Directors Report of Primo Chemicals Ltd.
Mar 31, 2023
The Directors are pleased to present their 48th Annual Report on the business and operations of the Company together with Standalone and Consolidated Audited Financial Statements (Ind AS based) for the Financial Year ended 31st March, 2023 and the report of the Auditors thereon.
The financial results of the Company for the year ended 31st March, 2023 are summarised below:-
|
(Rs. In Crores) |
||||
|
Particulars |
Standalone |
Consolidated |
||
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
|
Revenue from Operation and Other Income |
733.54 |
469.22 |
733.54 |
469.22 |
|
Finance Costs |
8.07 |
8.82 |
8.07 |
8.82 |
|
Depreciation |
23.95 |
17.46 |
23.95 |
17.46 |
|
Total Expenditure excluding Finance Costs and Depreciation, etc. |
515.02 |
367.41 |
515.02 |
367.41 |
|
Profit before tax |
186.50 |
75.53 |
186.50 |
75.53 |
|
Tax Expenses |
52.52 |
18.81 |
52.52 |
18.81 |
|
Profit after tax |
133.98 |
56.72 |
133.98 |
56.72 |
|
Share of Profit of Associates |
- |
- |
3.41 |
2.49 |
|
Net Profit for the period after Associates |
133.98 |
56.72 |
137.40 |
59.21 |
|
Earnings per Share (EPS) of Rs. 2/-Basic and Diluted (in Rs. ) |
5.53 |
2.50 |
5.67 |
2.61 |
Performance Review & State of Company''s Affairs
The Chlor-Alkali Sector performed well supported by higher realizations despite high captive energy costs. During the year under review, the Company''s performance was exceptionally good, particularly in the first three quarters of the year, driven by strong volume and realizations. The highlights of the Company''s performance for the year ended 31st March, 2023 are as under:
The Company has recorded an EBITDA of Rs. 218.52 crores during the Financial Year ended 31st March, 2023 as compared to Rs. 101.82 crores in the previous financial year resulting in an increase of 115%.
The Company has produced 1,34,977 MT of Caustic Soda Lye (CSL) at a capacity utilization of 91% (on enhanced capacity of 1,48,000) during the financial year ended 31st March, 2023. The Net Sales Turnover from operations has increased by 48.80% to Rs. 650.16 crores during the financial year ended 31st March, 2023 as against Net Sales Turnover from operations of Rs. 436.93 crores during the previous financial year. The Company has earned Net Profit before Tax of Rs. 186.50 crores for the financial year ended 31st March, 2023 as against Net profit before tax of Rs. 75.54 crores during the previous financial year.
The landed cost of raw material PMT of Caustic Soda Lye has increased from Rs. 5,305/- during the financial year ended 31st March, 2022 to Rs. 6,350/- during the financial year ended 31st March,
2023 mainly because of an increase in landed cost of Salt, Barium Carbonate, Soda Ash and Sulphuric Acid. Despite this significant increase in cost of raw materials, the Company has delivered significant growth in its operations and financial performance.
The combined average sales realization (net of GST) has increased to Rs. 50,045/- per ECU in the Financial Year under review from Rs. 39,661/- per ECU in the preceding Financial Year denoting an increase of 26%.
The performance of the Company aligns with its commitment to consistent growth through expansion plans, optimisation of resources and cost-effectiveness.
As on 31st March, 2023, the Company has only one Associate Company namely Flow Tech Chemicals Private Limited (FTCPL), a Promoter Group Company. The total Revenue of FTCPL was Rs. 246.56 crores with Profit before tax of Rs. 9.43 crores as compared to the Revenue of Rs. 166.18 crores with Net Profit of Rs. 11.33 crores in the previous year. There are no Subsidiary or Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013 (âActâ). Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the Statement containing salient features of the financial statements of the Associate Company in Form AOC-1 is given in Annexure - I, forming part of this Report.
During the period under review, the Company did not undertake any issuance or allotment of shares. As a result, there has been no change in the paid-up share capital of the company.
Performance at the Consolidated Level
During the Financial Year ended 31st March, 2023, the Company has increased its stake from 27.90% to 49% in the Associate Company which is primarily engaged in the manufacturing of Chlorinated Paraffin (CP) a widely used Plasticizer and Hydrochloric Acid. FTCPL is one of the major customers of Chlorine,
therefore Primo Chemicals Limited is substantially dependent on its Associate company for the disposal of Chlorine and sustainable operations.
At Consolidated Level, Profit after Tax of the Company was Rs. 137.40 crores during the Financial Year 202223 as against Rs. 59.21 crores in the previous year.
In view of the fund requirements for the expansion plan and various ongoing Projects of the Company, the Directors regret their inability to recommend any dividend for the financial year 2022-23. The Company believes that investment of the available funds in the expansion and upcoming Projects would be able to boost the investment made by the stakeholders.
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy, which is available on the website of the Company at https:// www.primochemicals.in/ page/investors.
Your Company has availed financial facilities from the Banks for meeting its fund''s requirement for Working Capital/Operational Capital and/or for expansion and new Projects. The details of which form part of Notes of the Financial Statements.
During the year under review, the Company has not accepted any deposit from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
Material Changes and Commitments affecting the Financial Position of the Company
There had been no material changes and commitments during the period from the end of the Financial Year under review till the date of this Report which may be affecting the financial position of the Company.
Being one of major producers of Caustic Soda in Northern India, Primo Chemicals proudly boasts a substantial capacity of 500 TPD, which can be further expanded as keeping in view the demand-supply scenario. Notably, the Company has successfully commissioned its Stable Bleaching Powder (SBP) plant with an annual capacity of 33,000 MT.
Primo''s ongoing expansion plans, including the 35 MW Coal and Biomass based Power Plant, Aluminium Chloride Project and Caustic Flaker unit, are developing as planned and it is anticipated that these projects will have a positive impact on the company''s revenue and profitability in FY 2023-24.
To strengthen the Company''s downstream portfolio, amplify product profitability, decrease energy expenses, and bolster Chlorine consumption for heightened Caustic Soda production. The Company has already acquired 49% stake in Flow Tech Chemicals Private Limited its Promoter Group Company till 30th June, 2022. The Company plans to acquire up-to 100% equity stake in FTCPL by 31st December, 2024. Post this acquisition, FTCPL will become wholly-owned Subsidiary of the Company.
The details of Credit Rating are disclosed in the Corporate Governance Report, which forms part of this Annual Report.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, disclosures relating to loans, guarantees and investments as on 31st March 2023 are given in the Notes to the Financial Statements.
Environment and Energy Conservation
The Company accords high priority to carry out its operations in an environment-friendly fashion and has been taking appropriate steps for pollution control,
safety measures and good house-keeping across all its Plants. The Company has in place the Online Monitoring System at Works connected with Central Pollution Control Board server showing Real Time data of all parameters specified by them. A Safety Audit of the Plant was conducted during the financial year 2022-23 by the National Safety Council and its recommendations are being implemented.
The improvement in energy efficiency is vital for the sustainable growth of the Company. The Company continues to place a great emphasis on energy efficiency. Energy Audit is conducted on a regular basis through various agencies, active in the field. Various activities & modifications in the plant process are being implemented which are directed towards achieving the Targeted Specific energy Consumption
i.e., Energy Consumption Per Metric Tonne of Caustic Production, as set by Bureau of Energy Efficiency.
The information relating to the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in Annexure-II forming a part of this report.
The Equity Shares of the Company are listed on the BSE Limited. The Annual listing fee for the year 202324 has been paid to BSE Limited.
Corporate Social Responsibility
During the year under review, the Company had to spend Rs. 67.60 lacs based on the average net profit of the last three years on CSR Activities. Accordingly, the amount was spent on various CSR Activities as per the Policy. The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 has been attached as Annexure III.
The particulars of the Corporate Social Responsibility Committee constituted by the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 and the rules made thereunder are included in the Corporate Governance Report annexed and forming part of this Report.
Human Resources
The relationship with the workmen and staff remained cordial and harmonious during the year and management received full cooperation from employees. The process of development and upgradation of human resources continued.
The Particulars of Employees and Managerial Remuneration under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure - IV forming a part of this Report.
As per the requirement of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company which will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining the said information will be furnished the same upon receipt of the request.
Policy on Prevention of Sexual Harassment at the Workplace
The Company has zero tolerance for Sexual Harassment at Workplace and has in place a âPolicy on Sexual Harassment at Workplaceâ pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. The Policy aims to provide protection to employees at the Workplace and prevent and redress complaints of sexual harassment. The Policy has been framed with the objective of providing a safe working environment, where employees feel secure.
Internal Complaints Committee has been setup to redress complaints regarding sexual harassment. During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Management Discussion and Analysis & Corporate Governance Report, Business Responsibility & Sustainability Report
i) Management Discussion and Analysis
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the financial year 2022-23 is annexed as Annexure - V forming part of this report.
ii) Corporate Governance Report
The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Corporate Governance Report for the financial year 2022-23 and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are also annexed as Annexure - VI forming part of this report.
iii) Business Responsibility & Sustainability Report
The Business Responsibility and Sustainability Report (BRSR) for the year ended 31st March, 2023 as stipulated under Regulation 34(2) (f) of SEBI Listing Regulations is annexed as Annexure VII which forms part of this Annual Report.
Compliance with Secretarial Standards
During the year under review, your Company is in compliance with the applicable Secretarial Standards specified by the Institute of Company Secretaries of India relating to the meetings of the Board and General Meetings.
Directors & Key Managerial Personnel
As on 31st March, 2023, the total Board strength comprises of 8 Directors out of which 2 Directors are Executive Directors, 2 are Non-Executive Non-
Independent Directors and 4 are Non-Executive Independent Directors.
Declaration of Independent Directors
As on 31st March, 2023, the Company has four Independent Directors on its Board including a woman Independent Director. All the Independent Directors have met the requirements specified under Section 149 (6) of the Act, 2013 regarding holding the position of âIndependent Director'' and the necessary Declaration from each Independent Director under Section 149(7) of the Act has been received.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. In terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company are registered on the Independent Director Databank maintained by the Indian Institute of Corporate Affairs (IICA).
Meeting of Board of Directors
Six meetings of the Board were held during the year under review. For details, please refer to the Corporate Governance Report, which is a part of this Report.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance, its Committees and all the Directors individually.
The performance of the Independent Directors was evaluated by the entire Board except the person being evaluated.
The evaluation of Non-Independent Directors, Chairman and the Board as a whole was done at a separate meeting by the Independent Directors.
Retirement by Rotation
In accordance with the provisions of the Articles of Association of the Company, read with Section 152 of the Companies Act, 2013, Shri Naveen Chopra, Managing Director of the company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
Re-appointment of Managing Director & Executive Director
Approval of the Members is being sought in the ensuing Annual General Meeting (AGM) for the reappointment of (i) Shri Naveen Chopra, Managing Director of the Company for the period of five consecutive years effective from 29th October, 2023 in the ensuing Annual General Meeting whose tenure is going to end on 28th October, 2023 and (ii) Shri Jatin Dahiya, Executive Director of the Company for the period of five consecutive years effective from 1st April, 2024 in the ensuing Annual General Meeting whose tenure is going to end on 31st March, 2024 as recommended by Nomination & Remuneration Committee and Board of Directors.
Necessary Resolutions for the appointment/re-appointment of aforesaid Directors, wherever applicable, have been incorporated in the Notice convening the ensuing AGM. As required under the listing regulations and Secretarial Standards on General Meetings issued by ICSI, the relevant details of Directors retiring by rotation and/or seeking appointment/re-appointment at the ensuing AGM are furnished as âAnnexure A'' to the Notice of AGM.
Committees of the Board
Pursuant to the requirements under the Companies Act, 2013 and the Listing Regulations, the Board has constituted the following committees:
a) Audit Committee
b) Stakeholders Relationship cum Share Transfer Committee
c) Nomination & Remuneration Committee
d) Corporate Social Responsibility (CSR) Committee
e) Risk Management Committee
The details of the Committees viz. Composition, number of meetings held and attendance of the Committee Members in the meetings are given in the Corporate Governance Report forming part of this Annual Report.
Key Managerial Personnel (âKMPâ)
There has been no change in Key Managerial Personnel of the Company during the year.
As on 31st March, 2023, the Company has the following Key Managerial Personnel as per Section 2(51) of the Companies Act, 2013:
1. Shri Naveen Chopra, Managing Director
2. Shri Jatin Dahiya, Executive Director
3. Shri Arun Kumar Kaushal, Chief Financial Officer
4. CS Sugandha Kukreja, Company Secretary and Compliance Officer.
Internal Financial Control with Respect to Financial Statements
The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the financial year 2022-23.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
i) In the preparation of the annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) 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 at the end of the financial year and of the profit of the Company for the period under review;
iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2023 on a âgoing concern'' basis;
v) 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;
vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Consequent upon acquisition of the PACL by new management in October 2020, the Companies with which PACL was already dealing with and had already entered into Agreements have become related parties. The transactions entered into by the Company with Related Parties were in the ordinary course of business and were at arm''s length price. All the contracts /arrangements /transactions with Related Parties during the year were in the ordinary course of business and/or the same were at arm''s length, the Company has also entered into material related party transactions during the year under review. Information on material transactions with related party pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are also annexed in Form AOC-2 and the same forms part of this report.
During the year, all related party transactions were placed before the Audit Committee and Board of Directors for approval.
Prior Omnibus approval of the Audit Committee has been obtained for related party transactions, which are repetitive in nature. The transactions entered into pursuant to Omnibus approval so granted are reviewed on a quarterly basis by the Audit Committee.
In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of related party transactions on consolidated basis half-yearly as per the specified format to BSE Limited.
In line with the requirements of the Companies Act, 2013 and the SEBI Regulations, the Company has formulated a Policy on Related Party Transactions which can be accessed on the Company''s website at https://www.primochemicals.in/page/investors.
Detailed Disclosure on Related Party transactions has been provided under the Notes on Financial Statements.
Vigil Mechanism and Whistle-Blower Policy
The Board of Directors of the Company has in place the Policy on Vigil Mechanism and Whistle Blower. The same has also been placed on the Company''s Website at https://www.primochemicals.in/page/ investors.
Statutory Auditors
M/s. S. Tandon & Associates, Chartered Accountants (Regn. No. 006388N), Statutory Auditors of the company, have been appointed by the shareholders in the Annual General Meeting held on 15th September, 2022 for a period of five years i.e. from the conclusion of 47th Annual General Meeting until the conclusion of the Annual General Meeting to be held in the year 2027, at such remuneration as may be fixed by the Board of Directors.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Cost Auditors
The Board of Directors of the Company at its Meeting held on 26th May, 2023 has appointed M/s. Kabra & Associates, Cost Accountant in practice, as Cost Auditors for the Financial Year 2023-24 as per the
provisions of the Companies Act, 2013 to conduct the audit of Cost Records maintained by the Company at a remuneration of Rs. 70,000/- plus applicable GST besides the reimbursement of out of Pocket Expenses. As per the provisions of the Companies Act, 2013, your Directors propose the Resolution in the Notice in respect of remuneration payable to the Cost Auditors for the Financial Year 2023-24 for your ratification and approval. The Company maintains necessary cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.
Secretarial Auditor
M/s. A. Arora & Co., Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial Year 2022-23. Their Secretarial Audit Report of the Company for the financial year ended 31st March, 2023 is annexed as Annexure-VIII to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practising Company Secretaries have been reappointed as Secretarial Auditors of the Company for the financial year 2023-24.
Annual Secretarial Compliance Report
The Company has obtained an Annual Secretarial Compliance Report for the financial year ended March 31,2023 from M/s. A. Arora & Co., Practising Company Secretaries in compliance with the Regulation 24A of the SEBI Listing Regulations and the SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019. The said Report for the financial year ended March 31,2023 has been submitted to the BSE Limited within the prescribed statutory timelines.
Pursuant to Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is placed on the Company''s Website and can be accessed at web link: https://www.primochemicals.in.com/page/investors.
i) There is no change in the nature of business of the Company.
ii) There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.
iii) There was no instances of one time settlement with Banks or Financial Institutions during the year.
iv) During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board''s report.
v) During the year, no unclaimed dividend was required to be transferred in the Investor Education & Protection Fund of IEPF Authority.
vi) There are no significant and material orders passed by the Regulators or Courts or tribunals impacting the going concern status and the Company''s operations in future.
The Board of Directors place on record its deep sense of appreciation for the committed services rendered by the employees of the Company at all levels.
The Board of Directors would also like to express its deep sense of gratitude or the cooperation and support received from Governments Authorities, Company''s Bankers, financial institutions, stakeholders, business associates, customers, vendors and members and look forward to their continued support in future.
Mar 31, 2018
The Directors submit their 43rd Annual Report together with the Audited Accounts for the financial year ended 31st March, 2018.
Financial Results
The financial results of the Company for the financial year ended 31st March, 2018 are summarised below :-
(Rs. in crores)
|
2017-18 |
2016-17 |
|
|
Sales Turnover & Other Income |
349.09 |
305.48 |
|
Total Expenditure excluding |
324.50 |
318.21 |
|
Finance Costs and Depreciation, etc. |
||
|
Finance Costs |
20.29 |
3.50 |
|
Cash Profit /(Loss) |
4.30 |
(16.23) |
|
Depreciation, etc. |
9.12 |
8.09 |
|
Net Loss before tax |
4.82 |
24.32 |
|
Provision for taxation |
- |
- |
|
Net Loss after tax |
4.82 |
24.32 |
Members would be happy to note that the Net Sales Turnover of the Company at Rs.333.64 crores was higher by 24% as compared to Rs.268.10 crores in the preceding financial year due to higher production and higher net sales realisation. The Company has achieved higher capacity utilisation of 92% in the financial year under review as compared to 89% and higher combined average realisation per Electro-Chemical Unit (ECU) at Rs.38,277 (Net) as against the ECU of Rs. 31,757 (Net) during the previous year. The Company earned a Cash profit of Rs.4.30 crores during the year under review as compared to Cash loss of Rs.16.23 crores in the financial year 2016-17. Inspite of reduction in power rates w.e.f. 1st January, 2018 by Punjab State Power Corporation Limited (PSPCL), the Company has incurred net loss of Rs. 4.82 crores during the year under review as against net loss of Rs. 24.32 crores due to provisioning of delayed payment surcharge on the deferment of power bills, provisioning of interest on Advance Consumption Deposit amounting to Rs.12.51 crores and write off of the amount of Rs.11.23 crores being service tax claimable on freight outward due to dismissal of appeal by CESTAT.
In view of the accumulated losses of the Company, the Directors regret their inability to recommend any dividend for the financial year 2017-18.
Finance and Corporate Debt Restructuring
Pursuant to the CDR Scheme approved by CDR EG and consent of Shareholders in the Annual General Meeting held on 29th September, 2016, the Company had issued and allotted a) 66,05,246 equity shares, b) 27,69,200 Fully Convertible Debentures (FCDs) and c) 4,06,000 Non Convertible Debentures (NCDs) to the CDR Lenders. These FCDs and NCDs are carrying coupon rate equivalent to base rate of IDBI Bank Limited i.e. 10% p.a. payable on six monthly basis. The FCDs shall be convertible into Equity shares of the Company on 1st July, 2020 at a price which shall be determined in accordance with SEBI ICDR Regulations, 2009 (as amended) and PACL shall have the first right of refusal for redemption before conversion of these FCDs into Equity Shares. The NCDs will be redeemed at par in six equal monthly installments from 1st July, 2020.
During the financial year under review, the Company did not raise funds by way of fixed deposits.
Current Operations and Outlook
Your Company has done extremely well in the first four months of the current financial year. The average capacity utilisation of the Plant was 103% as compared to 77% in the corresponding period of the preceding financial year. The combined average realisation in this period is Rs.40,000. The Provisional Net Profit (before tax) has been Rs.30 crores on a Sales Turnover of Rs.128.50 crores (Net) against a Net Loss (before tax) of Rs.1.50 crores on a Sales Turnover of Rs.100 crores in the corresponding period of the preceding financial year.
The Company has placed an order to M/s. Thyssenkrupp Industrial Solution (India) Pvt. Ltd. (Formerly M/s. UHDE), Germany for procurement of Generation 6 Electrolyzers and also hired their services for Detailed Engineering for modernization of its Plant Unit II which will reduce the power consumption with a consequential increase in production by 100 TPD and benefit the company by approx. Rs. 8.82 crores per annum. The Company has also placed an order to M/s. Hunan Kori Converters Co. Limited, China for supply of 2 Nos. Rectifier Transformer of its Plant Unit II. The new Rectifiers will give higher efficiency of 98% which will result in annual saving of Rs.5.40 crores (approx) per annum on account of power. The Company is also switching from Furnace oil to Coal / Rice Husk fired Boiler of its Plant, which will further save Rs. 30 lacs to Rs. 37 lacs per month.
The Companyâs endeavor to reduce costs continued. The major cost is on account of Power, which accounts for about 60% of the total cost of production.
The Directors are hopeful that the Companyâs efforts will lead to improvement in the performance of the Company in the financial year 2018-19.
Adoption of Indian Accounting Standard (IN D AS)
The Ministry of Corporate Affairs vide notification dated 16th February, 2015 made it mandatory in a phased manner for adoption and applicability of Indian Accounting Standards (IND AS) for companies other than Banking, Insurance and Non-Banking Finance Companies. Rule 4 of the Companies (Indian Accounting Standards) Rules 2015 specifies the classes of companies which shall comply with the IND AS in preparation of the financial statements. In accordance with clause (iii) of sub rule (1) of the Rule 4 of the Companies (Indian Accounting Standards) Rules 2015, the compliance of Indian Accounting Standards was applicable and mandatory to the company for the accounting period beginning from 1st April, 2017.
The financial statements for the year under review have been prepared in accordance with the IND AS including the comparative information for the year ended 31st March, 2017 as well as the financial statements on the date of transition i.e.1st April, 2016.
Environment and Energy Conservation
The Company is committed to run its operations in an environment-friendly manner. The Companyâs endeavor is to take all possible measures towards maintaining safety and good housekeeping in its Plants. Online Monitoring System has been installed at Works as per requirement of Central Pollution Control Board. A Safety Audit of the Plant was got conducted during the financial year 2017-18 from the National Safety Council and its recommendations are being implemented.
The Company continues to place a great emphasis on energy conservation. The Company is getting the Energy Audit conducted on regular basis. The information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in Annexure-I forming a part of this report.
Change in the nature of business
There is no change in the nature of business of the Company.
Listing
The Equity Shares of the Company are listed on the BSE Limited. The Annual listing fee for the year 2018-19 has been paid to the BSE Limited.
Human Resources
Your Company continues to develop and upgrade the skills of its human resources. The process of training and development of human resources continued. Industrial relations remain cordial and peaceful during the year.
The age of superannuation for existing employees of the Company will continue to remain at 60 years, however, those employees employed w.e.f. 17.10.2017 will retire at attaining the age of 58 years as ordered by Appellate Authority vide order dated 01.06.2018 while disposing of the appeal filed by the PACL Karamchari Sangh, Naya Nangal.
The Particulars of Employees and Managerial Remuneration under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure - II forming a part of this Report.
Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining the said information will be furnished the same upon receipt of request.
Policy on Sexual Harassment
The Company has Zero tolerance for Sexual Harassment at Workplace and has in place a âPolicy on Sexual Harassment at Workplaceâ pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. The Policy aims to provide protection to employees at the Workplace and prevent and redress complaints of sexual harassment and framed with the objective of providing a safe working environment, where employees feel secure. Internal Complaints Committee has been setup to redress complaints regarding sexual harassment. During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Corporate Governance
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the financial year 2017-18 is annexed herewith as Annexure - III forming a part of this report and the Corporate Governance Report for the financial year 2017-18 and Auditorsâ Certificate regarding compliance of conditions of Corporate Governance are also annexed. The provisions of section 135 of the Companies Act, 2013 in respect of Corporate Social Responsibility are not applicable to the Company in view of the losses of the Company. Directors & Key Managerial Personnel
The Punjab State Industrial Development Corporation Limited (PSIDC) nominated Smt. Vini Mahajan, IAS as Director and Chairperson of the Company vice Shri Rakesh Kumar Verma, IAS w.e.f. 13th August, 2018. Consequently, Shri Rakesh Kumar Verma, IAS resigned as a Director of the Company w.e.f. 13th August, 2018. The Board of Directors of the Company has appointed Smt. Vini Mahajan, IAS, as Additional Director in the capacity of Chairperson of the Company w.e.f. 13th August, 2018.
The PSIDC had requested the Company to appoint Shri Rajat Agarwal, IAS, as an Additional Director on the Board of Directors of the Company and also take necessary steps to appoint him as Managing Director of the Company for the period of absence of Shri Amit Dhaka, IAS, Managing Director from State. Accordingly, the Board of Directors of the
Company had appointed Shri Rajat Agarwal, IAS, as an Additional Director of the Company on 22nd November, 2017. The Board of Directors of the Company also appointed Shri Rajat Agarwal, IAS, as the Managing Director of the Company for the period from 22nd November, 2017 to 10th December, 2017 for acting as the Managing Director of the Company during the absence of Shri Amit Dhaka, IAS, Managing Director from State. Shri Rajat Agarwal, IAS resigned as a Director of the Company w.e.f. 10th December, 2017. Shri Rajat Agarwal, IAS also ceased to be the Managing Director of the Company w.e.f. 10th December, 2017.
The PSIDC has nominated Smt. Neelima, IAS as its Nominee on the Board of Directors of the Company in place of Smt. Indu Malhotra, IAS. Smt. Indu Malhotra, IAS resigned as a Director of the Company w.e.f. 2nd August, 2018. Accordingly, the Board has appointed Smt. Neelima, IAS as Additional Director of the Company on 14th August, 2018.
Smt. Vini Mahajan, IAS and Smt. Neelima, IAS, hold office as Directors till the date of the ensuing Annual General Meeting. Notices in writing have been received from a member under Section 160 of the Companies Act, 2013, signifying their intention to propose at the ensuing Annual General Meeting the appointment of Smt. Vini Mahajan, IAS and Smt. Neelima, IAS as Directors of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation.
Shri Amit Dhaka, IAS, Managing Director of the Company, retires as Director by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.
The Directors place on record their appreciation of the valuable contribution made by Shri Rakesh Kumar Verma, IAS, Shri Rajat Agarwal, IAS and Smt. Indu Malhotra, IAS.
The Board seeks approval of the Shareholders for Dr. A.K.Kundra, IAS (Retd.) and Shri D.C. Mehandru, who have attained the age of 75 years, to continue to hold office as Independent Directors of the Company, till the current tenure of their respective appointments, in line with Regulation 17 (1A) of the SEBI (LODR) (Amendment) Regulations, 2018.
The Board of Directors of the Company has appointed Shri Ajay Pal Singh as Chief Financial Officer of the Company on Contractual Basis for a further period of one year with effect from 6th June, 2018.
Audit Committee
The Audit Committee of the Board comprises of Shri D.C. Mehandru, Shri J.S. Mann and Shri Amit Dhaka, IAS, Managing Director with Shri D.C. Mehandru as its Chairman.
Risk Management Committee
The Board of Directors of the Company has constituted a Risk Management Committee to monitor and review the Risk Management Plan of the Company.
Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
(i) In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the loss of the Company for the period under review;
(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2018 on a âgoing concernâ basis;
(v) 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;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Declaration of Independent Directors
All the Independent Directors have met requirements specified under Section 149 (6) of the Companies Act, 2013 regarding holding the position of âIndependent Directorâ and necessary Declaration from each Independent Director under Section 149(7) of the Act has been received. The Independent Directors have held a separate meeting during the year under review.
Related Party Transactions Policy
During the year under review, the Company has not entered into any arrangement or contract or transactions with related parties except the remuneration paid to the Key Managerial Personnel.
Vigil Mechanism and Whistle Blower Policy
The Board of Directors of the Company has in place the Policy on Vigil Mechanism and Whistle Blower. The same has also been placed on the Companyâs Website www.punjabalkalies.com.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance and all the Directors individually.
The evaluation of Non-Independent Directors, Chairman and the Board as a whole was done at a separate meeting by the Independent Directors.
Auditors
M/s. Hari S. & Associates, Chartered Accountants (Regn No.007709N), Statutory Auditors of the company, have been appointed by the shareholders in the Annual General Meeting held on 27th September, 2017 for a period of five years i.e. from the conclusion of 42nd Annual General Meeting until the conclusion of the 47th Annual General Meeting to be held in the year 2022, at such remuneration as may be fixed by the Board of Directors. Section 139 of the Companies Act, 2013 (the âActâ) read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 required that the appointment of the statutory auditors will be subject to ratification by shareholders at every Annual General Meeting; but pursuant to the notification of the Central Government dated 7th May 2018, the ratification provision has been withdrawn. Consequently, the ratification of appointment of M/s. Hari S. & Associates as Statutory Auditors is not required.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Cost Auditors
Section 148 of the Companies Act, 2013 pertaining to audit of Cost Records is applicable to the Company. Accordingly, the Board has, subject to the approval of the Shareholders, appointed M/s. J.K. Kabra & Co., Cost Accountants as Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company in respect of the financial year 2018-19.
Secretarial Audit
M/s. A. Arora & Co., Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial Year 2017-18. Their Secretarial Audit Report of the Company for the financial year ended 31st March, 2018 is annexed as Annexure-IV to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practising Company Secretaries were reappointed as Secretarial Auditors of the Company for the Financial Year 2018-19.
Annual Return
Pursuant to the provisions of Section 134 (3) (a) and 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 is annexed as Annexure -V to this Report and is also placed on the website of the Company www.punjabalkalies.com. Acknowledgements
The Directors wish to thank the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Companyâs Bankers and Business Constituents for their continued cooperation and support to the Company.
The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitments and continued contribution to the Company.
For and on behalf of the Board
Sd/-
Place : Chandigarh (VINI MAHAJAN)
Date : August 14, 2018 Chairperson
Mar 31, 2016
The Directors submit their 41st Annual Report together with the Audited Accounts for the financial year ended 31st March, 2016.
Financial Results
The financial results of the Company for the financial year ended 31st March, 2016 are summarized below:-
(Rs. in crores)
|
2015-16 |
2014-15 |
|
|
Sales Turnover & Other Income |
277.87 |
303.49 |
|
Total Expenditure excluding Finance Costs and Depreciation, etc. |
280.04 |
307.77 |
|
Finance Costs |
4.64 |
0.91 |
|
Cash Profit/(Loss) |
(6.81) |
(5.19) |
|
Depreciation, etc. |
7.44 |
7.74 |
|
Net Loss before tax |
14.25 |
12.93 |
|
Provision for taxation |
- |
- |
|
Net Loss after tax |
14.25 |
12.93 |
Your Directors report that the financial year 2015-16 has been another tough year for the Company because of higher cost of production, lower production, provisioning of surcharge and interest amount on the deferment of power bills and provisioning of Interest on Debentures for the period from 1st July, 2015 to 31st March, 2016 proposed to be issued on conversion of last tranche of OTS Amount. The Capacity Utilization at 82% during the year under review was lower against 93% in the preceding year 2014-15. However, inspite of the Company having higher combined average realization per Electro-Chemical Unit (ECU) at Rs.35,107 as against the ECU of Rs. 34,075 the Net Loss (aftertax) was Rs. 14.25 crores. The Company has made a saving of about Rs.10 crores during the financial year on account of purchase of part of power at cheaper rates through Indian Energy Exchange under Open Access System.
In view of the accumulated losses of the Company, the Directors regret their inability to recommend any dividend for the financial year 2015-16.
Finance and Corporate Debt Restructuring
The CDR Empowered Group had approved the proposal of the Company for One Time Settlement (O.T.S.) of the outstanding Term Loans and Non Convertible Debentures and sanctioned Working Capital Facilities as on 1st April, 2012 on 100% principal basis with a cut-off date of 15th November, 2012. The final tranche of O.T.S. amount had fallen due on 1st April, 2015. The Company could not make the payment of the same on due date. At the request of the Company, the CDR Empowered Group has, inter alia, approved the terms of the said terminal payment i.e. (i) The Outstanding amount (as on 1st April, 2015) of terminal payment of OTS amount shall be converted into Equity and Fully Convertible Debentures (FCDs), (ii) Equity Conversion shall be by issuance of fresh equity of 66,05,246 shares as per applicable SeBi norms, (iii) The balance outstanding terminal OTS payment is to be converted into Fully Convertible Debentures (FCDs) and (iv) The Company shall issue Non Convertible Debentures (NCDs) to Lenders to the extent of Mark to Market Loss in respect of fresh Equity issued by the Company; and these FCDs & NCDs shall carry fixed interest rate at IDBI Bank Limited''s Base Rate as on cutoff date of 30th June, 2015 i.e. 10% p.a. The CDR Empowered Group further approved waiver of interest on outstanding O.T.S. amount during period April, 2015 to June, 2015. The Working Capital Banker i.e. Punjab National Bank (PNB) will continue the working capital facilities by restoring working capital limits at 55% of the original level and Punjab and Sind Bank will consider sharing working capital limits on merits as and when the need arises in line with PNB.
During the financial year under review, the Company did not raise funds by way of fixed deposits.
The Company has become a Sick Industrial Company and Company''s Reference under Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985 has been registered by the Board for Industrial and Financial Reconstruction as BIFR Case No. 152/2015.
Current Operations and Outlook
During the first Four Months of the current financial year, the average capacity utilization of the Plant was 91% as compared to 83% in the corresponding period of the preceding financial year. The combined average realization in this period is Rs.36,660. The Net Loss (before tax) has been Rs.1.70 crores on a Sales Turnover of Rs.104 crores (Gross) against a Net Loss (before tax) of Rs.3.78 crores on a Sales Turnover of Rs.90.41 crores in the corresponding period of the preceding financial year.
The Company''s endeavor to reduce costs continued. The major cost is on account of Power, which accounts for about 60% of the total cost of production. The Company is replacing the Membranes of its Plant Unit-I and Unit-II and getting the Anodes and Cathodes recoated in Electrolysers of its Plant Unit-I, in a phased manner. These will result in reduction in power consumption per unit of Caustic Soda Lye and also lead to increase in capacity utilization. To save on energy cost, the Company''s endeavor to purchase power under Open Access System through Indian Energy Exchange continued. Recently PSERC has imposed additional charges of Rs.1.13 per unit on the Energy purchase through Open Access System.
In view of the Company having become a Sick Industrial Company, the Company had requested Punjab Government for various Reliefs and Concessions viz. Concessional Power, Deferment of power bills, Waiver of Sales Tax/ VAT, Electricity Duty, Punjab Infrastructure Development Cess, Advance Electricity Consumption Deposit and Power Wheeling Charges.
The Chlorinated Paraffin Wax (CPW) Plant set up by M/s. Flow Tech Chemicals Pvt. Limited on B.O.O. basis in the Company''s Plant Complex has been commissioned. The same has lifted about 3500 M.T. of Chlorine during the four months ended 31st July, 2016 and has reduced the requirement for additional Chlorine Tonners.
Environment and Energy Conservation
The Company is committed to run its operations in an environment-friendly manner. The Company''s endeavor is to take all possible measures towards maintaining safety and good housekeeping in its Plants. Online Monitoring System has been installed at Works as per the requirement of Central Pollution Control Board. The Company has achieved Zero Discharge of Effluents from its Plant by getting its effluents treated in a Reverse Osmosis based Effluent Treatment Plant set up by M/s. J.B.R. Technologies Private Limited on Build, Own and Operate (B.O.O.) basis in the Company''s Plant Complex.
The Company continues to place a great emphasis on energy conservation. The Company is getting the Energy Audit conducted on regular basis. The information relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in Annexure-I forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. The Annual listing fee for the year 2016-17 has been paid to the Bombay Stock Exchange Limited.
Human Resources
The Company continues to place great value on its human resources. The process of training and development of human resources continued. The industrial relations remained cordial during the financial year under review. The Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Particulars of Employees and Managerial Remuneration under Section 197(12) of the Companies, Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure II forming a part of this Report.
Having regard to provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining the said information will be furnished the same upon receipt of request.
Corporate Governance
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the financial year 2015-16 is annexed herewith as Annexure III forming a part of this report and the Corporate Governance Report for the financial year 2015-16 and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are also annexed. The provisions of section 135 of the Companies Act, 2013 in respect of Corporate Social Responsibility are not applicable to the Company in view of the losses of the Company.
Directors & Key Managerial Personnel
The PSIDC has nominated Smt. Indu Malhotra, IAS as its Nominee on the Board of Directors of the Company in place of Shri S.R. Ladhar, IAS. Shri S.R. Ladhar, IAS resigned as a Director of the Company w.e.f. 16th February, 2016. Accordingly, the Board has appointed Smt. Indu Malhotra, IAS as Additional Director of the Company on 26th May, 2016. Smt. Indu Malhotra, IAS holds office till the date of the ensuing Annual General Meeting. A Notice in writing has been received from a member under Section 160 of the Companies Act, 2013, signifying his intention to propose at the ensuing Annual General Meeting the appointment of Smt. Indu Malhotra, IAS as Director of the Company, whose period of office shall be liable to determination by retirement of Directors by rotation.
Shri Anirudh Tewari, IAS, Chairman and Director of the Company, retire as Director by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.
The IDBI Bank Limited had withdrawn the nomination of Shri Rajesh Malhotra as its Nominee on the Board of Directors of the Company w.e.f. 15th July, 2016.
Smt. Gurneet Tej, IAS has vide her Resignation Letter dated 12th August, 2016 tendered her resignation from the Directorship with immediate effect i.e. with effect from 12th August, 2016.
The Directors place on record their appreciation of the valuable contribution made by Shri S.R. Ladhar, IAS, Smt. Gurneet Tej, IAS and Shri Rajesh Malhotra.
Shri Ajay Pal Singh, Chief Financial Officer of the Company ceased to be the Chief Financial Officer of the Company with effect from 31st May, 2016 on attaining the age of superannuation. The Board of Directors of the Company had appointed Shri Ajay Pal Singh as Chief Financial Officer of the Company on 26th May, 2016 on Contractual Basis for a period of one year with effect from 6th June, 2016.
Audit Committee
The Audit Committee of the Board comprises of Shri D.C. Mehandru, Shri J.S. Mann and Smt. Gurneet Tej, IAS (till 12th August, 2016) with Shri D.C. Mehandru as its Chairman.
Risk Management Committee
The Board of Directors of the Company has constituted a Risk Management Committee to monitor and review the Risk Management Plan of the Company.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
(i) In the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the loss of the Company for the period under review;
(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts for the financial year ended 31st March, 2016 on a âgoing concernâ basis;
(v) 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;
(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Declaration of Independent Directors
All the Independent Directors have met requirements specified under Section 149 (6) of the Companies Act, 2013 regarding holding the position of ''Independent Director'' and necessary Declaration from each Independent Director under Section 149(7) of the Act has been received. The Independent Directors have held a separate meeting during the year under review.
Performance Evaluation Policy of Directors
The Nomination and Remuneration Committee of the Board of Directors of the Company in its meeting had formulated and recommended to the Board of Directors of the Company ''Punjab Alkalies & Chemicals Limited Directors'' Performance Evaluation Policy'' and the Board of Directors had adopted the same.
Related Party Transactions
During the year under review, the Company has not entered into any arrangement or contract or transactions with related parties except the remuneration paid to the Key Managerial Personnel.
Auditors
The appointment of M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood & Associates, Chartered Accountants, as Auditors of the Company from the conclusion of the ensuing Annual General Meeting until the conclusion of 42nd Annual General Meeting to be held in the year 2017 is subject to ratification by the Members. The Auditors being eligible, have indicated their willingness to the same.
Cost Auditors
The Board has, subject to the approval of the Shareholders, appointed M/s. J.K. Kabra&Co., Cost Accountants as Cost Auditors of the Company for conducting an audit of the cost accounting records of the Company in respect of the financial year 2016-17.
Secretarial Audit
M/s. A. Arora &Co., Practicing Company Secretaries, were appointed as Secretarial Auditors of the Company for the financial year 2015-16. Their Secretarial Audit Report of the Company for the financial year ended 31st March, 2016 is annexed as Annexure-IV to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practicing Company Secretaries were reappointed as Secretarial Auditors of the Company for the financial year 2016-17.
Extract of Annual Return
Pursuant to Section 134 (3)(a) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, Extract of Annual Return in Form MGT-9 is annexed as Annexure-V to this Report.
Acknowledgements
The Directors wish to thank the Central and State Governments, Financial Institutions, Punjab State Industrial Development Corporation Limited, Punjab State Power Corporation Limited, Company''s Bankers and Business Constituents for their continued cooperation and support to the Company.
The Directors also wish to express their appreciation of the valuable services rendered by the employees of the Company at all levels.
For and on behalf of the Board
Sd/-
(ANIRUDH TEWARI)
Place : Chandigarh Chairman
Date : August 12, 2016
Mar 31, 2015
The Directors submit their 40,h Annual Report together with the
Audited Accounts for the financial year ended 31st March, 2015.
Financial Results
The financial results of the Company for the financial year ended 31st
March, 2015 are summarized below :-
(Rs.in crores)
2014-15 2013-14
Sales Turnovers Other Income 303.49 301.68
Total Expenditure excluding 307.77 300.15
Finance Costs and Depreciation, etc.
Finance Costs 0.91 0.80
Cash Profit /(Loss) (5.19) 0.73
Depreciation, etc. 7.74 10.30
Net Loss before tax 12.93 9.57
Provision for taxation
Net Loss after tax 12.93 9.57
Your Directors report that the Company's operations continued to be
under severe pressure during the financial year 2014-15 owing to
uncontrollable factors of excess capacity in the Chlor-Alkali Industry,
escalating manufacturing costs, import of Caustic Soda at cheaper rates
and lesser sales realization. Despite the same, the Company achieved
higher Sales Turnover of Rs.303.49 crores and better capacity
utilization of 93% in the financial year under review as compared to
Rs.301.68 crores and 90%, respectively during the preceding financial
year 2013-14. The Company also achieved a
savingofaboutRs.4.22croresduringthefinancialyear2014-15as a result of
purchase of part of power at cheaper rates through Indian Energy
Exchange under Open Access System. However, even with these favorable
developments, the Company's profitability in the financial year
2014-15, was severely impacted due to the said earlier indicated
uncontrollable adverse factors resulting in a lower combined average
realization per Electro-Chemical Unit (ECU) at Rs.34,075 and Net Loss
(after-tax) of Rs. 12.93 crores as against the ECU of Rs. 34,680 and
Net Loss (after-tax) of Rs. 9.57 crores in the financial year 2013-14.
In view of the accumulated losses of the Company, the Directors regret
their inability to recommend any dividend for the financial year
2014-15.
Finance and Corporate Debt Restructuring
The Corporate Debt Restructuring (CDR) Empowered Group had restructured
the debt liabilities of the Company in January, 2003 and had thereafter
revised, reworked and modified the same from time to time. The CDR
Empowered Group had approved for the Company a proposal for One Time
Settlement (O.T.S.) of the outstanding Term Loans and Non-Convertible
Debentures and Sanctioned Working Capital Facilities as on 1st April,
2012 on 100% principal basis with a cut-off date of 15,h November,
2012.
In terms of the same, the Company had already made the payment of the
first and second tranches of the O.T.S. Amount and the interest payable
up to the stipulated date by due dates. The last tranche of O.T.S.
Amount had fallen due on 1 * April, 2015. The Company was not in a
position to meet its obligation for the payment of last tranche on its
due date. The Company had informed the IDBI Bank Limited, the lead
Financial Institution that the Board of Directors of PSIDC. the
promoters of the Company, is agreeable for the conversion of entire
balance debt of about Rs.43 crores of the Lenders into Equity Shares at
a share price to be determined as per SEBI formula applicable on the
date of freezing/accepting the proposal. At the request of the Company,
the IDBI Bank Limited granted additional time till 30,h September, 2015
for making the payment of last tranche of O.T.S. Amount. Subsequently,
the Company has submitted a modified proposal to IDBI Bank Limited for
conversion of part of balance outstanding Debt of the Lenders into
Equity Shares at a share price to be determined as per SEBI formula and
the balance outstanding Debt into Secured Fully Convertible Debentures
and Secured Redeemable Non-Convertible Debentures. The IDBI Bank
Limited will be placing the same before the CDR Empowered Group for
approval.
During the financial year under review, the Company did not raise funds
by way of fixed deposits. The Company has become a Sick Industrial
Company within the meaning of Section 3 (1) (o) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA) and a reference will be
made to the Board for Industrial and Financial Reconstruction
(BIFR)under Section 15 of the SICA. Current Operations and Outlook
The operations of the Company in the first Four Months ended 31st July,
2015 of the financial year 2015-16, continued to reel under severe
pressure resulting in lower capacity utilization at 83% as against 101%
in the corresponding period of the preceding financial year. Although
the Company has done marginally well during first two months of the
first quarter of the financial year 2015-16 due to purchase of some
part of its power requirements at cheaper rates under Open Access
System, but, due to imposition of some restrictions by the Punjab State
Power Corporation Limited, the Company's savings on account of Power
purchase under Open Access, have got unfavourably impacted to a
significant extent, thus adversely affecting the profitability of the
Company in the remaining period of Two Months of
Four Months ended 31st July, 2015 . The situation has been further
aggravated due to levy of 5% Infrastructure Development Fee on Power by
the Government of Punjab w.e.f. 15,h June, 2015. All these resulted
into a Net Loss (before tax) of Rs.3.78 crores in the Four Months ended
31 * July, 2015 on a Sales Turnover of Rs.90.41 crores against a Net
Profit (before tax) of Rs.1.21 crores on a Sales Turnover of Rs.114.15
crores in the corresponding period of the preceding financial year
The Company is continuing its efforts to reduce its costs and increase
its revenues. The major input cost i.e. Power cost constitutes about
60% of the total production cost. The Company continues its Endeavour
to purchase maximum possible portion of its power requirements at
cheaper rates through Indian Energy Exchange under Open Access System.
The Company endeavors for recoating of the Anodes and Cathodes and
replacement of the Membranes in the Electrolyses of its Plant Unit-I in
a phased manner, for reduction in power consumption per unit of Caustic
Soda Lye.
The Chlorinated Paraffin Wax (CPW) Plant set up by M/s. Flow Tech
Chemicals Pvt. Limited on B.O.O. basis in the Company's Plant Complex
is likely to be commissioned shortly. The same will lead to increased
capacity utilization and reduced requirement for additional Chlorine
Tonners.
Environmental Energy Conservation
The Company's endeavor has always been to accord high priority to carry
out its operations in an environment-friendly fashion and the Company
has been taking appropriate pollution control and safety measures. A
Safety Audit of the Plant was got conducted during the financial year
2014-15 from the National Safety Council and its recommendations are
being implemented.
The Company continues to place a great emphasis on energy conservation.
The Company is getting the Energy Audit conducted on regular basis. The
information relating to Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo as required to be disclosed
pursuant to the provisions of Section 134 (3) (m) of the Companies Act,
2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is
given in Annexure-I forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited. The Annual listing fee for the year 2015-16has been
paid to the Bombay Stock Exchange Limited.
Human Resources
Your Company continues to develop and upgrade the skills of its human
resources. Industrial relations continued to be cordial. The Company
has not received any complaint under the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the financial year ended 31 * March, 2015, there was no employee
of the Company whose particulars need to be included in this report
under Section 197(12) of the Companies Act, 2013 read with Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2014-15 required in terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited is annexed herewith as Annexure II
forming a part of this report. The Corporate Governance Report for the
financial year 2014-15 and Auditors' Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Liting Agreement with the Bombay Stock Exchange Limited are also
annexed.
Directors & Key Managerial Personnel
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri Anirudh Tewari, IAS as Director and Chairman of the
Company vice Shri D.P. Reddy, IAS w.e.f. 18,h May, 2015. Consequently,
Shri D.P. Reddy, IAS resigned as a Director of the Company w.e.f. 18*
May, 2015. The Board of Directors of the Company has appointed Shri
Anirudh Tewari, IAS, as Additional Director of the Company w.e.f. 18,h
May, 2015. The Directors place on record their appreciation of the
valuable guidance provided by Shri D.P. Reddy, IAS.
The PSIDC had withdrawn the nomination of Shri S.S. Bains, IAS as its
Nominee Director on the Board of Directors of the Company w.e.f. 16th
July, 2015. Shri S.S. Bains, IAS resigned as a Director as well as
Managing Director of the Company we.f.16,h July, 2015. The Directors
place on record their appreciation of the valuable services rendered by
Shri S.S. Bains, IAS, during his tenure with the Company.
The PSIDC nominated Shri Amit Dhaka, IAS as its Nominee Director on the
Board of Directors of the Company we.f. 14th August, 2015. The Board of
Directors of the Company has appointed Shri Amit Dhaka, IAS, as
Additional Director of the Company w.e.f. 14th August, 2015 and has
also appointed him as the Managing Director of the Company for a period
of five years w.e.f. 17th August, 2015.
Shri J.S. Saraon ceased to be the Director of the Company w.e.f. 17*
April, 2015 consequent upon his demise.
The PSIDC had withdrawn the nomination of Shri Yogesh Goel as its
Nominee Director on the Board of Directors of the Company w.e.f. 28,h
May, 2015. Shri Yogesh Goel resigned as a Director of the Company
w.e.f. 28,h May, 2015.
The PSIDC nominated Shri S.R. Ladhar, IAS as its Nominee Director on
the Board of Directors of the Company w.e.f. 5th August, 2015. The
Board of Directors of the Company has appointed Shri S.R. Ladhar, IAS,
as Additional Director of the Company w.e.f. 5th August, 2015.
Shri Anirudh Tewari, IAS, Shri S.R. Ladhar, IAS and Shri Amit Dhaka,
IAS hold office as Directors till the date of the ensuing Annual
General Meeting. Notices in writing have been received from a member
under Section 160 of the Companies Act, 2013, signifying his intention
to propose at the ensuing Annual General Meeting the appointment of
ShriAnirudh Tewari, IAS, Shri S.R. Ladhar, IAS and Shri Amit Dhaka, IAS
as Directors of the Company, whose period of office shall be liable to
determination by retirement of Directors by rotation.
The Board of Directors of the Company had appointed Smt. Gurneet Tej,
IAS, as Additional Director of the Company on 11* February, 2015. Smt.
Gurneet Tej, IAS (Woman Director) holds office till the date of the
ensuing Annual General Meeting. Pursuant to the provisions of Section
149 and other applicable provisions of the Companies Act, 2013, the
Board of Directors is seeking appointment of Smt. Gurneet Tej, IAS
(Woman Director) as an Independent Director of the Company for a term
of five consecutive years w.e.f. 29* September, 2015. Notice in writing
has been received from a member under Section 160 of the Companies Act,
2013, signifying his intention to propose at the ensuing Annual General
Meeting the appointment of Smt. Gurneet Tej, IAS as an Independent
Director of the Company.
The IDBI Bank Limited has withdrawn the nomination of Shri Ravi Kumar
as its Nominee Director and nominated Shri Rajesh Malhotra as its
Nominee Director on the Board of Directors of the
Companyw.e.f.8,hSeptember,2014. The IFCI Limited had withdrawn the
nomination of Shri S. Sengupta as its Nominee on the Board of Directors
of the Company and nominated Shri Jagdish Garwal as its Nominee
Director w.e.f. 13th November, 2014 and had advised the Company to
co-opt him on the Board of Directors. Consequently, Shri S. Sengupta
resigned as a Director of the Company w.e.f. 13th November, 2014.
Accordingly, the Board of Directors of the Company had appointed Shri
Jagdish Garwal, as Additional Director of the Company on 13th November,
2014. The IFCI Limited had subsequently withdrawn the nomination of
Shri Jagdish Garwal as its Nominee on the Board of Directors of the
Companyw.e.f. 11,h August, 2015. Consequently, Shri Jagdish Garwal
resigned as a Director of the Company w.e.f. 11,h August, 2015.
The Directors place on record their appreciation of the valuable
contribution made by Shri J.S. Saraon, Shri Yogesh Goel, Shri Ravi
Kumar, Shri S. Sengupta and Shri Jagdish Garwal.
Pursuant to the provisions of Section 203 of the Companies Act, 2013,
Shri Ajay Pal Singh, General Manager (Finance) has been designated as
Chief Financial Officer.
Audit Committee
The Audit Committee of the Board comprised of Shri J.S. Saraon, Shri
D.C. Mehandru, Shri J.S. Mann and Shri Jagdish Garwal with Shri J.S.
Saraon as its Chairman. Subsequently, Shri J.S. Saraon ceased to be a
Member and Chairman of the Committee w.e.f. 17th April, 2015 consequent
upon his demise. The Board had appointed Shri D.C. Mehandru as the
Chairman of the Audit Committee w.e.f. 26th May, 2015. Shri Jagdish
Garwal subsequently ceased to be the Member of the Committee consequent
upon withdrawal of his nomination by IFCI Limited and his resignation
as a Director of the Company w.e.f. 11th August, 2015.
Risk Management Committee
As required under Clause 49 (VI) of the Listing Agreement, the Board of
Directors of the Company has constituted a Risk Management Committee to
monitor and review the Risk Management Plan of the Company.
Directors 'Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the loss of the
Company for the period under review;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts for the financial
year ended 31 * March, 2015 on a 'going concern' basis;
(v) 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;
(vi) The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Declaration of Independent Directors
All the Independent Directors have met requirements specified under
Section 149(6) of the Companies Act, 2013 regarding holding the
position of 'Independent Director' and necessary Declaration from each
Independent Director under Section 149(7) of the Act has been received.
The Independent Directors have held a separate meeting during the year
under review. Related Party Transactions Policy
As required under Clause 49 (VII) of the Listing Agreement, the Board
of Directors of the Company in its meeting held on 11th February, 2015
had approved the Related Party Transactions Policy of the Company. The
same has also been placed on the Company's Website
www.punjabalkalies.com. During the year under review, the Company has
not entered into any arrangement or contract or transactions with
related parties except the remuneration paid to the Key Managerial
Personnel. Vigil Mechanism and Whistle Blower Policy
As required under Section 177 (9) of the Companies Act, 2013 and Clause
49 (II) (F) of the Listing Agreement, the Board of Directors of the
Company in its meeting held on 11* February, 2015 had approved the
Vigil Mechanism and Whistle Blower Policy of the Company. The same has
also been placed on the Company's Website www.punjabalkalies.com.
Auditors
The appointment of M/s. S. Tandon & Associates, Chartered Accountants
and M/s. A.K. Sood & Associates, Chartered Accountants, as Auditors of
the Company from the conclusion of the ensuing Annual General Meeting
until the conclusion of 41st Annual General Meeting to be held in the
year 2016 is subject to ratification by the Members. The Auditors being
eligible, have indicated their willingness to the same.
Cost Auditors
The Board has, subject to the approval of the Shareholders, appointed
M/s. J.K. Kabra &Co., Cost Accountants as Cost Auditors of the Company
for conducting an audit of the cost accounting records of the Company
in respect of the financial year 2015-16.
Secretarial Audit
M/s. A. Arora & Co., Practicing Company Secretaries, were appointed as
Secretarial Auditors of the Company for the financial year 2014-15.
Their Secretarial Audit Report of the Company for the financial year
ended 31 * March, 2015 is annexed as Annexure-lll to this Report. The
Report does not contain any qualification. M/s. A. Arora & Co.,
Practicing Company Secretaries were reappointed as Secretarial Auditors
of the Company for the financial year 2015-16.
Extract of Annual Return
Pursuant to Section 134 (3)(a) of the Companies Act, 2013 and Rule
12(1) of the Companies (Management and Administration) Rules, 2014,
Extract of Annual Return in Form MGT-9 is annexed as Annexure-IV to
this Report.
Acknowledgements
Your Directors place on record their appreciation of the cooperation
and support extended by the Central and State Governments, Financial
Institutions, Punjab State Industrial Development Corporation Limited,
Punjab State Power Corporation Limited, Company's Bankers and esteemed
customers.
Your Directors also acknowledge the valuable contribution made by the
members of management team, staff and work- force.
For and on behalf of the Board
Sd/-
Place : Chandigarh (ANIRUDH TEWARI)
Date: August 17, 2015 Chairman
Mar 31, 2014
Dear Members,
The Directors submit their 39th Annual Report together with the
Audited Accounts for the financial year ended 31st Mai 2014.
Financial Results
The financial results of the Company forthe financial year ended 31st
March, 2014 are summarised below:-
(Rs. in crores)
2013-14 2012-13
Sales Turnover & Other Income 301.68 326.97
Total Expenditure excluding 300.15 302.14
Finance Costs and Depreciation, etc.
Finance Costs 0.80 7.75
Cash Profit 0.73 17.08
Depreciation, etc. 10.30 12.99
NetProfit/(Loss)beforetax (9.57) 4.09
Provision for taxation - 1.28
Net Profit/(Loss)after tax (9.57) 2.81
Your Directors report that after doing fairly well during the years
2011-12 and 2012-13, the Company''s operations came under intense
pressure during the financial year 2013-14 due to uncontrollable
factors of (a) upward revision in basic power tariff by about 13%
w.e.f. 1st April, 2013 by the Punjab State Electricity Regulatory
Commission (PSERC) which had an overall impact of about Rs.9.30 crores
on the Company, (b) excess capacity and surplus supply position in
Chlor Alkali Industry and (c) escalating cost of other inputs, etc. The
Capacity Utlisation at 90% during the year under review was lower
against 96% in the preceding year 2012-13. All these resulted in a
lower combined average realisation per Electro-Chemical Unit (ECU) at
Rs.34,680 and Net Loss (aftertax) of Rs. 9.57 crores as against the ECU
of Rs.35,390and Net Profit (aftertax) of Rs.2.81 crores in the
financial year ended 31st March, 2013. The scenario in the second half
of the financial year 2013-14 was better as compared to the situation
prevailing in the first half of the said financial year, due to better
sales realisation and Time of Day (TOD) Power Tariff Rebate allowed by
the Punjab State Power Corporation Limited.
In view of the Loss incurred by the Company, the Directors express
their inability to recommend any dividend for the financial year
2013-14.
Finance and Corporate Debt Restructuring
The Corporate Debt Restructuring (CDR) Empowered Group had approved the
Proposal of the Company for One Time Settlement (O.T.S.) of the
outstanding Term Loans and Non-Convertible Debentures and Sanctioned
Working Capital Facilities as on 1st April, 2012 on 100% principal
basis with a cut-off date of 15th November, 2012. In terms of the same,
the Company had to make payment of (a) Upfront Payment of 35% of the
O.T.S. Amount as first tranche, 10% of the balance 65% of O.T.S. Amount
as second tranche by 30th September, 2014 and the remaining 90% of the
balance 65% of O.T.S. Amount as third tranche by 1st April, 2015 and
(b) Interest from 1st July, 2012 to 30th September, 2012 on the entire
outstanding amount and interest from 1st October, 2012 to the date of
payment of first tranche on 35% of O.T.S. Amount alongwith the payment
of first tranche and interest from 1st October, 2012 to the date of
payment of first tranche on balance 65% of O.T.S. Amount by 31st
October, 2013. In addition, the Company has to create a reserve of
Rs.17.43 crores by 30th November, 2014. In terms of the said O.T.S.,
the Company is not required to pay interest on the balance 65% of
O.T.S. Amount from the date of payment of first tranche.
The Company had already made the payment of the first tranche of the
O.T.S. Amount and the entire interest payable as aforesaid by due
dates. The Company would be making the payment of the second tranche of
the O.T.S. Amount by due date i.e. 30th September, 2014.
Due to the current unfavourable market scenario and resultant tight
liquidity position, it may be difficult for the Company to meet its
obligations forthe payment of last tranche on its due date i.e. 1st
April, 2015 and creation of said reserve by 30th November, 2014. The
Company is exploring possibility of arranging funds from other Banks,
Financial Institutions and Private Financers. The Company is also
approaching IDBI Bank Limited for extension of time period for making
payment of said last tranche and for waiver of the condition of
creation of said reserve by 30th November, 2014.
During the financial year under review, the Company did not raise funds
by way of fixed deposits.
Current Operations and Outlook
After doing fairly well during the first quarter ended 30th June, 2014
of the financial year 2014-15, with the withdrawal of Time of Day (TOD)
Power Tariff Rebate by the Punjab State Power Corporation Limited
w.e.f. 1st June, 2014 and low ECU realisation, the financial position
of the Company has again come under strain. Despite the same, the
overall performance during first Four Months ended 31st July, 2014 was
fair in comparison to that of the corresponding period in the preceding
year 2013-14. During the first Four Months of the current financial
year, the average capacity utilisation of the Plant was 101% as
compared to 90% in the corresponding period of the preceding financial
year. The combined average realisation in this period increased to
Rs.35,840 per ECU over the combined average realisation of Rs.32,860
per ECU during the corresponding period in the financial year 2013-14.
The Net Profit (before tax) has been Rs.1.21 crores on a Sales Turnover
of Rs.114.15 crores against a Net Loss (before tax) of Rs.9.67 crores
on a Sales Turnover of Rs.92.84 crores in the corresponding period of
the preceding financial year.
The Company''s endeavor to reduce costs continued. The major cost is on
account of Power, which accounts for about 60% of the total cost of
production. The Company is replacing the Membranes of its Plant Unit-I
and Plant Unit-II and getting the Anodes recoated in Electrolysers of
its Plant Unit-II, in a phased manner. These will result in reduction
in power consumption per unit of Caustic Soda Lye and also lead to
increase in capacity utilisation. To save on energy cost, the Company''s
endeavor to purchase power under Open Access System through Indian
Energy Exchange continued. The Company is also making efforts for
making Bi-lateral Arrangement with Power Generators for purchasing
power.
The setting up of a Chlorinated Paraffin Wax (CPW) Plant by M/s. Flow
Tech Chemicals Pvt. Limited on B.O.O. basis in the Company''s Plant
Complex, with whom the Company had signed a Memorandum of
Understanding, is in progress. With the implementation of the same,
the Company expects to increase its capacity utilisation and to reduce
its requirement for additional Chlorine Tonners.
Your Directors are optimistic about improved performance in the days to
come.
Environment and Energy Conservation
The Company is committed to run its operations in an
environment-friendly manner. The Company''s endeavor is to take all
possible measures towards maintaining safety and good house keeping in
its Plants. The Environmental Audit of the Company''s Plants for the
year 2013-14 has been completed by M/s. Mantec Consultants Pvt. Limited
and their final Report is awaited.
The Company strives to make its Plant energy efficient. The Company had
got an Energy Audit of its Plants conducted from North India Technical
Consultancy Organisation Limited (NITCON) in the financial year
2013-14. The major recommendations of NITCON are being implemented. The
information required under the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, is given in Annexure-I
forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited. The Annual listing fee for the year 2014-15 has been
paid to the Bombay Stock Exchange Limited.
Human Resources
The Company continues to place great value on its human resources. The
process of training and development of human resources continued. The
industrial relations remained cordial during the financial year under
review.
During the financial year ended 31st March, 2014, there was no employee
of the Company whose particulars need to be included in this report
under Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2013-14 required in terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited is annexed herewith as Annexure - II
forming a part of this report. The Corporate Governance Report for the
financial year 2013-14 and Auditors'' Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Listing Agreement with the Bombay Stock Exchange Limited are
also annexed.
Directors
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri D.P. Reddy, IAS as Director and Chairman of the Company
vice Shri Karan Avtar Singh, IAS w.e.f. 22nd July, 2014. The Directors
place on record their appreciation of the valuable guidance provided by
Shri Karan Avtar Singh, IAS.
The PSIDC had vide its letter dated 9th April, 2014 requested the
Company to appoint Shri D.K. Tiwari, IAS, as an Additional Director on
the Board of Directors of the Company and also take necessary steps to
appoint him as Managing Director of the Company for the period of
absence of Shri S.S. Bains, IAS, Managing Director from Headquarters on
account of his Election Duty for Lok Sabha Elections-2014. Accordingly,
the Board of Directors of the Company had appointed Shri D.K. Tiwari,
IAS, as an Additional Director of the Company on 9th April, 2014. The
Board of Directors of the Company also appointed Shri D.K. Tiwari, IAS,
as the Managing Director of the Company for the period from 9th April,
2014 to 19th May, 2014 for acting as the Managing Director of the
Company during the absence of Shri S.S. Bains, IAS, Managing Director
from Headquarters on account of his Election Duty for Lok Sabha
Elections-2014. Shri D.K. Tiwari, IAS resigned as a Director of the
Company w.e.f. 19th May, 2014. Shri D.K. Tiwari, IAS also ceased to be
the Managing Director of the Company w.e.f. 19th May, 2014. The
Directors place on record their appreciation of the valuable
contribution made by Shri D.K. Tiwari, IAS.
The IFCI Limited has nominated Shri S. Sengupta as its Nominee on the
Board of Directors of the Company in place of Shri Gautam Meour and had
advised the Company to co-opt him on the Board of Directors. Shri
Gautam Meour resigned as a Director of the Company w.e.f. 19th
December, 2013. Accordingly, the Board has appointed Shri S. Sengupta,
as Additional Director of the Company on 12th February, 2014. Shri S.
Sengupta holds office till the date of the ensuing Annual General
Meeting. Notice in writing has been received from a member under
Section 160 of the Companies Act, 2013, signifying his intention to
propose at the ensuing Annual General Meeting the appointment of Shri
S. Sengupta as
Director of the Company, whose period of office shall be liable to
determination by retirement of Directors by rotation. The Directors
place on record their appreciation of the valuable contribution made
byShri Gautam Meour.
Pursuant to the provisions of Section 149 and other applicable
provisions of the Companies Act, 2013, the Board of Directors is
seeking appointment of Shri J.S. Saraon, Shri D.C. Mehandru, Dr. A.K.
Kundra, IAS (Retd.) and Shri J.S. Mann as Independent Directors of the
Company for a term of five consecutive years w.e.f. 29th September,
2014. Notice in writing have been received from some members under
Section160 of the Companies Act, 2013. signifying their intention to
propose at the ensuring Annual General Meeting the appointment of Shri
J.S. Saraon, Shri D.C. Mehandru, Dr. A.K. Kundra, IAS (Retd.) and Shri
J.S. Mann as Independent Directors of the Company.
Pursuant to the provisions of Sections 149 and 152 and other applicable
provisions of the Companies Act, 2013, the Board of Directors is
seeking appointment of Shri D.P. Reddy, IAS, Shri Yogesh Goel and Shri
S.S. Bains, IAS as Directors of the Company, liable to retire by
rotation. Notice in writing have been received from some members under
Section 160 of the Companies Act, 2013. signifying their intention to
propose at the ensuring Annual General Meeting the appointment of Shri
D.P. Reddy, IAS, Shri Yogesh Goel and Shri S.S. Bains, IAS as Directors
of the Company, whose period of office shall be liable to determination
by retirement of Directors by rotation.
Audit Committee
The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri
D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon
as its Chairman.
Directors'' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31st March, 2014, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the loss of the
Company for the year under review;
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts for the financial
year ended 31st March, 2014 on a ''going concern'' basis;
(v) 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;
(vi) The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Auditors
M/s. S.Tandon & Associates, Chartered Accountants and M/s. A.K. Sood &
Associates, Chartered Accountants, Auditors of the Company retire on
the conclusion of the ensuing Annual General Meeting and being eligible
they have indicated their willingness to be re-appointed.
Cost Auditors
M/s. J.K. Kabra &Co., Cost Accountants were re-appointed as Cost
Auditors of the Company for conducting an audit of the cost accounting
records of the Company in respect of the financial year 2013-14.
The Board has, subject to the approval of the Shareholders, appointed
M/s. J.K. Kabra & Co., Cost Accountants as Cost Auditors of the Company
for conducting an audit of the cost accounting records of the Company
in respect of the financial year 2014-15.
Acknowledgements
The Directors wish to thank the Central and State Governments,
Financial Institutions, Punjab State Industrial Development Corporation
Limited, Punjab State Power Corporation Limited, Company''s Bankers and
Business Constituents for their continued cooperation and support to
the Company.
The Directors also wish to express their appreciation of the valuable
services rendered by the employees of the Company at all levels.
For and on behalf of the Board
Sd/-
Place : Chandigarh (DP REDDY)
Date : August 12, 2014 Chairman
Mar 31, 2013
The Directors submit their 38th Annual Report together with the
Audited Accounts for the financial year ended 31st March, 2013.
Financial Results
The financial resultsofthe Company for the financial year ended 31st
March, 2013 are summarised below :-
(Rs. in crores)
2012-13 2011-12
Sales Turnover& Other Income 326.97 264.49
TotalExpenditure excluding 302.14 234.39
Finance Costs and Depreciation, etc.
Finance Costs 7.75 10.76
Cash Profit 17.08 19.34
Depreciation, etc. 12.99 12.80
Net Profit before tax 4.09 6.54
Provision for taxation 1.28 2.15
Net Profit after tax 2.81 4.39
Your Directors report that the financial year 2012-13 has not been a
smooth year for the Company. The Company achieved higher Sales Turnover
of Rs.326.97 crores, increased combined average realisation per
Electro-Chemical Unit (ECU) of Rs.35,390 and better capacity
utilisation of 96% in the financial year under review as compared to
Rs.264.49 crores, Rs.30,950 and 89%, respectively during the preceding
financial year 2011-12. The Company also made a saving of about
Rs.11.70 crores during the financial year 2012-13 on account of
purchase of part of power requirements at cheaper rates through Energy
Exchanges under Open Access System. Despite all these favourable
factors, the Company''s profitabilityin the financial year 2012-13, was
severely impacted due to (a)importofCaustic Sodaat cheaper prices, (b)
increase in cost of inputs such as Salt and other chemicals and (c)
exorbitant hike by the Punjab State Electricity Regulatory Commission
(PSERC) in the basic power tariff by about 13% w.e.f. 1st April, 2012
and steep increase in the Power Wheeling Charges of the Punjab State
Power Corporation Limited under Open Access System w.e.f. 1st April,
2012. Consequently, the Net Profit (before tax) and Net Profit (after
tax) have been Rs.4.09 crores and Rs.2.81 crores, respectively in the
said financial year.
In view of the accumulated losses of the Company, the Directors regret
their inability to recommend any dividend for the financial year
2012-13.
Finance and CorporateDebt Restructuring
The Corporate Debt Restructuring (CDR) Empowered Group had restructured
the debt liabilities of the Company in January, 2003 and had thereafter
revised, reworked and modified the same from time to time. The CDR
Empowered Group has approved the Proposal of the Company for One Time
Settlement (O.T.S.) of the outstanding Term Loans and Non-Convertible
Debentures and Sanctioned Working Capital Facilities ason 1st April,
2012 on 100% principal basis with a cut-off date of 15th November,
2012. In terms of the same, the Company had to make payment of (a)
Upfront Payment of 35% of the O.T.S. Amount as first tranche, 10% of
the balance 65% of O.T.S. Amount as second tranche by 30th September,
2014 and the remaining 90% of the balance 65% of O.T.S. Amount as third
tranche by 1st April, 2015 and (b) Interest from 1st July, 2012 to 30th
September, 2012 on the entire outstanding amount and interest from 1st
October, 2012 to the date of payment of first tranche on 35% of O.T.S.
Amount alongwith the payment of first tranche and interest from 1st
October, 2012 to the date of payment of first tranche on balance 65% of
O.T.S. Amount by 31st October, 2013. The Company has made the payment
of the first tranche of the O.T.S. Amount by 29th December, 2012 and
the interest payable therewith by 31st December, 2012. In terms of the
said O.T.S., the Company is not required to pay interest on the balance
65%of O.T.S. Amount from the dateofpaymentof first tranche. During the
financial year under review, the Company did not raise fundsby wayof
fixed deposits.
Current Operations and Outlook
The operations of the Company in the first Four Months ended 31st July,
2013 of the financial year 2013-14, came under severe pressure. During
the said period, the capacity utilisation of the plant was 90%. The
combined average realisation per ECU and the Sales Turnover in this
period were Rs.32,860 and Rs.92.84 crores, respectively. The upward
revision in the basic power tariff by about 13% w.e.f. 1st April, 2013
by the Punjab State Electricity Regulatory Commission (PSERC), having
an overall annual impact to the tune of approx. Rs.14.00 crores per
annum on the Company on 100% production basis, further adversely
affected the operations during the said period. The Company has
incurred a Net Loss (before tax)of Rs.9.67 croresinthe Four Months
ended 31st July, 2013.
The Company is continuing its efforts to reduce its costs and increase
its revenues. The major input cost i.e. Power cost constitutes about
60% of the total production cost. The Company endeavours to purchase a
maximum portion of its power requirements at cheaper rates through
Energy Exchanges under Open Access System. The Company also continues
with the replacement of the Membranes in the Electrolysers of its Plant
Unit-I and recoating of the Anodes and replacementofthe Membranesin the
Electrolysersof its Plant Unit-IIinaphased manner, for reductioninpower
consumption per unit of Caustic Soda Lye. The Company has signed a
Memorandum of Understanding with M/s. SEL Ecochem Private Limited for
setting up a Hydrogen Peroxide Plant on Build, Own and Operate (B.O.O.)
basis in the Company''s Plant Complex for purchase of 30,000 NM3
Hydrogen Gas per day from the Company and supply of Saturated Steam to
the Company for better realisation for Hydrogen Gas. Your Directors
are hopeful of better performance inthe days to come.
Environment and Energy Conservation
The Company continues to accord high priority to carry out its
operations in an environment-friendly fashion and has been taking
appropriate pollution control and safety measures. The Company has
achieved Zero Discharge of Effluents from its Plant by getting its
effluents treated in a Reverse Osmosis based Effluent Treatment Plant
set up by M/s. J.B.R. Technologies Private Limited on Build, Own and
Operate (B.O.O.) basis in the Company''s Plant Complex. A Safety Audit
of the Plant was got conducted during the financial year 2012-13 from
the National Safety Council and its recommendations are being
implemented.
The Company continues to place a great emphasis on energy conservation.
The information required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, is given in
Annexure-I forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited. The Annual listing fee for the year 2013-14 has been
paidtotheBombay Stock Exchange Limited.
HumanResources
Your Company continues to develop and upgrade the skills of its human
resources. Industrial relations continued to be cordial. The management
entered into a wage agreement with the workmen in September, 2012,
valid from 1st January, 2012to31st December, 2014.
During the financial year ended 31st March, 2013, there was no employee
of the Company whose particulars need to be included in this report
under Section 217(2A) of the Companies Act, 1956.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2012-13 required in terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited is annexed herewith as Annexure-II
forming a part of this report. The Corporate Governance Report for the
financial year 2012-13 and Auditors'' Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Listing Agreement with the Bombay Stock Exchange Limited are
also annexed.
Directors
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri Karan Avtar Singh, IAS as Director and Chairman of the
Company vice Shri A.R. Talwar, IAS w.e.f. 22nd January, 2013. The
Directors place on record their appreciation of the valuable guidance
provided by Shri A.R. Talwar, IAS.
The PSIDC had withdrawn the nomination of Shri Jivandeep Singh Kahlon,
IRS as its Nominee Director on the Board of
Directors of the Company w.e.f. 26th July, 2013. Consequently, Shri
Jivandeep Singh Kahlon, IRS ceased to be the
Managing Director of the Company w.e.f. 26th July, 2013. The Directors
place on record their appreciation of the valuable services rendered by
Shri Jivandeep Singh Kahlon, IRS, during his tenure with the Company.
The PSIDC nominated Shri S.S. Bains, IAS as its Nominee Director on the
Board of Directors of the Company w.e.f. 5th
August, 2013. The Board of Directors of the Company appointed Shri S.S.
Bains, IAS as the Managing Director of the Company w.e.f. 7th August,
2013. The Directors feel that the Company will benefit tremendously
from his rich and varied experience.
Shri J.S. Saraon and Shri D.C. Mehandru retire by rotation at the
ensuing Annual General Meeting and being eligible offer themselves for
re-appointment.
AuditCommittee
The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri
D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon
as its Chairman.
Directors''ResponsibilityStatement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31st March, 2013, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the profit of
the Company for the year under review;
(iii) 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) The Directors have prepared the annual accounts for the financial
year ended 31st March, 2013 on a Âgoing concern'' basis.
Auditors
M/s. S.Tandon & Associates, Chartered Accountants andM/s. A.K. Sood &
Associates, Chartered Accountants, Auditors of the Company retire on
the conclusion of the ensuing Annual General Meeting and being eligible
they have indicated their willingness to be re-appointed.
Cost Auditors
M/s. J.K. Kabra & Co., Cost Accountants were re-appointed as Cost
Auditors of the Company for conducting a cost audit of the cost
recordsofthe Companyinrespect ofthe financial year 2012-13.
Acknowledgements
Your Directors place on record their appreciation of the cooperation
and support extended by the Central and State Governments, Financial
Institutions, Punjab State Industrial Development Corporation Limited,
Punjab State Power Corporation Limited, Company''s Bankers and esteemed
customers.
Your Directors also acknowledge the valuable contribution made by the
members of management team, staff and work- force .
For andonbehalf of the Board
Sd/-
Place : Chandigarh (KARAN AVTAR SINGH)
Date : August 13, 2013 Chairman
Mar 31, 2012
The Directors submit their 37th Annual Report together with the
Audited Accounts for the financial year ended 31st March, 2012.
Financial Results
Your Directors report that the Company has shown encouraging
performance during the financial year ended 3111 March, 2012. The
financial results of the Company for the financial year ended 31st
March, 2012 are summarised below :-
(Rs. in crores)
2011-12 2010-11
Sales Turnover & Other Income 264.49 194.43
Total Expenditure excluding 234.39 196.58
Finance Costs and Depreciation, etc.
Finance Costs 10.76 9.64
Cash Profit / (Loss) 19.34 (11.79)
Depreciation, etc. 12.80 12.49
Net Profit / (Loss) before tax 6.54 (24.28)
Provision for taxation 2.15 -
Net Profit / (Loss) after tax 4.39 (24.28)
Members would be happy to note that your Company has posted a Net
Profit (before tax) of Rs.6.54 crores in the financial year 2011-12 as
against preceding financial year's Net Loss (before tax) of Rs.24.28
crores, due to increase in the combined average realisation from
Rs.25,600 per Electro-Chemical Unit (ECU) during the financial year
2010-11 to Rs.30,950 per ECU in the financial year 2011-12, better
capacity utilisation and savings of about Rs.11.00 crores on account of
procurement of part of power requirements at cheaper rates under Open
Access System. The Turnover of your Company during the financial year
under review at Rs.264,49 crores was higher by 36% as compared to
Rs.194.43 crores in the preceding financial year. The Company earned a
Cash Profit of Rs.19.34 crores in the financial year 2011-12 as against
a Cash Loss of Rs.11.79 crores during the preceding financial year.
During the financial year under review, the Net Profit (after tax) was
Rs.4.39 crores as compared to Net Loss (after tax) of Rs,24,28 crores
in the financial year 2010-11.
Your Directors believe that the results would have been better but for
increase in cost of raw materials and cost of power supplied by the
Punjab State Power Corporation Limited,
In view of the accumulated losses of the Company, the Directors express
their inability to recommend any dividend for the financial year
2011-12.
Finance and Corporate Debt Restructuring
The Corporate Debt Restructuring (CDR) Empowered Group had, in
September, 2011, acceded to the request of the Company for further
deferment of repayment of principal long term dues and Funded Interest
Term Loans of the Financial Institutions and Banks, falling due between
1s" April, 2011 and 111 January, 2012, so as to be repayable from 1st
April, 2012 without changing the terminal date, with a marginal
increase in the rate of interest. The CDR Empowered Group had, in
June, 2012, approved the further deferment of repayment of principal
long term dues and Funded Interest Term Loans falling due on 1st April,
2012 by one Quarter, with a marginal increase in the rate of interest.
The Company has submitted a proposal to the Financial Institutions and
Banks for making a One Time Settlement (OTS) in respect of the dues of
the Company towards them.
During the financial year under review, the Company did not raise funds
by way of fixed deposits.
Current Operations and Outlook
Your Company has done well in the first Four Months ended 31st July,
2012 of the financial year 2012-13. The average capacity utilisation of
the Plant during the said period was 95% as compared to 80% in the
corresponding period of the preceding financial year. The combined
average realisation in this period increased to Rs.35,950 per ECU - an
increase of Rs.5,650 per ECU over the combined average realisation of
Rs.30,300 per ECU during the corresponding period in the financial year
2011-12. The Net Profit (before tax) has been Rs,4.37 crores on a Sales
Turnover of Rs.107.77 crores against a Net Profit (before tax) of
Rs.4.75 crores on a Sales Turnover of Rs.73.27 crores in the
corresponding period of the preceding financial year. The results would
have been still better but for the exorbitant hike in Power Wheeling
Charges of the Punjab State Power Corporation Limited (PSPCL) w.e.f.
1s' April, 2012, which restrained the Company from purchasing power
under Open Access System to a great extent and the upward revision in
the power tariff of PSPCL w.e.f. 1st April, 2012,
The Company's endeavor to reduce costs continued. The major cost is on
account of Power, which accounts tor about 60% of the cost of
production. The Company is replacing the Membranes and getting the
Anodes recoated in Electrolysers of its Plant Unit-ll in a phased
manner, at a cost of about Rs.9.50 crores. These will result in
reduction in power consumption per unit of Caustic Soda Lye and also
lead to increase in capacity utilisation. The Company has signed a
Memorandum of Understanding (M.O.U.) with M/s. Purab Infrastructure
Projects Limited for setting up 45 MW Power Plants on Build, Own and
Operate (B.O.O.) basis in the Company's Plant Complex for supply of 35
MW power to the Company. This will result in saving in power cost,
after the same commences operations.
The Company has signed a M.O.U, with M/s. Flow Tech Chemicals Pvt.
Limited for setting up a Chlorinated Paraffin Wax (CPW) Plant on B.O.O.
basis in the Company's Plant Complex. As a result of this arrangement,
the Company expects to increase its capacity utilisation and to reduce
its requirement for additional Chlorine Tonners.
The Company is in the process of making arrangements with another Party
for setting up a Hydrogen Per-oxide Plant on B.O.O. basis in the
Company's Works Complex.
With these measures, your Directors are optimistic about improved
performance in the days to come. Environment and Energy Conservation
The Company's endeavor has always been to run its operations in an
environment-friendly manner. The Company is fully committed to take all
possible measures towards maintaining safety and good house keeping in
its Plants, The Company had got a Reverse Osmosis based Effluent
Treatment Plant set up on B.O.O. basis in the Company's Plant Complex
by M/s. J.B.R. Technologies Private Limited for treatment of effluents
of the Company for achieving Zero Discharge of Effluents from its
Plant.
The Company strives to make its Plant energy efficient. The information
required under the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, is given in Annexure-I forming a
part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited, The Annual listing fee for the year 2012-13 has been
paid to the Bombay Stock Exchange Limited.
Human Resources
The Company continues to place great value on its human resources. The
process of training and development of human resources continued. The
industrial relations remained cordial during the financial year under
review.
During the financial year ended 31st March, 2012, there was no employee
of the Company whose particulars need to be included in this report
under Section 217(2A) of the Companies Act, 1956.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2011-12 required in terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited is annexed herewith as Annexure - II
forming a part of this report. The Corporate Governance Report for the
financial year 2011-12 and Auditors' Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Listing Agreement with the Bombay Stock Exchange Limited are
also annexed.
Directors
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri A.R. Talwar, IAS as Director and Chairman of the Company
vice Dr. S,S, Channy, IAS w.e.f. 12th April, 2012. The Directors place
on record their appreciation of the valuable guidance provided by Dr.
S.S. Channy, IAS.
The PSIDC nominated Shri Jivandeep Singh Kahion, IRS as its Nominee
Director on the Board of Directors of the Company in place of Shri S.S.
Bains, IAS w.e.f. 23d July, 2012. Consequently, Shri S.S. Bains, IAS
ceased to be the Managing Director of the Company w.e.f. 23,rd July,
2012. The Directors place on record their appreciation of the valuable
services rendered by Shri S.S. Bains, IAS, during his tenure with the
Company. The Board of Directors of the Company appointed Shri Jivandeep
Singh Kahion, IRS as the Managing Director of the Company w.e.f. 21st
July, 2012. The Directors feel that the Company will benefit
tremendously from his rich experience.
The IFCI Limited has nominated Shri Gautam Meour as its Nominee on the
Board of Directors of the Company in place of Shri OP. Yadav and had
advised the Company to co-opt him on the Board of Directors. Shri O.P.
Yadav resigned as a Director ot the Company w.e.f. 13th February, 2012
Accordingly, the Board has appointed Shri Gautam Meour as Additional
Director of the Company on 13!h February, 2012. Shri Gautam Meour holds
office till the date of the ensuing Annual General Meeting. Notices in
writing have been received from some members under Section 257 of the
Companies Act, 1956, signifying their intention to propose at the
ensuing Annual General Meeting the appointment of Shri Gautam Meour as
Di'rector of the Company, whose period of office shall be liable to
determination by retirement of Directors by rotation. The Directors
place on record their appreciation of the valuable contribution made by
Shri O.P. Yadav.
Dr. A. K Kundra, IAS (Retd.) and Shri J.S. Mann retire by rotation at
the ensuing Annual General Meeting and being eligible offer themselves
for re-appointment.
Audit Committee
The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri
D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon
as its Chairman.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31st March, 2012, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the profit of
the Company for the year under review;
(lii) 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) The Directors have prepared the annual accounts for the financial
year ended 31st March, 2012 on a 'going concern' basis.
Auditors
M/s, S, Tandon & Associates, Chartered Accountants and M/s. A.K. Sood &
Associates, Chartered Accountants, Auditors of the Company retire on
the conclusion of the ensuing Annual General Meeting and being eligible
they have indicated their willingness to be re-appointed.
Cost Auditors
M/s. J.K. Kabra & Co., Cost Accountants were re-appointed as Cost
Auditors of the Company for conducting a cost audit of the cost records
of the Company in respect of the financial year 2011-12,
Acknowledgements
The Directors wish to thank the Central and State Governments,
Financial Institutions, Punjab State Industrial Development Corporation
Limited, Punjab State Power Corporation Limited, Company's Bankers and
Business Constituents for their continued cooperation and support to
the Company.
The Directors also wish to express their appreciation of the valuable
services rendered by the employees of the Company at all levels.
For and on behalf of the Board
Sd/-
Place: Chandigarh (A.R.TALWAR)
Date : August 13, 2012 Chairman
Mar 31, 2011
Dear Members,
The Directors submit their 36th Annual Report together with the
Audited Accounts for the financial year ended 31st March, 2011.
Financial Results
The financial results of the Company for the financial year ended 31st
March, 2011 are summarised below :-
(Rs. in crores)
2010-11 2009-10
Sales Turnover & Other Income 194.43 169.02
Total Expenditure excluding 196.58 173.97
Finance Charges and
Depreciation
Finance Charges 9.64 8.08
Cash Loss 11.79 13.04
Depreciation, etc. 12.49 11.94
Net Loss before tax 24.28 24.98
Provision for taxation - (2.56)
Net Loss after tax 24.28 22.41
Your Directors report that the Company's operations continued to be
under intense pressure during the financial year 2010-11 owing to
uncontrollable factors of excess capacity and surplus supply position
in the Chlor-Alkali Industry and escalating production costs. Although,
the combined average realisation per Electro-Chemical Unit (ECU)
increased from Rs.23,600 in the financial year 2009-10 to Rs.25,600
during the financial year under review and the Company achieved a
saving of about Rs.3.95 crores during December, 2010 to March, 2011 on
account of purchase of power at cheaper rates through Indian Energy
Exchange (IEX) under Open Access System, the technical disruptions in
the Plant operations coupled with the high input costs, aggravated by
the escalation in the basic power tariff by 5.77% w.e.f. 1st April,
2010 by the Punjab State Electricity Regulatory Commission (PSERC),
discontinuation of H.T. rebate by the PSERC and increase in the rate of
electricity duty from 10% to 13% w.e.f. 1st April, 2010 by the
Government of Punjab, the burden of all of which could not be absorbed
by the market, led to a Net Loss (after tax) of Rs.24.28 crores on a
Turnover of Rs.194.43 crores in the financial year under review.
In view of the Loss incurred by the Company, the Directors regret their
inability to recommend any dividend for the financial year 2010-11.
Finance and Corporate Debt Restructuring
The liquidity remained tight during the financial year under review.
The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had
in June, 2010, approved modification in the Rework Proposal of the CDR
approved Revised Restructuring Package for the Company for further
deferment of repayment of outstanding principal long term dues of the
Financial Institutions and Banks (two Quarters deferment), which shall
be repayable within the CDR approved terminal date and funding of 90%
of interest fallen/falling due on 1st April, 2010 and 1st July, 2010,
with a marginal increase in the rate of interest. The CDR Empowered
Group of CDR Cell had in December, 2010, approved the funding of 90% of
interest which had fallen due on 1st October, 2010 and 1st January,
2011 with a marginal increase in the rate of interest.
During the financial year under review, the Company did not raise funds
by way of fixed deposits.
Current Operations and Outlook
The performance of the Company in the first Four Months ended 31st
July, 2011 of the current financial year 2011-12 has been encouraging
with the combined average realisation going up from Rs.25,600 per ECU
in the financial year 2010-11 to Rs.30,300 per ECU during the said Four
Months Period, savings to the tune of about Rs.5.75 crores due to
purchase of power at cheaper rates through Indian Energy Exchange (IEX)
under Open Access System and the release of an amount of about Rs.2.46
crores by the Punjab State Power Corporation Limited on account of the
disallowed H.T. rebate in respect of the financial year 2010-11. As a
result of these favourable developments, the Company has achieved a
Cash Profit of Rs.8.90 crores and a Net Profit of Rs.4.75 crores in the
said Four Months Period ended 31st July, 2011 as against a Cash Loss of
Rs.3.70 crores and a Net Loss of Rs.7.92 crores during the Four Months
Period ended 31st July, 2010 and a Cash Loss of Rs.11.79 crores and a
Net Loss (after tax) of Rs.24.28 crores in the preceding financial year
2010-11. The performance would have been still better but for the hike
in power tariff w.e.f. 1st April, 2011 by the Punjab State Electricity
Regulatory Commission and increase in the Open Access Charges w.e.f.
1st July, 2011 by the Punjab State Power Corporation Limited.
The Company is making continuous efforts to reduce costs. The major
input cost i.e. Power cost constitutes about 60% of the total
production cost. The Company endeavours to purchase a maximum portion
of its power requirements at cheaper rates through Indian Energy
Exchange (IEX) under Open Access System
Your Directors are hopeful of better performance in the financial year
2011-12.
Environment and Energy Conservation
The Company continues to accord high priority to carry out its
operations in an environment-friendly fashion and has been taking
appropriate pollution control and safety measures. The Company has In
March, 2011, awarded the work of setting up a Reverse Osmosis based
Effluent Treatment Plant on Build, Own and Operate (BOO) Basis in the
Company's Plant Complex to M/s. J.B.R. Technologies Private Limited for
enabling the Company to achieve Zero Discharge of Effluents from its
Plant.
The Company continues to place a great emphasis on energy conservation.
The Company has been getting an Energy Audit of Its Plants conducted at
regular intervals. The Information required under the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, is given in Annexure-I forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited. The Annual listing fee for the year 2011-12 has been
paid to the Bombay Stock Exchange Limited.
Human Resources
Your Company continues to develop and upgrade the skills of its human
resources, industrial relations continued to be cordial.
During the financial year ended 31st March, 2011, there was no employee
of the Company whose particulars need to be included in this report
under Section 217(2A) of the Companies Act, 1956.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2010-11 required In terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited Is annexed herewith as Annexure - II
forming a part of this report. The Corporate Governance Report for the
financial year 2010-11 and Auditors' Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Listing Agreement with the Bombay Stock Exchange Limited are
also annexed.
Directors
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri Yogesh Goel as its Nominee Director on the Board of
Directors of the Company in place of Shri Anurag Agarwal, IAS w.e.f.
16th August, 2010.
The PSIDC nominated Shri S.S. Bains, IAS as its Nominee Director on the
Board of Directors of the Company In place of Shri Ajay Kumar Mahajan
w.e.f. 29th November, 2010. Consequently, Shri Ajay Kumar Mahajan
ceased to be the Managing Director of the Company w.e.f. 29th November,
2010. The Board of Directors of the Company appointed Shri S.S. Bains,
IAS as the Managing Director of the Company w.e.f. 30th November, 2010.
The Directors feel that the Company will benefit tremendously from his
rich and varied experience.
IDBI Bank Limited has withdrawn the nomination of Shri Rajlnder Kumar
as Its Nominee Director and nominated Shri Ravi Kumar as a Director of
the Company w.e.f. 10th August, 2011.
The Directors place on record their appreciation of the valuable
contribution made by Shri Anurag Agarwal, IAS, Shri Ajay Kumar Mahajan
and Shri Rajlnder Kumar.
Shri J.S. Saraon and Shri D.C. Mehandru retire by rotation at the
ensuing Annual General Meeting and being eligible offer themselves for
re-appolntment.
Audit Committee
The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri
D.C. Mehandru, Shri J.S. Mann and Shri Ravi Kumar with Shri J.S. Saraon
as Its Chairman.
Directors' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31st March, 2011, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the Toss of the
Company for the year under review;
(iii) 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) The Directors have prepared the annual accounts
for the financial year ended 31st March, 2011 on a 'going concern'
basis.
Auditors
M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood &
Associates, Chartered Accountants, Auditors of the Company retire on
the conclusion of the ensuing Annual General Meeting and being eligible
they have Indicated their willingness to be re-appointed.
Acknowledgements
Your Directors place on record their appreciation of the cooperation
and support extended by the Central and State Governments, Financial
Institutions, Punjab State Industrial Development Corporation Limited,
Punjab State Power Corporation Limited, Company's Bankers and esteemed
customers.
Your Directors also acknowledge the valuable contribution made by the
members of management team, staff and work-force.
For and on behalf of the Board
Sd/-
(DR. S.S. CHANNY)
Chairman
Place Chandigarh
Date August 12, 2011
Mar 31, 2010
The Directors submit their 35th Annual Report together with the
Audited Accounts for the financial year ended 31st March, 2010.
Financial Results
The financial results of the Company for the financial year ended 31st
March, 2010 are summarised below :-
(Rs. in crores)
2009-10 2008-09
Sales Turnover & Other Income 169.02 233.78
Total Expenditure excluding 173.97 198.92
Finance Charges and Depreciation
Finance Charges 8.08 9.78
Cash Profit / (Loss) (13.04) 25.08
Depreciation, etc. 11.94 11.87
Net Profit / (Loss) before tax (24.98) 13.21
Provision for taxation (2.56) 6.09
Net Profit / (Loss) after tax (22.41) 7.12
Your Directors report that the fiscal year 2009-10 has been a tough
year as the Companys operations came under tremendous pressure due to
factors over which the Company had virtually no control. The imbalance
in demand and supply in the Chlor-Alkali Industry due to excess
capacity and cheaper imports, adversely affected the operations of the
Company. This kept the combined realisation of Caustic Soda and related
products under strain during the financial year under review. The
combined average realisation went down from Rs.29,000 per
Electro-Chemical Unit (ECU) in the financial year 2008-09 to Rs.23,600
per ECU during the financial year 2009-
10. Lesser production - because of the power restrictions imposed by
the Punjab State Electricity Board (PSEB) during the period June -
October, 2009 and technical disruptions in the Plant operations,
coupled with escalation in the cost of power by 5.79%, further
aggravated the situation. These factors, inter-alia, combined to cause
a Cash Loss of Rs.13.04 Crores and a Net Loss (after tax) of Rs.22.41
Crores on a Turnover of Rs.169.02
. Crores in the financial year under review.
In view of the Loss incurred by the Company, the Directors regret their
inability to recommend any dividend for the financial year 2009-10.
Finance and Corporate Debt Restructuring
The Corporate Debt Restructuring (CDR) Empowered Group of CDR Cell had
approved a Rework Package of the CDR approved Revised Restructuring
Package for the Company, in May and June, 2009, for deferment of
repayment of principal long term dues of the Financial Institutions and
Banks for enabling the Company to meet the ftind requirements for the
essential capital and other expenditure in the Plant of the Company.
The CDR Empowered Group has further modified the said Revised
Restructuring Package in June and July, 2010, for further deferment of
repayment of outstanding principal long term dues of the Financial
Institutions and Banks (two Quarters deferment), which shall be
repayable within the CDR approved terminal date and funding of 90% of
interest which had fallen due on 1" April, 2010 and 1" July, 2010, with
a marginal increase in the rate of interest. During the financial year
under review, despite the Rework Package approved by the CDR Empowered
Group of CDR Cell, the liquidity remained under strain due to the Net
Loss (after tax) of Rs.22.41 Crores in the said financial year.
During the financial year under review, the Company did not raise funds
by way of fixed deposits.
Current Operations and Outlook The operations of the Company during the
first Four Months ended 31" July, 2010 of the financial year 2010-
11, continued to reel under the pressure of the preceding years
conditions. During the said period the capacity utilisation of the
plant was 77.70%. The combined average realisation in this period was
Rs.25,300 per ECU as against Rs.25,600 per ECU during the corresponding
period in the financial year 2009-10. The upward revision in the basic
power tariff by 5.77% w.e.f. 1" April, 2010 by the Punjab State
Electricity Regulatory Commission (PSERC), discontinuation of H.T.
rebate by the PSERC and increase in the rate of electricity duty from
10% to 13% w.e.f. i" April, 2010 by the Government of Punjab, with
these increases having an aggregate overall annual impact to the tune
of approx. Rs. 15 crores per annum on the Company on 100% production
basis, further adversely affected the operations in the said period.
The Company has incurred a Cash Loss of Rs.3.70 Crores and a Net Loss
of Rs.7.92 crores during the Four Months ended 31" July, 2010.
The Companys endeavor to reduce costs continued. The major cost is on
account of Power, which accounts for about 60% of the cost of
production. In this regard, the Company is exploring the possibility of
purchase of cheaper Power on Energy Exchanges in India.The Company has
replaced the Membranes in two Electrolysers . of its Plant Unit-I and
one Electrolyser of its Plant Unit-It and got the Anodes and Cathodes
recoated in one Electrolyser of its Plant Unit-I I, at a cost of about
Rs.4.13 Crores. The Company is also getting the Anodes and Cathodes
recoated in one Electrolyser of its Plant Unit-ll at a cost of about
Rs.1.36 Crores. These will result in reduction in power consumption per
unit of Caustic Soda Lye and increase in capacity utilisation.
The Chlor-Alkali Industry is passing through a crucial phase and the
Companys performance in the current year will depend upon the actual
market scenario. Your Directors are optimistic of improvement in the
performance of the Company in the days to come.
Environment and Energy Conservation
The Companys endeavor has always been to run its operations in an
environment-friendly manner. The Company is fully committed to take all
possible measures towards maintaining safety and good house keeping in
itsPlants. Ã A Safety Audit of the Plant was got conducted during the
financial year 2009-10 from the National Safety Council and its
recommendations are being implemented. An Environmental Audit of the
Plant was also got conducted during the financial year 2009-10 from
M/s. Mantec Consultants Private Limited and their recommendations are
being implemented. The Punjab Pollution Control Board has directed many
industrial units in Punjab including the Company to implement Zero
Discharge of Effluents and the Company has initiated necessary steps in
this regard.
The Company strives to make its Plant energy efficient. The Company
has, in December, 2009, been awarded a Trophy, a Certificate of Merit
and an Award of Rs. 1.00 lac by the Punjab Energy Development Agency
for securing the First Position in the category of Energy Intensive
Industries in the State Level Energy Conservation Award Competition,
for the Companys efforts in the field of Energy Conservation during
the year 2008. The information required under the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988, is
given in Annexure-I forming a part of this report.
Listing
The Equity Shares of the Company are listed on the Bombay Stock
Exchange Limited. The Annual listing fee for the year 2010-11 has been
paid to the Bombay Stock Exchange Limited.
Human Resources
The Company continues to place great value on its human resources. The
process of training and development of human resources continued.
The industrial relations remained cordial during the financial year
under review.
During the financial year ended 31" March, 2010, there was no employee
of the Company whose particulars need to be included in this report
under Section 217(2A) of the Companies Act, 1956.
Corporate Governance
The Management Discussion and Analysis Report for the financial year
2009-10 required in terms of Clause 49 of the Listing Agreement with
the Bombay Stock Exchange Limited is annexed herewith as Annexure - II
forming a part of this report. The Corporate Governance Report for the
financial year 2009-10 and Auditors Certificate regarding compliance
of conditions of Corporate Governance, required in terms of Clause 49
of the Listing Agreement with the Bombay Stock Exchange Limited are
also annexed.
Directors
The Punjab State Industrial Development Corporation Limited (PSIDC)
nominated Shri S.S. Rajput, IAS as its Nominee Director on the Board of
Directors of the Company in place of Shri Karan Avtar Singh, IAS w.e.f.
21" August, 2009 and thereafter Shri Anurag Agarwal, IAS as its Nominee
Director on the Board of Directors of the Company in place of Shri S.S.
Rajput, IAS w.e.f. 8m March, 2010.
The IFCI Limited has nominated Shri O.P. Yadav as its Nominee on the
Board of Directors of the Company in place of Shri Rattan Singh and had
advised the Company to co-opt him on the Board of Directors. Shri
Rattan Singh resigned as a Director of the Company w.e.f. 26*
September, 2009. Accordingly, the Board has appointed Shri O.P. Yadav
as Additional Director of the Company on 26" September, 2009. Shri
O.P. Yadav holds office till the date of the ensuing Annual General
Meeting. Notices in writing have been received from some members under
Section 257 of the Companies Act, 1956, signifying their intention to
propose at the ensuing Annual General Meeting the appointment of Shri
O.P. Yadav as Director of the Company, whose period of office shall be
liable to determination by retirement of Directors by rotation.
The Board has appointed Shri Jagtar Singh Mann as Additional Director
of the Company on 12th August, 2010. Shri Jagtar Singh Mann holds
office till the.date of the ensuing Annual General Meeting. Notices in
writing have been received from some members under Section 257 of the
Companies Act, 1956, signifying their intention to propose at the
ensuing Annual General Meeting the appointment of Shri Jagtar Singh
Mann as Director
of the Company, whose period of office shall be liable to determination
by retirement of Directors by rotation. Dr. A.K. Kundra, IAS (Retd.)
and Shri S.K. Sharma retire by rotation at the ensuing Annual General
Meeting. Dr. A.K. Kundra being eligible offers himself for
re-appointment. Shri S.K. Sharma has indicated his unwillingness to
offer himself for re-appointment in view of his other pre-occupations.
The Directors place on record their appreciation of the valuable
contribution made by Shri Karan Avtar Singh, IAS, Shri S.S. Rajput,
IAS, Shri Rattan Singh and Shri S.K. Sharma.
Audit Committee
The Audit Committee of the Board comprises of Shri J.S. Saraon, Shri
DC. Mehandru, Shri S.K. Sharma and Shri Rajinder Kumar with Shri J.S.
Saraon as its Chairman.
Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(i) In the preparation of the annual accounts for the financial year
ended 31 * March, 2010, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) 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 at the end of the financial year and of the loss of the
Company for the year under review;
(iii) 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) The Directors have prepared the annual accounts for the financial
year ended 31" March.
2010 on a going concern basis. Auditors
M/s. S. Tandon & Associates, Chartered Accountants and M/s. A.K. Sood &
Associates, Chartered Accountants, Auditors of the Company retire on
the conclusion of the ensuing Annual General Meeting and being eligible
they have indicated their willingness to be re-appointed.
Acknowledgements
The Directors wish to thank the Central and State Governments,
Financial Institutions, Punjab State Industrial Development Corporation
Limited, erstwhile Punjab State Electricity Board, Punjab State Power
Corporation Limited, Companys Bankers and Business Constituents for
their continued cooperation and support to the Company.
The Directors also-wish to express their appreciation of the valuable
services rendered by the employees of the Company at all levels.
For and on behalf of the Board
Sd/-
(DR. S.S. CHANNY)
Chairman
Place: Chandigarh
Date : August 12, 2010
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