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Updated:05 Dec, 2019, 15:58 PM IST

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Updated:05 Dec, 2019, 16:01 PM IST

Disclosure in board of directors report explanatory

DIRECTORS' REPORT  

To,
The Shareholders,

Your Directors have pleasure in presenting the 25th Annual Report of Neogen Chemicals Limited (the Company) on the business and operations of the Company together with the Audited Financial Statements for the Financial Year 2014–15.

STATUTORY AUDITORS & THEIR REPORT

At the Annual General Meeting held on September30, 2014, M/s. JMT &Associates, Chartered Accountants (Firm Registration No : 104167W), were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2019. As per the provisions of Section 139 of the Companies Act, 2013 the Company is required to ratify the appointment of M/s. JMT & Associates, Chartered Accountants, as statutory auditors of the Company, every year. The directors recommend the ratification of appointment for the current year.

There are no qualifications or adverse remarks in the Auditors’ Report which require any clarification/ explanation. The Notes on financial statements are self–explanatory, and needs no further explanation.

The Notes on accounts, referred to in the Auditor’s Report, are self–explanatory and therefore do not call for any further comments.

SHARE CAPITAL

The paid up equity capital of the Company as on March 31, 2015 was Rs. 58,000,000/– divided into 4,500,000 Equity Shares of Rs. 10/– each and 130,000 10% Cumulative Optionally Convertible Preference Shares of Rs. 100/– each. The Company has issued 130,000 10% Cumulative Optionally Convertible Preference Shares of Rs. 100/– on Private Placement basis per share during the year to part finance its new project in DAHEJ Free Trade Zone

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format is appended as “Annexure II” to the Board’s Report.

BOARD MEETINGS

The Board of Directors have met 9 times during the year ended 31st March, 2015. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

As part of Initiative under “Corporate Social Responsibility”, the Company constituted “Corporate Social Responsibility Committee” under the Chairmanship of an Independent Director Mr. Sanjay Mehta. During the year under review, Company has contributed funds for promotion of language and skills development of Adivasi Community, rural development and water resources management. The contribution in this regard has been made to the Registered Trust managing leading hospital.

The Annual Report on CSR Activities is annexed as “Annexure III” to the Board’s Report.


CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Board of directors has constituted Corporate Social Responsibility Committee of Directors on January 3, 2015 as required under Section 135 of the Companies Act, 2013. The Role of the Committee is to formulate and recommend to the Board, a corporate social responsibility policy, recommend the amount of expenditure to be incurred on activities and monitor CSR Policy.

The Committee consist of three directors, and attendance of each committee member is as under:

Name of Members

No. of Meetings held

No. of Meetings attended

Designation

Mr. Sanjay N. Mehta (Chairman)

1

1

Non Executive and Independent Director

Mr. Hitesh Reshamwala

1

1

Non Executive and Independent Director

Mrs. Beena Kanani (Resigned w.e.f. 06/12/2014)

1

1

Executive –Whole time Director



NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee was reconstituted on December 6, 2014 as Mrs. Beena Kanani resigned from Directorship of the Company w. e. f. December 6, 2014. The Nomination and Remuneration Committee comprises of two Independent directors. There were two nomination and remuneration committee meetings held during the year.





Attendance of each member at the Remuneration Committee Meetings held during the year.

Name of Members

No. of Meetings held

No. of Meetings attended

Designation

Mr. Sanjay N. Mehta

2

2

Independent Director

Mr. Hitesh Reshamwala

2

1

Independent Director

Mrs. Beena Kanani (Resigned w.e.f. 06/12/2014)

2

1

Director


The main term of reference of Remuneration Committee is to review and recommend the revision in remuneration of managerial personnel to the Board of Directors. The Remuneration Committee while reviewing the remuneration considers the industry remuneration standards, educational qualification, relevant experience and performance of the concerned managerial personnel vis–à–vis the company requirements.

COST AUDITORS

Your directors have appointed M/s. Y. R. Doshi& Associates, Cost Accountants to carry out cost audit for the financial year 2015 – 16. The Company has submitted Cost Compliance Certificate as well as Cost Audit Report to Ministry of Corporate affairs on 06/04/2015 for the year 2013 – 14. The Company had appointed M/s Y. R. Doshi & Associates, Cost Accountants to conduct cost audit for the year 2014 – 15.

ACKNOWLEDGMENTS

Your Directors are happy to place on record their appreciation of the whole–heartedco–operation and hard work of all of the Company’s employees and members who have contributed to the success of your Company.

The Directors would also like to place on record a deep sense of gratitude to the Company's Bankers State Bank of India for their co–operation and assistance rendered to the company during the year under review &also CITI Bank for continuing the facility mainly for Export business ( in United States Dollars ).

Description of state of companies affair

We are pleased to inform that the company has achieved sales growth of 13.66%. This wasachieved in–spite of very sluggish condition in the world economy including in our country. The growth was achieved mainly by increase in Export business. We could also achieve better profit growth of 28.12% vis–à–vis the sales growth by good cost management. The performance of the Company is improving steadily year on year due to launch of high tech innovative product portfolio supported by aggressive in–house R&D. The same trend is expected to continue in this year also as few more high technology products which are in pipe–line in R&D are also expected to result into commercial production in the current yeari.e. 2015–16 . We are also continuously upgrading our R&D Lab during the year &also upgrading of our Quality control Dept. to meet international standards of our products to be launched in next few years for our high profile Indian and international customers.

Details regarding energy conservation

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING & OUTGO The particulars as prescribed under Sub–section (3)(m) of Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are enclosed as per “Annexure I” to the Board’s Report. 1. CONSERVATION OF ENERGY 1.1 Energy Conservation Measures implemented during the year. We have carried out substantial re–structuring of our product mix. The products which are introduced, are based on more complicated reactions and hence though the quantity produced was up by about 7.93% as compared to previous year, the consumption of number of electricity units has gone up by 35.29 % and the total cost of electricity gone up only by 24.34% as the unit cost of electricity has gone down by 8.04% during the year. In the matter of Fuel Oil, the consumption has gone up by 22.07% whereas the increase in volume of production has gone up by 7.93% thereby indicating increase in consumption marginally but due to worldwide decrease in cost of fuel unit price by 21.07% the total fuel cost has gone down by 3.65% 1.2 Further Energy Conservation Measures planned. We have replaced all old electric installations with the new more efficient one during the last year under review & this will help reduce the electric consumption in the years to come. We have also installed two new energy efficient boilers from M/S Thermax Ltd., running on Diesel /Gas & the Gas connections are expected shortly. This will also reduce consumption and overall cost of fuel and will be more environments friendly. 2. TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION AS PER PRESCRIBED FORM–A 2.1 Electricity 2014–2015 2013–2014 a. Units consumed ( in ‘000 KWH) 15,27,256 11,28,865 b. Total amount (Rs.) 1,08,29,745 87,09,272 c. Average rate / unit (Rs.) 7.09 7.71 2.2 Diesel /Furnace Oil 2014–2015 2013–2014 a. Quantity consumed ( in Kilo/Litres) 5,81,803 4,76,616 b. Total amount (Rs.) 3,62,66,309 3,76,40,675 c. Average rate / unit (Rs.) 62.33 78.97 3. CONSUMPTION PER UNIT OF PRODUCTION Electricity Furnace oil/ Diesel 2014–2015 2013–20142014–2015 2013–2014 Kwh/Mt Rs/Mt Kwh/Mt Rs/Mt Lt/Mt Rs/MtLt/Mt Rs/Mt a. For Inorganic 110 780 92 709 56 3490 50 3949 Chemicals b. For Organic 883 6260 723 5574 325 20257 295 23296 Chemicals

Details regarding technology absorption

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT AND FOREIGN EXCHANGE EARNING & OUTGO The particulars as prescribed under Sub–section (3)(m) of Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are enclosed as per “Annexure I” to the Board’s Report. 4. TECHNOLOGY ABSORPTION Research & Development (R & D) 1. The Company had carried out R&D efforts in developing specialty chemicals and it has resulted in introducing the new products in markets. 2. By carrying out R&D efforts for the new specialty chemicals developed will generate good business during the current year. 3. Future plan of the action. The Company is updating continuously R & D centre which will help to develop new Speciality chemicals of international quality standards to strengthen the base of the Company. The company also is looking to work in the new avenues in Bio–tech operations. 4. Expenditure on R & D for the year 2014–2015 31.03.2015 31.03.2014 a. Capital 53,182/– 4,81,105/– b. Recurring 42,26,430/– 48,83,315/– c. Total 42,79,612/– 53,64,420/– d. Total R&D Expenditure : 0.51% 0.71% as a percentage of total turnover 5. Technology Absorption, adaption and innovation a) Efforts in brief, made towards technology absorption, adaption and innovation i) The Company has policy of developing in–house R&D and hence no efforts are required for absorption of external technology. ii) The Company has continued to improve the processes by in–house R&D efforts. b) Benefits derived as a result of the above efforts The Company has derived several advantages from these activities such as: i) The addition of new product and hence widened market base. ii) Increase in production capacity utilization. iii) Improvement in quality. iv) Increase in productivity. c) Technology imported during the last 5 years. The Company has not imported any technology.

Details regarding foreign exchange earnings and outgo

FOREIGN EXCHANGE EARNINGS AND OUTGO Particulars with regard to Foreign Exchange earnings and outgo appear in Note34to Note 38 forming part of the account.

Disclosures in director’s responsibility statement

23. DIRECTORS’ RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, the directors would like to state that: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed. (b) the directors have 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 of the profit of the Company for the year under review. (c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and for preventing detecting fraud and other irregularities. (d) the directors have prepared the annual accounts on a going concern basis and (e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

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