Your Directors are pleased to present the 46th Annual Report and the Audited FinancialStatements of the Company for the year ended 31 March 2019.
|DESCRIPTION ||2018-19 ||2017-18 |
|Sales Turnover (Net of Excise Duty / GST) ||174.80 ||133.59 |
|Gross Loss after meeting all expenses but before providing depreciation and interest ||32.10 ||39.21 |
|Add: Interest ||2.34 ||3.21 |
|Cash Loss ||34.44 ||42.42 |
|Add: Depreciation for the year ||3.47 ||2.33 |
|Extraordinary items ||- ||- |
|Net Profit / (Loss) for the year ||(37.91) ||(44.75) |
|Accumulated Loss ||302.79 ||264.88 |
|EPS & Diluted EPS ||(4.15) ||(30.51) |
During the financial year the operation of the CO2 plant was stabilized ensuringcontinuous supply of CO2 for production of Soda Ash. The solvent recovery system was alsoadded. Quality of the coal was selected to limit the impurities in the flue gas resultingin the better utilization of the CO2 plant. TWAD as per the judgement of the NationalGreen Tribunal (NGT) and further by the Supreme Court of India stopped water supply witheffect from 8.12.2018. Thereafter we continued our operation only with our recoveredwater of the SWRO plant. The Supreme court of India after presentation of the variousfacts permitted industries to use the water but under the continuous vigil of acommittee headed by the Collector of Tuticorin who will maintain the first right forsupply of drinking water to the city.
Inspite of continuous availability of CO2 and water from SWRO plant we could improvethe production by only 8% due to the problems projected by the ageing equipments in theSoda Ash and Ammonium Chloride plants. The repairs are being done continuously avoidinglong duration shutdowns but the short duration shutdowns hindered higher plant loadfactor. It is expected that the next financial year 2019-20 there could be substantialimprovement by 20 - 30% in the capacity utilization.
The production and sales during the year ended 31st March 2019 compared to theprevious year are as given below;
|Product || |
Sales (Includes internal Consumption)
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Soda Ash (Light) ||55881 ||48492 ||* 55735 ||*48454 |
|Soda Ash (Dense) ||- ||10 ||- ||3 |
|Ammonium Chloride (Fertilizer) ||52215 ||41940 ||55303 ||39054 |
|Sodium Bicarbonate ||- ||153 ||- ||166 |
Includes captive consumption
Your Directors were not able to recommend any dividend in view of the accumulatedlosses.
The selling price continued almost unchanged during the year. Since quantum ofproduction was less we didn't participate in the market concentrating only couple oflarge customers.
Due to steady Ammonia prices the sale price of Ammonium Chloride also remained steadythrough-out the year. However imposition of GST on Ammonium Chloride fertilizers hasbrought down the sales as the fertilizers has become costlier in the hands of farmerswho prefers to buy other subsidized fertilizers at lower prices. Efforts to requestreduction of GST on Ammonium Chloride fertilizers which will boost local sales comparedto the export is being made.
FUTURE OUTLOOK & STRENGTH
Since your company is the only production source for Soda Ash in South and the qualityis best suited for manufacture of detergent it is a preferred product in the market.Tuticorin port seems to be the second largest source for Soda Ash in South with almost allwestern based manufacturers have started to import through this port and competing withus. However continuous production from the company can easily ward of such kind ofefforts The selling price of the products are easy to determine matching with landedcost. It is considered as very good opportunity available for the company to expand. Theunit is situated right on the salt belt hence sourcing the salt with availability of inhouse Co2 are easy and large market for Soda ash in Asia & supply of imported ammoniafrom cheaper Asian market are the strengths of the Company to expand its operation. We arealso continuously working in finalizing the plans for NPK complex fertilizer for betterutilization of Ammonium Chloride (ACL). The absence of subsidy for ACL and need to makefurther investment to convert the ACL to NPK complex and the accumulated losses are theweaknesses of the Company.
OPPORTUNITIES AND THREATS
As already reported last year your company has opportunity to market its fertilizersand soda ash not only in South India but also at mid and eastern states when theexpansion activity gathers steam.
The major threat of single source CO2 has been overcome with the commissioning of theCO2 plant. Addition of lime kiln plant probably will make available more CO2. Greenstar'ssecond larger Ammonia tank will ensure continuous availability of Ammonia which willsubstantially nullify the single source of Ammonia.
ENVIRONMENT AND SAFETY
Updation to ISO 9001:2015 the latest standard is under progress.
During the year 2018 - 19 591608 units were generated from Wind Turbine PowerGenerators at Gudimangalam Tirupur District as against 55000 units generated in theprevious year. The aging windmills are being refurbished for better results.
Your company has not received any power from the Group Captive Scheme in the financialyear.
CAPTIVE SALT WORKS
13512 MT of salt was produced and all the unused pans were also brought underproduction and the systems were modified to produce quality salt. With the availability ofenriched water from the RO plant more quantity of quality salt would be produced duringthe year.
NCLT / SEBI
Subsequent to holding EGM on 10.04.18 an application was filed with BSE and SEBIrequesting their "in-principle" approval. NCLT also directed SEBI to decide soonon the matter who granted their approval on 6.9.18. Since our application with NCLT hasmet with all the requirements of NCLT/SEBI NCLT disposed off our case. We have issuedfresh shares to the promoters as per the SEBI order and now we are awaiting listingclearance and trading clearance from BSE.
There was no outstanding deposit as at 31st March 2019. The Company has neitheraccepted nor renewed any deposits during the year under review
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.
MATERIAL CHANGES AND COMMITMENT
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relateson the date of this report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY
The Statement was showing the details regarding the development and implementation ofRisk Management Policy of the Company is furnished in Annexure 1 and attached to thisreport. The risk management includes identifying types of risks and its assessment riskhandling and monitoring and reporting.
Your Company was dependent primarily on SPIC for the supply of CO2 and for receivingthe imported Ammonia through their storage system. Your Company has now implemented anindependent CO2 Recovery facility which is operational from November 2016. This hasreduced the risk considerably. The Board does not envisage any other major risks.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiates as the said provisions are not applicable as on date in view of the accumulatedlosses the Company has incurred.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The transactions entered into during the financial year with related party as definedunder the Act were in the ordinary course of business and at arm's length basis. Therewere no materially significant transactions during the financial year 2018-19 which werein conflict with the interests of the Company.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters as provided under Section 178 (3) of the Companies Act 2013 isfurnished in Annexure 2 and is attached to this report
NUMBER OF BOARD & COMMITTEE MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had four Board meetings during the financial year under review. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.Full details are given in the Corporate Governance Report.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY
Company's Internal Control System has been designed to provide for:
Accurate recording of transactions with internal checks and prompt reporting.
Adherence to applicable accounting standards and policies.
Compliance with applicable statutes management policies and procedures.
Effective use of resources and safeguarding of assets.
The Internal audit was carried out periodically through a practicing charteredaccountant. The observations arising out of the audit were periodically reviewed andcompliance ensured. The summary of the internal audit observations and managementresponses were submitted to the Board after review by the Audit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the directors had 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 the company at the end of the financial year and ofthe profit and loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis; and
e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively. Internal financial control means the policies and procedures adopted by theCompany for ensuring the orderly and efficient conduct of its business including adherenceto Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
No cases were filed under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Company's Board comprises of the following directors: Mr. B. Narendran Dr. RmKrishnan Mr. S. Asokan Mrs. Rita Chandrasekar Mr.G.Ramachandran and Mr.S.Shankar.
The term of appointment of Mr.B.Narendran and Mr. S.Asokan is ending on 13th August2019 hence the company has proposed their re-appointment for the second term of fiveyears in this Annual General Meeting
The tenure of appointment of Mr. G. Ramachandran has ended on 11th December 2018.Hence the Nomination Remuneration Committee has recommended his re-appointment for thefurther period of 3 years from 12 December 2018 to 11 December 2021.
The term of Dr. Rm Krishnan as Independent Director of the Company is ending on 13thAugust 2019 since he expressed his non willingness to get appointed for second term hewill be retiring on 13th August 2019.
Mr.S.Shankar Independent Director of the Company resigned with effect from 31.03.2019.
Mr. RS Abhinandhanan was appointed as a Company Secretary in place of Mr. S.Raghavandue to retirement.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves for the continuance / appointment as independent directors underthe provisions of the Companies Act 2013 and the relevant rules
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligations andDisclosure Requirements) Regulations 2015 the Boards' performance and performance of thenon-independent Directors were considered/evaluated by the independent directors at theirmeeting without the participation of the non-independent director and key managerialpersonnel.
They also assessed the quality quantity and timeliness of flow of information betweenthe Company's Management and the Board that are necessary for the Board to effectively andreasonably perform its duties. pursuant to the provisions of the Companies act 2013 andRegulation 17 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015the Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its various committees.
M/s. MSKA & Associates Chartered Accountants Chennai (Registration No.105047W)have been appointed as Statutory Auditors of the Company in 44th Annual General meetingfor a term of five years from the Financial year 2017-18 till the conclusion of theAnnual General Meeting of the Company to be held in the year 2022.
Mr. R Kannan has been appointed by the Board of Directors to carry out the SecretarialAudit for the year ended 31st March 2019. Secretarial Auditor's Report is annexed whichforms part of this report.
As per the Government of India's directive the Company's Cost Reports in respect ofFertilizer - Ammonium Chloride and Chemical - Soda Ash for the year ended 31st March 2019are being audited by the Cost Auditor Mr P R Tantri was appointed by the Board.
EXPLANATIONS OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There was no qualification reservations or adverse remarks made by the StatutoryAuditors M/s. MSKA & Associates and Secretarial Auditor and Mr. R. Kannan PracticingCompany Secretary in their reports.
DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLEBLOWER POLICY
The Audit Committee consists of Mr.B. Narendran Mr. S. Shankar Mr. S. Asokan and Dr.Rm Krishnan all of whom are Independent Directors. During the year Mr.S.Shankar resignedas a member of Audit Committee with effect from 31.03.2019
The Company has established a vigil mechanism and oversees through a committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safe guards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of co-employees and the Company.Policy is given in Annexure 3.
The Company has allotted 107040000 equity shares of Rs.10 each on 17.09.2018 byconverting unsecured loans and Preference shares in to equity in continuation to the EGMdated 10.04.2018 and order of SEBI dated 06.09.2018.
The Company has not bought back any of its shares during the year under review.
The Company has not issued any "Sweat Equity" Shares during the year underreview.
No Bonus Shares were issued during the year under review.
The Company has not provided any Stock Option Scheme to the employees.
FRAUDS REPORTED BY AUDITORS AS PER SEC 143 (12) OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT.
There were no frauds reported by auditors in their report.
The extracts of Annual Return in Form MGT pursuant to the provisions of Section 92 readwith Rule 12 of the Companies (Management and Administration) Rules 2014 is furnished inAnnexure 4 and is attached to this Report.
A report on Corporate Governance as stipulated under Schedule V and Regulation 34(3) ofthe SEBI (Listing obligations and Disclosure Requirements) Regulations 2015 forms part ofthis Annual Report. The requisite certificate from a practicing company secretaryconfirming compliance with the conditions of corporate governance as stipulated is annexedto this Report.
The Independent Directors attend a Familiarization programme on being inducted to theBoard. The details are provided in the Corporate Governance report and on the website ofthe Company.
DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been complied with.
PARTICULARS OF EMPLOYEES
The Company has no employee whose salary exceeds the limits as prescribed under Rule(5)(2) of Companies (Appointment and Remuneration of Key Managerial personnel) Rules2014.
Disclosures under Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
|The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year - 2018-19 ||Mr.G.Ramachandran Managing Director ||10.29% |
|The percentage increase in remuneration of each director Chief Financial Officer Company Secretary in the financial year - 2018-19. ||Mr.G.Ramachandran Managing Director Mr. S.Nandakumar Chief Financial Officer Mr. S.Raghavan Company Secretary Retired w.e.f 30.08.2018 ||128% (Reverted to full-time in Oct. '18) 6% No change |
|The percentage increase in the median remuneration of employees in the financial Year - 2018-19. ||(0.50) || |
|The number of permanent employees on the rolls of Company as on 31.03.2019 ||227 || |
|Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof ||Average percentage increase already made in the salaries of employees other than the key managerial personnel in the FY 2018-19. ||(3.41%) |
| ||Average percentage increase already made in the salaries of the key managerial personnel in the FY 2018-19 ||74.31% |
AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY
Company is adopting remuneration guidelines for fixing the remuneration as per thepolicies laid down by the Nomination and Remuneration Committee.
PARTICULARS AS REQUIRED UNDER RULE 3 OF THE COMPANIES (ACCOUNTS) RULES 2014
A. Conservation of Energy
1. Steps taken or impact on conservation of energy
The older insulations are periodically replaced especially in the chilled watercircuit to reduce the energy consumption. The compressors and condensers are alsoattended to regularly for higher efficiency. In-house CO2 production eliminated the needfor venting the recirculating gas which has brought in reduced specific consumption andimproved efficiency.
2. Steps taken for utilizing alternative sources of energy
A Solar power plant which is jointly installed by the Group companies is expected tobe commissioned in the ensuing financial year.
3. Capital investment in conservation energy
CO2 plant reduces the wastage of CO2 thereby saves energy indirectly. No directinvestment has been made during the Financial Year.
B. Technology Absorption
(a) The Company has fully utilized the imported Technology of Hitachi Zosen Japanwhich was imported in the year 1980.
(b) Expenditure on Research & Development
|(i) Capital ||Nil |
|(ii) Recurring ||Nil |
|(iii) Total ||Nil |
|C. Foreign Exchange Earnings and outgo: |
|(a) Foreign Exchange inflow: ||Rs. 6.56 Crores |
|(b) Foreign Exchange outflow: ||Rs. 3.36 Crores |
Details of significant changes in key financial ratios (Change of 25% or more ascompared to the immediately previous financial year).
During the year there was no significant change in the financial ratios as compared tothe previous year which are more than 25%.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. Your Directors also acknowledgegratefully to the shareholders for their support and confidence reposed on your Company.
Statements in the Management Discussion and Analysis describing the Company'sobjectives estimates projections expectations may be "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatwould make a difference to the Company's operations include economic conditions affectingdemand-supply and price conditions in the domestic and overseas markets in which theCompany operates raw material availability and its prices changes in the Governmentalregulations labour negotiations tax laws and other statutes and economic developmentwithin India
| ||For and on behalf of the Board of Directors |
|Chennai ||B. NARENDRAN ||G.RAMACHANDRAN |
|17th May 2019 ||Director ||Managing Director |