The Members of Indokem Limited
Your Directors have pleasure in presenting the Fifty Second Annual Report togetherwith the Audited Accounts for the financial year ended 31st March 2018.
1. Financial Results:
(Rs. in lakhs)
|Particulars ||For the financial year ended 31.03.2018 ||For the financial year ended 31.03.2017 |
|A Income from Continuing Operations ||7967.29 ||7652.21 |
|Profit/(Loss) Before Interest Depreciation & Taxes ||(6.12) ||189.23 |
|Less: Interest ||77.14 ||57.49 |
|Depreciation ||82.17 ||74.00 |
|Profit/(Loss) Before Tax ||(165.43) ||57.74 |
|Less: Provision for Tax ||- ||- |
|Profit/ (Loss) After Taxes ||(165.43) ||57.74 |
|B Income from Discontinuing Operations ||(6.89) ||1326.65 |
|Profit / (Loss) for the year ||(172.32) ||1384.39 |
|Total other comprehensive income ||(36.14) ||1.16 |
|Total comprehensive income / (loss) for the year ||(208.46) ||1385.55 |
|Profit/(Loss) Brought Forward from last year ||(1412.61) ||(2798.16) |
|Surplus/Deficit carried to Reserves ||(1621.07) ||(1412.61) |
Considering the accumulated losses the Board of Directors o f your Company doesnot consider it appropriate to recommend any Dividend for the financial year ended 31 stMarch 2018.
3. Operational Performance:
Revenue from operations for F. Y. 2017-18 at Rs.7967.29 lakhs was higher by 4.12%over previous year Rs.7652.21 lakhs. EBITDA at Rs.(6.12) lakhs registered a decline overEBITDA of Rs.189.23 lakhs in F.Y. 2016-17. PAT for the year was Rs.(165.43 lakhs)registering a decline over the PAT of Rs.57.74 lakhs in F.Y. 2016-17.
4. Transfer to Reserves:
In view of inadequate profits for the year under review no amount has been transferredto the reserves.
5. Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 149 of the Act Shri Kailash Pershad (DIN:00503603) Shri Rajagopalan Sesha (DIN: 00289643) and Shri Bhalchandra Sontakke (DIN:01225753) were appointed as Independent Directors of the Company at the AGM convened on 30thSeptember 2014. 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.
Smt. Asha M. Khatau retires by rotation and being eligible has offered herself forreappointment.
During the year the Non-executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than the sitting fees commission 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 Shri Mahendra K. Khatau as Chairman and Managing Director Mr.Manish M. Khatau as Whole Time Director Ms. Rupal B. Parikh as Chief Financial Officerand Mr . Rajesh D. Pisal as Company Secretary.
6. Appointment of Director:
Smt. Asha M. Khatau Non-executive Director of your Company retires by rotationand being eligible offers herself for reappointment. The details regarding Smt.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 Shri Mahendra K. Khatau and Mr. Manish M. Khatau who are relatedto each 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. 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
9. Statement on 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.
10. 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.
11. 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 policies have been selected and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theProfit of the Company for that period;
(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 Internal Financial Controls had been laid down to be followed by the Companyand the such internal financial 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.
12. 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 statement 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.
13. 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 undertakeSecretarial Audit of the Company for the financial year ended 31st March 2018.The Secretarial Audit Report issued by Ragini Chokshi & Co. (Company Secretaries) inthe prescribed Form MR-3 forms part of the Annual Report.
There are no qualifications reservations or adverse remarks in the Report.
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 Certificate compliance with theconditions of Corporate Governance as stipulated in Regulation 34(3) read with Schedule Vof SEBI Listing Regulations 2015 is included as a part of the Annual Report.
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 meetings of the Board:
Five 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 the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual Directors on the basis of the criteria such as the contributions of theindividual. Director to the Board and Committee meetings like preparedness on the issuesto be discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
A separate meeting of Independent Directors was convened in the month of March 2018to discuss the following:
(i) Review the performance of Non- Independent Directors and the Board as a whole;
(ii) Review the performance of the Chairman of the Company taking in to account theviews 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. 31 to the financial statementsfor the financial year 2017-18. The loans investments guarantees and securities providedby the Company during the financial year ended
31st March 2018 together with the existing loans investments guaranteesand securities do not exceed the limits prescribed under Section 186(2).
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:
In financial year 2016-17 the Company had entered into Memorandum of Understanding(MOU) with a seller for acquisition of Plot of Land at MIDC Ambernath together withfactory building standing thereon and machineries installed therein. The said transactionhas been completed successfully during the year.
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 up gradation in electrical system is done so as to minimize consumption ofelectrical power supply.
(ii) Furnace Oil / LDO Consumption:
Considering the above issue there are no major consumption of Furnace Oil / LightDiesel Oil. However there are some processing activities carried out limiting theconsumption 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 inthe process to upgrade and install new machineries which will altogether result in energysaving and will add to operational 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
Form A 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 ||31.03.2018 ||31.03.2017 |
|I. Foreign Exchange Earned || || |
|F. O. B. Value of Export ||1359.56 ||1253.69 |
|II. Foreign Exchange Outgo || || |
|C. I. F. Value of Imports of Raw Materials ||64.12 ||21.50 |
|Expenses in Foreign Currency ||46.31 ||13.33 |
|TOTAL ||110.43 ||34.83 |
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 2017-2018 and meetings attendedby each 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 2017-18.
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/- |
| ||Shri Mahendra K. Khatau |
|Place: Mumbai ||Chairman & Managing Director |
|Date: 14th August 2018 ||DIN: 00062794 |