The Directors have pleasure to present their 30th Annual Report and theAudited Annual Accounts for the year ended 31st March 2017.
The Company's financial performance for the year ended 31st March 2017 issummarized below:
[Rs. in Lacs]
|Particulars ||2016-17 ||2015-16 |
|Total Revenue ||37248.43 ||34855.26 |
|Profit before Depreciation Interest and Tax (PBDITA) ||5101.65 ||4564.60 |
|Interest for the year ||2246.42 ||2417.88 |
|Depreciation for the year ||900.68 ||931.48 |
|Profit/(Loss) before tax and Exceptional items ||1954.55 ||1215.24 |
|Exceptional items ||- ||- |
|Profit/(loss) for the year ||1954.55 ||1215.24 |
|Tax liability :- || || |
|Current Year's Tax ||401.55 ||270.00 |
|MAT Credit ||-401.55 ||-270.00 |
|Deferred Tax Liability/(Asset) ||684.20 ||91.78 |
|Prior period Tax Adjustment ||- ||189.15 |
|Net Profit/(Loss) for the year ||1270.35 ||934.31 |
State of Company's Affairs
During the year under consideration following important developments have taken place-It may be re-called as stated inter-alia in the last year's report that strong requestsand representations were made to the bank to re-classify account of the Company as theStandard Asset as soon as possible although IDBI Bank continued to classify the account asStandard Asset. Your Directors are pleased to inform you that the status of the Companyhas been restored as the Standard Assets w.e.f. 06.10.2016 which was identified earlieras NPA by the Lead Bankers of the Company State Bank of India due to its technicalreasons only and not the non performing by the Company.
Your Company had entered into an arrangement of sales marketing anddistribution of the products with Ascom Carbonate & Chemicals Manufacturing EGYPT[ASCOM] [Supplier] since 2009 viz. Ground Calcium Carbonate. The Company had outstandingdues amounting to USD 836166 payable to ASCOM since 2014 due to unresolved issues likeASCOM's shortfall in material dispatch default in payment of cost & freight toshipper detention charges default towards issuance of telex/bill of lading etc andASCOM was conveyed to have a joint meeting to sort out the issue of outstanding and carryout reconciliation for the same but there was no positive and concrete response fromASCOM ever. In view of this fact the Company had filed a Civil Suit at the Hon'bleDistrict Court at Vadodara in December 2015 for the recourse of arriving at a commonoutstanding amount by way of reconciliation jointly. On the other hands the Companyreceived the Notice from the Hon'ble High Court Gujarat intimating that ASCOM had filed awinding-up petition against the Company. Your company has filed its reply with Hon'bleHigh Court. The Company has alternative arrangements for procurement of materialtherefore do not have any impact on the business of the Company.
The Company received an Order dated 06th August 2016 fromGeology and Mining Department Bhuj Kutch for excavating the mine beyond the approvedlease area situated at Survey No. 483 Mamuara Bhuj Kutch. The aforesaid Department haslevied penalty of
Rs. 4.19 Crs and your Company filed an appeal/legal course against the order of theGeology and Mining Department as the company has carried out mining as per the approvedmine plan. Subsequently the appellate authority vide its order dated 17thSeptember 2016 has given Interim Stay against the aforesaid order issued by GeologistBhuj and further ordered to resume mining activity.
Net Worth of the Company is increased to Rs. 9672.10 Lacs as on 31st March2017 as compared to Rs. 8401.75 Lacs as on 31st March 2016.
Reclassification of Promoters/Promoters' Group
During the Year Mr. Rameshbhai B. Patel Promoter and Ms. Rupal Ashish Pathak Ms.Alpa Chetan Turakhia and Ms. Shilpa Chetan Mehta belonging to the Promoters' Group of thecompany were re-classified in Public Category. BSE and NSE vide their letters dated 07thMarch 2017 and 15th March 2017 respectively approved such Reclassification ofPromoters/Promoters' Group to Public Category.
To conserve the resources your Directors have not recommended dividend during the yearunder consideration.
Investors Education and Protection Fund
During the year no fund has been transferred to the Investors Education &Protection Fund.
Material Changes and commitments affecting financial position between the end of thefinancial year and the date of report
There have been no material changes and commitments affecting financial positionbetween the end of the Fiscal Year and the date of the report
Management Discussions and Analysis
Analysis of sector-wise performance of the Company for the fiscal year 2016-17 andfuture outlook are given hereunder. The outlook is based on the assessment of the currentbusiness scenario and Government Policies. Any deviation to the developments futureand other may affect the variances in the outlook.
Industry Progress & Outlook
This year particularly has seen a major setback in terms of changes in miningregulations and restrictions imposed especially by Rajasthan government disallowing miningactivities to mines operating without Environmental Clearance (EC) Licenses leading toclosure of many mines and causing price escalations and demand supply gap. Provisionalclearances were offered on conditional basis for certain minerals and clarity was veryambiguous about the actions taken and the expectations. About 500 mines are covered underthe Act of 22/3 and are awaiting the scrapping of this Act by Mining Department which isvery uncertain at this point of time. Simultaneously royalties have also escalated inGujarat Rajasthan and Andhra Pradesh creating unfortunate conditions in raw materialprocurement. But overall the impact has been quite positive to restrict illegal mining bythe government and creating a safe and sustainable environment for people working at themines. A few minor changes in the mining scenario for leasing and auction of mines havebeen brought into notice by the Central government. Apart from that not many significantchanges have been noticed or realized in the Industrial Minerals industry that the Companyoperates in. This industry still predominantly functions in an unorganized way wherein alimited players are trying to get their act through and shift their focus in an organizedway segmenting them in the category in which 20 Microns operates since more than fewdecades. India has always been a self sufficient nation with well endowed natural mineralresources in the league of larger nations of USA Europe and China. This industry fallingunder the larger Minerals & Mining sector is a significant contributor to India's GDPgrowth which is currently on the decline.
The Industrial Minerals sector provides the basic raw materials to the manufacturingsector and has always been considered as an important segment for the Indian economy. Themining sector has been reeling for few years now under a lethal mix of high borrowingcosts on one hand and environmental and regulatory policy paralysis on the part of thegovernment on the other hand. But with the new government in place who has had a briefhistory of bringing reforms in the mining industry the hope has revived in the industryto bring in some major growth oriented mining and mineral development policy reforms inthe next few years which should boost this industry to the next level.
Much greater emphasis is required on development of mineral deposits by way ofprospecting and zero-waste mining. The Indian government does not formally define miningas a core industrial activity. Rather it is viewed as more often as an ancillary rawmaterial industry. The mining legislation always gave accent to regulation whichemphasized management of the mines rather than on exploration and development.
The future should therefore usher in an era of mineral development with socio-economicdevelopment as the focus. A significant amount of mineral potential still lying untappedcould contribute enormously to the country's GDP if the challenges are overshadowed by ahigh flow of FDI in this sector.
The mining industry in India has however started to shape the future direction of thisengagement towards an inclusive agenda for improving livelihoods of the local populacebringing in much needed investment job wealth creation and government revenues.
The future therefore now lies on deployment of latest technologies as well asinterpretation of geological data to its best advantage for opening up of new mines. Asmineral exploration is a key to attracting investment in the mining sector separatelegislation and procedure for grant of prospecting/exploration licenses is required.
Product wise performance - CNC Coating & Construction Division
The product range for CNC division includes a varied application base with the majorityshare lying with Paint Industry inclusive of Architectural Industrial and Powder Coatingsand a minor share with the Allied base of industries catering to Agrochemicals Adhesives& Sealants Construction Cosmetics Printing Inks Oil Well Drilling FoundryCeramics and many others.
The year 2016-17 was quite challenging in itself due to the overall slowdown in theindustrial segment as well as in the retail market especially in the second half of theyear due to historical decision of de-monitisation and despite in such a sluggishscenario CNC division was able to manage the growth of above 9% over the previousfinancial year. It is also remarkable to note that our growth pace has been consistentlymaintained in Major Paint Companies by providing them value added as well as importsubstitute products and even in the commodities segment we have introduced variouspremium products which have given them substantial cost benefits in their productformulation. The paint industry can easily grow at 15% annually over the next few yearsfrom its current size as the per capita paint consumption in India which is a little over4 kgs is still very low as compared to the developed western nations. Therefore as thecountry develops and modernizes the per capita paint consumption is bound to increase.Considering this scenario Major paint companies have started their new lines ofproduction during the year and also have plan to establish their newer production Units tocome up with larger capacities across the country to cater the demand being generated inTier-II & III cities especially in the segment of Decorative Paints includingexterior wall paints interior wall paints wood finishes and enamel and ancillaryproducts such as primers putties etc. Decorative paints account for over 70% of theoverall paint market in India which consumes majority of the Industrial Minerals and beinga premium supplier and having a close association with the market leader of the segmentwe expect good volumes of business in the near future. In the recent past we haveintroduced speciality mineral product which will support us to get stable growth in thefuture too. The other side TiO2 prices are increasing and to control the overall costingof the finished products we have an advantage of getting good volume of our high endmineral additive which replace the costly opacifiers and expecting to get double digitgrowth in the segment.
Reports of various institutes & conducted studies show that the corporats arehopeful for a better turnaround in the Economy and improvement in Investment Climate inthe light of expected reforms in Government's Economic policies boost up theinfrastructure and housing sector as a whole which should eventually support the growth inthe Paint industries along with medium & small scale paint Manufacturers by adoptingthe new process technologies to produce high-end product and expanding their network inall segments by accepting the new products faster which helps us to increase the volume ofour specialty products.
However as with other fields some challenges also exists in this promising sectorthat can affect the growth trajectory of the paint industry if not handled accordingly.For instance the Paints industry is highly raw material-intensive and any fluctuation inthe availability of raw material leads to substantial price fluctuation in paintproduction costs. The Pressure is on the Raw material suppliers who are undergoingtremendous pressure to maintain the cost coupled with new entrants in the market whichhas resulted in the erosion of Bottom line and the challenge is going to be similar in thecoming financial year.
The Paints & Coatings industry expects outperforming 2017-18 and we anticipateoutgrowing our customers demand and by concentrating more towards the newer applicationwith the best possibilities of a great mix of commodity and specialty Products.
VAD - Value Added Division
This was year full of challenges which were both bitter and fruitful some wereexhausting while some were rewarding. especially in the second half of the year due tohistorical decision of demonetisation by the Indian Government and despite in such asluggish scenario the encouraging part of the story was that under such adversesituation our VALUE ADDED DIVSION did well and maintained a strong EBIDTA orbottom line growth compared to previous year & in such critical market situationsuccessfully achieved the target which itself is a commendable achievement and registeredgrowth in all segment i.e. PVC Pipe PVC cable PP/MB and Paper etc.
The paper industry in India is more than a century old. The Indian Paper Industryaccounts for about 1.6% of the world's production of paper and paperboard. The domesticproduction of paper and paperboard is estimated consumption is pegged at 9.3 kg. Till nowthe growth in paper industry has mirrored the growth in GDP. The Paper industry is apriority sector for foreign collaboration and 100% FDI is approved on automatic route byReserve Bank of India. Currently there are about 515 paper companies engaged in themanufacture of paper and paperboards and newsprint in India. Our country is almostself-sufficient in the manufacture of most varieties of paper and paperboards. But Importsof paper paperboard and newsprint into India have been steadily increasing. In the lastfive years imports have risen at a CAGR of 11.4% in value terms. The Pulp & PaperIndustry has made substantial investments in the last 5 years and it is becoming verydifficult to meet its financial obligation in view of significant drop in margins. if nourgent steps are taken it is feared that many mills may face closure there is a veryserious threat of existing investments in capacities turning economically unviable..Consequently these export-led economies in Asia continue to target the fragile Indianmarket. In case of Pulp & Paper Industry coal is being used for power generation andthe increase has had a significant impact on the cost structure of the industry which theindustry is finding it difficult to absorb.
Indian paper industry to witness a CAGR of 7% over the next five years. The growth willbe largely driven by printing & writing and packaging & paper board segment. TheIndian paper industry can be broadly classified into three segments:
1. Printing & writing (P&W) : Printing and writing segment caters tooffice stationary textbooks copier papers notebooks etc. This segment forms ~31% ofdomestic paper industry. Governments thrust on education through steps like Right toEducation Sarva Shiksha Abhiyan rise in service sector are key factors contributing tothe growth of this segment.
2. Packaging & paper board : Packaging & paper board segment catersto teritorry and flexible packaging purposes in industries such as FMCG food pharmatextiles etc. This segment forms 47% of the domestic paper industry. This is currentlyfastest growing segment owing to factors such as rising urbanization increasingpenetration of organized retail higher growth in FMCG pharmaceutical.
3. Newsprint : Newsprint serves the newspaper & magazines industry. Thissegment forms 18% of Indian paper industry. This segment is under stress due to lowergrowth rates and import threat.
The paper industry now widen its horizons with the help of joint ventures/long termscontractual business along with latest technological on-site / off-site WGCC plant. InPaper segment slurry business penetration had thrown excellent potential for thebusiness. Usually W&P paper industry in India consume Talc / Soap stone as majorfiller for their paper products mainly for writing & printing paper. From 2010 onwards& due to the closure of some TALC mines by NGT forcing paper inductees to use Calciumcarbonates instead of Talc. Due to effort of educating uses of Calcium Carbonate insteadof Talc as major fillers for writing & printing paper slowly slowly few papermills getting converted to use Dry Calcium Carbonate also as fillers apart from WGCC /Talc for paper product but conversion ratio is not as fast because Calcium Carbonateprice is little bit costlier than Talc fillers. However to offset the cut inmargins the company's teams are working with the technical teams of several paper millsfor using good calcium carbonate and try to reach at formulations which match theirtechnical requirement. Our special effort is towards promoting specialty product likeopacifiers Low abrasion DGCC and WGCC in Paper application which is contributing towardsthe positive trend in our sales pattern and resulted into substantially more EBIDTA growthagainst Projection for this year.
Globally Plastics Industries most lucrative business is growing bigger by the day.Plastics as the key material for man's progress today will be a keybeneficiary of this tremendous growth surge. India relatively low per capita consumptionof plastics currently at 9.7 kg per annum is expected to triple over nextdecade as the demand for polymer is driven by growth in end use markets such asagriculture packaging automotive infrastructure transport rails and telecommunicationmainly from emerging economies. Polymer is continuously substituting metals glass paperand other traditional materials in various applications due to its lightweight andstrength and the design flexibility they offer along with low-cost. Thermoplastics segmentis expected to witness the highest growth over the next few years. The entire year saw avery volatile and uncertain trend for polymer processing industries forcing manyindustries to cut down their production activities by substantial degree. However in suchadverse scenario our company registered fair bit of success in terms of achievingtargeted sales Quantity and targeted EBIDTA over to last year.
In-spite of the above change in business environment the second half of the year wastoo much bitter & exhausting as steep drop in the sales due to demonetisation effectcoupled a catastrophic spiraling about sales drop & uncertainties in markets. Apartfrom this also India's custom tariff compliance to allow zero percent import duty fromASEAN countries hampered & impacted a lot to market shift.
The segments of our plastics division which consist of application like RaffiaMaster-batch All type of master -batch Vinyl Industries PU Epoxy and Thermo-setsplastics Processing Industries etc :
Polyolefin's & Engineering plastics's compound industries means Master-Batch /compound application is majorly dependent on Automotive Parts Woven Sack and Plasticcarry Bags. The market is severely affected due to the demonetization and also therestriction imposed by government in uses pattern in the end industries as well asrestriction related to environmental hazard. In such adverse situation as a matter of factthe growth in this segment got terribly affected. The segment like PVC processingindustries consist of PVC pipe PVC compound for wire and cable and other PVC processingIndustries who making Sheet film profile and PU Flexible FoamSMC/ DMC Epoxy &Electrical Insulator and others allied Industries managed positive growth. Ourcompany focused to counter this period of uncertainties and we have formed a vigorousmarketing plan and increased our strength to revive the sector with better core productsfrom our overseas source coupled by serving them with our" Specialty ProductRange" which is more on concept selling of Value Added Product which canbe accumulate more bottom line profit for this Division of Company so products likeDesiccants Antiblocking Agents Synthetics Barium Sulfate for colored Master- batchbrilliancy & spacers application and valued added product like Opacifiers which ispartial replacement of TiO2 in white master batch application or TiO2 filled application.Apart from this range severe marketing efforts were also done in processing aids such asWax Multifunctional Processing aid which is necessities ingredient for extrusion basePolymer processing Industries. This paradigm shifts are posing exciting challenges andfavorable opportunities which we are addressing effectively to optimally positionourselves to secure concentrated business areas where we have clear sights of more marketpenetration and value addition. These efforts are kept ongoing and a separate team hasbeen formed to promote and market above products on a consistent basis. This has openednew segment with excellent prospective for the business and made us potential forprojecting profitable good growth year ahead.
During 2016-17 Rubber Industries growth marginally up compared to previous year due tofavorable market conditions main constraint was continued rate increase of rubber andcarbon black. Our Company's Rubber division took the advantage of the market scenario. Wehad crossed sales targets with increased profit as compared to previous fiscal. Severalnew products are also being developed for the partial replacement of synthetic silica andcarbon black which is widely used as filler in the segment. Also company is emphasizing tofocus more on value added products like Vaporlink (product which partially replaces carbonblack) Wax Zinkomer 100% replacement of Zinc Oxide. Rubber processing andVaporoxol series use as desiccant which are high value products can boost the salesturnover in coming future. This year we have developed new product viz. Flowaid which isone pack lubricant for rubber application. As India is growing hub for Rubber Industry forautomobile and other like industry and also getting quality natural rubber Company isexpecting good growth in our Rubber application. Company has increased dealer network tocater small and medium scale market.
Pharma Herbal Division
20 Microns Pharma Division launched its Herbal Ayurvedic Tablets viz."Dia-B-Microns" & "Dia-B-Microns FORTE" which is safe and reliableherbal medicine for effective management of joint pain & helpful in sugar control.Since Dia-B-Microns is completely Herbal product it has no side effects. This has nowbeen penetrated majorly in the States of South & North India besides Gujarat &Maharashtra in its span of about 3 4 years.
A new herbal ayurvedic medicine for Arthritis has been launched viz."Arthritol" which is rich combination of Karela Methi Sunthi Trifala andHaldi. This helps in relieving from mild and temporary pain due to exercise or normaloveruse. Helpful in the treatment of Arthritis relieves pain and inflammation andminimize joint stiffness/Swelling. Maximize joint function retards joint tissuedestruction. Also it is better substitute for patients who are intolerant to DMARDs.Also we developed and launched a softgel in the combination of Flexseed oil Garlic oiland Wheat Germ oil viz. Micronflax 369 which helps to keep our heart healthy take controlof cholesterol & Triglycerides. Also it increase fat burning enhance joint comfortBoost energy/stamina and promote blood sugar balance and anti ageing capabilities also.
Construction & Chemicals Division
The Division after having commenced its journey in 2015 continued to penetrate theconstruction & infrastructural markets and despite having giants in the competitionlaunched 3 products viz. MICRONSIL 30C & 30C+; NANOSIL & METAKRETE.
MICRONSIL 30C & 30C+ is a 3rd generation high quality and effectiveminerals admixture for plaster slab and masonry work applications suitable for surfacelike bricks stone blocks etc.
NANOSIL is a solvent free high reactive Silicone based waterproofing agent.
METAKRETE is a BIS certified minerals based product for pre-cast structures. It isthermally structured ultrafine pozzolan which replaces industry by-product such asSilicafume / Microsilica.
Strategically the drive for awareness was targeted from the grass-root i.e. theMasonry who are virtual operators in the construction & infrastructure fields. Duringthe year the Company conducted so many seminars; road shows; etc. in the big Cities likeVadodara Surat Vapi Indore Bhopal etc
and made aware about the Company's aboveproducts plus its effective benefits to the ultimate users.
Splendid Opportunities ahead for Export
India has seen probably the best exports in terms of Minerals because of the low oceanfreight coupled with increased demand and availability of materials. In value termsExport to Africa and Middle East has held up the best. However export sales of 20 Micronsproduct has increased 24% over last year. Mineral export from India is growning up sharplyover few years. Minerals like Talc Feldspar has seen tremendous growth.
Automation and advancement in Technology has given a great acceleration to Indianresources to compete with global Giants. Year over year it has been observed that exportopening has also increased due to US dollar appreciation against Indian Rupee whichbecomes incitement to exporter. Environment restriction in Europe and USA for discouragingmining has actively played a role to search resources in India. Indian mineral market willhave better opening since China has also put limitations export quota for naturalresources specially on Talc. But if India wants to make inroads into Europe with somespecialty minerals which are surface modified then REACH compliance becomes extremelyimportant and also expensive as the deadline for REACH registration ends in 2018.
Since most of the International players has their own manufacturing facilities inIndia it becomes easy for them to source and to extend approval for their global use.Considering contemporary standing 20 Microns accomplished to sale their products in 56countries across the globe. In the year 16-17 the Company has been able to encapsulatebulk business of Calcined Kaolin in Egyptian and Ethiopian markets and anticipating toinitiate bulk contract in European countries for their major products which will give avery good value addition in year 2017-18. We also would like to increase sales inexpanding into other application like plastics Ceramics.
For Future development company has started aggressive marketing activity by way ofarranging technical meet and conference which will help to generate more customer baseacross the globe.
Company is targeting around 23% growth for year 2017-18 for export sales over lastyear.
Your Company has been a pioneer in White Industrial Minerals and possesses miningleases having sizable mineral reserves of 55.110 Lacs MT and 96.492 Lacs MT and the lifeof the mine is more than 25 years at current capacity. The reserves shown in the tablebelow are located in the potential mineral block.
Reserves in Mining Leases Status as on 31.03.2017
|Sr. No. ||Details of Mines ||Approx. Reserves (in Lacs Tons) ||Approx. Value of the Reserves (Rs. In Lacs) |
|1. ||China Clay Mines Bhuj Dist. Kutchh Gujarat. Area11.89 Hector ||22.580 ||3274.10 |
|2. ||Dolomite Mine Taluka Chhota Udepur Dist. Vadodara Gujarat Area 6.25 Hector. ||13.890 ||4860.75 |
|3. ||Calcite Mine Dist. Sirohi Rajasthan Area 49.25 Hector. ||8.340 ||5002.52 |
|4. ||Limestone Mines Dist. Tirunelveli Tamil Nadu Area 4.43 Hector. ||10.300 ||4635.00 |
| ||TOTAL ||55.110 ||17772.37 |
Reserves in Private Owned Land Status as on 31.03.2017
|Sr. No. ||Details of Mines ||Approx. Reserves (in Lacs Tons) ||Approx. Value of the Reserves (Rs. In Lacs) |
|1. ||China Clay Mamuara Village Bhuj Dist. Kutchh Gujarat. Area 25.1455 Hector ||64.122 ||9297.69 |
|2. ||Bentonite Mines Bhuj Gujarat Area 6.5 Hector ||32.370 ||5664.20 |
| ||TOTAL || |
Your Company's endeavor for next five years is to make Zero Mining Waste. Theprocessing plants will be installed to utilize all the by-products and make them saleable/marketable.
Research & Development
Innovation is the foundation upon which 20 Microns was created and is the force thatdrives us to achieve greater success for our company and for our customers. Our R&Dactivities aim to strengthen our core businesses and to enhance our ability to morequickly develop products aligned with the demands of the market. To stay on the leadingedge in our priority fields we stimulate internal cooperation to maximize organizationalresources and generate synergies. We also collaborate in joint research projects withexternal research facilities at universities and other educational institutions and atpublic research laboratories.
20 Microns significantly invests in a variety of research and development activities toimprove product functionality identify new applications for our minerals and to enhanceour processing to provide benefits for customers. All of the innovative technical workundertaken is to increase our knowledge not only on the mineral products we manufactureand supply but also to fully understand and improve customer applications.
20 Microns R&D team consists of some 25 people focusing on product and technologyimprovements as well as laying the groundwork for future business. We have technicalspecialists covering a wide range of industries including paints & coatings polymers(plastic & rubber) paper ceramic construction additives refractory & foundryadhesive & sealants ink cosmetic agrochemical etc. Our technical specialists areactive within the industry they serve keeping upto date with the technologies and rawmaterials required by customers.
20 Microns priorities in allocating R&D resources are paints & coatingspolymers ceramic paper and construction chemicals. All of the application centers focuson these fields.
Paints & Coatings
20 Microns has extensive surface coatings test facilities. In our modern laboratory wecan manufacture lab scale coating formulations and perform various critical analyses likerheology color opacity sheen scrub crack etc. to develop next generation mineralsfor our customers.
Polymer (Plastic & Rubber)
For the Polymer industry we can manufacture formulations based on various compoundingtechnologies. Testing includes mechanical rheological dimensional evaluations allsupported by the latest analytical techniques.
Ceramic Construction Chemicals Paper & Foundry
We also have a lab facility to evaluate the opportunity for new raw material in all theabove mentioned application.
Innovative Products Developed during the year 2016 17
| LC 470 Pigment || Riobent EW |
| Dorkafil C1 || Pure Micron Mica |
| Low Oil absorption Talc || Low cost matting agent |
| Glowtox 50 Plus || Synthetic Redoxide |
| Micron China JBN 90 || Micron China white ICC |
| Whitex 90 || Micronsil 30 C |
| Metakrete || Nanosil |
| Glowtox D & DX || White Kaolin |
Our Commitment to Quality
At 20 Microns Minerals our mission is to consistently produce the highest qualityproducts in the industrial minerals industry at all of our plants. Quality is an integralpart of how we work and what we do. We have an entire team dedicated to quality workingwith our Research & Development team and directly with our plants to constantly testour incoming ores and finished products.
Each 20 Microns manufacturing site has a comprehensive quality testing laboratory wherewe monitor the products daily. Quality control tests performed include:physical testingchemical testing & optical properties.
We also work in partnership with various universities testing houses consultants andresearch institutions to keep abreast of new developments in the world of minerals and theindustries where they are utilised.
20 Microns- Employee's Second Home
20 Microns family members are working efficiently for the betterment of thecompany. Workplace where employees are both intrinsically satisfied and extrinsicallyencouraged. Employees are motivated not only by Monetary Benefits but also by providingWork-Life balance environment Appraisal Healthcare benefits etc.
Employees here are always supported to improve their skills and invest in themselves.Each one here is asked for their input and which communicates respect for an individual'sideas. The strength and weakness of the employee's peers/ co-workers and the culture ofthe company helps to build up a clear vision to achieve common goal.
Better physical and mental health promotes Healthy Work Environment. So keeping healthin priority company provides well equipped Fitness Center for all employees along with itTrained Staff to assist each one Cardio and Strength training equipment Fitnessassessments etc.
Regular Health check-ups along with nutrition guidance can help to keep employees ingood health which in turn has a positive effect on the entire workforce thus increasingproductivity. This helps in curing problems on early stage. Transparent and regularcommunication among peers and superiors which helps not only in individual growth but alsofor team growth which directly affects growth of the organization.
Whether economy is growing or shrinking Management always stands for Employees. Abalanced work and personal life helps to enhance employee's motivation. So keeping thoseall factors in mind Management are constantly working on betterment of the employees.
Environment Safety & Health
Celebrated 46th National Safety week 4th March to 10th
Celebrated 46th National safety Day/Week on the Theme of "SU }? S}? S}? ?H U" TheNational Safety Day/Week Campaign is celebrated in all 20 MICRONS plants in India everyyear (organized by the Safety Dept.) to commemorate the establishment of this event 4thof March as well as enhance the safety awareness among people. It is celebrated with greatenthusiasm to make aware the people about how to get prevented from the industrialaccidents by exhibiting widespread safety awareness programs in the public sectors whichhave not been covered by any safety legislation. During whole week campaign celebrationvarieties of specific activities are displayed to the people as per the safetyrequirements.
Following national level activities for whole week such as company employee withcontractor employee and interested party functions including seminars poster of safetymessages and slogans distribution banner exhibition play of drama and songs trainingprograms workshops display of films over SHE issues are held during the campaigncelebration. Safety Pledge event is carried out by the organizational employees.
Safety activities based training programs are held for the industrial staffs overvarious topics to carry out their responsibilities very well. During training session theyare taught about the testing and examination of pressure vessels lifting machineschemical and electrical safety risk handling and assessment fire control first aidknowledge etc.
Celebrated world Environment Day on 5th June 2016
The theme of World Environment Day: 2016 was "Zero tolerance for the illegal tradein wildlife" the theme encourages you to take action of your own to help safeguardthe species under threat. This also motivates you to show zero tolerance for the illegaltrade in wildlife.
20 MICRONS to raise awareness towards importance and benefits of cleanliness andenvironmental conservation. "Cleaner Production" word itself conveys the messageof cleanliness. Under this SHE team took initiative of cleaning our work place andpremises for creating healthy working environment for greener future.
Plant in charge Managers Union Employee with Contractor worker and interested partyshared their views on preservation of environment as per our Indian ideology. In thePlenary Discussion the participants shared their views on the environment preservation.The participants decided to contribute towards preservation of environment by changingtheir habits for example using bicycles in short distances using public transport forthe daily commute to the offices reducing food waste saving energy at home and officesby switching of lights and ACs when not in use including using water efficiently.
On the occasion of world environment Day: 2016 we arrange various events and practicalactivities like... Plantation of more than 500 trees across in company arrange seminar insubject of Virtual environment inside the plant.
Occupational Health Examination: 2016-17
20 MICRONS provide its employee full body health checkup packages for employees'continued good health. Our Annual medical checkup programs identify any symptoms of majorillness and also pinpoint potential areas of risk so as to prevent future health problemsthus lower the cost of future medical expenses. Our goal is to encourage people for alonger and healthier life. Today's fast paced stressful lifestyle affects our health.Regular health checkup is answer to this problem.
This gave comprehensive assessment of the health status of the individual for all agegroups.
Cautionary Authority Statement
Statements in this Management Discussions and Analysis Report describing the Company'sobjectives estimates and expectations may be "forward looking statements"within the meaning of applicable laws and regulations. Actual results might differmaterially from those either expressed or implied.
The Company has started accepting the deposits only from the shareholders of thecompany pursuant to the provisions of Companies Act 2013 and Rules made thereunder. Thesaid Scheme was approved by you at your Extra-ordinary General Meeting held on 24thMay 2014 and amended in Annual General Meeting held on 23rd September 2016.
As on 31.03.2017 Fixed Deposits from Shareholders stood at the total of Rs. 1912.94Lacs. Deposits amounting to Rs. 1262.10 are due for repayment on or before 31.03.2018. Thecompany has not made any default in repayment of deposits or interest due thereon.
The deposits accepted upto the 31st March 2014 pursuant to Companies Act1956 and interest thereon will be repaid to the depositors on the date of maturity ofrespective deposits. In this regard the Company has filed petition with Company LawBoard Mumbai (CLB) praying to allow the repayment as per maturity of respective depositonly and CLB accepted plea of the Company and vide its order no. C.A.NO.34/74(2)/CLB/MC/MAH/2015 dated 20th January 2016 directed the company torepay total outstanding principal amount as on date of order amounting to Rs. 398.27Lacs on or before 31.03.2017 along with the interest due thereon. Accordingly the Companyrepaid total Rs. 468.76 Lacs along with the interest thereon during the FY 2016-17.
The Company is liable to comply with the provisions relating to acceptance of depositsunder the Companies Act 2013 and Rules made there-under and any amendments made from timeto time.
Consolidated Financial Statements
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS 21) on Consolidated Financial Statements the audited consolidatedfinancial statement is provided in the Annual Report.
Subsidiaries Joint Ventures & Associates
As on 31st March 2017 we have 03 subsidiaries viz. 20 Microns NanoMinerals Ltd. 20 Microns FZE 20 Microns SDN BHD. During the year the Board of Directors(the Board) reviewed the affairs of the subsidiaries. In accordance with Section 129(3) ofthe Companies Act 2013 we have prepared consolidated financial statements of the Companyand all its subsidiaries which form part of the Annual Report. Further a statement inthe prescribed format AOC-1 is appended as Annexure A to the Board's Report. The statementalso provides the details of performance financial positions of each of the subsidiaries.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.20microns.com. These documents will also be available for inspection during businesshours at our registered office at Waghodia Vadodara.
Directors' Responsibility Statement
The Directors report that :
i) In the preparation of the annual accounts for the year ended 31st March2017 the applicable accounting standards have been followed and there are no materialdepartures from the same.
ii) The Directors have 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 as at 31st March 2017 and ofthe profit of the Company for the year ended on that date.
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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
General Shareholders Information
General Shareholder Information is given in the Report on Corporate Governance formingpart of the Annual Report.
Particulars of Employees
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure B to the Board's Report.
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 we have to state that since there are no employees falling withinthe purview of the said requirements the same has not been annexed herewith.
As required by SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Corporate Governance Report and the Auditor's Certificate regarding complianceof conditions of Corporate Governance form part of the Annual Report.
Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexureto this report. No adverse comments have been made in the said report by the PracticingCompany Secretary.
Cost Audit Compliances
Pursuant to Sec. 209 (1)(d) of the Companies Act 2013 Cost Audit Report for thefinancial year ended 31.03.2016 was submitted to the Central Government on 13.10.2016.
Related Party Transactions
Particulars of transactions with related parties referred to in Section 188(1) of theCompanies Act 2013 in the prescribed Form AOC-2 is annexed in Annexure C to the Board'sReport.
Extracts of Annual Return and Other Disclosures under Companies [Appointment andRemuneration] Rules 2014
The Extract of Annual Return in form No. MGT-9 as per Section 134 (3) (a) of theCompanies Act 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 ofCompanies (Management and Administration) Rules 2014 is annexed in Annexure D hereto andforms part of this report.
Particulars of Loan Guarantees or Investments
Loans guarantee and investment covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
Conservation of Energy Technology Absorption Foreign Exchange Earnings & Outgo
Information as per Companies(Disclosure of particulars in the Report of Board ofDirectors) Rules 1988 relating to conservation of energy technology absorption foreignexchange earnings and outgo are given in Annexure E forming part of this report.
Risk Management Policy Implementation
The Company operates in a competitive environment and is generally exposed to variousrisks at different times such as technological risks business risks operational risksfinancial risks etc. The Board of Directors and Audit Committee of Directors of theCompany periodically review the Risk of the Company so that the Management controls therisk through properly defined network. The Company has a system based approach to businessrisk management backed by strong internal control systems.
A range of responsibilities from strategy to the operational is specified. A strongindependent internal audit function at the corporate level carries out risk focused auditsacross all businesses enabling identification of areas where risk managements processesmay need to be improved. The Board reviews internal audit findings and provide strategicguidance on internal control monitors internal control environment within the Company andensures that Internal Audit recommendations are effectively implemented. The combinationof policies and procedures adequately addresses the various risks associated with yourcompany's businesses.
Corporate Social Responsibility
As the part of the CSR activities the Company had started its journey in the year 2008with formation of the "20 Microns Diabetes Centre" under the 20 MicronsFoundation Trust with an aim that the community at large is well aware as also consciousabout the very common diseases now-a-days on the Globe i.e. Diabetes.
There are about 4600 members registered on the above centre who are regularly beingchecked and counseled from time to time. This members take advantage of regular check upat the above centre where the specialized Doctors visits and spending their valuable timevoluntarily and complementarily.
During the year 2016-17 20 Microns Diabetes Centre initiated a special drive for thejuvenile diabetic students of 10th & 12th particularly. Theywere given extensive guidance especially for how to make preparation for the Exams despiteof having the diseases. Some of them who were needy were provided with the monetary helptoo.
Besides focus was diversify on the health of the Employees and Workers of variousFactories Corporate in and around Vadodara. Of this with the co-operation ofMakarpura Industrial Charitable Trust as well as the Entrepreneurs thereat the majorcheck-up and counseling camp-drive at the Industrial Estate at Makarpura VADODARA is onsince February 2017.
Internal Finance Control System Adequacy
The Company has established proper and adequate system of internal control to ensurethat all resources are put to optimum use and are well protected against loss and alltransactions are authorized recorded and reported correctly and there is proper adherenceto policies and guidelines processes in terms of efficiencies and effectiveness. TheCompany's internal control systems are supplemented by an extensive program of internalaudit by an independent firm.
All the transactions are conducted using the IT interface and the business processesare further audited by internal auditors.
The Company's internal control systems are also periodically tested and certified bythe internal auditors. The Audit Committee constituted by the Board constantly reviews theinternal control systems.
Directors and Key Managerial Personnel
In accordance with the Articles of association of the Company Mr. Rajesh C. ParikhCEO & Managing Director retires by rotation at this Annual General Meeting and beingeligible offers himself for re-appointment.
The Board has appointed Mrs. Sejal R. Parikh as an Additional Director in the categoryof Non Executive Non Independent Woman Director w.e.f. 4th May 2017. She holdsoffice of Additional Director up to the ensuing Annual General Meeting of the Company. TheCompany has received a notice u/s 160 of the Companies Act 2013 from a shareholder of theCompany proposing the candidature of Mrs. Sejal R. Parikh for the office of Non-ExecutiveNon-Independent Woman Director who is liable to retire by rotation. Brief profile of Mrs.Sejal R. Parikh is as under :
Mrs. Sejalben R. Parikh holds a Bachelor Degree in Production Engineering besides PostGraduation Diploma in Business Administration. She had worked for 2 years as the TraineeEngineer in Planning Department of GMM Pfaudler Limited Vallabh Vidhyanagar the Glasslined Equipment manufacturing company. She was also a part of projects related to HeritagePreservation of Vadodara in Maharaja Sayajirao University.
During the year Mr. Sudhir R. Parikh resigned as the Director in the category of Non Executive and Non Independent Director w.e.f. 04.05.2017 due to hisnon-availibility in the country. Mrs. Darsha Kikani also resigned as an Independent[Woman] Director w.e.f. 04.05.2017 due to her pre-occupations as the Practicing CompanySecretary. The Board appreciates and taken note of the extensive support and guidancereceived during their tenure as Directors in the respective categories.
During the year under review Mr. Narendra R. Patel was appointed as the ChiefFinancial Officer of the Company w.e.f. 08th August 2016.
The Company has set criteria for performance evaluation of Independent DirectorsBoard Committees and other individual Directors. The note on familiarization programme toIndependent Directors is avaible on the website of the Company www.20microns.com.
The Company has also prepared a Remuneration Policy for the Directors Key ManagerialPersonnel and Senior Management Employees which is avaible on the website of the Companywww.20microns.com.
None of the Directors of the Company is disqualified under Section 164(2) of theCompanies Act 2013. As required by law this position is also reflected in the Auditors'Report. In accordance with provisions of Section 149 of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations 2015) Mr. P. M. Shah Mr. Ramkisan Devidayal Mr. Atul Patel Mrs. DarshaKikani and Dr. Ajay Ranka have given a declaration to the Company that they meet thecriteria of independence as mentioned in Section 149(6) of the Companies Act 2013.
A. Statutory Auditors
In terms of the provisions of the Companies Act 2013 the tenure of the existingStatutory Auditors viz. M/s. Manubhai and Shah LLP Chartered Accountants Ahmedabadexpires at the conclusion of the ensuing Annual General Meeting [AGM]. In accordance withSection 139(1) of the Companies Act 2013 read with the Companies (Audit and Auditors)Rules 2014 it is proposed to appoint M/s. J.H. Mehta & Co. Chartered AccountantsAhmedabad as the Statutory Auditors of the Company for the period from the conclusion ofthe ensuing AGM to the conclusion of the AGM for the year 2022. The Company has received acertificate from the above Auditors to the effect that if they are appointed it would bein accordance with the provisions of Section 141 of the Companies Act 2013. This item isbeing included in the notice for your approval.
B. Internal Auditors
The Company has appointed M/s. N C Vaishanav and Co. M/s. P Mani and Co. and M/s.Deopura and Associates Chartered Accountants as Internal Auditors of the Company for theF.Y. 2017-18 for the Western Region & Eastern Region South Region and North Regionrespectively.
C. Cost Auditors
The Company has appointed M/s Y.S. Thakar and Co. Cost Accountants to audit its costaccounting records relating to Mining and Metallurgy of ferrous and non-ferrous metals forthe Financial Year 2017-18 subject to ratification of their remuneration by shareholdersof the Company.
The Company is seeking the ratification of the Shareholders for the remunerationpayable to M/s Y.S. Thakar and Co. Cost Accountants as the Cost Auditors of the Companyfor the Financial Year 2017-18 vide resolution no. 4 of the Notice of AGM.
D. Secretarial Auditors
As per provisions of Section 204 of the Companies Act 2013 and rules made thereunderthe Company is required to appoint Secretarial Auditor to carry out Secretarial Audit ofthe Company. The Company has appointed M/s. J.J. Gandhi and Co. Practicing CompanySecretaries as Secretarial Auditors of the Company for the F.Y. 2017-18.
Significant and Material Orders
There are no significant and material orders passed by the regulator or courts ortribunal impacting the going concern status and Company's operations in future.
CSR Committee of Directors
The CSR Committee comprises of Mr. P.M. Shah Mr. Chandresh Parikh and Mr. Sudhir R.Parikh as Members of the Committee.
Subsequently during the year at the Board Meeting held on 25.05.2017 the Committeewas re-constituted to the effect of replacement of Mrs. Sejalben R. Parikh in place of Mr.Sudhir R. Parikh who resigned as the Director w.e.f. 04.05.2017.
Audit Committee of Directors
The Audit Committee comprises Independent Directors namely Mr. Ramkisan Devidayal Mr.P.M. Shah and Mr. Atul Patel as Members of the Committee. All the recommendations made bythe Audit Committee were accepted by the Board.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulations 2015. Vigil Disclosures can be made by a whistle blowerthrough an email to the Chairman of the Audit Committee. The policy of vigil mechanism maybe accessed on the Company's website www.20microns.com.
Meeting of the Board of Directors
Five meetings of Board of Directors were held during the year. For further detailsplease refer Report on Corporate Governance annexed to this Annual Report.
Your Directors wish to express their grateful appreciation for the co-operation andsupport received from customers vendors shareholders Financial Institutions BanksRegulatory Authorities and the Society at large.
Deep appreciation is also recorded for the dedicated efforts and contribution ofExecutives Staff and Workers of the Company.
For and on behalf of the Board of Directors
Chandresh S. Parikh
Place : Waghodia Vadodara
Date : 25th May 2017