEW OF OPERATIONS
The total revenue of your company for the financial year ending 31st March 2017 hasbeen Rs. 5776 lakhs (PY Rs. 3524 lakhs).
The Company through fiscal responsibility and strong negotiations has despite workingon the same working capital base increased its production and subsequently its turnover.With the company's turnover increasing over 63% from the previous year the company is backin a healthy growth phase looking to increase the turnover going forward. Moreover withthe increase in production levels the company is back in the black and shall maintain inthe coming years.
Due to the company's increased production levels the company has reached a verycompetitive position in terms of product pricing with regards to global competitors. Dueto this the company has a very strong order position. With additional working capital thecompany shall be able to maintain the same or higher growth rate going forward as it hasin the last year over the previous year.
As a result the EBIDTA from normal operation for 2016-17 was Rs. 900 lakhs (PY EBIDTAof Rs. 223 lakhs) which represents a growth of 303%. Moreover the profit for the lastquarter of 2016-17 from normal operation was of Rs. 152 lakhs (Last quarter of PY profitof Rs. 93 lakhs) There was profit of Rs. 226 Lakhs (PY loss of Rs. 484 Lakhs) from normaloperation
Your company has become increasingly competitive on the global front and along withit's portfolio of selling to North and South America Japan across Europe and Korea yourcompany is now also selling significant exports to China. The Exports of your companyduring the year were Rs. 4152 lakhs (PY Rs. 2342 Lakhs) showing a growth of 77% inexport sales.
Exports constituted about 72% of the overall revenue from operation including otherincome. Company's Exports are well diversified in terms of product range as well as theCountries of Export.
5. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
5.1 As per Rule 8(1) of Chapter IX- Companies (Accounts) Rules 2014 - Report on theperformance and financial position of its wholly owned subsidiary- Anuchem B.V.B.A ispresented here under.
|Particulars ||2016 (in Euro) ||2015 (in Euro) |
|Turnover ||1368851.36 ||778913.43 |
|Profit before Finance Cost Depreciation and Tax ||10883.69 ||(8886.63) |
|Financial Expenses ||5678.04 ||2862.35 |
|Depreciation ||0.00 ||000 |
|Profit/(Loss) before tax expense ||5205.65 ||(11748.98) |
|Tax Expense ||0.0 ||000 |
|Profit/(Loss) after tax ||5205.65 ||(11748.98) |
5.2 The Company has one wholly owned foreign subsidiary viz. Anuchem B.V.B.A. Belgium)and the Audited Financial Statements of the said subsidiary is considered for the purposeof preparing Consolidated Financial statements.
5.3 No Company has become/ceased to be a joint venture or associate during the FY2016-17.
5.4 The performance and financial position / salient features of the financialstatement of each of the subsidiaries associates and joint venture companies for the yearended 31st March 2017 is given in Form AOC-1 and is attached and marked as 'Annexure-I'and forms part of the financial statements.
6. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. However as a matter ofabundant caution pnor omnibus approval of Board of Directors and Members of the Companyhas been obtained under Section 188 of the Companies Act 2013 for the transactions whichare of a foreseen and repetitive nature. Approval of the Audit Committee has been obtainedfor all the related party transactions. There are no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of thecompany.
The particulars of contracts or arrangements with related parties referred to insubsection (1) of section 188 of the Companies Act 2013 in the Form AOC-2 is attached as'Annexure-ll'.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act') read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details relating to deposits covered under Chapter V of theAct or the details of deposits which are not in compliance with the Chapter V of the Actis not applicable.
7.2 Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given below:-
|Sr. No Particulars ||Balance as on 31st March 2017 ||Balance as on 31st March 2016 |
|A. Loans given by the Company || || |
|B. Guarantees given by the Company || || |
|C. Investments in foreign Subsidiary and other bodies corporate made by the Company ||771550 ||771550 |
8. Disclosures Under Section 134(3)(l) Of The Companies Act 2013:
8.1 Subject to the approval of the Members in the Extra Ordinary General Meeting to beheld on 22nd May 2017 the Board has approved to re-classify the Authorized Share Capitalof the Company divided into 10000000 Equity Shares of Rs. 10/- each and 11000000Preference Shares of Rs. 10/-each.
8.2 The Board based on the recommendation of Nomination & Remuneration Committeesubject to the approval of the Members in the Extra Ordinary General Meeting to be held on22nd May 2017 has approved to issue and allot Equity shares not exceeding 500000 EquityShares of the Company under the Employees Stock Option Scheme 2017.
8.3 The Board based on the recommendation of Nomination & Remuneration Committeesubject to the approval of the Members in the Extra Ordinary General Meeting to be held on22nd May 2017 has also approved to issue and allot 114319 Equity shares of the Company asSweat Equity shares to Mr. Abhishek A. Javeri Executive Director & CFO for theservices rendered by him since 1st April 2016 on the basis of the valuation report dated24th April 2017 received from M/s. HEM Securities Limited Category I Merchant Bankers.
9. ISO CERTIFICATION
Your Company has certification as per ISO 9001-2008 ISO 14001:2004 and OHSAS B.S.18001:2007 granted by the certifying body RINA for development and manufacture of ChemicalIntermediates.
The assets of your Company are adequately insured. Your Company has also taken outsuitable cover for Public Liability.
11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate Internal Control System commensurate with the size andnature of its business. The preparation designing and documentation of Policy on InternalFinancial Control are in place and implemented which will be reviewed periodically andmodified suitably to ensure controls.
The internal audit functions are carried out by a separate firm of CharteredAccountants. The periodical audit reports including significant audit observations andcorrective actions thereon are presented to the Chairman of the Audit Committee.
12. VIGIL MECHANISM /WHISTLE BLOWER AND RISK MANAGEMENT POLICY
The Board of Directors of the Company has pursuant to the provisions of Section 177(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations. The Company alsoadopted Risk Assessment Procedure. The details of the same are mentioned in the CorporateGovernance Report.
13. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
13.1 Declarations by Independent Directors:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
13.2 Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Audit Nomination & Remuneration andStakeholder relationship Committees. The manner in which the evaluation has been carriedout has been explained in the Corporate Governance Report.
13.3 Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the year Five (5) Board Meetings and Five (5) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
13.5 Appointment of Key Managerial Personnel (KMP)
Shri Abhishek A. Javeri Non-Executive Director of the Company was appointed as anExecutive Director as on 27th May 2016 on the recommendation of the Nomination &Remuneration Committee.
13.6 Retirement by rotation
In accordance with the provisions of the Act none of the Independent Directors isliable to retire by rotation.
As per the provisions of Section 152 of the Companies Act 2013 Ms. Seema A. Javeriretire by rotation at the ensuing Annual General Meeting and being eligible offer herselffor reappointment. Your Directors recommend your approval to her re-appointment.
14. AUDIT COMMITTEE
The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The details of Composition and meetings AuditCommittee held has been mentioned in the Corporate Governance Report.
15. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of Directors as constituted by the Board ofDirectors of the Company in accordance with the requirements of Section 178 of the Act.
The details of composition of the Committee and the number of meetings held by thecommittee are mentioned in the Corporate Governance Report.
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees.
Major criteria / gist are defined in the Remuneration policy framed for appointment ofand payment of remuneration to the Directors of the Company. The remuneration policy isstated in the Corporate Governance Report.
16. STAKEHOLDERS RELATIONSHIP COMMITTEE
Board of Directors of the company has constituted pursuant to Section 178 of theCompanies Act 2013 the Board of Directors of the Company has constituted theStakeholder's Relationship Committee.
The details of composition of the Committee and the number of meetings held by thecommittee are mentioned in the Corporate Governance Report
17.1 Statutory Auditors
The Company's present Statutory Auditors Messrs V. SankarAiyar& Co. CharteredAccountants (Firm registration No :109208W) who retire at the ensuing Annual GeneralMeeting of the Company are not eligible for reappointment u/s 139(2) of the Companies Act2013 hence they are not considered for the appointment. The Board appreciates and takes onrecord their valuable services.
In view of above retirement M/s Chandrashekar Iyer & Co. Chartered Accountants(Firm registration No: 114260W) are recommended to the members of the Company for theirappointment as Statutory Auditors of the Company for the term of Five Financial Yearcommencing from FY 2017-18. They nave confirmed their eligibility under Section 141 of theCompanies Act 2013 and the Rules framed thereunder for reappointment as Auditors of theCompany. As required under Regulation 33(1 )(d) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the auditors have also confirmed that they aresubject to peer review by Board of the Institute of Chartered Accountants of India andtheir certificate is awaited . Necessary resolution for appointment of the said StatutoryAuditors is included in the Notice of AGM for seeking approval of members
17.2 Cost Auditors
Cost Audit is not applicable to the Company.
17.3 Secretarial Auditors
1) M/s. Makarand M. Joshi & Co. Company Secretaries in Practice Mumbai has beenresigned as Secretarial Auditors.
2) Pursuant to the provisions of Section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. VijayS. Tiwari & Associates Company Secretaries in Practice Mumbai has been appointed toundertake the Secretarial Audit of the Company. The Secretarial Audit Report in form MR-3for the financial year 2016-17 is annexed herewith as 'Annexure IN'.
18. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSISREPORT.
Regulations 17 to 27 clauses (b) to (i) of Regulation 46(2) and Para C D and E ofSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isnot mandatory to the Company however the Company has voluntarily disclosed the Complianceto the best extent possible in corporate governance report together with Auditor report onthe compliance on the same is attached as 'Annexure- IV' and the Management Discussion andAnalysis report is attached as 'Annexure V'.
19. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23 and AS 27 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules2014 is annexed herewith as 'Annexure-VI'.
21. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended 31st March 2017 made under the provisionsof Section 92(3) of the Act is attached as 'Annexure-VII' which forms part of this Report.
22. PARTICULARS OF EMPLOYEES
There is no Employee drawing Remuneration in excess of the limits prescribed by theCompanies Act 2013. The information required pursuant to Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees ofthect read with Rule 12(9) of the Companies (Share Capital andDebenture) Rules 2014 is furnished.
Company will be provided upon request In terms of Section 136 of the Act the Reportand Accounts are being sent to the Members and others entitled thereto excluding theinformation on employees' particulars which is available for inspection by the Members atthe Registered Office of the Company during business hours on working days of the Companyup to the date of the ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary in this regard.
23. HUMAN RESOURCE/INDUSTRIAL RELATIONS
Human Resource programs and initiatives are aligned to meet the business needs. Yourcompany believes in investing in people to develop and expand their capability. TheCompany has been able to create a favourable work environment that motivates performancecustomer focus and innovation in your company's strategies are based inter alia onprocesses of continuous learning and improvement.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
25. DISCLOSURE UNDERSECTION43(a)(ii)OF THE COMPANIES ACT 2013
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
26. DISCLOSURE UNDER SECTION 54(1)(D)OF THE COMPANIES ACT 2013
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1 )(d) of the Act read with Rule8(13) of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
27. DISCLOSURE UNDER SECTION 62(1 )(B) OF THE COMPANIES ACT 2013
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1 )(b) ofthe Act read with the rule 12(9) of the companies (Share Capital and Debenture) Rules2014 is furnished.
28. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014 is furnished.
29. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in Note No.1 of the Notes to theFinancial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31 st March 2017 and of the profit ofthe Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
Your Directors would like to express their appreciation for the assistance andco-operation received from the Bankers Central and State Government Departmentscustomers vendors and other business partners. The Directors also wish to place onrecord their appreciation to all the employees of the Company for their co-operation andcontinued contribution to the Company. Last but not least the Directors place on recordtheir gratitude to the Investors Clients and Shareholders of the Company for theirsupport and trust reposed.
| ||For and On Behalf of the Board of Directors |
| ||Asit D Javeri |
|Place: Mumbai ||Chairman And Managing Director |
|Date: 26th April 2017 ||DIN: 0000268114 |