Mar 31, 2018
Dear Members,
The Directors are pleased to submit their 31st Annual Report of the business operations together with the Audited financial statements of the Company for the year ended 31stMarch 2018:
1. OVERVIEW OF FINANCIARESULTS
(Rs. in Lakhs)
2017-2018 |
2016-2017 |
|
Sales |
18500 |
17482 |
Other Operating Income |
26 |
27 |
Revenue from Operations |
18526 |
17509 |
Other Income |
153 |
22 |
Total Income |
18679 |
17531 |
Less : Materials Consumed |
12585 |
11358 |
Employees Remuneration & Benefits |
713 |
661 |
Manufacturing, Administrative, Selling & |
3665 |
4775 |
Other Expenses |
||
Total Expenses |
16963 |
16794 |
Operating Profit (EBITDA) |
1716 |
737 |
Less: Finance Cost |
969 |
932 |
Profit / (Loss) Before Tax |
747 |
(195) |
& Depreciation |
||
Less: Depreciation |
596 |
598 |
Net Profit/ (Loss) Before Tax |
151 |
(793) |
Less: Tax Expense Current Tax Expense Deferred Tax (Credit)/Charge |
31 |
(126) |
Net Profit / (Loss) after Tax |
120 |
(667) |
Other Comprehensive Income |
||
Add: Remeasurements of post |
5 |
(4) |
employment benefit obligation Income tax related to items |
1 |
|
that will not be reclassified to |
||
profit or loss |
||
Total Comprehensive Income for the period |
125 |
(670) |
2 ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)
Beginning 1st April, 2017, the Company has, for the first time, adopted Indian Accounting Standard (Ind AS) with a transition date of 1st April, 2016. Accordingly, the financial statements have been prepared in compliance with Ind AS as notified by the Ministry of Corporate Affairs and prescribed under Section 133 of the Companies Act, 2013 (hereinafter referred to as "the Act") read with relevant rules made thereunder and other accounting pronouncements generally accepted in India. Accordingly, the figures for the corresponding year ended 31st March, 2017 have also been presented after incorporating the applicable Ind AS adjustments.
3. DIVIDEND
In view of carried forward losses, the Board of Directors does not recommend any dividend for the year ended 31st March 2018.
4. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2018 was Rs. 7.35 Crores. During the year under review, the Company has not issued new shares.
5. MANAGEMENT''S DISCUSSION AND ANALYSIS : F.Y. 2017-2018
I. Industry Structure & Development :-
The Chemical Industry is a key enabler for other industries. As chemicals are consumed in varying proportion by every industry (rightly from electronics to paints, from pharmaceuticals to cosmetics), without chemicals sustainable development of other sectors is not possible.
The Chemical Industry is a crucial constituent of the growing Indian Economy, providing the key material for several industries. The Company is operating only in one Segment, namely ''Specialty Chemicals''. Specialty Chemicals are particular chemical products which provide a wide variety of effects on which many other industry sectors rely.
Specialty chemicals, which comprise of low volume, high value chemicals with specific applications, constitute a significant part of the Indian chemical industry and are targeted towards specific end-use applications.
Specialty chemicals are produced by a complex, interlinked industry. In the strictest sense, specialty chemicals are chemical products that are sold on the basis of their performance or function, rather than their composition. Products and services in the specialty chemicals industry require intensive knowledge and ongoing innovation.
The Company manufactures a wide range of specially formulated and customized products for various Industrial applications. Company''s customers are well recognized and located not only in India but all over the World especially in America, Europe, and Far- East.
Our customers represent a wide range of Industries such as Wire Insulation Enamel, PVC stabilizers, Inks, Colours, Coatings, Textiles, Agro Chemicals, Polymers, Plastics, Rubber, Latex, Tyre and Tubes, Conveyor belts, Lubricants, Additives, Home care, Cosmetic, Soaps detergents, Fertilizers and many more.
Our customers are always seeking innovative products formulations for their current process needs, which are fulfilled by Company''s Production Development, application knowledge & experience. Solvay Group which represents this worldwide, in specialty chemicals supports the Sunshield team.
Company''s main products belong to:
a. Specialty Surfactant applications, which are predominantly Ethylene Oxide (EO) based products. The technologies developed involve surfactants, Esters, Amides, and other complementary processes.
b. Specialty Anti-Oxidants for Lubricants, Polymers, Rubber, Tyre & Latex and other Industries involving Aminic & Phenolic technologies and
c. Other Non-EO technologies & customized blends for various applications.
II. Operating and Financial Performance of the Company
(Rs. in Lakhs)
F.Y. 2017-2018 |
F.Y. 2016-2017 |
Change over Previous Year |
|
i) Exports |
7953 |
8182 |
(3%) |
ii) Domestic |
10547 |
9300 |
13% |
iii) Other Operating |
26 |
27 |
(4%) |
Income |
|||
Revenue from |
18526 |
17509 |
6% |
Operation (Excluding Excise Duty) |
|||
Other Income |
153 |
22 |
595% |
Total Income |
18679 |
17531 |
7% |
F.Y. 2017-2018 |
F.Y. 2016-2017 |
Change over Previous Yeai |
|
Volume Sales (MT) |
13704 |
13323 |
3% |
Sales Value (Rs.) |
18500 |
17482 |
6% |
Average Production (Rs. per kg) |
135 |
131 |
3% |
During the year, Sales by Volume went up by 3%, whereas the sales in Value terms went up by 6%.
Export Sales went down by 3 % from Rs. 8,182 Lakhs to Rs. 7,953 Lakhs and domestic Sales went up by 13% from Rs. 9,300 Lakhs in 2016-17 to Rs. 10,547 Lakhs in 2017-2018.
Major change is in sales of Theic where volume has gone down but on a higher price realization. Sale of Ethoxylates, Propoxylates and Antioxidants products in terms of value and volume has gone up as compared to last year. The improvement is mainly due to change in product mix and increase in the demand of products.
Profits are mainly on account of improved margin on sales, positive forex fluctuations gains.
III. Outlook
The growth for specialty chemicals is driven by both domestic consumption and exports. Specialty chemicals finding applications across consumer, industrial and infrastructure segments are driven by the overall growth of the Indian economy. The segment has immense potential for growth, driven by growing end user industry. Technology & Innovation will play a major role in growth.
The Company''s products continue to be well received by World''s leading users of specialty chemicals for a diverse range of industrial applications. The Company has been recognized as a reputable and dependable supplier to many Indian and global consumers of specialty products developed in-house.
Company remains optimistic on its future out look however, there is need to watch out for volatility of raw material prices, increased competition from abroad, ability of the Company to develop new business in new business segments.
IV Risks and Concerns
The Present and future risks are reviewed by the management of the Company at regular intervals. Adequate risk management is a key success factor, to mitigate risks associated with the solutions we provide. Major risks identified by the business and functions are systematically addressed through by taking corrective actions on continuous basis. These are discussed at Audit Committee and Board of Directors Meetings.
Major Risk arises from main raw material viz., Ethylene Oxide (EO). EO is currently and consistently available from only one manufacturer in the country. Besides some of the major raw materials are hazardous and inflammable. The Company has ensured that Safety equipment''s and infrastructure are in place as per statutes and global safety standards.
V. Internal Financials Controls and its , adequacy
Internal Checks and Controls covering operations of the Company are in place and are constantly being improved upon. The Company had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company are for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
During the year, the internal auditors of the Company have reviewed the effectiveness and efficiency of these controls and procedures. As per the said assessment Board is of the view the Internal Financial Controls operate effectively and no material weaknesses exist.
VI. Human Resources
Employee relationships at all levels continued to be satisfactory. The management would like to record its appreciation of dedicated and strong support provided to your Company, by its employees at all levels. The number of the employees on the rolls as on 31st March 2018 is 95.
(The statement in this report including Management''s Discussions & Analysis Report reflects Company''s projections, estimates, expectations or predictions. These may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, since your Company''s operations are influenced by many external and internal factors beyond the control of the Company.)
6. BOARD OF DIRECTORS COMPOSITION
The composition of the Board of Directors of the Company is in complete conformity with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act 2013. The composition of the Board represents an optimal mix of professionalism, knowledge and experience which enables the Board to discharge its responsibilities and provide effective leadership to the business. None of the Directors of the Company is related inter-se. The details of the Board of Directors, as on date of this report are as under:
Sr. no. |
Name of Director |
Category of Directorship |
1 |
R L Shenoy |
Non-executive Chairman and Independent Director |
2 |
Ajit Shah |
Non-Executive Independent Director |
3 |
Aruna Soman |
Non-Executive Independent and Woman Director |
4 |
Chidananda Bhagwat* |
Executive Director |
5 |
Manoj Khullar |
Managing Director |
6 |
Srivata M K^ |
Executive Director |
7 |
Satish Kelkar |
Non-Executive Director |
8 |
Ian Brown |
Non-Executive Director |
9 |
Boon Tong Goh# |
Non-Executive Director |
10 |
Yock Jeng Koh@ |
Non-Executive Director |
11 |
Guo Lin! |
Alternate Director |
* Mr. Chidananda Bhagwat is Director upto 23rd July 2018.
^ Mr. Srivatsa M K was appointed as Director with effect from 19th July 2018
# Mr. Boon Tong Goh was appointed as Director with effect from 28th May 2018.
@ Mr. YockJeng Koh was appointed as Director with effect from 28th May 2018.
! Mr. Guo Lin was appointed as Alternate Director to Mr. YockJeng Koh with effect from 28th May 2018.
7. BOARD MEETINGS
The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business.
The Board met four times in the financial year 2017-18 i.e on 26th May 2017, 12th September 2017, 13th December 2017 and 13th February 2018.
8. BOARD COMMITTEES
There are currently six Committees of the Board, which are given below:
- Audit Committee
Audit Committee includes Five Directors viz., Mr. Ajit Shah (Chairman/Independent Director), Mrs. Aruna Soman (Independent Director), Mr. Ranjal Laxmana Shenoy (Independent Director), Mr. Manoj Khullar (Managing Director) and Mr. Satish Kelkar (Non-Executive Director).
The role includes amongst others, oversight of Company''s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible; recommending the appointment, re-appointment, remuneration and terms of appointment of auditors and approval of payment for any other services rendered by statutory auditors; reviewing with the management quarterly results and annual financial statements before submission to the Board for approval; approval or any subsequent modification of any transactions of the Company with related parties; review and monitor the auditor''s independence and performance and effectiveness of audit process; scrutiny of inter corporate loans and investments, if any; evaluation of internal financial controls and risk management system; and reviewing the functioning of the whistle blower mechanism, reviewing the findings of any internal investigation involving suspected fraud or irregularity. The Audit Committee also reviews before submission to the Board for approval of financial statements, the Directors Responsibility statement, changes in accounting policies, if any, with reasons for the same, Management Discussions and Analysis on Company''s operations.
Audit committee met 4 times on 26th May 2017, 12th September 2017, 13th December 2017 and 13th February 2018.
- Nomination and Remuneration Committee
The Board has constituted Nomination and Remuneration Committee which comprises of Independent Directors viz. Mr. Ranjal Laxmana Shenoy, Mr. Ajit Shah, and Mrs. Aruna Soman.
The role of the committee include the Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; formulation of criteria for evaluation of Independent Directors and the Board; devising a policy on Board diversity; and identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
- Stakeholders'' Relationship Committee
Stakeholders Relationship Committee comprises of Mr. Ajit Shah (Independent Director) Mrs. Aruna Soman (Independent Director), and Mr. Manoj Khullar (Managing Director).
The Committee focuses primarily on monitoring and ensuring that all shareholder and investor services operate in an efficient manner and that shareholder and investor grievances / complaints including those of all other stakeholders are addressed promptly with the result that all issues are resolved rapidly and efficiently.
Corporate Social Responsibility (CSR) Committee
The Board has constituted Corporate Social Responsibility Committee comprising of Mr. Ajit Shah (Independent Director), Mr. Chidananda Bhagwat (Director) (till 19th July . 2018) Mr. Srivata M.K. (from 20th July 2018) and Mr. Manoj Khullar (Managing Director).
The Committee focuses on formulation and Review of CSR policy indicating activities to be und ertaken by the Co mp any; recommendation of the amount of expenditure to be incurred on CSR activities and monitoring and implementing this policy from time to time.
During the year under review, the Company was not required to spend on CSR activities on account of the losses incurred by the Company in the three preceding financial years. However as a part of societal responsibility, the Company has spent on CSR activities during the year under review.
The CSR policy of the Company and Annual Report on CSR activities is annexed herewith as Annexure A.
- Risk Management Committee
The Board has constituted Risk Management Committee comprising of Mr. Manoj Khullar (Managing Director), Mr. Chidananda Bhagwat, (Director) (till 19th July 2018) Srivata M.K. (from 20th July 2018)and Mr. Shekhar Pattekar (Manager Factory).
The role of Risk Management Committee includes reviewing and approving the risk management policies of the Company; assessment and monitoring of all risks associated with the operations of the Co mp an y and development an d implementation of internal compliance and control systems and procedures to manage risk.
- Committee for Issue of Duplicate Share Certificates
The Board has constituted a Committee for the purpose of issuance of duplicate share certificates. The Committee comprises of viz Mr. Satish Kelkar (Non-executive director), Mr. Chidananda Bhagwat (Director (till 19th July 2018) Mr. Srivata M.K. (from 20th July 2018) and Mr. Manoj Khullar (Managing Director).
9. DIRECTORS'' RESPONSIBILITY STATEMENT
In pursuance of section 134 (3) (c) of the Companies Act, 2013, the Directors here by confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively;
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
10. SECRETARIAL STANDARDS
The Directors state that all applicable Secretarial Standards issued by the Institute of Company Secretaries of India relating to meetings of Board of Directors and General Meetings have been duly followed by the Company.
11. FRAUD REPORTING BY AUDITORS
As required under Section 134(3) (ca) of the Companies Act, 2013, there are no instances of Fraud being reported by the Auditors.
12. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).
13. DIRECTORS AND KEY MANANGERIAL PERSONNEL
In accordance with the provision of the Companies Act, 2013 Mr. Ian Brown, Director of the Company, retire by rotation and being eligible, offer himself, for re-appointment. The profiles of the Director seeking re-appointment form part of the Annexure to the Notice.
Mr. Arun Roy and Mr. Sanjeev Mukerjee resigned as Directors with effect from 31st May 2017. Ms. Sze Wee Ong and Ms. Valdirene Licht, resigned as Directors with effect from 9th January 2018 and 16th January 2018 respectively. Your Directors place on record their sincere appreciation of the valuable contribution made by them during their tenure as Directors of the Company.
The Board of Directors appointed Mr. Boon Tong Koh and Mr. YockJeng Goh as an Additional Director to hold office as Director of the Company with effect from 28th May 2018 Mr. Koh and Mr. Goh shall hold office as Director upto the date of the forthcoming Annual general meeting of the Company.
During the year, Mr. Guo Lin ceased to be Alternate Director to Ms. Sze Wee Ong with effect from 9th January 2018. He was appointed as an Alternate Director to Mr. YockJeng Goh under the Companies Act, 2013 with effect 28th May 2018.
The Board of Directors of the Company on the recommendation of Nomination and Remuneration Committee at their meeting held on 28th May 2018 and 19th July 2018 have, sought to reappoint Mr. Manoj Khullar as Managing Director, for a further period of 3 (Three) years, effective 1st July 2018 and appoint Mr. Srivatsa M K as an additional Director and also as Executive Director for a period of 3 (Three) years, effective 19th July 2018. The Board seeks members'' approval for appointment of Mr. Manoj Khullar as Managing Director and Mr. Srivatsa M K as Executive Director of the Company.
Details of the proposal of Directors seeking appointment/reappointment are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 31st Annual General Meeting.
None of the Directors is disqualified from being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013.
The Company has recognized pursuant to Sections 2 (51) and 203 of the Companies Act 2013, Mr. Manoj Khullar, Managing Director, Mr. Chidananda Bhagwat, Director, Mr. Srivatsa M K, Director, Mr. Rajeev Gupte, Chief Financial Officer and Mr. Amit Kumashi Company Secretary of the Company as Key Managerial Personnel of the Company.
14. ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an annual performance evaluation of its own performance, of the Directors individually, as well as the evaluation of the working of its Committees. The Independent Directors have evaluated the performance of the non-independent Directors and the Board as a whole. They also assessed the quality, quantity and flow of information between Company''s management and the Board which is essential for the Board to effectively and reasonably perform their duties.
Based on the evaluation, Company expects the Board and other Directors evaluated to continue to play a constructive and meaningful role in creating value for all the stakeholders in the ensuing years.
15. COMPANY''S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Company has in place Policy on Directors Appointment and Remuneration. The Policy has been published on the Company''s website https://www.solvayindia.in/en/solvay-in/Sunshield-Policies.html.
Prior to the induction of the director on the Board, the Managing Director briefs the incoming director about the Company, its line of business, and the composition of the present board organization chart etc. The appointment letter issued to the independent directors also sets out detailed terms of employment including their roles, function, responsibilities and their fiduciary duties, code of conduct, performance evaluation process etc. as a director of the Company.
Independent directors have a right to access information and documents for enabling them to have a good understanding of the Company and its various operations.
16.RISK MANAGEMENT POLICY AND INTERNAL CONTROL ADEQUACY
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.
The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
17. VIGIL MECHANISM
The Company has established a vigil mechanism named as Whistle Blower Policy within the Company. The policy of such mechanism has been circulated to all employees within the Company, which provides a framework to the employees for guided & proper utilization of the mechanism. The Whistle Blower Policy has been placed on the Company''s website http://www.solvayindia.in/en/solvay-in/sunshield-chemical-limited
18. SIGNIFICANT AND MATERIALS ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Company''s operation s in future. There have been no instances of any personnel seeking access to the Audit Committee.
19. AUDITORS
Statutory Auditors
The Statutory Auditors, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, continue to hold office for the remaining term of their appointment till 2019. In accordance with the Companies Amendment Act, 2017, Section 139 as amended was enforced from 7th May, 2018 by the Ministry of Corporate Affairs. As per the said amendment, appointment of auditors is not required to be ratified at every Annual General Meeting.
The necessary certificate section 139 of the Companies Act, 2013 inter alia indicating the fulfillment of the criteria provided under Section 141 of the Companies Act, 2013 has been issued by the Statutory Auditors.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, on the recommendations of the Audit Committee, the Board the Company had appointed M/s. Kishore Bhatia & Associates, Cost Accountant as the Cost Auditor of the Company for the financial year 2017-18. The ratification of the fee payable to the Cost auditors is sought from the Members in the ensuing Annual General Meeting. The cost audit report will be filed within the period stipulated under the Act.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Alwyn D''Souza & Co., Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure B. The Report does not contain any qualification, reservation or adverse remark.
Internal Auditors
M/s. Nikhil Narkar & Associates, Chartered Accountants has been appointed as Internal Auditor of the Company.
20. COMMENTS ON AUDITORS'' REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made by Deloitte Haskins & Sells LLP, Statutory Auditors, in their report and by Mr. Alwyn D''souza, Company Secretary in Practice, in his secretarial audit report.
21. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure C.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided any loans, Guarantees or made investments under Section 186 of the Companies Act, 2013
23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)
All Related Party Transaction (RPT) entered into by the Company during the year under review were in the ordinary course of business and on arms'' length basis.
All RPT are placed before the Audit Committee for its review and approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of repetitive nature. Pursuant to the provisions of the Listing Regulations 2015 as well as the Rule 6A of the Companies (Meetings of Board and its Power) Rules 2014, Audit Committee had granted omnibus approval for the proposed RTP to be entered into during the year under review. Since there are no material RTP and also all the transactions with related parties are at arms'' length and are in ordinary course of business, no transactions need to be reported in AOC-2. Note No.38 in the note to accounts provide the details on the related party transactions.
24. FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year There are no deposits which are outstanding as on 31st March, 2018.
25. SUBSIDIARY. ASSOCIATES AND TOINT VENTURES
The Company does not have any subsidiary or associates or joint ventures as on the date of this report. Therefore separate section for report on the performance and financial position of Subsidiaries, Associates and Joint Venture Companies is not required.
26.TRANSFER OF SHARE TO IEPF DEMAT ACCOUNT
Since the Company has not declared the provision pertaining to transfer of shares on which dividend was unclaimed/unpaid for seven years to Investor Education and Protection Fund (IEPF) Authority is not applicable to the Company.
27. MATERIAL CHANGES AND COMMITMENTS . AFFECTING THE FINANCIAL POSITION OF . THE COMPANY
Implementation of Voluntary Retirement Scheme
After end of Financial Year but before the date of Report, the Company has announced a Voluntary Retirement Scheme (VRS) for all its permanent Executives and Workers as per the scheme. The financial impact of VRS will be incorporated in financials of 2018-19.
28. EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is annexed herewith as Annexure D.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION. REDRESSAL) ACT 2013
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act, 2013.
The internal committee is set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. The following is the summary of sexual harassment complaints received and disposed off during the Financial Year 2017-18:
Number of Complaints of sexual harassment received during the period April 2017 to March 2018 |
Number of complaints disposed off during the period April 2017 to March 2018 |
Nature of action taken by the employer |
Nil |
Not applicable |
Not applicable |
30. CONSERVATION OF ENERGY. TECHNOLOGY . ABSORPTION AND FOREIGN EXCHANGE . EARNINGS AND OUTGO
As required by Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, relevant data pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, is annexed herewith as Annexure E to this Report.
31. CORPORATE GOVERNANCE REPORT
Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with respect to Corporate Governance report and certain regulations are not applicable to Sunshield Chemicals Limited ("Company"), since Company''s paid-up Capital is less than Rs. 10 crores and net worth is less than Rs. 25 crores.
32. ENVIRONMENT. HEALTH AND SAFETY
Your Company recognizes importance of Health and Safety of its employees and its neighborhood. Regular Safety Audits are being conducted. Your Company has adopted a Health, Safety and Environment (HSE) Policy, which applies to all employees and activities.
33. APPRECIATION
Your Directors place on record their sincere appreciation of the wholehearted support extended by the Company''s bankers, business associates, employees'' union, shareholders, auditors and various statutory authorities, both, central and state Government.
For and on behalf of the Board of Directors
R L Shenoy
Chairman
Mumbai, 1 9th July 2018 DIN Na 0074761
Phoenix House,
''A'' Wing, 4th Floor,
462 Senapati Bapat Marg,
Lower Parel (West), Mumbai-400013
Mar 31, 2016
Dear Members,
The Directors are pleased to submit their 29th Annual Report of the Company along with the Audited financial statements for the year ended 31st March 2016:
1. OVERVIEWOFFINANCIALRESULTS
Highlights of Company''s performance during the financial year 2015-16, is as under:
(Rs,In Lacs)
2015-16 |
2014-15 |
|
Export Sales |
8139 |
6509 |
Domestic Sales (Net of Excise Duty) |
6798 |
5346 |
Other Operating Income |
86 |
45 |
Revenue from Operations |
15023 |
11900 |
Other Income |
304 |
69 |
Total Income |
15327 |
11969 |
Less : Materials Consumed |
10060 |
8627 |
Employees Remuneration & Benefits |
667 |
630 |
Manufacturing, Administrative, Selling & Other Expenses |
3315 |
2428 |
Total Expenses |
14042 |
11685 |
Operating Profit (EBITDA) |
1285 |
284 |
Less: Finance Cost |
1080 |
349 |
Profit Before Tax & Depreciation (Cash Profit) |
205 |
(65) |
Less: Depreciation |
548 |
326 |
Net Profit Before Tax |
(343) |
(391) |
Less: Tax Expense Current Tax Expense Tax adjustments relating to prior years Deferred Tax (Credit)/Charge |
4 (263) |
17 (90) |
Net Loss after Tax |
(84) |
(318) |
2. DIVIDEND
In view of losses, the Board of Directors does not recommend any dividend for the year ended 31st March 2016.
3. SHARECAPITAL
The paid up Equity Share Capital as on 31st March, 2016 was '' 7.35 Crores. During the year under review, the Company has not issued new shares.
4. MANAGEMENT''S DISCUSSION AND ANALYSIS : F.Y. 2015-2016
I. Industry Structure & Development :-
The Chemical Industry is a crucial constituent of the growing Indian Economy, providing the key material for several industries. The Company is operating only in one Segment, namely ''Specialty Chemicals''. Specialty Chemicals are particular chemical products which provide a wide variety of effects on which many other industry sectors rely.
The Company manufactures a wide range of specially formulated and customized products for various Industrial applications. Company''s customers are well recognized and located not only in India but all over the World especially in the America, Europe, and Far- East.
Our customers represent a wide range of Industries such as Wire Insulation Enamel, PVC stabilizers, Inks, Colours, Coatings, Textiles, Agro Chemicals, Polymers, Plastics, Rubber, Latex, Tyre and Tubes, Conveyor Belts, Lubricants, Additives, Home care, Cosmetic, Soaps detergents, Fertilizers and many more.
Customers are always expanding and they want to up-grade their products and all these improvements need Company''s R&D and niche formulation and application knowledge & experience. Solvay represents this worldwide knowledge base in specialty chemicals supporting the Sunshield team.
Company''s main products belong to:
a. Specialty Surfactant applications, which are predominantly Ethylene Oxide (EO) based products. The technologies developed involve surfactants, Esters, Amides, and other complementary processes.
b. Specialty Anti-Oxidants for Lubricants, Polymers, Rubber, Tyre & Latex and other Industries involving Aminic & Phenolic technologies and
c. Other Non-EO technologies & customized blends for various applications.
II. Operating and Financial Performance of the
Company
(Rs, In Lacs)
F.Y. 2015 - 2016 |
F.Y 2014 - 2015 |
Change over Previous year |
|
i) Exports |
8139 |
6509 |
25% |
ii) Domestic |
7628 |
6184 |
23% |
iii) Other Operating Income |
86 |
45 |
91% |
Gross Sales |
15853 |
12738 |
24% |
Less: Excise Duty |
830 |
838 |
|
Net Sales |
15023 |
11900 |
26% |
Other Income |
304 |
69 |
341% |
Total Income |
15327 |
11969 |
28% |
F.Y. 2015 - 2016 |
F.Y. 2014 - 2015 |
Change over Previous year |
|
Volume Sales (MT) |
10446 |
8576 |
22% |
Net Sales Value (Rs,) |
15023 |
11900 |
26% |
Average Product Price ('' per kg) |
144 |
139 |
4% |
During the year, Sales by Volume went up by 22% from 8576 Mt. to 10446 Mt. the sales in Value terms went up by 26%. The growth was contributed by increase in average selling price of its products from Rs, 139 per kg to Rs, 144 per kg.
Export Sales went up by 25% from Rs, 6509 lacs to Rs, 8139 lacs and domestic Sales went up by 23% from Rs, 6184 lacs in 2014-15 to Rs, 7628 lacs in 2015-16.
During the year, the Company had sold its property situated at Dadar for a total consideration ofRs, 550 lacs thereby earning a profit of Rs,117 lacs on sale of property.
EBIDTA was up by 352% at Rs, 1285 lacs in the year 2015-16 against EBIDTA ofRs, 284 lacs in the previous year.
Finance Cost went up from Rs, 349 lacs in 2014-15 to Rs, 1080 lacs in 2015-16, mainly on account of increase in interest cost and Foreign Exchange losses. Interest cost increased on account of borrowings to finance the capital expenditure. The capital expenditure incurred was during 2014-15 but it was commissioned in 2015-16.
Cash profit (Profit before Tax & Depreciation) was at Rs, 205 lacs in the year 2015-16 as compared to loss of Rs, 65 lacs in the year 2014-15.
III. Outlook
Solvay is actively involved in planning and implementing the current capital expenditure through its worldwide professional teams for Products and Project development. The Company now has its Rasal production site upgraded to Solvay standards of safety and efficiency for a multi-product niche specialty product range.
The CompanyRs,s products continue to be well received by World''s leading users of specialty chemicals for a diverse range of industrial applications. The Company has been recognized as a reputable and dependable supplier to many Indian and global consumers of specialty products developed in-house.
IV. Risks and Concerns
The Present and future risks are reviewed by the management of the Company at regular intervals. Major risks identified by the business and functions are systematically addressed through mitigating actions on continuous basis. These are discussed at Audit Committee and Board of Directors Meetings. Following risks are considered as high risks areas:
i Foreign Exchange Fluctuations
ii. Procurement Risk
iii. Competition Risk
Major Risk arises from main raw material viz., Ethylene Oxide (EO). EO is currently consistently available from only one manufacturer in the country. Some of the major raw materials are hazardous and inflammable. The Company has ensured that Safety equipment''s and infrastructure are in place as per statues and global safety standards.
In addition to above, the Company feels that slowdown in world economies, will affect demand from user industry specifically and lower overall demand, can bring pressures all over and the aggressive pricing can cause concerns about margins.
V. Internal Financials Controls and its adequacy
Internal Checks and Controls covering operations of the Company are in place and are constantly being improved upon. The Company had laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.
VI. Human Resources
Employee relationships at all levels continued to be satisfactory. The management would like to record its appreciation of dedicated and strong support provided to your Company, by its employees at all levels. During the year under review, the Company successfully entered into wage settlement agreement with workers of the Company. The number of employees on rolls as on 31stMarch 2016 is 98.
(The statement in this report including Management''s Discussions & Analysis Report reflects Company''s projections, estimates, expectations or predictions. These may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, since your Company''s operations are influenced by many external and internal factors beyond the control of the Company.)
5. BOARDMEETINGS
The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business.
The Board met four times in the financial year 2015-16 i.e on 23rdMay 2015, 12th August 2015, 4th November 2015 and 9th February 2016.
6. BOARDCOMMITTEES
During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently six Committees of the Board, which are given below:
- Audit Committee
Audit Committee includes five Directors viz., Mr. Ajit Shah (Chairman/Independent Director), Mr. Sanjeev Mukerjee (Independent Director), Mr. Ranjal Laxmana Shenoy (Independent Director), Mr. Manoj Khullar (Managing Director) and Mr. Satish Kelkar (NonExecutive Director).
The role includes oversight of Company''s financial reporting process and disclosure of financial information to ensure that the financial statements are correct, sufficient and credible; recommending the appointment, re-appointment, remuneration and terms of appointment of auditors and approval of payment for any other services rendered by statutory auditors; reviewing with the management quarterly results and annual financial statements before submission to the Board for approval; approval or any subsequent modification of any transactions of the Company with related parties; review and monitor the auditor''s independence and performance and effectiveness of audit process; scrutiny of inter corporate loans and investments, if any; evaluation of internal financial controls and risk management system; and reviewing the functioning of the whistle blower mechanism.
- Nomination and Remuneration Committee
The Board has constituted Nomination and Remuneration Committee which comprises of three Independent Directors viz. Mr. Ranjal Laxmana Shenoy, Mr. Ajit Shah and Mr. Sanjeev Mukerjee.
The role of the committee include the Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; formulation of criteria for evaluation of Independent Directors and the Board; devising a policy on Board diversity; and identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.
- Stakeholders'' Relationship Committee
Stakeholders Relationship Committee comprises of Mr. Sanjeev Mukerjee (Independent Director), Mr. Ajit Shah (Independent Director) and Mr. Manoj Khullar (Managing Director).
The Committee focuses primarily on monitoring and ensuring that all shareholder and investor services operate in an efficient manner and that shareholder and investor grievances / complaints including that of all other stakeholders are addressed promptly with the result that all issues are resolved rapidly and efficiently.
- Corporate Social Responsibility Committee
The Board has constituted Corporate Social Responsibility Committee comprising of Mr. Ajit Shah (Independent Director), Mr. Arun Roy (Non-Executive Director) and Mr. Manoj Khullar (Managing Director).
The Committee focuses on formulation and Review of CSR policy indicating activities to be undertaken by the Company; recommendation of the amount of expenditure to be incurred on CSR activities and monitoring and implementing this policy from time to time.
The CSR policy of the Company and Annual Report on CSR activities is annexed herewith as Annexure A.
- Risk Management Committee
The Board has constituted Risk Management Committee comprising of Mr. Arun Roy (Non -Executive Director), Mr. Manoj Khullar (Managing Director) and Mr. Chidananda Bhagwat, (Operation Manager).
The role of Risk Management Committee includes reviewing and approving the risk management policies of the Company; assessment and monitoring of all risks associated with the operations of the Company and development and implementation of internal compliance and control systems and procedures to manage risk.
- Committee for Issue of Duplicate Share Certificates
The Board has constituted a Committee for the purpose of issuance of duplicate share certificates. The Committee comprises of two Non-Executive Directors, Mr. Arun Roy, Mr. Satish Kelkar and Mr. Manoj Khullar, Managing Director.
7. DIRECTORS'' RESPONSIBILITYSTATEMENT
In pursuance of section 134 (3)(c) of the Companies Act, 2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
8. FRAUDREPORTINGBYAUDITORS
As required under Section 134(3) (ca) of the Companies Act, 2013, there are no instances of Fraud being reported by the Auditors.
9. DECLARATION FROM INDEPENDENT DIRECTORS ONANNUALBASIS
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).
10. DIRECTORS AND KEYMANANGERIAL PERSONNEL
In accordance with the provision of the Companies Act, 2013 Mr. Ian Brown and Ms. Sze Wee Ong, Directors of the Company, retire by rotation and being eligible, offer themselves, for re-appointment. The profiles of the Directors seeking re-appointment form part of the Annexure to the Notice.
During the year Mr. Yogesh Thar and Mr. Pierre Franck Valentin resigned as Directors with effect from 30th September 2015 and 29th February 2016 respectively. Mr. Chen Pu ceased to be Alternate Director to Mr. Pierre Franck Valentin with effect from 29th February 2016. Your Directors place on record their sincere appreciation of the valuable contribution made by them during their tenure as Directors of the Company.
The Board of Directors appointed Mr. Ajit Shah as an Additional Director to hold office as an Independent Director of the Company with effect from 20thOctober 2015 and Ms. Valdirene Licht as Additional Director with effect from 15th March 2016.
Mr. Shah and Ms. Licht shall hold office of Director up to the date of the forthcoming Annual general meeting of the Company. The Company has received a notice in writing from a member along with the deposit of requisite amount under Section 160 of the Act proposing the candidature each of Mr. Shah and Ms. Licht for the office of Director of the Company.
Details of the proposal for appointment of Ms. Valdirene Licht and Mr. Ajit Shah are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 29th Annual General Meeting.
None of the Directors is disqualified from being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013.
The Company has recognized pursuant to Sections 2 (51) and 203 of the Act, Mr. Manoj Khullar, Managing Director, Mr. RajeevGupte, Chief Financial Officer and Mr. Amit Kumashi, Company Secretary of the Company as Key Managerial Personnel of the Company.
11. ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Committees. The Independent Directors have evaluated the performance of the working Directors and the Chairman of the Company
12. COMPANY''S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
In accordance with Section 178 of the Companies Act, 2013 the Nomination and Remuneration Committee has formulated Remuneration Policy ("the policy").
The objective of the policy is to ensure that Executive Directors and other employees are sufficiently compensated for their performance. The Policy seeks to provide criteria for determining qualifications, positive attributes and independence of a director.
REMUNERATION POLICY Directors
Nomination and Remuneration Committee shall recommend the remuneration, including the commission based on the net profits of the Company for the Non-Executive Directors and Managing Director and other Executive Directors. This will be then approved by the Board and shareholders. Prior approval of shareholders will be obtained wherever applicable in case of remuneration to non-executive directors.
The Company pays remuneration by way of salary, perquisites and allowances (fixed component) and variable pay to Managing Director. Salary is paid within the range approved by the Shareholders. Annual increments effective 1st January each year, as recommended by the Nomination and Remuneration Committee, and is approved by the Board. Within the prescribed ceiling, the perquisites package is approved by the Remuneration Committee.
The remuneration paid to Executive Directors is determined keeping in view the industry benchmark and the relative performance of the Company to the industry performance. Perquisites and retirement benefits are paid according to the Company policy as applicable to all employees.
Independent Non-Executive Directors are appointed for their professional expertise in their individual capacity as independent professionals / Business Executives. Independent Non-Executive Directors receive sitting fees for attending the meeting of the Board and Board Committees and commission as approved by the Board and shareholders.
The remuneration by way of commission paid to the Independent Non-Executive directors is determined periodically & reviewed based on the industry benchmarks.
Key Managerial Personnel and Other Employees
The remuneration of employees largely consists of basic salary, perquisites, allowances and performance incentives. Perquisites and retirement benefits are paid according to the Company policy, subject to prescribed statutory ceiling.
The components of the total remuneration vary for different grades and are governed by the industry pattern, qualification & experience / merits, performance of each employee. The Company while deciding the remuneration package takes into consideration current employment scenario and remuneration package of the industry.
The annual variable pay of managers is linked to the performance of the Company in general and their individual performance for the relevant year measured against Company''s objectives fixed in the beginning of the year.
CRITERIA FOR BOARD MEMBERSHIP
Directors
The Company shall take into account following points:
- Director must have relevant experience in Finance/ Law/ Management/ Sales/ Marketing/ Administration/ Research/Corporate Governance/ Technical Operations or the other disciplines related to company''s business.
- Director should possess the highest personal and professional ethics, integrity and values.
- Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities.
Independent Director
Independent Director is a director who has no direct or indirect material relationship with Sunshield or any of its officers, other than as a director or shareholder of Sunshield.
Independent Director shall meet all criteria specified in Section 149(6) of the Companies Act, 2013 and rules made there under.
13. RISK MANAGEMENT POLICY AND INTERNAL CONTROLADEQUACY
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.
The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee.
14. VIGILMECHANISM
The Company has established a vigil mechanism named as Whistle Blower Policy within the Company. The policy of such mechanism has been circulated to all employees within the Company, which provides a framework to the employees for guided & proper utilization of the mechanism. The Whistle Blower Policy has been published on the Company''s website http://www.solvayindia.in/en/solvay-in/sunshield-chemical-limited. There have been no instances of any personnel seeking access to the Audit Committee.
15. SIGNIFICANTAND MATERIALS ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Company''s operations in future.
16. AUDITORS Statutory Auditors
The Statutory Auditors, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, hold office for a term of Five (5) years subject to ratification by members at every Annual General Meeting. Accordingly, a Resolution seeking Member''s ratification for the appointment of M/s. Deloitte Haskins & Sells LLP is included at Item No. 4 of the Notice convening the Annual General Meeting.
They have issued necessary certificate as required under Section 141 of the Companies Act, 2013.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Company has appointed M/s. Kishore Bhatia & Associates, Cost Accountant as the Cost Auditor of the Company for the financial year 2015-16.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed
M/s. Alwyn D''Souza & Co., Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure B. The Report does not contain any qualification, reservation or adverse remark.
Internal Audit
M/s. Nikhil Narkar & Associates, Chartered Accountants has been appointed as Internal Auditor of the Company.
17. COMMENTSONAUDITORS''REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made by Deloitte Haskins & Sells LLP, Statutory Auditors, in their report and by Mr. Alwyn D''souza, Company Secretary in Practice, in his secretarial audit report.
18. EXTRACTOFANNUALRETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure C.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided any loans, Guarantees or made investments under Section 186 of the Companies Act, 2013
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1)
During the financial year 2015-16, Company has entered into transactions with related parties, which were in the ordinary course of business and on arms'' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under.
The details of the related party transactions as required under Accounting Standard - 18 are set out in Note 26.9 to the financial statements forming part of this Annual Report.
The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure D.
21. FIXEDDEPOSITS
The Company has not accepted any fixed deposits during the year.
22. MATERIAL CHANGES AND COMMITMENTS AFFECTING THEFINANCIALPOSITIONOF THECOMPANY
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
23. EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is annexed herewith as Annexure E.
24. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The status of complaints received from female employees with regard to sexual harassment during the year is as under:
Number of Complaints of sexual harassment received during the period April 2015 to March 2016 |
Number of complaints disposed off during the period April 2015 to March 2016 |
Nature of action taken by the employer |
NIL |
Not applicable |
Not applicable |
governance is applicable to Sunshield Chemicals Limited ("Company"), since Company''s paid-up Capital is less than Rs, 10 crores and net worth is less than Rs, 25 crores.
27. ENVIRONMENT, HEALTH AND SAFETY
Your Company recognizes importance of Health and Safety of its employees and its neighborhood. Regular Safety Audits are being conducted. Your Company has adopted a Health, Safety and Environment (HSE) Policy, which applies to all employees and activities.
28. APPRECIATION
Your Directors place on record their sincere appreciation of the wholehearted support extended by the Company''s bankers, business associates, employees'' union, shareholders, auditors and various statutory authorities, both, central and state Government.
For and On Behalf of the Board of
Directors R L Shenoy
Chairman
DIN No. 0074761
Mumbai, 30thMay 2016
Mar 31, 2015
Dear Members,
The Directors are pleased to submit their 28th Annual Report and
Audited Accounts for the year ended 31st March 2015:
1. OVERVIEWOF FINANCIAL RESULTS
Highlights of Company's performance during the financial year 2014-15,
is as under:
(Rs. In Lac)
2014-15 2013-14
Export Sales 6509 7786
Domestic Sales 5346 5547
(Net of Excise Duty)
Other Operating Income 45 32
Revenue from Operations 11900 13365
Other Income 69 38
Total Income 11969 13403
Less :
Materials Consumed 8627 9594
Employees Remuneration 629 499
& Benefits
Manufacturing,
Administrative, Selling &
Other Expenses 2428 2184
Total Expenses 11685 12277
Operating Profit (EBITDA) 285 1126
Less: Finance Cost 349 357
Profit Before Tax &
Depreciation (Cash Profit) (64) 769
Less: Depreciation 327 230
Net Profit Before Tax (391) 539
Less: Tax Provision (73) 579
Net Loss after Tax (318) (40)
2. MAJOR PLANT SHUDOWN: For long-term sustainable site in India at
Solvay Global Standards
A major Plant Shutdown was undertaken for upgradation of plantfora
period of 103 days beginning with 15th December 2014 and ending on 28th
March 2015.
During the shutdown period, the Company had taken up major CAPEX Plan
of Rs. 40.17 crores - a rise of about 113% from Rs. 36.71 crores in 2013-14
to Rs. 78.31 crores in 2014-15.
In view of the above, performance of current year could not see an
upward trend compared to previous year.
However, the upgradation after the Shutdown has achieved the following
long-term strengths:
- Solvay Global Standards of Safety with respect to storage and
handling of Ethylene Oxide and other related products.
- Higher capacity of Electrical Transformer makes the site further
expandable.
- Change from Manual Control System to Distributed Control System -
Automation.
- Higher storage capacity of Ethylene Oxide Condensates (EOC)
products.
- Improved quality control and development laboratories.
3. DIVIDEND
In view of losses, the Board of Directors does not recommend any
dividend for the year ended 31st March 2015.
4. SHARECAPITAL
The paid up Equity Share Capital as on 31st March, 2015 was Rs. 7.35
Crores. During the year under review, the Company has not issued
newshares.
5. MANAGEMENT'S DISCUSSION AND ANALYSIS : F.Y. 2014-2015
(Pursuant to Clause 49 of the Listing Agreement with BSE Limited)
The Company is operating only in one Segment, namely 'Specialty
Chemicals'.
I. Industry Structure & Development :-
Your Company manufactures a wide range of specially formulated and
customized products for various Industrial applications. Company's
customers are well recognized and located not only in India but all
over the World especially in the America, Europe, and Far- East.
Our customers represent a wide range of Industries such as Wire
Insulation Enamel, PVC stabilizers, Inks, Colours, Coatings, Textiles,
Agro Chemicals, Polymers, Plastics, Rubber, Latex, Tyre and tubes,
Conveyor belts, Lubricants, Additives, Home care, Cosmetic, soaps
detergents, Fertilizers and many more.
Customers are always expanding and they want to up- grade their
products and all these improvements need Company's R&D and niche
formulation and application knowledge & experience. Solvay represents
this worldwide knowledge base in specialty chemicals supporting the
Sunshield team.
Company's main products belongto:
a. Specialty Surfactant applications, which are predominantly Ethylene
Oxide (EO) based products. The technologies developed involve
surfactants, Esters, Amides, and other complementary processes.
b. Specialty Anti-Oxidants for Lubricants, Polymers, Rubber, Tyre &
Latex and other Industries involvingAminic& Phenolic technologies and
c. Other Non-EO technologies & customized blends for various
applications.
A number of Surfactants and specialty chemicals formulated by the
Company depend on EO, which is currently commercially produced and sold
in India by only one Supplier. However the supplier has 3 independent
production sites viz., at Nagothane, Baroda and Dahej. This
multi-location option, gives a reasonable dependability of EO supplies
for the Company. Managing logistics of EO procurement is a key factor
of operations.
In recent upgradation at our factory, the storage capacity of EO is
increased by over 40%. In addition, the site has been upgraded to
Solvay global standards of Environment, Health, safety and efficiency.
Solvay is actively involved in planning and implementing the current
CAPEX through its worldwide professional teams for Products and Project
development. The Company now has its Rasal production site upgraded to
Solvay standards of safety and efficiency for a multi-product niche
specialty product range.
II. Operating and Financial Performance of the Company
(Rs. In Lacs)
F.Y. F.Y.
2014-2015 2013-2014
i) Exports 6509 7786
ii) Domestic 6077 6128
iii) Processing Charges 107 111
iv) Other Operating Income 45 32
Gross Sales 12738 14057
Less: Excise Duty 838 692
Net Sales 11900 13365
Net Loss after Tax (318) (40)
The Sales in Value terms went down by 11%. Export Sales went down by
16% from Rs. 7786 Lacs to Rs. 6509 Lacs and domestic Sales went down by
1%from Rs. 6128 Lacs in 2013-14 to Rs. 6077 Lacs in 2014-15.
EBIDTA was down by 75% atRs. 285 Lacs in the year 2014-15 against EBIDTA
ofRs. 1126 Lacs in the previous year.
Finance Cost came down from Rs. 357 Lacs in 2013-14 to Rs. 349 Lacs in
2014-15, a drop of 2% over that of previous year.
Cash profit (Profit before Tax & Depreciation) went down by 108% from Rs.
769 Lacs in the year 2013-14 to loss ofRs. 64 Lacs in the year 2014-15.
The above adverse performance is mainly on account of major shutdown of
103 days as detailed earlier.
III. Outlook
The Company's products continue to be well received by World's leading
users of specialty chemicals for a diverse range of industrial
applications. The Company has been recognized as a reputable and
dependable supplier to many Indian and global consumers of specialty
productsdeveloped in-house.
Now that Sunshield is a Solvay group Company with access to management,
goodwill and global customer base, it is accepted as efficient and
dependable global supplier and provides service worldwide.
With the implementation of Capex plan of Rs. 40.17 crores during 2014-15,
the Company has a very positive out-look for growth in exports as also
domestic.
IV. Risks and Concerns
i. Slowdown in world economies, affect demand from user industry
specifically in Europe.
ii. Lower overall demand, can bring pressures all over and the
aggressive pricing can cause concerns about margins.
V. Internal Control System and its adequacy
During the year, no significant internal control issue was identified.
Internal checks and controls appropriate to growing size of the
Company's business, is being put in place.
VI. Human Resources
Employee relationships at all levels continued to be satisfactory. The
management would like to record its appreciation of dedicated and
strong support provided to your Company, by its employees at all
levels. The number of employees on rolls as on 31st March 2015 is 106.
(The statement in this report including Management's Discussions &
Analysis Report reflects Company's projections, estimates, expectations
or predictions. These may be forward looking statements within the
meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied, since your
Company's operations are influenced by many external and internal
factors beyond the control of the Company.)
6. BOARDMEETINGS
The Board meets at regular intervals to discuss and decide on Company /
business policy and strategy apart from other Board business.
The Board metfour times in the financial year 2014-15 i.e on 23rd May
2014,12th August 2014,14th November 2014 and 13th February 2015.
7. BOARDCOMMITTEES
During the year, in accordance with the Companies Act, 2013, the Board
re-constituted some of its Committees and also formed Corporate Social
Responsibility Committee, Risk Management Committee and Committee for
issue of Duplicate Share Certificates. There are currently six
Committees of the Board, as follows:
- AuditCommittee
- Nomination and Remuneration Committee
- Stakeholders' Relationship Committee
- Corporate Social Responsibility Committee
- RiskManagementCommittee
- Committee for Issue of Duplicate Share Certificates
Details of all the Committees are provided in the
"Report on Corporate Governance", a part of this
Annual Report.
8. DIRECTORS' RESPONSIBILITY STATEMENT
In pursuance of section 134 (5) of the Companies Act,
2013, the Directors hereby confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the company for that period;
(c) the directors had 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;
(d) the directors had prepared the annual accounts on a going concern
basis; and
(e) the directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively
9. FRAUD REPORTING BY AUDITORS
As required under Section 134(3)(ca)of the Companies Act, 2013, there
are no instances of Fraud being reported by the Auditors.
10. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from each Independent
Director of the Company under Section 149(7) of the Companies Act, 2013
that the Independent Directors of the Company meet with the criteria of
their Independence laid down in Section 149(6).
11. DIRECTORS AND KEY MANANGERIAL PERSONNEL
In accordance with the provision of the Companies Act, 2013 Mr. Manoj
Khullar and Mr. Satish Kelkar, Directors of the Company, retire by
rotation and being eligible, offer themselves, for re-appointment. The
profiles of the Directors seeking re-appointment form part of the
Annexuretothe Notice.
Mr. Michel Ybert, Mr. Suresh Talwar resigned as Directors with effect
from 14th November 2014 and 16th February 2015 respectively. Your
Directors place on record their sincere appreciation of the valuable
contribution made by them during their tenure as Directors of the
Company.
The Board of Directors appointed Ms. Sze Wee Ong and Mr. Arun Roy as
Additional Directors with effect from 14th November, 2014 and 1st July
2015 respectively. The Board of Directors appointed Mr. Ranjal Laxmana
Shenoy as an Additional Director to hold office as an Independent
Director of the Company with effect from 20th March 2015.
Ms. Ong, Mr. Roy and Mr. Shenoy hold office of Director upto the date
of the forthcoming Annual general meeting of the Company. The Company
has received a notice in writing from a member along with the deposit
of requisite amount under Section 160 of the Act proposing the
candidature each of Ms. Ong, Mr. Roy and Mr. Shenoy for the office of
Director of the Company.
During the year, Mr. Guo Lin ceased to be Alternate Director to Mr.
Michel Ybert with effect from 14th November, 2014. He was appointed as
an Alternate Director to Ms. Sze Wee Ong under the Companies Act, 2013
with effectfrom the same date.
Details ofthe proposal for appointment of Ms. Sze Wee Ong, Mr. Ranjal
Laxmana Shenoy, Mr. Arun Roy and Mr. Manoj Khullar are mentioned in the
Explanatory Statement under Section 102 of the Companies Act, 2013
ofthe Notice ofthe 28th Annual General Meeting.
The Board of Directors in their meeting held on 23rd May 2015, accepted
the resignation of Mr. Shrirang Belgaonkar, Wholetime Director with
effectfrom 30th June 2015. Your Directors place on record their sincere
appreciation ofthe contribution made by him during histenure asa member
ofthe Board.
The Board of Directors of the Company on the recommendation of
Nomination and Remuneration Committee at their meeting held on 23rd May
2015 have, soughttoappointMr. Manoj Khullar as Managing Director, for a
period of 3 (Three) years, effective from 1st July 2015. The Board
seeks members' approval for appointment of Mr. Manoj Khullar as
Managing Director ofthe Company.
None of the Directors is disqualified from being appointed as Directors
as specified in Section 164(2) of the Companies Act, 2013.
The Company has recognized Mr. Manoj Khullar, Managing Director, Mr.
Rajeev Gupte Chief Financial Officer and Mr. Amit Kumashi Company
Secretary of the Company as Key Managerial Personnel as required
underSection 203 ofthe Companies Act, 2013.
12. ANNUAL EVALUATION
Pursuant to the provisions ofthe Companies Act, 2013 and Clause 49
ofthe Listing Agreement, the Board has carried out an annual
performance evaluation of its own performance, the Directors
individually, as well as the evaluation ofthe working of its
Committees.
13. COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
In accordance with Section 178 ofthe Companies Act, 2013 the Nomination
and Remuneration Committee has formulated Remuneration Policy ("the
policy").
The objective of the policy is to ensure that Executive Directors and
other employees are sufficiently compensated for their performance. The
Policy seeks to provide criteria for determining qualifications,
positive attributes and independence of a director.
REMUNERATION POLICY
Directors
Nomination and Remuneration Committee shall recommend the remuneration,
including the commission based on the net profits ofthe Company for the
Non-Executive Directors and Wholetime Director and other Executive
Directors. This will be then approved by the Board and shareholders.
Prior approval of shareholders will be obtained wherever applicable in
case of remuneration to non-executive directors.
The Company pays remuneration by way of salary, perquisites and
allowances (fixed component) and variable pay to Wholetime Director.
Salary is paid within the range approved by the Shareholders. Annual
increments effective 1st January each year, as recommended by the
Nomination and Remuneration Committee, and is approved by the Board.
Within the prescribed ceiling, the perquisites package is approved by
the Remuneration Committee.
The remuneration paid to Executive Directors is determined keeping in
view the industry benchmark and the relative performance of the Company
to the industry performance. Perquisites and retirement benefits are
paid according to the Company policy as applicable to all employees.
Independent Non-Executive Directors are appointed for their
professional expertise in their individual capacity as independent
professionals / Business Executives. Independent Non-Executive
Directors receive sitting fees for attending the meeting of the Board
and Board Committees and commission as approved by the Board and
shareholders.
The remuneration by way of commission paid to the Independent
Non-Executive directors is determined periodically & reviewed based on
the industry benchmarks.
Key Managerial Personnel and Other Employees
The remuneration of employees largely consists of basic salary,
perquisites, allowances and performance incentives. Perquisites and
retirement benefits are paid according to the Company policy, subject
to prescribed statutory ceiling.
The components of the total remuneration vary for different grades and
are governed by the industry pattern, qualification & experience /
merits, performance of each employee. The Company while deciding the
remuneration package takes into consideration current employment
scenario and remuneration package ofthe industry.
The annual variable pay of managers is linked to the performance of the
Company in general and their individual performance for the
relevantyear measured against Company's objectives fixed in the
beginning of the year.
CRITERIA FOR BOARD MEMBERSHIP
Directors
The Company shall take into account following points:
- Director must have relevant experience in Finance/ Law/ Management/
Sales/ Marketing/ Administration/Research/Corporate Governance/
Technical Operations or the other disciplines related to company's
business.
- Director should possess the highest personal and professional
ethics, integrity and values.
- Director must be willing to devote sufficient time and energy in
carrying out their duties and responsibilities.
Independent Director
Independent Director is a director who has no director indirect
material relationship with Sunshield or any of its officers, other than
as a director or shareholder of Sunshield.
Independent Director shall meetall criteria specified in Section 149(6)
ofthe Companies Act, 2013 and rules made thereunder and Clause 49 of
the Listing Agreement entered into with BSE Limited.
14. RISK MANAGEMENT POLICY AND INTERNAL CONTROLADEQUACY
The Company has in place a mechanism to identify, assess, monitor and
mitigate various risks to key business objectives. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. These are discussed
at the meetings ofthe Audit Committee and the Board of Directors ofthe
Company.
The Company's internal control systems are commensurate with the nature
of its business and the size and complexity of its operations. These
are routinely tested and certified by Statutory as well as Internal
Auditors. Significant audit observations and follow up actions thereon
are reported to the Audit Committee.
15. VIGILMECHANISM
The Company has established a vigil mechanism named as Whistle Blower
Policy within the Company. The policy of such mechanism has been
circulated to all employees within the Company, which provides a
framework to the employees for guided & proper utilization of the
mechanism. The Whistle Blower Policy has been published on the
Company's website http://www.solvayindia.in/en/solvay-in/sunshield-
chemical-limited. There have been no instances of any personnel
seeking access to the Audit Committee.
16. AUDITORS
Statutory Auditors
The Statutory Auditors, M/s. Deloitte Haskins & Sells LLP Chartered
Accountants, hold office for a term of Five (5) years subject to
ratification by members at every Annual General Meeting. Accordingly, a
Resolution seeking Member's ratification for the appointment of M/s.
Deloitte Haskins & Sells LLP is included at Item No. 4 of the Notice
convening the Annual General Meeting.
They have issued necessary certificate as required under Section 141 of
the Companies Act, 2013.
CostAuditors
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the Company
has appointed M/s. Kishore Bhatia & Associates, Cost Accountant as the
Cost Auditor of the Company for the financial year 2014-15.
Cost Audit Report for the year 2013-14 was filed with the Ministry of
Corporate Affairs on 12th August 2014 in XBRL format. Cost Audit Report
for the financial year 2014-15 shall be filed with the Ministry of
Corporate Affairs within 180 days from the closure of the financial
year i.e. on or before 27thSeptember 2015.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s. Alwyn D'Souza &
Co., Company Secretaries in Practice to undertake the Secretarial Audit
of the Company. The Report of the Secretarial Audit Report is annexed
herewith asAnnexure A. The Report does not contain any qualification,
reservation or adverse remark.
Internal Audit
M/s. Nikhil Narkar & Associates, Chartered Accountants has been
appointed as Internal Auditor of the Company.
17. COMMENTS ON AUDITORS' REPORT
There are no qualifications, reservations or adverse remarks or
disclaimers made by Deloitte Haskins & Sells LLP, Statutory Auditors,
in their report and by Mr. Alwyn D'souza, Company Secretary in
Practice, in his secretarial audit report.
18. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed herewith as Annexure B.
19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not provided any loans, Guarantees or made investments
under Section 186 of the Companies Act, 2013
20. PARTICU LARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
REFERRED TO IN SECTION 188(1)
During the financial year 2014-15, Company has entered into
transactions with related parties, which were in the ordinary course of
business and on arms' length basis and in accordance with the
provisions of the Companies Act, 2013, Rules issued thereunder and
Clause 49 of the Listing Agreement. During the financial year 2014-15,
there were no transactions with related parties which qualify as
material transactions under the ListingAgreement.
The details of the related party transactions as required under
Accounting Standard - 18 are set out in Note
27.9 to the financial statements forming part of this Annual Report.
The Form AOC- 2 pursuant to Section 134 (3)(h) of the Companies Act,
2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is
annexed herewith as Annexure C.
21. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility (CSR)
Committee in accordance with Section 135 of the Companies Act, 2013.
The CSR policy of the Company and Annual Report on CSR activities is
annexed herewith as Annexure D.
22. FIXED DEPOSITS
The Company has not accepted any fixed deposits during the year.
23. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
OF THE COMPANY
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the financial year of the Company to which the financial
statements relate and the date of the report.
24. EMPLOYEES
The information required pursuantto Section 197 read with Rule, 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, is annexed herewith
as Annexure E.
25. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
There were no incidences of sexual harassment reported during the year
under review, in terms of the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGSANDOUTGO
As required by Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, relevant data
pertaining to Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo, is annexed herewith as Annexure F to this
Report.
27. CORPORATEGOVERNANCE REPORT
The Corporate Governance Report for the financial year 2014-15 is set
out as a separate Annexure to this Report. Certificate from the
Practicing Company Secretary, certifying, compliance with Clause 49 of
the Listing Agreement with the Stock Exchange in respect of Corporate
Governance is annexed to the Report on Corporate Governance.
28. ENVIRONMENT, HEALTH AND SAFETY
Your Company recognizes importance of Health and Safety of its
employees and its neighborhood. Regular Safety Audits are being
conducted. Your Company has adopted a Health, Safety and Environment
(HSE) Policy, which applies to all employees and activities.
29. APPRECIATION
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Company's bankers, business
associates, employees' union, shareholders, auditors and various
statutory authorities, both, central and state Government.
For and On Behalf of the Board of Directors
R L Shenoy
Chairman
Mumbai, 15th July 2015
Mar 31, 2014
Dear Members,
The Directors are pleased to submit their 27th Annual Report and
Audited Accounts for the year ended 31st March 2014, also incorporating
Management''s Discussion and Analysis of performance of your Company:
A. overview of Financial Results
Highlights of Company''s performance during the financial year 2013-14,
is as under:
(Rs. In Lacs)
2013- 2012- Change
2014 2013 over
previous
years
Export Sales 7927 6307 26%
Domestic Sales 5463 4223 29%
(Net of Excise Duty)
Revenue from
Operations 13390 10530 27%
Other Income 78 20 62%
Total Income 13468 10550 28%
Less :
Materials Consumed 9610 7559 27%
Employees
Remuneration &
Benefits 499 468 7%
Manufacturing,
Administrative, Selling
& Other Expenses 2141 1662 29%
Total Expenses 12250 9689 27%
Operating Profit 1218 861 41%
(EBITDA)
Less: Finance Cost 449 510 (12%)
Profit Before Tax &
Depreciation (Cash
Profit) 769 351 119%
Less: Depreciation 230 248 (7%)
Net Profit Before Tax 539 103 423%
Less: Tax Provision
Current Tax 115 21
Deferred Tax 693 (2)
MAT Credit
Entitlement (229) -
Net Profit/(Loss)
after tax (40) 84 (52%)
B. Management''s Discussion and Analysis: F.Y. 2013-2014
(pursuant to Clause 49 of the listing Agreement with the Stock
exchange, Mumbai)
The Company is operating only in one Segment, namely ''Specialty
Chemicals''.
I. Industry Structure & Development:
Your Company manufactures process chemicals that are formulated to meet
requirements of industries and are known as "Specialty Chemicals" (SC).
Specialty Chemicals manufactured by the Company fnd extensive use in
diverse range of Industries such as Wire Insulation Enamel, PVC
stabilizers, Inks, Colours, Coatings, Textiles, Agro-chemicals,
Plastics, Rubber and Latex, Tyre and Tubes, Lubricant and additives,
and many more.
Some of these SC are Ethylene Oxide (EO) based derivatives, called
Ethylene Oxide Condensates (EOC). For the EOC industry, EO is a vital
input. EO is a product manufactured mainly for captive consumption by
petrochemical complexes to produce MEG, a vital input for Polyester
Fibre industry. Based on the captive requirements, petrochemical
complexes allocate EO to EOC industry. EO is non importable by sea/air
on account of transportation hazards because of its characteristics of
low boiling point and explosive nature. EO, therefore needs to be
transported at controlled temperatures and under Nitrogen pressure, in
specially designed road tankers. EOC Industry therefore depends
entirely on domestic EO availability and Prices.
Besides, EOC based Specialty Chemicals; Company has also diversifed
into the manufacture of a range of Anti-Oxidants and certain other
additives, which do not use EO. This range of products is also required
by a diverse group of industries in the feld of Lubricants, Additives,
Plastics, Polymers, Rubber, Tyre, Resins and other industries.
The Company is presently catering to the requirements of both the
ranges of SC, for large domestic Companies and prime MNCs operating in
North and South America; Germany, France, Italy, Netherlands, Turkey
etc. in Europe; and also in Asian markets like Korea, Taiwan, Malaysia,
Japan etc.
II. operating and Financial performance of the Company
(Rs. In Lacs)
F.Y. F.Y. Change
2013-2014 2012-2013 over
Previous
year
(i) Exports 7927 6307 26%
(ii) Domestic 6155 4878 26%
Gross Sales 14082 11185 26%
Less: Excise 692 655 6%
Duty
Net Sales 13390 10530 27%
F.Y. F.Y. Change
over
2013-2014 2012-2013 Previous
year
Volume Sales 9703 8146 19%
(MT)
Net Sales 13390 10530 27%
Value (Rs.)
During the year, Sales by Volume went up by 19% from 8146 Mt to 9703
Mt.
The Sales in Value terms went up by 27%. Export Sales went up by 26%
from Rs. 6307 lacs to Rs. 7927 lacs and Domestic Sales went up by 26% from
Rs. 4878 lacs in 2012-13 to Rs. 6155 lacs in 2013-14.
EBIDTA was up by 41% at Rs. 1218 lacs in the year 2013-14 against EBIDTA
of Rs. 868 lacs in the previous year.
Finance Cost came down from Rs. 510 lacs in 2012-13 to Rs. 449 lacs in
2013-14, a drop of 12% over that of previous year.
Cash profit (profit before Tax & Depreciation) went up by 119% from Rs. 351
lacs in the year 2012-13 to Rs. 769 lacs in the year 2013-14.
After provision of depreciation of Rs. 230 lacs for 2013-14 (Rs. 248 lacs
for 2012-13. Net profit before Tax provision went up from Rs. 103 lacs to
Rs. 539 lacs a rise of 423%.
However, as a matter of abundant caution and prudence, in addition to
provision of current year''s Income tax, a provision for MAT credit
entitlement and revision on Deferred Tax has been made having final
effect that post tax provision, the Net profit after Tax came down from
Rs. 84 lacs in 2012-13 to a loss of Rs. 40 lacs for 2013-14.
III. outlook
Your Company is already recognized globally, as a reliable supplier of
quality Specialty Chemicals, for a variety of end use applications.
Your Company is reasonably optimistic to further improve its
performance in the current year. Your Company''s products range
continues to be accepted all over the world and now Sunshield being of
Solvay group has a strong presence worldwide, resulting in 26% growth
in domestic as also export business.
With the Company''s strength to implement Environment Health and Safety
upgrades at Rasal production site to meet Solvay''s Global standards,
the Company plans to take up Capex plan (amounting to Equivalent to US
$ 8 million, for which Reserve Bank of India approval has been already
received) for these up-grades as also capacity increase and
diversifcation, bringing long term sustainable growth path for the
Company.
IV. Risks and Concerns:
(i) Slow down in world economies, affect demand from user industry
Specifically in Europe.
(ii) Lower overall demand, can bring pressures all over and the
aggressive pricing can cause concerns about margins.
V. Internal Control System and its adequacy:
During the year, no significant internal control issue was identified.
Internal checks and controls appropriate to growing size of Company''s
business, is being put in place.
VI. Human Resources:
Employee relationships at all levels continued to be satisfactory. The
management would like to record its appreciation of dedicated and
strong support provided to your Company, by its employees at all
levels.
(the statement in this report including Management''s Discussions &
Analysis Report refects Company''s projections, estimates, expectations
or predictions. these may be forward looking statements within the
meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied, since your
Company''s operations are infuenced by many external and internal
factors beyond the control of the Company.)
C. Dividend
In view of losses, the Board of Directors does not recommend any
dividend for the year ended 31st March 2014.
D. Directors
The Board of Directors at their meeting held on 23rd May 2014 have,
sought to reappoint Mr. Shrirang Belgaonkar as Wholetime Director, for
a further period of 3 (Three) years, effective from 24th July 2014. The
Board seeks approval for re-appointment of Mr. Shrirang Belgaonkar as
Wholetime Director of the Company.
On notifcation of Section 149 and other applicable provisions of
Companies Act, 2013, your Directors are seeking appointment of Mr.
Suresh Talwar, Mr. Yogesh Thar and Mr. Sanjeev Mukerjee as Independent
Directors for five consecutive years for a term upto 31st March 2019.
Details of the proposal for appointment of Mr. Suresh Talwar, Mr.
Yogesh Thar and Mr. Sanjeev Mukerjee are mentioned in the Explanatory
Statement under Section 102 of the Companies Act, 2013 of the Notice of
the 27th Annual General Meeting.
In accordance with the provision of the Companies Act, 2013 Mr. Ian
Brown and Mr. Pierre Frank Valentin, Directors of the Company, retires
by rotation and being eligible, offers themselves, for re-appointment.
The profles of the Directors seeking re-appointment forms part of the
Annexure to the Notice.
None of the Directors is disqualified from being appointed as Directors
as specified in Section 164(2) of the Companies Act, 2013.
e. Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, it is hereby confirmed:
(i) that in the preparation of the 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) that the Directors have selected such accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair view of the profit
or loss of the Company for the year under review;
(iii) that the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2014 on a going concern'' basis.
F. Fixed Deposits
The Company has not accepted any fixed deposits during the year.
G. Auditors
M/s. Ashok Pandit & Co., Chartered Accountants, Auditors of the
Company, will retire at the conclusion of the 27th Annual General
Meeting and are not seeking re-appointment for the next year.
The Board of Directors at its Board Meeting held on 23rd May 2014 has
appointed M/s. Deloitte Haskins & Sells LLP, as Statutory Auditors of
the Company. They have issued necessary certifcate as required under
Section 141 of the Companies Act, 2013. The Board recommends their
appointment.
H. Cost Audit
Cost Audit Report for the year 2012-13 was fled with the Ministry of
Corporate Affairs on 26th August 2013 in XBRL format.
M/s. Kishore Bhatia & Associates, Cost Accountant has been appointed as
the Cost Auditor of the Company under section 233B of the Companies
Act, 1956 for the financial year 2013-14. Cost Audit Report for the
financial year 2013-14 shall be fled with the Ministry of Corporate
Affairs within six months from the closure of the financial year i.e. on
or before 30th September 2014.
I. employees
During the year under review there were no employees, whose particulars
are to be given under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 in this
Report.
The status of complaints received from female employees with regard to
sexual harassment during the year is as under:
J. Conservation of energy, technology Absorption and Foreign exchange
earnings and outgo
As required by Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, relevant data pertaining to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
are given as Annexure to this Report.
K. Corporate Governance Report
The Corporate Governance Report is set out as a separate Annexure to
this Report. Certifcate from the Auditors of the Company, certifying,
compliance with Clause 49 of the Listing Agreement with the Stock
Exchange in respect of Corporate Governance is annexed to the Report on
Corporate Governance.
l. environment, Health and Safety
Your Company recognizes importance of Health and Safety of its
employees and its neighborhood. Regular Safety Audits are being
conducted. Your Company has adopted a Health, Safety and Environment
(HSE) Policy, which applies to all employees and activities. Company is
planning to take major upgradation on Safety, Health and Environment to
further higher standards of Safety, Health and Environment in
accordance with Policies on Safety, Health and Environment of Solvay
Group.
M. Appreciation
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Company''s bankers, business
associates, employees'' union, shareholders, auditors and various
statutory authorities, both, central and state Government.
For and on Behalf of the Board of Directors
Mumbai, Suresh Talwar
23rd May 2014 Chairman
Mar 31, 2013
Dear Members,
The Directors are pleased to submit their 26th Annual Report and
Audited Accounts for the year ended 31st March, 2013, also
incorporating Management''s Discussion and Analysis of performance of
your Company:
A. Overview of Financial Results
Highlights of Company''s performance during the fnancial year 2012-13,
is as under:
(Rs.In Lacs)
2012- 2011- Change
2013 2012 over
previous
years
Export Sales 6307 4938 28%
Domestic Sales (Net 4223 4490 (6%)
of Excise Duty)
Revenue from 10530 9428 12%
Operations
Other Income 20 93 (78%)
Total Income 10550 9521 11%
Less :
Materials Consumed 7559 6817 11%
Employees
Remuneration &
Benefts 468 390 20%
Manufacturing,
Administrative,
Selling & Other
Expenses 1655 1457 14%
Total Expenses 9682 8664 12%
Operating Proft 868 857 1%
(EBITDA)
Less: Finance Cost 510 550 (7%)
Proft Before Tax & Depreciation
(Cash Proft) 358 307 17%
Less: Depreciation 248 224 11%
Net Proft Before Tax 110 83 33%
Less: Tax Provision 19 (14)
Net Proft after Tax 91 97 (6%)
B. Acquisition of Majority Stake in the Company by Rhodia Amines
Chemicals Pte. Ltd. (Part of Solvay Group)
During the year the Agreement for the Sale and Purchase of shares in
Sunshield Chemicals Limited was executed between the Company, its
erstwhile Promoters and Rhodia Amines Chemicals Pte. Ltd. (part of
Solvay S.A. group, Belgium)
In terms of the said Agreement, Rhodia Amines Chemicals Pte. Ltd. on
26th December, 2012 acquired 45,85,196 Equity shares of Rs. 10/- each
representing 62.36% Equity Shares in the Company as per the SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations 2011.
Solvay S.A. is an international chemical group committed to sustainable
development with a clear focus on innovation and operational
excellence. It generates over 90% (ninety per cent) of its sales in
markets where it is among the top three leaders. Solvay S.A. offers a
broad range of products that contribute to improving the quality of
life and the performance of its customers in markets such as consumer
goods, construction, automotive, energy, water and environment, and
electronics.
C. Dividend
In order to conserve resources, the Board of Directors does not
recommend any dividend for the year ended 31st March, 2013.
D. Directors
The Board at its meeting held on 27th December,
2012 had appointed Mr. Suresh Talwar, Mr. Ian Brown, Mr. Yogesh Thar,
Mr. Sanjeev Mukerjee, Mr. Michel Ybert, Mr. Pierre-Franck Valentin, and
Mr. Manoj Khullar as Additional Directors.
As per the Provision of Section 260 of the Companies Act, 1956, these
Directors hold offce only up to the date of forthcoming Annual General
Meeting of the Company.
The Board at its meeting held on 13th February,
2013 had appointed Mr. Chen Pu and Mr. Guo Lin as Alternate Director to
Mr. Pierre Franck Valentin and Mr. Michel Ybert respectively.
With effect from 27th December, 2012 Mr. Amit Choksey, Mr. Ashok Datar,
Mr. Bipin Jhaveri, Mr. Dhiren Mehta, Mr. Manubhai Patel and Mr.
Sandeep Junnarkar relinquished their offce. Your Directors express
their appreciation for the valuable services rendered by them during
their tenure.
In accordance with the provision of the Companies Act, 1956 read with
Article 166 of the Articles of Association of the Company, Mr. Satish
Kelkar, Director of the Company, retires by rotation and being
eligible, offers himself, for re-appointment.
The profles of the Directors seeking re- appointment forms part of the
Annexure to the Notice.
None of the Directors are disqualifed from being appointed as Directors
as specifed in Section 274(1)(g) of the Companies Act, 1956.
F. Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, it is hereby confrmed:
(i) that in the preparation of the accounts for the fnancial year ended
31st March, 2013, the applicable accounting standards have been
followed along with proper explanation relating to material departures.
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair view of the proft
or loss of the Company for the year under review;
(iii) that the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the accounts for the fnancial
year ended 31st March, 2013 on a going concern'' basis.
G. Fixed Deposits
The Company has not accepted any fxed deposits during the year. During
the year, the Company has fully repaid fxed deposits. There has been no
default in payment of interest on or repayment of these deposits.
H. Shifting of the Registered Offce of the Company
With effect from 15th January, 2013, the Registered Offce of the
Company has been shifted from N.K.M. International House, 178, Backbay
Reclamation, Babubhai Chinai Marg, Mumbai - 400 020 to Phoenix House,
4th Floor, 462, Senapati Bapat Marg, Lower Parel (West), Mumbai - 400
013.
I. Auditors
M/s. Tembey & Mhatre, Chartered Accountants, Auditors of the Company,
will retire at the conclusion of the 26th Annual General Meeting and
are not seeking re-appointment for the next year.
The Board of Directors vide its resolution dated 5th June, 2013, passed
by circulation, has appointed M/s. Ashok Pandit & Co., as Statutory
Auditors of the Company. They have issued necessary certifcate as
required under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their appointment.
J. Cost Compliance Report
Cost Compliance Report for the year 2011-12 was fled with the Ministry
of Corporate Affairs on 31st January, 2013 in XBRL format.
K. Cost Audit
M/s. Kishore Bhatia & Associates, Cost Accountant has been appointed as
the Cost Auditor of the Company under section 233B of the Companies
Act, 1956 for the fnancial year 2012-13. Cost Audit Report for the
fnancial year 2012-13 shall be fled with the Ministry of Corporate
Affairs within six months from the closure of the fnancial year i.e. on
or before 30th September 2013.
L. Particulars of Employees
During the year under review there were no employees, whose particulars
are to be given under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 in this
report.
M. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings And Outgo
As required by Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, relevant data pertaining to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
are given as Annexure to this Report.
N. Corporate Governance Report
The Corporate Governance Report is set out as a separate Annexure to
this Report. Certifcate from the Auditors of the Company, certifying,
compliance with Clause 49 of the Listing Agreement with the Stock
Exchange in respect of Corporate Governance is annexed to the Report on
Corporate Governance.
O. Environment, Health and Safety
Your Company recognizes importance of Health and Safety of its
employees and its neighborhood. Regular Safety Audits are being
conducted. Your Company has adopted a Health, Safety and Environment
(HSE) Policy, which applies to all employees and activities. Company is
planning to take major upgradation on Safety, Health and Environment to
further higher standards of Safety, Health and Environment in
accordance with Policies on Safety, Health and Environment of Solvay
Group.
P. Appreciation
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Company''s bankers, business
associates, employees'' union, shareholders, auditors and various
statutory authorities, both, central and state Government.
For and On Behalf of the
Board of Directors
Mumbai, Suresh Talwar
7th June, 2013 Chairman
Mar 31, 2012
The Directors are pleased to submit their 25th Annual Report and
Audited Accounts for the year ended 31st March, 2012, also
incorporating Management's Discussion and Analysis of performance
of your Company:
A OVERVIEW OF FINANCIAL RESULTS
Highlights of Company's performance during the financial year 2011-12,
is as under:
(Rs. in Lacs)
2011-2012 % to Net 2010-2011 % to Net Change over
Sales Sales Previous
year
Gross Sales 10069 Ã 8492 Ã 19%
Net Sate by
volume (MT) 8062 Ã 7972 Ã 1%
Net Sates 9429 Ã 7914 Ã 19%
Other income 93 Ã 65 Ã
Total Income 9522 Ã 7979 Ã 19%
Less : Materials
Consumed 6817 72% 5539 70% 23%
Employees
Remuneration &
Benefits 390 4% 327 4% 19%
Manufacturing,
Administrate , 1458 15% 1247 16% 17%
Setting & Other
Expenses
Total Expenses 8665 19% 7112 20% 22%
Operating Prett
(EBITDA) 857 9% 867 11% (1%)
Less: Finance
Cost 550 6% 410 5% 34%
Prom Before Tax
4 Depredation 307 3% 457 6% (33%)
(cash profit)
Less;
Depreciation 224 2% 193 2% 16%
Net Profit
before Tax 83 Ã 264 Ã (68%)
Less: Tax
Provision
Income Tax (18) Ã (51) Ã
Deferred Tax 31 Ã (54) Ã
Net Profit
after Tax 97 Ã 159 Ã (39%)
B MANAGEMENT DISCUSSION AND ANALYSIS: F.Y. 20H-2012
(Pursuant to Clause 48 of the Listing Agreement with the Stock
Exchange, Bombay)
L The Company is operating only in one Segment, namely 'Specialty
Chemicals'.
L Industry Structure & Development :-
Your Company manufactures process chemicals that are formulated to meet
requirements of industries and are known as "Specialty Chemicals" (SC)
Specialty Chemicals manufactured by the Company find extensive use in
diverse range of Industries, such as Wire Insulation Enamel, PVC
stabilizers, Inks, Colours, Coatings, Textiles, Agro-chenricats,
Plasties, Rubber and Latex, Tyre and Tubes, Lubricant and additives,
and many more- Some of these SC are Ethylene Oxide (EO) based
derivatives, catted Etttytene Oxide Condensates (EOC). For the EOC
industry, EO is a vital input. EO is a product manufactured mainly for
captive consumption by petrochemical complexes to produce MEG, a vilal
input for Polyester Fibre industry. Based on the captive requirements,
petrochemical complexes allocate EO to EOC industry. EO is non
importable by sea im on account of transportation hazards because of
its characteristics of low boiling point and explosive nature. EO,
therefore needs to be transported at controlled temperatures and under
Nitrogen pressure, in specially designed road tankers. EOC Industry
therefore depends entirely on domestic EO avatebtlity and Prices.
Besides, EOC based Specialty Chemicals; Company has also diversified
into the manufacture ot a range of Anti-Oxidants and certain other
additives, which do not use EO. This range of products is also required
by a diverse group of industries in the field of Lubricants, Additives,
Plastics, Polymers, Rubber, Tyre, Resins and other industries.
The Company is presently catering to the requirements of both the
ranges of SC, for large domestic Companies and prime MNCs operating in
North and South America; Germany, France, Italy, Netherlands, Turkey
etc. in Europe; and also in Asian markets like Korea, Taiwan, Malaysia,
Japan etc.
III. Operating and Financial Performance of the Company
Sales / Pressures on Margins (Rs in Lacs)
FY. FY. Change over
2011-2012 2010-2011 Previous year
i) Domestic 4902 4003 22%
ii) Exports 4969 4300 16%
iii) Other Processing
Revenue 206 192 7%
Gross Sales 10069 8492 19%
Less: Excise Duty 640 578
Net Sales 9429 7914 19%
Other Income 93 65 43%
Total Income 9522 7979 19%
FY FY. Change over
2011-2012 2010-2011 Previous year
Volume Sales (MT) 8062 7972 1%
Net Sales Value (Rs.) 9429 7914 19%
Average Product Price (Rs. per kg) 117 99 18%
1. During the year, Sales by Volume went up by 1% from 7972 Mt to 8062
Mt. the sales in Value terms went up by 19%. The growth was contributed
by increase in average selling price of its products from Rs. 99 per kg
to Rs.117 per kg. This increase in average selling price was caused on
account of steep increase in landed cost of imported input materials as
also adverse foreign exchange rates.
Value of the Materials consumed as percentage of net sales increased by
2%.
2. The Company could not increase selling prices of its key products
for sales in the export markets to the extent of increase in the costs
of input materials, partly due to earlier commitments and partly due to
increase in competition from Chinese manufactures.
3. In addition, one of its foreign customers slowed down its offtake
from the Company of a product with good margin for major part of the
year. Export of the product has restarted in the current year.
4. Profit Margins were, therefore under pressure.
5. EBIDTA stood at Rs. 8.57 crores in the year 2011-12 against EBIDTA
of Rs. 8.67 crores in the previous year, a drop of 2% as percentage to
Net Sales.
6. There was a steep increase in Finance Cost to the extent of 34%.
Cash profit (Profit before Tax & Depreciation) came down from Rs. 4.57
croresjn the year. 2010-11 to Rs. 3.07 crores in the year 2011 -12.
IV. Outlook
Your Company is already recognized globally, as a reliable supplier of
quality Specialty Chemicals, for a variety of end use applications.
Company is reasonably optimist to improve its performance in the
current year.
This outlook is on account of sustained sales to globally renowned
customers and acceptance of Antioxidants of the Company in EU and USA
markets.
V. Risks and Concerns:
i. Slow down in world economies, coupled with weakening of rupee, will
bring severe pressure on cost of input materials including those based
on Naphtha / Crude, which will translate into pressure on profit
margins during the current year.
ii. Uncertainties in global economies may affect demand, from some of
the overseas customers.
iii. During the year, the Company converted a part of its long term
rupee borrowings into FCNR(B) borrowings for achieving interest cost
reduction. Volatility of $:Rs. exchange rate may nullify the benefit
that would have accrued in interest costs.
VI. Internal Control System and its adequacy:
During the year, no significant internal control issue was identified.
Internal checks and controls appropriate to growing size of Company's
business, are being introduced. An independent firm of Chartered
Accountants is entrusted with the Internal Audit of the Company.
VII. Human Resources:
Employee relationships at all levels continued to be satisfactory. The
management would like to record its appreciation of dedicated and
strong support provided to your Company, by its employees at all
levels.
(The statement in this report including Management's Discussions &
Analysis Report reflect Company's projections, estimates, expectations
or predictions. These may be forward looking statements within the
meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied, since your
Company's operations are influenced by many external and internal
factors beyond the control of the Company.)
C DIVIDEND
In view of the balance accumulated losses, the Board of Directors do
not recommend payment of any dividend.
D DIRECTORS
In accordance with the provision of the Companies Act, 1956 read with
Article 166 of the Articles of Association of the Company, Shri Satish
M Kelkar and Shri Dhiren P. Mehta, Directors of the Company, retire by
rotation and being eligible, offer themselves, for re-appointment.
E DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, it is hereby confirmed:
(i) that in the preparation of the 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) that the Directors have selected such accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair view of the profit
or loss of the Company for the year under review;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2012 on a 'going concern' basis.
E FIXED DEPOSITS
During the year, the Company has accepted fixed deposits. Fixed
deposits from Public and the shareholders stood at Rs. 110 Lakhs at the
end of the year. There has been no default in payment of interest on or
repayment of these deposits.
G. AUDITORS
M/s. Tembey & Mhatre, Chartered Accountants, Mumbai, hold office upto
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment. They have issued necessary certificate as required
under Section 224 (1B) of the Companies Act, 1956. The Board
recommends their appointment.
H PARTICULARS OF EMPLOYEES
During the year under review there were no employees, whose particulars
are to be given under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 in this
report.
L CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, relevant data pertaining to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
are given as Annexure to this Report.
J. CORPORATE GOVERNANCE REPORT
The Corporate Governance Report is set out as a separate Annexure to
this Report. Certificate from the Auditors of the Company, certifying,
compliance with Clause 49 of the Listing Agreement with the Stock
Exchange in respect of Corporate Governance is annexed to the Report on
Corporate Governance.
K. ENVIRONMENT. HEALTH AND SAFETY
Your Company has adopted a Health, Safety and Environment (HSE) Policy,
which applies to all employees and activities. Policy is being
continuously updated.
L APPRECIATION
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Company's bankers, business
associates, employees' union, shareholders, auditors and various
statutory authorities, both, central and state Government. The
Directors also place on record their sincere appreciation of the
support and cooperation rendered by the employees of the Company at all
levels.
For and On Behalf of the Board of Directors
Amit Choksey Shrirang Belgaonkar
Chairman Wholetime Director
Mumbai, 11th May, 2012
Mar 31, 2011
The Directors are pleased to submit their 24th Annual Report and
Audited Accounts for the year ended 31st March, 2011 incorporating
Managements Discussion and Analysis of performance of your Company:
A. OVERVIEW OF FINANCIAL RESULTS
Highlights of Companys performance during the financial year 2010-11,
is as under:
(Rs. in Lakhs)
2010-2011 2009-2010
Gross Sales Rs. 8479 6800
Net Sales Rs. 7901 6450
Net Sale by Volume MT 7230 6661
Other Income Rs. 81 1
Total Income Rs. 7982 6451
Less : Materials Consumed Rs. 5539 4271
Employees Remuneration & Benefits Rs. 327 272
Manufacturing, Admininistrative,
Selling & Other Expenses Rs. 1248 989
Total Expenses Rs. 7114 5532
Operating Profit (EBITDA) Rs. 868 919
Less: Interest Rs. 410 355
Profit Before Tax & Depreciation
(Cash Profit) Rs. 458 564
Less: Depreciation Rs. 193 181
Net Profit before Tax Rs. 265 383
Less: Tax Provision Rs. 105 78
Net Profit after Tax Rs. 160 305
C. DIVIDEND
In view of the balance accumulated losses, the Board of Directors do
not recommend payment of any dividend.
D. DIRECTORS
In accordance with the provision of the Companies Act, 1956 read with
Article 166 of the Articles of Association of the Company, Shri Ashok R
Datar and Shri Manubhai G Patel, Directors of the Company, retire by
rotation and being eligible, offer themselves, for re-appointment.
E. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, it is hereby confirmed:
(i) that in the preparation of the 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) that the Directors have selected such accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair view of the profit
or loss of the Company for the year under review;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2011 on a going concern basis.
F . FIXED DEPOSITS
During the year, the Company has accepted fixed deposits. Fixed
deposits from Public and the shareholders stood at Rs. 110 Lakhs at the
end of the year. There is no default in payment of interest on, or
repayment of, any fixed deposits.
G. AUDITORS
M/s. Tembey & Mhatre, Chartered Accountants, Mumbai, hold office upto
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment. They have issued necessary certificate as required
under Section 224 (1B) of the Companies Act, 1956. The Board recommends
their appointment.
H. PARTICULARS OF EMPLOYEES
During the year under review there were no employees, whose particulars
are to be given under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 in this
report.
I. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, relevant data pertaining to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
are given as Annexure to this Report.
J. CORPORATE GOVERNANCE REPORT
The Corporate Governance Report is set out as a separate Annexure to
this Report. Certificate from the Auditors of the Company, certifying,
compliance with Clause 49 of the Listing Agreement with the Stock
Exchange in respect of Corporate Governance is annexed to the Report on
Corporate Governance.
K. ENVIRONMENT, HEALTH AND SAFETY
Your Company has adopted a Health, Safety and Environment (HSE) Policy,
which applies to all employees and activities. Policy is being
continuously updated.
L. APPRECIATION
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Companys bankers, business
associates, employees union, shareholders, auditors and various
statutory authorities, both, central and state Government. The
Directors also place on record their sincere appreciation of the
support and cooperation rendered by the employees of the Company at all
levels.
For and On Behalf of the Board of Directors
Amit Choksey Shreerang Belgaonkar
Chairman Wholetime Director
Mumbai, 10th May, 2011
Mar 31, 2010
The Directors are pleased to submit their 23rd Annual Report and
Audited Accounts for the year ended 31st March, 2010 along with
Managements Discussion and Analysis of performance of your Company:
A OVERVIEW OF FINANCIAL RESULTS
Highlights of Companys performance during the financial year 09-10 are
as under.
(Rs. In Lacs)
Sr. Particulars 2009-2010 2008-2009 Changeover
No. Previous year
1 Gross Sales 6864 6846 0.27%
2 Net Sales 6450 6304 2.32%
3 Other Income 5 66
4 Total Income 6455 6370 1.33%
5 Operating Profit (EBITDA) 919 740 24.19%
6 Interest 355 316
7 Profit before Depreciation and
Tax (Cash Profit) 564 424 33.25%
8 Depreciation 181 153
9 Net Profit / (Loss) before Tax 383 271 41.33%
B MANAGEMENTS DISCUSSION AND ANALYSIS:
(Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchange)
I. The Company is operating in only one Segment, namely Speciality
Chemicals.
II. Industry Structure & Development:-
Your Company manufactures process chemicals that are formulated to meet
requirements of various industrial applications and are known as
"Speciality Chemicals" (SC)
Some of these Speciality Chemicals are Ethylene Oxide (EO) based
derivatives called Ethylene Oxide Condensates (EOC). For the EOC
industry, EO is a vital input. EO is a product manufactured mainly for
captive consumption by Petrochemical complexes to produce MEG, a vital
input for Polyester Fibre industry. Based on the captive requirements
and market conditions for "MEG", petrochemicals complexes allocate EO
to EOC industry. EOC industry greatly depends on availability and
prices of EO for its growth.
The EOC Industry comprises of a larger number of players in the
Commodity Ethylene Oxide condensates and a - smaller number
concentrating on EO based Speciality Chemicals and others. Your Company
is presently in the later group and manufactures, besides EO based
Speciality Chemicals, a range of Anti-oxidants and certain other
Chemicals, which are not dependent on EO. The range of Antioxidants is
required by a diverse group of industries in the field of lubricants,
plastics, polymers, rubber, tyre, pesticides, ink, coatings, resins and
many other industries.
The Company is presently catering to the requirements of large domestic
Companies and prime multinational companies operating in North and
South America; in Europe - Germany, France, Italy, Netherlands; and
also in Asia - Korea, Taiwan, Malaysia, Japan etc.
III. Operating and Financial Performance during the year 2009-2010
1. In 2009-10, total Net Sales by Volume went up by 18.6% but in rupee
terms it was up by 2.32%. Domestic Export details are as follows:
SALES BY Volume (MT) Value (Rs. In crores)
2008-09 2009-10 % 2008-09 2009-10 %
Total Net Sales 5616 6661 18.6 63.04 64.50 2.32
Export Sales 2749 2949 7.2 33.59 31.08 (7.47)
Domestic Sales 2867 3712 29.5 29.45 33.42 13.48
The growth in Volume Sales was not parallel to growth in value terms on
account of:
- Lower Export Sales realisations on account of devaluation of US $ /
EURO against Indian Rupee. Export Volume Sales was up by 7.2% but sale
value of exports has gone down by 7.47%.
- Similarly in domestic sales, the Sales realisations in Rupee term
declined in 2009-10 as compared to 2008-09 prices, resulting in growth
in Volume Sales by 29.5% but value growth only at 13.48%.
2. Due to declining raw-material prices and better exchange value of
rupee against relevant currencies, material consumption as percentage
to Net Sales was lower at 66% in the year 2009-10 as compared to 72% in
the previous year, reflecting improved Sales margin per unit of Sales.
3. Operating Profits (EBITDA) of the year stood at Rs. 9.19 crores
registering a jump of 24% over that of the previous year. Cash profit
went up from Rs. 4.24 crores in the year 2008-09 to Rs. 5.64 Crore in
the year 2009-10, an increase of over 30%.
4. With the improved profits, your company brought down its carry
forward losses from the peak level of Rs.9.27 crores as at 31st March,
2008 (Rs 5.61 crores as at 31st March 2009) to Rs.2.67 crores as at
31st March, 2010.
5. To meet the increased demand from overseas customers, your company
has upgraded its production processes, installed balancing equipments
to increase production and introduced new products. Addition to fixed
assets during the year 2009-10 was of the order of Rs 4.91 crores.
6. Your Company is no more in default in the payment of Sales tax
deferral having been granted a schedule of installments for its
repayment by the concerned authorities. The schedule has been strictly
adhered to by the Company.
IV. Outlook
With the recognition of the Company as a reliable supplier of quality
Speciality Chemicals for a variety of end use application, the Company
is reasonably optimist to improve its performance in the current year,
despite continuing economic slowdown in the overseas markets.
V. Risks and Concerns:
i. Slow down in world economies, coupled with rupee up valuation may
bring in severe competition in the domestic markets from imported
Speciality Chemicals.
ii. Uncertainties in international economies may affect the demand from
some of the overseas customers. In such situation, export sales may be
adversely affected.
iii. Export realizations may be adversely affected if Indian rupee
strengthens further against other foreign currencies.
VI. Internal Control System and its adequacy:
During the year, no significant internal control issue was identified.
Internal checks and controls appropriate to growing size of companys
business are being introduced. An independent firm of Chartered
Accountants has been entrusted with Internal Audit of the Company.
VII. Material Development in Human Resources :
Employee relationships at all levels continued to be satisfactory. The
management would like to record its appreciation of dedicated and
strong support provided to your Company, by its employees, at all
levels.
(The statement in this report including Managements Discussions &
Analysis Report reflect Companys projections, estimates, expectations
or predictions. These may be forward looking statements within the
meaning of applicable securities laws and regulations. Actual results
could differ materially from those expressed or implied, since your
Companys operations are influenced by many external and internal
factors beyond the control of the Company.)
C. DIVIDEND
In view of the balance accumulated losses, the Board of Directors do
not recommend payment of any dividend.
D. DIRECTORS:
In accordance with the provision of the Companies Act, 1956 read with
Article 166 of the Articles of Association of the Company, Shri Sandeep
H Junnarkar and Shri Bipin V Jhaveri, Directors of the Company, retire
by rotation and being eligible, offer themselves, for re-appointment.
E DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, it is hereby confirmed:
(i) that in the preparation of the accounts for the financial year
ended 31st March, 2010, the applicable accounting _.,. standards have
been followed along with proper explanation relating to material
departures. - æ-
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgment and estimates that were
reasonable and prudent so as to give a true and fair view of the profit
or loss of the Company for the year under review;
(iii)that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provision of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2010 on a going concern basis.
E FIXED DEPOSITS
During the year, the Company has accepted fixed deposits. Fixed
deposits from Public and the shareholders stood at Rs. 110 Lacs at the
end of the year. There is no default in payment of interest on, or
repayment of, any fixed deposits.
G AUDITORS
M/s. Tembey & Mhatre, Chartered Accountants, Mumbai, hold office upto
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment. They have issued necessary certificate as required
under Section 224 (1B) of the Companies Act, 1956. The Board recommends
their appointment.
H. PARTICULARS OF EMPLOYEES
During the year under review there were no employees, whose particulars
are to be given under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 in this
report.
I. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
As required by Section 217 (1) (e) of the Companies Act, 1956 read with
the Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988, relevant data pertaining to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo,
are given as Annexure to this Report.
J. CORPORATE GOVERNANCE REPORT
The Corporate Governance Report is set out as a separate Annexure to
this Report. Certificate from the Auditors of the Company, certifying,
compliance with Clause 49 of the Listing Agreement with the Stock
Exchange in respect of Corporate Governance is annexed to the Report on
Corporate Governance.
K. ENVIRONMENT HEALTH AND SAFETY
Your Company has adopted a Health, Safety and Environment (HSE) Policy,
which applies to all employees and activities. Policy is being
continuously updated.
L APPRECIATION
Your Directors place on record their sincere appreciation of the
wholehearted support extended by the Companys bankers, business
associates, employees union, shareholders, auditors and various
statutory authorities, both, central and state Government. The
Directors also place on record their sincere appreciation of the
support and cooperation rendered by the employees of the Company at all
levels.
For and On Behalf of the Board of Directors
AmitChoksey Shreerang Belgaonkar
Chairman Wholetime Director
Mumbai, 7th May, 2010
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