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Ashok Alco-Chem Ltd.

BSE: 524594 Sector: Industrials
BSE 00:00 | 26 Nov 94.70 1.20






NSE 05:30 | 01 Jan Ashok Alco-Chem Ltd
OPEN 96.65
52-Week high 124.35
52-Week low 39.10
P/E 13.04
Mkt Cap.(Rs cr) 44
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 96.65
CLOSE 93.50
52-Week high 124.35
52-Week low 39.10
P/E 13.04
Mkt Cap.(Rs cr) 44
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ashok Alco-Chem Ltd. (ASHOKALCO) - Director Report

Company director report

The Members

Ashok Alco-Chem Limited

Your Directors are pleased to present their 27 Annual Report together with the AuditedFinancial Statements of your Company for the year ended March 31 2019. The section on theManagement Discussion and Analysis (MD&A) forms a part of this report.


The following figures summaries the financial performance of your Company during theyear under review:

( Lakhs)
Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Income from Operations 17042.95 15931.23 17155.90 16074.39
Other Income 161.83 454.23 163.01 451.56
Total Income 17204.78 16385.46 17318.91 16525.95
Less : Total Expenditure 17255.15 15646.20 17362.47 15849.29
Profit/(Loss) before Interest Depreciation and Tax (50.37) 739.26 (43.56) 676.66
Less : Interest 113.68 97.94 113.68 98.08
Profit/(Loss) before Depreciation and Tax (164.05) 641.32 (157.24) 578.58
Less : Depreciation 117.05 111.88 118.40 113.93
Profit/(Loss) before Tax (281.10) 529.44 (275.64) 464.65
Less : Tax Expenses
Current Tax 1.25 (200.00) 0.25 (200.00)
Deferred Tax 78.61 25.28 79.05 25.07
Tax adjustment earlier year (95.95) - (92.56) (0.14)
Profit/(Loss) for the year (297.19) 354.72 (288.90) 289.58
Add: Other Comprehensive Income - - - -
i. Re-measurement gain/(loss) on the Defined Benefit Plans 4.80 1.46 4.80 1.46
ii. Income tax on (i) above (1.25) (0.51) (1.25) (0.51)
Total Comprehensive Income for the year (293.64) 355.67 (285.35) 290.53


The turnover of the Manufacturing Division of your Company has increased by 6.43% inits revenue and has seen the decline in the production figures by 4.57% vis a vis previousyear 2017-18. The rise in topline was mainly due to relatively increase in average pricingof the finished product during the year vis a vis previous year 2017-18.

The performance of the Trading Division has shown the decay of 14.41% as compared toprevious year 2017-18. The merchant trade has gone down due to decrease in the end productprices. The increasing number of suppliers and traders globally has enhanced the level ofcompetition resulting in very low margins in chemical merchant trade.

The Manufacturing Division has contributed up to 94.43% to total revenue during 2018-19 as compared to 93.16% during previous year 2017-18.

The Trading Division has contributed up to 5.57% to total revenue during 2018 -19 ascompared to 6.84% during previous year 2017-18.


The performance of the Manufacturing Division of your Company was good till 3 quarterof FY 18-19 {i.e EBITDA Rs. 508.56 Lakhs} which is remarkably better when compared with FY17-18 nine months results {i.e EBITDA Rs. 378.02 Lakhs} but the negative impact startedfrom January 2019 onwards which has wiped out your Company's nine months efforts andturndown the bottom line from positive to negative as compared till 3 quarter YTD results{i.e EBITDA Rs. 508.56 Lakhs} and 4 quarter results of FY 18-19 {i.e EBITDA Rs. (397.89)Lakhs} the YTD EBITDA of Manufacturing Division is Rs. 110.67 Lakhs for the FY 18-19. Thecontribution given by the Trading Division has leads to the net negative impact on annualperformance of your Company as EBITDA Rs. (50.36) Lakhs.

Considering the various strategies adopted by the management to operate the businessunder profits the volatile nature of the business has always been a challenge to achievethe desired results. It is a volume base business which requires infusing more workingcapital. The hardcore fluctuation in the prices of both raw material and finished goodsare not in the control of your Company rather which is mainly driven by the prevailingmarket forces including the global factors.

In addition to the above the continued struggle to maintain the profits of yourCompany the efforts of your Company's management has gone at toss by the fluctuatingprices of the raw material and the finished products which has resulted in operating lossduring the year under review as elaborated under Segment-wise Performance.

Subsequent to the year under review the Board considered the proposal received by theCompany for sale of its manufacturing facility along with the residential colony situatedat Mahad Maharashtra. The proposal is being considered and evaluated by a team nominatedby the Board of Directors.


The revenue from subsidiary of your Company has declined by 20.28% as compared to FY2017-18. It has contributed Rs. 5.46 Lakhs towards Profit Before Tax during the year ascompared to Rs. 64.77 Lakhs Loss Before Tax during FY 17-18. The subsidiary of yourCompany has contributed positively to the extent of 1.98% to the Loss Before Tax in theconsolidated profit and loss account.


Though your Company's performance is negative during FY 2018-19 considering theprevious year's performance and to appropriately reward the Members your Directorspropose to pay dividend out of the surplus available under the Reserves & SurplusAccount of the Company.

Your Directors are pleased to recommend a dividend of Re. 1/- (i.e. 10%) per equityshare of Rs. 10/- each for the financial year ended March 31 2019 amounting to Rs. 55.37Lakhs (inclusive of dividend distribution tax of Rs. 9.37 Lakhs) out of accumulatedprofits of past years. This dividend is subject to the approval of the Members at theforthcoming AGM and if approved Members whose names appear on the Register of Members onrecord date i.e. September 21 2019 will be entitled to dividend.

In the previous year the Company paid a dividend of Re. 1/- per equity share (i.e.10%)of Rs. 10/- each of the Company.


Considering the loss incurred during the year under review your Directors propose notto transfer any sum to the general reserves.


During the financial year 2018-19 there is no change in the authorized issuedsubscribed and paid-up share capital of the Company. As on March 31 2019 the Company ishaving authorized share capital of Rs.70000000/- comprising of 5000000 equity sharesof Rs 10/- each and 2000000 11% preference shares of Rs 10/- each.

The issued subscribed and paid-up equity share capital of the Company as on March 312019 is Rs. 46003430/- comprising of 4600343 equity shares of Rs. 10/- each.

During the year under review the Company has not issued shares with differentialrights as to dividend voting or otherwise or bought back any of its securities. TheCompany has not issued any sweat equity/bonus shares/employee stock option plan under anyscheme.


Aura Alkalies and Chemicals Private Limited continues to be Holding Company of theCompany by holding 2518632 Equity Shares of the Company i.e. 54.75% at the end of thefinancial year March 31 2019.


Your Company continues to be Holding Company of Ashwa Minerals Private Limited as onMarch 31 2019.

Your Company does not have any Associate or Joint Venture Companies within the meaningof Section 2(6) of the Act.

Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiary in Form AOC-1 is attachedto the financial statements of the Company.

Further pursuant to the provisions of Section 136 of the Act the audited standaloneand consolidated financial statements and other relevant documents and audited accounts ofthe said subsidiary company are available on the website of the Company at


There has been no change in the shares of the Company under the "Promoter andPromoter Group". The present promoters of the Company are:

Sr. No. Name No. of Shares held % to total paid up capital
1. Aura Alkalies and Chemicals Private Limited 2518632 54.75
2. Mr. Sunil Shah 1000 0.02
3. HK Dealers Private Limited 1000 0.02
Total Promoters' holding 2520632 54.79


Appointment /Re-appointment

1) During the year under review Mrs. Hina Shah was appointed as an additional director(Category – Non – Executive / Independent) of the Company w.e.f. February 122019 for a period of three years subject to approval of Members at thRs. 27 AGM of theCompany.

2) Subsequent to the year under review Mr. Purab Shah Executive Director & ChiefExecutive Officer ("Executive Director & CEO") of the Company wasre-appointed for a further period of one year effective from April 19 2019. The Members'approval is being sought for the said re-appointment which forms part of notice convening27 AGM.

3) The Members had appointed Mr. Manoj Ganatra as an Independent Director of theCompany to hold office for five consecutive years from September 26 2014 up to September25 2019. Pursuant to the provisions of the Act and based on the recommendation of theNomination and Remuneration Committee ('NRC') the Board recommends for the approval ofthe Members through a Special Resolution the re-appointment of Mr. Manoj Ganatra as anIndependent Director of the Company for a second term of five consecutive years fromSeptember 26 2019 to September 25 2024.

4) Pursuant to the provisions of Section 152 of the Act and the Articles of Associationof the Company Mr. Sunil Shah Non-Executive Director of the Company retires by rotationat the ensuing AGM and being eligible has offered himself for re-appointment.


Subsequent to the year under review Mrs. Neeta Shah Non-Executive Director resignedfrom the Board of the Company w.e.f. May 29 2019. Your Directors takes this opportunityto express their appreciation for the valuable contribution made by Mrs. Neeta Shah duringher tenure as Director of the Company.

Independent Directors

The following Non-Executive Directors are Independent Directors in terms of theprovisions of section 149(6) of the Act read with the provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"Listing Regulations").

a) Mr. Manoj Ganatra

b) Mr. Shekhaar Shetty

c) Mrs. Hina Shah

The said Independent Directors are not liable to retire by rotation. The Company hasreceived declarations from all the Independent Directors confirming that they meet thecriteria of independence as prescribed under Section 149(6) of the Act and Regulation16(1) (b) of the Listing Regulations and are independent from the management and there hasbeen no change in the circumstances which may affect their status as independent directorduring the year.

Non-Executive Directors

The Non-Executive Directors were not paid any remuneration other than the sitting feesand reimbursement of expenses incurred by them for the purpose of attending meetings ofthe Company.

Key Managerial Personnel (KMP)

In terms of the provisions of Section 2(51) and Section 203 of the Act the followingare the KMP of the Company:

a) Mr. Purab Shah - Executive Director & CEO

b) Ms. Seema Gangawat - Company Secretary & Compliance Officer

c) Mr. Vaize Ahmed Kampli - Chief Financial Officer


The Board of Directors of the Company met five times during the financial year 2018-19viz. on May 24 2018 August 14 2018 November 02 2018 February 12 2019 and March 192019. The details of attendance of respective Directors is given in the CorporateGovernance Report. The intervening gap between the meetings was within the periodprescribed under the Act and Regulation 17 of the Listing Regulations.


As per the applicable provisions of the Act and the Listing Regulations the Companyhas formed the following statutory committees.

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders Relationship Committee.

Detailed information of all the Committees and relevant information for the year underreview are set out in the Corporate Governance Report.


Pursuant to the provisions of the Act and the Part D of Schedule II of ListingRegulations the Company has formed and implemented Nomination and Remuneration Policy andthe same is available on the Company's website


The familiarisation programme seeks to update the Directors on the rolesresponsibilities rights and duties under the Act and other statutes.

The policy on Company's familiarisation programme for Independent Directors is postedon the Company's website at


Pursuant to the provisions of the Act and the Listing Regulations annual performanceevaluation of the Board its Committee and of individual Directors has been made.

The manner in which the evaluation has been carried out forms part of the CorporateGovernance Report.


Pursuant to section 134(3)(c) and section 134(5) of the Act your Company's Directorsbased on the representations received from the management confirm that:

a. the applicable Accounting Standards have been followed in the preparation of theannual accounts along with the proper explanation relating to material departures if any;

b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and the profit andloss of the Company for that period;

c. they have 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. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


Cautionary Statement

Statements made under this section describing the Company's projections estimates andexpectations may be "forward-looking statements" within the meaning ofapplicable securities laws and regulations. Important factors that could make a differenceto the Company operations include among others economic conditions affectingdemand/supply and price conditions in the domestic and overseas markets in which theCompany operates changes in government regulations tax laws and other statutes andincidental factors. The information provided in Economy Outlook and Industry ScenarioOutlook section is based on our internal study which is not prejudice.

Although the expectations are based on reasonable assumptions the actual results mightdiffer.

Economy Outlook

A G-20 surveillance note expects India's economy to grow 7.3% in 2019 and 7.5% in 2020.The International Monetary Fund (IMF) lowered the growth estimate for India by 30 basispoints (100 basis points means 1 percentage point) for the current as well as the nextfinancial year.

"India's economy is set to grow at 7 per cent in 2019 picking up to 7.2 per centin 2020. The downward revision of 0.3 percentage point for both years reflects aweaker-than-expected outlook for domestic demand" the multilateral agency said inits update on "World Economic Outlook" (WEO). The revision is relative to theApril 2019 WEO.

However despite the revision India's growth rate will still be the fastest in theworld followed by China. The WEO update says that in China the negative effects ofescalating tariffs and weakening external demand have added pressure to an economy alreadyin the midst of a structural slowdown.

With policy stimulus expected to support activity in the face of the adverse externalshock China's growth is forecast at 6.2 per cent in 2019 and 6.0 per cent in 2020 whichis 10 basis points lower each year relative to the April 2019 WEO projection.

Industry Scenario Outlook

Chemicals industry in India is highly diversified covering more than 80000 commercialproducts. The Indian chemical industry is ranked 6 largest in the world in terms ofoutput. The chemical companies in India support a sizable and highly diversified industrythat includes commodities specialties polymers agrochemicals and a range of othergroups. India is steadily moving up the ranks as a global economic power and a businessmagnet for investment.

The country is also the largest consumer of its own products accounting for around 33%of its output. By 2025 the Indian chemical industry is projected to reach US$ 403billion. Demand of chemical products is expected to grow at approximately 9% p.a. over thenext 5 years. The capacity utilization surged to over 85 per cent in fiscal 2019 comparedwith 75 per cent in fiscal 2017.

Furthermore the chemical industry is one of the major factors driving our country'sGDP. It accounts for nearly 15-18% of the manufacturing sector in GDP and the governmentaims to expand it to 25% by 2025. Utilization rates of new capacities coming up willremain high over the medium term because of improving environmental compliance and costcompetitiveness. As a result the share of Indian specialty chemicals in global supplychain is seen rising 100 basis points to 5.2 per cent in fiscal 2022 from 4.2 per centlast fiscal.

The agency noted that Indian players are also benefiting because of the closure orshifting of capacities in 50 chemicals manufacturing clusters in China which has about 20per cent share of global specialty chemicals revenue.

Segment-wise Performance

The Government has imposed the new policies for importing of Ethanol on one hand and onthe other the scarcity of Ethanol in domestic market due to the Government encouragingprogram for oil blending of Absolute Alcohol for petroleum industry has increased theEthanol prices in domestic market.

Due to the US-China trade war the prices of Glacial Acetic Acid has a Roller Coastereffect on the cost of inventories of your Company in-turn which has left direct increasingcost impact on the cost of production. The raw material prices have increased during theyear as a result the cost of material consumed on a percentage of sales of products hasincreased to 81.41% for the year as compared to 78.99% for the previous year 17-18.

During the FY 18-19 the exports of Ethyl Acetate has declined from India which hasforced other players in the industry to dump their material in domestic market. Inaddition to the above globally two new manufacturing units of Ethyl Acetate has startedin Europe and Middle East at a very large scale of production capacity putting pressurein export market by creating a stiff competition for Indian origin Ethyl Acetate whichalso has resulted in dumping of the quantities by the other players in domestic market.The more supply against the demand has resulted in the reduction of the selling pricesparticularly during the fourth quarter of FY 18-19.

In addition to the above the condition of the Plant & Machinery of your Companyrequires more and more ware and tare towards its maintenance which has resulted in theincrease of the plant maintenance expenses during the year under review.

The overall Profits Before Interest and Tax of your Company has declined by 126.68% ascompared to previous financial year 17-18. In this PBIT declinRs. 54.81% was contributedby the Manufacturing Segment and 45.19% by Trading Segment. Your Company's overall LossAfter Tax for financial year 2018-19 was Rs. 297.19 Lakhs against Rs. 354.72 Lakhs infinancial year 2017-18. The Total Comprehensive Income of your Company for FY 2018-19 wasRs. (293.64) Lakhs against Rs. 355.67 Lakhs in financial year 2017-18.

Opportunities Threats Risks and Concerns

The manufacturing industry and the demand thereof are influenced by general economicconditions including among other things rates of economic growth credit availabilityInfrastructure spending interest rates environmental and tax policies safetyregulations freight rates and fuel and commodity prices. Negative trends in any of thesefactors impacting the regions where the Company operates could materially and adverselyaffect the results of operations and scalability of the Company's business financially.Your Company recognizes that every business have its inherent risks and what is requiredis a proactive approach to identify and mitigate them in time so that they do not impactthe business negatively. We endeavor to regularly scan the internal and externalenvironment to identify risks and decide on possible mitigation measures and costs forovercoming them and incorporate them in Company's strategic business and operationalplans. The Company has developed systems and processes to map the risks across segmentsproducts and geographies and respond effectively to counter them and achieve theorganizational goals. Sustained action is taken to further strengthen the system.

Financial Performance

Financial performance achieved by your Company during the year under review is asdisclosed in this Report under the head "Financial Results" and "Overviewof the Financial Performance".

Internal Control Systems and Adequacy

Your Company has a well-placed suitable and adequate internal control systemcommensurate with the size scale and complexity of its operations which ensure;

- Reliable and accurate financial reporting

- Keeping constant check on cost structure

- Prevention and detection of the frauds and errors

- Assurance of orderly and efficient conduct of operations

- Safeguarding of assets

The Company is committed to good corporate governance practices and facilitate timelydetection of any irregularities and early remedial steps against factors such as loss fromunauthorized use and disposition. Company policies guidelines and procedures provide foradequate checks and balances which are meant to ensure that all transactions areauthorized recorded and reported correctly. The internal controls are continuouslyassessed and improved/modified to meet changes in business conditions statutory andaccounting requirements.

Statutory Auditors of the Company has audited the financial statements included in thisannual report and has issued report on our internal control over financial reporting (asdefined in section 143 of the Act).

The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the Internal Auditorsreports the process owners undertake corrective actions in their respective areas andstrengthen the area of controls.

Every quarter the Audit Committee of the Board of Directors oversight the activitieswhich mainly include:

- Reviewing the significant audit observations the corrective steps recommended andtheir implementation status.

- Reviewing of financial reports and other financial information and communicatingwith the regulators.

- Reviewing the internal financial controls system and procedure governance and riskmanagement.

Human Resource and Industrial Relations

As on March 31 2019 the Company had a total head count of 127. The Directors wish toplace on record their appreciation for the contributions made by the employees to theCompany during the year under review at all levels.

During the year under review industrial relations in the factory/plant were cordialand pro-active and all employees and the Union supported productivity and processimprovement measures undertaken at all the functions of the Company.

The Company has in place Health Safety and Environment policy for Mahad operations.

Details of Significant Changes in Key Financial Ratios:

Particulars FY 18-19 FY 17-18
Debtors Turnover Ratio (Number of Days) 4.01 3.77
Inventory Turnover Ratio (Number of Days) 7.92 7.01
Interest Coverage Ratio (1.47) 6.41
Current Ratio 1.44 1.57
Debt Equity Ratio - 0.03
Operating Profit Margin ( in % ) (0.98%) 3.94%
Net Profit Margin ( in % ) (1.74%) 2.23%
Return on Net Worth ( in % ) (3.86%) 13.37%

Credit Rating

The Company enjoys a decent status for its complete financial management and theability to meets its financial obligation. During the year under review Acuite Rating& Research a reputed rating agency has assigned BBB- (stable) rating for long-termand A3 rating for short-term. Subsequent to the year under review the aforementionedrating agency has assigned BB+ (stable) rating for long-term and A4+ rating forshort-term.


Information as per section 197 of the Act read with the RulRs. 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time totime forms part of this report as "Annexure A".

Further none of the employees of the Company were in receipt of remuneration in excessof the limits as set out under RulRs. 5(2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 as amended from time to time.


Statutory Auditors and Auditors Report

M/s. R A Maru & Associates Chartered Accountants (Firm Registration No. 141914W)were appointed as statutory auditors of the Company at thRs. 25 AGM held on September 222017 for a period of five years from the conclusion of thRs. 25 AGM until the conclusionof thRs. 30 AGM.

However pursuant to notification issued by the Ministry of Corporate Affairs on May 72018 amending section 139 of the Act and the rules framed thereunder the mandatoryrequirement for ratification of appointment of auditors by the Members at every AGM hasbeen omitted and accordingly the Company is not proposing ratification of appointment ofauditors at this AGM.

The Audit Report for the financial year 2018-19 does not contain any qualificationreservation or adverse remarks.

Cost Auditors and Cost Audit Report

The Board of Directors on recommendation of the audit committee has re-appointed M/s.N. Ritesh & Associates Cost Accountants (Firm Registration No. R100675) as CostAuditors of the Company for the financial year 2019-20 for conducting the audit of CostRecords maintained by the Company relating to "Chemical Division" atremuneration as mentioned in the notice convening the AGM of the Company.

A resolution seeking Members' ratification for the remuneration payable to the CostAuditors for the financial year 2019-20 forms part of the notice of thRs. 27 AGM of theCompany and the same is recommended for your consideration and approval.

The Cost Audit Report for the financial year ended March 31 2018 issued by M/s. N.Ritesh & Associates Cost Accountants was filed on September 12 2018 by the Company.The Cost Audit Report for the financial year ended March 31 2019 will be filed in duecourse.

As per the requirements of Section 148(1) of the Act the Cost Accounts and Records ofthe Company are duly made and maintained during the financial year 2018-19.

Secretarial Auditors and Secretarial Audit Report

M/s. Jay Mehta & Associates Company Secretaries were re-appointed as secretarialauditors to conduct the secretarial audit of the Company for the financial year 2018-19.

The Secretarial Audit Report in Form MR-3 is annexed to this report as "AnnexureB".

The Secretarial Audit Report for the financial year 2018-19 contains the followingqualification reservation or adverse remarks:

(a) The composition of the Board of Directors of the Company was not in accordancewith the provisions of Regulation 17(1)(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 during the period from 1 April 2018 till 11 February2019. The Company has complied with the Regulation 17(1)(b) by appointment of Mrs. HinaRakesh Shah as an Independent Director w.e.f. 12 February 2019.

Board's Explanation / Comments on above remarks:

During the year under review the Board of Directors on the recommendation ofNomination and Remuneration Committee appointed Mrs. Hina Rakesh Shah as an AdditionalDirector (Category–Non-Executive Independent) of the Company with effect fromFebruary 12 2019 for a period of three years subject to approval of the Members at theensuing AGM of the Company.

(b) The Chief Financial Officer had resigned w.e.f. 1 May 2017. In accordance withthe provisions of section 203(4) of the Companies Act 2013 the said vacancy was requiredto be filled by the Board within a period of six months from the date of such vacancy.However the Company has not filled the said vacancy within the time period prescribedunder section 203(4) of the Companies Act 2013.

Board's Explanation / Comments on above remarks:

During the year under review the Board of Directors on the recommendation ofNomination and Remuneration Committee and Audit Committee appointed Mr. Vaize Ahmed Kamplias Chief Financial Officer of the Company w.e.f. August 14 2018. Accordingly the Companyhas complied with the provisions of section 2013 of the Act.

Internal Auditors and Internal Audit Report

M/s. N. P. Patwa & Co Chartered Accountants were re-appointed as InternalAuditors of the Company for the Financial Year 2018-19. The Audit Committee reviews thefindings made by the Internal Auditors in their Report on quarterly basis and makesnecessary recommendations to the management.


During the year under review the Statutory Auditors have not reported any instances offrauds committed in the Company by its Officers or Employees to the Audit Committee /Central Government under Section 143(12) of the Act read with RulRs. 13 of the Companies(Audit and Auditors) Rules 2014.


In accordance with the provisions of Section 177(9) of the Act read with Regulation 22of Listing Regulations the Company has formulated and adopted Vigil Mechanism / WhistleBlower policy to enable the Directors and employees to report about unethical behavior andinstances of fraud or mismanagement if any. The mechanism provides for adequatesafeguards against victimization of employees and Directors to avail of the mechanism andalso provide for direct access to the Chairman of the Audit Committee in exceptionalcases.

The policy can be accessed at the website of the Company

During the year under review no compliant has been received under the Whistle BlowerPolicy (Vigil Mechanism).


Particulars of loans guarantees and investments covered under Section 186 of theCompanies Act 2013 forms part of the notes to the financial statements provided in thisannual report.


The Company has formulated a policy on Related Party Transactions for the purpose ofidentification and monitoring of such transactions. The said policy on Related PartyTransactions as approved by the Board is uploaded on the Company's website

During the year under review the Company has entered into a transaction with relatedparty which is not materially significant and does not have a potential conflict with theinterest of the Company at large. Hence the disclosure in the requisite Form AOC-2 is notrequired. However the details relating to Related Party Transaction is provided in theNote No. 37 of Standalone Financial Statements.


In compliance with the provisions of section 135 of the Act the Board of Directors ofthe Company has formed a Corporate Social Responsibility (CSR) Committee and has alsoframed a CSR Policy.

The terms of reference details of meetings held during the year attendance of Membersand details pertaining to composition of CSR Committee are included in CorporateGovernance Report which forms part of this Report.

The detailed report about CSR activities undertaken during the year is annexed as "Annexure- C" as required under the Companies (Corporate Social Responsibilities Policy)Rules 2014.

The CSR policy can be accessed at the website of the Company


Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. In line with corporate bestpractices the Company assesses the risks in the internal and external environment whichwill monitor evaluate and execute all mitigation actions in this regards and takes allmeasures necessary to effectively deal with incidences of risk. Adequate risk managementframework capable of addressing the risks is in place.


The extract of the Annual Return as provided under section 92(3) of the Act andprescribed in Form No. MGT- 9 of the Companies (Management and Administration) Rules2014 is annexed as "Annexure - D" to this Report.

Further in accordance with the provisions of section 92(3) of the Act the copy ofAnnual Return of the Company is available on its website


Your Company observes high standards of corporate governance in all areas of itsfunctioning with strong emphasis on transparency integrity and accountability. Asrequired under the Listing Regulations a detailed report on corporate governance alongwith the auditors' certificate thereon forms part of this report as "Annexure– E".


There have been no material changes and commitments which have occurred between the endof financial year till the date of this report affecting the financial position of theCompany.


The Company has not accepted any deposit within the meaning of Section 73 and 74 ofthe Act read with the Companies (Acceptance of Deposits) Rules 2014 during the yearunder review.


There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and the operations of the Company.


The Company does not have Demat Suspense Account / Unclaimed Suspense Account.Accordingly the disclosure required to be made as per Schedule V (F) of ListingRegulations is not applicable.


In accordance with the provisions of the Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has put in place a Policyon Prevention of Sexual Harassment at Workplace which provides for protection againstsexual harassment of women employees at workplace and for prevention and redressal of suchcomplaints. The Company has constituted Internal Complaints Committee (ICC) and has 5members in the ICC.

Disclosure for complaints received / disposed of by ICC for FY 2018-19:

a. number of complaints filed during the financial year: Nil
b. number of complaints disposed of during the financial year: Nil
c. number of complaints pending as on end of the financial year: Nil


In terms of RulRs. 8 (3) of the Companies (Accounts) Rules 2014 the required detailsare as below:

Conservation of energy:

(i) The steps taken or impact on conservation of energy

Your Company is committed to ensure a clean & green pollution free environment aswell a safe and healthy work place at all locations of the Company. Your Company has madeall efforts to optimize the use of energy and minimize its wastage. To ensure minimumconsumption of energy for a given level of production operating parameters of productionhave been standardized. The Key Initiatives towards conservation of Energy were:

• Change of few of the efficient power serving motors.

• Maintaining the proper servicing of the MCC Panel for the improvement of powerfactor.

• Change of CFL to LED at plant.

• Installation of VFD for few of the Motor Power Control.

(ii) The steps taken by the Company for utilising alternate sources of energy

Major energy conservation initiatives in the past few years has been successfullycontinued for the steam saving which has helped the Company to reduce the Coal consumptionwhich in turn resulted in to reduction of emission of CO2 in atmosphere.

(iii) The capital investment on energy conservation equipment – Nil

Technology absorption:

The Company is constantly trying to provide its customers with products thatincorporate latest available materials and technology are preferred efforts are beingmade wherever possible to make use of best contemporary technology.

(i) Efforts made towards Technology Absorption: The efforts made in the past for thedevelopment of the new technology with the help of engineering modification hassuccessfully helped the Company to continue its production with the consumption of theimported alcohol as a raw material.

The Company's R & D department is making constant efforts in absorbing and updatingthemselves with the technological advancements in the product portfolio of the Company.

(ii) The benefits derived like product improvement cost reduction product developmentor import substitution: The efforts made in the past for the import of raw material andthe plant modification we are able to improve the product quality with the yield offinished product.

(iii) in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year)-

(a) the details of technology imported - NA

(b) the year of import - NA

(c) whether the technology been fully absorbed - NA

(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof – NA

(iv) The expenditure incurred on Research and Development –Rs. 142904/-

Foreign exchange earnings and outgo
(Amount in Rs. )
Particulars 2018-2019 2017-2018
i. Foreign Exchange used 843002 426742
ii. Foreign Exchange earned 258881707 256750488


The Board take this opportunity to express and place on record their appreciation forthe continued support cooperation trust and assistance extended by shareholdersemployees customers principals vendors agents bankers financial institutionssuppliers distributors and other stakeholders of the Company.

For and on behalf of the Board
Sd/- Sd/-
Place: Mumbai Purab Shah Sunil Shah
Date: August 13 2019 Executive Director& CEO Director