TO THE MEMBERS
The Directors take pleasure in presenting their Sixty-Fifth Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended 31st March 2019.
1. FINANCIAL RESULTS
(Rs. in Lacs)
|Financial Year Ended|
|Profit before tax and exceptional items||23526.72|
|Profit before tax after exceptional items||23526.72|
|Net Profit after Tax||15303.33|
|Dividend paid on Equity Shares (Rs. 65 Per Share for FY 2017-18 and Rs. 34 Per Share for FY 2016-17)||3735.55|
|Dividend Distribution Tax||767.86|
Your Directors have recommended a dividend of Rs. 65/- per equity share of Rs. 10/- each for the Financial Year 2018-19 to be paid if declared by the members at the Annual General Meeting to be held on 6th August 2019.
3. TRANSFER TO RESERVES
During the current financial year no transfers were made to reserves.
4. STATE OF COMPANY'S AFFAIRS
The gross sales and other income for the year under review were Rs. 42061.07 lacs as against Rs. 32423.82 lacs for the previous year registering increase of 29.70%. The profit before tax was Rs. 23526.72 lacs and the profit after tax was Rs. 15303.33 lacs for the year under review as against Rs. 14622.61 lacs and Rs. 9511.67 lacs respectively for the previous year registering increase of 60.90% in each case.
During the year under review the Company achieved a capacity utilisation of 106.60% of the installed capacity of Hydrogen Peroxide as compared to 108.50% during the previous year.
The project for Expansion of the Hydrogen Peroxide Plant capacity from 95000 MTPA to 150000 MTPA is under progress and is scheduled to be completed during the financial year 2019-20.
5. CHANGE(S) IN THE NATURE OF BUSINESS IF ANY
There is no change in the nature of business carried on by the Company and its subsidiary. The Company has not changed the class of business in which the Company has an interest.
6. MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
7. AWARDS AND RECOGNITION
The Company received the following awards during 2018-19.
|Name||Awards Received from|
|Award for Excellence in Energy Conservation and Management||Indian Chemical Council (ICC) Mumbai|
|Award for Efficiency in Energy Usage in Chemical Sector||Federation of Indian Chambers of Commerce and|
|Industry (FICCI) New Delhi|
8. SAFETY & ENVIRONMENT
The Company continues to maintain a good safety and environmental record. There was no lost time injury during the Financial Year 2018-19. It has worked for 1156 days without Lost Time Injury as on 31st March 2019.
All the properties of the Company including buildings plant and machinery stocks and materials have been adequately insured. The Company also has a public liability insurance policy as per the Public Liability Insurance Act 1991. The ongoing Expansion Project has also been adequately insured.
10. DEPOSITS FROM PUBLIC
The Company does not accept deposits from public at present and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.
11. DETAILS OF SUBSIDIARIES JOINT VENTURES ASSOCIATE AND HOLDING COMPANY
Naperol Investments Limited (Naperol) is the only subsidiary of the Company. There were no joint ventures and associate companies.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 the statement containing salient features of the financial statements of Naperol (in Form AOC-1) forms part of the Consolidated Financial Statements. Pursuant to Section 136 of the Companies Act 2013 the Company is exempted from attaching to its Annual Report the Annual Report of Naperol.
The Audited Financial Statements of the subsidiary company are kept open for inspection by the Members at the Head Office of the Company. The Company shall provide free of cost a copy of the financial statements of its subsidiary company to the Members upon their request. The statements are also available on the website of the Company at www.naperol.com.
Nowrosjee Wadia and Sons (NWS) holds 30.79% shares in the Company and is the holding company of Macrofil Investments Limited (Macrofil) with 50.78% shares. Macrofil holds 33.38% shares in the Company. Hence NWS is the holding company of the Company.
12. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY COMPANY NAPEROL INVESTMENTS LIMITED
Naperol Investments Limited was incorporated on 6th May 1980 and is registered as a Non-Banking Financial Company as provided by Section 45-IA of the Reserve Bank of India Act 1934. The Company is engaged in the business of long term investment. During the year under review the Company earned a profit after tax of Rs. 76.36 lacs as against Rs. 72.04 lacs in the previous year.
13. CONSOLIDATED FINANCIAL STATEMENTS
The Company has prepared Consolidated Financial Statements (CFS) in accordance with the applicable Accounting Standards as prescribed under the Companies (Accounts) Rules 2014 of the Companies Act 2013. The Consolidated Financial Results reflect the results of the Company and its subsidiary. As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Audited CFS together with the Independent Auditors' Report thereon are annexed and form part of this Report. The summarized Consolidated Financial Results are provided above at point no. 1 of this Report.
14. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is appended as Annexure I.
15. CORPORATE GOVERNANCE
Your Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance in terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 have been complied with.
A separate report on Corporate Governance along with a Certificate from a Practicing Company Secretary regarding compliance of the conditions of Corporate Governance is appended as Annexure II.
16. CORPORATE SOCIAL RESPONSIBILITY
The Company has spent Rs. 17000000/- towards its Corporate Social Responsibility (CSR) activities during the Financial Year 2018-19 as per the provisions of the Companies Act 2013.
The CSR Policy of the Company and the details about the development of CSR Policy and initiatives taken by the Company on Corporate Social Responsibility during the year as per the Companies (Corporate Social Responsibility Policy) Rules 2014 are appended as Annexure III.
17. DETAILS OF BOARD MEETINGS
During the year 7 Board Meetings were held details of which are provided in the Corporate Governance Report.
18. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of Annual Return of the Company as at 31st March 2019 is uploaded on the website of the Company at www.naperol.com.
19. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to the best of their knowledge and ability confirm that:
1. in the preparation of the annual accounts the applicable accounting standards have been followed and that there are no material departures;
2. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;
3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. they have prepared the Annual Accounts on a `going concern' basis;
5. they have laid down internal financial controls to be followed by the Company and that such internal controls are adequate and were operating effectively; and
6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.
20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Control Systems.
The Internal Control Systems provide among other things reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company's assets. The details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.
21. STATUTORY AUDITORS
M/s. Price Waterhouse Chartered Accountants LLP (PW) (FRN. 012754N/N500016) had been appointed as the Statutory Auditors of the Company from the conclusion of the Annual General Meeting (AGM) held on 9th August 2017 upto the conclusion of the AGM to be held in the financial year 2022-23. PW has furnished certificate of eligibility for their continuance as Statutory Auditors of the Company for the financial year 2019-20.
The Statutory Auditors' Report contains an Unmodified Opinion and does not have any qualifications reservations or adverse remarks. The Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the Companies Act 2013.
22. COST AUDIT
Pursuant to Section 148 of the Companies Act 2013 read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules 2014 the cost records of the Company are required to be audited. The Board of Directors on the recommendation of the Audit Committee appointed M/s. D. C. Dave & Co. Cost Accountants to audit the cost records of the Company for the financial year ending 31st March 2020 on a remuneration of Rs. 400000/- plus applicable taxes and reimbursement of out-of-pocket expenses as incurred by them for the purpose of Audit. The remuneration payable to the Cost Auditor is required to be ratified by the shareholders at this AGM.
There are no qualifications reservations or adverse remarks made in the Cost Auditors' Report.
23. SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. Parikh & Associates Practicing Company Secretaries have been appointed as Secretarial Auditors of the Company to carry out Secretarial Audit. The Report of the Secretarial Auditors is appended as Annexure V.
The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board and General Meetings.
There are no qualifications reservations or adverse remarks made in the Secretarial Auditors' Report.
24. RELATED PARTY TRANSACTIONS
The Company's policy on dealing with Related Party Transactions is disclosed on the Company's website (weblink:http://www.naperol.com/pdf/boardpolicies/RPT_Policy.pdf).
All transactions entered into with Related Parties as defined under the Companies Act 2013 and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 during the financial year were in the ordinary course of business and on an arms length basis and do not attract the provisions of Section 188 of the Companies Act 2013.
During the year the Company had not entered into any contract/ arrangement /transactions with related parties which could be considered as material. The related party transactions are disclosed under Note No. 42 of the Notes to Standalone Financial Statements for the year 2018-19.
25. AUDIT COMMITTEE
The Audit Committee of the Company comprises of three Independent Directors. The details are provided in the Corporate Governance Report.
Pursuant to the requirements of the Companies Act 2013 the Company has established vigil mechanism through the Audit Committee for directors and employees to report genuine concerns about unethical behaviour actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy.
The vigil mechanism provides for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases.
The details of establishment of such mechanism is also disclosed on the Company's website. (weblink:http://www.naperol.com/pdf/boardpolicies/Whistle-Blower-policy.pdf).
26. RISK MANAGEMENT POLICY
The Company has formulated a Risk Assessment & Management Policy. The details of Risk Management are covered in the Corporate Governance Report.
27. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 and the Articles of Association of the Company Mr. Ness N. Wadia Director retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment.
The Board of Directors appointed Mr. Viraf Mehta as an Additional Director with effect from 4th July 2019 to hold office up to the date of this AGM. Being eligible Mr. Viraf Mehta has offered his candidature to be appointed as an Independent Director of the Company.
In terms of the requirements of the Companies Act 2013 the Independent Directors of the Company were appointed for a period of five years on 11th August 2014. Such term of appointment of the Independent Directors shall come to an end on 10th August 2019. In view of the same the Board of Directors of the Company based on their performance evaluation and recommendation of Nomination and Remuneration Committee proposed to re-appoint Mr. Rajesh Batra and Mr. S. Ragothaman as the Independent Directors of the Company for a second term. A resolution proposing re-appointment of these Directors of the Company for a second term pursuant to Section 149(6) of the Companies Act 2013 forms part of the Notice of this AGM. Mr. S. Ragothaman shall attain the age of 75 years during the proposed second term. A resolution proposing his continuation of term on attaining age of 75 years during his second term pursuant to Section 149(6) of the Companies Act 2013 forms part of the Notice.
Mr. N. P. Ghanekar Independent Director of the Company has not offered his candidature for re-appointment at the forthcoming Annual General Meeting. Consequently he will cease to hold the position of an Independent Director with effect from 10th August 2019 after serving 8 years in the Company. The Board places on record its appreciation for Mr. N. P. Ghanekar's contribution during his tenure as Director.
The Independent Directors of the Company have given the certificate of independence to the Company stating that they meet the criteria of independence as required under Section 149(6) of the Companies Act 2013.
Key Managerial Personnel
The Board of Directors had on the recommendation of the Nomination & Remuneration Committee appointed Mr. Conrad Fernandes as the Chief Financial Officer of the Company w.e.f. 7th January 2019. Mr. Shailesh Chauhan had ceased to be the Chief Financial Officer of the Company w.e.f. 6th January 2019.
During the year Ms. Jenny Shah who was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 13th June 2018 resigned w.e.f. 5th October 2018. The Board of Directors on the recommendation of the Nomination & Remuneration Committee elevated Mr. Chandukumar Parmar as the Company Secretary & Compliance Officer of the Company w.e.f. 14th February 2019.
28. NOMINATION AND REMUNERATION POLICY
The Board has adopted on there commendation of the Nomination & Remuneration Committee a policy for selection appointment and remuneration of Directors and Senior Management. A brief detail of the policy is given in the Corporate Governance Report and also posted on the Company's website (weblink: http://www.naperol.com/pdf/boardpolicies/ Nomination_Policy.pdf).
29. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carried out annual performance evaluation of its own performance the Directors individually and all Committees of the Board. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
30. PARTICULARS OF EMPLOYEES
The information in terms of provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 which forms part of this Report is appended as Annexure VI.
However as per the provisions of Section 136 of the Companies Act 2013 the Report and Accounts are being sent to the Members and others entitled thereto excluding the information on employees' particulars as required under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 which is available for inspection by the Members at the Head Office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof such Member may write to the Company Secretary in this regard.
31. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees or Investments covered under the provisions of Section 186 of the Companies Act 2013 are given in Note No. 13 of the Notes to the Standalone Financial Statements.
32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There have been no significant and material orders passed by the regulators courts and tribunals impacting the going concern status and the Company's operations in future.
33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is appended as Annexure VII.
34. DIVIDEND DISTRIBUTION POLICY
The Dividend Distribution Policy is currently not applicable to the Company since the Company does not fall under the top five hundred listed entities as on 31st March 2019. However this Policy has been adopted on a voluntary basis as recommended under Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Policy is posted on the Company's website (weblink:http://www.naperol.com/pdf/boardpolicies/Dividend_Distribution_Policy.pdf).
Your Directors would like to express their sincere appreciation to the Customers Vendors Bankers Shareholders Central and State Governments and Regulatory Authorities for their continued co-operation and support. Your Directors also take this opportunity to acknowledge the dedicated efforts made by employees for their contribution to the success achieved by the Company.
|On behalf of the Board of Directors|
|NESS N. WADIA|
|Mumbai 4th July 2019|