Your Directors have pleasure in presenting the 25th Board Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended 31st March 2021.
[Rupees in Lacs]
|PARTICULARS ||2020-21 ||2019-20 |
|Revenue from Operations ||5333.10 ||5744.96 |
|Other Income ||79.64 ||85.80 |
|Total Revenue ||5412.74 ||5830.76 |
|Less: Expenses before Interest and Depreciation ||4077.86 ||4270.35 |
|Less: (a) Interest ||14.82 ||32.17 |
|(b) Depreciation ||120.13 ||117.61 |
|Profit before Tax & Extra Ordinary Items ||1199.93 ||1410.63 |
|Less: Prior period expenses ||0.00 ||0.13 |
|Less: Prior year's Income Tax Adjustment ||(4.59) ||(7.60) |
|Profit Before Tax ||1204.52 ||1418.10 |
|Less: Tax Expenses || || |
|Current Tax ||300.00 ||363.00 |
|Deferred Tax ||11.16 ||(9.16) |
|Profit after Tax ||893.36 ||1064.26 |
|Earnings per Share ||18.10 ||21.56 |
2. KEY FINANCIAL RATIOS :
|Sr. No. Particulars ||FY 20-21 ||FY 19-20 ||% Change |
|1 Debtors Turnover Ratio ||8.38 ||5.68 ||47.54 |
|2 Inventory Turnover Ratio ||7.24 ||12.62 ||-42.63 |
|3 Interest Coverage ||81.96 ||44.84 ||82.78 |
|4 Current Ratio ||4.39 ||2.75 ||59.64 |
|5 Debt Equity Ratio ||0.01 ||0.03 ||-66.67 |
|6 Operating Profit Margin (%) ||24.75 ||26.6 ||-6.95 |
|7 Net Profit Margin (%) ||16.75 ||18.53 ||-9.61 |
|8 Return on Net worth (%) ||38.05 ||39.24 ||-3.03 |
Board noted that Company key financial ratios have declined as compared to previousyear owing to shutdown of production operations during the FY 2020-21 as per theenvironmental directives issued by the Government Authorities. The decline in Debt EquityRatio demonstrates that your Company is less leveraged and operating with minimum borrowedfund.
Dividend is recommended by your Board taking into consideration the factors likeoverall profitability cash flow capital requirements and other business needs of yourcompany. Your Board of Directors are pleased to recommend a final dividend of Rs. 2.00/-per equity share (20%) on 4936280 equity shares of Rs.10/- each subject to approval ofshareholders at the forthcoming Annual General Meeting. The Dividend when approved wouldresult in a total outflow of Rs. 9872560. According to Finance Act 2020 with effectfrom April 1 2020 dividend declared and paid by the Company is taxable in the hands ofshareholders and the Company is required to deduct tax at source (TDS) from dividend paidto the shareholders at the applicable rates.
4. OPERATIONAL HIGHLIGHTS:
Your Company's financial highlights during preceding three years period can besummarized as follows:
|Rs. In Lacs ||FY 18-19 ||FY 19-20 ||FY 2020-21 ||% increase (1 year) ||% increase (3 years) ||CAGR% (3 years ) |
|Revenue ||5576.79 ||5830.76 ||5412.74 ||-7.17 ||-2.94 ||-1.99 |
|EBDITA ||1391.04 ||1560.41 ||1334.89 ||-14.45 ||-4.04 ||-2.36 |
|Profit before Tax ||1234.76 ||1418.10 ||1204.52 ||-15.06 ||-2.45 ||-1.82 |
|Net Profit ||931.55 ||1064.26 ||893.36 ||-16.06 ||-4.10 ||-2.39 |
|Networth ||2373.94 ||3241.2451 ||4085.24466 ||26.04 ||72.09 ||19.83 |
|EPS ||18.87 ||21.56 ||18.10 ||-16.05 ||-4.08 ||-2.38 |
5. SHARE CAPITAL:
At present the Company has only one class of share - Equity shares of face value ofRs. 10 each. The authorized share capital of the company is Rs. 60000000/- divided into6000000 equity shares of Rs. 10 each. The paid-up share capital of the company is Rs.49362800/- divided into 4936280 equity shares of Rs. 10 each. The Company had raisedfund through Public Issue of shares in F/Y 2016-17 and the Equity shares of your Companyare listed on SME segment of BSE Limited since March 2017.
6. TRANSFER TO RESERVE:
The Company proposes to transfer Rs. 84399961/- to its General Reserve.
7. CREDIT FACILITIES:
The Company has been optimally utilizing its fund based and non-fund based workingcapital requirements as tied up with Kotak Mahindra Bank Limited. Effective financialmeasures have been continued to reduce cost of interest and bank charges.
8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:
There was no amount outstanding to be transferred as unclaimed dividend to investoreducation and protection fund during the FY 2020-21.
9. MATERIAL EVENTS OCCURING AFTER BALANCE SHEET DATE:
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which the financialstatement relates and the date of the Board Report other than the effects of globalpandemic on business.
10. ORDER OF AUTHORITIES:
Other than the order of Gujarat Pollution Control Board (GPCB) received in January 2021for shutdown of operations of our Factory located at Ankleshwar in view of environmentaldirectives no order of any government state local or statutory authorities werereceived during the FY 2020-21 which could have affected the workings of the company.However after complying with order of the GPCB relating to environmental directives theproduction operations have resumed since April-2021.
11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134(3) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished as under:
(A) Conservation of energy:
Steps taken / impact on conservation of energy with special reference to thefollowing:
Steps taken by the company for utilizing alternate sources of energy including wastegenerated:
Your Company is certified with ISO 50001: 2018 Certification from BSI (BritishStandards Institution) and ANAB (American National Standards Institution AccreditationBoard). Your Company is compliant with the Energy Management Systems and aims to improveenergy efficiency and consumption thereby resulting in costs reduction and increase inproductivity. During the FY 2020-21. Energy consumption was 2003414 units (equivalent to2.00mwh) and cost incurred was Rs. 145.30 lakhs.
(B) Technology absorption:
1. Efforts in brief made towards technology absorption. Benefits derived as a resultof the above efforts e.g. product improvement cost reduction product developmentimport substitution etc.
The Company has not entered into any technology-based ventures during the year underreview.
In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished:
The Company has not imported any technology and hence not applicable.
2. Expenditure incurred on Research and Development:
The Company is coming up with a R&D facility located at GIDC Ankleshwar Gujarat.
(C) Foreign exchange earnings and Outgo:
|PARTICULARS ||Amt (In Lacs) |
|Foreign Exchange earned in terms of actual inflows during the year ||1059.74 |
|Foreign Exchange outgo during the year in terms of actual outflows ||817.43 |
Your Company is ISO 14001:2015 certified which specifies the requirements for theformulation and maintenance of an environmental management systems (EMS). During the yearyour Company has complied with local and regulatory environment laws and regulations. Westrive actively to reduce the overall impact on the environment by targeting annualreductions in our carbon intensity and the management of waste water vehicle emissionsand energy consumption. The Board of Directors has adopted the Environment Policyoutlining our commitment to conduct operations in environment friendly and responsibleway. The policy can be accessed at the website www.chemcrux.com
12. RISK MANAGEMENT:
The Company has framed a sound Risk Management Policy to identify and evaluate businessrisks and opportunities and the same has become integral part of Company's Day to dayoperations. The key business risks identified by the Company are as follows viz. IndustryRisk Management and Operations Risk Market Risk Government Policy risk Liquidity riskand Systems risk. The Company has in place adequate mitigation plans for the aforesaidrisks. On account of outbreak of Covid global pandemic and uncertainty caused by itCompany adopted Risk Management Policy to minimize the impact on its operationscustomers suppliers and employees.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The provisions of Section 135 of the Companies Act 2013 read with Rule 9 of theCompanies (Accounts) Rules 2013 were applicable to the company from the financial year2019-20. In line with same a Corporate Social Responsibility Committee was formed by theBoard of directors constituting of Mr. Sanjay Marathe as Chairman of the Committee Mrs.Sidhdhi G. Shah and Mr. Shailesh Patel (Independent Director) as Committee Members. TheCSR Committee has formulated and recommended to the Board the Corporate SocialResponsibility Policy which indicates the activities to be undertaken by the Company inareas or subjects specified in schedule VII of the Companies Act 2013. Accordinglyduring the FY 2020-21 as approved by the CSR Committee the amount for CSR expenditureamounting to Rs. 2102000 /- was spent in areas specified under schedule VII of theCompanies Act 2013. Please refer Annexure IV for further details and click on the linkwww.chemcrux.com/investor-info.php under investors info/Corporate Policy link to accessthe CSR Policy of Company.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
There were no loans or guarantees given by the Company under Section 186 of theCompanies Act 2013 during the year under review. Investments in short term UTI MutualFund schemes were made during the year which was within the limits approved by Board ofDirectors and the limits prescribed under section 186 of the Companies Act 2013.
15. RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Board Meeting as per the omnibus approval ofAudit Committee and the particulars of contracts entered during the year as per Form AOC-2is enclosed as Annexure III.
The Board of Directors of the Company has on the recommendation of the Audit Committeeadopted a policy to regulate transactions between the Company and its related parties incompliance with the applicable provisions of the Companies Act 2013 the Rules thereunderand the Listing Regulations. This policy has been uploaded on the website of the Companyat www.chemcrux.com/investor-info.php under investors info/Corporate Policy link.
16. DIRECTORS / KEY MANAGERIAL PERSONNEL:
During the year none of the directors were appointed or resigned. The CompanySecretary of the Company Mrs. Ekta Kumari Shrivastava resigned from her office w.e.f.20/02/2021 and Mrs. Dipika Rajpal was appointed in her place to take over the charge asthe Company Secretary of the Company w.e.f. 05/03/2021.
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mrs. Neela Sanjay MaratheNon-Executive Director shall retire by rotation in the ensuing Annual General Meeting andbeing eligible for re-appointment has offered her candidature for directorship.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedan annual performance evaluation of its own performance committees and the directorsindividually.
The Board has on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining qualifications positive attributes and independenceof a Director and also a policy for remuneration of directors key managerial personneland senior management. The policy is available at the website of company atwww.chemcrux.com/investor-info.php.
During the year six Board Meetings and four Audit Committee Meetings were convened andheld. The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
17. AUDIT COMMITTEE AND VIGIL MECHANISM:
The Audit Committee comprises of Mr. Shailesh Patel- Independent Director Mr.Bhanubhai Patel- Independent Director and Mrs. Neela Sanjay Marathe - Non-ExecutiveDirector. During the year four Audit Committee Meetings were held. In pursuance of theprovisions of section 177(9) & (10) of the Companies Act 2013 a Vigil Mechanism fordirectors and employees to report genuine concerns has been established. The VigilMechanism Policy has been uploaded on the website of the Company athttp://www.chemcrux.com/investor-info.php.
18. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility statement: -
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) 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 at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors 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) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. ANNUAL RETURN
The Annual Return of Company will be placed at the website of the Company pursuant tothe provisions of Section 92 read with Rule 12 of the Companies (Management andadministration) Rules 2014 Weblink of the same is ashttp://www.chemcrux.com/investor-info.php.
20. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
The Company's Auditors M/s. R.J. Shah & Associates has been appointed as theStatutory Auditor of the Company at the 22nd Annual General Meeting untilconclusion of 27th Annual General Meeting of the Company for a term of fiveyears. The report of the Statutory Auditors of the Company is annexed and is forming partof the Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/S. Kashyap Shah & Co. a Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit Report is annexedherewith as "Annexure
The Company has appointed Naresh & Co. as the Internal Auditors. Their report isreviewed by the Audit Committee from time to time.
23. OBSERVATION OF AUDITORS:
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors Internal Auditors and Secretarial Auditors. The auditors have not reported anyfrauds under sub section 12 of section 143 other than those which are reportable to theCentral Government.
24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorised recorded and reported to the Management. The Company is following all theapplicable 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.
a. BUY BACK OF SECURITIES: The Company has not bought back any of its securities duringthe year under review.
b. SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during the yearunder review.
c. BONUS SHARES: The Company has not issued any bonus share during the year underreview.
d. EMPLOYEES STOCK OPTION PLAN: The Company has not provided any Stock Option Scheme tothe employees.
e. FRESH ISSUE OF SHARES: The Company has not issued any shares during the year underreview.
26. CORPORATE GOVERNANCE:
Provisions relating to Corporate Governance Report under Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are not applicable to SMElisted Company hence the same has not been annexed to the Board's Report.
27. AWARDS AND RECOGNITIONS:
Your company has received Authorised Economic Operator (AEO)-T1 certificate fromIndian Customs Board Ministry of Finance.
Your Company has been accorded Certificate of Recognition as "One StarExport House" by the Directorate General of Foreign Trade Ministry of Commerce &Industry.
Your Company has featured at 1st Rank in the list of Top 50 SMECompanies of India in an article published in Dalal Street Investment Journal (June 07-202021 edition) based on the past financial performance and other crucial parameters.
28. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report is presented in a separate sectionforming part of this Annual Report at Annexure I.
29. PARTICULARS OF EMPLOYEES: -
Disclosure under the provisions of Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year.
Ratio of remuneration of MD and Whole Time Director - 15.67 : 1 (Rs. 8400000 :536219)
Other Directors - Not Applicable
b) The percentage increase in the remuneration of each director Chief ExecutiveOfficer Chief Financial Officer and Company Secretary if any in the financial year -During the FY 2020-21 there was Nil % increase in remuneration of WTD and MD. There was11.87 % increase in the remuneration of CFO & for CS no comparative figures areavailable as she is appointed w.e.f. 05/03/2021.
c) The percentage increase in the median remuneration of employees in the financialyear - Median Remuneration is Rs. 536219 and average increase is 11.87% for the F.Y.2020-21.
d) The number of permanent employees on the rolls of the Company as on 31.03.2021 - 78
e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration - Average11.87% increase in salaries of Employees and Nil % increase in Managerial Remuneration ofDirectors during F.Y. 2020-21. The increase in remuneration of managerial person iscommensurate with the efforts put in by them in leading the Company to greater heights andas per the prescribed limits of Schedule V of the Companies Act 2013.
f) Affirmation that the remuneration is as per the remuneration policy of the company.
The Company's remuneration policy is driven by the success and performance of theindividual 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 policy of the Company.
g) Details pertaining to remuneration as required under Section 197 (12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 with reference to remuneration of employees in excess ofthe limits prescribed - None of the employees were in receipt of remuneration above 8 lakh50 thousand per month or Rs. One crore Two lakhs per annum and above.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION OFPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. All women employees (permanent contractual temporary trainees) are coveredunder this policy. An Internal complaint committee is formed to look after any complaintsof women employees. No complaints for sexual harassment were received during the year.
31. COST AUDIT:
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 dated 31/12/2014 cost audit was not applicableto the Company for the Financial Year 2020-21. However the maintenance of cost records asspecified by the Central Government under sub-section (1) of section 148 of the CompaniesAct 2013 was applicable to the Company from the and the Company has maintained costsrecords for the F Y 2020-21.
32. COPORATE GOVERNANCE AND FAIR BUSINESS PRACTICES:
The extant provisions of corporate governance prescribed under SEBI Regulations is notapplicable to the Company being an SME listed Company. However as good Corporate Citizenthe Company strives to comply with the provisions of corporate governance on voluntarybasis. Company's approach to business is based upon core set of values and ethics. Themanagement of Company is dedicated to ethical fair and just business practices. In linewith this vision the Board of Directors of the Company has during the year adopted theBusiness Ethics Policy which is available at the website of company www.chemcrux.com.
33. 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 the CentralGovernment under section 118(10) of the Companies Act 2013.
34. HUMAN RESOURCES:
During the period under review the personal and industrial relations with theemployees 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. The Company has in place Human Rights Policy Statement to express Company'scommitment to do business with ethical values and embrace practices that supports humanrights and labour laws on a continuous basis. The policy is available on the website ofCompany www.chemcrux.com.
35. CAUTIONARY STATEMENT:
Statements in these reports describing company's projection statements expectationsand hopes are forward looking statements. Though these are based on reasonableassumption the actual results may differ.
Your Directors place on record their sincere thanks to bankers business associatesconsultants employees and various Government Authorities for their continued supportextended to your Companies activities during the year under review. Your Directors alsoacknowledge gratefully the shareholders for their relentless support and confidencereposed on the Company.
|For and on behalf of the Board of Directors |
|CHEMCRUX ENTERPRISES LIMITED |
| ||Sd/- |
|Place: Vadodara ||GIRISHKUMAR SHAH |
|Date: July 23 2021 ||CHAIRMAN |