Mar 31, 2015
TO THE MEMBERS OF ORGANIC COATINGS LIMITED
The directors are pleased to present the 50th Annual Report and the
Company's Audited Financial Statement for the financial year ended
March 31, 2015.
FINANCIAL RESULTS
The Company's financial performance for the year ended March 31, 2015
is summarized below:
(In Lacs)
2014-15 2013-14
Profit before Interest, Depreciation, Tax 220.52 1043.58
(Previous year includes Exceptional item on
Profit of Rs. 1200.51 Lacs for sale of
land and building of Thane Unit)
Less: Finance Cost 194.21 256.46
26.31 787.12
Less: Depreciation 140.76 162.57
(Loss)/Profit for the year before tax (114.45) 624.55
Less/(Add): Exceptional Items - 207.62
(114.45) 416.93
Excess Depreciation of earlier years
written back (2.11) (2.43)
Loss/Profit after Exceptional Items &
before tax (112.34) 419.36
Less: Provision for current taxation (net) 0.00 0.01
Less: Prior year's Income Tax 0.06 0.07
(Loss) / Profit after tax (112.40) 419.28
RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY
* Revenue from operations (net) increased by 9.1% to Rs. 4557.18 Lacs
from Rs. 4176.99 Lacs in the previous year.
* PBDIT decreased by 78.89% to Rs. 220.52 Lacs for the year ended 31st
March, 2015 compared to previous year Rs. 1043.58 Lacs (after
considering the exceptional items for sale of assets and land at Thane
in the previous year).
* PBDIT increased by 240.52% to Rs. 220.52 Lacs for the year ended 31st
March, 2015 compared to loss of Rs. 156.93 Lacs in the previous year
(before considering exceptional items for sale of assets and land at
Thane in the previous year).
* Net Profit declined by 126.81% due to Loss of Rs. 112.40 Lacs for the
year ended 31st March, 2015 compared to profit of Rs. 419.28 Lacs in
the previous year.
The financial year 2014-15 was the first year of the full operations at
Baroda after disposal of Thane Unit.
There are no material changes and commitments have occurred after the
close of the financial year till the date of this report, which affect
the financial position of the Company except that the Company has
entered into Marketing and Distribution Agreement with M/s. Heidelberg
India Pvt. Ltd. for exclusive Marketing and Distribution in India of
its products viz. all Sheetfed products which includes Low Segment, Mid
Segment, Higher End Segment Inks, Spot Color Inks, Specialty Inks, UV
Inks & Coatings and Water-based Inks & Coatings In the opinion of the
management, this should have positive have impact on the performance of
the Company from the financial year 2015-16 onwards.
DIVIDEND ANDTRANSFERTO RESERVE
In view of the loss the Directors are unable to recommend any dividend
and no amount is transferred to Reserves & Surplus forthe financial
year 2014-15.
MANAGEMENT DISCUSSION AND ANALYS IS STATEMENT AND CORPORATE GOVERNANCE
REPORT
The statement on Management Discussion and Analysis and report on
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with Stock Exchange, forms part of the Annual Report is
provided in Annexure I.
A certificate of the auditors of the Company, Soman Uday & Co.,
Chartered Accountants, confirming compliance of the conditions of
corporate governance as stipulated in Clause 49 is annexed.
DIRECTORS'RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts forthe year ended March
31,2015, the applicable accounting standards read with requirements set
out under Schedule III to the Act have been followed and there are no
material departures from the same;
b) 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 affairs
of the Company as at March 31,2015 and of the loss of the Company for
the year ended on that date;
c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis.
e) Proper internal financial controls laid down by the Directors were
followed by the Company and that Such internal financial controls are
adequate and were operating effectively.
f) Proper systems to ensure compliance with the provisions of all
applicable laws were in place and that such system were adequate and
operating effectively.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties wherein ordinary course of
business and on arms length basis and that the provisions of Section
188 of the Companies Act, 2013 are not attracted. Thus disclosure in
Form AOC-2 is not required.
Your Directors draw attention of the members to Note 31 to the
financial statement which sets out related party disclosures.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions relating to Corporate Social Responsibility (CSR) under
section 135 of the companies Act, 2013 are not applicable to the
Company.
RISKMANAGEMENT
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in (a) Overseeing and approving the Company's enterprise wide
risk management framework (b) Overseeing that all the risks that the
organization faces such as strategic financial, credit, market,
liquidity, security, property, IT, legal, regulatory, reputational and
other risks have been identified and assessed and there is an adequate
risk management infrastructure in place capable in addressing those
risks. Risk Management Policy was reviewed and approved by the
Committee. The Company manages, control, monitors and reports on the
principal risks and uncertainties that can impact its ability to
achieve its strategic objectives.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with
reference to the financial statements. During the year such controls
were tested and no reportable material weakness in the design or
operation was observed.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act and Articles of
Association of the Company Mr. Ajay R. Shah retires by rotation and
being eligible offer himself for re-appointment at the ensuing annual
general meeting.
The special resolution for appointment of Mr. Sudhir Sathe as
Non-Executive Independent Director, not liable to retire by rotation
for the period mentioned in the resolution therein is proposed for the
approval of members in terms of the provisions of the Companies Act,
2013 and revised Clause 49 of the Listing Agreement as notified by the
Securities & Exchange Board of India.
During the year under review the members approved the re-appointments
of the following key managerial personnel viz. Mr. Rajnikant Kodarlal
Shah as Vice Chairman & Managing Director, Mr. Abhay R. Shah, Joint
Managing Director, Mr. Manoj V. Mehta, Whole Time Director and Mr. Ajay
R. Shah as Whole Time Director of the Company and Mr. Sudhir Sathe, Mr.
Vinay Jog and Ms. Ashwini Lad were appointed as an Independent
Directors who are not liable to retire by rotation.
The Company has received declaration from all the Independent Directors
of the Company confirming that they meet the criteria of independence
as prescribed both under the Companies Act, 2013 and Clause 49 of the
Listing Agreement of BombayStock Exchange Limited.
The Company has devised a policy for performance in relation of
Independent Directors, Board, Committees which includes criteria for
performance evaluation of the Non-Executive and Executive Directors.
The detailed programs for familiarization of Independent Directors with
the Company, their roles, rights and responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company are put in place.
REMUNERATION AND NOMINATION POLICY
The Board of Directors has framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and
Senior Management of the Company. This policy also lays down criteria
for selection and appointment of Board Members keeping in mind the
relevant provisions of the companies Act 2013 read with specific
rules.The details of this policy is explained in the Corporate
Governance Report.
AUDITORS AND AUDITORS REPORT
Statutory Auditors
M/s. Soman Uday & Co, Chartered Accountants, Statutory Auditors of the
Company hold the office till the conclusion of ensuing Annual General
Meeting and are eligible for re-appointment. The Company has received a
letter from M/s. Soman Uday & Co. to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141 (3)(g) of the Companies Act, 2013 and they are not
disqualified for re-appointment.
The Auditors'Report does not contain any qualification, reservation or
adverse remark.
Secretarial Auditor
The Board has appointed D.Kothari & Associates, Practicing Company
Secretary to conduct the Secretarial Audit for the financial year ended
2014-15. The Secretarial Audit report for the financial year ended
March 31, 2015 is annexed herewith and marked as Annexure II to this
report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
DISCLOSURES
Audit Committee
The Audit Committee comprises Independent Directors viz. Mr. Vinay Jog,
Chairman, Mr. Sudhir Sathe and Ms. Ashwini Lad as other members. All
the recommendations made by the Audit Committee were accepted by the
Board.
Vigil Mechanism
The Vigil Mechanism of the Company, which also includes Whistle Blower
Policy in terms of the Listing Agreement, includes an ethics and
compliance task force comprising senior executives of the Company.
Protected disclosures can be made by Whistle Blowerthrough an email or
letter to the Chairman of the Audit Committee. No person has been
denied access to the Audit Committee.
Meetings of the Board
Six meetings of the Board of Directors were held during the year.
Forfurther details, please refer to report on Corporate Governance
attached to this Annual Report.
Particulars of loans given, investments made, Guarantees given and
Securities provided
The Company has not given any loans or made any investments or provided
guarantees u/s 186 of the Companies Act, 2013.
Conservation of Energy, technology absorption and foreign exchange
earning and outgo.
The particulars related to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required to be
disclosed under the act are provided in Annexure III to this report.
Extract of Annual Return
Extract of Annual Return ofthe Company is annexed herewith as Annexu re
IVto this report.
Particulars of Employees and Related disclosures
Disclosures with respect to the remuneration of Directors, KMPs and
employees as 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 given in Annexure V to this
report.
The Company does not have any employee whose particulars are required
to be disclosed in terms of the provisions of Section 197(12) of the
act read with Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014, hence furnishing of
the same does not arise.
General
Your Directors take that no disclosure or reporting required in respect
ofthe following items as there were no transactions on these items
during the year under review.
1) Details relating to deposits covered under Chapter V of the act.
2) Issue of Equity Shares to differential rights as to dividend, voting
or otherwise.
3) Issue of shares (including sweat equity shares) to employees ofthe
Company
4) The Company does not have any subsidiaries, hence, the question of
receiving remuneration or commission by the Managing Directors or Whole
Time Directors of the Company from the subsidiaries does not arise.
5) No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operation in the future.
Your Directors further state that during the year under review there
were no cases filed pursuant to the Sexual Harassment ofWomen at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors would like to express the sincere appreciation for the
assistance and co-operation received from Shareholders, Bank of
Maharashtra, Government Authorities and other Business constituents
during the year under review. Your Directors would also like to
appreciate the commitment displayed by the human resources ofthe
Company.
On behalf of the Board of Directors
R. K. Shah (Vice Chairman & Managing
Director) (DIN 00011746)
Place : Mumbai
Date : June 22,2015 Abhay R.Shah (Joint Managing Director)
(DIN00016497)
Mar 31, 2013
TO THE MEMBERS OF ORGANIC COATINGS LIMITED
The directors have pleasure in presenting their annual report together
with audited statement of accounts of the Company for the year ended
31st March, 2013.
1) Financial Results (Rs. In Lacs)
2012 - 13 2011 - 12
(Loss)/Profit before Interest, Depreciation
& Tax (83.88) (188.22)
Less: Finance Cost 386.31 384.55
---------- ---------
(470.19) (572.77)
Less: Depreciation 184.56 185.47
---------- ---------
(Loss)/Profit for the year before tax (654.75) (758.24)
Less/(Add): Excess Deprecition of Earlier
years Written Back (24.88) -
---------- ---------
(Loss)/Profit after Extra Ordinary
Items & before tax (629.87) (758.24)
Less: Provision for taxation
Deferred - (110.40)
Less: Prior year''s Income Tax (0.52) (1.61)
----------- ---------
(Los/ Profit after tax (629.35) (646.23)
======== ========
The accumulated losses of the Company at the end of financial year 31st
March, 2013 have resulted in erosion of more than fifty percent of its
peak net worth during the immediately preceding four financial years.
While the Company is taking necessary steps to protect further erosion,
the Company will report to the Board for Industrial and Financial
Reconstruction about such erosion of networth as envisaged under
Section 23 of the Sick Industrial Companies (Special Provisions) Act,
1985 forthwith upon finalization of the duly audited accounts of the
Company for the financial year ended 31st March, 2013. Shareholders are
also requested to take note of this erosion and consider the same at
the Extraordinary General Meeting of the members being convened for the
purpose.
2) Dividend
In view of the loss for the year ended 31st March, 2013, the Directors
are unable to recommend any dividend for the year under report.
3) Operations
During the year under report, your Company achieved a net turnover of
(Rs.)4524.30 Lacs as compared to (Rs.)6121.27 Lacs in the previous year
resulting in decrease of about 26.09%. The operations of the company
has resulted into loss of (Rs.)83.88 Lacs before finance cost,
depreciation and taxation for the year under review as against the loss
of (Rs.)188.22 Lacs in the previous year. The net loss for the year after
finance cost, depreciation and taxation was (Rs.)629.35 Lacs as against
loss of (Rs.)646.23 Lacs in the previous year. The Company is exploring
the possibility of identifying the customer''s of international repute
for exporting Company''s product in bulk which would result into
positive growth both in terms of turnover and profit during the current
year on materialization of the export orders.
4) Sale of Land & Building at Thane
The Company has presently two manufacturing units one located at
S.V.Road, Ghodbunder Village, Post Mira, Dist. Thane  401 104 and
another located at Block No. 395, 437, 450, Village Umraya, Taluka
Padra, Vadodara  391 440 both carrying on manufacturing of printing
inks of various types used in printing industry. The unit located at
S.V.Road, Ghodbunder Village, Post Mira, Dist. Thane  401 104 was set
up way back in the year 1965 having installed capacity of manufacturing
300 MT/month of Printing Inks. Over the period of last 47 years the
Plant & Machineries installed at Thane Unit has become very old and has
become technologically obsolete requiring excessive manpower besides
involving payment of Octroi on all the inputs resulting into
economically unviable.
As the members are aware the Company has set up another manufacturing
unit and commenced the production in July 2011 for printing inks at
Block No. 395, 437, 450, Village Umraya, Taluka Padra, Vadodara  391
440 with latest semi-automated Plant & Machinery having installed
capacity of 800 MT/month for manufacturing printing inks, which results
into saving in manpower cost, electricity cost, low wastage and zero
octroi. This would have contributed towards profitability of the
Company as estimated at the time of setting up the said manufacturing
unit at Vadodara. However, the demand for the printing ink manufactured
by the Company did not grow correspondingly as expected to absorb the
productive capacity set up in both the units put together resulting in
huge losses in the last couple of years and working of the Company has
suffered quite substantially.
The Board of Directors has therefore decided to discontinue the
operation at Thane unit and sale/dispose off the Land & Building etc.
as per the Ordinary Resolution proposed to be passed by Postal Ballot
sent to all the shareholders. The Company has entered Memorandum of
Understanding for sale of the aforesaid Land & Building for a
consideration of (Rs.)15.50 Crores. The Plant & Machineries, other Office
Equipments which can be installed and used at the new manufacturing
unit at Vadodara will be shifted and installed therein. The old Plant &
Machineries which have become obsolete/unusable will be disposed off at
the best possible consideration as may be agreed by the Board. The
aforesaid new manufacturing unit at Vadodara will cater to all the
existing customers of the Company and meet their demand.
The money realized from sale/disposal of the Thane unit will be
utilized for the purpose of reduction of significant amount of cash
credit facilities availed from the Bank by the Company and thereby
reduce the cost of interest. With this the Company expects to improve
its bottomline and come out of the red within a short span.
5) Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 as amended, the
directors confirm that:
I) in the preparation of the annual accounts for the year ended 31st
March, 2013, the applicable accounting standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31st March, 2013 and
of the loss for the year ended on that date;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) The annual accounts for year ended 31st March, 2013, have been
prepared on a going concern basis.
The above statements have been noted by the Audit Committee at its
meeting held on 29th May, 2013.
6) Directors
Mr. Ajay R. Shah and Mr. Manoj V. Mehta retire by rotation and being
eligible offer themselves for re-appointment at the ensuing annual
general meeting.
7) Corporate Governance Report and Management Discussion and Analysis
Statement
The report on Corporate Governance including Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement with
Stock Exchange, forms part of the Annual Report is annexed.
A certificate of the auditors of the Company, Soman Uday & Co.,
Chartered Accountants, confirming compliance of the conditions of
corporate governance as stipulated in Clause 49 is annexed.
8) Fixed Deposits
The Company has not accepted any deposits from the public during the
year.
9) Industrial Relations
The Company is happy to have extremely cordial industrial relations
with the workers and the staff.
10) Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Information as required under Section 217(1)(e) of the Companies Act,
1956, read with Rule 2 of the Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988 relating to Conservation
of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
is given in Annexure ''A'' forming part of this report.
11) Particulars of Employees
The Company does not have any employee whose particulars are required
to be disclosed under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975.
12) Auditors
M/s. Soman Uday & Co, Chartered Accountants retire as Auditors at the
forthcoming annual general meeting and being eligible offer themselves
for re-appointment. The members are requested to consider reappointing
them as Auditors and to fix their remuneration.
12) Cost Auditors
The Ministry of Corporate Affairs (MCA) has introduced The Companies
(Cost Audit Report) Rules 2011 vide its Notification No. GSR430(E)
dated 03/06/2011. These rules make it mandatory for certain industries
to appoint Cost Auditor within 90 days of the commencement of the
financial year. In compliance thereof board of directors has appointed
M/s. Divyesh Vagadiya & Associates as a Cost Auditor for auditing
Company''s Cost Accounts for the year ending 31st March, 2014.
13) Acknowledgements
Your directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, Bank of
Maharashtra, regulatory bodies and other business constituents during
the year under review.
Your directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers,
staff and workers.
On behalf of the Board of Directors
(R. K. Shah)
Vice Chairman & Managing Director
Place : Mumbai
Date : 29th May, 2013
(Abhay R. Shah)
Joint Managing Director
Mar 31, 2012
TO THE MEMBERS OF ORGANIC COATINGS LIMITED
The directors have pleasure in presenting their annual report together
with audited statement of accounts of the Company for the year ended
31st March, 2012.
1) Financial Results
(Rs. In Lacs)
2011-12 2010-11
(Loss) Profit before finance cost,
depreciation and tax (188.22) 319.55
Less: Finance cost 384.55 230.55
(Loss) Profit before depreciation and tax (572.77) 89.00
Less: Depreciation 185.47 124.25
(Loss)/Profit for the year before tax (758.24) (35.25)
Less: Provision for taxation
Deferred (110.40) (13.74)
Add / (Less): Prior year's Income Tax (1.61) 0.98
(Loss) / Profit after tax (646.23) (22.49)
2) Dividend
In view of the loss for the year ended 31st March, 2012, the Directors
do not recommend any dividend for the year under report.
3) Presentation of financial results
Pursuant to Notification dated 28th February, 2011 issued by the
Ministry of Corporate Affairs, the format for disclosure of financial
statement prescribed under Schedule VI to the Companies Act, 1956 has
been substantially revised. The financial results of the Company for
the year ended 31 st March, 2012 have therefore been disclosed as per
the revised Schedule VI. Previous year's figures also been restated to
conform with the current year's presentation.
4) Extension of time for holding Annual General Meeting
In terms of Section 166 read with Section 210 of the Companies Act,
1956 the Ministry of Corporate Affairs, Department of Company Affairs,
Office of the Registrar of Companies, Maharashtra, Mumbai has granted
extension of time for holding Annual General Meeting for three months.
5) Operations
During the year under report, your Company achieved a net turnover of Rs.
6121.27 Lacs as compared to Rs. 6442.68 Lacs in the previous year
resulting in decrease of about 5%. The operations of the company has
resulted into loss of Rs.188.22 before finance cost, depreciation and
taxation for the year under review as against the profit of Rs. 319.55
Lacs in the previous year. The net loss for the year after finance
cost, depreciation and taxation was Rs. 646.23 Lacs as against loss of Rs.
22.49 Lacs in the previous year.
As reported in the last year the Company has commenced the commercial
production at its Vadodara Plant in July 2011. The said plant is
semi-automated which results into saving in manpower cost, electricity
cost, low wastage and zero octroi. This would have contributed towards
profitability of the Company during the last financial year. However,
the demand for the printing ink manufactured by the Company did not
grow correspondingly as expected resulting into under utilization of
Company's productive capacity. This coupled with increased burden of
interest on additional borrowings taken for Vadodara Plant has resulted
into above mentioned loss.
The Company is exploring the possibility of identifying the customer's
of international repute for exporting Company's product in bulk which
would result into positive growth both in terms of turnover and profit
during the current year on materialization of the export orders.
6) Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 as amended, the
directors confirm that:
i) in the preparation of the annual accounts for the year ended 31st
March, 2012, the applicable accounting standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31st March, 2012 and
of the loss for the year ended on that date;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts for year ended 31st March, 2012, have been
prepared on a going concern basis.
The above statements have been noted by the Audit Committee at its
meeting held on 10th October, 2012.
7) Directors
Mr. Sudhir A. Sathe and Mr. Abhay R. Shah retire by rotation and being
eligible offer themselves for re-appointment at the ensuing annual
general meeting.
Justice S. C. Pratap and Mr. Vilas K. Shah have resigned as Directors
and Independent Directors of the Company effective from 30th March,
2012 and 25th August, 2012 respectively and the Directors have placed
on record the appreciation of the services rendered by them during
their association with the Company.
Mr. Vimal Mehra has resigned as a Directors Managing Director of the
Company w.e.f. 30th September, 2012 and the Board of Directors has
accepted the same.
Mr. Vinay S. Jog has been appointed as an Independent Director of the
Company w.e.f. 15th May, 2012 to fill the casual vacancy caused by the
resignation of Justice S.C. Pratap, Independent Director of the
Company.
8) Corporate Governance Report and Management Discussion and Analysis
Statement
The report on Corporate Governance including Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement with
Stock Exchange, forms part of the Annual Report is annexed.
A certificate of the auditors of the Company, Soman Uday & Co.,
Chartered Accountants, confirming compliance of the conditions of
corporate governance as stipulated in Clause 49 is annexed.
9) Fixed Deposits
The Company has not accepted any deposits from the public during the
year.
10) Industrial Relations
The Company is happy to have extremely cordial industrial relations
with the workers and the staff.
11) Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Information as required under Section 217(1 )(e) of the Companies Act,
1956, read with Rule 2 of the Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988 relating to Conservation
of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
is given in Annexure 'A' forming part of this report.
12) Particulars of Employees
The Company does not have any employee whose particulars are required
to be disclosed under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975.
13) Auditors
M/s. Soman Uday & Co, Chartered Accountants retire as Auditors at the
forthcoming annual general meeting and being eligible offer themselves
for re-appointment. The members are requested to consider reappointing
them as Auditors and to fix their remuneration.
14) Cost Auditors
The Ministry of Corporate Affairs (MCA) has introduced The Companies
(Cost Audit Report) Rules 2011 vide its Notification No. GSR430(E)
dated 03/06/2011. These rules make it mandatory for certain industries
to appoint Cost Auditor within 90 days of the commencement of the
financial year. In compliance thereof board of directors has appointed
M/s. U.R.Bagade & Co. as a Cost Auditor for auditing Company's Cost
Accounts for the year ended 31st March, 2012.
15) Acknowledgements
Your directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, Bank of
Maharashtra, regulatory bodies and other business constituents during
the year under review.
Your directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers,
staff and workers.
Mumbai For Soman Uday & Co.
Chartered Accountants
August 25th 2012 FirmRegn. No. 110352W
Uday Soman
Proprietor
Membership No. 38870
Mar 31, 2011
TO THE MEMBERS OF ORGANIC COATINGS LIMITED
The directors have pleasure in presenting their annual report together
with audited statement of accounts of the Company for the year ended 31
st March, 2011.
1) Financial Results
(Rs. In Lacs)
2010-11 2009-10
Profit before Depreciation and Tax 89.00 206.70
Less: Depreciation 124.25 113.65
(Loss) /Profit for the year before tax (35.25) 93.05
Less: Provision for taxation
Current - 15.00
Deferred 13.74 15.98
(Loss) / Profit after adjustment (21.51> 62.07
Add / (Less): Prior year's Income Tax (0.98) (6.50)
(Loss) / Profit after tax (22.49) 55.57
Previous Year's balance b/f 137.68 124.25
Amount available for appropriation 115.19 179.82
Transfer to General Reserve - 1.75
Proposed Dividend - 34.52
Corporate Dividend Tax - 5.87
Balance carried forward 115.19 137.68
2) Dividend
In view of the loss for the year ended 31 st March, 2011, the Directors
do not recommend any dividend for the year under report.
3) Operations
During the year under report, your Company achieved a net turnover of
Rs. 6365.53 Lacs as compared to Rs. 4546.95 Lacs in the previous year
registering an increase of about 40%. The operating profit before
depreciation and taxation for the year under review has gone down to
Rs. 89.00 Lacs as against Rs. 206.70 Lacs in the previous year,
decrease of over 56% arising out of increase in cost of all inputs.
Inspite of two price increases taken during the fiscal year 2010-11 (5%
in June, 2010 and 10% in December, 2010) the company could not recover
the total cost increase in the raw material prices. Due to competition
there was no further scope to correct the situation. However, effective
from 1 st July, 2011 your company is once again going in for a steep
price increase of 7% to 10% as well as internal corrections are being
done to control cost at all levels.
The following were the salient features for the year:
a) The Bank Note Press successfully used our Plasto Coat for enhancing
the life of the currency in commercial production and your company made
two supplies to them valuing around Rs. 80 Lacs.
b) An exclusive distributor was appointed to penetrate and increase
your company's businesses in Nepal, Bhutan and North Eastern States. It
was a successful venture which resulted in additional business of Rs.
1 Crore a year.
c) To increase the penetration of your Company in Saudi Arabia your
company has transferred its Sales Manager - North to Saudi Arabia on an
employee basis with the company's distributor to expand its businesses.
Inquiries from Egypt and other neighbouring countries are in the
pipeline and expect to result in business in this financial year.
d) Since the US economy is showing signs of recovery, your company has
re-entered US this year and the company's products have performed to
their satisfaction. Your company expect good volume business from US
this year.
The year also saw your company becoming a major supplier to large
regional newspapers like Sakal, Lokmat, Nai Duniya and Matrubhumi.
As of today Times of India has also approved your company's products
and commercial supplies are likely to start in next few weeks.
4) Expansion
Your company is pleased to inform of the Baroda Plant going Mo
commercial production from July 2011. Since this plant is
semi-automated your company expects huge savings in manpower cost,
electricity cost, low wastages and zero octroi, which in turn will
contribute towards profitability of the company.
The company is still awaiting the clearance from the Pollution Board to
start manufacturing pigments /flushes at this unit which is part of
your company's backward integration plan.
5) Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 as amended, the
directors confirm that:
i) in the preparation of the annual accounts for the year ended 31 st
March, 2011, the applicable accounting standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31 st March, 2011
and of the loss for the year ended on that date;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts for year ended 31 st March, 2011, have been
prepared on a going concern basis.
The above statements have been noted by the Audit Committee at its
meeting held on 20th June, 2011.
6) Directors
Mr. Manoj V. Mehta, Justice S.C.Pratap and Mr. Vilas K. Shah retire by
rotation and being eligible offer themselves for re-appointment at the
ensuing annual general meeting.
Mr. Dhaval Nanavati has resigned as a Director and Executive Director
of the Company and the Directors have placed on record the appreciation
of the services rendered by him during his association with the
Company.
7) Corporate Governance Report and Management Discussion and Analysis
Statement
The report on Corporate Governance including Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement with
Stock Exchange, forms part of the Annual Report is annexed.
A certificate of the auditors of the Company, Soman Uday & Co.,
Chartered Accountants, confirming compliance of the conditions of
corporate governance as stipulated in Clause 49 is annexed.
8) Fixed Deposits
The Company has not accepted any deposits from the public during the
year.
9) Industrial Relations
The Company is happy to have extremely cordial industrial relations
with the workers and the staff.
10) Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Information as required under Section 217(1 )(e) of the Companies Act,
1956, read with Rule 2 of the Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988 relating to Conservation
of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
is given in Annexure A' forming part of this report.
11) Particulars of Employees
The Company does not have any employee whose particulars are required
to be disclosed under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975.
12) Auditors
M/s. Soman Uday & Co, Chartered Accountants retire as Auditors at the
forthcoming annual general meeting and being eligible offer themselves
for re-appointment. The members are requested to consider reappointing
them as Auditors and to fix their remuneration.
13) Social responsibility
100% Biodegradable Green Ink has been developed to help reduce emission
of volatile content into atmosphere and the same was launched in the
market during the year under report.
14) Acknowledgements
Your directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, Bank of
Maharashtra and other bankers, regulatory bodies and other business
constituents during the year under review.
Your directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers,
staff and workers.
On behalf of the Board of Directors
R. K. Shah
Vice Chairman & Managing Director
Place : Mumbai Abhay R. Shah
Date : June 20, 2011 Joint Managing Director
Mar 31, 2010
The directors have pleasure in presenting their annual report together
with audited statement of accounts of the Company for the year ended
31st March, 2010.
1) Financial Results
(Rs. In Lacs)
2009-10 2008-09
Profit before Depreciation and Tax 206.69 161.24
Less: Depreciation 113.65 95.29
Profit for the year before tax 93.04 65.95
Less : Provision for
Taxation
Current 15.00 6.25
Deferred 15.97 21.56
Fringe Benefit Tax - 5.20
Profit after adjustment 62.07 32.94
Less: Prior years Income Tax 6.50 -
Profit after tax 55.57 32.94
Previous Years balance b/f 124.25 91.31
Amount available for appropriation 179.82 124.25
Transfer to General Reserve 1.75 -
Proposed Dividend 4.52 -
Corporate Dividend Tax 5.87 -
Balance carried forward 137.68 124.25
2) Dividend
Your Directors are pleased to recommend subject to your approval a
dividend aggregating to Rs. 34,52,380 on a total paid-up capital of the
company, which is equivalent to Re. 0.50 per equity share (5%) on
69,04,760 Equity Shares of the face value of Rs. 10/- each.
3) Operations
During the year under report, the Company achieved a net turnover of
Rs. 4546.95 Lacs as compared to Rs. 3720.32 Lacs in the previous year
registering an increase of about 22.22%. The operating profit before
depreciation and taxation for the year under review has gone up to Rs.
206.69 Lacs as against Rs. 161.24 Lacs in the previous year, an
increase of about 33.94%. The following were the achievements for the
year:
1) Expanding business of Bank Note Press in India.
2) Strengthening distribution network in neighbouring countries like
Nepal, Bhutan and Sri Lanka.
3) Expanding export to new countries like Saudi Arabia, Egypt and South
East Asia.
4) Focus on large distribution houses in India and to convert them in
promoting our products.
5) Penetration in rural and semi rural areas of U.P., Bihar and North
Eastern states.
4) Issue and allotment of equity shares to share warrant holders
In terms of the approval of the shareholders of the Company granted
pursuant to Section 81(1A) of the Companies Act, 1956 and guidelines
for Preferential Issues contained in the SEBI (Disclosure and Investor
Protection) Guidelines, 2000 at an Extra Ordinary General Meeting held
on 10lh November, 2008, the Board of Directors of the Company has
allotted 10,00,000 Equity Shares of the face value of Rs. 10/- each at
a price of Rs. 14/- per share aggregating to Rs. 140.00 Lacs on
exercising rights by the share warrant holders to apply for equity
shares of the company for the each warrant on payment of balance price
of 90% of the issued price in two trenches as under:
Date of allotment No. of Equity Price in Rs. Total amount
Shares allotted
(Rs.)
27/01/2010 2,30,160 14.00 32,22,240.00
11/05/2010 7,69,840 14.00 1,07,77,760.00
Total 10,00,000 1,40,00,000.00
5) Expansion
Due to the increased demand for companys products, we expanded our
capacity by adding a state of the art Cobra Mill from Buhler,
Switzerland at a total cost of Rs. 2.10 Crore. Due to this addition it
is expected that capacity will increase by 200 Tons per month of Black
Ink. To meet the growing demand of Color Inks, the company has further
invested into buying a Land & Building in Padra, Baroda. This property
was purchased in the month of November 2009 and when ready will give us
additional capacity of 500-600 Tons per month. The company will use
this plant for backward integration to make pigments, flushes and inks.
The total cost of this project is estimated at about Rs. 10 Crores.
6) Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 as amended, the
directors confirm that:
i) in the preparation of the annual accounts for the year ended 31st
March, 2010, the applicable accounting standards have been followed;
ii) appropriate accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year ended 31s March 2010 and
of the profit for the year ended on that date;
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) the annual accounts for year ended 31st March, 2010, have been
prepared on a going concern basis.
The above statements have been noted by the Audit Committee at its
meeting held on 19lh May, 2010.
7) Directors
Mr. Abhay R. Shah, Mr. Ajay R. Shah and Mr. Vimal C. Mehra retire by
rotation and being eligible offer themselves for reappointment at the
ensuing annual general meeting.
Mr. Avinash Mehendale and Mr. Vikram Trivedi resigned as Independent
Directors of the company effective from 09/02/2010. They also ceased to
be members of the Audit Committee, Shareholders Committee and
Remuneration Committee on their resignation as Directors of the
Company. The Directors have placed on record the appreciation of the
services rendered by them during their long association with the
company.
Mr. Sudhir Sathe has been appointed as an Independent Director of the
company effective from 17m February, 2010 to fill the casual vacancy
caused by the resignation of Mr. Avinash Mehendale.
The Board of Directors has proposed special resolutions authorizing the
Board to determine the salaries of the Managing Directors, Joint
Managing Director, Executive Director, Wholetime Directors upto an
amount of Rs. 2,50,000/- p.m. plus other benefits as laid down in the
proposed resolutions. The Board of Directors recommends the aforesaid
special resolutions.
8) Corporate Governance Report and Management Discussion and Analysis
Statement
The report on Corporate Governance including Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement with
Stock Exchange, forms part of the Annual Report is annexed.
A certificate of the auditors of the Company, Soman Uday & Co.,
Chartered Accountants, confirming compliance of the conditions of
corporate governance as stipulated in Clause 49 is annexed.
9) Fixed Deposits
The Company has not accepted any deposits from the public during the
year.
10) Industrial Relations
The Company is happy to have extremely cordial industrial relations
with the workers and the staff.
11) Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Information as required under Section 217(1)(e) of the Companies Act,
1956, read with Rule 2 of the Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988 relating to Conservation
of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
is given in Annexure A forming part of this report.
12) Particulars of Employees
The Company does not have any employee whose particulars are required
to be disclosed under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975.
13) Auditors
M/s. Soman Uday & Co, Chartered Accountants retire as Auditors at the
forthcoming annual general meeting and being eligible offer themselves
for re-appointment. The members are requested to consider reappointing
them as Auditors and to fix their remuneration.
14) Social responsibility
Water harvesting plant is being installed by making investment of Rs. 8
Lacs at our factory at Ghodbunder, Post Mira, Dist. Thane. This would
help in saving the scarce resource like water.
100% Biodegradable Green Ink has been developed to help reduce emission
of volatile content into atmosphere.
15) Acknowledgements
Your directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, Bank of
Maharashtra and other bankers, regulatory bodies and other business
constituents during the year under review.
Your directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers,
staff and workers.
On behalf of the Board of Directors
Managing Director
Place: Mumbai
Date : August 12, 2010
Joint Managing Director
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