ISHAN DYES AND CHEMICALS LIMITED
Your Directors have pleasure in presenting 25th Annual Report together withthe Audited Financial Statements for the financial year ended 31st March 2018.
1. FINANCIAL RESULTS:
The Company's financial performance for the year ended March 31 2018 is summarizedbelow:
| ||Current ||Previous |
| ||Year ||Year |
| ||(2017-181 ||(2016-171 |
|Sales(Net) ||7214.94 ||6674.29 |
|Other Income ||159.20 ||114.24 |
|Total Revenue ||7374.14 ||6788.53 |
|Earnings before Interest Depreciation Exceptional /Extraordinary Items Tax & Amortizations (EBITDA) ||685.98 ||1219.07 |
|Interest(Net) ||64.26 ||81.90 |
|Depreciation ||84.37 ||154.64 |
|Profit before Exceptional / Extraordinary items & tax ||592.34 ||982.53 |
|Exceptional / Extraordinary expenses || || |
|Profit before Tax ||592.34 ||982.53 |
|Tax Adjustments (Net) ||256.01 ||422.43 |
|Profit after Tax ||336.33 ||560.10 |
2. STATE OF COMPANY'S AFFAIRS AND FINANCIAL PERFORMANCE:
The Company has achieved total revenue of Rs. 7374.14 Lacs and EBITDA (pre-exceptionaland extraordinary item) of Rs. 685.98 Lacs as against that of Rs. 6788.53 Lacs and Rs.1219.07 Lacs respectively for the previous year. During the year the operations hasresulted increase in total revenues by 8.63%. However EBITDA has decreased due to increasein prices of key raw materials which the Company was unable to pass in finished productprices due to various market constraints. Besides that other operating overheads has alsoincreased marginally due to inflationary pressure. The overall cost escalation hasresulted into lower margins for the year ended and in turn lower EBITDA and Net Profit forthe year ended.
3. PROSPECTS & DEVELOPMENTS:
During the year the Company has undertaken modernization program and already incurredcapital expenditure of more than Rs. 8.00 Crores to improve its plant building and alsoadd balancing equipments. The same will result into overall efficiency improvementsreduction in operating cost and better quality product with increased output. Theundertaken steps will facilitate better yields reduction in cost of operations and alsooverall increase in margins for the products of the Company. The Company has developedsound export market and overall customer spread besides introducing new ranges for theproducts all these factors will drive the growth during coming years for the benefits ofthe Company. Barring unforeseen circumstances the management is confident of deliveringimproved results during the coming years. The management is also working on variousexpansion plans and opportunities to diversify for creating value chain of business.
The Company is also planning to raise funds by right issue and the proceeds of samewill be utilized to repay debts of the Company.
The Company operates in a competitive business environment and key challenge areas areecology and allied regulatory compliances commodity and petro-products price volatilityforeign currency fluctuations inflationary pressure on operational costs large workingcapital need skilled manpower availability etc. The management of the Company is workingwith a proactive approach to meet challenges and cater opportunities with an aim toenhance stakeholder's value. The management of the Company has charted out growth plansfor the Company which includes further expanding export business; add new ranges andproducts to create a basket of products for catering customer needs and also to createvalue addition in present product portfolio with a view to increase revenues and marginfor the Company. Also debt reduction will help to reduce interest burden for the Companyand overall profitability of the Company would be improved in due course of time.
Barring unforeseen circumstances the management is confident to further improve itsbusiness performance and also position the Company as a preferred quality producer andexporter of Pthalocyanine blue pigments.
4. CHANGE IN NATURE OF BUSINESS. IF ANY:
During the Financial Year 2017-18 the company has not changed its nature of business.
The Board of Directors at their meeting held on 23rd February 2018 haddeclared an interim dividend of Rs. 0.75/- per Equity Share i.e. @ 7.5% of face value ofRs. 10/- per share to all the shareholders ofthe Company whose names appeared on theRegister of Members / Register of Beneficial Owners on Friday 09th March2018. The interim dividend was paid to the Shareholders in the month of March 2018.
The Board has recommended the same to be confirmed as the Final Dividend for FY2017-2018. Necessary resolution is being proposed for the purpose at the ensuing 25thAnnual General Meeting ("AGM).
During the year your Company has obtained sanction for machinery term loan and otherterm loan from the Kalupur Commercial Co. Op. Bank Ltd. Also the working capitalfacilities has been renewed during the year for Rs. 8.00 Crores from the KalupurCommercial Co. Op. Bank Ltd. All the installments of banking facilities private loans andvehicle loans which were due during the financial year were repaid as per schedule in duecourse.
7. TRANSFER TO RESERVES:
During the year under review no transfer to reserves was carried out.
The Export is the thrust area for the growth ofthe Company and during the year endedrecorded gross export turnover of Rs. 34.29 Crores
9. SHARE CAPITAL:
As on 31st March 2018 the Share Capital structure of the Company stood asfollows:
|Particulars ||No of Shares ||Amount |
|Authorized Share Capital |
|Equity Shares of Rs. 10/- each ||25000000 ||250000000 |
|Total ||25000000 ||250000000 |
|Issued. Subscribed and Paid ud Share ||Capital || |
|Equity Shares of Rs. 10/- each ||11264700 ||112647000 |
|Total ||11264700 ||112647000 |
Increase in Authorized Share Capital of the Company:
During the year 2017-18 the Authorized Share Capital of the Company has been increasedfrom Rs. 20.00 Crores to Rs. 25.00 Crores by way of Ordinary Resolution passed by theShareholders at the 24th AGM of the Company held on 28th September2017. In this regard the Company has complied with all the applicable sections rulesregulations and guidelines of the Companies Act 2013 and the Securities Exchange Board ofIndia (SEBI].
During the year under review the Board of Directors at their meeting held on 20thMarch 2018 has approved to raise funds upto an aggregate amount of Rs. 20.00 Crores byway of Issue of Equity Shares of the Company to its eligible existing Shareholders onrights basis subject to the Shareholders approval.
Further at the Extra Ordinary General Meeting held on 23rd April 2018 theShareholders of the Company has approved to raise funds upto an aggregate amount of Rs.20.00 Crores by way of Issue of Equity Shares of the Company to its eligible existingShareholders on a rights basis.
The Company has appointed M/s Vivro Financial Services Private Limited as the LeadManager to the Issue and M/s Link Intime India Private Limited as the Registrar to theRights Issue.
The Board of Directors at their meeting held on 19th July 2018 has approvedthe Draft Letter of Offer dated 19th July 2018 for submission with theSecurities Exchange Board of India ("SEBI] and BSE Limited ("BSE"]which has been submitted to SEBI for their comments and observations.
10. SEGMENT WISE PERFORMANCE:
The Company has only one reportable segment of activity i.e. "Chemicals" inaccordance with the definition of "Segment" as per the Accounting Standard 17issued by the Institute of Chartered Accountants of India. The performance of the Companyis discussed separately in this Report.
11. SUBSIDIARIES. IOINT VENTURES & ASSOCIATES:
Your Company doesn't have any Subsidiaries Joint Ventures and Associates.
12. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report as required under Regulation 34 andSchedule V of the SEBI (Listing Obligations and Disclosure Requirements] Regulations 2015forms an integral part of this Report and provides overview of the business and operationsof the Company.
13. PUBLIC DEPOSITS:
The Company has not accepted any public deposits nor any amount of principal orinterest thereof was outstanding in terms of Sections 73 and 74 of the Companies Act 2013read with the Companies (Acceptance of Deposits] Rules 2014 for the financial yearended.
14. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFTHE FINANCIAL YEAR AND DATE OF REPORT:
In terms of Section 134(3] (1] of the Companies Act 2013 except as disclosedelsewhere in this Report no material changes and commitments which could affect theCompany's financial position have occurred between the end of the financial year of theCompany and date of this Report.
15. CORPORATE GOVERNANCE:
As required by Schedule V(C] of the SEBI (Listing Obligations and DisclosureRequirements] Regulations 2015 a detailed report on Corporate Governance is given as apart of the Annual Report The Company is in full compliance with the requirements anddisclosures that have to be made in this regard. The Auditors' Certificate of thecompliance with Corporate Governance requirements by the Company is attached to the Reporton Corporate Governance.
16. INDUSTRIAL RELATIONS
The relationship with employees at all level remained cordial and harmonious during theyear. We appreciate for committed contribution made by employees of the Company at all thelevels to achieve present growth of the Company.
17. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS. KEY MANAGERIAL PERSONNEL ANDSENIOR MANAGEMENT OF THE COMPANY:
In accordance with the provisions of Section 178 of the Companies Act 2013 andRegulation 19 of the SEBI (Listing Obligations and Disclosure Requirements] Regulations2015 The Board of Directors has formulated the Nomination and Remuneration Policy on thebasis of recommendations made by the Nomination and Remuneration Committee. The salientaspects covered in the Nomination and Remuneration Policy has been outlined in theCorporate Governance Report which forms part of this Report The Policy is also availableon the website of the Company www.ishandves.com.
18. BOARD DIVERSITY
The Company recognizes the importance of a diverse Board in its process. We believethat a truly diverse Board will leverage differences in thought perspective knowledgeskill regional and industry experience cultural and geographical background ageethnicity race and gender which will help to provide better directions and supervision tothe affairs of the Company. The Board has adopted the Board diversity policy which setsout the approach to diversity of the Board of Directors. The Policy is also available onthe website of the Company www.ishandyes.com
19. PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 (12] of the Companies Act 2013 and Rule 5 (1] of the Companies(Appointment and Remuneration of Managerial Personnel] Rules 2014 are given in "Annexure[A]" that forms part of this Report.
No employee of the Company was in receipt of remuneration more than the limitsspecified under Rule 5(2] of the Companies (Appointment and Remuneration of ManagerialPersonnel] Rules 2014 during the financial year ended 31st March 2017.
20. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointments:
During the year 2017-18 No Director was appointed on the Board of the Company.
Pursuant to the provisions of Section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of your Company Smt. Anilaben P. Patel Non-Executive and Non-IndependentDirector of the Company is liable to retire by rotation at the ensuing AGM and beingeligible offered herself for reappointment.
Appropriate resolution for her re-appointment is being placed for your approval at theensuing AGM. The brief resume of Smt. Anilaben P. Patel together with other relatedinformation has been detailed in the Notice of AGM which is forming part of the AnnualReport.
Your Directors recommend her re-appointment as Non-Executive and Non IndependentDirector of your Company.
Resignations along with facts of resignation:
During the financial year 2017-18 no Director has been resigned from the office ofDirectorship of the Company.
Key Managerial Personnel:
During the year under review Ms. Ankita Vivekkumar Shah (ACS: 40326) has beenappointed as a Company Secretary & Compliance officer of the Company w.e.f 20thMarch 2018.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Shri Piyush N.Patel Chairman and Managing Director Shri Chintan Prakash Pancholi Chief FinancialOfficer and Ms. Ankita Vivekkumar Shah Company Secretary and Compliance officer are theKey Managerial Personnel of your Company.
Annual Evaluation of Board's Performance:
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe corporate governance report section in this Annual Report.
Declaration of Independence:
Your Company has received declarations from all the Independent Directors under Section149(7) of the Companies Act 2013 confirming that they fulfill the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 read with theSchedules and Rules issued thereunder as well as under Regulation 16(b) of the SecuritiesExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
Familiarization Program for Independent Directors
At the time of the appointment of an Independent Director the Company issues a formalletter of appointment outlining his/her role function duties and responsibilities.Further the Independent Directors
are introduced with the corporate affairs new developments and business of the Companyfrom time to time. The Familiarization program is also available on the website of theCompany www.ishandves.com.
21. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING:
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulations 2015. The InsiderTrading policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with shares of the Company as well as consequences ofviolation. The Policy has been formulated to regulate monitor and ensure reporting ofdeals by the employees and to maintain the highest ethical standards of dealing in theCompany's Shares. The code is also available on the website of the Companywww.ishandves.com.
22. COMMITTEES OF THE BOARD
As on 31st March 2018 the Board has following committees:
a. Audit committee
b. Nomination and Remuneration committee
c. Stakeholder's relationship committee
d. Corporate Social Responsibility Committee
e. Rights Issue Committee.
A detailed note on the Board and its committees is provided under the corporategovernance report section in this Annual Report
23. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE MEETINGS:
The details of the number of Board and Committee Meetings of your Company along withthe composition and attendance of the Directors and Members at such meetings are set outin the Corporate Governance Report which forms part of this Report. The time gap betweenthe two meetings was in accordance with the requirements. All the information required tobe furnished to the Board was made available along with detailed Agenda.
24. DIRECTORS' RESPONSIBILITY STATEMENT:
As required under Section 134(3) (c) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed and there are no materialdepartures from the same;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2018 and of the profitand loss statement of the Company for the financial year ended 31st March 2018;
(c) proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual accounts have been prepared on a going concern' basis;
(e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and operating effectively;and
(f) Proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
25. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT- 9 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 are set out herewith as "Annexure[B]" and form an integral part to this Report.
26. RELATED PARTY TRANSACTIONS
During the financial year 2017-18 all transactions with the Related Parties as definedunder Section 2(76) of the Companies Act 2013 read with Companies (Specification ofDefinitions Details) Rules 2014 and Regulation 23 of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 were entered inthe ordinary course of business and on an arm's length basis.
27. LOANS AND INVESTMENTS:
Loans guarantees/securities and investments if any and as covered under Section 186of the Companies Act 2013 forms part of the notes to the financial statements.
28. RISK MANAGEMENT:
At present the company has not identified any element of risk which may threaten theexistence of the Company.
All the properties and insurable interest of the Company are adequately insured.
29. VIGIL MECHANISM AND WHISTLE BLOWER POLICY:
The Board of Directors has formulated a Whistle Blower Policy which is in compliancewith the provisions of Section 177 (10) of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The policy provides for aframework and process whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimization or any other unfair practice being adoptedagainst them. The policy is also available on the website of the Companywww.ishandyes.com.
30. CORPORATE SOCIAL RESPONSIBILITY:
Your Company has constituted the Corporate Social Responsibility (CSR) Committee as perthe requirement of the Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 as amended from time to time. ShriPiyush N. Patel is the Chairman of the Committee and two other members namely Shri RoopinA. Patel and Shri Mayankkumar H. Patel are the members of said Committee. The Committeehas framed the Corporate Social Responsibility Policy for the Company. The philosophy forCSR activity of the Company is mainly focused in the various areas of rural infrastructuredevelopment social upliftment education promotion of healthcare and sanitationensuring environmental sustainability and promoting rural sports.
During the year under review the Company has not spent any amount on CSR activities dueto lack of availability of proper and satisfactory opportunity for such spending in linewith policy and philosophy framed by the Committee. However the Committee in consultationwith the Management of the Company is working out long term basis plan for CSR spending ina phased manner over a period of time.
31. AUDITORS AND AUDITORS* REPORT:
At the 21st Annual General Meeting held on 23rd September 2014M/s. G. S. Mathur & Co. Chartered Accountants were appointed as statutory auditors ofthe Company to hold office till the conclusion of the 26th Annual GeneralMeeting to be held in the calendar year 2019.
Further in terms of Clause 40 of the Companies (Amendment) Act 2017 which wasnotified vide Notification dated S. 0.1833 (E) dated 07th May 2018 and effective fromthat date the Proviso of Section 139 (1) relating to ratification of Appointment ofAuditors at every Annual General Meeting of the Company has been omitted and therequirement of Ratification of Auditors Appointment is no longer required as per theCompanies Act 2013.
Therefore the resolution for ratification of Appointment of Statutory Auditors M/s G.S. Mathur & Co Chartered Accountants has not been provided for the approval of theShareholders and not formed as a part of Notice of the 25th AGM of the Company
The appointment of Cost Auditor for the Company is not applicable to the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed Mr. Kunal Sharma Practicing Company Secretary to conduct the SecretarialAudit of your Company. The Secretarial Audit Report is annexed herewith as Annexure- [C]'' to this Report.
32. EXPLANATION ON AUDITORS REPORT:
The notes to the accounts referred to in the Auditors Report are self-explanatory andtherefore do not call for any separate or further comments or explanations.
The Secretarial Audit report does not contain any remarks and qualifications and areself-explanatory therefore do not call for any separate or further comments orexplanations.
33. FRAUDS REPORTED BY AUDITORS:
No frauds are reported by Auditors which falls under the purview of sub section (12) ofSection 143 of the Companies Act 2013.
34. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The information required under Section 134 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 with respect to the information on conservation ofenergy technology absorption and foreign exchange earnings and outgo is given in Annexure- [D]"appended hereto and forms part of this Report
35. INTERNAL FINANCIAL CONTROLS:
The Company has adequate internal controls and checks in commensurate with its size andactivities. The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE fPREVENTION.PROHIBITION AND REDRESSAL1 ACT. 2013:
Your Company is committed to provide and promote a safe healthy and congenialatmosphere irrespective of gender caste creed or social class of the employees. Duringthe year under review there was no case filed pursuant to the sexual harassment of Womenat workplace (Prevention Prohibition and Redressal) Act 2013.
37. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:
There are no significant/material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of your Company and its futureoperations.
Your Directors wish to place on record their appreciation for the continued supportreceived from stakeholders employees at all levels vendors customers bankersconsultants and all associates of the Company.
| ||By order of the Board of Directors |
| ||For ISHAN DYES & CHEMICALS LIMITED |
|14th August 2018 ||Piyush N. Patel |
|Ahmedabad ||Chairman & Managing Director DIN: 00450807 |