Your Directors are pleased to present the 39th Annual Report together withthe Audited Financial Statements of the Company for the Financial Year Ended on 31stMarch 2018
1. FINANCIAL PERFORMANCE
|Particulars ||For the year ended on 31st March 2018 ||For the year ended on 31st March 2017 |
|Sales (Net of excise duty) ||16594.74 ||12115.87 |
|Other Income ||49.95 ||36.71 |
|Operating Profit / (Loss) before Interest and Depreciation ||2096.86 ||1310.02 |
|Interest/ Finance Cost ||226.10 ||201.65 |
|Depreciation ||409.56 ||437.04 |
|Exceptional Items - (Gain)/ Loss ||- ||(119.10) |
|Profit/(loss) before tax ||1461.20 ||790.43 |
|Tax expense ||(613.95) ||(431.77) |
|Net Profit / (Loss) ||847.25 ||358.66 |
|Other Comrehensive Income (Net of Tax) ||(31.58) ||11.13 |
|Total Comprehensive Income ||815.67 ||369.79 |
During the year the Company has achieved the revenue of Rs. 16594.74 lacs with theincrease of 36.97% as compared to previous year. Profit after tax is Rs. 847.25 lakhs withincrease of 136.21% as compared to previous year.
Previous five year trend of the sales and the net profit has been given below:
2. PERFORMANCE AND STATE OF COMPANY AFFAIRS
As promised last year Your Company has increased its production capacity to 207 TPDand plans to increase the same substantially to 275 TPD in near future. Further yourCompany has plans to replace old forced circulation technology ASAHI Electrolysers withNCZ technology Electrolysers for making the entire production process energy efficient andto be competent in the market. Company is also working on few new products for captiveconsumption of Chlorine.
Demand for Caustic Soda in India was around 4.20 million TPA approx. in 2017-18.Further Caustic Soda imports decreased by margin of 4 % approx. in comparison to 2016-17resulting in better capacity utilization for domestic industry.
Your directors are pleased to inform you that the CIF price for caustic import has alsojumped to $590 per MT which indicates demand has increased across the sectors around theworld. Reduced capacity utilization at plants in coastal region of China due toenvironmental reasons and Chlorine and Caustic price recovery in last quarter of 2017-18had positive effect on prices of caustic soda and chlorine resulting in betterprofitability for the Company.
The Indian economy is growing at a healthy rate of around 7% and the pace may quickenup due to better business climate foreseen due to GST and other measures taken by theGovernment.
4. FUTURE OUTLOOK
The economic parameters for the industry are looking good in the future with thegovernment giving a big push to infrastructure and make in India. Caustic and Chlorinethe products of the Company are closely linked with the growth of the economy.
Company has expanded its capacity by installing additional latest technology productionfacilities of 70 TPD. This resulted in the installed capacity of the Company increased to207 TPD and products are sold comfortably. The Company is also planning to start projectto make derivatives of Chlorine in the near future to create more value addition and inhouse consumption of Chlorine.
5. directors and key managerial personnel
Pursuant to the provisions of the Section 152 of Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of Company Shri Yuvraj Ahuja Non-Executive Director is liable to retire byrotation at the ensuing Annual General Meeting
(AGM) and being eligible has offered himself for reappointment. Appropriate resolutionfor his re-appointment is being placed for your approval at the ensuing AGM. The briefresume of Director and other related information has been detailed in the notice conveningthe 39th AGM of your Company. Your Directors recommend his re-appointment as aNon-Executive Director of the Company.
During the year under review Board of Directors on the recommendation of theNomination & Remuneration Committee and the Audit Committee had approved in theirmeeting held on 13th February 2018 the re-appointment of Shri Deepak Mathursubject to approval of members by special resolution at the ensuing Annual General Meetingas Whole Time Director of the Company for a period of 3 (three) years w.e.f. 19thFebruary 2018.
The present term of Shri Ajay Virmani Managing Director of the Company going to expirew.e.f. 11 thJuly 2018 On the recommendation of the Nomination &Remuneration Committee and the Audit Committee the Board in its meeting held on 16thMay 2018 subject to the approval of members by special resolution at the ensuing AnnualGeneral Meeting has re-appointed Shri Ajay Virmani as Managing Director of the Companyfor a term of 3 (three) years w.e.f. 12th July 2018.
During the year under review Shri Rohit Verma has been appointed as a Company Secretaryw.e.f. 29th May 2017 of the Company and further he has tendered hisresgnation from the post of Company Secretary w.e.f. 31st August 2017. ShriDipendra Chaudhary had joined the Company as a Company Secretary of the Company w.e.f. 27thFebruary 2018.
The Company has received the declaration from all Independent Directors of the Companyconfirming that they meet the criteria of Independence as prescribed under the CompaniesAct 2013 and SEBI (Listing Obligations and Dsiclosure Requirements) Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors of the Company in theirmeeting held on 13th February 2018 had carried out the annual evaluation ofits own performance the Individual Directors (Including the Independent and NonIndependent Directors) as well as of its Committees. The structured questionnaires werecirculated to all the Directors requesting them to fill and return the duly filledquestionnaires to the Company giving their views for evaluation of the self & thepeers. The feedback received from the Directors had been compiled and the outcome has beensummarized.
The Independent Directors of the Company in their separate meeting held on 13thFebruary 2018 reviewed the performance of the Non-Independent Directors and the Board asa whole. They also reviewed the performance of the Chairperson of the Company.
The Policy on performance evaluation of Independent Directors Board of DirectorsCommittees and other individual Directors covered the role rights responsibilities ofIndependent Director and related matters are put up on the website of the Company at thelink www.lordschloro.com.
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link www. lordschloro.com.
The following policies of the Company are attached herewith marked as Annexure A andB.
a) Policy for selection of Directors and determining Directors independence; and
b) Remuneration Policy for Directors Key Managerial Personnel and other employees.
6. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186
During the year there was no loan given investment made guarantees given orsecurities provided by the Company.
7. MATERIAL CHANGES AND COMMITMENTS IF ANY:
There were no material changes and commitments have been occurred between the end ofthe financial year of the Company to which the financial statements relate and date ofsigning of board report affecting the financial position of the Company.
8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY
THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'SOPERATIONS IN FUTURE
The Company has not received any significant/material orders from the statutoryregulatory bodies/courts/tribunals which affect the operations/status of the Company.
9. STATUTORY AUDITORS
At the 37th AGM of your Company the members had approved the appointment ofM/s Gupta Vigg & Co. Chartered Accountants as Statutory Auditors of the
Company to hold office till the conclusion of 42nd AGM subject torectification by the Members at every Annual General Meeting.
The Board of Directors of your Company at their meeting held on 16th May2018 have on the recommendation of Audit Committee and subject to the approval ofmembers ratify the appointment of M/s Gupta Vigg & Co. Chartered Accountants asStatutory Auditors for the Financial Year 2018-19 i.e. from conclusion of this AnnualGeneral Meeting till the conclusion of next Annual General Meeting.
10. COST AUDITORS
The provisions of section 148 of the Companies Act 2013 read with Rules 4 & 5 ofthe Companies (Cost Audit and Record) Rules 2014 for maintenance of Cost Records CostAudit are applicable to the Company for the financial year 2018-19.
The Board of Directors of your Company at its meeting held on 16th May2018 has on the recommendation of Audit Committee had approved the appointment of M/sGoyal Goyal & Associates Cost Accountant as Cost Auditor of your Company to conductthe audit of cost records for the Financial Year 2018-19. The remuneration proposed to bepaid to the Cost Auditor subject to your ratification at the 39th AGM will beRs. 50000/- (Rupees Fifty Thousand Only) for the Financial Year 2018-19.
11. SECRETARIAL AUDITOR
Pursuant to the provisions of section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors of the Company had appointed Shri Sanjeev PandeyPartner of M/s SSPK & Co. Practising Company Secretary as Secretarial Auditors toconduct Secretarial Audit of the Company for the financial year 2017-18. The SecretarialAudit Report for the financial year ended 31stMarch 2018 is annexed herewithmarked as Annexure C to this Report.
12. AUDITORS' OBSERVATIONS
In reference to the Comments mentioned in the Statutory Auditors Report for the year2017-18 we wish to submit the following:
(i) Company has not received all the records from old management. We are in the processof reconciliation the records. We shall deposit the whole amount in the Investor Educationand Protection Fund (IEPF) as soon as records are reconciled.
During the year under review no fraud was reported by the statutory auditor of thecompany under section 143(12) of the Companies Act 2013.
13. SAFETY ENVIRONMENT PROTECTION & POLLUTION CONTROL
Your Company is continuously making endeavors to have safe operations by training andconducting various safety mock drills/ safety audits.
Your Company has recently commissioned a water recycling/ purifier plant which hashelped to bring down the dosing of chemicals and has also improved the process. We arealso implementing a water harvesting system to stop wastage of rain water. This is in linewith the Company's policy to safeguard the environment in and outside the factory.
14. DIVIDEND AND TRANSFER TO RESERVE
During the year the Company has earned a profit of Rs. 815.67 Lacs however keeping inview the future needs expansion plans and other fund requirements your Board ofDirectors did not recommend any dividend for the financial year 2017-18 and Rs. 815.67Lacs has been transferred to General Reserve.
15. ENERGY CONSERVATION TECHNOLOGYABSORPTION FOREIGN EXCHANGE EARNING AND OUTGOING.
In compliance with provisions of clause (m) of sub-section (3) of Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 the statements givingthe required information relating to energy conservation technology absorption foreignexchange earnings and outgoings is annexed herewith as Annexure D.
16. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 read with rule 8(2) of the Companies (Accounts)Rules 2014 in the prescribed Form AOC - 2 is annexed as Annexure E to this Report.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: www.lordschloro.com.
17. PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
(a) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:
|Name of the Directors ||Ratio to median remuneration ||Remuneration in Rs. |
|Shri Rakesh Ahuja ||- ||- |
|Shri Madhav Dhir ||8.81 ||2407000 |
|Shri Yuvraj Ahuja ||- ||- |
|Shri Ajay Virmani ||22.38 ||6113500 |
|Shri Pawan Kumar Nayyar ||- ||- |
|Shri Sandeep Chaudhari ||- ||- |
|Shri Chandra Shaker Pathak ||- ||- |
|Shri Rajbir Singh Makhni ||- ||- |
|Smt. Poonam Rawat ||- ||- |
|Shri Shiv Dutt Sharma ||- ||- |
|Shri Deepak Mathur ||10.64 ||2904817 |
(b) The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary in the financial year:
|Name ||% increase |
|Shri Ajay Virmani ||8.96 |
|Shri Madhav dhir ||- |
|Shri Deepak Mathur ||11.67 |
|Shri Rajiv Kumar ||10.99 |
|(Chief Financial Officer) || |
|Shri Dipendra Chaudhary* ||- |
|(Company Secretary) || |
* Shri Dipendra Chaudhary has joined the Company w.e.f. 27th February 2018hence increase in percentage with previous year is not possible.
(c) The percentage increase in the median remuneration of employees in the financialyear:
The percentage increase in the median remuneration of employees in the financial yearwas 17.82%.
(d) the number of permanent employees on the rolls of Company;
The number of permanent employees on the rolls of the company at the end of financialyear were 177.
(e) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
Average percentile increase in the salaries of employees other than the managerialpersonnel is 12.13%. Average percentile increase in the salaries of managerial personnelis 9.15%.
(f) Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that the remuneration is as per the remuneration policy of theCompany.
Pursuant to the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee who is employed throughout the financial year was in receipt of remuneration ofRs. 1.02 crores (one crore and two lacs) or more per annum and no employee who is employedfor a part of the financial year was in receipt of remuneration Rs. 8.5 lacs (eight lacsfifty thousand) or more per month. Any member interested in obtaining the information oftop-10 employee of the Compnay may write to the Company Secretary at the registered officeor the corporate office of the Company.
18. ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure F tothis Report.
19. PUBLIC DEPOSITS
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
20. CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Report on Corporate Governance and aCertificate from the Practicing Company Secretary confirming the compliance withconditions of corporate governance are appended herewith.
Further as per the above mentioned regulation and Schedule the Report on ManagementDiscussion & Analysis is also annexed herewith to this Report.
A certificate from Managing Director and Chief Financial Officer of the Company interms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 interalia confirming the correctness of financial statements and cash flow statementsadequacy of internal control measures and reporting of matters was placed before the AuditCommittee and Board.
21. RISK MANAGEMENT
The Company has constituted a Risk Management Committee which ensures that the Companyhas an appropriate and effective Enterprise Risk Management system with appropriatepolicies and processes which carries out risk assessment and ensures that risk mitigationplans are in place by validating the same at regular intervals.
Brief details about the Risk Management are provided in the Corporate GovernanceReport.
22. CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provision of Section 135 of the Companies Act 2013 read withrules made thereunder Company has constituted Corporate Social Responsibility Committeewhich framed a Board approved CSR Policy for the Company same is available on Company'swebsite www.lordschloro.com.
An annual report of CSR activity has been disclosed with this report as Annexure G.
23. MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year. For further detailsplease refer section of Report on Corporate Governance of this Annual Report.
24. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company established a vigil mechanism for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of thecompany's Code of Conduct or ethics policy.
This mechanism provides adequate safeguards against victimization of director(s) /employee(s) and also provide for direct access to the Chairman of the Audit Committee inexceptional cases.
The details of establishment of such mechanism disclosed at the website of the companywww.lordschloro.com.
25. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference tothe financial statements some of which are out lined below.
Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and other relevantprovisions of the Companies Act 1956 to the extent applicable. These are in accordancewith generally accepted accounting principles in India.
The Management periodically reviews the financial performance of your Company againstthe approved plans across various parameters and takes necessary action wherevernecessary.
Your Directors state that during the year under review there was no case reportedpursuant to the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013.
27. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended on 31stMarch 2018 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the financial year ended on 31stMarch 2018 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care 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;
d) the Directors have prepared the annual accounts on a going concern' basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating.
Your Directors wish to convey their deep appreciation to all the Company'semployees/workers for their dedication and hard work as well as their collectivecontribution to the Company's performance.
The Directors would also like to thanks to the Members Customers Dealers SuppliersBankers Financial Institutions Government Authorities and all other business associatesfor continued support given by them to the Company and their confidence in its management.
| ||For and on behalf of the Board of Directors |
| ||Lords Chloro Alkali Limited |
|Place : New Delhi ||Ajay Virmani ||Yuvraj Ahuja ||Madhav Dhir |
|Date : 16th May 2018 ||Managing ||Director ||Whole Time |
| ||Director || ||Director |
| ||DIN:00758726 ||DiN:00164675 ||DiN:07227587 |