Directors Report of DMCC Speciality Chemicals Ltd.
Mar 31, 2018
The Directorsâ are pleased to present their Ninety Seventh Annual Report together with the audited financial statements of the Company for the financial year ended 31st March, 2018.
FINANCIAL RESULTS
|
Financial Year ended 31st March, 2018 |
Financial Year ended 31st March, 2017 |
|
|
Rs. in lakhs |
Rs. in lakhs |
|
|
Sales Turnover |
17,688.82 |
18,733.83 |
|
Gross Profit / (Loss) |
1,976.61 |
2,515.45 |
|
Less : Depreciation |
418.63 |
371.64 |
|
Profit / (Loss) before taxation |
1,557.98 |
2,143.81 |
|
Less : Provision for Taxation (MAT) |
348.92 |
443.94 |
|
Add: Tax impact due to OCI |
(16.78) |
(2.30) |
|
Profit (Loss) after Taxation |
1,225.82 |
1,702.17 |
|
Add : Other Comprehensive income |
61.71 |
7.42 |
|
Total Comprehensive Income |
1,287.53 |
1,709.59 |
|
The following is the Sales Turnover |
||
|
Commodity Chemicals |
8,182.08 |
8,957.01 |
|
Speciality Chemicals |
9,033.70 |
9,182.60 |
|
Others |
473.04 |
594.22 |
|
Total |
17,688.82 |
18,733.83 |
The Financial results for the year ended 31st March, 2018 are in compliance with the Indian Accounting Standards (Ind-AS) and accordingly the results for the year ended 31st March, 2017 have been re-stated.
Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July 2017, Central Excise, Value Added Tax (VAT) etc. have been replaced by GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, GST, GST Compensation Cess, VAT etc. are excluded from Gross Revenue from sale of products and services for applicable periods. In view of the aforesaid restructuring of indirect taxes, Gross Revenue from sale of products and services and Excise duty for the year ended 31st March, 2017 and year ended 31st March, 2018 are not comparable with the previous periods. The following additional information is being provided to facilitate such comparison:
|
Particulars |
For the year ended |
For the year ended |
|
31/03/2018 |
31/03/2017 |
|
|
Rs. In Lakhs |
Rs. In Lakhs |
|
|
- Sales Turnover (Including Excise) |
17,688.82 |
18,733.83 |
|
(-) Taxes - Excise duty |
259.19 |
1427.82 |
|
Sales Turnover |
17,429.63 |
17,306.01 |
There has been no material change which have occurred between end of the Financial year 2017-18 and the date of this report.
Dividend
In view of reasonable improvement in the financial performance of the Company, your Directors have recommended a dividend of Rs. 0.50 per Equity share of Rs. 10/- each (i.e. 5%) for the Financial Year ended 31st March, 2018, subject to the approval of the members at the 97th Annual General Meeting of the Company scheduled to be held on 26th September, 2018. The dividend will absorb Rs. 124.70 Lakhs and the Dividend Distribution Tax to be borne by the Company would amount to Rs. 25.40 Lakhs. The amount towards payment of dividend will be distributed from profits of the company for the current year in compliance with the provisions of the Companies Act, 2013.
Your company has also paid the Cumulative arrears of the Dividend aggregating to Rs. 71.74 Lakhs upto 31.03.2018 on 2,80,000 2.5% cumulative non-convertible redeemable preference shares of Rs. 100/- each aggregating to Rs. 2.80 Crores. The company has also paid Dividend Distribution Tax payable on the amount of dividend paid to Preferential shareholders.
BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 (the Act) and the corporate governance requirements as prescribed by Securities and Exchange Board of India ( â SEBI â ) under Clause 49 of the Listing Agreement.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning etc.
The Board and the Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the âChief Executive Officerâ and âManagerâ of the Company under the Companies Act, 2013.
In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of non-executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performances of the Board, its committees and individual Directors were also discussed.
NOMINATION AND REMUNERATION POLICY
The Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and other employees have evolved and have been formulated in terms of the provisions of the Companies Act, 2013 and the listing agreement with a view to pay equitable and commensurate remuneration to the Directors, Key Managerial Personnel and other Employees of the Company, based on the Qualification, experience and industry standard.
In view of the inadequacy of profits, the Directors of the Company were not being paid any remuneration/commission etc. except the normal sitting fees.
The Managing Director, & Chief Executive Officer (CEO) of the Company is being paid in accordance with the provisions of the Companies Act, 2013 and Schedule V of the Companies Act, 2013 which prescribes the ceiling on the maximum permissible remuneration in respect of Companies having inadequate profits.
The Management of the Company has taken into consideration the various applicable factors such as qualification, experience, industry standards etc. and evolved an appropriate Remuneration policy.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
The Company has not provided any loan to any person or body corporate or given any guarantee or provided security in connection with such loan or made any investment in the securities of anybody corporate pursuant to Section 186 of the Companies Act, 2013. The Company has given advance against salary to some employees in terms of the applicable policies of the Company.
SEXUAL HARASSMENT
During the year under review, there was not a single incident under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013.
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year five Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
DIRECTORS/KEY MANAGEMENT PERSONNEL Shri Laxmikumar Narottam Goculdas
Shri Laxmikumar Narottam Goculdas (holding 00459347), Director, is retiring by rotation in accordance with the requirements of the Act and under the Article 135 of the Articles of Association of the Company, and being eligible, offers himself for re-appointment.
Shri Laxmikumar Narottam Goculdas, Chairman of the Company has wide knowledge and experience in industry, trade, finance, commerce, corporate affairs and international trade.
Based on the Report of the Committee on Corporate Governance chaired by Mr. Uday Kotak, the Securities and Exchange Board of India (SEBI) amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âListing Regulationsâ). According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. The said provision comes into effect from 1st April, 2019.Shri Laxmikumar Narottam Goculdas would attain the age of seventy-five years on 16th September, 2018, the approval of the Shareholders is being sought for the continuation of directorship.
Shri Haridas Tricumdas Kapadia
Shri Haridas Tricumdas Kapadia, Director of the company has vide knowledge and experience in industry, trade, commerce, corporate affairs and International Trade,. He is B.Sc. and Diploma in Chemical Engineering.
Shri Haridas Tricumdas Kapadia, Non-Executive Independent Directors whose appointment for a period of five years commencing from 18th September, 2014 and ending on 17th September, 2019, was approved by the Shareholders at the 93rd Annual General Meeting of the company held on 18th September, 2014.
According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. Accordingly the approval of the Shareholders is being sought for the continuation of directorship of Shri Haridas Tricumdas Kapadia,.
Shri Arvind Wasudeo Ketkar
Shri Arvind Wasudeo Ketkar, is B.Com (Hons), A.C.A., Practising Chartered Accountant for over 44 Years and has indepth knowledge in finance and accounting. Sshri Arvind Wasudeo Ketkar, Non-Executive Independent Directors whose appointment for a period of five years commencing from 18th September, 2014 and ending on 17th September, 2019, was approved by the Shareholders at the 93rd Annual General Meeting of the company held on 18th September, 2014.
According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. Accordingly the approval of the Shareholders is being sought for the continuation of directorship of Shri Arvind Wasudeo Ketkar,.
Shri Mukul Manoharlal Taly
Shri Mukul Manoharlal Taly is B.Sc., LL.M practicing over 34 years as Senior in S. Mahomedbhai & Co., Advocate & Solicitors, High Court, Mumbai. He has been a Gold Medallist ( 1st in the University of Mumbai in LLB) in the year 1983. He has LL.M. degree from the University of Mumbai in Commercial Law and Constitutional Law during the year 1983-85.
Shri Mukul Manoharlal Taly taught various subjects such as Commercial Laws, Civil Procedure Code, Bankruptcy etc., at the Government Law College as Fellow and as a Professor from 1983 to 1991.
Shri Mukul Manoharlal Taly has appeared in his matters before the Mumbai and Gujarat High Courts, various District Courts, Powered Committee and Tribunals and also in the Supreme Court of India.
Shri Sanjeev Vishwanath Joshi
Shri Sanjeev Vishwanath Joshi is B.Com, Practising Chartered Accountant for over 34 years.
Shri Sanjeev Vishwanath Joshi has in-depth knowledge in finance and accounting and taxation.
Shri Bimal Lalitsingh Goculdas
Shri Bimal Lalitsingh Goculdas ( DIN 00367792) is a Chemical Engineer from The Institute of Chemical Technology (ICT), Mumbai and has done M.S. in Chemical Engineering from University of Wyoming, U.S.A. Shri Bimal Laitsingh Goculdas is a leading professional with wide experience in business , commercial, technical, corporate finance both in India and Abroad.
Shri Bimal Lalitsingh Goculdas has been associated with the Company holding various senior Management positions for over last 20 years and has handled production, technology, supply chain management, marketing both domestic & export and finance.
Shri Bimal Lalitsingh Goculdas, Chief Executive Officer and Manager of the Company is related to Shri Laxmikumar Narottam Goculdas and Ms. Mitika Laxmikumar Goculdas.
His existing term of appointment as CEO and Manager of the Company would have normally come to an end on 31.03.2019. His appointment as the Managing Director, and CEO of the Company is for five years w.e.f. 01.04.2018 upto 31.03.2023.
The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.
During the year, the non-executive Directors of the Company had no pecuniary relationship or transactions with the Company.
Shri D.K. Sundaram, Chief Finance Officer of the company left the company w.e.f. 31/12/2017 and Shri D.G. Patil was appointed as Chief Finance Officer of the company. On his relieving w.e.f. 1st July, 2018 Shri Chirag Jaswant Shah, Chartered Accountant joined as Chief Finance Officer of the company w.e.f. 6th July, 2018. The Company continues its operations under the leadership of the Senior Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas, Managing Director, & Chief Executive Officer, Shri D. T. Gokhale, Sr. Executive Vice President and Company Secretary and Shri Chirag Jaswant, Chief Finance Officer, who are the Key Managerial Personnel.
WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower policy has been posted on the website of the Company (www.dmcc.com).
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year under review were at armâs length basis and were in the ordinary course of business.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The Audit Committee and the Board of Directors at their meetings have reviewed and approved all the related party transactions undertaken by the Company during the Financial Year. The related party transactions entered into by the Company are disclosed in Note no. 43 of the Notes to Accounts. All Related Party Transactions are placed/routed through the Audit Committee and the Board of Directors. None of the Directors has any pecuniary relationships or transactions with the Company.
The Policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website.
RISK MANAGEMENT POLICY
The Company has formulated a Risk Management Policy which reflects the overall risk management philosophy, the Companyâs overall approach to risk management, risk assessment, risk mitigation mechanism and the roll and responsibilities for risk management. Risk management forms an integral part of the business planning and review cycle. The Companyâs Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safe guarding the integrity of the Companyâs financial reporting and its related disclosures.
The identification and analysis of and putting in place the process for mitigation of these risks is an ongoing process. The Company has also laid down procedure to inform the Audit Committee and the Board about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management control risks by means of a properly defined frame work. The monthly review meetings of all the functional/ departmental heads inter alia discuss the relative risk management issues.
INSIDER TRADING
In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulation 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a code of conduct to Regulate, Monitor and Report Trading by Insiders (âInsider Trading Codeâ) and code of Practices and Procedures for Fair Disclosure of unpublished Price Sensitive Information (âCode of Fair Disclosureâ).
The Insider Trading Code is intended to prevent misuse of unpublished price sensitive information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.
The code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the need and interest of all the Stakeholders.
ENVIRONMENT HEALTH AND SAFETY (EHS)
The prime endeavor of our Management is to achieve Environment Health and Safety (EHS). Your Company has various EHS management processes and methodologies being deployed and implemented under the EHS to ensure that our employees become more safety conscious . The Company has a system of in- house EHS training for employees and workmen at the factory as also the practice of sending the employees/workmen to various external EHS programmes.
RESPONSIBLE CARE®
Responsible care® is a global voluntary initiative of the Chemical Industry, the objective of which is continuous improvement in the areas of environmental protection, health, safety and security. It is the endeavor of your Company that our products - both raw material and finished goods pose no risk to employees, society and environment as well. This is sought to be achieved by minimizing the negative influence of our products along the entire supply chain, right from procurement, storage and manufacturing right upto sale. Your Company is one of the few in India authorized to use the Responsible care® logo. This has been achieved after extensive site and systems improvement, third party mentoring, and a series of audits. Logo usage validity is upto November 2018, renewable thereafter.
REACH
REACH regulation is adopted by the European union to improve protection of human health and environment from the risks of that can be posed by the Chemicals. REACH stand for Registration, Evaluation, and Authorisation of all Chemical Substances. Borax Morarji ( Europe ) GmbH has registered several products under the REACH Regulations and with merger of BML with DMCC, your company will be able to take advantage of this registration.
AUDITORS
In the 96th Annual General Meeting (AGM) held on 26th day of December, 2017 Messrs Rahul Gautam Divan & Associates (RGD & Associates), Chartered Accountants (ICAI Firm Registration No.120294W), was appointed as Statutory Auditors of the Company for a tenure of five years subject to ratification of their appointment at every subsequent AGM. The Ministry of Corporate Affairs has vide notification dated May 7, 2018 obliterated the requirement of seeking Memberâs ratification at every AGM on appointment of Statutory Auditor during their tenure of five years.
Messrs Rahul Gautam Divan & Associates (RGD & Associates), Chartered Accountants (ICAI Firm Registration No.120294W), have under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility.
The report of the Statutory Auditor forming part of the Annual Report, does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditorâs Report are self-explanatory and therefore do not call for any further comments.
Rahul Gautam Divan & Associates is a member of Kreston International, a worldwide network of accounting firms, offering high quality accounting, auditing, legal and consultancy services. The combined experience of the partners in the chartered accountancy profession within the associated firms is over 50 years. RGD & Associates have associated offices in Bangalore and Ahmedabad, with residential partners at both associated offices. RGD & Associates have been involved in the Statutory Audits and also Internal Audits of various companies, and have the necessary experience to conduct the statutory audit of the Company. RGD & Associates have consented to the said appointment and confirmed that their appointment, if made, would be in accordance with Section 139 read with Section 141 of the Act.
As you are aware that Messrs. K.S. Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W, who were the Statutory Auditors of your Company for last so many years till the year ended 31st March, 2017. The Company would like to express our deep appreciation for the cooperation, guidance and support extended by them during their tenure as the statutory auditors of the Company.
COST AUDITOR AND COST AUDIT REPORT
The Board of Directors, on the recommendation of Audit Committee has appointed Shri S.S. Dongare, Cost Accountant, as Cost Auditor of your Company to audit the cost accounts of the Company for Financial Year 2018-19 at remuneration of Rs. 66,000/- (Rupees Sixty Six Thousand Only) as also the payment of taxes as applicable and re-imbursement of actual out-of-pocket expenses incurred in connection with the aforesaid audit. As required under the Companies act, 2013, a resolution seeking membersâ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. In accordance with the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company carries out an audit of cost records (Sulphuric Acid) maintained by the Company every year.
The Cost Audit Report and the Compliance Report of your Company for the Financial Year ended 31st March, 2017, by Shri S.S. Dongare, Cost Accountant, which was due for filing with the Ministry of Corporate Affairs, was duly filed on 03rd November, 2017, accepted by the Government as filed in time.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as âAnnexure Iâ.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
A Corporate Social Responsibility Committee of the Directors was constituted earlier consisting of Ms. Mitika Laxmikumar Goculdas as Chairman, Shri H. T. Kapadia, Shri M. T. Ankleshwaria and Shri A. W. Ketkar as members of the Committee.
The Committee met once during the year and due to the average net profit of last three years being negative, your Company is not required to spend any amount towards Corporate Social Responsibility activities during the year under review, the report is annexed herewith as âAnnexure IIâ.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri A. D. Gupte, FCS No.300, and C.P. No. 1210 to undertake the Secretarial Audit of the Company. The
Secretarial Audit Report is included as âAnnexure IIIâ and forms integral part of this Report.
There is no qualification in the report of Secretarial Auditor, for the year under review.
PARTICULARS OF EMPLOYEES
The particulars of employees as required under section 197 and rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been furnished as there are no employees falling within the purview of the provisions of said section and the said rule during the period under review.
Information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in âAnnexure IVâ to this Report.
SUBSIDIARY COMPANY
Borax Morarji (Europe) GmbH is a 100% wholly owned subsidiary Company in Germany. Primarily it takes care of complying with the German Regulations for exports of Specialty Boron products to Germany and Europe.
In terms of exemption granted by the Ministry of Corporate Affairs wide its order No. 2/2011 dated 8th February, 2011 Balance Sheet of Borax Morarji (Europe) GmbH, Germany is not attached to the accounts of the Company. However, the annual accounts of the subsidiary are available for inspection at the office of the Company and the related detailed information will be made available to the Shareholders when asked for.
CONSOLIDATION OF ACCOUNTS
In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements for the year under report, consolidating its accounts with the accounts of its Wholly Owned Subsidiary Company, viz. Borax Morarji (Europe) GmbH, Germany (Change of name under process). A separate report of the Statutory Auditor on the consolidated Financial Statements also forms part of the same.
PUBLIC DEPOSITS
During the year 2017-18, your Company has not accepted/renewed any fixed deposit. Post Merger the unclaimed matured deposits as on 31.03.2017 were Rs. 31.69 Lakhs . As on 31.03.2018 the unclaimed matured deposits is Rs. 28.68 Lakhs.
DIRECTORSâ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, external agencies and Secretarial Auditor, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by the Management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year ended 31st March, 2018. Accordingly, to the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013:
(i) that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable Accounting Standards have been followed and that there are no material departures;
(ii) the Directors had selected such accounting policies and applied them consistently and 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, 2018 and of the profit of the Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the annual accounts have been prepared on a going concern basis;
(v) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lay strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the BSE Limited, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditorsâ Certificate on its compliance.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure-V and forms an integral part of this Report.
ACKNOWLEDGEMENTS
The Directors are thankful to your Companyâs shareholders, customers, suppliers, and contractors, various departments of Central and State Governments and Banks for their continued valuable support. The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation and commitment.
For and on behalf of the Board
LAXMIKUMAR NAROTTAM GOCULDAS
Chairman
Registered Office
Prospect Chambers, 317/321,
Dr. Dadabhoy Naoroji Road, Fort,
Mumbai 400 001.
Date : 10th August, 2018
Mar 31, 2016
DIRECTORSâ REPORT (Including Management Discussion and Analysis Report)
The Directors'' are pleased to present their Ninety Fifth Annual Report together with the audited financial statements of the Company for the financial year ended 31st March, 2016.
FINANCIAL RESULTS
|
|
Financial Year ended 31st March, 2016 Rs. in lacs |
Financial Year ended 31st March, 2015 Rs. in lacs |
|
Sales Turnover (Net of Excise Duty) |
9980.35 |
11948.32 |
|
Gross Profit / (Loss) |
1540.38 |
1784.73 |
|
Less : Depreciation |
225.83 |
243.85 |
|
Less : Exceptional Items |
- |
142.60 |
|
Profit / (Loss) before Taxation |
1314.55 |
1398.28 |
|
Less : Provision for Taxation (MAT) |
117.38 |
- |
|
Profit (Loss) after Taxation |
1197.17 |
1398.28 |
|
Add: Balance brought forward |
61.83 |
(1295.81) |
|
Add : Depreciation in respect of Earlier Year as per the provision contain at 7 (b) of Schedule II to the Companies Act, 2013 |
Nil |
(40.64) |
|
Balance carried forward |
1259.00 |
61.83 |
|
The following is the Sales Turnover (Net of Excise Duty) by group of products: |
||
|
Commodity Chemicals |
3932.34 |
3987.98 |
|
Speciality Chemicals |
5714.07 |
7446.07 |
|
Others |
333.94 |
514.27 |
|
Total |
9980.35 |
11948.32 |
Dividend
Though Your Company has made profit during the year, in view of the balance of accumulated losses, your Directors have not recommended any Dividend on Cumulative Preference Shares and Equity Shares of the Company, for the financial year ended 31st March, 2016.
MANAGEMENT DISCUSSION & ANALYSIS REPORT INCLUDING PROSPECTS IN THE INDUSTRY
As predicted by all leading global and economic institutions, India is a bright star in the world and Indian economy is expected to grow at 7.5%. As in the past, Indian chemical industry is expected to perform well.
The company has followed a policy of revamping and re-modelling of the manufacturing capacity by judiciously following combination of productivity improvement of existing plants and manufacturing facilities and creation of new multipurpose and flexible manufacturing infrastructure ( capable of producing multiple products and capable of carrying out multiple processes) through fresh capital expenditure.
The Company''s specialty chemical business is driven by extensive product R & D and process innovations which are significantly different from those in case of commodity chemicals business.
The growth of specialty chemicals is driven by both domestic consumption and exports. The specialty chemicals, finding application across consumers, are driven by overall growth of Indian economy. Specialty chemical exports are growing as India has the potential of becoming an important manufacturing hub for such chemicals.
Large parts of the world are under turmoil and while your company has so far not faced any significant disruptions on the customer side, growth in areas such as EU is likely to be muted. Business has been expanded to other several countries so as to ensure a good geographical spread.
On the process development side, your company continues to focus on the Sulphur and Ethanol chemistry. The expertise gained over the years, especially in the safe handling of hazardous chemicals, is being commercially exploited. Products are being selected based on experience in manufacturing process developed over the years. This includes development of novel process, an improvement in specifications or cost effectiveness owing to backward integration or economies of scale. With specialization in chemistry, rather than a particular end use, your company is attempting to insulate from the business cycles of any one industry. With specialization in multiple and multipurpose processes and the new products, your Company is better insulated from the cyclical fluctuations in the Chemical Industry.
The falling crude oil prices has resulted in lower prices of downstream chemicals such as Benzene and Sulphur. Consequently your company was required to reduce the selling prices of finished products when the need arose, which has partly reflected in lower turnover during the financial year ended 31st March 2016 as compared to the previous year. Your Company had planned essential maintenance shut down which has also affected the performance during the 3rd quarter of the year under review.
Overview of operations Chemicals
The turnover of Commodity Chemicals during the current Financial Year ended 31st March, 2016 was slightly lower at Rs. 39.32 crores as compared to the turnover of Rs. 39.88 crores during the previous Financial Year. The turnover of Specialty Chemicals during the current Financial Year ended 31st March, 2016 was Rs. 57.14 crores as compared to Rs. 74.46 crores in the previous year. The Export turnover of the Company during the current Financial Year ended 31st March, 2016 was Rs. 39.11 crores as compared to Rs. 51.76 crores for the previous Financial Year.
Fertilizers
The Company''s fertilizer business viz. Single Superphosphate (SSP) continues to remain suspended / discontinued. Your Company however continues on moderate scale the brand licensing arrangement of the Company''s popular âSHIP - BRANDâ of SSP Fertilizer.
Cautionary Statement
Statements in this âManagement Discussion and Analysis Reportâ describing the Company''s objectives, projections, estimates, expectations or predictions may be considered as âforward looking statementsâ within the meaning of applicable security laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.
ADEQUACY OF INTERNAL CONTROLS
Your Company has well laid down policies, guidelines and procedures which form part of its internal control system. The Audit Committee of the Board periodically reviews reports of Internal Auditors, inter alia, on adherence by the operating Management of such policies and procedures and suggests changes/modifications and improvements on a continuous basis. The Company has an independent and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and the transactions are authorized, recorded and reported correctly. The internal control systems are supplemented by a programme of internal audit.
HUMAN RESOURCE DEVELOPMENT
As part of ongoing exercise of the restructuring and re-organization of the Company''s business, the Company undertakes periodic comprehensive reviews of its HR policies and amends the same suitably from time to time, to meet the emerging business requirements. Special emphasis is being led continually on recruitment of multi-disciplinary and experience staff to carry forward the growth objectiveness of the Company. Regular training programmes are being held for the benefit of the staff and the workmen.
Your Company believes in a collaborative approach and works closely with the unions, and Industrial relations have been cordial during the year under review.
BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 (the Act) and the corporate governance requirements as prescribed by Securities and Exchange Board of India ( â SEBI â ) under Clause 49 of the Listing Agreement.
The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning etc.
The Board and the Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the âChief Executive Officerâ and âManagerâ of the Company under the Companies Act, 2013.
In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of non-executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performances of the Board, its committees and individual Directors were also discussed.
NOMINATION AND REMUNERATION POLICY
The Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and other employees have evolved and have been formulated in terms of the provisions of the Companies Act, 2013 and the listing agreement with a view to pay equitable and commensurate remuneration to the Directors, Key Managerial Personnel and other Employees of the Company.
The Company passed through adverse financial condition which had an inevitable impact on the existing compensation and pay structure rather than the qualification, experience and the industry standards.
The Chief Executive Officer (CEO) of the Company is being paid in accordance with the provisions of the Companies Act, 2013 and Schedule V of the Companies Act, 2013 which prescribes the ceiling on the maximum permissible remuneration in respect of Companies having inadequate profits.
In view of the inadequacy of profits, the Directors of the Company are not being paid any remuneration/commission etc. except the normal sitting fees.
The Management of the Company will therefore take into consideration the various applicable factors such as qualification, experience, industry standards etc. and evolve an appropriate policy in course of time once the Company starts making adequate profits.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
During the financial year 2015-16, the Company has not provided any loan to any person or body corporate or given any guarantee or provided security in connection with such loan or made any investment in the securities of anybody corporate pursuant to Section 186 of the Companies Act, 2013. The Company has given advance against salary to some employees in terms of the applicable policies of the Company.
SEXUAL HARASSMENT
During the year under review, there was not a single incident under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013.
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year five Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
AUDIT COMMITTEE
The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.
DIRECTORS/KEY MANAGEMENT PERSONNEL
Shri Laxmikumar Narottam Goculdas (holding DIN 00459347), Director, is retiring by rotation in accordance with the requirements of the Act and under the Article 135 of the Articles of Association of the Company, and being eligible, offer himself for re-appointment.
Shri Shantilal Tejshi Shah an Independent Directors resigned on 10th August, 2016 due to his personal commitments. It is not proposed to fill up the vacancy at present, since the Company is still complied as regards composition of the Board.
The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.
During the year, the non-executive Directors of the Company had no pecuniary relationship or transactions with the Company.
The Company continues its operations under the leadership of the Senior Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas, Chief Executive Officer, Shri D. T. Gokhale, Executive Vice President and Company Secretary and Shri D. K. Sundaram, Chief Finance Officer, who are the Key Managerial Personnel.
The Nomination and Remuneration Committee, at its meeting held on 12th February, 2016 recommended and the Board of Directors of the Company at its Board Meeting held on 12th February, 2016 have re-appointed Shri Bimal Lalitsingh Goculdas, subject to the approval of the shareholders by way of special resolution ( in view of inadequacy of profits ) at the ensuing Annual General Meeting as â Chief Executive Officerâ and âManagerâ of the Company within the meaning of the Companies Act, 2013, for a period of three years with effect from 1st April, 2016.
The proposed Remuneration and terms and conditions of appointment of Shri Bimal Lalitsingh Goculdas âChief Executive Officerâ and âManagerâ of the Company are as per the provisions of the Companies Act, 2013 and Schedule V thereto as given in the Special Resolution at item no. 5 of the accompanying Notice of the Meeting and the particulars contained therein are in accordance with the disclosures as required as per Schedule V Part II, Section II of the Companies Act, 2013:
The Board recommends the Resolution at Item No. 5 of the accompanying Notice for approval by the Members of the Company.
WHISTLE BLOWER POLICY
The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower policy has been posted on the website of the Company (www.dmcc.com).
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year under review were at arm''s length basis and were in the ordinary course of business.
There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
The Audit Committee and the Board of Directors at their meetings have reviewed and approved all the related party transactions undertaken by the Company during the Financial Year.
The related party transactions entered into by the Company are disclosed in Note no. XIII 7(E) of the Notes to Accounts.
All Related Party Transactions are placed/routed through the Audit Committee and the Board of Directors.
None of the Directors has any pecuniary relationships or transactions with the Company.
The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website.
RISK MANAGEMENT POLICY
The Company has formulated a Risk Management Policy which reflects the overall risk management philosophy, the Company''s overall approach to risk management, risk assessment, risk mitigation mechanism and the roll and responsibilities for risk management. Risk management forms an integral part of the business planning and review cycle.
The Company''s Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safe guarding the integrity of the Company''s financial reporting and its related disclosures.
The identification and analysis of and putting in place the process for mitigation of these risks is an ongoing process. The Company has also laid down procedure to inform the Audit Committee and the Board about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management control risks by means of a properly defined frame work.
The monthly review meetings of all the functional/departmental heads interalia discuss the relative risk management issues.
INSIDER TRADING
In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulation 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a code of conduct to Regulate, Monitor and Report Trading by Insiders (âInsider Trading Code'') and code of Practices and Procedures for Fair Disclosure of unpublished Price Sensitive Information (âCode of Fair Disclosure'').
The Insider Trading Code is intended to prevent misuse of unpublished price sensitive information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive and benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.
The code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the need and interest of all the Stakeholders.
ENVIRONMENT HEALTH AND SAFETY (EHS)
In the Company, it has been our prime endeavour to achieve environment health and safety (EHS). We thrive to achieve the objective by ensuring accident free work place. We have various EHS management processes and methodologies being deployed and implemented under the EHS to ensure that our employees become more safety conscious and strive to improve the organizationâs approach towards loss prevention.
The Company has a system of in house EHS training for employees and workmen at the factory as also the practice of sending the employees/ workmen to various external EHS programmes.
All these EHS endeavours help the Company in its efforts in preventing loss of life and property damage.
AUDITORS
Messers. K.S.Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W, who are the Statutory Auditors of your Company, hold office until the conclusion of the 96th Annual General Meeting of the Company to be held in the year 2017 (subject to ratification of their appointment at every AGM). It is proposed to ratify the appointment of Messers. K.S.Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W as Statutory Auditors of the Company from the conclusion of this AGM till the conclusion of the 96th AGM. Messrs. K.S. Aiyar & Co., Chartered Accountants, under Section 139 of the Act, furnished a certificate of its eligibility for re-appointment. The Members are requested, to ratify their appointment as Statutory Auditors and to authorize the Board of Directors to fix their remuneration. In this connection, the attention of the Members is invited to item No.3 of the Notice.
AUDITORSâ OBSERVATIONS
In respect of the Auditors'' observation (in quotes):
âThe Company had recognized net deferred tax asset in earlier years aggregating to Rs.2654.15 lacs till 31st March, 2009, considering unabsorbed loss upto 31st March, 2008 and unabsorbed depreciation up to 31st March, 2009. For the subsequent financial periods, further net deferred tax asset has not been recognized in view of managementâs perceptions and reason detailed in Note No.V(c). We are not in a position to opine on the realisability of the said net deferred Tax Asset. Consequently, the Accumulated losses as at the end of the year would have been higher by Rs.2654.15 Lacsâ.
The managements perception and reasons are detailed in Note no.V(c), and the same is reproduced here below:
Deferred Tax Assets (Net)
The break-up of the Deferred Tax Liability / (Deferred Tax asset) as on 31.03.2016 and 31.03.2015, recognized by the Company in the books of account, is as follows:
|
Particulars |
As at 31-03-2016 Rs. In Lacs |
As at 31-03-2015 Rs. In Lacs |
|
Deferred Tax Liabilities : |
|
|
|
Difference between book and tax depreciation |
1611.05 |
1611.05 |
|
Others |
221.90 |
221.90 |
|
Total |
1832.95 |
1832.95 |
|
Deferred Tax Assets : |
|
|
|
Unabsorbed depreciation / Business loss |
3610.68 |
3610.68 |
|
Others |
876.42 |
876.42 |
|
Total |
4487.10 |
4487.10 |
|
Net Deferred Tax Liabilities / (Deferred Tax Assets) : |
(2654.15) |
(2654.15) |
The Company''s export business over the last three years has been steadily growing at an impressive rate. This has been possible due to appropriate marketing efforts coupled with quality consciousness on the part of the Company. The focused R & D activity to identify and develop relevant products meeting high quality standards has always remained vital to the Company''s business and efforts are undertaken to spread this message across the customer base both abroad as well as domestic. The Company is confident of improving the current growth rate substantially in overseas business in addition to consolidating the domestic market both in Speciality and Bulk chemicals. In the near term, the Company expects to achieve this objective by making use of the available unutilized capacity as well as building up additional capacity. The marketing team is also being strengthened. Consequently, there is virtual certainty of realization of âDeferred Tax assetâ mainly resulting from unabsorbed depreciation and carried forward losses. Accordingly, the recognized âDeferred Tax Assetâ of Rs.2654.15 Lacs as at 31.03.2009, without any addition, is being carried forward.
COST AUDITOR AND COST AUDIT REPORT
The Board of Directors, on the recommendation of Audit Committee has appointed Shri S.S. Dongare, Cost Accountant, as Cost Auditor of your Company to audit the cost accounts of the Company for Financial Year 2016-17 at remuneration of Rs. 66,000/- (Rupees Sixty Six Thousand Only) as also the payment of service tax as applicable and re-imbursement of actual out-of-pocket expenses incurred in connection with the aforesaid audit. As required under the Companies act, 2013, a resolution seeking members'' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. In accordance with the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company carries out an audit of cost records (Sulphuric Acid) maintained by the Company every year.
The cost Audit Report and the Compliance Report of your Company for the Financial Year ended 31st March, 2015, by Shri S.S. Dongare, Cost Accountant, which was due for filing with the Ministry of Corporate Affairs by 30th September, 2015, was duly filed on 12th October, 2015, accepted by the Government as filed in time.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as âAnnexure Iâ.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
A Corporate Social Responsibility Committee of the Directors was constituted earlier consisting of Shri L. N. Goculdas as Chairman, Shri H. T. Kapadia, Shri M. T. Ankleshwaria and Shri A. W. Ketkar as members of the Committee.
During the current year the committee has been reconstituted with Ms. Mitika Laxmikumar Goculdas as Chairman, Shri H. T. Kapadia, Shri M. T. Ankleshwaria and Shri A. W. Ketkar as members of the Committee.
The Committee met once during the year and due to the average net profit of last three years being negative, your Company is not required to spend any amount towards Corporate Social Responsibility activities during the year under review, is annexed herewith as âAnnexure IIâ.
However, as a gesture towards the Corporate Social Responsibility, the Company has donated an amount of Rs. 5,00,000/- (Rupees Five Lacs Only) to the Corbett Foundation for Assam Flood Relief.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri A. D. Gupte, FCS No.300, and C.P.No. 1210 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as âAnnexure IIIâ and forms integral part of this Report.
There is no qualification in the report of Secretarial Auditor, for the year under review.
PARTICULARS OF EMPLOYEES
The particulars of employees as required under section 197 and rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been furnished as there are no employees falling within the purview of the provisions of said section and the said rule during the period under review.
Information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in âAnnexure IVâ to this Report.
PUBLIC DEPOSITS
During the year 2015-16, your Company has not accepted/renewed any fixed deposit. The unclaimed deposits as on 31.03.2015 were Rs. 60,000/-. The Company had paid Rs. 20,000/- to depositors and paid/transferred Rs. 40,000/- to Investor Education and Protection Fund as required. Therefore no deposit has remained unclaimed as on 31 March, 2016.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3) (c) of the Companies Act, 2013:
(i) that in the preparation of the Annual Accounts for the year ended March 31, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;
(ii) the Directors had selected such accounting policies and applied them consistently and 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, 2016 and of the profit of the Company for the year ended on that date;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the annual accounts have been prepared on a going concern basis;
(v) that the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lay strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the Stock Exchange, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors'' Certificate on its compliance.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure-V and forms an integral part of this Report.
ACKNOWLEDGEMENTS
The Directors are thankful to your Company''s shareholders, customers, suppliers, and contractors, various departments of Central and State Governments and Banks for their continued valuable support. The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation, commitment, sense of understanding and the sacrifices made by them during the difficult and critical period which the Company is passing through. Management of your Company is confident that with the active co-operation from all the stake holder of the Company will be in a position to overcome this difficult phase.
For and on behalf of the Board
LAXMIKUMAR NAROTTAM GOCULDAS
Chairman
Registered Office
Prospect Chambers,
317/321, Dr. Dadabhoy Naoroji Road,
Fort, Mumbai 400 001.
Date : 10th August, 2016
Mar 31, 2013
The Directors are pleased to present their Ninety Second Annual Report,
together with the accounts of the Company for the financial year ended
31st March, 2013.
FINANCIAL RESULTS
Financial
Year ended Financial
Year ended
31st March,
2013 31st March,
2012
Rs. in lacs Rs. in lacs
Sales Turnover (Net of Excise Duty) 8559.15 8132.75
Gross Profit / (Loss) 244.27 87.73
Less: Depreciation 509.96 486.06
Add: Non recurring items 3591.07 Nil
Profit/(Loss) before Taxation 3325.38 (398.33)
Less: Provision for Taxation
Profitl(Loss) after Taxation 3325.38 (398.33)
Add: Balance brought forward (6227.11) (5828.78)
Balance carried forward (2901.73) (6227.11)
The following is the Sales Tumover
(Net of Excise Duty) by group of
products:
Single Superphosphate Nil Nil
Commodity Chemicals 2972.70 4138.99
Specialty. Chemicals 4478.04 3176.95
Others 1108.41 816.81
Total 8559.15 8132.75
In view of the accumulated losses, your Directors have not recommended
any Dividend on Cumulative Preference Shares and Equity Shares of the
Company, for the financial year ended 31s1 March, 2013.
CORPORATE FINANCIAL RESTRUCTURING
In furtherance to the requisite approval of the shareholders of the
Company obtained on 17th August, 2010, under Section 293(1) (a) of the
Companies Act, 1956, for the sale/transfer/disposal of its land,
factory buildings and plant and machinery at its Ambernath Factory,
steps are being taken to complete Corporate Financial Restructuring.
The Management is continuing its endeavors to complete the Corporate
Financial Restructuring, with a view to improve the operational and
financial performance of the Company.
ADEQUACY OF INTERNAL CONTROLS
Your Company has clearly laid down policies, guidelines and procedures
which form part of its internal control system. The Audit Committee of
the Board periodically reviews reports of Internal Auditors, inter
alia, on adherence by the operating Management of such policies and
procedures and suggests changes/modifications and improvements on a
continuous basis. The Company has strong, independent and adequate
system of internal controls to ensure that all assets are safeguarded
and protected against loss from unauthorized use or disposal and the
transactions are authorized, recorded and reported correctly. The
internal control systems are supplemented''by a programme of internal
audit.
HUMAN RESOURCE DEVELOPMENT
As an ongoing exercise of the restructuring and re-organisation, the
Company undertakes periodic comprehensive reviews of its HR policies
and amends the same suitably from time to time, to meet the emerging
business requirements.
DIRECTORS/KEY MANAGEMENT PERSONNEL
Shri H.T Kapadia and Shri M.T.Ankleshwaria, Directors, are retiring by
rotation under Article 135 of the Articles of Association of the
Company and being eligible , offer themselves for re- appointment.
The Company continues -its operations under the leadership of the
Senior Corporate Management Team comprising of Shri Bimal Lalitsingh
Goculdas, Chief Executive Officer, Shri. D.T.Gokhale, Executive Vice
President and Company Secretary and Shri D.K.Sundaram, Chief Finance
Officer.
AUDITORS'' OBSERVATIONS
As regards the Auditors'' observation regarding the Deferred Tax Asset
amounting to Rs. 2654.15 lacs as at the end of the Financial Year,
ending 31s" March, 2009, it may please be noted that, thereafter, in
view of the changed circumstances, the Company has not created any
additional Deferred Tax Asset.
The Company''s Export Chemical business has been growing since last
three years. The Company has also concentrated in R & D activity to
identify and develop new products with high quality standards. The
Company therefore expects to improve business growth in domestic and
export markets at an increasing rate. The Company is also putting
efforts in strengthening marketing strategy of the Company. In the
circumstances , the Board of Directors reasonably expect, barring
unforeseen circumstances, virtual certainty of realization of Deferred
Tax Asset, mainly resulting from un- absolved depreciation and carried
forward losses. Therefore, the said Deferred Tax Asset of Rs. 2654.15
Lacs as on 31st March, 2013 is being carried forward without any
addition thereto since the Financial Year ending 31s1 March, 2009.
As regards the Auditors'' observation regarding non compliance with
regard to the deposits accepted from public including non-filing of
returns of Fixed Deposit, it may please be noted that the Company has
not accepted or renewed any deposit from public and shareholders from
the financial year 2006-2007 onwards and there is no default in respect
of repayment of the matured Fixed Deposits and interest payable
thereon. The Company has filed the Fixed Deposit Return on 261* June,
2013 for the Financial Year 2012-13.
The Company has also deposited all the unclaimed deposit amounts which
are due for more than seven years with Investor Education and
Protection Fund.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
As per Section 217 of the Companies Act, 1956, read with The Companies
(Disclosure of Particulars in the report of Board of Directors) Rules,
1988, the relevant data pertaining to conservation of energy,
technology absorption and foreign exchange are given in the prescribed
format as an Annexure-I to this report.
PARTICULARS OF EMPLOYEES
During the financial year ended 31" March, 2013 there was no employee
within the purview of Sec.217(2A) of the Companies Act, 1956 read with
The Companies (Particulars of Employees) Rules, 1975.
PUBLIC DEPOSITS
Out of the unclaimed deposits of Rs. 1826000/-as on 31st March, 2012,
the Company has transferred/paid Rs. 1265000/-to Investor Education and
Protection Fund as required. In addition, Rs.50000/- have been paid to
the depositors, who claimed the same during the financial year
01.04.2012 to 31.03.2013. Therefore only 38 deposits aggregating to Rs.
511000/- have remained unclaimed as on 31st March, 2013.
AUDITORS
Mis. K. S. Aiyar & Co., Chartered Accountants, the existing Auditors
have, under Section 224 (1-B) of the Companies Act, 1956, furnished a
Certificate of their eligibility for re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed :
(i) That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of the affairs of the Company at the end of the financial year and of
the profit or loss of the Company for that period; .
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the years and the Board of Directors lays strong
emphasis on transparency, accountability and integrity. Your Company
has adopted a Code of Conduct which is approved by the Board of
Directors as required under the Listing Agreement with the Stock
Exchange, Mumbai. The Directors and the Management Staff have confirmed
their adherence to the provisions of the said code. Your Company has
also evolved a Risk Management Policy regarding risk assessment and
risk mitigation mechanism, which has been approved by the Board of
Directors. A separate report on Corporate Governance is annexed as a
part of the Annual Report, along with the Auditors'' Certificate on its
compliance.
ACKNOWLEDGMENTS
The Directors are thankful to your Company''s shareholders, customers,
suppliers, contractors, various departments of Central and State
Governments and Banks for their continued valuable support.
The relations between the employees and the management continue to be
cordial. Your Directors place on record their appreciation of the
sincere and devoted efforts of the employees at all levels and their
continued co-operation, commitment, sense of understanding and the
sacrifices made by them during the difficult and critical period which
the company is passing through.
Management of your Company is confident that with the active
co-operation from all the stake holder of the Company, the Company will
be in a position to overcome this difficult phase.
For and on behalf of the Board
LAXMIKUMAR NAROTTAM GOCULDAS
Chairman
Registered Office:
Prospect Chambers,
317/21, Dr. Dadabhoy Naoroji Road,
Fort, Mumbai - 400 001.
Date : 07th August, 2013.
Mar 31, 2012
The Directors are pleased to present their Ninety First Annual Report,
together with the accounts of the Company for the financial year ended
31st March, 2012. (Twelve months)
FINANCIAL RESULTS
Financial Year Financial Year
ended ended
31st March, 2012 31st March, 2011
(12 Months) (9 Months)
Rs. in lacs Rs. in lacs
Sales Turnover (Net of
Excise Duty) 8132.75 4295.80
Gross Profit/(Loss) 87.73 7.17
Less: Depreciation & Lenders'
sacrifice Amortisation 486.06 486.70
Profit/(Loss) before Taxation (398.33) (479.53)
Less: Provision for Taxation - -
Profit/(Loss) after Taxation (398.33) (479.53)
Add: Balance brought forward (5828.78) (5349.25)
Balance carried forward (6227.11) (5828.78)
The following is the Sales
Turnover (Net of Excise Duty)
by group of products:
Single Superphosphate - 4.50
Commodity Chemicals 4138.99 2063.83
Specialty Chemicals 3176.95 1802.12
Others 816.81 425.35
Total 8132.75 4295.80
The financial statements for the previous financial year were prepared
for a period of nine months commencing from 1st July, 2010 and ending
on 31st March, 2011. Therefore, the Sales Turnover for the Financial
Year ended 31st March, 2012 is not comparable with the Sales Turnover
for the previous Financial Year ended 31st March, 2011 (9 months).
In view of the loss during the year under review, your Directors have
not recommended any Dividend on Cumulative Preference Shares and Equity
Shares of the Company, for the financial year ended 31st March, 2012.
CORPORATE FINANCIAL RESTRUCTURING
In furtherance to the requisite approval of the shareholders of the
Company obtained on 17th August, 2010, under Section 293 (1) (a) of the
Companies Act, 1956, for the sale/transfer/disposal of its land,
factory buildings and plant and machinery at its Ambernath Factory,
steps are being taken to complete Corporate Financial Restructuring.
The Management is continuing its endeavors to complete the Corporate
Financial Restructuring, with a view to improve the operational and
financial performance of the Company.
ADEQUACY OF INTERNAL CONTROLS
Your Company has clearly laid down policies, guidelines and procedures
which form part of its internal control system. The Audit Committee of
the Board periodically reviews reports of Internal Auditors, inter
alia, on adherence by the operating Management of such policies and
procedures and suggests changes/modifications and improvements on a
continuous basis. The Company has a strong, independent and adequate
system of internal controls to ensure that all assets are safeguarded
and protected against loss from unauthorised use or disposal and that
transactions are authorised, recorded and reported correctly. The
internal control systems are supplemented by a programme of internal
audit.
HUMAN RESOURCE DEVELOPMENT
As an ongoing exercise of the restructuring and re-organisation, the
Company undertakes periodic comprehensive reviews of its HR policies
and amends the same suitably from time to time, to meet the emerging
business requirements.
DIRECTORS/KEY MANAGEMENT PERSONNEL
The Board regrets to inform the Shareholders about the sad and sudden
demise of Shri D.N. Vaze, Chief Finance Officer of the Company, on 9th
August 2012. He has been associated with the Company for the last many
years in various capacities. He has been guiding force to the
Management and staff of the Company. The Directors, the Management and
the Employees of the Company are deeply grieved at the sad and sudden
demise of Shri D.N. Vaze. The Board recognises and place on record
their appreciation for his deep sense of commitment, loyalty towards
the Company and the valuable contribution made by him in the Management
of the Company, especially during the financial crisis which the
Company had undergone.
Shri Arvind W. Ketkar and Shri Shantilal T. Shah, Directors, are
retiring by rotation under Article 135 of the Articles of Association
of the Company and being eligible, offer themselves for re-
appointment.
The Board of Directors of the Company at its meeting held on 4th
November, 2011, has appointed Ms. Mitika Laxmikumar Goculdas, as an
additional Director on the Board of Directors of the Company. Ms.
Mitika Laxmikumar Goculdas, is MBA (Finance) from Pennsylvania State
University, USA. She has total work experience of 16 years including
her stint as Vice President with Merrill Lynch both at USA and Dubai.
She has experience in Finance, Industry and International Trade. As per
provisions of Section 260 of the Companies Act, 1956 and Article 126 of
the Articles of Association of the Company, Ms. Mitika Laxmikumar
Goculdas, will hold office of Director upto the date of ensuing Annual
General Meeting. Appointment of Ms. Mitika Laxmikumar Goculdas, as a
Director liable to retire by rotation is proposed at Sr. No. 5 of the
Notice of the ensuing Annual General Meeting. Your Directors recommend
the appointment of Ms. Mitika Laxmikumar Goculdas, as Director of the
Company.
Subject to the approval of the Shareholders, the Board of Directors of
the Company at its meeting held on 2nd April, 2012 has re- appointed
Shri Bimal Lalitsingh Goculdas (who is also a Managing Director of
Borax Morarji Limited) as Chief Executive Officer and "Manager" of the
Company within the meaning of the Companies Act, 1956 for a period of 3
years with effect from 1st April, 2012.
AUDITORS' OBSERVATIONS
As regards the Auditors' observation regarding recognition of "Deferred
Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the
proposed association with a "Strategic Investor", is confident that
this proposed association will result in significant additional revenue
and profits.
As regards the Auditors' observation regarding Trade Receivables that
could not be classified as outstanding for a period of more than six
months from the due date instead of invoice date as required by the
revised Schedule VI to the Companies Act, 1956, the Management is of
the view that the revised classification does not have any material
impact on the financial statements except for the Presentation and
Disclosure of the same. However the necessary modification in the
existing computer programme is being carried out and the same will be
completed in due course of time during the current financial year
2012-2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
As per Section 217 of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the report of Board of Directors) Rules,
1988, the relevant data pertaining to conservation of energy,
technology absorption and foreign exchange are given in the prescribed
format as an Annexure-I to this report.
PARTICULARS OF EMPLOYEES
During the financial year ended 31st March, 2012 there was no employee
within the purview of Sec. 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975.
PUBLIC DEPOSITS
Out of deposits which matured during the financial year ended 31st
March, 2012, 151 deposits aggregating to Rs. 18,26,000/- remained
unclaimed as on 31st March, 2012, of which NH deposit amounting to Rs.
Nil has since been claimed and repaid.
AUDITORS
M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors
have, under Section 224 (1-B) of the Companies Act, 1956, furnished a
Certificate of their eligibility for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of the affairs of the Company at the end of the financial year and of
the profit or loss of the Company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the years and the Board of Directors lays strong
emphasis on transparency, accountability and integrity. Your Company
has adopted a Code of Conduct which is approved by the Board of
Directors as required under the Listing Agreement with the Stock
Exchange, Mumbai. The Directors and the Management Staff have confirmed
their adherence to the provisions of the said code. Your Company has
also evolved a Risk Management Policy regarding risk assessment and
risk mitigation mechanism, which has been approved by the Board of
Directors. A separate report on Corporate Governance is annexed as a
part of the Annual Report, along with the Auditors' Certificate on its
compliance.
ACKNOWLEDGMENTS
The Directors are thankful to your Company's shareholders, customers,
suppliers, contractors, various departments of Central and State
Governments and Banks for their continued valuable support.
The relations between the employees and the management continue to be
cordial. Your Directors place on record their appreciation of the
sincere and devoted efforts of the employees at all levels and their
continued co-operation, commitment, sense of understanding and the
sacrifices made by them during the difficult and critical period which
the company is passing through.
Management of your Company is confident that with the active
co-operation from all the stake holders of the Company, the Company
will be in a position to overcome this difficult phase.
For and on behalf of the Board
LAXMIKUMAR NAROTTAM GOCULDAS
Chairman
Registered Office:
Prospect Chambers,
317/21, Dr. Dadabhoy Naoroji Road,
Fort, Mumbai - 400 001.
Date :08th August, 2012.
Mar 31, 2011
Dear Members,
The Directors are pleased to present their Ninetieth Annual Report
together with the accounts of the Company for the financial year ended
31 st March, 2011 (nine months).
FINANCIAL RESULTS
Financial Year
ended Financial Year
ended
31s'March, 2011 301h June, 2010
(9 Months) (15 Months)
Rs. in lacs Rs. in lacs
Gross Turnover 4743.72 6584.40
Gross Profit / (Loss) 7.19 (2387.21)
Less: Depreciation & Lenders'
Sacrifice Amortisation 486.70 798.84
Profit/(Loss) before Taxation (479.51) (3186.05)
Less: Provision for Taxation 0.02 0.02
Profit/(Loss) after Taxation (479.53) (3186.07)
Add: Balance brought forward (8877.89) (5691.82)
Balance carried forward (9357.42) (8877.89)
The following is the Gross turnover
by group of products:
Single Superphosphate 4.50 41.15
Commodity Chemicals 2376.19 3443.30
Specialty Chemicals 1914.75 2745.13
Others 448.28 354.82
Total 4743.72 6584.40
The Company has closed the current financial year of nine months as on
31s" March, 2011 as decided by the Board of Directors of the Company.
Accordingly, financial statements for the current financial year have
been prepared for a period of nine months commencing from 1 st July,
2010 and ending on 31s1 March, 2011. Therefore, the Gross Turnover for
the Financial Year ended 31st March, 2011 is not comparable with the
Gross Turnover for the previous Financial Year ended 30th June, 2010(15
months).
In view of the loss during the year under review, your Directors have
not recommended any Dividend on Cumulative Preference Shares and Equity
Shares of the Company, for the nine months financial year ended 31st
March, 2011.
DIRECTORS/KEY MANAGEMENT PERSONNEL
Shri Laxmikumar Narottam Goculdas and Shri M.T. Ankleshwaria,
Directors, are retiring by rotation under Article 135 of the Articles
of Association of the Company and being eligible, offer themselves for
re- appointment.
Shri D. P. Goculdas, Chief Executive Officer (Agri. Business) of the
Company resigned from the services of the Company with effect from 6th
April, 2011. The Board places on record its appreciation for the
valuable contributions made by Shri D. P. Goculdas, during his tenure
of services with the Company.
The Company continues its operations under the leadership of the Senior
Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas,
Chief Executive Officer, Shri D. N. Vaze, Chief Finance Officer and
Shri D.T.Gokhale, Vice President (Legal/ Corporate Affairs) and Company
Secretary.
AUDITORS' OBSERVATIONS
As regards the Auditors' observation regarding recognition of "Deferred
Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the
proposed association with a "Strategic Investor", is confident that
this proposed association will result in significant additional revenue
and profits.
As regards the Auditors' observation regarding crediting of "Waived
Dues" aggregating to Rs. 3362.76 lacs (representing only the principal
amount of borrowings ) to the "Capital Reserve" of the Company, this
amount has been credited to the "Capital Reserve" since these "Waived
Dues" are of capital nature. Further, this treatment of crediting the
"Waived Dues" to the "Capital Reserve" (instead of crediting the same
to the Profit-and Loss Account) is in compliance with the applicable
Accounting Standards referred to in sub-section ( 3C) of Section 211 of
the Companies Act, 1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
As per Section 217 of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the report of Board of Directors) Rules,
1988, the relevant data pertaining to conservation of energy,
technology absorption and foreign exchange are given in the prescribed
format as an Annexure-I to this report.
PARTICULARS OF EMPLOYEES
During the nine months financial year ended 31st March, 2011 there was
no employee within the purview of Sec.217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975.
PUBLIC DEPOSITS
Out of deposits which matured during the nine months financial year
ended 31 * March, 2011,171 deposits aggregating to Rs. 18,88,000/-
remained unclaimed as on 31st March, 2011, of which 4 deposits
amounting to Rs. 42,000/- have since been claimed and repaid.
AUDITORS
M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors
have, under Section 224 (1-B) of the Companies Act, 1956, furnished a
Certificate of their eligibility for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the annual account?, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the State
of the affairs of the Company at the end of the financial year and of
the profit or loss of the Company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the years and the Board of Directors lays strong
emphasis on indecency, accountability and integrity. Your Company
has adopted a Code of Conduct which is approved by the Board of
Directors as required under the Listing Agreement with the Stock
Exchange, Mumbai. The Directors and the Management Staff have confirmed
their adherence to the provisions of the said code. Your Company has
also evolved a Risk Management Policy regarding risk assessment and
risk mitigation mechanism, which has been approved by the Board of
Directors. A separate report on Corporate Governance is annexed as a
part of the Annual Report, along with the Auditors' Certificate on its
compliance.
ACKNOWLEDGMENTS
The Directors are thankful to your Company's shareholders, customers,
suppliers, contractors, various departments of Central and State
Governments and Banks for their continued valuable support.
The relations between the employees and the management continue to be
cordial. Your Directors place on record their appreciation of the
sincere and devoted efforts of the employees at all levels and their
continued co-operation, commitment, sense of understanding and the
sacrifices made by them during the difficult and critical period which
the company is passing through.
Management of your Company is confident that with the active
co-operation from all the stake holders of the Company, the Company
will be in a position to overcome this difficult phase.
For and on behalf of the Board
Laxmikumar Narottam Goculdas
Chairman
Registered Office:
Prospect Chambers,
317/21, Dr. Dadabhoy Naoroji Road,
Fort, Mumbai - 400 001.
Date : 25th July, 2011.
Jun 30, 2010
The Directors are pleased to present their Eighty Ninth Annual Report
together with the accounts of the Company for the extended financial
year ended 30th June, 2010 (fifteen months).
FMANCIAL RESULTS
Financial Year ended Financial Year ended
30th June, 2010 31st March, 2009
(15 Months) (18 Months)
Rs. in lacs Rs. in lacs
Gross Turnover 6584.40 17677.35
Gross Profit/(Loss) (2387.21) (2054.57)
Less: Depreciation & Lenders
sacrifice Amortisation 798.84 1158.99
PmW(Loss) before Taxation (3186.05) (3213.26)
Add: Deferred Tax Asset 0.00 505.98
Profit/(Loss) after considering
Deferred Tax Asset (3186.05) (2707.28)
Less: Provision for Taxation
/Fringe Benefit Tax 0.02 18.04
Profil/(Loss) after Taxation (3186.07) (2725.32)
Add: Balance brought forward (5691.82) (2966.30)
Balance carried forward (8877.89) (5691.82)
The following is the gross
turnover by group of products:
Single Superphosphate 41.15 1690.68
Commodity Chemicals 3443.30 10243.66
SpeoaKtyOieiriicate 2745.13 4135.62
Others 354.82 1607.39
Total 6584.40 17677.35
The Company has extended the current financial year by three months
upto 30* June, 2010 in accordance with the provisions of Sec.210 (4) of
the Companies Act, 1956. Accordingly, financial statements for the
current financial year have been prepared for a period of fifteen
months commencing from 1st April, 2009 and ending on 30* June, 2010.
In view of the loss during the year under review, your Directors have
not recommended any Dividend on Cumulative Preference Shares and Equity
Shares of the Company, for the extended financial year ended 30* Jane,
2010.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
(a) Overview of operations
(i) The Companys fertiliser business continued to get adversely
affected inter alia due to strained liquidity and shortage of Working
Capital. This has forced your Company to reduce volumes of the
fertiliser business, during the year under review. Consequently the
turnover in respect of fertilizers during the current financial year
ended 30* June, 2010 was very small.
(it) The turnover of Commodity Chemicals during the current financial
year ended 30*1 June, 2010 was also lower at Rs. 34 crates as compared
to the turnover of Rs. -102 crores. during the previous financial year
ended 31st March, 2009 mainly due to substantial reduction in seang
prices. The turnover of Speciality Chemicals during the current
financial year was also lower at Rs. 27 crores, as compared to the
turnover of Rs. 41 crores during the previous financial year ended 31s1
March, 2009, due to reduction in selling prices as wefl as lower
volumes. The selling prices of both Commodity Chemicals and Speciality
Chemicals were lower during the current financial year, mainly due to
substantial reduction in the purchase prices of the main raw material
viz. sulphur.
Prospects in the Industry:
Fertilisers and Chemicals
The Companys Fertilisers and Chemical businesses continue to be
adversely affected by severe working capital constraints experienced by
the Company, resulting in reduced capacity utilization. The Company
expects to increase its capacity utilization, after completing
Corporate Financial Restructuring.
Cautionary Statement
Statements in this "Management Discussion and Analysis Report"
describing the Companys objectives, projections, estimates,
expectations or predictions may be considered as "forward looking
statements" within the meaning of applicable securities laws and
regulations. Many factors may affect the actual results, which could be
different from what the Directors envisage in terms of the future
performance and outlook.
CORPORATE FINANCIAL RESTRUCTURING
The Management is continuing its endeavors for Corporate Financial
Restructuring, with a view to improve the operational and financial
performance of the Company. Towards this end, the Company has obtained
the requisite approval of its shareholders under Section 293 (1) (a) of
the Companies Act, 1956 for sale/transfer/disposal of its land, factory
buildings and plant and machinery at its Ambernath Factory.
ADEQUACY OF INTERNAL CONTROLS
Your Company has clearly laid down policies, guidelines and procedures
which form part of its internal control system. The Audit Committee of
the Board periodically reviews reports of Internal Auditors, inter
alia, on adherence by the operating Management of such policies and
procedures and suggests changes/modifications and improvements on a
continuous basis. The Company has a strong, independent and adequate
system of internal controls to ensure that all assets are safeguarded
and protected against loss from unauthorised use or disposal and that
transactions are authorised, recorded and reported correctly. The
internal control systems are supplemented by a programme of internal
audit.
HUMAN RESOURCE DEVELOPMENT
As an ongoing exercise of the restructuring and re-organisation, the
Company has undertaken periodic comprehensive reviews of its HR
policies and amended the same suitably from time to time.
DIRECTORS
During the period under report, we lost the beloved Chairman of our
Company, Shri Ranchhoddas Mathradas Goculdas on 9th November, 2009. He
had a very long association with the Company as a Director from 6th
May, 1961 and the Chairman of the Company from 8th May, 1978. He was a
versatile personality with a vision. He was the guiding force and an
architect of various corporate decisions and policies of the Company.
The Board of Directors place on record its deep sense of appreciation
for the invaluable contribution made by late Shri Ranchhoddas Mathradas
Goculdas over several decades, during his long tenure with the Company.
Consequent upon the sad demise of late Shri Ranchhoddas Mathradas
Goculdas on 991 November, 2009, Shri Laxmikumar Narottam Goculdas (the
then Vice Chairman of the Company) was elected as the Chairman of the
Company as well as the Chairman of the Board of Directors of the
Company, from 10th November, 2009.
During the period under review, Shri C.B. Nalawala ceased to be a
Director of the Company from 10th September, 2009. Shri Kumar Bakhru a
nominee Director of General Insurance Corporation of India, also ceased
to be a Director of the Company from 23rd January, 2010. The Board of
Directors place on record their appreciation for the valuable guidance
and advise given by both of them to the Company during their long
association with the Company as also the contributions made by both of
them during the deliberations at the Board Meetings of the Company.
Shri H.T.Kapadia, a Director, is retiring by rotation under Article 135
of the Articles of Association of the Company and being eligible,
offers himself for re-appointment.
The Board of Directors of the Company at its meeting held on 22nd
January, 2010, has appointed Shri Arvind W. Ketkar as an Additional
Director - on the Board of Directors of the Company. Shri Arvind W.
Ketkar has in-depth knowledge in Finance and Accounting and has been in
practice as a Chartered Accountant for over thirty nine years. As per
provisions of Section 260 of the Companies Act, 1956 and Article 126 of
the Articles of Association of the Company, Shri Arvind W. Ketkar will
hold office of Director upto the date of ensuing Annual General
Meeting. Appointment of Shri Arvind W. Ketkar as a Director liable to
retire by rotation is proposed at Sr. No. 4 of the Notice of the
ensuing Annual General Meeting. Your Directors recommend the
appointment of Shri Arvind W. Ketkar, as Director of your Company.
The Board of Directors of the Company at its meeting held on 27th July,
2010, has appointed Shri Shantilal T. Shah as an Additional Director on
the Board of Directors of the Company. Shri Shantilal T. Shah is in
Chemical business for last 45 years and has got vast experience in
marketing, finance and administration of the Chemical Industry. As per
provisions of Section 260 of the Companies Act, 1956 and Article 126 of
the Articles of Association of the Company, Shri Shantilal T. Shah will
hold office of Director upto the date of ensuing Annual General
Meeting. Appointment of Shri Shantilal T. Shah as a Director liable to
retire by rotation is proposed at Sr. No. 5 of the Notice of the
ensuing Annual General Meeting. Your Directors recommend the
appointment of Shri Shantilal T. Shah, as Director of your Company.
AUDITORSOBSERVATION
As regards the Auditors observation regarding recognition of "Deferred
Tax Asset" amounting to Rs. 2654.15 lacs, the Company, based on the
proposed association with a "Strategic Investor", is confident that
this proposed association will result in significant additional
turnover and profits.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
As per Section 217 of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the report of Board of Directors) Rules,
1988, the relevant data pertaining to conservation of energy,
technology absorption and foreign exchange are given in the prescribed
format as an Annexure-I to this report.
PARTICULARS OF EMPLOYEES
During the extended financial year ended 30th June, 2010, there was no
employee within the purview of Sec.217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) RuIps, 1975.
PUBLIC DEPOSITS
Out of deposits which matured during extended financial year ended 30*
June, 2010,172 deposits aggregating to Rs. 21,91,000/- remained
unclaimed as on 30th June, 2010, of which 1 deposit amounting to Rs.
10,000/- has since been claimed and repaid.
AUDITORS
M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors
have, under Section 224 (1 -B) Of the Companies Act, 1956, furnished a
Certificate of their eligibility for re-appointment.
DIRECTORSRESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of the affairs of the Company at the end of the financial year and of
the profit or loss of the Company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the years and the Board of Directors lays strong
emphasis on transparency, accountability and integrity. Your Company
has adopted a Code of Conduct which is approved by the Board of
Directors as required under the Listing Agreement with the Stock
Exchange, Mumbai. The Directors and the Management Staff have confirmed
their adherence to the provisions of the said code. Your Company has
also evolved a Risk Management Policy regarding risk assessment and
risk mitigation mechanism,which has been approved by the Board of
Directors. A separate report on Corporate Governance is annexed as a
part of the Annual Report, along with the Auditors Certificate on its
compliance.
ACKNOWLEDGMENTS
The Directors are thankful to you and your Companys customers,
suppliers, contractors, various departments of Central and State
Governments, Financial Institutions and Banks for their continued
valuable support.
The relations between the employees and the management continue to be
cordial. Your Directors place on record their appreciation of the
sincere and devoted efforts of the employees at all levels and their
continued co-operation, commitment, sense of understanding and
sacrifices shown by them during the difficult and critical period which
the company is passing through.
Management of your Company is confident that with active co-operation
from all employees, the Company will be in a position to overcome this
difficult phase.
For and on beharf of the Board
L. N. GOCULDAS
Chairman
Registered Office:
Prospect Chambers,
317/21, Dr. Dadabhoy Naoroji Road,
Fort, Mumbai - 400 001.
Date : 3rd November, 2010.
Mar 31, 2009
The Directors are pleased to present their Eighty Eighth Annual Report
together with the accounts of the Company for the extended financial
year ended 31st March, 2009 (eighteen months).
FINANCIAL RESULTS
Financial Year ended Financial Year ended
31 st March, 2009 30th September, 2007
(18 Months) (18 Months)
Rs. in lacs Rs. in lacs
Gross Turnover 17677.35 28125.53
Gross Profit / (Loss) (2054.27) (2486.15)
Less : Depreciation &
Lenders sacrifice
Amortisation 1158.99 1260.13
Profit/(Loss) before
exceptional Item & Taxation (3213.26) (3746.28)
Add: Exceptional Item
Waiver of dues by Banks
/Financial Institution by
One Time Settlement Nil 139.31
Profit/(Loss) after exceptional
Item but before Taxation (3213.26) (3606.97)
Add: Deferred Tax Asset 505.98 2148.17
Profit/(Loss) after exceptional
Item and after considering
Deferred Tax Asset (2707.28) (1458.80)
Less: Provision for Taxation/
Fringe Benefit Tax 18.04 25.05
Profit/(Loss) after Taxation (2725.32) (1483.85)
Add: Balance brought forward (2966.50) (1482.65)
Balance carried forward (5691.82) (2966.50)
The following is the gross
turnover by group of products:
Single Superphosphate 1690.68 8487.21
Commodity Chemicals 10243.66 11054.28
Speciality Chemicals 4135.62 7974.10
Others 1607.39 609.94
17677.35 28125.53
The Company has extended the current financial year by six months upto
31st March, 2009 in accordance with the approval received by the
Company from the Registrar of Companies, Maharashtra State, Mumbai.
Accordingly, financial statements for the current financial year have
been prepared for a period of eighteen months commencing from 1st
October, 2007 and ending on 31st March, 2009.
In view of the loss during the year under review, your Directors have
not recommended any Dividend on Cumulative Preference Shares and Equity
Shares of the Company, for the extended financial year ended 31 st
March, 2009.
PROPOSAL FOR ONE TIME SETTLEMENT (O.T.S.) OF DUES TO SECURED LENDERS
The Company had submitted a proposal to its Secured Lenders to settle
their dues by way of One Time Settlement (O.T.S.) As the shareholders
are aware, the proposal was accepted by one of the Secured Lenders and
their dues have been settled accordingly. The Companys proposal is
under consideration of the remaining Secured Lenders.
ADEQUACY OF INTERNAL CONTROLS
Your Company has clearly laid down policies, guidelines and procedures
which form part of its internal control system. The Audit Committee of
the Board periodically reviews reports of Internal Auditors, inter
alia, on adherence by the operating Management of such policies and
procedures and suggests changes/modifications and improvements on a
continuous basis. The Company has a strong, independent and adequate
system of internal controls to ensure that all assets are safeguarded
and protected against loss from unauthorised use or disposal and that
transactions are authorised, recorded and reported correctly. The
internal control systems are supplemented by an extensive programme of
internal audit.
HUMAN RESOURCE DEVELOPMENT
As an ongoing exercise of the restructuring and re-organisation, the
Company has undertaken periodic comprehensive reviews of its HR
policies and amended the same suitably from time to time.
RESEARCH & DEVELOPMENT
Inspite of heavy odds, your Company has continued its Research and
Development initiatives and endeavours, keeping in view the long term
perspective for growth.
SUBSIDIARY
The audited statements of accounts of DMCC Oil Terminals (Navlakhi)
Limited (DOTL), a subsidiary of the Company, for the extended financial
year ended 30th September, 2007, together with the reports of its
Directors and Auditors are attached to the accounts of the Company, as
required under Section 212 of the Companies Act, 1956.
DIRECTORS
During the year under review, Shri R. Kannan, Nominee Director of ICO
Bank Ltd, resigned from the Board of Directors, effective 22nd January
2008, consequent upon the withdrawal of his nomination by ICICI Bank
Ltd. Mrs. U. D. Morarji also resigned from the Board of Directors,
effective 8th December 2008. The Board of Directors place on record
their appreciation for the valuable guidance and advice given by both
of them to the Company during their long association with the Company
as also the contributions made by both of them during the deliberations
at the Board meetings.
Shri OB. Nalawala, a Director, is retiring by rotation at the
conclusion of the ensuing Annual General Meeting of the Company,
scheduled to be held on 9th September, 2009. Although eligible, he does
not offer himself for re-appointment. Shri. C. B. Nalawala was on the
Board of the Company since March, 2002. The Board of Directors place on
record their appreciation for the valuable guidance and advice given by
him to the Company, during his long association with the Company as
also the contribution made by him during the deliberations at the Board
meetings and the Audit Committee meetings during his tenure as a
director and Chairman of the Audit Committee, respectively.
The Board of Directors of the Company, at its meeting held on 31st July
2009, has appointed Shri M.T. Ankleshwaria as an additional Director on
the Board of Directors of the Company. Shri M.T. Ankleshwaria has
indepth knowledge in Finance and Accounting and has been in practice as
a Chartered Accountant, for over three decades. Mr. Ankleshwaria is
also the Head of Department of Accountancy at N.M.College of Commerce &
Economics, Vile Parle (W), Mumbai 56. As per provisions of Section 260
of the Companies Act, 1956, and Article 126 of the Articles of
Association of the Company. Shri M.T. Ankleshwaria will hold office of
Director upto the date of ensuing Annual General Meeting. Appointment
of Shri M.T. Ankleshwaria as a Director liable to retire by rotation
is proposed at Sr.No.3 of the Notice of the ensuing Annual General
meeting. Your Directors recommend the appointment of Shri M.T.
Ankleshwaria, as a Director of your Company.
Shri Dilip Pratapsingh Goculdas was appointed as Managing Director
(Agri Business) of the Company for a period of two years with effect
from 1st April, 2007. Subject to the approval of the shareholders at
the ensuing Annual General meeting, he has now been appointed as Chief
Executive Officer (Agri Business) and "Manager" under the Companies
Act, 1956, for a period of three years with effect from 1 st April,
2009.
Shri Bimal Lalitsingh Goculdas was appointed as Managing Director
(Chemical Business) of the Company for a period of two years with
effect from 1st April, 2007. Subject to the approval of the
shareholders at the ensuing Annual General meeting, he has now been
appointed as Chief Executive Officer (Chemical Business) and "Manager"
under the Companies Act, 1956, for a period of three years with effect
from 1st April, 2009.
Shri Dilipkumar Nilkanth Vaze was appointed as Executive Director
(Finance) of the Company for a period of three years with effect from
1st April, 2006. He has now been appointed as Chief Finance Officer of
the Company, with effect from 1st April, 2009.
AUDITORS OBSERVATIONS
1. As regards the Auditors observation regarding the non-compliance
of the certain conditions of the revised Corporate Debt Restructuring
(CDR) package, the Management is in the process of complying with the
same, in due course of time.
2. As regards the Auditors observation regarding non-provision of
interest of Rs. 785.82 lacs, the Company has not recognized this
interest amount since the banks concerned have not debited the same to
the respective accounts of the Company.
3. As regards the Auditors observation regarding recognition of
"Deferred Tax Asset" amounting to Rs.2654.15 lacs, the Company, based
on the proposed association with a "Strategic Investor", is confident
that this proposed association will result in significant additional
turnover and profits.
4. As regards the Auditors observation regarding preparing the Annual
Accounts on a "Going Concern Basis", notwithstanding the negative net
worth of the Company as on 31st March, 2009, the Managements views are
as under:
Though the net worth of the Company as on 31st March, 2009 is negative,
the Company has prepared Financial Statements for the year ended 31st
March, 2009 (eighteen months), on a "Going Concern Basis", since the
Company is confident that its profitability will improve in future, in
view of the following :
a. a new activity of trading (in various fertilisers & other agri
inputs) which the Company will commence in association with a "
Strategic investor" after completing OTS of dues to Banks and
b. Continuing efforts by the Company for improving efficiency,
restructuring/rationalisation of operations and optimisation of costs.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
As per Section 217 of the Companies Act, 1956, read with Companies
(Disclosure of Particulars in the report of Board of Directors) Rules,
1988, the relevant data pertaining to conservation of energy,
technology absorption and foreign exchange are given in the prescribed
format as an Annexure-I to this report.
PARTICULARS OF EMPLOYEES
During the extended financial year ended 31st March, 2009 there was no
employee within the purview of Sec.217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975.
PUBLIC DEPOSITS
Out of deposits which matured during extended financial year ended 31st
March, 2009, 173 deposits aggregating to Rs. 22,06,000/- remained
unclaimed as on 31st March 2009, of which 1 deposit amounting to Rs.
15,000 has since been claimed and repaid.
AUDITORS
M/s. K S Aiyar & Co., Chartered Accountants, the existing Auditors
have, under Section 224 (1-B) of the Companies Act, 1956, furnished a
Certificate of their eligibility for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed :
(i) That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) That the Directors have selected such accounting policies and
appliedthem consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of the affairs of the Company at the end of the financial year and of
the profit or loss of the Company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the years and the Board of Directors lays strong
emphasis on transparency, accountability and integrity. Your Company
has adopted a Code of Conduct which is approved by the Board of
Directors as required under the Listing Agreement with the Stock
Exchange, Mumbai. The Directors and the Management Staff have confirmed
their adherence to the provisions of the said code. Your Company has
also evolved a Risk Management Policy regarding risk assessment and
risk mitigation mechanism, which has been approved by the Board of
Directors. A separate report on Corporate Governance is annexed as a
part of the Annual Report, along with the Auditors Certificate on its
compliance.
ACKNOWLEDGMENTS
The Directors are thankful to your Companys customers, suppliers,
contractors, various departments of Central and State Governments,
Financial Institutions and Banks for their continued valuable support.
The relations between the employees and the management continue to be
cordial. Your Directors place on record their appreciation of the
sincere and devoted efforts of the employees at all levels and their
continued co-operation, commitment, sense of understanding and
sacrifices shown by them during the difficult and critical period which
the company is passing through.
Management of your Company is confident that with active co-operation
from all employees, the Company will be in a position to overcome this
difficult phase.
For and on behalf of the Board
R. M. GOCULDAS
Chairman
Registered Office:
Prospect Chambers, 317/21, Dr. Dadabhoy Naoroji Road, Fort, Mumbai -
400 001.
Date :31st July, 2009.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on DMCC Speciality Chemicals Ltd.
-
DMCC Speciality Chemicals Ltd. Tools
- Bulk Deals
-
DMCC Speciality Chemicals Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Rights
- BSE Price History
- NSE Price History
-
DMCC Speciality Chemicals Ltd. Key Financial Ratios
- Ratios
-
DMCC Speciality Chemicals Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
DMCC Speciality Chemicals Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
DMCC Speciality Chemicals Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
DMCC Speciality Chemicals Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
