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Directors Report of Dai Ichi Karkaria Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Fifty-Fourth Annual Report together with the audited accounts for the year ended March 31, 2014.

FINANCIAL RESULTS:

Operational Performance 2014 2013 (Rs in millions) (Rs in millions)

Gross Revenue from operations 1175.22 888.72

Less: Excise duty 97.48 80.93

Net Revenue from operations 1077.74 807.79

PBDIT (before exceptional item) 110.21 71.54

PBDIT (after exceptional item) 170.36 71.54

EPS (Rs) 16.79 5.89

Book Value of Shares (Rs) 99.29 85.45

performance review:

The Company has achieved a top line growth of 32%, registering total revenues of approx. '' 1175 million against '' 889 million last year. EBIDTA (before exceptional item) has increased close to 55%, by closely monitoring manufacturing costs and operational efficiencies. This against a fairly challenging environment for growth in the past twelve months.

Profit before Tax has increased to '' 153.71 million from '' 56.50 million in 2012-13.

Dividend:

The Directors have recommended a dividend of '' 2.00 per equity share and a special dividend of '' 0.50 per equity share aggregating to '' 2.50 per equity share of '' 10 each for the year ended 31st March, 2014. The dividend payout will aggregate to '' 18.63 million and the tax on distributable profits payable by the Company would amount to '' 3.17 million.

The Company proposes to transfer '' 12.52 million to General Reserves. management discussion and analysis report:

INDUSTRY STRUCTURE & DEVELOPMENT: OPPORTUNITIES AND THREATS, RISKS AND CONCERNS The current size of the Indian Chemical Industry is US$ 108 billion and accounts for 7% of the Indian GDP The Indian Specialty Chemical Industry has the potential to quadruple in size from US$ 20 billion to US$ 80 billion over the decade.

The Industry is expected to grow at 10% to 12% in 2017 on the back of increasing demand from growth of Urban population and infrastructure.

Studies have shown that the per capita consumption of specialty chemicals in India is far below world standards. India''s demographics together with its expanding middle class with expanding per capita incomes will automatically lead to consumption led growth. Higher growth expectations and improved environmental standards could lead to double digit growth within certain segments.

Indian markets have great potential for growth in several end-use industries. In addition, Indian companies have the capability of occupying a dominant share in the growing global market. All this translates to higher growth potential for companies who are willing to look at new opportunities for innovative specialty chemicals in applications as diverse as paints, automotives, textiles and construction. Political stability will ensure these opportunities emerge as substantial game changers, in what now looks like a stagnant and sluggish market. Also a positive economic environment will provide a thrust to construction activity and its associated demands.

The Company continues to focus on the specialty niche areas, where it can leverage its expertise. However, the focus has expanded to performance products that are used in larger volumes in the Oil Field and Construction Chemical Sectors, to maintain the integrity of its pipe lines.

SECTORWISE PERFORMANCE:

The Indian Economy continues to struggle at growth levels under 5%.

The Company however has shown a year on year growth of over 15% for the past 2 years, and surpassed its targets for the year.

The Company has had a good year, mainly due to exports, which to some extent was facilitated by the weakening of the Rupee. The Company''s focus on Oil Field Chemicals and the Oil Sector in general, has allowed it to survive the lackluster environment in some of the other areas of operation.

The Company''s capabilities in complex synthesis, and its ability to meet exacting delivery schedules, has opened up a new opportunity with its JV partner Nalco Champion.

Products are jointly developed by the two partnering companies. This Joint Venture attitude of two production partners, enables innovative new applications to be developed with chemicals from renewable or other sources. Every month new products are being added to the portfolio, based on cost performance, compatibility and stability. Synergistic blends of both companies'' products are catering to some effective performance solutions whilst remaining in the competitive space.

Successfully developing and commercializing new production chemicals will therefore cover not only cost performance and environmental issues, but also compatibility and stability issues.

Stimulus responsive chemicals and combination products are the innovations that will be the new way forward in this area.

In addition, the Company''s foray into Construction chemicals, specifically additives for concrete, has been fairly successful, showing significant growth in this year.

In the Company''s traditional businesses, in spite of the challenging business environment the Company has shown decent growth in its offerings to the Rayon, Textile Sizing, and Paint Industries.

Areas that showed poor performance were for Spin Finishes, and some of the Company''s newer offerings in Polymerisable Surfactants, where market acceptances to price were a serious challenge.

The Company continues to re-evaluate the products it manufactures and those under development.

Our Company''s focus on safety and environment issues has moved it towards greener chemistries and cleaner processes that have proved economically beneficial for the Company. The Company exited products that were economically non-viable. Products with greener footprints and higher value addition are being developed as substitutes. We are focusing on ecologically sustainable solutions in all our key market segments including emulsifiers for emulsion, polymerization, metal cleaning, bio-pesticides, textiles, etc. The Company has developed APEO free equivalents for some of its standard products, which are slowly gaining momentum as export markets open up for our customers.

The Company''s focus on innovative application based Chemistry continues to support its sustainability model through the years.

Innovation is essential for the Company to remain competitive and maintain its pioneering position. The new focus will be on sustainable chemistry, and a continued re-evaluation of energy use, water consumption, use of renewable feedstock, whilst optimizing processes.

This strategy brings its own challenges, as well as opportunities.

New chemistries with improved performance characteristics and the use of natural products like fatty acid derivatives will be the future trend.

The recent policy paralysis, in the past year has considerably delayed the Company''s plans for expansion.

The Company''s expansion plans at Dahej have been stalled for want of environmental clearances, due to the present political stalemate.

Decisions of expansions and reorientation of business have been put on hold for several months partly because of the prevailing uncertainties in the economic system and mainly due to delay in environmental clearances at our new site.

The Company has therefore moved ahead with debottlenecking its present plant in Pune, in order to achieve higher capacities required immediately.

The Company is moving forward with replacing its older reactors in Pune with newer more efficient reactors which will enhance capacities in the interim.

The Company has gradually switched over to automation of its processes, for all its new reactors. Automation brings with it enormous potential for effective utilization of manpower whilst standardizing batches to highly precise levels. It is a very effective tool in ensuring standard specifications batch after batch, whilst avoiding human error and dependence on the skill, judgment and experience of the chemist and whilst promoting all round safety.

WORKING CAPITAL MANAGEMENT:

The significant ratios of the Company such as Ratio of Inventory to Sales is 9.70%, Receivable to Sales is 18.72%, and Net Working Capital to Sales is 19.64%.

The working capital was rotated 5 times in the year, showing effective working capital management. Surplus generated from operations is invested in business by increasing capacity of plant to cater additional business of the Company.

JOINT VENTURE/SUBSIDIARY COMPANIES:

Joint Venture company - champion Dai-ichi technologies India Ltd.:

The Company has a Joint Venture with CTI Chemicals Asia Pacific Pte. Ltd., in the ratio of 50:50.

Key Performance Indicators for the year under review, of the Joint Venture Company are as under:

Turnover Rs 91,97,86,197/-

Profit Before Tax Rs 11,40,35,063/-

Net Profit Rs 7,50,31,999/-

Earning per share Rs 33.35

Annual report of subsidiary company:

As on 31st March 2014, the Company has only one subsidiary, Dai-ichi Gosei Chemicals (India) Limited. The Company continues to be a dormant company.

The Annual accounts of the subsidiary company are placed at the website of the Company and will be provided to investors on request.

Statement containing salient features of the financial statement of subsidiary company is attached to the financials.

consolidated financial statements:

As per the Listing Agreement and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its Joint Venture Company, Champion Dai-ichi Technologies India Ltd and Subsidiary Company, Dai-ichi Gosei Chemicals (India) Ltd., duly audited by the Statutory Auditors are provided in the Annual Report.

Director''s responsibility statement:

Pursuant to Section 217 (2AA) of the Companies Act, 1956 the Directors confirm that:

1. In the preparation of the annual accounts for the year ended 31st March, 2014, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments 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 March 31, 2014, and of the profit of the Company for the period April 1, 2013 to March 31, 2014;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis.

DIREcToRs:

The Company has received requisite notices in writing from members proposing appointment of Mr. K. D. Patel, Dr. A. M. Naik & Mr. K. M. Elavia as Independent Directors of the Company.

Pursuant to Section 149(6) of the Companies Act, 2013 & Clause 49 of the listing agreement with Stock Exchange, declaration from the aforesaid Directors confirming their Independent status is received.

Mr. J. H. C. Jehangir retires from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 2013 and Articles of Association of the Company. Being eligible for reappointment, he has offered himself for re-appointment.

The information required to be furnished under Clause 49 of the Listing Agreement is given in the Notice of the 54th Annual General meeting.

MATERIAL DEVELOPMENTS ON HUMAN RESOURCES INCLUDiNG NUMBER OF PEOPLE EMPLOYED

The Company''s Human Resource Policy over the years has resulted in a very low attrition ratio of less than 1% per annum. All manpower requirements are assessed and filled in a timely manner. The Company has a sound knowledge pool of experienced employees, which helps it to maintain consistency in performance across all disciplines. It has built a team of dedicated employees, who work with commitment and a sense of belonging towards the growth of the Company.

Following areas are given special attention to enhance performance of the employees.

- Identification of Training & development needs and upgrade job specific skills.

- Compensation, recognition & rewards.

- Career growth plan through annual assessment.

As on 31st March, 2014, the total number of employees on the payrolls of the company at all the locations are 239.

HEALTH, SAFETY & ENVIRONMENT:

The Company''s commitment to Health, Safety and Environment is continued to be maintained through both Internal & External Standards.

Regular mock drills, periodic employee health checkups, regular training in safe practices are some of the controls through which the Company ensures sustainable performance in this area.

Being a signatory to the Responsible Care Initiative, the Company is voluntarily working towards a safer and cleaner environment.

industrial relations:

The wage agreement with the workers of the Company expired on 30th November, 2008. As Conciliation proceedings before the Labour Commissioner, Pune for arriving at a settlement were not conclusive, the matter was referred to the Industrial Court, Pune for adjudication. The said reference is rejected by the Hon''ble Industrial Court for want of prosecution by the recognized union. The decision of the Industrial Court was challenged before the Mumbai High Court, the Court has upheld the decision of the Industrial Court. The matter is further challenged and is now pending before the Supreme Court.

Internal control systems and Their Adequacy

The Company has an adequate system of internal controls in all business spheres of its activities which are commensurate with the size and the nature of its business. It ensures adequate protection of the Company''s resources, provision of accurate and speedy financial statements and reports, and compliance with the Company policies and procedures and other statutory and legal obligations. The internal control is supplemented by effective and independent internal audit. The Management regularly reviews the findings of the Internal Auditors and effective steps to implement any suggestions/observations of the Internal Auditors are taken and monitored regularly. In addition, the Audit Committee of the Board regularly addresses significant issues raised by the Internal and the Statutory Auditors.

AUDITORs:

M/s. Deloitte Haskins & Sells LLP the Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and being eligible are recommended for re-appointment. In accordance with Section 139(1) of the Companies Act, 2013 read with rules framed thereunder it is proposed to appoint Deloitte Haskins & Sells LLP as Statutory Auditors of the Company for a term of three consecutive years.

COST AUDITORS:

The Company has appointed Mr. S. G. Jog, Cost Accountant, (Membership no. 5599), Mumbai as Cost Auditor of the Company for the financial year 2013-14. Due date of filing Cost Audit Report was 30th September, 2013, actual date of filing the report was 24th September, 2013.

CORPORATE GOVERNANCE:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the amended Listing Agreement of the Bombay Stock Exchange Limited with which the Company is listed, are complied with. A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors'' statement on its compliance.

RELATED PARTY DISCLOSURES:

The Company has made disclosures in compliance with the Accounting Standard on Related Party Disclosures as required by clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

FIXED DEPOSITS:

The Company has discontinued its fixed deposit scheme during the financial year 2007-2008. The Company has repaid all the outstanding Fixed Deposits by the year 2009-10. The only deposits that are outstanding as on 31st March, 2014 are the matured but unclaimed deposits which amount to '' 0.045 millions.

LISTING

The Equity Shares of your company are presently listed on The Bombay Stock Exchange Ltd. and the Company has paid the annual listing fees for the financial year 2014-2015.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956:

(a) There are no employees other than the Managing Director covered under the purview of Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

(b) The particulars as prescribed under sub section (1) (e) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of particulars in respect of Board of Directors) Rules 1988 are given in Annexure A'' to this report.

CAUTIONARY NOTE:

Certain statements in the Director''s Report and Management & Discussion Analysis Section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.

By Order of the Board For Dai-ichi Karkaria Ltd.

Kavita Thadeshwar Company Secretary

Registered Office:

Liberty Building, Sir Vithaldas Thackersey Marg, Mumbai - 400 020.

Place : Mumbai Date : July 2, 2014


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the Fifty-Third Annual Report together with the audited accounts for the year ended March 31, 2013.

1. FINANCIAL RESULTS:

Operational Performance 2013 2012 (Rs.in millions) (Rs.in millions)

Gross Revenue from operations 888.86 763.28

Less: Excise duty 80.93 59.84

Net Revenue from operations 807.93 703.44

PBDIT 71.47 51.87

EPS (Rs.) 5.89 4.50

Book Value of Shares (Rs.) 85.45 82.46

PERFORMANCE REVIEW:

The Company has achieved a top line growth of 16%, registering total revenues of approx. Rs. 889 millions against Rs. 763 million last year. EBIDTA has been increased close to 40%, by closely monitoring manufacturing costs and operational efficiencies. This against a fairly challenging environment for growth in the past twelve months.

Profit before Tax has increased to Rs. 56.50 million from Rs. 40.42 million in 2011-12.

2. DIVIDEND:

The Directors have recommend a dividend of Rs. 2.00 per equity share and a Special dividend of 0.50 per equity share, on completion of 50 years of operations, aggregating to Rs. 2.50 per equity share of Rs. 10 each for the year ended 31st March, 2013. The dividend payout will aggregate to Rs. 18.63 million and the tax on distributable profits payable by the Company would amount to Rs. 3.02 million.

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

INDUSTRY STRUCTURE & DEVELOPMENT: OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Chemical Industry reflects the economic climate of the country, and has grown in India at a rate higher than GDP over the last 5 years.

Chemical demand continues to grow, due to sustained end-use industry growth and increased usage and intensities in various applications. The Indian Chemical Industry can leverage this situation to its advantage by focusing its developments to the specific needs of its end use customers.

India''s Chemical Industry was slated to grow by approx. 9% in 2013. Specialty Chemical, being the fastest growing segment, was expected to grow at 11-12%. The Indian Chemical Industry, valued at US$ 108 billion, accounts for only 3% of the Global Chemical space. This sector therefore has the potential to grow, as the need for Specialty Chemicals intensify in end use markets.

The Indian Specialty Chemical Industry being in a nascent stage, shows substantial promise for growth with maturing markets and as the Government authorities and forward thinking companies see the need for better quality, greater sustainability and improved safety, there could be a spurt in this area.

With this backdrop the auxiliary manufacturer has the task to understand the specific needs of the customer and deliver customized solutions that are flexible to the customers'' requirements. Continuous customer interaction to understand the complexities of the customer''s performance requirements is key to successful business across all industry segments.

SECTORWISE PERFORMANCE:

Dai-ichi has achieved a revenue growth of 16% for 2012-13.

The Company participated in some of the key growth oriented end-use industries, viz. Paint and Coatings,

Construction Chemicals, Oil Field Chemicals, Textile Chemicals & Specialty Polymers.

The Company''s prudent but aggressive growth strategy has achieved results. The weakening of the Rupee has improved the Company''s export performance, inspite of tough market conditions in Europe.

With capacities at the Company''s Pimpri site stretched to the limit, it is crucial that the Company expands to take advantage of growing demand in various sectors. This expansion will enable the Company to expand its manufacturing foot print and production capacity cost effectively.

The Company plans to set up facilities in Dahej and utilize the PCPIR''s infrastructure to add to its manufacturing capacities. The new site will focus on the manufacture of Ethoxylates and Propoxylates, together with Specialties for the Oil Field Chemical Sector. Several global chemical and petrochemical companies have committed to make large investments in Gujarat, specifically at Dahej, which is soon becoming the hub of the Chemical Sector in Gujarat.

As part of the PCPIR complex the availability to feedstock and infrastructure makes it an ideal location for Chemical companies.

At Dai-ichi, 80% of the Company''s business is based on Ethylene Oxide derivatives and various formulations based on these.

Demand for ethoxylates is forecast to grow at 12% over the next 3-4 years.

These products go as additives in concrete admixtures, dispersing agents, auxiliaries, finishes for the

Polyester Industry, metal working fluids, etc.

The Company has grown its business this year through organic growth and increased product share in the Paint Industry, the Textile Sector, the Cement Industry and increased sales to its oil field partner viz. Champion Technologies Inc. and our JV in the oil field viz. Champion Dai-ichi Technologies India Ltd.

The Textile Chemical Industry in India is projected to grow at 11%, while the Paint Industry is expected to grow at 15% during 2012-15.

The Company has met most of its growth targets for the year, except its offerings to the Polyester Industry, where the difficult market conditions and depressed margins affected growth.

The Company''s focus on continuous improvement in all departments has resulted in enhanced performance across the organization.

With improved production processes and debottlenecking of manufacturing, the Company has been able to increase tonnages within the same infrastructure.

To stay competitive in the market place, the Company requires to increase productivity along the entire value chain. Automation technologies are being introduced linked with efficiency in the use of energy etc. The concept of standardized operating conditions has provided for not only enhanced efficiencies but greater safety at the plant level.

The Company will continue to employ its resources towards greater automation and enhanced productivity and efficiencies at the plant.

Product development continues to be focused on existing as well as newer applications in various growth oriented end user markets like Construction, Paint and the Oil Sectors. Whilst the Company continues to drive innovation it is also strengthening its applied technology labs for the various business lines.

From being a small valued added supplier for Specialty Performance applications, the Company is working towards supplying larger volume Performance chemicals to the Construction, Oil & Lubricant Industries, whilst continuing its offerings to the Paint & Rayon sectors, as a preferred supplier to certain end use customers.

The Company''s Joint Venture with CTI Chemicals Asia Pacific Pte. Ltd. is performing extremely well, having bagged some prestigious contracts with the country''s premium private oil producers, capturing over 85% of this market.

The synergy between Champion''s technical expertise in the field and the capability of Dai-ichi Karkaria Ltd. to manufacture specialty performance chemicals at competitive rates, and in a timely way, has resulted in a very successful business model.

WORKING CAPITAL MANAGEMENT:

The significant ratios of the Company such as Ratio of Inventory to Sales is 12.99%, Receivable to Sales is 18.46%, and Net Working Capital to Sales is 29.17%.

The working capital was rotated 4 times in the year, showing effective working capital management. Funds surplus to the operational requirements have been invested in safe and relatively risk free instruments to earn a reasonable return.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an adequate system of internal controls in all business spheres of its activities which are commensurate with the size and the nature of its business. It ensures adequate protection of the Company''s resources, provision of accurate and speedy financial statements and reports, and compliance with the Company policies and procedures and other statutory and legal obligations. The internal control is supplemented by effective and independent internal audit. The Management regularly reviews the findings of the Internal Auditors and effective steps to implement any suggestions/observations of the Internal Auditors are taken and monitored regularly. In addition, the Audit Committee of the Board regularly addresses significant issues raised by the Internal and the Statutory Auditors.

MATERIAL DEVELOPMENTS ON HUMAN RESOURCES INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company''s Human Resource Policy over the years has resulted in a very low attrition ratio of less than 1% per annum. All manpower requirements are assessed and filled in a timely manner. The Company has a sound knowledge pool of experienced employees, which helps it to maintain consistency in performance across all disciplines.

Training needs of all employees are assessed annually and specific training is imparted to employees belonging to different departments. Employees are encouraged to attend seminars and workshops to enhance their skill and knowledge.

As on 31st March, 2013, the total numbers of employees on the payrolls of the Company at all the locations are 239.

4. JOINT VENTURE/SUBSIDIARY COMPANIES:

(i) JOINT VENTURE COMPANY – CHAMPION DAI-ICHI TECHNOLOGIES INDIA LTD.

The Company had w.e.f. 7th September, 2010, formed a Joint Venture with CTI Chemicals Asia Pacific Pte. Ltd., in the ratio of 50:50.

(ii) ANNUAL REPORT OF SUBSIDIARY COMPANY:

As on 31st March 2013, the Company has only one subsidiary, Dai-ichi Gosei Chemicals (India) Limited.

Pursuant to General Circular 2/2011 of the Ministry of Corporate Affairs, with respect to section 212(8) of the Companies Act, 1956, the Company has opted for not attaching the Annual Report of the subsidiary company to the balance sheet of the Company. The Annual accounts of the subsidiary company and related information will be made available for inspection to investors, at the registered office of the Company.

As per the Listing Agreement and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its Joint Venture Company, Champion Dai-ichi Technologies India Ltd and Subsidiary Company, Dai-ichi Gosei Chemicals (India) Limited., duly audited by the Statutory Auditors are attached.

5. FIXED DEPOSITS:

The Company has discontinued its fixed deposit scheme during the financial year 2007-2008. The Company has repaid all the outstanding Fixed Deposits by the year 2009-10. The only deposits that are outstanding as on 31st March 2013 are the matured but unclaimed deposits which amount to Rs. 0.31 millions.

6. DIRECTORS:

The Directors record their profound grief on the sad demise of its Founder Chairman Mr. D. M. Neterwala on 31st May, 2013.

Mr. D. M. Neterwala, with great entrepreneurial vision and foresight founded the Company 53 years ago. As a promoter of the Company, he contributed immensely towards building a strong ethical foundation for the Company and establishing a pioneering place in the industry. He steered the Company to become a reputable and national name in the Surfactant Industry.

The Directors record their appreciation for his outstanding leadership and invaluable contribution to the Company.

The Directors record their profound grief on the sad and untimely demise of its Independent Director, Mr. Jimmy Bilimoria on 3rd May, 2013.

Mr. Jimmy Bilimoria joined the Board of Directors in the year 2007. He was a valuable member of the Board and contributed significantly to the Board discussions and decisions. The Directors place on record their deep appreciation of the valuable services rendered by him.

Mr. Kavas Patel and Mr. Keki Elavia retire from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 1956 and Articles of Association of the Company. Being eligible for reappointment, they have offered themselves for re-appointment.

The information required to be furnished under clause 49 of the Listing Agreement is given in the Notice of the 53rd Annual General meeting.

The Board of Directors recommends their re-appointment.

7. INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956:

(a) There are no employees covered under the purview of Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

(b) The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in the annexure to this Report.

8. DIRECTOR''S RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that:

1. in the preparation of the annual accounts for the year ended 31st March, 2013, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments 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 March 31, 2013, and of the profit of the Company for the period April 1, 2012 to March 31, 2013;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis.

9. CORPORATE GOVERNANCE:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the amended Listing Agreement of the Bombay Stock Exchange Limited with which the Company is listed are complied with. A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors'' statement on its compliance.

10. LISTING:

The Equity Shares of your Company are presently listed on The Bombay Stock Exchange Ltd. and the Company has paid the annual listing fees for the financial year 2013-2014.

11. RELATED PARTY DISCLOSURES:

The Company has made disclosures in compliance with the Accounting Standard on Related Party Disclosures as required by clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

12. CONSOLIDATED ACCOUNTS:

The Company has also published the consolidated financial statements in respect of the Company and its subsidiary/joint venture company, as required by clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

13. HEALTH, SAFETY & ENVIRONMENT:

The Company always ensure good health, safety & environment friendly practices. During the financial year factory had no reportable accident. Meetings of Safety Committee were conducted once in every three months and suggestions were effectively implemented, which resulted in zero accidents in the said financial year. Regular Mock Drills were conducted once in three months to ensure best performance while addressing emergency situations and incidents adversely affecting the environment. Periodical employee health checks were carried out and accordingly employees were educated for maintaining their health. Regular training relating to work place safety, fire fighting, first aid etc. were provided to the employees. Company always adheres to all statutory & legal compliances pertaining to Employee Health, Safety & Environment. The Company conducts periodical monitoring of Air, Noise & Water to verify the performances of various utilities, which confirms the MPCB & DISH approved norms.

14. INDUSTRIAL RELATIONS:

The wage agreement with the workers of the Company expired on 30th November, 2008. As Conciliation proceedings before the Labour Commissioner, Pune for arriving at a settlement were not conclusive, the matter was referred to the Industrial Court, Pune for adjudication. The said reference is rejected by the Hon''ble Industrial court for want of prosecution by the recognized union. The decision of the Industrial Court is challenged and is pending before the Mumbai High Court.

15. FORM A & B REPORT:

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as prescribed under sub section (1) (e) of section 217 of the Companies Act 1956 read with Companies (Disclosure of particulars in respect of Board of Directors) Rules 1988 are given in Annexure ''A'' to this report.

16. AUDITORS:

M/s. Deloitte Haskins & Sells, the Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and being eligible are recommended for re-appointment to audit the accounts of the Company for the financial year 2013-2014.

17. ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.

CAUTIONARY NOTE:

Certain statements in the Director''s Report and Management & Discussion Analysis section may be forward looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. For and on behalf of the Board

Mrs. S. F. Vakil

Chairperson & Managing Director Place : Mumbai

Date : June 24, 2013


Mar 31, 2012

The Directors have pleasure in presenting the Fifty - Second Annual Report together with the audited accounts for the year ended March 31, 2012.

1. FINANCIAL RESULTS:

Operational Performance 2012 2011

(Rs.in millions) (Rs.in millions)

Gross Revenue from operations 763.28 590.86

Less: Excise duty 59.84 48.56

Net Revenue from operations 703.44 542.30

PBDIT 51.87 58.45

EPS (Rs) 4.50 5.51

Book Value of Shares (Rs) 82.46 80.29

PERFORMANCE REVIEW:

Sales increased by 30% to approx. Rs 76 crores compared with the year ended 2010-11. There is a substantial increase in exports contributing to 15% of total revenue.

Sharply increased RM costs could not be passed on in Sales prices with several customers, resulting in higher Material to Sales ratios. These high costs have put a strain on bottom-line of the Company, reducing PBDIT to 7%.

2. DIVIDEND:

The Directors have recommended a dividend of Rs 2/- per equity share, having face value of Rs 10/- each, for the year ended 31st March 2012. The dividend payout will aggregate to Rs 149.02 lacs and the tax on distributable profits payable by the Company would amount to Rs 24.17 lacs.

4. JOINT VENTURE/SUBSIDIARY COMPANIES:

(i) JOINT VENTURE COMPANY - CHAMPION DAI-ICHI TECHNOLOGIES INDIA LTD.

The Company had w.e.f. 7th September, 2010, formed a Joint Venture with CTI Chemicals Asia Pacific Re. Ltd., in the ratio of 50:50.

(ii) ANNUAL REPORT OF SUBSIDIARY COMPANY:

As on 31st March 2012, the Company has only one subsidiary, Dai-ichi Gosei Chemicals (India) Limited.

Pursuant to General Circular 2/2011 of the Ministry of Corporate Affairs, with respect to Section 212(8) of the Companies Act, 1956, the Company has opted for not attaching the Annual Report of the subsidiary company to the balance sheet of the Company. The Annual accounts of the subsidiary company and related information will be made available for inspection to investors, at the registered office of the Company.

As per the Listing Agreement and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its Joint Venture Company, Champion Dai-ichi Technologies India Ltd. and Subsidiary Company, Dai-ichi Gosei Chemicals (India) Limited., duly audited by the Statutory Auditors are attached.

5. FIXED DEPOSITS:

The Company has discontinued its fixed deposit scheme during the financial year 2007-2008. The Company has repaid all the outstanding Fixed Deposits by the year 2009-10. The only deposits that are outstanding as on 31st March 2012 are the matured but unclaimed deposits which amount to Rs 3.97 lacs.

6. DIRECTORS:

Mr. D. M.Neterwala, Mr. A. H.Jehangir and Mr. J. S. Bilimoria retire from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 1956 and Articles of Association of the Company. Being eligible for reappointment, they have offered themselves for re-appointment.

The information required to be furnished under clause 49 of the Listing Agreement is given in the Notice of the 52nd Annual General meeting.

The Board of Directors recommends their re-appointment.

7. INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT 1956:

(a) There are no employees covered under the purview of Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

(b) The particulars as prescribed under sub-section (l)(e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in the annexure to this Report.

8. DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies (Amendment), Act, 2000 the Directors confirm that:

1. in the preparation of the annual accounts for the year ended 31st March, 2012, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments 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 March 31, 2012, and of the profit of the Company for the period April 1, 2011 to March 31, 2012;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis. '

9. CORPORATE GOVERNANCE:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the amended Listing Agreement of the Bombay Stock Exchange Limited with which the Company is listed are complied with. A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors' statement on its compliance.

10. LISTING:

The Equity Shares of your company are presently listed on The Bombay Stock Exchange Ltd. and the Company has paid the annual listing fees for the financial year 2012-2013.

11. RELATED PARTY DISCLOSURES:

The Company has made disclosures in compliance with the Accounting Standard on Related Party Disclosures as required by clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

12. CONSOLIDATED ACCOUNTS:

The Company has also published the consolidated financial statements in respect of the Company arid its subsidiary/joint venture company, as required by clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

13. HEALTH, SAFETY & ENVIRONMENT:

Safety, Health & Protection of the Environment continue to remain one of the priority areas for the Company. The Company continues to put special emphasis in this area at every stage, from conception and design of new products, optimization of process, to commercial manufacturing and delivery of goods to the customers.

(a) HEALTH:

A special committee ensures good sanitation and hygienic condition in the plants and canteen. Medical examination of all employees is done annually and six monthly medical examinations are conducted for employees who are working in Hazardous area.

(b) SAFETY & ENVIRONMENT:

(i) Following audits and compliances were completed for the year:

(a) Risk assessment/ risk analysis, preparation of risk assessment/risk analysis report as per Maharashtra Factory Rules, 1963.

(b) HAZOP study report of all machines as per Section-41 B Factories Act, 1948.

(c) HAZOP study report for all chemical & mfg. process as per Section -41 B of Factories Act, 1948.

(d) Preparation of fire fighting survey report.

(e) Conducted electrical safety audit for whole plant.

(f) , Prepared health audit report, preparation of health hazard & occupational health survey report along with detection of occupational hazard.

(g) Prepared welfare audit report.

(ii) Safety Audit as per Factories Act - 1948 and Maharashtra Factories Control of Industrial Major Accident Hazards) Rules-2003 was completed & submitted to Director of Industrial Safety & Health, Pune.

(iii) Prepared fresh factory site layout, Factory elevation plan, machine layout plan, Stability certificate as per Maharashtra Factories (Control of Industrial Major Accident Hazards) Rules-2003 & Submitted the copies to Director of Industrial Safety & Health, Pune.

14. INDUSTRIAL RELATIONS:

The wage agreement with the workers of the Company expired on 30th November 2008. As Conciliation proceedings before the Labour Commissioner, Pune for arriving at a settlement were not conclusive, the matter was referred to the Industrial Court, Pune for adjudication. The said reference is rejected by the Hon'ble Industrial court for want of prosecution by the recognized union.

15. FORM A & B REPORT:

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo:

The particulars as prescribed under sub section (1) (e) of Section 217 of the Companies Act 1956 read with Companies (Disclosure of particulars in respect of Board of Directors) Rules 1988 are given in Annexure A' to this report.

16. AUDITORS:

M/s. Deloitte Haskins & Sells, the Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and being eligible are recommended for re-appointment to audit the accounts of the Company for the financial year 2012-2013.

17. ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.

For and on behalf of the Board

Mrs. S. F. Vakil Mr. Keki Elavia

Vice Chairperson & Managing Director Director

Place : MUMBAI

Date : May 11, 2012


Mar 31, 2011

The Directors have pleasure in presenting the Fifty - first Annual Report together with the audited accounts for the year ended March 31, 2011.

1. FINANCIAL RESULTS:

Operational Performance 2011 2010 (Rs. in (Rs. in millions) millions)

Gross Sales (manufacturing) 587.83 516.87

Less: Excise duty 48.57 37.34

Net Sales (manufacturing) 539.26 479.53

Trading Sales Nil 25.30

Total net sales 539.26 504.83

PBDIT 58.66 66.92

EPS (Rs.) 5.51 5.30

Book Value of Shares (Rs.) 80.29 77.11

PERFORMANCE REVIEW:

The Kasarwadi plant has shown a revenue growth of around 17% against the previous year, for manufactured products.

However, the Kurkumbh plant has registered a revenue loss of 7%.

Therefore, the result for the Company as a whole is a revenue increase of a little over 12%. The PBDIT has reduced by almost 12% as the Company was unable to recover the increase in material costs over the past 6 months.

Exports have increased this year, and margins on exports are strained (in order to be globally competitive). The overall impact has resulted in reduction in the bottom line.

2. DIVIDEND:

The Directors have recommended a dividend of Rs. 21- per equity share, having face value of Rs. 10/- each, for the year ended 31st March, 2011. The dividend payout will aggregate to Rs. 149.02 lacs and the tax on distributable profits payable by the Company would amount to Rs. 24.18 lacs.

4. SUBSIDIARY COMPANIES:

(i) Formation of Joint Venture in its wholly owned subsidiary:

During the year under review, the Company had executed a tripartite shareholders agreement dated 26th May, 2010, with CTI Chemicals Asia Pacific Re. Ltd. (Subsidiary of Champion Technologies Inc.) and its wholly owned subsidiary Basic Oil Treating (India) Ltd. (name changed to Champion Dai-ichi Technologies India Ltd.), for formation of Joint Venture.

Pursuant to the formation of Joint Venture, the shareholding of Champion Dai-ichi Technologies India Ltd. is held by the Company and CTI Chemicals Asia Pacific Re. Ltd. in the ratio of 50:50. Accordingly Champion Dai-ichi Technologies India Ltd. has ceased to be a subsidiary of the Company w.e.f. 7th September, 2010.

(ii) Annual report of subsidiary company:

As on 31st March, 2011, the Company has only one subsidiary, Dai-ichi Gosei Chemicals (India) Limited.

Pursuant to General Circular No. 2/2011 dtd. 8th February, 2011 read with General Circular No. 3/2011 dated 21st February, 2011 issued by the Ministry of Corporate Affairs, with respect to Section 212(8) of the Companies Act, 1956, the Company has opted for not attaching the Annual Report of the subsidiary company to the balance sheet of the Company. The Annual accounts of the subsidiary company and related information will be made available for inspection to investors, at the registered office of the Company.

As per the Listing Agreement and applicable Accounting Standards, the Consolidated Financial Statements of the Company with its subsidiary company, Dai-ichi Gosei Chemicals (India) Limited and Joint Venture Company, Champion Dai-ichi Technologies India Ltd., duly audited by the Statutory Auditors are presented in the Annual Report.

5. FIXED DEPOSITS:

The Company has discontinued its fixed deposit scheme during the financial year 2007-2008. The Company has repaid all the outstanding Fixed Deposits by the year 2009-10. The only deposits that are outstanding as on 31st March, 2011 are the matured but unclaimed deposits which amount to Rs. 5.15 lacs.

6. DIRECTORS:

Mr. Keki Elavia has been appointed as the Additional Director of the Company w.e.f. 22nd February, 2011.

Mr. J. H. C. Jehangir and Dr. Anil Naik retire from the Board of Directors by rotation, in pursuance of the provisions of the Companies Act, 1956 and Articles of Association of the Company. Being eligible for re-appointment, they have offered themselves for re-appointment.

The information required to be furnished under Clause 49 of the Listing Agreement is given in the Notice of the 51st Annual General meeting.

The Board of Directors recommends their appointment/re-appointment.

7. INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT 1956:

(a) There are no employees covered under the purview of Section 217(2A) of the Companies Act, 1956 and the rules framed there under.

(b) The particulars as prescribed under sub-section (l)(e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in the annexure to this Report.

8. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000 the Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed;

2. appropriate accounting policies have been selected and applied consistently, and have made judgments 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 March 31, 2011, and of the profit of the Company for the period April 1, 2010 to March 31, 2011;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the annual accounts have been prepared on a going concern basis.

9. CORPORATE GOVERNANCE:

The Company has taken adequate steps to ensure that all mandatory provisions of Corporate Governance as prescribed under the amended Listing Agreement of the Bombay Stock Exchange Limited with which the Company is listed are complied with. A separate report on Corporate Governance is attached as a part of the Annual Report along with the Auditors statement on its compliance.

10. LISTING:

The Equity Shares of your company are presently listed on The Bombay Stock Exchange Ltd. and the Company has paid the annual listing fees for the financial year 2011-2012.

11. RELATED PARTY DISCLOSURES:

The Company has made disclosures in compliance with the Accounting Standard on Related Party Disclosures as required by Clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd.

12. CONSOLIDATED ACCOUNTS:

The Company has also published the consolidated financial statements in respect of the Company and its subsidiary/joint venture company, as required by Clause 32 of the Listing Agreement of The Bombay Stock Exchange Ltd. & the relevant accounting standards.

13. HEALTH, SAFETY & ENVIRONMENT:

Safety, Health & Protection of the Environment continue to remain one of the priority areas of the company. The Company continues to put special emphasis on the environment, health and safety at every stage, from conception and design of new products, optimization of process, to commercial manufacturing and delivery of goods to the customers.

(a) HEALTH:

A special committee ensures good sanitation and hygienic condition in the plants and canteen. Medical examination of all employees is done annually and six monthly medical examinations are conducted for employees who are working in Hazardous area.

(b) SAFETY:

(i) Periodic safety audits and meetings are conducted. The recommendations at the meetings are implemented and reviewed in the following meetings to ensure compliance. All minor incidents are reported, investigated and steps taken to avoid recurrence of such incidents.

(ii) Periodic training programmes on safety are conducted for all the personnel and Periodic Mock Drills of "On site Emergency Control Plan" are conducted to check employees response to the emergency

calls. Employees are always alert, prompt and capable of tackling emergency situations in the plants.

(iii) Safety requirements are built - into the high design of the facility.

(iv) Electrical fire hydrant pump was installed to cater the emergency need.

(c) ENVIRONMENT:

(i) Environmental impact assessment and HAZOP studies of our process are performed right from the development stage to scale up at various levels and further up to commercial production. Our commitment is to select operationally safer and environmentally cleaner processes right from R&D stage itself, with constant upgradation of existing production technologies.

(ii) The company has taken several measures to reduce effluent generation. The Effluent Treatment Plant has operated efficiently to meet the Pollution Control Board norms.

(iii) Periodic Air monitoring of the work place is being carried out to ensure the Environment remains pollution free.

14. INDUSTRIAL RELATIONS:

The wage agreement with the workers of the Company expired on 30th November, 2008. Conciliation proceedings before the Labour Commissioner, Pune for arriving at a settlement were not conclusive. The matter is referred to the Industrial Court, Pune for adjudication.

15. FORM A & B REPORT:

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo:

The particulars as prescribed under sub-section (l)(e) of Section 217 of the Companies Act, 1956 read with Companies (Disclosure of particulars in respect of Board of Directors) Rules 1988 are given in Annexure A to this report.

16. AUDITORS:

M/s. Deloitte Haskins & Sells, the Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and being eligible are recommended for re-appointment to audit the accounts of the Company for the financial year 2011-2012.

17. ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation of the contribution made by the employees of the Company. The Directors wish to convey their appreciation to the Banks, dealers and other business associates and the shareholders for their continuous trust and support.



For and on behalf of the Board

Mrs. S. F. Vakil Mr. Keki Elavia Vice Chairperson & Managing Director Director



Place : MUMBAI Date : May 4, 2011





 
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