The Members of Indokem Limited
Your Directors have pleasure in presenting the Fifty Third Annual Report togetherwith the Audited Accounts for the financial year ended31st March 2019.
1. Financial Results:
(Rs. in Lakhs)
|Particulars ||For the financial ||For the financial year |
| ||year ended 31.03.2019 ||ended 31.03.2018 |
|A Income from Continuing Operations ||7940 ||7967 |
|Profit / (Loss) Before Interest Depreciation & Taxes ||118 ||(6) |
|Less: Interest ||116 ||77 |
|Depreciation ||100 ||82 |
|Profit / (Loss) Before Tax ||(98) ||(165) |
|Less: Provision for Tax ||- ||- |
|Profit / (Loss) After Taxes ||(98) ||(165) |
|B Income from Discontinuing Operations ||(18) ||(7) |
|Profit / (Loss) for the year ||(116) ||(172) |
|Total other comprehensive income ||10 ||(36) |
|Total comprehensive income / (loss) for the year ||(106) ||(208) |
|Profit / (Loss) Brought Forward from last year ||(1622) ||(1414) |
|Surplus / Deficit carried to Reserves ||(1728) ||(1622) |
Considering the accumulated losses the Board of Directors of your Company does notconsider it appropriate to recommend any Dividend for the financial year ended 31 stMarch 2019.
3. Operational Performance:
Revenue from operations for F. Y. 2018-19 at Rs.7940 lakhs declined by 0.34% overprevious year Rs.7967 lakhs. EBITDA at Rs.118 lakhs registered an increase over EBITDA ofRs. (6) lakhs in F. Y. 2017-18. PAT for the year was Rs. (98) lakhs registering anincrease over the PAT of Rs. (165) lakhs in F. Y. 2017-18. Despite global slowdown in F.Y. 2018-19 Company has maintained the same pace of growth in production and sales ascompared to the last year.
During the year Company has registered itself under Micro Small & MediumEnterprises Development (MSMED) Act 2006 as a Small Enterprise.
4. Transfer to Reserves:
In view of inadequate profits for the year under review no amount has beentransferred to the reserves.
5. Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 149 of the Act Mr. Kailash Pershad (DIN:00503603) Mr. Rajagopalan Sesha (DIN: 00289643) and Mr. Bhalchandra Sontakke (DIN:01225753) were appointed as Independent Directors of the Company at the AGM convened on 28thSeptember 2018. They have submitted a declaration that each of them meets the criteria ofindependence as provided in Section 149(6) of the Act and there has been no change in thecircumstances which may affect their status as Independent Director during the year. Mrs.Asha M. Khatau retires by rotation and being eligible has offered herself forre-appointment.
During the year the Non-executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees andreimbursement of expenses incurred by them for the purpose of attending meetings of theCompany.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. Mahendra K. Khatau as Chairman and Managing Director Mr.Manish M. Khatau as Whole-time Director
Ms. Rupal B. Parikh as Chief Financial Officer and Mr. Rajesh D. Pisal as CompanySecretary.
6. Appointment of Director:
Mrs. Asha M. Khatau Non-executive Director of your Company retires by rotationand being eligible offers herself for reappointment. The details regarding Mrs.Asha M. Khatau as required under Regulation 17 of SEBI Listing Regulations 2015 aredisclosed in the notice of the Annual General Meeting. None of the other Directors arerelated inter se except Mr. Mahendra K. Khatau and Mr. Manish M. Khatau who are related toeach other.
7. Remuneration of Directors and Key Managerial Personnel:
Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the details of remuneration of Directors and Key ManagerialPersonnel are as furnished in Annexure A.
8. Statutory Auditors:
Pursuant to the provisions of Section 139 of the Companies Act 2013 CNK &Associates LLP Chartered Accountants Mumbai were appointed as the Statutory Auditors ofthe Company on 29th September 2017 for a period of five years to hold officeuntil the conclusion of the 56 th Annual General Meeting. They have confirmedthat they are not disqualified from continuing as Auditors of the Company.
The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
9. Secretarial Audit Report:
Pursuant to the Provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Ragini Chokshi & Co.
Company Secretaries Mumbai to undertake Secretarial Audit of the Company for thefinancial year ended
31st March 2019. The Secretarial Audit Report in the prescribed FormMR-3 issued by Ragini Chokshi & Co. (Company Secretaries) forms part of thisAnnual Report.
There are no qualifications reservations or adverse remarks in the Report.
10. Training and Familiarization Programme for Directors:
The Company has provided information and made the Independent Directors aware aboutthe major developments in legal and regulatory areas particularly regarding CompaniesAct 2013 and Regulation 25 (7) of SEBI Listing Regulations 2015. The details ofFamiliarization Programme for the Independent Directors are available on the website ofthe Company at www.indokem.co.in
11. Statement of declaration given by Independent Directors:
The Independent Directors of the Company have submitted their Declaration ofIndependence as required under the provisions of Section 149 (7) of the Companies Act2013 stating that they meet the criteria of Independence as provided in Section 149 (6) ofthe Act.
12. Particulars of Employees:
None of the employees of the Company fall under the limits laid down in Rule 5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
13. Directors' Responsibility Statement:
Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors herebyconfirm that:
(i) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed and there are no material departures; (ii) Appropriate accounting policieshave been selected and applied 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 the
Company at the end of the financial year and of the Profit of the Company forthatperiod;
(iii) Proper and sufficient care had been taken 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;(iv) The Annual Accounts had been prepared on a going concern basis; (v) The InternalFinancial Controls had been laid down to be followed by the Company and the such internalfinancial controls are adequate and are operating effectively; and
(vi) In order to ensure compliance with the provisions of all applicable laws propersystems had been devised and that such systems were adequate and operating effectively.
As required under Regulation 34(2) read with Schedule V of SEBI ListingRegulations 2015 the Management Discussion and Analysis is enclosed as a part ofthe Annual Report.
The Company has taken necessary steps to adhere to all the requirements of SEBI ListingRegulations 2015. A report on Corporate Governance together with the Certificatecompliance with the conditions of Corporate Governance as stipulated in Regulation 34(3)read with Schedule V of SEBI Listing Regulations 2015 is included as a part of the AnnualReport.
15. Extract of Annual Return:
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Companies(Accounts) Rules 2014 the extract of Annual Return in the prescribed Form MGT-9 isattached herewith and marked as Annexure D.
16. Number of eetings of the Board:
Four meetings of the Board were held during the financial year. For details of themeetings of the Board please refer to the Corporate Governance Report which forms partof this report.
17. Performance Evaluation of the Board:
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed under SEBI Listing Regulations 2015. Theperformance of the Board was evaluated by the Board after seeking inputs from all theDirectors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee members onthe basis of the criteria such as the composition of Committees effectiveness ofCommittee meetings etc The Board and the Nomination and Remuneration Committee reviewedthe performance of the individual Directors on the basis of the criteria such as thecontributions of the individual. Director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspects ofhis role. A separate meeting of Independent Directors was convened in the month of March2019 to discuss the following: (i) Review the performance of Non-independent Directorsand the Board as a whole; (ii) Review the performance of the Chairman of the Companytaking in to account the views of Executive Directors and Non-executive Directors;
(iii) Assess the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
All Independent Directors were present at the Meeting and discussed the above andexpressed their satisfaction.
18. Policy on Directors' Appointment and Remuneration and other details:
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of this report.
19. Internal Financial Control Systems and their Adequacy:
Company has established Internal Financial Control over financial reporting in thefinancial year 2016-17.
The details in respect of Internal Financial Control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
20. Audit Committee:
The details pertaining to composition of Audit Committee are included in theCorporate Governance Report which forms part of this report.
21. Particulars of Loans Guarantees or Investments:
Pursuant to Section 186 of the Companies Act 2013 the details of loans giveninvestments made or guarantees given are given in Note No. 29 to the financial statementsfor the financial year 2018-19 The loans investments guarantees and securities providedby the Company during the financial year ended
31st March 2019 together with the existing loans investments guaranteesand securities do not exceed the limits prescribed under Section 186(2) of the Act.
22. Transactions with Parties:
None of the transactions with related parties fall under the scope of Section188(1) of the Companies Act 2013. Information on transactions with related partiespursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)Rules 2014 are stated in Annexure B in Form AOC-2 which forms part of thisreport.
All the properties and insurable interests of the Company including the buildingsplant and machineries and stocks have been adequately insured.
24. Material Changes and Commitments:
There have been no material changes and commitments if any affecting thefinancial position of the Company statements which have occurred between the end offinancial year of the Company to which the financial relate and the date of thereport.
25. State of Company's Affairs:
There is no change in the nature of business during the year under review. No orderhas been passed by any Regulatory Court or Tribunal which can impact the going concernstatus of the Company and its operations in future.
26. The Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo:
Your Company is engaged in the continuous process of energy conservation by way ofimproved operational and maintenance practices:
A. Conservation of Energy:
(a) Energy Conservation measures taken:
(i) Electrical Energy:
Regular preventive / predictive maintenance of electrical system is carried out toensure minimum loss of energy / power supply.
Regular upgradation in electrical system is done so as to minimize consumption ofelectrical power supply.
(ii) Furnace Oil / LDO Consumption:
There is no major consumption of Furnace Oil / Light Diesel Oil. However there aresome processing activities carried out limiting the consumption of energy.
(b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy:
Apart from the above mentioned strategies your Company is in the process to upgrade andinstall new machineries which will altogether result in energy saving and will add tooperational efficiency in coming years.
(c) Impact of the measures at (a) and (b) for reduction of consumption of energy andconsequent impact on the cost of production: There is no such special impact for thesame.
(d) Energy consumption and energy consumption per unit of production: As per FormA forming part of Annexure C
B. Technology Absorption:
Your Company has taken positive efforts for technology absorption and its upgradation;
(a) Modification in air conditioning system to improve process conditions.
(b) Modification in existing machines for high value and new products developmentsincluding process simplification.
(c) The Company focused its Research and Development efforts on process and processdevelopment of new products and formulations trouble shooting.
Due to above factors and measures been considered there are various benefits resultedas such;
(i) Cost reduction
(ii) Improvement in quality
(iii) Improvement in operating performance
(iv) New product developments
C. Foreign Exchange Earnings and Outgo:
(Rs. in Lakhs)
|PARTICULARS ||31.03.2019 ||31.03.2018 |
|I. Foreign Exchange Earned || || |
|F. O. B. Value of Export ||1283 ||1360 |
|II. Foreign Exchange Outgo || || |
|C. I. F. Value of Imports of Raw Materials ||96 ||64 |
|Expenses in Foreign Currency ||14 ||46 |
|TOTAL ||110 ||110 |
27. Committees of Directors and Key Managerial Personnel:
Composition of Audit Committee of Directors Nomination and Remuneration Committeeof Directors and Stakeholders Relationship / Grievance Committee of Directors number ofmeetings held of each Committee during the financial year 2018-19 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report forming part of the report.
28. Corporate Social Responsibility (CSR):
Your Company does not fall under the criteria of Corporate Social Responsibility aslaid down under Section 135 of the Companies Act 2013 and by virtue of above your Companyhas not initiated any initiative for the same.
29. Cost Audit:
Your Company does not fall under the eligibility criteria to conduct Cost Audit andto maintain Cost Records as required under Section 148 of the Companies Act 2013 duringthe financial year 2018-19.
The Board of Directors is thankful to the employees customers vendors investorsof the Company for their continuous support and is grateful for the confidence and faithshown by them. Your Directors take this opportunity to place on record their sinceregratitude to the Banks Central and State Government Departments and the Local Authoritiesfor their guidance and support.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Mr. Mahendra K. Khatau |
|Place: Mumbai ||Chairman & Managing Director |
|Date: 12th August 2019 ||DIN: 00062794 |