Your Directors have pleasure in presenting the 33rd Annual Report ofthe Company along with the Audited Financial Statements for the year ended March 31 2018.
FINANCIAL HIGHLIGHTS :
The performance during the period ended 31st March 2018 has been asunder:
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As at March 31 2018
As at March 31 2017
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During the year under review your Company has earned net revenue of Rs.2403.39 Lacs as against Rs. 1790.19 Lacs in the previous year. The Profit before financecost and depreciation amounted to Rs. 284.56 Lacs as against Rs. 211.19 Lacs in theprevious year. Profit before tax during the year worked out to Rs. 137.05 Lacs as comparedto Rs. 48.40 Lacs in the previous year.
In view of meagre profit earned for the year under review yourDirectors do not recommend any dividend.
INDIAN ACCOUNTING STANDARD (IND AS):
The Company has adopted Indian Accounting Standards (Ind AS) witheffect from 1st April 2017 pursuant to the notification of Companies (Indian AccountingStandard) Rules 2015 issued by the Ministry of Corporate Affairs. Hence previous years'figures have been regrouped and reclassified wherever considered necessary to confirm thefigures represented in the current period.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
There is no change in the nature of business during the financial year2017-18.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY:
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear of the Company to which the financial statements relate and the date of the report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year 2017-18 no significant and material orders passed bythe regulators or courts or tribunals impacting the going concern status and company'soperations in future.
MANAGEMENT DISCUSSION AND ANALYSIS:
A. Industry Structure and Developments:
The Company's main business was to manufacture organic intermediateswhich a reused in pharmaceuticals agro and specialty chemical industries.
B. Opportunities and Threats:
Due to specialized technology involved the possibility of furthercompetition is minimal. However lack of large market is its limitation.
Your Company believes that it has a competitive edge in the market asthe Company delivers timely and quality products to its customers. The Company has longstanding relationship with many of its customers and vendors. The Company also believesthat the real strength of the Company lies with its employees and they are the assets ofthe Company.
In spite of various restrictions as per environmental laws the Companyhas successfully utilized the existing capacity in compliance with those laws.
Your Company is continuously working on strengthening the business.Your Company has been successfully executing major orders from various customers and ithas been enjoying the confidence of all customers with repeat orders. Your Company hasbeen making consistent efforts for improving margins in majority products by reducing thevarious costs. The results of these initiatives are expected to improve the overallprofitability of the Company further during the coming years.
E. Risks & Concerns:
Continuous upward trend in crude oil prices affecting raw material costand depreciated rupee has also increased price of imported products.
F. Internal Control Systems and their Adequacy:
The Company has an adequate system of internal control to ensurecompliance with policies and procedures. The internal audit is done by an independent firmof Chartered Accountants. Internal audits are regularly carried out to review the internalcontrol systems. The internal audit reports along with recommendations contained thereinare reviewed by the Audit Committee of the Board.
G. Human Resources / Industrial Relations Fronts:
The Company had cordial relations with its employees and all problemswere solved across the table in a very congenial atmosphere. Your Directors wish to placeon record their appreciation to all its employees for their sustained efforts and valuablecontribution.
Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 in connection with Corporate Governance are not applicableto the Company since the paidup capital of the Company is less than Rs. 10 Croreand Net Worth of the Company is below Rs. 25 Crore.
EXTRACT OF ANNUAL RETURN :
The detail forming part of the extract of the Annual Return in formMGT-9 as required under Section 92 of the Companies Act 2013 is annexed as Annexure"A" and forms an integral part of this Report.
A calendar of Meetings was prepared and circulated in advance to theDirectors. The Board met six times in the Financial Year 2017-2018. The Meetings were heldon May 30 2017 August 12 2017 September 28 2017 November 14 2017 January 25 2018and March 31 2018. The interval between two Meetings was well within the maximum periodmentioned under Section 173 of the Companies Act 2013 and Regulation 17(2) SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013.
(a) that in the preparation of the annual accounts for the year endedMarch 31 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures; if any; (b) that the Directors had selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2018 and of the profit of the Company for the year ended onthat date; (c) that the Directors had taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (d) that the Directors had prepared the annual accounts on a goingconcern basis;
(e) that the Directors in the case of a listed Company had laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and were operating effectively; and (f) that the Directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
INDEPENDENT DIRECTOR'S DECLARATION:
The Company has received the necessary declaration from eachIndependent Director in accordance with Section 149(7) of the Act that he/she meets thecriteria of independence as laid out in Section 149(6) of the Act and the ListingRegulations.
EVALUATION OF THE BOARD'S PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a structuredquestionnaire was prepared after taking into consideration the various aspects of theBoard's functioning composition of the Board and its Committees The Board has carried outan annual performance evaluation of its own performance the Directors individually aswell as evaluation of the working of its Committees. The Board of Directors expressedtheir satisfaction with the evaluation process.
BOARD OF DIRECTORS:
The Company has a judicious combination of Executive and Non-ExecutiveDirectors. As on March 31 2018 the Board comprised of 5 Directors out of which two areExecutive Directors and three are Independent Directors. The Chairman of the Board is anExecutive Director.
As per the applicable provisions of the Companies Act 2013 Shri B VRetarekar is liable to retire by rotation at the ensuing Annual General Meeting (AGM) ofthe Company and being eligible has offered himself for reappointment. The Board recommends his reappointment at the ensuing Annual General Meeting for your approval.
RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial yearwere on an arm's length basis and were in the ordinary course of business. Transactionswith related parties entered by the Company in the normal course of business areperiodically placed before the Audit Committee for its omnibus approval and theparticulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure"B".
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO:
Information required under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies Accounts) Rules 2014 is given in the Annexure"C" to this report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
In pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 a Vigil Mechanism for directors and employees to report genuineconcerns has been established.
(A) STATUTORY AUDITOR:
Members of the Company at the Annual General Meeting ('AGM') held onSeptember 28 2017 approved the appointment of M/s. Sanjay Soni & AssociatesChartered Accountants as the Statutory Auditors of the Company for a period of five yearscommencing from the conclusion of the 32nd Annual General Meeting held on September 282017 until the conclusion of 37th Annual General Meeting of the Company to be held in theyear 2022. M/s. Sanjay Soni & Associates Chartered Accountants has audited the bookof accounts of the Company for the Financial Year ended March 31 2018 and has issued theAuditors' Report thereon. There are no qualifications or reservations or adverse remarksor disclaimers in the said Report.
In terms of the provisions relating to statutory auditors forming partof the Companies (Amendment) Act 2017 notified on May 7 2018 ratification ofappointment of
Statutory Auditors at every AGM is no more a legal requirement.Accordingly the Notice convening the ensuing AGM does not carry any resolution onratification of appointment of Statutory Auditors. However M/s. Sanjay Soni &Associates Chartered Accountants has confirmed that they are eligible to continue asStatutory Auditors of the Company to audit the books of accounts of the Company for theFinancial Year ending March 31 2019 and accordingly they will continue to be theStatutory Auditors of the Company for Financial Year ending March 31 2019.
(B) SECRETARIAL AUDIT:
A Secretarial Audit was conducted during the year by the SecretarialAuditor M/s. Vijay Bhatt & Co. Company Secretaries. The Secretarial Auditors Reportis attached as Annexure "E". There are no qualifications or observationsor remarks made by the Secretarial Auditor in their Report.
The Company has in place proper systems to ensure compliance with theprovisions of the applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and such systems are adequate and operating effectively.
Your Company does not have any subsidiary /subsidiaries within themeaning of the Companies Act 2013.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company does not fall within the purview of Section 135 of theCompanies Act 2013.
The Company has not accepted any fixed deposits and accordingly noamount was outstanding as on the date of the Balance Sheet.
During the year under review the Company has neither issued anysecurities nor has taken any Corporate Action for cancellation of issues securitieshence there is no change in share capital structure of the Company.
PA RTICU LARS OF LOAN S GUARAN TEES A ND INVESTMENTS:
The Company has not given any loans or guarantees or made anyinvestments as per Section 186 of the Companies Act 2013.
DISCLOSURE UN DER RU LE 5 OF COMPAN IES (APPOINTMENT &REMUNERATION) RULES 2014:
Disclosures required under Section 197 of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment & Remuneration) Rules 2014 have beenannexed as Annexure "D".
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION & REDRESSAL) ACT 2013:
The Company has safe and healthy work environment that enables itsemployees to work without fear prejudices gender bias and sexual harassment and also setup guideline in line with the requirement of The Sexual Harassment of Women at workplace(Prevention Prohibition & Redressal) Act 2013. During the financial year 2017-18 nocomplaint was received under the policy.
Your Directors wish to place on record their appreciation for thecontribution made by the employees at all levels. Your Directors also wish to thank itscustomers suppliers investors and bankers for their continued support and faith reposedin the Company.
PLACE : VADODARA
DATE : 29.05.2018