Your Directors have pleasure in presenting the 22nd Board Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended 31st March 2018.
|1. FINANCIALS: || || |
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[Rupees in Lacs]
|PARTICULARS || |
|Revenue from Operations || |
|Other Income || |
|Total Revenue || |
|Less: Expenses before Interest and Depreciation || |
|Less: (a) Interest || |
|(b) Depreciation || |
|Profit before Tax & Extra Ordinary Items || |
|Less : Prior period expenses || |
|Less: Prior year's Income Tax Adjustment || |
|Profit Before Tax || |
|Less: Tax Expenses || || |
|Current Tax || |
|Deferred Tax || |
|Profit after Tax || |
Your Directors have recommended a final dividend of Rs. 00.25/- pershare (i.e. 2.5%) on Company's paid up equity share capital comprising of 4936280numbers of equity shares of Rs. 10/- each.
3. OPERATIONAL HIGHLIGHTS:
Your Company's Revenue increased to Rs. 31.76 crore in FY18 as comparedto Rs. 27.84 crore in previous year FY17 recording a remarkable growth of 14.06% (YoY)despite operational period of 10 months and volatile raw materials prices which have beenwell absorbed by higher sales volume and better product value realisation. Export Turnovergrew remarkably by 36.13% to reach 4.82 crore as compared to P/Y figure of 3.54 crore.
Net profit increased to Rs. 2.36 crore in FY18 compared to Rs. 1.49crore during the same period of last year representing 57.73 % increase in profits. TheCompany managed to register a commendable growth in profits inspite of increasing overheadcosts and non operation of plant for two months.
EBIDTA increased to Rs 5.02 crore from Rs. 3.80 crore as compared tosame period last year recording a growth of 32.20% due to sales growth propelled byincrease in demand of its products.
4. SHARE CAPITAL:
At present the Company has only one class of share Equity shares offace value of Rs. 10 each. The authorized share capital of the company is Rs.60000000/- divided into 6000000 equity shares of Rs. 10 each. The paid up sharecapital of the company is Rs. 49362800/- divided into 4936280 equity shares of Rs. 10each. The Company had raised fund through Public Issue of shares in F/Y 2016-17 and theequity shares of the Company are now listed on SME platform of BSE Limited.
5. IPO FUND UTILISATION:
The Company had raised the fund to meet the working capital requirementand general corporate purpose in the F/Y 2016-17. The amount raised in IPO has been fullyutilized for the specified purposes. Particulars of the utilization of fund raised throughPublic Issue in the month of March 2017 is as below:
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|Particulars || |
Amount allotted for Object as disclosed in the Prospectus (Rs.)
Utilization of fund received from allotment of shares till September 30 2017
Balance amount to be utilized
Deviation (if any) (Rs.)
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|For IPO Issue || |
|Expense || || || || |
|For General || || || || |
|Corporate Purpose || |
|For Working || || || |
|Capital Purpose || |
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|Total || |
6. TRANSFER TO RESERVE:
The Company proposes to transfer Rs. 22140878 to its GeneralReserve.
7. CREDIT FACILITIES:
The Company has been optimally utilizing its fund based and non fundbased working capital requirements as tied up with Kotak Mahindra Bank Limited. During theyear Company transferred its Banking facilities from State Bank of India to Kotak MahindraBank Limited. All the dues of State Bank of India were cleared. The Company wascomfortable in meeting its financial requirements from Kotak Mahindra Bank Limited.Effective financial measures have been continued to reduce cost of interest and bankcharges.
8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION ANDPROTECTION FUND: There is no amount outstanding to be transferred as unclaimed dividend toinvestor education and protection fund.
9. MATERIAL EVENTS OCCURING AFTER BALANCE SHEET DATE :
No material changes and commitments affecting the financial position ofthe Company have occurred between the end of the financial year of the Company to whichthe financial statement relate and the date of the Board Report.
10. ORDER OF AUTHORITIES :
At the time of filing Draft Prospectus for public issue of 1336000equity shares of the Company there was a reference of litigation against the Company byCommercial Tax Officer Ankleshwar relating to pending sales tax liability of Rs.3291032/-.In the aforesaid matter Deputy Commissioner of Commercial Tax has grantedrelief by way of setting aside entire sales tax liability of Rs. 3291032/- vide itsorder dated 28.02.2018 and has granted refund of Rs. 1503636/- to the Company vide itsfinal order dated 23.03.2018. As on date there is no pending Tax liability.
The Company received on 4th August 2017 closure notice of the factorylocated at 4712 -14 GIDC Road South 10 Ankleshwar Gujarat form Gujarat PollutionControl Board (GPCB) for non compliance of certain technical requirements observed bythem. However Company quickly responded to resolve the issue and the factory operationswere reinstated vide GPCB order dated 04/10/2017.
11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND
The information pertaining to conservation of energy technologyabsorption Foreign exchange Earnings and outgo as required under Section 134(3) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 isfurnished as under:
(A) Conservation of energy:
Steps taken / impact on conservation of energy with special referenceto the following: Steps taken by the company for utilizing alternate sources of energyincluding waste generated : NIL
(B) Technology absorption:
1. Efforts in brief made towards technology absorption.Benefits derived as a result of the above efforts e.g. product improvement costreduction product development import substitution etc. The Company has not entered intoany technology based ventures during the year under review. However the Company aims fordigitisation of processes of purchase sales marketing and other operations over nextyear and gradual increase in manpower facilities and office workspace.
2. In case of imported technology (imported during the last 3years reckoned from the beginning of the financial year) following information may befurnished: The Company has not imported any technology and hence not applicable.
3. Expenditure incurred on Research and Development :
The Company has not incurred any expenditure on research anddevelopment
(C) Foreign exchange earnings and Outgo:
|PARTICULARS || |
Amt (In Rs.)
|Foreign Exchange earned in terms of actual inflows during the year || |
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|Foreign Exchange outgo during the year in terms of actual outflows || |
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12. RISK MANAGEMENT:
The Company has framed a sound Risk Management Policy to identify andevaluate business risks and opportunities and the same has become integral part ofCompany's day to day operations. The key business risks identified by the Company are asfollows viz. Industry Risk Management and Operations Risk Market Risk Government Policyrisk Liquidity risk and Systems risk. The Company has in place adequate mitigation plansfor the aforesaid risks.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The provisions of Section 135 of the Companies Act 2013 read with Rule9 of the Companies (Accounts) Rules 2013 is not applicable to the Company.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION186 OF THE
COMPANIES ACT 2013:
There were no loans guarantees or investments made by the Companyunder Section 186 of the Companies Act 2013 during the year under review and hencefurnishing of above information is not applicable.
15. RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial yearwere on an arm's length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Company's Promoters DirectorsManagement or their relatives which could have had a potential conflict with theinterests of the Company. Transactions with related parties entered by the Company in thenormal course of business are periodically placed before the Board Meeting as per theomnibus approval of Audit Committee and the particulars of contracts entered during theyear as per Form AOC-2 is enclosed as Annexure.
The Board of Directors of the Company has on the recommendation of theAudit Committee adopted a policy to regulate transactions between the Company and itsRelated Parties in compliance with the applicable provisions of the Companies Act 2013the Rules thereunder and the Listing Regulations. This Policy has been uploaded on thewebsite of the Company at www.chemcrux.com/investor-info.php under investorsinfo/Corporate Policy link.
16. DIRECTORS / KEY MANAGERIAL PERSONNEL:
During the year no directors were appointed or have resigned. Mr.Alpesh Makwana Company Secretary resigned from office w.e.f. March 1st 2018. Inaccordance with the provisions of the Companies Act 2013 and in terms of the Memorandumand Articles of Association of the Company Mrs Neela Marathe Director retire by rotationand being eligible for re-appointment has offered her candidature for director. Thepresent term of Whole Time Director and Managing Director will expire on 31st December2018. They are eligible for reappointment and hence resolution for re-appointment of WholeTime Director and Managing Director is put forth for approval of members.
Pursuant to the provisions of the Companies Act 2013 and Regulation17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and Compliance Committees.
The Board has on the recommendation of the Nomination &Remuneration Committee formulated criteria for Determining Qualifications PositiveAttributes and Independence of a Director and also a Policy for remuneration of DirectorsKey managerial Personnel and senior management. The details of criteria laid down and theRemuneration Policy are given in the Corporate Governance Report.
During the year five Board Meetings and four Audit Committee Meetingswere convened and held. The details are given in the Corporate Governance Details. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. The required particulars of various Committee Meetings held during the year arestated in the Corporate Governance Details.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.
17. AUDIT COMMITTEE AND VIGIL MECHANISM:
The composition and other particulars of Audit Committee are providedin the Corporate Governance Details attached herewith.
In pursuance of the provisions of section 177(9) & (10) of theCompanies Act 2013 a Vigil Mechanism for directors and employees to report genuineconcerns has been established. The Vigil Mechanism Policy has been uploaded on the websiteof the Company at http://www.chemcrux.com/investor-info.php.
18. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 the Board hereby submits its responsibility Statement: (a) in the preparation ofthe annual accounts the applicable accounting standards have been followed along withproper explanation relating to material departures; (b) the directors have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period;
(c) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; (d) the directors have prepared the annual accounts on a goingconcern basis; and (e) the directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively. (f) the directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
19. ANNUAL RETURN:
Extract of Annual Return of Company pursuant to the provisions ofSection 92 read with Rule 12 of the Companies (Management and administration) Rules 2014has been placed at website of the Company. Weblink of the same is ashttp://www.chemcrux.com/investor-info.php
20. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES: The Companydoes not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during theyear under review.
22. AUDITORS: STATUTORY AUDITORS
The Company's Auditors M/s. Talati & Talati Chartered AccountantsVadodara will retire at ensuring Annual General Meeting of the Company. In terms ofsection 139 to 141 of the Companies Act 2013 and the Rules framed thereunder it has beenproposed to make appointment of M/s. R. J. Shah & Associates Chartered Accountantsas Auditors of the Company to hold the office from the conclusion of ensuing AnnualGeneral Meeting until conclusion of 27th Annual General Meeting. As required under ListingRegulations the auditors have also confirmed that they hold a valid certificate issued bythe Peer Review Board of the Institute of Chartered Accountants of India.
Pursuant to the provisions of Section 204 of the Companies Act 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/S. Kashyap Shah & Co. a Practicing Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as Annexure.
The Company has appointed Naresh & Co. as the Internal Auditors forthe F.Y. 2017-18.
23. OBSERVATION OF AUDITORS:
There are no qualifications reservations or adverse remarks made bythe Statutory Auditors and Secretarial Auditors.
24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system of internal control to safeguard andprotect from loss unauthorized use or disposition of its assets. All the transactions areproperly authorised recorded and reported to the Management. The Company is following allthe applicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.
25 . SHARES: a. BUY BACK OF SECURITIES: The Company has notbought back any of its securities during the year under review. b. SWEAT EQUITY: TheCompany has not issued any Sweat Equity Shares during the year under review. c. BONUSSHARES: The Company has not issued any bonus share during the year under review. d.EMPLOYEES STOCK OPTION PLAN:The Company has not provided any Stock Option Scheme to theemployees. e. Fresh issue of shares: The Company has not issued any shares during the yearunder review.
26. CORPORATE GOVERNANCE:
Provisions relating to Corporate Governance Report under Schedule V ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are notapplicable to SME listed Company. However as a better corporate practice a separateSection on Corporate Governance has been annexed.
27. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report is appended as Annexure -to this Report.
28. PARTICULARS OF EMPLOYEES:
Disclosure under the provisions of Section 197 of the Companies Act2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
a) The ratio of the remuneration of each director to the medianremuneration of the employees of the Company for the financial year. Ratio of remunerationof MD and Whole Time Director 8.06 : 1 (Rs. 3000000 : 372234) Other Directors NotApplicable
b) The percentage increase in the remuneration of each director ChiefExecutive Officer Chief Financial Officer and Company Secretary if any in the financialyear During the FY 2017-18 there was nil % increase in remuneration of WTD MD otherDirectors CFO and Company Secretary.
c) The percentage increase in the median remuneration of employees inthe financial year Median Remuneration is Rs. 372234 and average % increase is 15%
d) The number of permanent employees on the rolls of the Company as on31.03.2018 52
e) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration Average 15% increase in salaries of Employees and nil % increasein Managerial Remuneration during F.Y. 2017-18.
f) Affirmation that the remuneration is as per the remuneration policyof the company. The Company's remuneration policy is driven by the success and performanceof the individual employees and the Company. Through the compensation package the companyendeavors to attract retain develop and motivate high performance staff. The Companyfollows a compensation mix of fixed pay benefits and performance based variable pay. TheCompany affirms that the remuneration is as per remuneration of the Company.
g) Details pertaining to remuneration as required under Section 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 with reference to remuneration ofemployees in excess of the limits prescribed None of the employees were in receipt ofremuneration above 8 lakh 50 thousand per month or Rs. One crore Two lakhs per annum andabove.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION OF PROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a Sexual harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013. All women employees (permanent contractual temporarytrainees) are covered under this policy. An Internal complaint committee is formed to lookafter any complaints of women employees. During the year four meetings of internalcommittee for prevention prohibition and redressal of sexual harassment of women atworkplace were held. No complaints for sexual harassment were received during the year.
30. COST AUDIT:
Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 dated 31/12/2014 cost audit andmaintenance of cost records is not applicable to the Company for the Financial Year2017-18.
31. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS :
The Company has complied with the provisions of Secretarial Standards(I & II) issued by the Institute of Company Secretaries of India and approved by theCentral Government under section 118(10) of the Companies Act 2013.
32. HUMAN RESOURCES:
During the period under review the personal and industrial relationswith the employees remained cordial in all respects. The management has always carried outsystematic appraisal of performance and imparted training at periodic intervals. TheCompany recognizes talent and has judiciously followed the principle of rewardingperformance.
Your Directors place on record their sincere thanks to bankersbusiness associates consultants and various Government Authorities for their continuedsupport extended to your Companies activities during the year under review. Your Directorsalso acknowledges gratefully the shareholders for their support and confidence reposed onyour Company.
For and on behalf of the Board of Directors
For CHEMCRUX ENTERPRISES LIMITED
Place: Vadodara Date: 24th August 2018