Mar 31, 2019
To the members
The Directors are pleased to present the 39th Annual Report along with the Audited Annual Financial Statements (including Audited Consolidated Financial Statements) of the Company for the Financial Year ended March 31, 2019.
1. SUMMARY OF FINANCIAL RESULTS
(Rs. in lakhs)
Particulars |
For the year ended March 31, 2019 |
For the year ended March 31, 2018 |
Net Sales/Income from Operations |
3,87,63.86 |
3,32,02.51 |
Other Income |
9,40.12 |
5,43.97 |
Total Revenue |
3,97,03.98 |
3,37,46.48 |
Profit/(Loss) Before Taxation |
1,02,57.48 |
79,63.31 |
Provision for Taxation * |
(28,83.34) |
(22,88.30) |
Profit/(Loss) after Taxation |
73,74.14 |
56,75.01 |
Other Comprehensive Income(Net of Tax) |
90.92 |
57.75 |
Amount Available for Appropriation |
3,84,08.92 |
3,22,73.98 |
Appropriation: |
||
Interim Dividend on Equity Shares |
4,11.15 |
3,08.88 |
Tax on Interim Dividend |
84.66 |
62.88 |
Final Dividend for Previous Year |
7,20.72 |
7,20.72 |
Tax on Final Dividend |
1,48.15 |
1,46.72 |
Balance Carried to Balance Sheet |
3,70,44.24 |
3,10,34.78 |
* Including RS.(807.53 lakhs) Deferred Tax (Previous year RS.(5,96.11 lakhs)).
2. DIVIDEND
Your Directors are pleased to recommend Final Dividend of 80% on 99,90,092 Equity Shares (RS.8/- per share of RS.10 each) which is subject to the approval of Shareholders in the ensuing Annual General Meeting. With this, the total dividend for the year including interim dividend of 40% comes to 120%..
3. OPERATIONS
Insoluble Sulphur
The second phase of (5500MTPA) expansion of Insoluble Sulphur at Mundra, Gujarat was commissioned in July 2018. The Company achieved a revenue growth of about 15% in Insoluble Sulphur during the year. The additional quantities are being sold by meeting the increased demand in existing customer and addition of new geographies. Margins grew during the year mainly on account of favourable exchange rate even after absorbing the increase in Raw Material prices during the year.
The newly commissioned line at Mundra is expected to be ramped-up fully during the current financial year.
Sulphuric Acid & Oleum
The performance of Acid and Oleum was very good due to all time high margins on account of robust demand for the same in North India.
FUTURE PROSPECTS
Insoluble Sulphur
With all major global tyre companies in expansion mode, the outlook for the sales of our product looks positive. Investments in tyre industry are majorly happening in South East Asia, India, USA and Central Europe. These regions will be engines of growth for the industry. For the Company also these will be focus regions in future. The Company has approvals from some of the major tyre companies around the world and volumes are expected to grow as these companies execute their growth plans. Further some new approvals are also expected to come soon which will further add to our sales.
We have been successful in starting and growing sales in US market which is again looking up on account of curbs placed on Chinese tyre imports by US. Response for the Companyâs products in this market has been good and it also offers a sufficient head room for growth. Apart from US, South East Asia looks promising where we are expecting sales to grow on account of some expected new approvals and additional plants being allocated by our existing customers.
The growth in the Indian market is expected to be high on the back of aggressive expansion plans of domestic tyre companies. The Company therefore, expects to maintain high growth rate in domestic market.
Keeping the above opportunities in mind, the Board of Directors has approved a brownfield capacity expansion of Insoluble Sulphur at its existing facilities in Dharuhera, Haryana at estimated cost of RS.216 Crores. The Expansion shall be in two phases of 5500 MTPA each. The first phase of expansion is expected to be commissioned in the third quarter of FY 20-21.
Sulphuric Acid & Oleum
The Demand of Acid continues to be normal. Contributions are expected to be under pressure going forward as two more plants of Sulphuric Acid (with combined capacity of about 250 MTPA) are being commissioned during the year in North India.
Along with the capacity expansion of Insoluble Sulphur, the Board has approved the expansion of Sulphuric Acid Production mainly with the view of providing steam for the Insoluble Sulphur Capacities.
4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an established internal control system including internal financial Controls designed to ensure proper recording of financial and operational information, compliance of various internal controls and other regulatory and statutory compliances. Self-certification exercise is also conducted by which senior management certifies effectiveness of the internal control system of the Company. Internal Audit is conducted throughout the organization by qualified outside Internal Auditors. Findings of the internal Audit Report are reviewed by the top Management and by the Audit Committee of the Board and proper follow up actions are ensured wherever required. The Statutory Auditors have evaluated the system of internal controls including internal financial control of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business.
5. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of the business of the Company during the year. The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited).
There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future. There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2019 and the date of this report.
6. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013 read with Section 92(3), an extract of Annual Return in the prescribed format i.e. Form MGT-9 is annexed as Annexure A which forms an integral part of this Report and is also available on the Companyâs website viz. www.occlindia.com.
7. INSIDER TRADING REGULATIONS
Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the Code of Conduct for prevention of insider trading is in force in your Company. The Board of Directors of the Company has adopted the revised Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information in compliance with Chapter IV of the said Regulations and the same has been uploaded on the Companyâs website www. occlindia.com.
8. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2019 was RS.9,99,00,920/- (Rupees Nine Crore Ninety Nine Lakh Nine Hundred Twenty Only) divided into 99,90,092 equity shares of RS.10/- each. During the year under review, the Company has not issued or allotted any securities. During the year, there was a reduction in the paid up equity share capital from B 10,29,60,620/- to RS.9,99,00,920/- on account of buyback of equity shares.
9. BUYBACK OF SHARES
During the year 2018-19, the Board ofDirectors of your Company at their meeting held on November 01, 2018, approved the buyback of the Companyâs fully paid-up equity shares of the face value of RS.10 each at a maximum price of B 1,150/- Per Share up to total amount of buyback of RS.35 crores (Rupees thirty five crores only) from its members/beneficial owners, other than those who are promoters or persons in control of the Company and the promoter group, from the open market through the stock exchange mechanism i.e. using the electronic trading facilities of the BSE Limited and the National Stock Exchange of India Limited, where the equity shares are listed in accordance and consonance with the provisions contained in the Companies Act, 2013 (Act) and the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018 (Buyback Regulations).
The buyback commenced on November 14, 2018 and closed on February 27, 2019. The Company bought back 3,05,970 equity shares at an average price of B 1,143/- per equity share for a total consideration of RS.34,97,24,253.85 (Rupees Thirty Four Crores Ninety Seven lakhs Twenty Four Thousand Two Hundred Fifty Three and Paisa Eighty Five Only) (excluding Transaction Costs), which represents 99.92% of the total approved amount of RS.35 Crores (Rupees Thirty Five Crores) towards Buy Back.
10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
As required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this Report as Annexure B.
11. RESEARCH & DEVELOPMENT
Research & Development is fundamental to the Companyâs efforts to maintain the technical and quality edge for the product. A full in-house Research & Development team works on continuous basis to improve the quality of product and its properties. New Grades are also being developed to meet customers varied requirements. Research in the areas of reducing utility cost and process parameters improvement is also being done. Help of accredited independent laboratories is also taken as and when required for studying and evolving critical parameters.
The Companyâs Research and Development Facility is approved by Department of Scientific and Industrial Research, Ministry of Science and Technology Government of India.
The R&D lab is regularly augmented by acquiring state of the art analytical and process equipments to help in faster and detailed analysis. Further, pilot plants, as required, are being set up to validate the research findings. The details of some specific R&D activities carried out and benefits derived out of them have been annexed to this report.
12. POLLUTION CONTROL
Your Companyâs Plants have all the requisite Pollution Control Equipments and meets all the desired and statutory norms in this regard. The Insoluble Sulphur Units of the Company enjoys ISO-TS 16949:2009, EMS14001-2004 and OHSAS18001:2007 Certification. The Company has started using Natural Gas in place of Furnace Oil and other liquid fuels at its Dharuhera Plant thus helping in reduction of pollution.
13. STATUTORY AUDITORS AND AUDIT REPORT
Messrs S S Kothari Mehta & Co., Chartered Accountants, were appointed as Auditors of the Company for tenure of five years i.e. from the conclusion of 37th Annual General Meeting till the conclusion of the 42nd Annual General Meeting of the Company. The Auditors have confirmed their eligibility and qualification under Section 141 of Companies Act, 2013. As regards the comments in the Auditorsâ Report, the relevant notes in the Accounts are self-explanatory and may be treated as information/ explanation submitted by the Board as contemplated under provisions of the Companies Act, 2013.
14. SECRETARIAL AUDIT
In compliance with the provisions of Sec 204 and other applicable provisions of Companies Act, 2013, a Secretarial Audit was conducted during the year by Secretarial Auditors M/s. S. Rath & Co. The Secretarial Auditorâs Report for the Financial Year ended March 31, 2019 is attached as Annexure C and form part of this report. There are no qualifications or observations or remarks made by the Secretarial Auditors in their Audit Report.
15. COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company relating to insoluble Sulphur plants located at Dharuhera, Haryana is required to be audited. Your Board had, on recommendation of the Audit Committee, appointed Messrs J K Kabra & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2018-19. The Cost Audit Report for the year ended March 31, 2018 has been submitted to the Ministry of Corporate Affairs within stipulated time period.
Messrs J K Kabra & Co., Cost Accountants has been appointed as Cost Auditor of the Company by the Board on recommendation of the Audit Committee to carry out the requisite cost audit for the financial year 2019-20 on a remuneration of RS.1.4 lakhs. As required under the Companies Act, 2013, the remuneration payable to Cost Auditors is required to be placed before the members in a General Meeting for their ratification. Accordingly, a Resolution seeking memberâs ratification for remuneration payable to Messrs J K Kabra & Co., Cost Auditors is included at item no. 4 of the Notice convening the Annual General Meeting.
16. PUBLIC DEPOSITS
The Company has accepted RS.57,70,000/- (Rupees Fifty seven lakhs seventy thousand only) of Fixed Deposits including renewed Fixed Deposit from public during the year under review.
Fixed Deposits from public outstanding with your Company at the end of the financial year stood at RS.2,71,05,000/-. Out of this, deposits aggregating to RS.2,88,000/- due for repayment on or before March 31, 2019 were not claimed by the depositors by the said date.
There was no default on part of the Company in repayment of deposits or payment of interest thereon at the begining of the year and at the end of the year.
Deposits of RS.12,95,000/- and B 10,000/-, though claimed and due for repayment, were lying unpaid, due to dispute between the joint beneficiary holders in the first case and inability to produce requisite documents by the beneficiaries in the second case. These deposits, along with interest of RS.4,27,558/- thereon, have been transferred to IEPF during the year as the depositors failed to reply or produce any documents for settlement in their favour.
17. DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of your Directorâs knowledge and belief and according to the information and explanations obtained your Directors make the following statements in terms of section 134 (3)(c) of the Companies Act, 2013:
i) that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii) the directors had selected such accounting policies and applied them consistently and made judgements 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 the profit and loss of the Company for that period;
iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual financial statements have been prepared on a going concern basis;
v) that proper financial controls were in place and that the financial controls were adequate and were operating effectively; and
vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
18. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company consists of Mr. O. P. Dubey as Chairman, Mr. B. B. Tandon, Mr. S. J. Khaitan and Mr. Akshat Goenka as Members. The Company Secretary is the Secretary of the Committee. The Managing Director, Chief Financial Officer and Auditors are permanent invitees to the committee meetings. The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the attached Corporate Governance Report. Your Company has a well structured Internal Audit System commensurate with its size and operations. During the year there were no instances where the board had not accepted the recommendations of the Audit Committee.
19. STAKE HOLDERâS RELATIONSHIP COMMITTEE
The Company has a Stake Holderâs Relationship Committee for reviewing Shareholders/Investors complaints. The present members of this Committee are Mr. J. P. Goenka (Chairman), Mr. Arvind Goenka (Member) and Mr. S. J. Khaitan (Member). The detail of number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
20. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee has Mr. S. J. Khaitan as Chairman, Mr. K. Raghuraman and Mr. Arvind Goenka as members. The detail of terms of reference, number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
The Company recognizes that an effective practice of CSR is required giving due consideration to the welfare of the community, environment and social structure that it operates in and that of the country including focus welfare areas identified by the State and Central Governments. The CSR Committee of the Company has laid down the policy to meet the Corporate Social Responsibility objectives of the Company.
The CSR Policy includes activities prescribed as CSR activity as per the Rules of Companies Act, 2013. The main Focus areas taken in the policy are Education, Health care and family welfare, Environmental Safety, contribution to any relief fund setup by the Government of India and any State Government.
RS.148.53 lakhs were spent on CSR activities and projects undertaken during the year. The brief outline of CSR Policy along with required disclosure is given in Annexure D and form part of the Directorâs Report.
The detailed CSR policy of the Company is available on the website of the Company which is www.occlindia.com.
21. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee has Mr. O. P. Dubey as Chairman, Mr. B. B. Tandon and Mr. K. Raghuraman as members. The detail of terms of reference of this Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them and the brief outline of the Remuneration policy of the Company are given separately in the attached Corporate Governance Report.
The approved Remuneration Policy of the Company is also available on the website of the Company which is www. occlindia.com.
22. NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013..
23. POLICY ON DIRECTORSâ APPOINTMENT
The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skill and experience that are required of the members of the Board. The members of the Board should possess the expertise, skills and experience needed to manage and guide the Company in the right direction and to create value for all stakeholders. The members of the Board will need to consist of eminent persons of proven competency and integrity with an established track record. Besides having financial literacy, experience, leadership qualities and the ability to think strategically, the members are required to have a significant degree of commitment to the Company and should devote adequate time in preparing for the Board meeting and attending the same. The members of the Board of Directors are required to possess the education, expertise, skills and experience in various sectors and industries needed to manage and guide the Company. The members are also required to look at strategic planning and policy formulations.
The members of the Board should not be related to any executive or independent director of the Company or any of its subsidiaries. They are not expected to hold any executive or independent positions in any entity that is in direct competition with the Company. Board members are expected to attend and participate in the meetings of the Board and its Committees, as relevant. They are also expected to ensure that their other commitments do not interfere with the responsibilities they have by virtue of being a member of the Board of the Company. While reappointing Directors on the Board and Committees of the Board, the contribution and attendance record of the Director concerned shall be considered in respect of such reappointment. The Independent Directors shall hold office as a member of the Board for a maximum term as per the provisions of the Companies Act, 2013 and the rules made thereunder, in this regard from time to time, and in accordance with the provisions of the Listing Regulations. The appointment of Directors shall be formalised through a letter of appointment.
The Executive Directors, with the prior approval of the Board, may serve on the Board of any other entity if there is no conflict of interest with the business of the Company.
24. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(3) & (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors in their meeting held on January 31, 2019 have evaluated the Performance of Non-Independent Directors, Chairperson of the Company after considering the views of the Executive and Non-Executive Directors, Board as a whole assessed the quality, quantity and timeliness of flow of information between the Companyâs Management and the Board. The Nomination and Remuneration Committee has also carried out evaluation of performance of every Director of the Company. On the basis of evaluation made by the Independent Directors and the Nomination and Remuneration Committee and by way of individual and collective feedback from the Non-Independent Directors, the Board has carried out the Annual Performance Evaluation of the Directors individually as well as evaluation of the working of the Board as a whole and Committees of the Board. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report.
The Independent Directors are regularly updated on industry & market trends, plant process, and operational performance of the Company etc. through presentations in this regard and periodic plant visits. They are also periodically kept aware of the latest developments in the Corporate Governance, their duties as directors and relevant laws.
25. DIRECTORS
In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Article of Association of the Company, Mr. H S Shashikumar is due to retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer himself for appointment.
The current tenure of Mr. O. P. Dubey, Mr. B. B. Tandon, Mr. S. J. Khaitan and Mr. K. Raghuraman, Independent Directors of the Company are expiring on conclusion of 39th Annual General Meeting of the Company, i.e. July 26, 2019. The Nomination and Remuneration Committee and the Board of your Company recommended the appointment of Mr. O. P. Dubey, Mr. B. B. Tandon, Mr. S. J. Khaitan and Mr. K. Raghuraman as Independent Directors of the Company for their 2nd term of 5 (five) consecutive years with effect from July 30, 2019 with the approval of Members in the ensuing Annual General Meeting of the Company. The brief profile and other information of the Directors seeking re-appointment as required under Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been given in the Notice convening the ensuing Annual General Meeting of the Company. None of Directors of the Company are disqualified as per applicable provisions of the Act.
Appointment of directors is made in accordance with the Policy on Selection & Remuneration of Directors, Key Managerial Personnel and other employees and on Board Diversity as recommended by the Nomination & Remuneration Committee and approved by the Board of Directors.
Declaration by Independent Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed both under the Act and Regulation 16 of the Listing Regulations.
Separate Meeting of Independent Directors
Details of the separate meeting of Independent Directors held in terms of Schedule IV of the Act and Regulation 25(3) of the Listing Regulations are given in the Corporate Governance Report.
26. PARTICULARS OF EMPLOYEES AND KEY MANAGERIAL PERSONNEL (KMP)
The following four persons are the Key Managerial Personnel of the Company as per the provisions of Sec 203 of the Companies Act, 2013.
a) Mr. Arvind Goenka, Managing Director
b) Mr. Akshat Goenka, Jt. Managing Director
c) Mr. Anurag Jain, Chief Financial Officer
d) Mr. Pranab Kumar Maity, Company Secretary
Mr. Akshat Goenka, Joint Managing Director of the Company who is also serving as Managing Director of Duncan Engineering Limited, the Subsidiary of the Company received a remuneration of B 12,000/- and RS.19.75 Lacs as commission from the Subsidiary Company during the year 2018-19.
Pursuant to Sec 134(3) (q) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, a Report on Remuneration and other details of Key Managerial Personnel and other Employees for the year ended March 31, 2019 is annexed to this report as Annexure E.
27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
28. CREDIT RATING
The Companyâs Credit Rating has been done by ICRA for Long Term and Short term borrowings including Fixed Deposit Programme. The current upgraded Credit Rating, received from ICRA on July 17, 2018, for fund based limits (RS.200 Crore) is (ICRA) A and for non-fund based limits (RS.14 Crore) is (ICRA) A1 . The Credit Rating for Fixed Deposit Programme (RS.5 Crore) is MAA-. ICRA has further assigned outlook for long term rating as Positive.
29. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on armsâ length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All related party transactions are placed before the Audit Committee and given in the notes annexed to and forming part of this Financial Statement. The approved policy on Related Party Transactions is also available on the website of the Company www.occlindia.com.
30. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company sends reminder letters to all members whose dividend are unclaimed so as to ensure that they receive their rightful dues. Your Company has also uploaded on its website, www.occlindia.com, information regarding unpaid/unclaimed dividend amounts lying with your Company.
During 2018-19, the unclaimed dividend amount of RS.5,02,855/-and RS.5,08,748/- towards the unpaid dividend account of the Company for the financial year 2010-11 (Final Dividend) and 2011-12 (Interim Dividend) was transferred to Investor Education and Protection Fund. The said amount had remained unclaimed for seven years, despite reminder letters having been sent to each of the members concerned.
Pursuant to Section 124(6) of the Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and its amendments, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company in the demat account of Investor Education and Protection Fund (âIEPFâ) Authority (the âAuthorityâ) as per the procedure mentioned in the said Rules. Accordingly, your Company has transferred 4972 equity shares to the demat account of the Authority and in terms of the said Rules. All benefits accruing on such shares viz. bonus shares, split, consolidation, fraction shares etc. except the right issue shall also be credited to such demat account.
Members may note that unclaimed dividend and shares transferred to the demat account of the Authority can be claimed back by them from IEPF Authority by following the procedure mentioned in the said Rules.
31. RISK MANAGEMENT
As a policy the Company has identified key risk concern/areas. The assessment of each risk area is done on quarterly basis. Following are the main concern/risk related to the Company:
Market Related Risk: mainly demand, realisation and redundancy of the product.
Production Related Risk: mainly availability of inputs, accident or break down in the plant and rejection of material by the customers.
Human Resources Risk: includes the risk of labour unrest, high employee turnover ratio and lower productivity due to dissatisfaction of employees.
Revenue Risk: adverse exchange rate movement, Govt. Policies and duty rates
Data and records: data loss, fire Virus attack etc.
A Risk Management committee has been formed for the purpose of evaluation of Risks.
The Board and the Audit Committee also takes note of Risk management of the Company in every quarter.
The Risk Assessment is also discussed in the Management Discussion and Analysis Report.
32. SUBSIDIARY
The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited). A Statement in Form AOC -1 containing the salient features of the Subsidiary Company is attached to the Financial Statements in a separate section and forms part of this Report. The separate audited accounts of the Subsidiary Company is available on the website of the Company.
The Companyâs subsidiary registered a gross turnover of RS.45,12.24 lakhs during the current Financial Year against RS.41,98.36 lakhs during FY 2017-18. The Subsidiary reported a profit of RS.2,77.93 lakhs (Previous Year Profit RS.14.76 lakhs).
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Consolidated Financial Statements prepared by the Company in this Report include the financial results of the subsidiary company duly audited by the Statutory Auditors. The financial Statements of the Subsidiary for the Financial Year ended March 31, 2019, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rule, 2014. The Consolidated statements have been prepared in accordance with the relevant Indian Accounting Standards (IndAS) as prescribed under the Companies Act, 2013.
The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI has made it mandatory for all listed companies to formulate a policy for determining âmaterialâ subsidiaries. Accordingly, a policy on âmaterialâ subsidiaries was formulated by the Audit Committee of the Board of Directors and same is also posted on the website of the Company and may be accessed at the link http://www.occlindia.com/policies.htm
33. VIGIL MACHANISM POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
34. COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
35. CORPORATE GOVERNANCE
The report of the Board of Directors of your Company on Corporate Governance is presented as a separate section titled Corporate Governance Report, which forms a part of the Annual Report.
The composition of the Board, the Audit Committee, the Nomination and Remuneration Committee, the Stakeholders Relationship Committee, the Corporate Social Responsibility Committee and other Committees of the Board, the number of meetings of the Board and Committees of the Board, and other matters are presented in the Corporate Governance Report.
A certificate from Mr. Sahadeb Rath of (Membership no. ACS13298 of M/s. S. Rath & Co., Practising Company Secretaries regarding compliance with the Corporate Governance requirements as stipulated in the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), which forms part of the Annual Report.
36. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the financial year 2018-19, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given as a separate statement in the Annual Report.
37. CEO AND CFO CERTIFICATION
Pursuant to Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO and CFO certification as specified in Part B of Schedule II thereof is attached with the Annual Report. The Managing Director & CEO and the Chief Financial Officer also provide quarterly certification on Financial Results while placing the Financial Results before the Board in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
38. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Code of Conduct for Directors and Senior Management Personnel is posted on the Companyâs website. The Managing Director & CEO of the Company has given a declaration that all Directors and Senior Management Personnel concerned affirmed compliance with the code of conduct with reference to the financial year ended on March 31, 2019. Declaration is attached with the Annual Report.
39. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.
40. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy line with the requirements of the Sexual Harassment of Women at Work place (Prevention, Prohibition & Redressal) Act, 2013. An internal committee has been setup to redress complaints received regarding sexual harassment. No complaints received during the year under review.
41. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE
During the period under review, there were no significant and material orders passed by any regulator / court / tribunal impacting the going concern status and the Companyâs operations in future.
42. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and assistance of various Banks, Government Agencies, Suppliers, valued Customers and the shareholders in particular and looks forward to their continued support. Relations between your Company and its employees remain cordial and the Directors wish to express their appreciation for the co-operation and dedication of all employees of the Company.
On behalf of the Board of Directors
Arvind Goenka O P Dubey
Place: Noida Managing Director Director
Date: May 10, 2019 DIN-00135653 DIN-00228441
Mar 31, 2018
DIRECTORSâ REPORT TO THE MEMBERS
Your Directors are pleased to present the 38th Annual Report along with the Audited Annual Financial Statements (including Audited Consolidated Financial Statements) of the Company for the Financial Year ended March 31, 2018
1. SUMMARY OF FINANCIAL RESULTS (Rs. Lakhs)
Particulars |
For the |
For the |
Year ended |
Year ended |
|
31.3.2018 |
31.3.2017 |
|
Net Sales/Income from Operations |
33,202.51 |
31,057.99 |
Other Income |
554.53 |
678.11 |
Total Revenue |
33,757.04 |
31,736.10 |
Profit/(Loss) Before Taxation |
7963.31 |
7,471.71 |
Provision for Taxation 1 |
(2,288.30) |
(2,054.34) |
Profit/(Loss) after Taxation |
5,417.37 |
|
Other Comprehensive Income(Net of Tax) |
57.75 |
218.72 |
Amount Available for Appropriation |
32,273.98 |
27,652.30 |
Appropriation: Interim Dividend on Equity Shares |
308.88 |
308.88 |
Tax on Interim Dividend |
62.88 |
62.88 |
Final Dividend for Previous Year |
720.72 |
566.29 |
Tax on Final Dividend |
146.72 |
115.28 |
Balance Carried to Balance Sheet |
31,034.78 |
26,598.97 |
major growth drivers for new capacities.
Including Rs.(596.11) Lakhs Deferred Tax (Previous year Rs.830.96 Lakhs).
The financial Statements for the financial Year ended March 31, 2018, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rule, 2014. The Financial Statements for the year ended March 31, 2017, therefore, have also been restated in accordance with Ind AS for comparative information.
2. DIVIDEND
Your Directors are pleased to recommend Final Dividend of 70% on 10296062 Equity Shares (Rs.7/- per share of Rs.10 each) which is subject to the approval of Shareholders in the ensuing Annual General Meeting. The Dividend will absorb Rs.867.45 Lakhs (inclusive of Dividend Tax of Rs.146.72 Lakhs). With this, the total dividend for the year including interim dividend of 30% comes to 100%.
3. OPERATIONS Insoluble Sulphur
After commissioning of the new line at Mundra SEZ in December 2016, the second phase of (5500 MTPA) expansion of Insoluble Sulphur at Mundra, Gujarat is progressing on schedule and within budget. With additional capacities available for sales, the Company achieved a growth of about 10% in Insoluble Sulphur Sales during the year. The additional quantities are being sold by meeting the increased demand of existing customers and addition of new geographies. The sales volume growth was in double digit in both indigenous as well as global markets. Raw material cost was almost stable during the first half and increased in second half of the year. The margins remained stable during the year. Sulphuric Acid & Oleum
It was a good year for Sulphuric Acid and sales and margin were better than the previous year resulting in good profitability.
FUTURE PROSPECTS Insoluble Sulphur
The Company have successfully opened up newer markets like China and USA. The response for the Companyâs products have been good and there is sufficient head room for growth in these markets. These markets are expected to be our
Domestic Market is expected to grow in double digit mainly on account of growth in radicalization of Commercial Vehicle tyres, increased in tyres exports due to anti-dumping duty being imposed on Chinese tyres.
Growth numbers are also expected to be healthy as tyre companies where we have full approvals and good standing are also expanding.
Other growth driver is the new compounds being designed for Ultra High Performance Tyres where requirement of Insoluble Sulphur is on the higher side. This will add further to the growth of Insoluble Sulphur consumption globally.
The work on second phase of capacity expansion of Insoluble Sulphur at its Mundra Plant is progressing well and expected to be commissioned on schedule.
Sulphuric Acid & Oleum
Sulphuric Acid Plant performance is expected to be good in next year also due to stable market as monsoon have been forecasted to be normal resulting in better fertilizer demand for which Sulphuric Acid is as raw material.
4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an established internal control system including internal financial Controls designed to ensure proper recording of financial and operational information, compliance of various internal controls and other regulatory and statutory compliances. Self-certification exercise is also conducted by which senior management certifies effectiveness of the internal control system of the Company. Internal Audit is conducted throughout the organization by qualified outside Internal Auditors. Findings of the internal Audit Report are reviewed by the top Management and by the Audit Committee of the Board and proper follow up action are ensured wherever required. The Statutory Auditors have evaluated the system of internal controls including internal financial control of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business.
5. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of the business of the Company during the year. The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited).
There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future. There were no material changes and commitments affecting the financial position of the company occurring between March 31, 2018 and the date of this report.
6. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of Annual Return in the prescribed format i.e. Form MGT 9 is annexed to this report as Annexure A.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
As required under Section 134(3) (m) of the Companies Act, 2013 read with Rule8 (3) of the Companies (Accounts) Rules2014, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this Report as Annexure B.
8. RESEARCH & DEVELOPMENT
Research & Development is fundamental to the Companyâs efforts to maintain the technical and quality edge for the product. A full in-house Research & Development team works on continuous basis to improve the quality of product and its properties. New Grades are also being developed to meet customers varied requirements. Research in the areas of reducing utility cost and process parameters improvement is also being done. Help of accredited independent laboratories is also taken as and when required for studying and evolving critical parameters.
The Companyâs Research and Development Facility is approved by Department of Scientific and Industrial Research, Ministry of Science and Technology Government of India.
The R&D lab is regularly augmented by acquiring state of the art analytical and process equipments to help in faster and detailed analysis. Further, pilot plants, as required, are being set up to validate the research findings. The details of some specific R&D activities carried out and benefits derived out of them have been annexed to this report.
9. POLLUTION CONTROL
Your Companyâs Plants have all the requisite Pollution Control Equipments and meets all the desired and statutory norms in this regard. The Insoluble Sulphur Units of the Company enjoys ISO-TS 16949:2009, EMS14001-2004 and 0HSAS18001:2007 Certification.
10. STATUTORY AUDITORS AND AUDIT REPORT
Messrs S S Kothari Mehta & Co., Chartered Accountants, were appointed as Auditors of the Company for tenure of five years i.e. from the conclusion of 37th Annual General Meeting till the conclusion of the 42nd Annual General Meeting of the Company. The Auditors have confirmed their eligibility and qualification under Section 141 of Companies Act 2013. As regards the comments in the Auditorsâ Report, the relevant notes in the Accounts are self-explanatory and may be treated as information/ explanation submitted by the Board as contemplated under provisions of the Companies Act, 2013.
11. SECRETARIAL AUDIT
In compliance with the provisions of Sec 204 and other applicable provisions of Companies Act 2013, a Secretarial Audit was conducted during the year by Secretarial AuditorsM/s. S. Rath & Company. The Secretarial Auditorâs Report for the Financial Year ended March 31, 2018 is attached as Annexure C and form part of this report. There are no qualifications or observations or remarks made by the Secretarial Auditors in their Audit Report.
12. COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company relating to insoluble Sulphur plants located at Dharuhera, Haryana is required to be audited. Your Board had, on recommendation of the Audit Committee, appointed Messrs J K Kabra & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2017-18. The Cost Audit Report for the year ended 31st March, 2017 has been submitted to the Ministry of Corporate Affairs within stipulated time period.
Messrs J K Kabra & Co., Cost Accountants has been appointed as Cost Auditor of the Company by the Board on recommendation of the Audit Committee to carry out the requisite cost audit for the financial year 2018-19 on a remuneration of Rs1.35 lakhs. As required under the Companies Act, 2013, the remuneration payable to Cost Auditors is required to be placed before the members in a General Meeting for their ratification. Accordingly, a Resolution seeking memberâs ratification for remuneration payable to Messrs J K Kabra & Co., Cost Auditors is included at item no. 4 of the Notice convening the Annual General Meeting.
13. PUBLIC DEPOSITS
Fixed Deposits from public outstanding with your Company at the end of the financial year stood at Rs.4,97,40,000/-. Of this, a deposit amounting to Rs.10,000/- which had fallen due for payment on 7th May, 2003 has since been claimed by the depositor on 5th May, 2010. However, the same could not be paid as depositor has failed to produce the Original Deposit Receipt in respect thereof. Deposits aggregating to Rs.8,35,000/- due for repayment on or before 31st March, 2018 were not claimed by the depositors by the said date. Out of these, deposits totaling Rs.3,42,000/- have since been claimed and settled. This apart, deposits amounting to Rs. 12,95,000/- though fallen due for payment, could not be settled as there is dispute between the concerned joint depositors and the matter is sub-judice.
14. DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of your Directorâs knowledge and belief and according to the information and explanations obtained your Directors make the following statements in terms of section 134 (3)(c) of the Companies Act, 2013:
i) that in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit and loss of the Company for that period;
iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual financial statements have been prepared on a going concern basis;
v) that proper financial controls were in place and that the financial controls were adequate and were operating effectively; and
vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
15. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company consists of Mr. O. P. Dubey as Chairman,Mr. B. B. Tandon, Mr. S. J. Khaitan and Mr. Akshat Goenka as Members. The Company Secretary is the Secretary of the Committee. The Managing Director, Chief Financial Officer and Auditors are permanent invitees to the committee meetings. The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the attached Corporate Governance Report. Your Company has a well structured Internal Audit System commensurate with its size and operations. During the year there were no instances where the board had not accepted the recommendations of the Audit Committee.
16. STAKE HOLDERâS RELATIONSHIP COMMITTEE
The Company has a Stake Holderâs Relationship Committee for reviewing Shareholders/Investors complaints. The present members of this Committee are Mr. J. P. Goenka (Chairman), Mr. Arvind Goenka (Member) and Mr. S. J. Khaitan (Member). The detail of number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
17. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee has Mr. S. J. Khaitan as Chairman, Mr. K. Raghuraman and Mr. Arvind Goenka as members. The detail of terms of reference, number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
The Company recognizes that an effective practice of CSR is required giving due consideration to the welfare of the community, environment and social structure that it operates in and that of the country including focus welfare areas identified by the State and Central Governments. The CSR Committee of the Company has laid down the policy to meet the Corporate Social Responsibility objectives of the Company.
The CSR Policy includes activities prescribed as CSR activity as per the Rules of Companies Act, 2013.The main Focus areas taken in the policy are Education, Health care and family welfare, Environmental Safety, contribution to any relief fund setup by the Government of India and any State Government.
Rs.135 Lakhs were spent on CSR activities and projects undertaken during the year. The brief outline of CSR Policy along with required disclosure is given in Annexure D and form part of the Boardâs Report.
The detailed CSR policy of the Company is available on the website of the Company which is www.occlindia.com.
18. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee has Mr. O. P. Dubey as Chairman, Mr. B. B. Tandon and Mr. K. Raghuraman as members. The detail of terms of reference of this Committee, number and dates of meetings held attendance of the directors and remunerations paid to them and the brief outline of the Remuneration policy of the Company are given separately in the attached Corporate Governance Report.
The approved Remuneration Policy of the Company is also available on the website of the Company which is www. occlindia.com.
19. NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
20. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(3) & (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors in their meeting held on February 01, 2018 have evaluated the Performance of Non-Independent Directors, Chairperson of the Company after considering the views of the Executive and Non-Executive Directors, Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Companyâs Management and the Board. The Nomination and Remuneration Committee has also carried out evaluation of performance of every Director of the Company. On the basis of evaluation made by the Independent Directors and the Nomination and Remuneration Committee and by way of individual and collective feedback from the Non-Independent Directors, the Board has carried out the Annual Performance Evaluation of the Directors individually as well as evaluation of the working of the Board as a whole and Committees of the Board. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report.
The Independent Directors are regularly updated on industry & market trends, plant process, and operational performance of the Company etc through presentations in this regard and periodic plant visits. They are also periodically kept aware of the latest developments in the Corporate Governance, their duties as directors and relevant laws.
21. DIRECTORS
Mr. Akshat Goenka retires by rotation at the forthcoming Annual General Meeting and, being eligible, offer himself for appointment.
Mr. O. P. Dubey, Mr. B. B. Tandon, Mr. S. J. Khaitan, Mr. K. Raghuraman, Mrs. Runa Mukherjee are Independent Directors of the Board of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
22. PARTICULARS OF EMPLOYEES AND KEY MANAGERIAL PERSONNEL (KMP)
The following four persons are the Key Managerial Personnel of the Company as per the provisions of Sec 203 of the Companies Act, 2013.
a) Mr. Arvind Goenka, Managing Director
b) Mr. Akshat Goenka, Jt. Managing Director
c) Mr. Anurag Jain, Chief Financial Officer
d) Mr. Pranab Kumar Maity, Company Secretary
Pursuant to Sec 134(3) (q) read with Rule 5 of Companies (appointment and Remuneration of Managerial Personnel) Rules 2014, a Report on Remuneration and other details of Key Managerial Personnel and other Employees for the year ended March 2017 is annexed to this report as Annexure E.
23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial Statements.
24. CREDIT RATING
The Companyâs Credit Rating has been done by ICRA for Long Term and Short term borrowing including Public Deposit. The current Credit rating, received from ICrA on 23rd July 2017, for fund based limits(Rs 200 Crore) is (ICRA) A and for non-fund based limits(Rs 14 Crore) is (ICRA) A1. The Credit Rating for Public Deposits (Rs 5 Crore) is MA. ICRA has further assigned outlook for long term rating as Positive.
25. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on armsâ length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All related party transactions are placed before the Audit Committee and given in the notes annexed to and forming part of this Financial Statement.The approved policy on Related Party Transactions is also available on the website of the Company www.occlindia.com.
26. RISK MANAGEMENT
As a policy The Company has identified key risk concern/areas. The assessment of each risk area is done on quarterly basis. Following are the main concern/risk related to the Company:
Market Related Risk: mainly demand, realization and redundancy of the product.
Production related Risk: mainly availability of inputs, accident or break down in the plant and rejection of material by the customers.
Human Resources Risk includes the risk of labour unrest, high employee turnover ratio and lower productivity due to dissatisfaction of employees.
Revenue Risk: adverse exchange rate movement. Govt. Policies and duty rates Data and records: data loss, fire, virus attack etc.
A Risk Management committee has been formed for the purpose of evaluation of Risks.
The Board and the Audit Committee also takes note of Risk management of the Company in every quarter.
The Risk Assessment is also discussed in the Management Discussion and Analysis attached to this report.
27. SUBSIDIARY
The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited). A Statement in Form AOC -1 containing the salient features of the Subsidiary Company is attached to the Financial Statements in a separate section and forms part of this Report. The separate audited accounts of the Subsidiary Companies are available on the website of the Company.
The Companyâs subsidiary registered a gross turnover of Rs.42,18.40 lakhs during the current Financial Year against Rs.39,49.21 Lakhs during FY 2016-17. The Subsidiary reported a profit of Rs. 14.46 lakhs (Previous Year loss Rs.5,87.57 lakhs).
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Consolidated Financial Statements prepared by the Company in this Report include the financial results of the subsidiary company duly audited by the Statutory Auditors. The financial Statements of the Subsidiary for the financial Year ended March 31, 2018, have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rule, 2014. The Consolidated statements have been prepared in accordance with the relevant Indian Accounting Standards (IndAS) as prescribed under the Companies Act, 2013.
The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI has made it mandatory for all listed companies to formulate a policy for determining âmaterialâ subsidiaries. Accordingly, a policy on âmaterialâ subsidiaries was formulated by the Audit Committee of the Board of Directors and same is also posted on the website of the Company and may be accessed at the link http://www.occlindia.com/policies.htm
28. VIGIL MACHANISM POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
29. CORPORATE GOVERNANCE
a) As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion & Analysis, a Report on Corporate Governance together with the Auditorsâ certificate regarding the Compliance of conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive Code of Conduct for all its Board members and senior management personnel which have also been posted on the website of the Company. A certificate by the Managing Director regarding compliance of the code of conduct of the Company is also included in the Annual report.
30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the financial year 2017-18, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given as a separate statement in the Annual Report.
31. CEO AND CFO CERTIFICATION
Pursuant to Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the CEO and CFO certification as specified in Part B of Schedule II thereof is attached with the Annual Report. The Managing Director & CEO and the Chief Financial Officer also provide quarterly certification on Financial Results while placing the Financial Results before the Board in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
32. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL
The Code of Conduct for Directors and Senior Management Personnel is posted on the Companyâs website. The Managing Director & CEO of the Company has given a declaration that all Directors and Senior Management Personnel concerned affirmed compliance with the code of conduct with reference to the financial year ended on March 31, 2018. Declaration is attached with the Annual Report.
33. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.
34. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
No case was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 during the year under review.
35. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE
During the period under review, there were no significant and material orders passed by any regulator / court / tribunal impacting the going concern status and the Companyâs operations in future.
36. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and assistance of various Banks, Government Agencies, Suppliers, valued Customers and the shareholders in particular and looks forward to their continued support. Relations between your Company and its employees remain cordial and the Directors wish to express their appreciation for the co-operation and dedication of all employees of the Company.
On behalf of the Board of Directors
Place : Noida Arvind Goenka O.P. Dubey
Date :29th May, 2018 Managing Director Director
DIN:00135653 DIN:00228441
Mar 31, 2017
The Directors hereby present their Thirty Seventh Report along with the Audited Annual Financial Statements (including Audited Consolidated Financial Statements) of the Company for the Financial Year ended March 31, 2017.
1. FINANCIAL RESULTS (Rs. Lakhs)
Particulars |
For the |
For the |
|
Year ended |
Year ended |
|
31.3.2017 |
31.3.2016 |
Net Sales/Income from Operations |
2,97,45.16 |
2,74,71.72 |
Other Income |
6,59.96 |
5,68.64 |
Total Revenue |
3,04,05.12 |
2,80,40.36 |
Profit/(Loss) Before Taxation |
73,58.33 |
64,76.32 |
Provision for Taxation * |
(20,15.10) |
(11,77.59) |
Profit/(Loss) after Taxation |
53,43.23 |
52,98.73 |
Amount Available for Appropriation |
2,67,72.99 |
2,24,83.09 |
Appropriation: |
|
|
Interim Dividend on Equity Shares |
308.88 |
3,08.88 |
Tax on Interim Dividend |
62.88 |
62.88 |
Proposed Final Dividend on Equity Shares |
- |
5,66.29 |
Tax on Proposed Final Dividend |
- |
1,15.28 |
Balance Carried to Balance Sheet |
2,64,01.23 |
2,14,29.76 |
* Including Rs.(7,91.72) Lakhs Deferred Tax (Previous year Rs.2.08 Lakhs). Increase in deferred tax is attributable to the new capacity added at Mundra.
2. DIVIDEND
Your Directors are pleased to recommend Final Dividend of 70% on 10296062 Equity Shares (Rs.7 per share of Rs.10 each) which is subject to the approval of Shareholders in the ensuing Annual General Meeting. The Dividend will absorb Rs.8,67.45 Lakhs (inclusive of Dividend Tax of Rs.1,46.72 Lakhs). With this, the total dividend for the year including interim dividend of 30% comes to 100%.
3. OPERATIONS Insoluble Sulphur
During the year the Company registered a growth of about 9% in Insoluble Sulphur Sales. The growth was achieved consequent to commissioning of the new line at Mundra SEZ in December 2016. The additional sales were mainly on account of increase in domestic demand and export mainly due to new geographies added. The sales volume growth was in double digit in both the markets. Average Sales Realization was lower during the year due to reduction in Raw Material Prices. However, there was an improvement in margin over last year on account of better capacity utilization.
The first phase (5500MTPA) of Expansion of Insoluble Sulphur at Mundra, Gujarat was completed during the year and commercial production was started on 20th December, 2016.
Sulphuric Acid & Oleum
Sulphuric Acid margin were better than the previous year resulting in better profitability. However sales were lower due to lower production on account of maintenance issues in the plant. Steam, produced as a byproduct, was supplied to Insoluble Sulphur Plants resulting in fuel savings.
FUTURE PROSPECTS
Insoluble Sulphur
Growth in global tyre Industry, after a period of lull, has started picking up. Many Tyre companies are working on expanding their capacities. This will add to growth in demand of Insoluble sulphur. Growth numbers are also expected to be healthy as Tyre companies where we have full approvals and good standing are also expanding.
Other growth driver is the new compounds being designed for Ultra High Performance Tyres where requirement of Insoluble sulphur is on the higher side. This will add further to the growth of Insoluble sulphur, consumption globally. Our product is accepted and is suitable for such new age applications.
We have successfully opened up newer markets like China and USA. The response for the Companyâs products has been good and there is sufficient head room for growth in those markets. These markets are expected to be our major growth drivers.
The Company has also been able to get approvals from couple of new Tyre customers. This along with new geographies apart from adding to the sales numbers will also help to mitigate risks.
The work on second phase of capacity expansion of Insoluble Sulphur at its Mundra Plant is under progress and expected to be commissioned on schedule in second quarter of 2018-19.
Sulphuric Acid & Oleum
Sulphuric Acid Plant performance is expected to be profitable in next year also due to stable market as monsoon have been forecasted to be normal resulting in better fertilizer demand for which Sulphuric Acid is a raw material.
4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an established internal control system including Internal Financial Controls designed to ensure proper recording of financial and operational information, compliance of various internal controls and other regulatory and statutory compliances. Self-certification exercise is also conducted by which senior management certifies effectiveness of the internal control system of the Company. Internal Audit is conducted throughout the organization by qualified outside Internal Auditors. Findings of the internal Audit Report are reviewed by the top Management and by the Audit Committee of the Board and proper follow up action are ensured wherever required. The Statutory Auditors have evaluated the system of internal controls including internal financial control of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business.
5. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of the business of the Company during the year. The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited).The name of the Subsidiary has been changed during the year as per agreed terms at the time of acquisition. One production line of this subsidiary producing tyre tube valves was closed during the year.
There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future. There were no material changes and commitments affecting the financial position of the company occurring between March 31, 2017 and the date of this report.
6. RESEARCH & DEVELOPMENT
Research & Development is fundamental to the Companyâs efforts to maintain the technical and quality edge for the product. A full in-house Research & Development team works on continuous basis to improve the quality of product and its properties. New Grades are also being developed to meet customers varied requirements. Research in the areas of reducing utility cost and process parameters improvement is also being done. Help of accredited independent laboratories is also taken as and when required for studying and evolving critical parameters.
The Companyâs Research and Development Facility is approved by Department of Scientific and Industrial Research, Ministry of Science and Technology Government of India.
The R&D lab is regularly augmented by acquiring state of the art analytical and process equipments to help in faster and detailed analysis. Further, pilot plants, as required, are being set up to validate the research findings. The details of some specific R&D activities carried out and benefits derived out of them have been annexed to this report.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
As required under Section 134(3) (m) of the Companies Act, 2013 read with Rule8 (3) of the Companies (Accounts) Rules 2014, the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this Report.
8. POLLUTION CONTROL
Your Companyâs Plants have all the requisite Pollution Control Equipments and meets all the desired and statutory norms in this regard. The Insoluble Sulphur Units of the Company enjoys ISO-TS 16949:2009, EMS14001-2004 and OHSAS18001:2007 Certification.
9. STATUTORY AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, were appointed as Auditors of the Company for tenure of three years i.e. from the conclusion of 34th Annual General Meeting till the conclusion of the 37th Annual General Meeting of the Company.
Pursuant to Sec 139 of Companies Act, 2013 Messrs Singhi & Co are not eligible for reappointment as Statutory Auditors of the Company.
M/s SS Kothari Mehta & Co has given its consent to be appointed as Statutory Auditor of the Company with effect from Financial Year 2017-18. The Board of Directors has evaluated the same and found them suitable and recommend that they may be appointed as Statutory Auditors of the Company for five years as per terms of the Companies Act, 2013.
However, this appointment is subject to ratification by members at every Annual General Meeting held after appointment during their tenure of office. The Auditors have confirmed their eligibility and qualification under Section 141 of Companies Act, 2013.
As regards the comments in the Auditorsâ Report, if any, the relevant notes in the Accounts are self-explanatory and may be treated as information/ explanation submitted by the Board as contemplated under provisions of the Companies Act, 2013.
10. SECRETARIAL AUDIT
In compliance with the provisions of Sec 204 and other applicable provisions of Companies Act 2013, a Secretarial Audit was conducted during the year by Secretarial Auditors M/s. S. Rath & Company. The Secretarial Auditorâs Report is attached as annexure and form part of this report. There are no qualifications or observations or remarks made by the Secretarial Auditors in their Audit Report.
11. COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company relating to insoluble Sulphur plants located at Dharuhera, Haryana is required to be audited. Your Board had, on recommendation of the Audit Committee, appointed Messrs J K Kabra & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2016-17. The Cost Audit Report for the year ended 31st March, 2016 has been submitted to the Ministry of Corporate Affairs within stipulated time period.
Messrs J K Kabra & Co., Cost Accountants has been appointed as Cost Auditor of the Company by the Board on recommendation of the Audit Committee to carry out the requisite cost audit for the financial year 2017-18 on a remuneration of Rs1.35 lakhs. As required under the Companies Act, 2013, the remuneration payable to Cost Auditors is required to be placed before the members in a General Meeting for their ratification. Accordingly, a Resolution seeking memberâs ratification for remuneration payable to Messrs J K Kabra & Co., Cost Auditors is included at item no. 5 of the Notice convening the Annual General Meeting.
12. PUBLIC DEPOSITS
Fixed Deposits from public outstanding with your Company at the end of the financial year stood at Rs. 4,94,35,000/-. Of this, a deposit of Rs.10,000/- which had fallen due for payment on 7th May, 2003 was claimed by the depositor on 5th May, 2010 but the same could not be paid as the depositor has failed to produce the Original Deposit Receipt. This apart, deposits amounting to Rs.12,95,000/- though fallen due for payment, could not be settled as there is dispute between the concerned joint depositors and the matter is sub-judice. Deposits aggregating to Rs.3,68,000/- due for repayment on or before 31st March, 2017 were not claimed by the depositors by the said date. Out of these, deposits aggregating to Rs. 90,000/- have since been claimed and settled.
13. DIRECTORSâ RESPONSIBILITY STATEMENT
To the best of your Directorâs knowledge and belief and according to the information and explanations obtained, your Directors make the following statements in terms of section 134 (3)(c) of the Companies Act, 2013:
i) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
ii) the directors had selected such accounting policies and applied them consistently and made judgmentsâ 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 the profit and loss of the Company for that period.
iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the annual financial statements have been prepared on a going concern basis;
v) that proper financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
14. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company consists of Mr. O P Dubey as Chairman, Mr. B B Tandon, Mr. S J Khaitan and Mr. Akshat Goenka as Members. The Company Secretary is the Secretary of the Committee. The Managing Director, Chief Financial Officer and Auditors are permanent invitees to the committee meetings. The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the attached Corporate Governance Report. Your Company has a well structured Internal Audit System commensurate with its size and operations. During the year there were no instances where the board had not accepted the recommendations of the Audit Committee.
15. STAKE HOLDERâS RELATIONSHIP COMMITTEE
The Company has a Stake Holderâs Relationship Committee for reviewing Shareholders/Investors complaints. The present members of this Committee are Mr. J P Goenka (Chairman), Mr. Arvind Goenka (Member) and Mr. S J Khaitan (Member). The detail of number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
16. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee has Mr. S J Khaitan as Chairman, Mr. K Raghuraman and Mr. Arvind Goenka as members. The detail of terms of reference, number and dates of meetings held, attendance of the Directors and remunerations paid to them are given separately in the attached Corporate Governance Report.
The Company recognizes that an effective practice of CSR is required giving due consideration to the welfare of the community, environment and social structure that it operates in and that of the country including focus welfare areas identified by the State and Central Governments. The CSR Committee of the Company has laid down the policy to meet the Corporate Social Responsibility objectives of the Company.
The CSR Policy includes activities prescribed as CSR activity as per the Rules of Companies Act, 2013.The main Focus areas taken in the policy are Education, Health care and family welfare, Environmental Safety, contribution to any relief fund setup by the Government of India and any State Government.
Rs.119 Lakhs were spent on CSR activities and projects undertaken during the year the details of which are given in the annexure to this Reports.
The detailed CSR policy of the Company is available on the website of the Company which is www.occlindia.com.
17. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee has Mr. O P Dubey as Chairman, Mr. B B Tandon and Mr. K Raghuraman as members. The detail of terms of reference of this Committee, number and dates of meetings held attendance of the directors and remunerations paid to them and the brief outline of the Remuneration policy of the Company are given separately in the attached Corporate Governance Report.
The approved Remuneration Policy of the Company is also available on the website of the Company which is www. occlindia.com.
18. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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 Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report. The Independent Directors are regularly updated on industry & market trends, plant process, and operational performance of the Company etc through presentations in this regard and periodic plant visits. They are also periodically kept aware of the latest developments in Corporate Governance, their duties as directors and relevant laws.
19. DIRECTORS
Mr. J P Goenka retires by rotation at the forthcoming Annual General Meeting and, being eligible, offer himself for reappointment.
Mr. O. P. Dubey, Mr. B. B. Tandon, Mr. S J Khaitan, Mr. K. Raghuraman, Mrs. Runa Mukherjee are Independent Directors of the Board of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
20. PARTICULARS OF EMPLOYEES AND KEY MANAGERIAL PERSONNEL (KMP)
The following four persons are the Key Managerial Personnel of the Company as per the provisions of Sec 203 of the Companies Act, 2013.
a) Mr. Arvind Goenka, Managing Director
b) Mr. Akshat Goenka, Jt. Managing Director
c) Mr. Anurag Jain, Chief Financial Officer
d) Mr. Pranab Maity, Company Secretary
Pursuant to Sec 134(3) (q) read with Rule 5 of Companies (appointment and Remuneration of Managerial Personnel) Rules 2014, The Remuneration and other details of Key Managerial Personnel and other Employees for the year ended March 2017 are annexed to this report.
21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial Statements.
22. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on armsâ length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All related party transactions are placed before the Audit Committee and given in the notes annexed to and forming part of this Financial Statement. The approved policy on Related Party Transactions is also available on the website of the Company www.occlindia.com.
23. SUBSIDIARY
The Company has only one subsidiary, namely Duncan Engineering Ltd (formerly known as Schrader Duncan Limited). The name of the Subsidiary has been changed during the year as per agreed terms at the time of acquisition. A Statement in Form AOC -1 containing the salient features of the Subsidiary Companies is attached to the Financial Statements in a separate section and forms part of this Report. The separate audited accounts of the Subsidiary Companies are available on the website of the Company.
The Companyâs subsidiary registered a turnover of Rs 37,73.31 lakh during the current Financial Year against Rs 64,00.39 Lakhs during FY 2015-16. The Subsidiary also reported a loss of Rs 5,88.98 lakhs (Previous Year Rs.6,07.42 lakhs). During the year the loss making Tyre Tube Valve business was discontinued. The above loss includes the cost of closer and impairment of assets on account thereof. The Management is now concentrating on the engineering division. During the year Mr. Akshat Goenka, Jt. Managing Director of the Company was appointed as Managing Director of the Subsidiary.
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Consolidated Financial Statements prepared by the Company in this Report include the financial results of the subsidiary company duly audited by the Statutory Auditors. The said statements have been prepared in accordance with the relevant accounting standards as prescribed under the Companies Act, 2013. The Company does not have any material subsidiary in the immediately preceding accounting year. However, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, SEBI has made it mandatory for all listed companies to formulate a policy for determining âmaterialâ subsidiaries. Accordingly, a policy on âmaterialâ subsidiaries was formulated by the Audit Committee of the Board of Directors and same is also posted on the website of the Company and may be accessed at the link http://www.occlindia.com/policies.htm
24. VIGIL MACHANISM POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
25. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 is annexed to this report.
26. FRAUD REPORTING
There was no fraud reported by the Auditors of the Company under Section 143(12) of the Companies Act, 2013, to the Audit Committee or the Board of Directors during the year under review.
27. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
No case was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 during the year under review.
28. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYâS OPERATIONS IN FUTURE
During the period under review, there were no significant and material orders passed by any regulator / court / tribunal impacting the going concern status and the Companyâs operations in future.
29. RISK MANAGEMENT
As a policy The Company has identified key risk concern/areas. The assessment of each risk area is done on quarterly basis. Following are the main concern/ risk related to the Company:
Market Related Risk: mainly demand, realization and redundancy of the product.
Production related Risk: mainly availability of inputs, accident or break down in the plant and rejection of material by the customers.
Human Resources Risk includes the risk of labour unrest, high employee turnover ratio and lower productivity due to dissatisfaction of employees.
Revenue Risk: adverse exchange rate movement. Govt. Policies and duty rates Data and records: data loss, fire and Virus attack etc.
A Risk Management committee has been formed for the purpose of evaluation of Risks. The Board and the Audit Committee also takes note of Risk management of the Company in every quarter.
The Risk Assessment is also discussed in the Management Discussion and Analysis attached to this report.
30. NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
31. CORPORATE GOVERNANCE
a) As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion & Analysis, a Report on Corporate Governance together with the Auditorsâ certificate regarding the Compliance of conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive Code of Conduct for all its Board members and senior management personnel which have also been posted on the website of the Company. A certificate by the Managing Director regarding compliance of the code of conduct of the Company is also included in the Annual report.
32. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and assistance of various Banks, Government Agencies, Suppliers, valued Customers and the shareholders in particular and looks forward to their continued support. Relations between your Company and its employees remain cordial and the Directors wish to express their appreciation for the co-operation and dedication of all employees of the Company.
On behalf of the Board of Directors
Place : Noida Arvind Goenka O.P. Dubey
Date :23rd May, 2017 Managing Director Director
DIN:00135653 DIN:228441
Mar 31, 2015
TO THE MEMBERS
The Directors hereby present their Thirty Fifth Report along with the
Audited Annual Financial Statements (including Audited Consolidated
Financial Statements) of the Company for the Financial Year ended March
31, 2015.
1. FINANCIAL RESULTS (Rs. Lakhs)
Particulars For the Year ended
31.3.2015 31.3.2014
Net Sales/Income from Operations 2,82,57.35 2,61,69.57
Other Income 12,86.13 3,49.00
Total Revenue 2,95,43.48 2,65,18.57
Profit/(Loss) Before Taxation 62,96.21 50,15.50
Provision for Taxation (11,64.61) (9,71.59)
Profit/(Loss) after Taxation 51,31.60 40,43.91
Amount Available for Appropriation 1,82,36.57 1,44,48.18
Appropriation:
Interim/Proposed Dividend on Equity Shares 8,75.17 7,20.72
Tax on Dividend 1,77.04 1,22.49
Transferred to General Reserve - 500.00
Balance Carried to Balance Sheet 1,71,84.36 1,31,04.97
Including Rs. 2,67.12 Lakhs Deferred Tax (Previous year Rs. 2,14.26
Lakhs)
2. DIVIDEND
Your Directors are pleased to recommend Final Dividend of 55% on
10296062 Equity Shares (Rs.5.5 per share of Rs.10 each). The Dividend
will absorb Rs.6,81.57 Lakhs (Inclusive of Dividend Tax of Rs.1,15.28
Lakhs). With this, the total dividend for the year including interim
dividend of 30% comes to 85%.
3. OPERATIONS Insoluble Sulphur
During the year, Company's Gross Revenue from Insoluble Sulphur
increased by 5% over the previous year driven by growth in domestic as
well as export sales. Export sales quantity increased by 10% as
compared to last year on account of increased off take by existing
customers and addition of some new customers. The growth rate in
domestic volumes was 6% only as the tyre industry in India was in the
grip of slowdown and demand picked up late in the second half of the
year. The increase in production was 14% over previous year.
Contribution levels were also maintained on account of better capacity
utilization of Mundra Plant and optimization of utility consumption.
Sulphuric Acid & Oleum
Sulphuric Acid and Oleum sales also registered 40% growth over previous
year due to better market conditions. Production of Sulphuric Acid
(Eqvt.) was 32% higher than previous year. This was due to
debottlenecking of the Plant in the previous year.
FUTURE PROSPECTS Insoluble Sulphur
Production from both the Plants have now been fully tied up and it is
expected that the Company will be able to utilise its installed
capacities at the optimum levels. Demand of Insoluble Sulphur in India
is expected to grow in
double digits on the back of increased use of Radial Tyres in
Commercial Vehicles which consumes more Insoluble Sulphur. Global
Demand continues to grow at 3-4% per annum resulting in positive
outlook. In order to expand its customer base and geographical
footprints, the Company is exploring capacity expansion at Mundra. The
Future prospects are discussed in greater detail in the management
discussion and analysis annexed to this report.
Sulphuric Acid & Oleum
The prospects of Sulphuric Acid and Oleum, being commodity products
remain same. The pricing trend is determined by one dominate
manufacturer for whom Sulphuric Acid is a by-product. However, as the
full steam requirement of Insoluble Sulphur Plant is now met by
Sulphuric Acid Plant, the plant continues to be viable.
4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an established internal control system
designed to ensure proper recording of financial and operational
information, compliance of various internal controls and other
regulatory and statutory compliances. Self certification exercise is
also conducted by which senior management certifies effectiveness of
the internal control system of the Company. Internal Audit is conducted
throughout the organization by qualified outside Internal Auditors.
Findings of the Internal Audit Report are reviewed by the top
Management and by the Audit Committee of the Board and proper follow up
action are ensured wherever required. The Statutory Auditors have
evaluated the system of internal controls of the Company and have
reported that the same are adequate and commensurate with the size of
the Company and nature of its business.
5. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of the business of the Company during
the year. The Company has only one subsidiary, namely Schrader Duncan
Limited (SDL) and there was no change in the nature of the business of
this Subsidiary. There were no significant and material orders passed
by regulators or courts or tribunals impacting the going concern status
and Company's operations in future. There were no material changes
and commitments affecting the financial position of the Company
occurring between March 31, 2015 and the date of this report.
6. RESEARCH & DEVELOPMENT
Research & Development is fundamental to the Company's efforts to
maintain the technical and quality edge for the product. A full
in-house Research & Development team works on continuous basis to
improve the quality of product and its properties. New Grades are also
being developed to meet customers varied requirements. Research in the
areas of reducing utilities cost and process parameters improvement is
also being done. Help of accredited independent laboratories is also
taken as and when required for studying and evolving critical
parameters.
The Company's Research and Development unit is approved from
Department of Scientific and Industrial Research, Ministry of Science
and Technology Government of India.
The focus on R&D has increased during the year. The R&D lab has been
augmented by acquiring state of the art analytical and process
equipments to help in faster and detailed analysis. Further, pilot
plants, as required, are being set up to validate the research
findings. The details of some specific R&D activities carried out and
benefits derived out of them have been annexed to this report.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
As required under Section 134(3) (m) of the Companies Act, 2013 read
with Rule8 (3) of the Companies (Accounts) Rules 2014, the information
relating to conservation of energy, technology absorption and foreign
exchange earnings and outgo is annexed to this Report.
8. POLLUTION CONTROL
Your Company's Plants have all the requisite Pollution Control
Equipments and meets all the desired and statutory norms in this
regard. The Insoluble Sulphur Units of the Company enjoys ISO-TS
16949:2009, EMS14001-2004 and OHSAS18001:2007 Certification.
9. STATUTORY AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, were appointed as Auditors
of the Company for tenure of three years i.e. from the conclusion of
34th Annual General Meeting till the conclusion of the 37th Annual
General Meeting of the Company. However, this appointment is subject to
ratification by members at every Annual General Meeting held after
appointment during their tenure of office. The Auditors have confirmed
their eligibility and qualification under Section 141 of Companies Act
2013 and therefore, their ratification for appointment as Statutory
Auditors for the year 2015-16 is being sought from the Members of the
Company at the ensuing AGM. As regards the comments in the Auditors'
Report, the relevant notes in the Accounts are self explanatory and may
be treated as information/ explanation submitted by the Board as
contemplated under provisions of the Companies Act, 2013.
10. SECRETARIAL AUDIT
In compliance with the provisions of Sec 204 and other applicable
provisions of Companies Act 2013, a secretarial audit was conducted
during the year by Secretarial Auditors M/s. S.Rath & Company. The
Secretarial Auditor's Report is attached as annexure and form part of
this report. There are no qualifications or observations or remarks
made by the Secretarial Auditors in their Audit Report.
11. COST AUDIT
In compliance with the Central Government's order, your Board has
appointed Messrs. J K Kabra & Co., Cost Accountants, to carry out the
Cost Audit of the Company in respect of Chemicals for the financial
year 2014-15. The Cost Audit Report for the year ended 31st March,
2014 has been submitted to the Ministry of Corporate Affairs.
12. PUBLIC DEPOSITS
Fixed Deposits from public outstanding with your Company at the end of
the financial year stood at Rs. 4,94,02,000/-. Of this, deposit
amounting to Rs. 10,000/- which had fallen due for payment on 7th May,
2003 has since been claimed by the depositor on 5th May, 2010. However,
the same could not be paid as the depositor has failed to produce the
Original Deposit Receipt in respect thereof. Deposits aggregating to
Rs.14,94,000/- due for repayment on or before 31st March, 2015 were not
claimed by the depositors by the said date. Out of these, deposits
totalling Rs. 14,000/- have since been claimed and settled. This apart,
deposits amounting to Rs. 12,95,000/- though fallen due for payment,
could not be settled as there is a dispute between the concerned joint
depositors and the matter is sub-judice.
13. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of your Director's knowledge and belief and according to
the information and explanations obtained your Directors make the
following statements in terms of section 134 (3)(c) of the Companies
Act, 2013:
i) that in the preparation of the annual financial statements for the
year ended March 31, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
ii) the directors had selected such accounting policies and applied
them consistently and made judgements 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 the profit and loss
of the Company for that period.
iii) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) that the annual financial statements have been prepared on a going
concern basis;
v) that proper financial controls were in place and that the financial
controls were adequate and were operating effectively.
vi) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
14. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company consists
of Mr O.P Dubey as Chairman, Mr. B.B Tandon, Mr. Suman J Khaitan as
Members. The Company Secretary is the Secretary of the Committee. The
Managing Director, Chief Financial Officer and Auditors are permanent
invitees to the committee meetings. The detail of terms of reference of
Audit Committee, number and dates of meetings held, attendance of the
directors and remunerations paid to them are given separately in the
attached Corporate Governance Report. Your Company has a well
structured Internal Audit System commensurate with its size and
operations. During the year there were no instances where the Board had
not accepted the recommendations of the Audit Committee.
15. STAKE HOLDER'S RELATIONSHIP COMMITTEE
The Company has a Stake Holder's Relationship Committee for reviewing
shareholders/investors complaints. The present members of this
Committee are Mr J.P Goenka (Chairman), Mr. Arvind Goenka (Member) and
Mr. Suman J Khaitan (Member). The detail of number and dates of
meetings held attendance of the directors and remunerations paid to
them are given separately in the attached Corporate Governance Report.
16. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee was constituted on 29th
May, 2014 with Mr. Suman J Khaitan as Chairman, Mr. K Raghuraman and
Mr. Arvind Goenka as members. The detail of terms of reference, number
and dates of meetings held, attendance of the directors and
remunerations paid to them are given separately in the attached
Corporate Governance Report.
The Company recognizes that an effective practice of CSR is required
giving due consideration to the welfare of the community, environment
and social structure that it operates in and that of the country
including focus welfare areas identified by the Sate and Central
Government. CSR Committee of the Company has laid down the policy to
meet the Corporate Social Responsibility objectives of the Company.
The CSR Policy includes any activity prescribed as CSR activity as per
the Rules of Companies Act 2013. The main Focus areas taken in the
policy are Education, Health care and family welfare, Environmental
Safety, contribution to any relief fund setup by the Government of
India and any State Government.
The details of amount of Rs. 90.00 lakhs spent zon CSR activities and
projects undertaken during the year are given in the annexure to the
Directors Reports.
The detailed CSR policy of the Company is available on the website of
the Company which is www.occlindia.com.
17. NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee has Mr. O.P. Dubey as
Chairman, Mr. B.B Tandon and Mr. K Raghuraman as members. The detail of
terms of reference of this Committee, number and dates of meetings held
attendance of the directors and remunerations paid to them and the
brief outline of the Remuneration policy of the company are given
separately in the attached Corporate Governance Report. The approved
Remuneration Policy of the company is also available on the website of
the Company which is www.occlindia.com.
18. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, 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 Audit, Nomination and
Remuneration and other Committees. The manner in which the evaluation
has been carried out has been explained in the Corporate Governance
Report. The Independent Directors are regularly updated on industry and
market trends, plant and process and operational performance of the
Company through presentations in this regard and periodic plant visits.
They are also periodically kept aware of the latest developments in the
Corporate Goverence, their duties as directors and relevant laws.
19. DIRECTORS
Mr. J P Goenka retires by rotation at the forthcoming Annual General
Meeting and, being eligible, offers himself for re-appointment.
The term of Mr. Arvind Goenka, Managing Director of the Company, is
expiring on 30th September, 2015. The Board has extended his term for a
period of three years subject to your approval and such other approvals
as may be required. Details of the proposal of his re-appointment are
mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of 35th Annual General Meeting. Mrs.
Runa Mukherjee was appointed by the Board of Directors by resolution of
circulation on 16th March, 2015. Mrs. Mukherjee holds office as an
Additional Director of the Company upto the date of the ensuing Annual
General Meeting. The Company has received a notice pursuant to Section
160 of the Companies Act, 2013 along with prescribed deposit from a
member of the Company signifying his intention to propose the
candidature of Mrs. Runa Mukherjee for the Office of the Director of
the Company.
As per Section 149, 150, 152, 161 and any other applicable provisions
of the Companies Act, 2013 and the rules made thereunder, your
Directors are seeking reappointment of Mrs. Runa Mukherjee as an
Independent Director of the Company to hold office for five consecutive
years for a term upto the conclusion of 40th Annual General Meeting of
the Company in the calendar year 2020. Details of the proposal of
appointment of Mrs. Runa Mukherjee are mentioned in the Explanatory
Statement under Section 102 of the Companies Act, 2013 of the Notice of
35th Annual General Meeting. Her appointment is appropriate and in the
best interest of the Company.
Mr. Akshat Goenka, Vice President was appointed by the Board of
Directors as an Additional Director of the Company with effect from
14th May, 2015. The Directors are seeking appointment of Mr. Akshat
Goenka as a Whole Time Director, retiring by rotation, designated as
'Joint Managing Director' for a period of three years w.e.f. 1st
June, 2015. Details of the proposal of appointment of Mr. Akshat Goenka
are mentioned in the Explanatory Statement under Section 102 of the
Companies Act, 2013 of the Notice of 35th Annual General Meeting. His
appointment is appropriate and in the best interest of the Company.
The independent directors of the Company have confirmed and declared
that they are not disqualified to act as an Independent Director in
compliance with the provisions of Sec 149 of the Companies Act 2013 and
the Board is also of the opinion that independent directors fulfill all
the conditions specified in the Companies Act 2013 making them eligible
to act as independent directors.
20. PARTICULARS OF EMPLOYEES AND KEY MANAGERIAL PERSONNEL (KMP)
The following three persons are the Key Managerial Personnel of the
Company as per the provisions of Sec 203 of the Companies Act, 2013.
a) Mr. Arvind Goenka, Managing Director
b) Mr. Anurag Jain, Chief Financial Officer
c) Mr. Pranab Maity, Company Secretary
Pursuant to Sec 134(3) (q) read with Rule 5 of Companies (appointment
and Remuneration of Managerial Personnel) Rules 2014, The Remuneration
and other details of Key Managerial Personnel and other Employees for
the year ended March 2015 are annexed to this report.
21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the financial Statements
22. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on arms' length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of Company at large. All related
party transactions are placed before the Audit Committee and given in
the notes annexed to and forming part of this Financial Statement. The
approved policy on related party transactions is also available on the
website of the Company www.occlindia.com.
23. SUBSIDIARY
The Company has only one subsidiary, namely Schrader Duncan Limited
(SDL). A statement containing financial details of the subsidiary is
included in the Annual Report.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statements presented by the Company
in this Report include the financial results of the subsidiary company
duly audited by the statutory auditors. The said statements have been
prepared in accordance with the relevant accounting standards as
prescribed under the Companies Act, 2013.
24. VIGIL MECHANISM POLICY
The Company has a Vigil Mechanism Policy to deal with instance of fraud
and mismanagement, if any. The details of the Vigil Mechanism Policy is
explained in the Corporate Governance Report and also posted on the
website of the Company.
25. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT 9 is annexed to this report.
26. RISK MANAGEMENT
As a policy the Company has identified key risk concern/areas. The
assessment of each risk area has been done on quarterly basis.
Following are of the concern areas of the Company:
Market Related Risk: related to mainly demand, realisation and
redundancy of the product.
Production related Risk: related to mainly availability of inputs,
accident or break down in the plant and rejection of material by the
customers.
Human Resources Risk includes the risk of labour unrest, high employee
turnover ratio and lower productivity due to dissatisfaction of
employees.
Revenue Risk: adverse exchange rate movement.
The Board and the Audit Committee takes note of the Risk management of
the Company in every quarter.
The Risk Assessment is also discussed in the Management Discussion and
Analysis attached to this report.
27. NUMBER OF MEETINGS OF THE BOARD
During the year four Board Meetings and four Audit Committee Meetings
were convened and held. The details of which are given in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013.
28. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Exchanges, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors' certificate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Board members and senior management
personnel which have also been posted on the website of the Company. A
certificate by the Managing Director regarding compliance of the code
of conduct of the Company is also included in the Annual report.
29. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and
assistance of various Banks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations between your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
Place : New Delhi J.P. Goenka
Date : 14th May, 2015 Chairman
Mar 31, 2014
TO THE MEMBERS
The Directors hereby present their thirty fourth Reports together with
the Audited Accounts of the Company for the accounting year ended March
31, 2014.
1. FINANCIAL RESULTS (Rs. in Lacs)
For the For the
Year ended Year ended
31.3.2014 31.3.2013
profit/(Loss) Before Taxation 50,15.50 40,03.51
Provision for Taxation * (9,71.59) (12,65.06)
profit/(Loss) after Taxation 40,43.91 27,38.45
Amount Available for Appropriation 1,44,48.18 1,14,04.98
Appropriation:
Interim/Proposed Dividend
on Equity Shares 7,20.72 5,14.80
Tax on Dividend 1,22.49 85.91
Transferred to General Reserve 5,00.00 4,00.00
Balance Carried to Balance Sheet 1,31,04.97 1,04,04.27
* Including Rs. (2,14.26) Lacs Deferred Tax (Previous year Rs.9,89.09
Lacs)
2. DIVIDENDS
Your Directors are pleased to recommend Final Dividend of 50% on
10296062 Equity Shares (Rs.5 per share of Rs.10 each). The Dividend
will absorb Rs.6,02.29 Lacs (Inclusive of Dividend Tax of Rs.87.49
Lacs). With this, the total dividend for the year including interim
dividend of 20% comes to 70%.
3. OPERATIONS Insoluble Sulphur
During the year total sales of Insoluble Sulphur was 19224 MT and
Production of Insoluble Sulphur was 18733 MT which is 13% and 5% higher
respectively than the previous year. Export sales volume registered 14%
growth as compared to last year mainly due to demand increase in some
areas and entry into new markets. Domestic sales also increased 12%
over previous year. Per MT sales realisation also improved due to
better exchange rate.
Sulphuric Acid & Oleum
Production of Sulphuric Acid (Eqvt.) was 31860 MT which is 17% lower
than previous year and Oleum production was at 3589 MT 28% lesser than
last year. On the same line sales of Sulphuric Acid was at 27233 MT 17%
lower than last year. Sales of Oleum was at 3483 MT which is 28% lower
than the last year. During the year two months shutdown was taken for
annual maintenance, modernization of plant and capacity increase
resulting in lower production and sales.
After the modifications, total steam requirement of both the Insoluble
Sulphur Plants at Dharuhera is now being met from surplus steam
generated by the Sulphuric Acid Plant resulting in reduction in Boiler
Steam generation.
FUTURE PROSPECTS Insoluble Sulphur
With approvals now available for full capacities of the plants, sales
during the next year is expected to be good and the Company is planning
for further expansion of its Insoluble Sulphur Capacities. The Market
has moved decisively to High Grade (Highly Stable and Highly
Dispersible) Insoluble Sulphur and your Company is striving to shift
all its production to these High Performance Insoluble Grades. The
future prospects are discussed in greater detail in the Management
Discussion and Analysis annexed to this report.
Sulphuric Acid & Oleum
The market prospects of Sulphuric Acid and Oleum remain the same as
these are commodity products with price being directed by one dominant
manufacturer in the area for whom Sulphuric Acid is a byproduct.
However with increase in Surplus Steam for supply to Insoluble Sulphur
Plant, the unit remains viable.
4. RESEARCH & DEVELOPMENT
A full in-house Research & Development team works on continuous basis
to improve the quality of product and its properties. New Grades are
also being developed to meet customers varied requirements. Research in
the areas of reducing utilities cost and process parameters improvement
is also being done. Help of accredited independent laboratories is also
taken as and when required for studying and evolving critical
parameters. Research & Development is fundamental to the Company''s
efforts to maintain the technical and quality edge for the product.
During the year your Company''s Research and Development unit has got
approval from Department of Scientific and Industrial Research,
Ministry of Science and Technology Government of India. The focus on
R&D has increased during the year. The R&D lab is being augmented by
acquiring State of the Art analytical and process equipments to help in
faster and detailed analysis. Further, pilot plants are also being set
up to validate the research fndings.
5. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the information relating to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is annexed to this Report.
6. POLLUTION CONTROL
Your Company''s Plant has all the requisite Pollution Control Equipments
and meets all the desired and statutory norms in this regard. The
Insoluble Sulphur Units of the Company enjoys ISO 14001-2004
certification.
7. COST AUDIT
In compliance with the Central Government''s order, your Board has
appointed Messrs. J K Kabra & Co., Cost Accountants, to carry out the
Cost Audit of the Company in respect of Sulphuric Acid for the financial
year 2013-14. The Cost Audit Report for the year ended 31st March, 2013
has been submitted to Ministry of Corporate Affairs.
8. PUBLIC DEPOSITS
Fixed deposits from public outstanding with your Company at the end of
the financial year stood at Rs.4,98,82,000/-. Of this, deposit
amounting to Rs.10,000/- which had fallen due for payment on 7th May,
2003 has since been claimed by the depositors on 5th May, 2010.
However, the same could not be paid as the depositor has failed to
produce the Original Deposit Receipts in respect thereof. Deposits
aggregating to Rs.20,36,000/- due for repayment on or before 31st
March, 2014 were not claimed by the depositors by the said date. Out of
these, deposits totaling Rs.3,70,000/- have since been claimed and
settled. This apart, deposits amounting to Rs.12,95,000/- though fallen
due for payment, could not be settled as there is a dispute between the
concerned joint depositors and the matter is sub-judice.
9. DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors, based on representation received from operating Management,
state that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates have been reasonably and prudently made
when required 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;
iii) proper and suffcient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
iv) Annual accounts for the financial year have been prepared on a going
concern basis.
10. AUDIT & INVESTORS/SHAREHOLDERS GRIEVANCE COMMITTEE
Your Company has a well structured Internal Audit System commensurate
with its size and operations. An Audit Committee consisting of three
independent non-executive Directors is in place with terms of reference
as per the provisions of the Companies Act, 1956 and Listing Agreement
with the Stock Exchanges.
The Company also has a Committee of Directors for reviewing
shareholders/investors complaints.
11. DIRECTORS
The Board of Directors at their meeting held on 11th November, 2013
appointed Mr. H S Shashikumar as a Nominee Director of the Company in
place of Mr. S K Roy, who has resigned from the Board w.e.f. 26th July,
2013. Mr. Shashikumar holds office up to the date of forthcoming Annual
General Meeting of the Company and is eligible for re-appointment.
The Board has placed on record its deep appreciation for the valuable
contribution made by Mr. S.K Roy during his tenure of directorship in
the company.
Impending notifcation of Section 149 of the Companies Act, 2013, your
Directors are seeking appointment Mr. S J Khaitan, Mr. B B Tandon. Mr.
O P Dubey and Mr. K Raghuraman as Independent Directors for five
consecutive years for a term upto 29th July, 2019. Details of the
proposal for appointment and brief profle of Mr. Tandon, Mr. Khaitan,
Mr. Dubey and Mr. Raghuraman are mentioned in Explanatory Statement
under
Section 102 of the Companies Act, 2013 of the Notice of the 34th Annual
General Meeting
12. SUBSIDIARY
The Company has only one subsidiary, namely Schrader Duncan Limited
(SDL). A statement containing brief financial details of the subsidiary
is included in the Annual Report.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated financial statements presented by the Company
in this Report include the financial results of the subsidiary company
duly audited by the statutory auditors. The said statements have been
prepared in accordance with the relevant accounting standards as
prescribed under Section 211(3C) of the Companies Act, 1956. In terms
of General Circular No. 2/2011 dated February 8, 2011 issued by the
Ministry of Corporate Affairs, Government of India, granting general
exemption to attach the Subsidiaries'' Annual Accounts, as required
under section 212(8) of the Act, the Report and Audited Accounts of the
subsidiary company viz. Schrader Duncan Limited are not annexed to this
Report. However, the financial information of the subsidiary company is
disclosed in this Report along with the Consolidated Financial
Statements in compliance with the said circular. The Company will make
available the Annual Accounts of subsidiary company and the related
detailed information to any shareholder of the Company who may be
interested in obtaining the same at any point of time. The annual
accounts of the subsidiary company shall also be kept open for
inspection by any shareholder at the Registered office of the Company
and that of the subsidiary company.
13. AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and are eligible for re-appointment. As regards
the comments in the Auditors'' Report, the relevant notes in the
Accounts are self explanatory and may be treated as information/
explanation submitted by the Board as contemplated under Section 217(3)
of the Companies Act, 1956.
14. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Exchanges, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors'' certifcate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Board members and senior management
personnel which have also been posted on the website of the Company. A
certifcate by the Managing Director regarding compliance of the code of
conduct of the Company is also included in the Annual report.
15. PARTICULARS OF EMPLOYEES
In compliance with the Provision of Section 217(2) (A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, a statement giving the required information relating
to the employee is annexed to this report.
16. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and
assistance of various Banks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations between your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
Place : New Delhi J.P. Goenka
Date : 29th May, 2014 Chairman
Mar 31, 2013
TO THE MEMBERS
The Directors hereby present their thirty third Report together with
the Audited Accounts of the Company for the accounting year ended March
31, 2013.
1. FINANCIAL RESULTS
(Rs. in Lacs)
For the For the
Year ended Year ended
31.3.2013 31.3.2012
Proft/(Loss) Before Taxation 40,03.51 44,49.79
Provision for Taxation * (12,65.06) (13,04.03)
Proft/(Loss) after Taxation 27,38.45 31,45.76
Amount Available
for Appropriation 1,14,04.98 96,64.83
Appropriation:
Interim/Proposed Dividend
on Equity Shares 5,14.80 5,14.80
Tax on Dividend 85.91 83.50
Transferred to General Reserve 4,00.00 4,00.00
Balance Carried
to Balance Sheet 1,04,04.27 86,66.53
* Including Rs. (989.09) Lakhs Deferred Tax (Previous year Rs.10.99
Lakhs)
2. DIVIDENDS
Your Directors are pleased to recommend Final Dividend of 30% on
10296062 Equity Shares (Rs.3 per share of Rs.10 each). The Dividend
will absorb Rs.3,61.38 Lakhs (Inclusive of Dividend Tax of Rs.52.50
Lakhs. With this, the total dividend for the year including interim
dividend of 20% comes to 50%.
3. OPERATIONS Insoluble Sulphur
During the year total production of Insoluble Sulphur was 17918 MT out
of which 11070 Mt was from Dharuhera plant and 6848 Mt was from Mundra
Plant. Commercial Production from Phase-II of Mundra plant started in
May 2012. However, total production of Insoluble Sulphur was higher by
only 3% from last year. Total Sales during the year was 16951 MT
including 6317 MT from Mundra Plant. The sales of Insoluble Sulphur was
3% lower than the previous year due to lower demand. The low sales was
a result of global as well Indian tyre plants cutting production due to
slowdown in Indian as well as global economy. Further, due to lower
demand, the impetus for tyre companies to speedily approve our new
plants and products was absent resulting in delayed approvals. Though
PMT Sales realisation improved during the year, proftability was lower
due to higher input costs and higher fxed costs as the expenditure of
the full Mundra Unit was charged post declaration of commercial
productions of both the Phases.
Sulphuric Acid & Oleum
Production of Sulphuric Acid (Eqvt.) was at 38275 MT which is 6% higher
than the last year production of 35991 MT. Production of Oleum was 37%
higher than last year. However sales of Sulphuric Acid at 32850 MT was
at par with the previous year sales of 32748 MT. Sales of Oleum was at
4866 MT which is 28% higher than the last year. Both demand and
realization were good during the year resulting in the better results
for the year from Sulphuric Acid Business.
4. FUTURE PROSPECTS Insoluble Sulphur
Demand from tyre companies continue to be sluggish due to global
economic factors. Domestic tyre companies are also taking production
cuts due to signifcant reduction in the tyre demand. Your Company is
making all efforts to mitigate the situation by entering new
geographical markets and customers. Consequently it is expected that
sales should rise to optimum levels during the second half of 2013-14.
Sulphuric Acid & Oleum
Due to increase in Sulphuric Acid capacities of Zinc and copper plants,
the availability of Sulphuric Acid has increased resulting in over
supply in the region. This can result in prices for Sulphuric Acid as
well as Oleum being under pressure during the next year.
5. RESEARCH & DEVELOPMENT
A full in-house Research & Development team works on continuous basis
to improve the quality of product and its properties. New Grades are
also being developed to meet customer''s varied requirements. Research
in the areas of reducing utilities cost and process parameters
improvement is also being done. Help of accredited independent
laboratories is also taken as and when required for studying and
evolving critical parameters. Research & Development is fundamental to
the Company''s efforts to maintain the technical and quality edge for
the product.
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the information relating to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is annexed to this Report.
7. POLLUTION CONTROL
Your Company''s Plant has all the requisite Pollution Control Equipments
and meets all the desired and statutory norms in this regard. The
Insoluble Sulphur Units of the Company enjoy ISO 14001-2004
Certifcation.
8. COST AUDIT
In compliance with the Central Government''s order, your Board has
appointed Messrs. J K Kabra & Co., Cost Accountants, to carry out the
Cost Audit of the Company in respect of Sulphuric Acid. This
appointment has to be made in each fnancial year and based on the
application of your Company the Central Government has approved the
re-appointment of Cost Auditor for the year under review. The Cost
Audit Report for the year ended 31st March, 2012 has been submitted to
Ministry of Corporate Affairs.
9. PUBLIC DEPOSITS
Fixed deposits from public, outstanding with your Company at the end of
the fnancial year, stood at Rs.5,37,95,000/-. Of the above, deposit
amounting to Rs.10,000/- which had fallen due for payment on 7th May,
2003 and Rs. 45,000/- which had fallen due for payment on 2nd November,
2005 have since been claimed by the depositors on 5th May, 2010 and
14th August, 2012 respectively, but the same could not be paid as the
depositors have failed to produce the Original Deposit Receipts in this
respect. Deposits aggregating to Rs.21,22,000/- due for repayment on or
before 31st March, 2013 were not claimed by the depositors by said
date. Out of these, deposits totaling Rs.2,10,000/- have since been
claimed and settled. This apart, deposits amounting to Rs.12,95,000/-
though fallen due for payment, could not be settled as there is a
dispute between the concerned joint depositors and the matter is
sub-judice.
10. DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors, based on representation received from operating Management,
state that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the fnancial statement;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates have been reasonably and prudently made
when required so as to give a true and fair view of the state of
affairs of the Company at the end of the fnancial year and of the proft
and loss of the Company for that period;
iii) proper and suffcient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
iv) Annual accounts for the fnancial year have been prepared on a going
concern basis.
11. AUDIT & INVESTORS/SHAREHOLDERS GRIEVANCE COMMITTEE
Your Company has a well structured Internal Audit System commensurate
with its size and operations. An Audit Committee consisting of three
independent non-executive Directors is in place with terms of reference
as per the provisions of the Companies Act, 1956 and Listing Agreement
with the Stock Exchanges.
The Company also has a Committee of Directors for reviewing
shareholders/investors complaints.
12. DIRECTORS
Mr. J P Goenka and Mr. K Raghuraman retire by rotation and, being
eligible, offer themselves for re-election. Brief resumes of Mr. J P
Goenka and Mr. K Raghuraman are given in Point No. 6 of the Report on
Corporate Governance attached to this report.
13. SUBSIDIARY
The Company has one subsidiary, namely Schrader Duncan Limited (SDL). A
statement containing brief fnancial details of the subsidiary is
included in the Annual Report.
As required under the Listing Agreements entered into with the Stock
Exchanges, a consolidated fnancial statements presented by the Company
in this Report include the fnancial results of the subsidiary company
duly audited by the statutory auditors. The said statements have been
prepared in accordance with the relevant accounting standards as
prescribed under Section 211(3C) of the Act.
In terms of General Circular No. 2/2011 dated February 8, 2011 issued
by the Ministry of Corporate Affairs, Government of India, granting
general exemption to attach the Subsidiaries'' Annual Accounts, as
required under section 212(8) of the Act, the Report and Audited
Accounts of the subsidiary company viz. Schrader Duncan Limited are not
annexed to this Report. However, the fnancial information of the
subsidiary company is disclosed in this Report along with the
Consolidated Financial Statements in compliance with the said circular.
The Company will make available the Annual Accounts of subsidiary
company and the related detailed information to any shareholder of the
Company who may be interested in obtaining the same at any point of
time. The annual accounts of the subsidiary company shall also be kept
open for inspection by any shareholder at the Registered Offce of the
Company and that of the subsidiary company.
14. AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and are eligible for re-appointment. As regards
the comments in the Auditors'' Report, the relevant notes in the
Accounts are self explanatory and may be treated as information/
explanation submitted by the Board as contemplated under Section 217(3)
of the Companies Act, 1956.
15. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Exchanges, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors'' certifcate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Board members and senior management
personnel which have also been posted on the website of the Company. A
certifcate by the Managing Director regarding compliance of the code of
conduct of the Company is also included in the Annual report.
16. PARTICULARS OF EMPLOYEES
In compliance with the Provision of Section 217(2) (A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, a statement giving the required information relating
to the employee is annexed to this report.
17. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and
assistance of various Banks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations between your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
O.P Dubey Arvind Goenka
Director Managing Director
Place : New Delhi
Date : 29th May, 2013
Mar 31, 2012
The Directors hereby present their thirty second Report together with
the Audited Accounts of the Company for the accounting year ended March
31, 2012.
1. FINANCIAL RESULTS (Rs. Lakhs)
For the For the
Year ended Year ended
31.3.2012 31.3.2011
Profit/(Loss) Before Taxation 44,49.79 43,61.16
Provision for Taxation for Current year* (13,05.01) (6,22.99)
Profit/(Loss) after Taxation for Current year 31,44.78 37,39.75
Tax Adjustment for earlier years (0.98) 1.82
Profit/(Loss) after Taxation for earlier years 31,45.76 37,37.93
Amount Available for Appropriation 96,64.83 73,98.52
Appropriation:
Interim/Proposed Dividend on Equity Shares 5,14.80 4,11.84
Tax on Dividend 83.50 67.61
Transferred to General Reserve 4,00.00 4,00.00
Balance Carried to Balance Sheet 86,66.53 65,19.07
* Including Rs. (10.99) Lakhs Deferred Tax (Previous year Rs.(36.83)
Lakhs)
2. DIVIDENDS
Your Directors are pleased to recommend Final Dividend of 30% on
10296062 Equity Shares (Rs.3 per share of Rs.10 each). The Dividend
will absorb Rs.3,58.99 Lakhs (Inclusive of Dividend Tax of Rs.50.10
Lakhs).
3. OPERATIONS
Insoluble Sulphur
During the year total production of Insoluble Sulphur was 17392 MT.
Commercial Production from Phase-1 of Mundra plant started in August
2011 and a production of 2983 MT was achieved during the year. The
total production of Insoluble Sulphur from Dharuhera operations was
14409 MT registering 6% growth from last year. Total Sales during the
year was 17417 MT including 2660 MT from Mundra Plant. The demand from
both international & domestic market continued to be healthy. The net
profit during the year is less as the Income Tax Exemption on the
Company's EOU Plant has expired resulting in tax on its income during
the year.
Sulphuric Acid & Oleum
Production of Sulphuric Acid (Eqvt.) was at 35991 MT which is 6% lower
than the last year production of 38402 MT. Production of Oleum was 36%
lower than last year. This was mainly due to new capacities coming up
in the region without any increase in demand. However, sales of
Sulphuric Acid at 32748 MT was at par with the previous year sales of
32312 MT. Sales of Oleum was at 3805 MT which is 32% lower than the
last year due to competition in the market from new suppliers.
4. FUTURE PROSPECTS
Insoluble Sulphur
The demand of Insoluble Sulphur was stable in international as well as
the domestic market during the year. The prospect of economic slowdown
being faced worldwide is expected to have adverse effect on the tyre
industry as well which is the main consumer of Insoluble Sulphur.
However since your Company is currently having a good order book and by
virtue of having long term supply contracts the impact of the same is
expected to be significantly less on the Company.
After successful completion of Phase-1 of the new plant of Insoluble
Sulphur at Mundra SEZ, the work on Phase-II for another 5500 capacity
addition has also been completed. The commercial production of the same
has been declared in the month of May-2012.
Sulphuric Acid & Oleum
Demand of Sulphuric Acid is expected to remain at the existing levels
in the near future. However, due to consumption of steam produced by it
in Insoluble Sulphur Plants, the division is expected to remain
profitable in the coming year.
5. RESEARCH & DEVELOPMENT
A fully in-house Research & Development team works on continuous basis
to improve the quality of product and its properties. New Grades are
also being developed to meet customers varied requirements. Your
Company is currently working on development of pre-dispersed Insoluble
Sulphur which will be a value added form of Insoluble Sulphur. Help of
accredited independent laboratories is also taken as and when required
for studying and evolving critical parameters. Research & Development
is fundamental to the Company's efforts to maintain the technical and
quality edge for the product.
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, the information relating to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is annexed to this Report.
7. POLLUTION CONTROL
Your Company's Plants have all the requisite Pollution Control
Equipments and meets all the desired and statutory norms in this
regard. The Insoluble Sulphur Units of the Company enjoys ISO
14001-2004 Certification.
8. COST AUDIT
Department of Company Affairs has approved the appointment of M/s.J K
Kabra and Co., Cost Auditors, for conducting Audit in respect of
Sulphuric Acid Unit for the year ending March 2013.
9. PUBLIC DEPOSITS
Fixed deposits from public outstanding with your Company, at the end of
the financial year, stood at Rs.3,88,41,000/-. Of the above, deposit
amounting to Rs. 10,000/- which had fallen due for payment on 7th May,
2003 has since been claimed by the depositor on 5th May, 2010, but the
same could not be paid as the depositor has not been able to produce
the Original Deposit Certificate in this respect. Deposits aggregating
to Rs. 17,53,000/- due for repayment on or before 31st March, 2012 were
not claimed by the depositors. Out of these, deposits totalling Rs.
1,82,000/- have since been claimed and settled. Besides this, deposits
amounting to Rs. 12,95,000/- though fallen due for payment could not be
settled as there is a dispute between the concerned joint depositors
and the matter is sub-judice.
10. DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors, based on representation received from operating Management,
state that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates have been reasonably and prudently made
when required 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;
iii) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
iv) Annual accounts for the financial year have been prepared on a
going concern basis.
11. AUDIT & INVESTORS/SHAREHOLDERS GRIEVANCE COMMITTEE
Your Company has a well structured Internal Audit System commensurate
with its size and operations. An Audit Committee consisting of three
independent non-executive Directors is in place with terms of reference
as per the provisions of the Companies Act, 1956 and Listing Agreement
with the Stock Exchanges.
The Company also has a Committee of Directors for reviewing
shareholders/investors complaints.
12. DIRECTORS
Mr. B B Tandon and Mr. O P Dubey retire by rotation and, being
eligible, offer themselves for re-election. The term of Mr. Arvind
Goenka, Managing Director, is expiring on 30th September 2012. The
Board has extended his term for a period of three years subject to your
approval and such other approvals as may be required.
13. SUBSIDIARY
In the month of April 2012, your Company has acquired 50% of the total
paid up equity shares of Schrader Duncan Limited from M/S Schrader
Bridgeport International Inc, SDL's foreign promoters. Due to this
acquisition Schrader Duncan Limited has become a subsidiary of your
Company in the year 2012-13.
14. AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and are eligible for re-appointment. As regards
the comments in the Auditors' Report, the relevant notes in the
Accounts are self explanatory and may be treated as information/
explanation submitted by the Board as contemplated under Section 217(3)
of the Companies Act, 1956.
15. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Exchanges, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors' certificate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Board members and senior management
personnel which have also been posted on the website of the Company. A
certificate by the Managing Director regarding compliance of the code
of conduct of the Company is also included in the Annual report.
16. PARTICULARS OF EMPLOYEES
In compliance with the Provision of Section 217(2) (A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, a statement giving the required information relating
to the employee is annexed to this report.
17. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and
assistance of various Banks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations between your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
Place: New Delhi O.P. DUBEY ARVIND GOENKA
Date: 30th May, 2012 Director Managing Director
Mar 31, 2011
The Directors hereby present their thirty-first Report together with
the Audited Accounts of the Company for the accounting year ended March
31, 2011.
1. FINANCIAL RESULTS (Rs. Lakhs)
For the For the
Year ended Year ended
31.3.2011 31.3.2010
Profit/(Loss) Before Taxation 43,62.74 34,27.21
Provision for Taxation for Current year* (6,22.99) (4,81.52)
Profit/(Loss) after Taxation for Current year 37,39.75 29,45.69
Tax Adjustment for earlier years 1.82 0.00
Profit/(Loss) after Taxation for earlier years 37,37.93 29,45.69
Add: Surplus Brought Forward 36,59.99 14,94.93
Transfer from Capital Reserve Account 0.60 0.60
Amount Available for Appropriation 73,98.52 44,41.22
Appropriation:
Interim/Proposed Dividend on Equity Shares 4,11.84 4,11.84
Tax on Dividend 67.61 69.39
Transferred to General Reserve 4,00.00 3,00.00
Balance Carried to Balance Sheet 65,19.07 36,59.99 * Including Rs.
(36.83) Lakhs Deferred Tax (Previous year Rs. 49.65 Lakhs.)
2. DIVIDENDS
Your Directors are pleased to recommend Final Dividend of 20% on
10296062 Equity Shares (Rs.2 per share of Rs.10 each). The Dividend
will absorb Rs.2,39.33 Lakhs (Inclusive of Dividend Tax of Rs. 33.41
Lakhs).
3. OPERATIONS
Insoluble Sulphur
During the year your Company achieved 17% growth in production to 13621
MT as compared to 11696 MT last year. 10% growth was also registered in
sales volumes on the back of global demand to 13796 MT against last
year sales of 12506 MT. This was due to robust Global Demand and the
fact that many major global tyre companies have identifed the Company
as a strategic supplier. The Sales were constrained by production ca-
pacities which augers well for the upcoming project. During the year,
Raw Material prices witnessed gradual increase over the year.
Sulphuric Acid & Oleums
Production of Sulphuric Acid (Eqvt.) was at 38402 MT which is 8% higher
than the last year production of 35638 MT. However, Oleum Production
was 10% lower than the last year production. During this year sales of
Sulphuric Acid was higher by 11% at 32312 MT and Oleum was at 5625 MT
which is 16% lower than the last year sales. Price of Sulphuric Acid
remained remunerative during the year on back of stable demand.
4. FUTURE PROSPECTS
Insoluble Sulphur
The demand of Insoluble Sulphur has picked up in international as well
as the domestic market and the trend is expected to continue.
The work on a new plant for Insoluble Sulphur at SEZ Mundra to increase
the capacity by 11000 Mtpa in two phases is on track.The first phase for
5500 MT is expected to be commissioned in June-2011. Production from
this phase is already sold out subject to technical approvals.
Accordingly, the second phase of 5500 Mtpa has been brought forward and
orders for major machinery have been placed. The second phase is now
targeted to be commissioned in the fourth quarter of 2011-12.
Sulphuric Acid & Oleums
Sale of Sulphuric Acid in 2011-12 is being affected by low off take in
the first quarter, which is traditionally a good period for it.
Therefore, margins are expected to be under pressure in 2011-12. Off
take of Oleum has decreased due to addition of capacities in the region
without increase in demand.
5. RESEARCH & DEVELOPMENT
A fully in-house Research & Development team works on continuous basis
to improve the quality of product and its properties. New Grades are
also being developed to meet customers varied requirements. Your
Company is currently working on development of pre-dispersed Insoluble
Sulphur which will be a value added form of Insoluble Sulphur. Help of
accredited independent laboratories is also taken as and when required
for studying and evolving critical parameters. Research & Development
is fundamental to the Companys efforts to maintain the technical and
quality edge for the product.
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS & OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclo- sure of Particulars in the Report
of Board of Directors) Rules, 1988, the information relating to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is annexed to this Report.
7. POLLUTION CONTROL
Your Companys Plant has all the requisite Pollution Control Equipments
and meets all the desired and statu- tory norms in this regard. The
Insoluble Sulphur Units of the Company enjoys ISO 14001-2004
Certifcation.
8. COST AUDIT
Department of Company Affairs has approved the appointment of M/s.J K
Kabra and Co., Cost Auditors, for conducting Audit in respect of
Sulphuric Acid Unit for the year ending 31st March 2012.
9. PUBLIC DEPOSITS
Fixed deposits from public, outstanding with your Company at the end of
the financial year, stood at Rs.19221000/-. Of the above, deposit
amounting to Rs. 10000/-which had fallen due for payment on 7th
May,2003 has since been claimed by the depositors on 5th May,2010 but
the same could not be paid as the depositor has not been able to
produce the Original Deposit Certifcate in this respect. Deposits
aggregating Rs.1789000/- due for repayment on or before 31st March,
2011 were not claimed by the depositors. Out of these, deposits
totaling Rs.120000/- have since been claimed and settled. Besides this,
deposits amounting to Rs.1295000/- though fallen due for payment, could
not be settled as there is a dispute between the concerned joint
depositors and the matter is sub-judice.
10. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors, based on representation
received from operating Management, state that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates have been reasonably and prudently made
when required 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;
iii) proper and suffcient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
pre- venting and detecting fraud and other irregularities; and
iv) Annual accounts for the financial year have been prepared on a going
concern basis.
11. AUDIT & INVESTORS/SHAREHOLDERS GRIEVANCE COMMITTEE
Your Company has a well structured Internal Audit System commensurate
with its size and operations. An Audit Committee consisting of three
independent non-executive Directors is in place with terms of reference
as per the provisions of the Companies Act, 1956 and Listing Agreement
with the Stock Exchanges.
The Company also has a Committee of Directors for reviewing
shareholders/investors complaints.
12. DIRECTORS
Mr. S.J Khaitan and Mr S.K Roy retire by rotation and, being eligible,
offer themselves for re-election. Mr. H.C Taneja retired as Whole time
Director of the Company on 15th Nov 2010 upon attaining the age of
superannuation. The Board has placed on record its deep appreciation
for the invaluable services rendered by Mr. Taneja throughout his
tenure of directorship in the Company.
13. AUDITORS AND AUDIT REPORT
Messrs Singhi & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and are eligible for re-appointment. As regards
the comments in the Auditors Report, the relevant notes in the
Accounts are self explanatory and may be treated as information/
explanation submitted by the Board as contemplated under Section 217(3)
of the Companies Act, 1956.
14. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Exchanges, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors certifcate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Board of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Board members and senior management
personnel which have also been posted on the website of the Company. A
certifcate by the Managing Director regarding compliance of the code of
conduct of the Company is also included in the Annual report.
15. PARTICULARS OF EMPLOYEES
In compliance with the Provision of Section 217(2) (A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, a statement giving the required information relating
to the employee is annexed to this report.
16. ACKNOWLEDGMENTS
The Board places on record its appreciation of the support and
assistance of various Banks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations between your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
Place : New Delhi J.P Goenka
Date : 27th May, 2011 Chairman
Mar 31, 2010
The Directors hereby present their thirtieth Report together with the
Audited Accounts of the Company for the accounting year ended March 31,
2010.
1. FINANCIAL RESULTS (Rs. Lakhs)
For the For the
Year ended Year ended
31.3.2010 31.3.2009
Profit/(Loss) Before Taxation 3427.21 813.34
Provision Cor Taxation for Current year* (481.52) (50.41)
Profit/(I.oss) after Taxation for Current
year 2945.69 762.93
Tax Adjustment for earlier years 0.00 0.24
Profit/(Loss) after Taxation for earlier
years 2945.69 762.69
Add: Surplus Brought Forward 1494.93 1312.33
Transfer from Capital Reserve Account 0.60 0.60
Amount Available for Appropriation 4441.22 2075.62
Appropriation:
Interim/Proposed Dividend on Kquity Shares 411.84 154.44
lax on Dividend 69.39 26.25
Transferred to General Reserve - 400.00
Balance Carried to Balance Sheet 3959.99 1494.33
* Including Rs. 49.65 I.akhs Deferred Tax (Previous year Rs. (59.02)
Lakhs.
2. DIVIDENDS
Your Directors are pleased to recommend Pinal Dividend of 15% on
10296062 Hquity Shares (Rs. 1.5 per share of Rs.10 each). The Dividend
will absorb Rs. 180.09 Lakhs (Inclusive of Dividend Tax of Rs. 25.65
Lakhs).
3. OPERATIONS
Insoluble Sulphur
During the year your Company achieved 9% growth in production to 11696
MT as compared to 10703 Ml last year. Your Company registered to 27%
growth in sales on the back of revival in global demand to 12506 MT
against last year salesof 9822 MT. After turbulent and high prices of
Raw Material last year, the prices of Raw Material remained relatively
stable during the year. The selling price has also reflected this
easing of prices. I lowever margin levels remained robust.
Sulphuric Acid & Oleums
Production of Sulphuric Acid (Hqvt.) was at 35638 MT which is 8% higher
than the last year production of 32970 Ml. I lowever Oleum Production
was 14 % lower than the last year production. During this year sales of
Sulphuric Acid was higher by 17% at 29043 MT and Oleum was at 6731 MT
which is in line with the last year sales. Price of Sulphuric Acid
remained stable during the current year after recovery from sharp
lluctuations during the last year.
4. FUTURE PROSPECTS
Insoluble Sulphur
The demand of Insoluble Sulphur has picked up in international as well
as the domestic market and the trend is expected to continue.
The debottlenecking exercise has added another 2000 MTPA to the
capacity of Insoluble Sulphur. However,
willi additionof new custorncrs/plants and economic revival, (he
current capacity is already sold out. The work on a new plant for
Insoluble Sulphur at SKZ Mundra to increase the capacity by 11000 MTPA
in two phases is on track and the first phase for 5500 MT is expected
to be completed by 2"(l quarter of 2011. Land has already been
acquired, civil work has commenced and order for long delivery items
have been placed.
Sulphuric Acid & Volumes
Economic revival has given a boost to Sulphuric Acid demand and the
prices are expected to remain remunerative in the coming year.
5. RESEARCH & DEVELOPMENT
A fully in-house Research & Development team works on continuous basis
to improve the quality of product and its properties. New (trades are
also being developed to meet customers varied requirements. Help of
accredited independent laboratories is also taken as and when required
for studying and evolving critical parameters. Research & Development
is fundamental to the Companys efforts to maintain the technical and
quality edge for the product.
6.
CONSERVATIONS OF ENERGY & TECHNOLOGY ABSORBTION AND FOREIGN EXCHANGES
& OUTGO
As required under Section 217(1 )(e) of the Companies Art, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Hoard of Directors) Rules, 1988, the information relating to
conservation of energy, technology absorption and foreign exchange
earnings and outgo is annexed to this Report.
7. POLLUTION CONTROL
Your Companys Plant has all the requisite Pollution Control Equipments
and meets all the desired and statutory norms in this regard. The
Insoluble Sulphur Units of the Company enjoys ISO 14001-2004
Certification.
8. COST AUDIT
The Department of Corporate A Hairs has approved the appointment of
M/s. J K Kabra and Co., Cost Auditors, for conducting Audit in respect
of Sulphuric Acid Unit for the year ending March 2011.
9. PUBLIC DEPOSITS
Fixed deposits from public, outstanding with your Company at the end
of the financial year, stood at Rs. 1,66,70,000/-. Deposits aggregating
Rs. 19,58,000/- due for repayment on or before 31 si March, 2010 were
not claimed by the depositors. Out of these, deposits totaling
Rs.78,000/- have since been claimed and settled. Besides, this,
deposits amounting to Rs. 12,95,000/- though fallen due for payment,
could not be settled as there is a dispute between the concerned joint
depositors and the matter is sub-judice.
Ml. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, your
Directors, based On representation
received from operating Management, state that:
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures in the financial statement;
ii) the accounting policies have been selected and applied consistently
and judgments and estimates have been reasonably and prudently made
when required 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;
iii) proper and sufficient care has been taken for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
iv) Annual accounts for the financial year have been prepared on a
going concern basis.
11. AUDIT & INVESTORS/SHAREHOLDERS GRWVANCE COMMITTEE
Your Company has a well structured Internal Audit System commensurate
with its si/.e and operations. An Audit Committee consisting of three
independent non-cxccutivc Directors is in place with terms of reference
as per the provisions of the Companies Act, 1956 and Listing Agreement
with the Stock Exchanges.
The Company also has a Committee of Directors for reviewing sharehol
-ders/investors complaints.
12. DIRECTORS
Mr. J.P Goenka and Mr K Raghuraman retire by rotation and, being
eligible, offer themselves for re-election. Mr. Arvind Goenka has been
appointed by the Hoard of Directors as the Managing Director of the
Company for a period of three years with effect from Isl October, 2009
subject to your approval and the requisite approval of the Central
Government, if required, and such other approvals as may be necessary.
13. AUDITORS AND AUDI I REPORT
Messrs Singhi & Co., Chartered Accountants, retire at the ensuing
Annual General Meeting and are eligible for re-appointment. As regards
the comments in the Auditors Report, the relevant notes in the
Accounts are self explanatory and may be treated as information/
explanation submitted by the Hoard as contemplated under Section 217(3)
of the Companies Act, 1956.
14. CORPORATE GOVERNANCE
a) As per the amended Listing Agreement with the Stock Lxchangcs, a
Management Discussion & Analysis, a Report on Corporate Governance
together with the Auditors certificate regarding the Compliance of
conditions of Corporate Governance forms part of the Annual Report.
b) The Hoard of Directors of the Company has laid down a comprehensive
Code of Conduct for all its Hoard members and senior management
personnel which have also been posted on the website of the Company. A
certificate by the Managing Director regarding compliance of the code
of conduct of the Company is also included in the Annual report.
15. PARTICULARS OK EMPLOYEES
In compliance with the Provision of Section 217(2) (A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975 as amended, a statement giving the required information relating
to the employees is annexed to this report.
16. ACKNOWLEDGMENTS
The Hoard places on record its appreciation of the support and
assistance of various Hanks, Government Agencies, Suppliers, valued
Customers and the shareholders in particular and looks forward to their
continued support. Relations"betwecn your Company and its employees
remain cordial and the Directors wish to express their appreciation for
the co-operation and dedication of all employees of the Company.
By Order of the Board
Place : New Delhi J.P. Goenka
Date :28,th May, 2010 Chairman