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Gulshan Polyols Ltd.

BSE: 532457 Sector: Industrials
NSE: GULPOLY ISIN Code: INE255D01024
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VOLUME 15175
52-Week high 288.70
52-Week low 35.25
P/E 15.18
Mkt Cap.(Rs cr) 1,267
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Sell Price 0.00
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OPEN 270.00
CLOSE 269.45
VOLUME 15175
52-Week high 288.70
52-Week low 35.25
P/E 15.18
Mkt Cap.(Rs cr) 1,267
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gulshan Polyols Ltd. (GULPOLY) - Director Report

Company director report

Dear Members

Your Board of Directors have pleasure in presenting the 20th (Twentieth) Annual Reporton the business and operations of the Company together with the audited financialstatements for the financial st March 2020.

I. FINANCIAL AND OPERATIONAL PERFORMANCE

1. FINANCIAL RESULTS

Particulars Year Ended Year Ended
31.03.2020 31.03.2019
REVENUE
Revenue from Operations 62079.77 67388.61
Other Income 94.72 196.30
TOTAL INCOME (I) 62174.49 67584.91
TOTAL EXPENSES (II) 55192.22 59023.61
Earnings before Interest Tax and Depreciation (EBITDA)
(I II) 6982.27 8561.30
Less: Finance Cost (Interest) 1138.08 1425.88
Depreciation 3101.96 4433.67
PROFIT BEFORE TAX (PBT) (III) 2742.22 2701.73
Less - Current Tax 495.94 592.68
Add - MAT Credit entitlement 47.95 44.82
- Deferred Tax 139.93 (78.30)
PROFIT AFTER TAX (PAT) (IV) 2058.40 2142.52
OTHER COMPREHENSIVE (INCOME)/LOSS (V) 19.01 3.02
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (VI)
(IV + V) 2039.39 2139.50
Retained Earnings-Opening Balance 19765.95 18322.10
Add: -profit for the year 2058.40 2142.52
Any other Change - -
Less: Dividend (including Dividend Distribution Tax) (Interim and Final) 565.61 395.65
Transfer to Capital Redemption Reserve 50 -
Transfer to General Reserve - 300
Other Comprehensive (income) /loss for the year net of income tax 19.01 3.02
Retained Earnings-Closing Balance 21189.73 19765.95
Earnings per Share Basic (Rs.) 4.39 4.57
Diluted (Rs.) 4.39 4.57

2. OPERATIONAL PERFORMANCE HIGHLIGHTS

We seek to develop and justify the reason of our existence through value creation inmanagement and processes. Our approach to managing the Company stands on the core valuesof Respect Trust Ownership and Integrated Teamwork. We are working to strengthen ourmoves to achieve goals with the principles of being decisive innovative inspiringempowering dynamic and process driven to take our integrated approach forward. This is afitting for an organization such as ours where we interact and have intense relationshipswith a broad and diverse set of stakeholders.

The Financial Year 2019-20 was a challenging year on multiple fronts despite that yourCompany has delivered a resilient performance.

During the financial year ended March 31 2020 Company achieved Revenue fromOperations of Rs. 62079.77 lakhs (Previous Year: Rs. 67388.61 lakhs). The EBIDTA for theyear stood at Rs. 6982.26 lakhs against Rs. 8561.28 lakhs reported in the previous year.The Net Profit for the year stood at Rs. 2058.40 lakhs (Previous year Rs. 2142.52lakhs).

The company has three manufacturing segments viz Mineral Processing Grain Processing& Distillery. The products processed under these segments are having end use inmultiple industries.

Segment wise Revenue & Profits for the year ended 31st March 2020 (Rs. inLakhs)

Segments

Revenue for the year ended 31st March

Profits before Interest and Tax for the

year ended 31st March
2020 2019 2020 2019
Mineral Processing 13144.68 12048.18 3291.26 1706.14
Grain Processing 48430.59 52149.04 1091.82 4113.93
Distillery 504.49 3191.38 -473.20 -1750.48
Unallocated - - -29.57 58.02
Total 62079.77 67388.61 3880.31 4127.61

In March 2020 the country was severely impacted by the COVID-19 pandemic a calamitythat has affected almost every country in the world. However during these challengingtimes we have prioritized the health and safety of our employees protected the interestof our stakeholders and strictly adhered to government guidelines while conducting ouroperations to ensure minimal overall impact.

During the year under review our earnings per share is Rs. 4.39 as compared to Rs.4.57 in the previous year. As far as liquidity is concerned we are adequately funded tonavigate through these challenging times and we do not foresee any major impact on ouroperations. Despite difficulties due to COVID-19 pandemic we remain motivated andcommitted to consistently create value for our stakeholders while maintaining our strongleadership position in key business segments.

3. ORGANISATIONAL INITIATIVES IN RESPONSE TO COVID-19 SITUATION

The ongoing COVID-19 crisis calls for the entire nation to fightas one collectiveforce your Company has contributed Rs. 5 lakh to the PM CARES Fund in this hour ofIndia's battle against COVID-19. Your Company shall endeavor to contribute additionalresources to support the Governments and fellow citizen in these testing times.

We aim to emerge stronger once situations normalize. The emphasis will be on continuedincubation of future businesses and to create values for our stakeholders in the longterm. Free distribution of sanitizers' produced at our own manufacturing unit at goregaon.

4. TRANSFER TO RESERVES

During the year under review consequent to redemption of 50000 8% RedeemablePreference Shares of Rs. 100/- each your Company has created "Capital RedemptionReserve (CRR)" and transferred a sum of Rs. 50 lakhs in pursuance to the provisionsSection 55 of read with applicable rules of the Companies Act 2013. Further there was noamount transferred to the general reserve during the year against Rs. 300 lakhs inprevious year.

5. DIVIDEND

During the year under review the Board of Directors of your Company had declared andpaid an interim dividend of 70% on 46917020 equity shares of face value Rs. 1/- eachamounting to Rs. 0.70 per share. The Board of Directors do not recommend any finaldividend for the Financial Year 2019-20 Further a dividend of Rs.8065574/- on 10250008% Redeemable Preference shares has also been declared and paid by the Board of Directorsof your Company during the period under review.

6. TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

During the Financial Year 2019-20 in pursuance to the provisions of Section 124(5)read with Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Rules 2016 the Company has transferred the unclaimed dividend pertaining toFinancial Year 2011-12 amounting to Rs. 275888.75/- to the Investors Education andProtection Fund ("IEPF") Account established by the Central Government.The details of dividend amount transferred to IEPF are available on the Company's websiteat web link http://www.gulshanindia.com/iepf.html.

Further pursuant to the provisions of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 as amended the shares on whichdividend remains unclaimed for seven consecutive years or more shall be transferred toIEPF account after giving due notices to the concerned shareholders. Accordingly theCompany has transferred 33430 (Thirty-Three Thousand Four Hundred and Thirty only) equityshares to the IEPF account during the financial year 2019-20. The details of equity sharestransferred are also available on the Company's website at web linkhttp://www.gulshanindia.com/iepf.html.

The Nodal officer appointed by the Company is Mr. Vijay Kumar Garg. The details of thenodal officer are also available on the Company website www.gulshanindia.com.

7. SHARE CAPITAL

During the year under review your Company has redeemed 50000 8% RedeemablePreference Shares of Rs. 100/- each. Consequently the outstanding issued subscribed andpaid-up 8% Preference Share Capital of the Company stands reduced from Rs. 102500000comprising of 1025000 Shares of Rs. 100/- each to Rs. 97500000 comprising of 975000shares of Rs. 100/- each. Further the Company has not issued any shares during thefinancial year 2019-20.

8. ECONOMIC SCENARIO AND OUTLOOK

Due to outbreak of COVID-19 pandemic the Company's management made an initialassessment of short term adverse impact on business and financial risks. Henceforth themanagement is not foreseeing any medium to long term risks in the Company's ability tocontinue as a going concern and meeting its liabilities as and when they shall be fallingdue.

Since your Company's line of business activities falls under the category ofessentials goods therefore your Company has managed to show more steady growth in itsbottom line.

9. ENVIRONMENT HEALTH AND SAFETY

Environment Health and Safety are among the core values of your Company. In order topromote zero accident culture your Company conducted various training & awarenessprograms. Employees are encouraged to report all near miss incidents so that preventiveactions can be taken to avoid any mishap. Environment sustainability is paramount to anyindustry and your Company is conscious of its responsibility towards the impact of itsoperations on the environment.

Your Company believes that healthy and hygienic work environment not only benefits theworkforce but it also increases the productivity and works as a retention tool.

10. CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

Details of energy conservation technology absorption foreign exchange earnings andoutgo in accordance with the provisions of Section 134 (3) (m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 are given as Annexure‘A' to this Report.

11. HOLDING SUBSIDIARIES ASSOCIATES & JOINT VENTURES

During the year under review the Company has become subsidiary of Gulshan HoldingsPrivate Limited consequent to the acquisition of 4245000 (9.05%) Equity Shares by way oflnter-se transfer from and amongst the Promoters and Promoter Group and 3725 EquityShares from the public in open market dated February 12 2020 through Exchange.

Further there are no Subsidiaries Associates and Joint Ventures of the Company.

12. MATERIAL CHANGES AND COMMITMENTS

The Board of Directors of the Company has in principally agreed to initiate the processfor Amalgamation of Gulshan Holdings Private Limited (Transferor Company 1) and East DelhiImporters and Exporters Private Limited (Transferor Company 2) into your Company(Transferee Company) in its Board Meeting held on May 26 2020. Further there have beenno material changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year 2019-20 and

13. CREDIT RATINGS

During the year under review CARE Ratings Limited has granted to your Company'sLong-Term Bank Facilities rating at CAREA+; Stable and Short Term Bank Facilities ratingat CARE A1+.

II. EMPLOYEES

1. KEY MANAGERIAL PERSONNEL

In pursuance of the provisions of Section 2(51) and Section 203 of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Dr. C.K Jain Managing Director Ms. Aditi Pasari Whole Time Director Ms. ArushiJain Whole Time Director Mr. S.K Tewari Whole Time Director Mr. A.K Vats ChiefExecutive Officer & Whole Time Director Mr. Rajiv Gupta Chief Finance Officer andMr. Vijay Kumar Garg Company Secretary are the Key Managerial Personnel of the Company.

During the year Mr. Suresh Kumar Tewari (DIN:00062373) was re-appointed as a WholeTime Director of the Company at the Annual General Meeting held on 21stSeptember2019 to hold the office for a further term of 3 (three) years from April 012019 to March 31 2022.

And Dr. Chandra Kumar Jain (DIN: 00062221) was re-appointed as a Managing Directordesignated as Chairman & Managing Director of the Company for a period of 3 (three)years with effect from April 01 2020 subject to approval of the shareholders of theCompany in the forthcoming AGM.

* Mr. S.K. Tewari ceased to be on the Board of the Company w.e.f. May 26 2020

2. EMPLOYEES

Your Company believes that human resource is vital to the growth and sustainability ofan organization. Your Company maintains healthy work environment at all levels in theorganization and encourages the employees to contribute their best. The informationrequired to be disclosed in pursuance of Section 197 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as Annexure "B" to this Report.

3. EMPLOYEES STOCK OPTION PLAN

The members of the Company had approved Gulshan Polyols Limited Employees Stock OptionPlan 2018 as amended ("ESOP 2018") for grant of stock optionsexercisable into not more than 2345851 equity shares of face value of Re 1/- each toeligible employees including Directors of the Company.

During the year under review the Company has granted 245100 and 20400 stock optionson September 12 2019 and September 17 2019 respectively to all the eligible employeesincluding Directors of the Company. There has been no change in ESOP 2018 during thefinancial year 2019-20. ESOP 2018 is in compliance with Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 ("ESOP and implementedthrough Employees Welfare Trust ("Trust"). For the purpose of ESOP 2018 theTrustee of the Trust holds 265500 equity shares of the Company as on March 31 2020(29692 equity shares as on March 31 2018) being 0.57% of the paid-up share capital ofthe Company. The ownership of these shares cannot be attributed to any particular employeetill he / she exercises the stock options granted to him / her and the concerned sharesare transferred to him / her. Hence the eligible employees to whom the stock options weregranted under ESOP

2018 cannot exercise voting rights in respect of aforesaid shares held by the Trusteeof the Trust as these eligible employees are not holders of such shares. The Trustee hasnot exercised the voting rights in respect of the aforesaid shares during the financialyear 2019-20.

The disclosures required to be made under ESOP Regulations are given on the websitehttp://www.gulshanindia. com/annonuncement.html of the Company. The details in respect ofESOP 2018 and movements during the year are as under: Number of options outstanding at thebeginning of the period: NIL

Number of options granted during the year: 265500 Number of options forfeited /lapsed during the year: NIL Number of options vested during the year: NIL Number ofoptions exercised during the year: NIL Number of shares arising as a result of exercise ofoptions: NIL Number of options outstanding at the end of the year: 265500

4. DISCLOSURE ON SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

The Company has an Internal Committee ("IC") under the SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013 andRules made there under for providing a redressal mechanism pertaining to sexual harassmentof women employees at workplace. To build awareness the Company has been conductingonline training programmes on a periodic basis. During the year no complaint was receivedby the Company at the beginning and end under Anti-sexual harassment Policy.

III.CORPORATE SOCIAL RESPONSIBILITY

During the year under review your Company has not spent the eligible amount ofCorporate Social Responsibility (CSR) due to shortage of more suitable projects andprograms in line with the activities which fall under the purview of Schedule VII of theCompanies Act 2013. Further your company is in process of finding suitable options forimplementation of appropriate and effective CSR plan in accordance with the provisions ofSection 135 of the Companies Act 2013 read with Schedule VII of the Companies Act 2013.Also the Company has created the provision for spending of the entire unspent amount inthe coming years.

Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 your Company as part ofits CSR initiatives has undertaken projects/programs in accordance with the CSR Policy.The details of the CSR activities are given as Annexure ‘C' formingpart of this Report.

IV. GOVERNANCE/SECRETARIAL

1. CORPORATE GOVERNANCE AND CODE OF CONDUCT

A Report on Corporate Governance for the financial year ended 31st March2020 along with the Statutory Auditor's Certificate on compliance with the provisions ofCorporate Governance under SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 (hereinafter referred to as ‘SEBI Listing Regulations 2015') isforming part of the Annual Report as Annexure-‘D'. The declaration ofChief Executive Officer (CEO) confirming compliance with the ‘Code of Conduct andEthics' by the members of the Board of Directors and Senior Management Personnel of theCompany is also forming part of this report as Annexure-‘E'.

2. EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT-9 in accordance with the provisions of Section92 of the Companies Act 2013 read with the Companies (Management and Administration)Rules 2014 is attached as Annexure ‘F' to this Report.

3. WHISTLE BLOWER POLICY/VIGIL MECHANISM

Pursuant to the provisions of Section 177 of the Act and Regulation 22 of the SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 the Company hasestablished a robust Whistle Blower policy/Vigil Mechanism for Directors and employees toreport the instances of unethical behavior actual or suspected fraud or violation of theCompany's code of conduct or ethics policy. The said policy is explained in the CorporateGovernance Report forming part of this report and also displayed on Company's website: www.gulshanindia.comunder investor's relations/ policy documents.

4. COMMITTEE RECOMMENDATIONS

During the year the Board of Directors has accepted all recommendation of theCommittees of the Board of Directors which are mandatorily required to be made.

5. BOARD EVALUATION

Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulations an Annual Performance Evaluation ofthe Board its Committees and the individual Directors is to be carried out either by theBoard or by the Nomination and Remuneration Committee or by an independent external agencyand the Board is required to review its implementation and compliance. In view of theabove the Annual Performance Evaluation was undertaken by the Board. The framework andcriteria of evaluation has been approved by the Nomination & Remuneration Committee ofthe Company. The details of evaluation of Directors Committees and Board as a whole aregiven in the Corporate Governance Report which forms part of this report.

6. REMUNERATION POLICY

Remuneration Policy of the Company aims at recommending and reviewing the remunerationto Managing Director Non-Executive Directors and Key Managerial Personnel of the Companyand is based on evaluation criteria such as industry benchmarks company's annualperformance & its strategy expertise talent and meritocracy including criteria fordetermining qualification positive attributes independence of a Director etc. Thedetailed policy is available on website of the Company i.e. www.gulshanindia.com and thesame has been elaborated in the Corporate Governance Report.

7. RISK MANAGEMENT

Your Company has a well-defined risk management framework in place and a robustorganizational structure for managing and reporting risks. Risk management process hasbeen established across your Company and is designed to identify assess and frame aresponse to threats that affect the achievement of its objectives.

8. INDEPENDENT DIRECTORS

Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the Companies Act 2013and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.

All independent Directors inducted into the Board attend an orientation program. Thedetails of familiarization program are provided in the corporate governance report.Further at the time of the appointment of an independent Director the Company issues aformal letter of appointment outlining his / her role function duties andresponsibilities.

9. BOARD AND COMMITTEES

As on March 31 2020 the Board is having four committees: the Audit Committee theCorporate Social Responsibility Committee the Nomination and Remuneration Committee andthe Stakeholder's Relationship Committee. A detailed note on the composition of the Boardand its committees is provided in the Corporate Governance Report.

10. RELATED PARTY TRANSACTIONS

The framework for dealing with related party transactions is given in the CorporateGovernance Report. During the year under review all the contract / arrangement /transactions entered with Related Parties referred in Section 188(1) of the Companies Act2013 read with the rules made thereunder were on arm's length basis and in the ordinarycourse of business. In terms of the applicable SEBI Listing Regulations 2015' nomaterial related party transactions were entered during the Financial Year by yourCompany. The disclosure of related party transactions as required under Section 134(3)(h)of the Companies Act 2013 in Form AOC-2 is not applicable to your Company. In accordancewith IND AS-24 the Related Party Transactions are disclosed under Note No. 39 of theFinancial Statements.

The Policy on Materiality of Related Party Transactions and on dealing with RelatedParty Transactions as approved by the Board is put up on the Company's website atwww.gulshanindia.com.

There were no materially significant related party transactions which could havepotential conflict with interest of the Company at large.

11. DEPOSITS

During the year the Company has not accepted any deposits from the public underChapter V of the Companies Act 2013. There was no public deposit outstanding as at thebeginning and end of the financial

12. PARTICULARS OF LOANS GUARANTEES SECURITIES OR INVESTMENTS

The particulars of Investments Loans Securities and Guarantees covered under theprovisions of Section 186 of the Companies Act 2013 read with the rules made thereunderare given in the Notes to the Financial Statements.

13. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS

Theresignificantand material orders passed by the Regulators or Courts or Tribunalsduring the year were no impacting the going concern status and the operations of theCompany in future.

14. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review the Company has complied with the applicable SecretarialStandards prescribed under the Section 118(10) of the Companies Act 2013.

15. LISTING ON STOCK EXCHANGES

The Company's shares are listed on BSE Limited and the National Stock Exchange of IndiaLimited (NSE).

V. DIRECTORS

1. APPOINTMENT /RE-APPOINTMENT/CHANGES

Mr. Suresh Kumar Tewari (DIN:00062373) was re-appointed as a Whole Time Director ofthe Company at the Annual General Meeting held on September 21 2019 to hold the officefor a further term of 3 (three) years from April 01 2019 to March 31 2022.

Further Mr. Suresh Kumar Tewari resigned from the Board as Director of the Companyw.e.f 26/05/2020 due to some personal reasons.

Mr. Ajay Jain (DIN:00062146) was re-appointed as a Non-executive Independent Directorof the Company at the Annual General Meeting held on September 21 2019 to hold office fora further term of 5 (five) years from April 01 2019 to March 31 2024.

Mr. Akhilesh Kumar Maheshwari (DIN: 00062645) was re-appointed as a Non-executiveIndependent Director of the Company at the Annual General Meeting held on September 212019 to hold office for a further term of 5 (five) years from April 01 2019 to March 312024.

Mr. Rakesh Kumar Gupta (DIN: 06909233) was re-appointed as a Non-executive IndependentDirector of the Company at the Annual General Meeting held on September 21 2019 to holdoffice for a further term of 5 (five) years from April 01 2019 to March 31 2024.

Mr. Jeewan Jyoti Bhagat (DIN: 00007743) was re-appointed as a Non-executiveIndependent Director of the Company at the Annual General Meeting held on September 212019 to hold office for a further term of 5 (five) years from April 01 2019 to March 312024.

Dr. Chandra Kumar Jain (DIN: 00062221) was re-appointed as a Managing Directordesignated as Chairman & Managing Director of the Company for a period of 3 (three)years with effect from April 01 2020 subject to approval of the shareholders of theCompany in the forthcoming AGM.

Ms. Aditi Pasari (DIN: 00120753) is due for retirement by rotation at the forthcomingAGM and has offered herself for re- appointment.

The Board of Directors on the recommendation of Nomination and Remuneration Committeeat their meeting held on May 26 2020 has proposed the re-appointment of Ms. Arushi Jainand Ms. Aditi Pasari w.e.f January 01 2021 and of Mr. Ashwani Kumar Vats w.e.f April 012020 as Whole Time Director(s) for approval of shareholders in the ensuing AGM.

Seven meetings of the Board of Directors were held during the financial year 2019-20.The maximum interval between any two meetings did not exceed 120 days as prescribed bythe Companies Act 2013.

Other information on the Directors and the Board Meetings is provided in the CorporateGovernance Report attached to this Report.

A certificate obtained by the Company from M/s. RMG & Associates PracticingCompany Secretaries confirming that none of the Directors on the Board of Directors ofthe Company have been debarred or disqualified from being appointed or continuing asDirectors of companies by the Securities and Exchange Board of India /Ministry ofCorporate Affairs or any such statutory authority is enclosed as Annexure ‘G'to this Report.

2. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that: a. In the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; b. They have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit and loss of the company forthat period; c. They have taken proper and sufficient care for the maintenance of adequateaccounting records in with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; d. The annualaccounts are prepared on a going concern basis; and e. They have laid downinternalfinancialcontrols to be followed by the company and that such internal financialcontrols are adequate and were operating effectively. f. They have devised proper systemsto ensure compliances with the provisions of all applicable laws and that such systemswere adequate and operating effectually.

VI. AUDITORS

1. STATUTORY AUDITORS

M/s Rajeev Singal & Co. Chartered Accountant (Firm Registration No. 008692C) havebeen appointed as Statutory Auditors of the Company at the Annual General Meeting held onSeptember 09 2017 for a period of five years subject members at every consequent AnnualGeneral Meeting. The requirement for the annual ratification toratification of auditor'sappointment at the Annual General Meeting has been omitted pursuant to Companies(Amendment) Act 2017 notified May 7 2018 on However in compliance with the resolutionpassed at the Annual General Meeting held on September 09 2017 and pursuant to therecommendations of the Audit Committee the Board of Directors have recommended theratification of the appointment of M/s. Rajeev Singal & Co. Chartered Accountant asStatutory Auditors of the Company for a period of two years ending on the conclusion of22nd AGM of the Company to be held in the year 2022.

In this regard M/s. Rajeev Singal & Co. Chartered Accountants have submitted acertificateconfirming that their appointment if ratified will be in accordance withSection 139 read with Section 141 of the Companies Act 2013. The Auditors' Report doesnot contain any qualification reservation adverse remark or disclaimer.

2. INTERNAL AUDITORS i) M/s. Shahid & Associates Chartered Accountantshave been appointed as Internal Auditors for the financial year 2020-21 for all the Unitsof the Company except Bharuch Unit. ii) M/s Anil Ram Kumar & Co. CharteredAccountants have been appointed as Internal Auditors for audit of Bharuch Unit for thefinancial year 2020-21.

They will perform the duties of Internal Auditors of the Company and their report willbe placed before the Audit Committee from time to time.

3. COST AUDITORS

M/s Rahul Jain & Associates Cost Accountants (Firm Registration Number:101515)have been appointed as Cost Auditors for auditing the cost accounts of your Company forthe financial year 2020-21 by the Board of Directors. Pursuant to the provisions ofSection 148 of the Act read with the Companies (Audit and Auditors) Rules 2014 Membersare requested to considertheratificationof the remuneration payable to M/s Rahul Jain& Associates. The Cost Audit Report for the financial year 2019-20 will be filed withthe Central Government in due course.

 

There has been no qualification reservations adverse remark or disclaimer in theabove Auditor's Reports.

4. SECRETARIAL AUDITORS

The Board of Directors of the Company had appointed M/s. RMG & Associates CompanySecretaries (Firm Registration Number: P2001DE16100) for conducting Secretarial Audit ofthe Company for the financial year 2019-20. The Secretarial Audit Report issued by theaforesaid Secretarial Auditor is attached as Annexure ‘H' to thisReport.

The Secretarial Audit Report contains the following qualification reservationobservation disclaimer or adverse remark as follows: a. The company has not spenteligible amount on Corporate Social Responsibility during the financial year under reviewpursuant to Section 135(5) of the Companies Act 2013 read with the Companies (CorporateResponsibility Policy) Rules 2014. Further the Board Report does not contain explanationabout the qualification made by the Secretarial Auditors and reasons for less spending ofCSR amount. b. The Company has paid managerial remuneration for the financialyear ended onMarch 31 2020 in excess of the specified limits under Section 197(1) of the CompaniesAct 2013 for which approval of shareholders shall be obtained in the ensuing AnnualGeneral Meeting. c. The Company has published a notice under Rule 6(3) (a) of InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 with delay.

Management's Reply a. The management submits that this was due to shortage ofmore suitable projects and programs in line with the activities which fall under thepurview of Schedule VII of the Companies Act 2013 and company is in process of findingsuitable options for implementation of appropriate and effective CSR plan. Further theCompany has created the provision for spending of the entire unspent amount in the comingyears. b. The Company is under process of taking the approval of shareholders in theensuing Annual General Meeting by way of Special Resolution for waiver of excessremuneration paid. c. There was an inadvertent delay in publishing the notice; howeverthe same will be taken care of in future. The management of the Company assures you tocomply all the provisions of the applicable law in true spirit in future and is underprocess of making all the default good.

5. REPORTING OF FRAUDS BY AUDITORS

During the year under review Auditors have not reported to the Audit Committee underSection 143 (12) of the or employees the CompaniesAct2013 any instances of fraudcommittedagainsttheCompanybyitsofficers details of which would need to be mentioned in theBoard's Report.

I. INTERNAL FINANCIAL CONTROLS

The Company has internal financial controls commensurate to the size and nature of itsbusiness. The Company has policies and procedures in place for ensuring orderly andefficient conduct of its business and operations including adherence to the Company'spolicies the safeguarding of its Assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information. The details of internal control system are given in theManagement Discussion and Analysis Report attached as Annexure ‘I' tothis Report.

II. ACKNOWLEDGEMENTS

The Board of Directors wish to place on record its appreciation for the committedservices by all the employees of the Company. The Board of Directors would also like toexpress their sincere appreciation for the assistance and co-operation received from theFinancial Institutions Banks Government and Regulatory Authorities Stock ExchangesCustomers Vendors and Members during the year under review.

For and on behalf of the Board of Directors Sd/-

Dr. C.K. Jain

Chairman and Managing Director DIN: 00062221

Place: Delhi Date: May 26 2020

ANNEXURE-A TO DIRECTORS' REPORT

Disclosure of particulars with respect to conservation of energy and Consumption perUnit of Production Conservation of energy

(i) Energy Conservation measures taken: The Company has realigned the existingpower consuming sections to remove bottleneck and to ensure the uninterrupted and qualitypower supply at the minimum cost.

(ii) Additional Investment and proposal if any being implemented for reduction ofEnergy consumption: None (iii) Impact of measures (i) & (ii) above for reduction ofenergy consumption and consequent impact on cost of production of goods: This would resultin higher yield and reduction in power cost.

(iv) Total energy consumption and energy consumption per unit of production: Thedetails are as under:

A Power Consumption and Fuel Consumption: 31.03.2020 31.03.2019
1 Electricity:
a Purchased:
Units 33225410 38227010
Total Amount () 256257106 281425209
Average Rate ()/Unit 7.71 7.36
b Own Generation:
I Through Diesel Generator:
Units - -
Cost () - -
Cost ()/Unit - -
II Through Steam Turbine/Generator:
Units 24215067 27404618
Cost () 69628297 89191312
Cost ()/Unit 2.88 3.25
2 Coal /Coke: (Used in Boiler Microniser & Gas Producer)
Qty. (MT) 47934 61402
Total Cost () 282120266 420212419
Average Rate () 5885.59 6843.63
3 Agriculture Waste: (Used in Boiler Microniser & Gas Pro- ducer)
Qty. (MT) 24543 33937
Total Cost () 116720689 173970301
Average Rate () 4755.76 5126.27
4 HSD: (Used in Microniser)
Qty. (Ltrs) - -
Total Cost () - -
Average Rate () - -
B Consumption Per Unit (MT) of Production
1 Products – Production
Calcium Carbonate (in MT) 64142 83184
Sorbitol & Sweetener (in MT) 71285 77176
Starch (in MT) 36732 56017
Liquor -ENA/IMFL 614066 5615376
2 Electricity (Units/Ton)
Calcium Carbonate (in MT) 211 192
Sorbitol & Sweetener (in MT) 402 394
Starch (in MT) 394 285
Liquor -ENA/IMFL (Units/Ltr.) 1.18 0.48
3 Coal/Coke (MT/Ton): (On Directly attributable Production)
Calcium Carbonate (in MT) 0.11 0.08
Sorbitol & Sweetener (in MT) 0.44 0.44
Starch (in MT) 0.21 0.17
Liquor -ENA/IMFL (Units/Ltr.) 0.002 0.002
4 Agriculture Waste (Mt/Ton): (On Directly attributable Pro-
duction)
Calcium Carbonate (in MT) 0.12 0.11
Sorbitol & Sweetener (in MT) 0.09 0.06
Starch (in MT) 0.30 0.36

TECHNOLOGY ABSORPTION ADAPTION & INNOVATION

No technology ties up were entered into. The Company keeps itself updated with latesttechnological innovations by way of constant communication personal discussions andvisits to foreign countries/plants.

FOREIGN EXCHANGE EARNINGS & OUTGO:

Despite severe competition from low cost countries the Company has madeeffortsonvarious fronts for promotion of exports.

(Amount in)
S.No. PARTICULARS 2019-20 2018-19
(i) Earnings by way of Export of Goods calculated on FOB basis 929838006 857706329
(ii) Payment of interest on loan taken 15933955 15906733
(iii) Payment of Commission on Export of Goods 2743386 5368407
(iv) Expenditure on Foreign Travelling 3101598 2627014
(v) Expenditure on Testing/Analysis Service 7709112 2077992
(vi) Expenditure on Legal & Professional fee 582499 255388

Annexure ‘B' to Directors' Report

A) Information pursuant to Section 197 (12) of the Companies Act 2013 read with Rule5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 i)The ratio of the remuneration of each director to the median remuneration of the employeesof the Company for the financial year 2019-20 and the percentage increase in remunerationof each Director Managing Director Chief Financial Officer and Company Secretary in thefinancial year 2019-20:

S/ No. Name Designation Remuneration FY 2019-20 (+/-) Remuneration Ration of remuneration
(%)
1 Dr. Chandra Kumar Jain Chairman and Managing Director 168.99 3.90 98.08
2 Ms. Arushi Jain Whole Time Director 45.99 7.48 26.69
3 Ms. Aditi Pasari Whole Time Director 42.99 8.04 24.95
4 Mr. Ashwani Kumar Vats Whole Time Director and CEO 50.96 42.24 29.58
5 *Mr. Suresh Kumar Tewari Whole Time Director 34.05 35.64 19.76
6 Mr. A. K Maheshwari Independent Director 3.69 6.65 2.14
7 Mr. K. C. Gupta Independent Director 3.57 3.32 2.07
8 Mr. Ajay Jain Independent Director 3.69 6.65 2.14
9 Mr. Rakesh Kumar Gupta Independent Director 3.57 3.32 2.07
10 Mr. J.J Bhagat Independent Director 3.46 3.44 2.01
11 Mr. Rajiv Gupta Chief Financial Officer 22.40 51.37 Not Applicable
12 Mr. Vijay Kumar Garg Company Secretary 4.29 223.01 Not Applicable

*Mr. Suresh Kumar Tewari resigned from the Board as Director of theCompany w.e.f 26/05/2020.

The Remuneration of Independent Non-Executive Directors cover sitting feesfor attending Board/ Committee Meetings re-imbursement of expenses and commission. ii)Median remuneration of employees was 3.7% lower as compared to previous year. iii) Thenumber of permanent employees on the rolls of the Company: 496 iv) Average percentileincrease already made in the salaries of employees other than the managerial personnel inthe last financial year and its comparison with the percentile increase in the managerialremuneration and justification thereof and point out if there are any exceptionalcircumstances for increase in the managerial remuneration:

Average increase in remuneration of employees excluding KMPs: 3.2%

Average increase in remuneration of KMPs: 14.70%

The remuneration of the Executive Chairman and the Managing Director is decided basedon the individual performance inflation prevailing industry trends and benchmarks.

The remuneration of Non-Executive Directors consists of commission sitting fees andre-imbursement of expenses. While deciding the remuneration various factors such asDirector's participation in Board and Committee Meetings during the year otherresponsibilities undertaken such as Membership or Chairmanship of Committees time spentin carrying out other duties role and functions as envisaged in Schedule IV of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and such other factors as the Governance Nomination and RemunerationCommittee may deem fit etc. were taken into consideration. v) It is hereby affirmed thatthe remuneration is as per the remuneration policy of the Company.

B) Statement pursuant to Section 197 of the Companies Act 2013 read with the Rule 5(2)& (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

Details of Employees employed throughout the financial year was in receipt ofremuneration for that year which in the aggregate was not less than One Crore Two LakhsRupees is given hereunder:

S. No. Name Designation of the em- ployee Qualifica - tions Age (Years) Expe- rience (Years) Date of commence- ment of Employment Nature of Employ- ment Remunera- tion Received (Rs.) % of Eq- uity share held

Last Employment

Employer's Name Post Held
1. Dr. Chairman Doctorate 72 yrs 50 yrs 20.10.2000 Contrac- 16899600/- 7.56% NO NA
Chandra and Managing Degree in tual
Kumar Director Chemistry
Jain

None of the employees of the Company was in receipt of remuneration in excess of theremuneration drawn by the Managing Director of the Company.

Except Dr. Chandra Kumar Jain who is relative of Ms. Aditi Pasari and Ms. Arushi Jainnone of other employee is relative of any Director of the Company.

For and on behalf of the Board of Directors Sd/-

Dr. C.K. Jain

Chairman and Managing Director DIN: 0006222

Place: Delhi Date: May 26 2020

.