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Chemiesynth (Vapi) Ltd.

BSE: 539230 Sector: Industrials
NSE: N.A. ISIN Code: INE829R01018
BSE 05:30 | 01 Jan Chemiesynth (Vapi) Ltd
NSE 05:30 | 01 Jan Chemiesynth (Vapi) Ltd

Chemiesynth (Vapi) Ltd. (CHEMIESYNTHVAPI) - Director Report

Company director report

FOR THE YEAR ENDED ON 31ST MARCH 2020

Dear Shareholders

Your Directors present the 34th Annual Report and Audited Financial Statements of thecompany for the year ended 31st March 2020.

FINANCIAL RESULTS

During the year under review the financial results on the operations of the Companyare as under:

(Amount in Rupees)
Particulars: Current Year Previous Year
(2019-20) (2018-19)
Gross Income 146804455 112587543
Profit /(Loss) before Depreciation 21275571 19130610
Less : Depreciation (5491794) (4568855)
Profit (Loss) before Tax 15783777 14561755
Less Provision for Tax : Current Tax 2715000 2825000
: Deferred Tax
Profit (Loss) for the year 13068777 11736755

OPERATIONS/STATE OF COMPANY S AFFAIRS i. Total Income

Your Company s Total Income during the year under review was Rs. 146804455/- ascompared to Rs. 112587543/- in the Previous Year.

ii. Profits

Profit before Tax for the year 2019-20 was Rs. 15783777/- against Rs. 14561755/- inthe previous year. Profit after Tax for the year 2019-20 stood at Rs. 13068777/- asagainst Rs. 11736755/- in the preious year

SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on March 31 2020 was Rs. 3.07 crorecomprising of 3070000 equity shares of 10 each. During the year under review yourCompany has neither issued any shares with differential voting rights nor has granted anystock options or sweat equity. The Company has paid Listing Fees for the Financial Year2020-21 to Bombay Stock Exchanges where its equity shares are listed.

MATERIAL CHANGES AND COMMITMENT- IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANYFROM THE END OF THE FINANCIAL YEAR TILL DATE OF THIS REPORT:

There has been no material change and commitment affecting the financial performanceof the Company which occurred between the end of the Financial Year of the Company towhich the financial statements relate and the date of this Report except for the impactarising out of COVID-19 which is detailed elsewhere in this Report.

COVID-19 AND ITS IMPACT

The Directors have been closely reviewing with the Management the impact of COVID-19on the Company. Your Company had to temporarily suspend operations at its plants andlocations as per the directives of the Government and keeping in mind the paramount needof safety of the employees. The operations though in a scaled down manner have sincecommenced after obtaining permissions from the authorities concerned and all safetymeasures including social distancing are being followed. The dispatches to customers havealso recommenced. The Management is in constant touch with its customers on the evolvingsituation and are making all efforts to service their requirements with minimal delays.The situation created by Covid-19 continues to hold some uncertainties for the future;however the Board and the Management will do it s best to address the same as thesituation evolves in the interests of all stakeholders of the Company.

DIVIDEND

With a view to deploy the profits into the existing operations of your Company Boardof Directors has not recommended any dividend for the year.

CAPITAL EXPENDITURE

During the Financial Year 2019-20 Rs. 4537115/- was incurred towards capitalexpenditure primarily on account of repairmaintenance modernization upgradationreplanting and other programmes undertaken in the unit of the Company.

DEPOSITS

During the year under review your Company has neither accepted nor renewed anydeposits from the public within the meaning of Section 73 of the Act and the Companies(Acceptance of Deposits) Rules 2014.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The company accords high priority to control environment and conservation of energywhich is an on going process. The Company has planted trees to control and maintainenvironment surrounding of the factory. As required by the provisions of Section 134(3)(m)of the Companies Act 2013 read with Companies (Accounts) Rules 2014 are given inseparate statement attached here to and forming part of the report (Annexure B).

SAFETY AND HEALTH

The Company gives highest priority to safety and occupational health. The workersofficers and other staff members of the Company are given training from time to time todeal with any safety and health related emergency situations. The factory buildingsmachineries and intellectual information properties are maintained in safe condition.Process operations and handling of chemicals at the factory are reviewed frequently forsafety. Adequate safety equipments are given to workers for safe guard.

PARTICULARS OF EMPLOYEES

Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 statement of particulars of employees is annexed. (Annexure C).

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION ANDREDRESSAL) ACT 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and Redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the financial year2019-20 the Company has not received any complaints on sexual harassment.

LISTING WITH STOCK EXCHANGE:

The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 toBSE where the Company s Shares are listed.

INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE

The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and isavailable on our website http://www.chemiesynth.com/.

AUDITORS

At the 31st Annual General Meeting of the Company held on 26th day of September 2017M/s. Milin J. Jani & Co. Chartered Accountants (Firm No.: 106396W) were appointed asthe Statutory Auditors of the Company from the conclusion of 31st AGM till the conclusionof the 36th AGM of the Company.

STATUTORY AUDITORS OBSERVATION:

The Report given by the Auditors on the financial statements of your Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the rules made there underthe Company had appointed M/s. Nitin Sarfare Company Secretaries to undertake theSecretarial Audit of the Company for the year ended March 31 2020. A Secretarial AuditReport for the year ended 31st March 2020 in prescribed form duly audited by thePractising Company Secretary Mr. Nitin Sarfare Proprietor of Nitin Sarfare CompanySecretaries is annexed herewith and forming part of the report.

COMMENTS ON SECRETARIAL AUDIT REPORT

The board of directors are in process of appointment of Internal Auditor and willcomply with section 138 of the Companies Act 2013. Dematerialisation of the Promotersshareholding are in process. 97% 0f the Promoters Shareholding has been dematerialised andpromoters are in the process of dematerialising the remaining physical shares. Otherremarks of the Secretarial Auditor is self-explanatory.

ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS

Sr. No. Performance evaluation of Performance evaluation performed by Criteria
1. Each Individual directors Nomination and Remuneration Committee Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided key performance aspects in case of executive directors etc.
2. Independent directors; Entire Board of Directors excluding the director who is being evaluated Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided etc.
3. Board and its committees All directors Board composition and structure; effectiveness of Board processes information and functioning fulfillment of key responsibilities performance of specific duties and obligations timely flow of information etc. The assessment of committees based on the terms of reference of the committees and effectiveness of the meetings.

PARTICULARS OF LOANS INVESTMENTS AND GURANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013

The details of Loans and Investments and guarantees covered under the provisions ofSection 186 of the Act are given in the Notes to the Financial Statements forming part ofAnnual Report.

DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS

Pursuant to Section 149(6) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in the aforesaid section.

RISK MANAGEMENT POLICY/ COMMITTEE

The Management evaluated various risks and that there is no element of risk identifiedthat may threaten the existence of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of annual return (MGT-9)is annexed herewith and forming part of the report. (Annexure D).

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3) (c) of the Companies Act 2013 and alsoon the basis of discussions with the Statutory Auditors of the Company from time to timethe Board of Directors to the best of its knowledge and ability confirm that :

(a) in the preparation of the annual accounts for the Financial Year ended March 312020 the applicable accounting standards have been followed and there are no materialdepartures;

(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 of the profitof 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 the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the Annual Accounts for the Financial Year ended March 31 2020on a going concern basis;

(e) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

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

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

(a) The Company has a proper and adequate system of internal financial controlscommensurate with its nature and size of business and meets the following objectives:

(b) Providing assurance regarding the effectiveness and efficiency of operations;

(c) Efficient use and safeguarding of resources;

(d) Compliance with policies procedures and applicable laws and regulations; and

(e) Transactions being accurately recorded and reported timely.

(f) The Company has a budgetary control system to monitor expenditures and operationsagainst budgets on an ongoing basis.

REPORTING OF FRAUDS

There were no instances of frauds during the year under review which required theStatutory Auditors to report to the Audit Committee and / or the Board under Section143(12) of the Act and the rules made thereunder.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

The Board of directors have met 9 times and Independent Directors once during the yearended 31st March 2020. Meetings of Board of Directors were held during financial year2019-20 are as follows:

1 8th May 2019
2 16th May 2019
3 30th May 2019
4 22nd July 2019
5 12th August 2019
6 19th August 2019
7 22nd October 2019
8 14th November 2019
9 12th February 2020

The Board as on 31st March 2020 comprises of 6 (Six) Directors out of which twoDirectors are Non-Executive Independent Directors and three directors are Non-ExecutiveDirectors and one Director is Managing Director who is responsible for the day-to-daymanagement of the Company subject to the supervision direction and control of the Boardof Directors. The Chairman of the Company is Non-Executive Director. The Company satisfiesthe criteria of having minimum no of independent directors in the board as per theprovisions of Companies Act 2013.Further the Company is not required to satisfy thecriteria of minimum of Independent Directors as per SEBI (LODR) 2015 regulations as thecorporate governance clauses are not applicable to the company.

Detail of attendance at Board Meeting is as follows:

Name of Director No. of Board Meetings held during financial year 2019-20 No. of Board Meetings attended Number of Membership in Boards of Other Companies* NO. of Membership/ Chairmanship in Other Companies*
Mr. Satish B Zaveri 9 7 NIL NIL
Mr. Sandip S Zaveri 9 9 NIL NIL
Mr. Bhanurai N Mehta 9 8 NIL NIL
Mr. Rushabh S Mehta 9 7 NIL NIL
Mr. Pramod G Gujarathi 9 9 NIL NIL
Ms. Zarna Shah 9 9 NIL NIL

* Excludes directorships in Private Limited Companies Section 25 CompaniesForeign Companies.

Membership/Chairmanship in Committee of Directors includes Audit Committee andStakeholders Relationship/Grievance Committee of Directors only. This does not includeMembership/Chairmanship in Committee of Directors of Chemiesynth (Vapi) Limited.

DETAILS OF COMMITTEE OF DIRECTORS (AS ON 31ST MARCH 2020) A. AUDITCOMMITTEE

The composition of Audit Committee consists of two independent directors and a ManagingDirector.

The terms of reference stipulated by the Board to the Audit Committee are as per theCompanies Act 2013 and SEBI (LODR) Regulations 2015. Attendance of Committee membersduring 2018-19 is as follows:

Name Chairman/ Member No. of Audit committee meetings No. of Audit Committee meetings attended
Ms. Zarna Shah (Independent Director) Chairman 4 4
Mr. Pramod Gujarathi (Independent Director) Member 4 4
Mr. Sandip Zaveri (Managing Director) Member 4 4

Audit Committee meeting were held 4 times on the following dates during the year2019-20:

1.) 30th May 2019 2.) 12th August 2019 3)14thNovember 2019 4.)12th February 2020.

The recommendation by the Audit committee as and whenever made to Board has beenaccepted by it.

B. NOMINATION AND REMUNERATION COMMITTEE

Composition of Nomination and Remuneration Committee:
Mr. Pramod G Gujarathi - Chairman
Mr. Zarna Shah - Member
Mr. Bhanurai Mehta - Member

During the financial year 2019-20 Nomination and Remuneration Committee met one time.The meeting was held on 22nd July 2019. All committee members were present atboth meeting.

C. SHAREHOLDER/INVESTORS GRIEVANCE COMMITTEE :

Your Company is not required to constiture a Shareholder/Investors Grievance committeeunder section 178 (5) of Companies Act 2013 and under regulation 20 of SEBI (LODR)Regulations 2015

D. SHARE TRANSFER COMMITTEE

The Board of Directors in its meeting dated 28th May 2016 had constituted Sharetransfer committee for approving transfer request received from Registrar & ShareTransfer Agent. Composition of the committee is as follows:

A. Sandip S. Zaveri - Chairman
B. Satish B. Zaveri - Member
C. Bhanurai N. Mehta - Member

Share transfer committee met two times in FY 2018-19 and all members were present inthe meeting.

PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY

Particulars of Contracts or Arrangements with Related Parties referred to in Section188 (1) in Form AOC-2 are annexed as "Annexure E" to this Report.

CORPORATE SOCIAL RESPONSIBILITY POLICY

The company is not falling within the criteria of Section 135 of the Companies Act2013. Board of Directors will formulate the policy once it comes within the provisions ofSection 135 of the Companies Act 2013.

KEY MANAGERIAL PERSONNEL :

No Changes has been made in the key managerial personnel of the company.

The following is list of Key Managerial Personnel of the company.
Mr. Sandip Satish Zaveri - Managing Director
Mr. Parimal A. Desai - Chief Financial Officer
Mr. Shinil U Nambrath - Company Secretary

DIRECTORS

Mr. Bhanurai N Mehta (DIN: 00158885) Director of the Company would retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment.

During the year under review Mr. Sandip Satish Zaveri (DIN:00158876) was reappointedas the Managing Director of the company at the 33rd AGM for a tenure of fiveyears.

POLICY ON DIRECTORS APPOINTMENT

Policy on Directors appointment is to follow the criteria as laid down under theCompanies Act 2013 and the Listing Agreement with Stock Exchanges and good corporatepractices. Emphasis is given to persons from diverse fields or professions.

POLICY ON REMUNERATION

Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that –

• Remuneration to unionised workmen is based on the periodical settlement with theworkmen union.

• Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and factors such as to attract and retain quality talent.

• For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has put in place a Whistle Blower Policy to provide an open and transparentworking environment and to promote responsible and secure whistle blowing system fordirectors and employees of the Company to raise concern. The Policy provides adequatesafeguard against victimisation of director(s) / employee(s) who raise the concern andhave access to Chairman of Audit Committee who is entrusted to oversee the whistle blowermechanism. The Policy is available on the website of the Companyhttp://www.chemiesynth.com.

POLICIES OF THE COMPANY

The Board of Directors has formulated the following policies which are available on website of the company http://www.chemiesynth.com.

1. Code Of Business Conduct For Directors And Senior Executives

2. Nomination and Remuneration Policy

3. Vigil Mechanism / Whistle Blower Policy

4. Insider Trading - Code of Conduct

5. Code of Fair Disclosure CSL

6. Preservation of Documents and Archival Policy

7. Policy on Determination of Materiality of Events/Information

SUBSIDIARIES AND ASSOCIATE COMPANY S

As on 31st March 2020 Company has no subsidiaries and associate companies.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management s Discussion and Analysis Report for the year under review is annexed tothis report (Annexure F).

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders which were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company s Operations infuture.

SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The company falls under the criteria 15(2) (a) of the Listing Obligations &Disclosure requirements (LODR) Regulations 2015 as the Paid-up capital of the company wasbelow Rs. 10 Crores and net worth was below Rs. 25 Crores as on the last day of theprevious financial year. Hence compliance with Corporate Governance provisions as perListing Obligations & Disclosure requirements (LODR) Regulations 2015 are notapplicable to company.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the whole hearted andsincere co-operation the Company has received from its banker Bank of Baroda and variousGovernment agencies. Your Directors also wish to thank all the employees for theirco-operation.

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