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We are delighted to present the 25 Annual Report and the Audited Financial statements for the financial Year Ended March 31st 2015
The Company has recorded highest performance in its history. This is mainly because of contribution of Company's newly introduced products in Fine & Speciality Chemicals intermediates segment which have contributed maximum to the total revenue of the Company. The Profit before Tax (before Interest & Unallocable expenses) from this segment stood at Rs.4,009 lakhs.
Though the economic environment was highly volatile with prices of crude falling to six–year low in F.Y. 2014–15, your Company has demonstrated highest performance in its history by achieving record growth in Revenue and Profit after Tax (PAT) of 88.57% and 288.27% respectively.
The Highlights of the Company's performance is as follows
• Revenue from Operation increased by 89% (YOY) to Rs.24,761.11 Lakhs
• Earnings(Profit) Before Interest, Depreciation, Tax & Amortisation (EBIDTA) increased by 114% (YOY) to Rs.3,416.88 Lakhs
• Profit before Tax was at Rs.1,370.97 Lakhs whereas Profit after Tax was at Rs.1,303.07 Lakhs, up 133.18% and 288.27% respectively (YOY).
Management Discussion and Analysis
As required under Clause 49 of the listing agreement Management Discussion and Analysis report during the period under review, is attached and form part of this report.
Considering that it was the very first full year of commercial operations for the newly introduced forward integrated products in the Fine and Speciality Chemicals segment and immediate future Expansion and Development program of the Company, your Directors do not recommend any dividend and plan to retain the profit in Business.
Capacity Expansion, New Projects & Diversification
Your Company has embarked on its mission to be self–reliant for most of its Raw materials, Reduce Cost of Energy, Diversify into Specialised High Value & High Margin products, Value addition to By–Products by reusing the same for manufacturing of high margin products and expansion in capacity of its captive use products. This phase of expansion shall phoenix up the Bottom– line and Top–line of the Company and shall make it achieve leading and dominant position globally for all its products
Reserves & Surplus
The Reserves, at the beginning of the year were Rs.4,111 Lakhs and the Reserves at the end of the year are Rs.5,414Lakhs
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013
The Company's Information Technology (IT) infrastructure is continuously reviewed and renewed in line with the development in technology and its requirements.
Directors and Key Managerial Personnel Directors
In Accordance with the provision of the Act and the Articles of Association of the Company, Mr. Asit Kumar Bhowmik is liable to retire by rotation and being eligible offered himself for reappointment.
Due to Mr. Virendra Singh Khurana's professional Commitments abroad, he had to resign from the office of the Independent Director. The Board acknowledges and appreciates the valuable contribution made by him during his tenure as Director of the Company.
Ms. Kalpana Nasikrao Tirpude is appointed by the Board of Directors on April 23, 2015 as an additional Director (Independent).
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 Section 149(6) of the Act and Clause 49 of the Listing Agreement with the Stock Exchange. In the opinion of the Board, they fulfil the conditions of independence as specified in the Act, and the Rules framed there under and are independent of the management.
The brief resume and other details relating to the Director who is proposed to be appointed / re–appointed as required to be disclosed under clause 49 of the listing agreement is mentioned in the explanatory Statement annexed to the Notice of 25th Annual General Meeting.
Key Managerial Personnel (KMP)
During the year under review, the Company has designated Mr. Ashok G Rajani, Managing Director and Ms. Manisha Solanki, Company Secretary, as KMP as per the definition under Section 2 (51) and Section 203 of the Act.
The Company has adopted governance guidelines on Board effectiveness. The governance guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directors' term, retirement age and committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director Remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board committees.
Performance evaluation of Board, its committees and of Director's
The Board recognise the Importance of reviewing and improving upon its performance. For this purpose they discuss the effectiveness of the functioning of the Chairman, Executive Directors, and other Directors and to agree ways in which performance can be further improved looking at the likely needs in future.
A structured questionnaire was prepared after taking into consideration, various aspect of the Board's functioning, composition of the Board and its committees, culture, execution and performance of specific duties, obligation and governance.
The Performance evaluation of the Chairman and Non–independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process of Board.
Familiarization Programme for Independent Directors
The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industries.
The Details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company under the Investor section
Policy on Directors' Appointment and Remuneration Including criteria for determining Qualifications, Positive Attributes and Independence of a director
Based on the recommendation of Nomination and Remuneration Committee (NRC) the Board has adopted the nomination and remuneration policy for Directors, KMP and other employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director and also criteria for evaluation of Individual Directors and the Board / Committees. The Nomination and Remuneration policy is given by way of Annexure – I to this report
Meetings of the Board
The details of the number of meetings of the Board of Directors held during the Financial Year 2014–15 forms part of the Corporate Governance Report.
Employee Stock Option
The Company has not issued any Employee Stock Options during the period under review.
Directors' Responsibility Statement
Based on framework of the internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the Opinion that the Company's internal financial controls were adequate and effective during the financial year 2014–15. Accordingly, pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors, based on the representations received from the Operating Management and to the best of their knowledge and ability, confirms that:
a. in the preparation of the Annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed and that there are no material departures;
b. they have, in selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date;
c. they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. they have prepared annual accounts on a 'going concern basis.'
e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f. proper system has been devised to ensure compliance with provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts & Arrangements with Related Parties
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on company's website.
As required by the Clause 35 of the listing Agreement entered into with Stock Exchanges, Your Company periodically discloses its promoter group and persons acting in concert in the shareholding pattern and other filings with the Stock exchanges.
Corporate Social Responsibility (CSR)
During any financial year preceding the FY 2014–15 the Company was not falling under any of the criteria which mandate the Company to comply with the Section 135 of the Companies Act, 2013 in FY 2014–15. However, the Company is required to comply with the provision from the financial year 2015–16.
Material changes and commitments, if any, affecting the financial position of the Company
No material changes and commitments affecting the financial Position of the Company occurred between the end of the financial year to which this financial statement relate on the date of this report.
Significant and material orders passed by the Regulators or Courts
During the year under review, no material Orders were passed by the Regulators / Courts / Tribunals, impacting the Company's going concern status and future Operations.
M/s. Jagiwala and Co., Chartered Accountants, Mumbai, Statutory Auditor of the Company, holds office till the conclusion of the ensuing Annual General Meeting and being eligible, are recommended for re–appointment on the terms and conditions recommended by the Audit and Risk management Committee to the Board of Directors. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. Jagiwala And Co. as the statutory auditors of the Company from the conclusion of forthcoming AGM till the conclusion of 26th AGM to examine and audit the accounts of the Company for the financial year 2015–16. The Auditor's report does not contain any qualification, reservation or adverse remark.
The Board has appointed M/s. Hemant Shah & Associates, Cost Accountants as the Cost Auditor for the Financial Year 2014–15. M/s. Hemant Shah & Associates, have been appointed as Cost Auditor of the Company for the Financial Year 2015–16 and approval of members is being sought for ratification of their remuneration.
Section 204 of the Companies Act, 2013 inter alia requires every listed company to annex with its Board's report, a Secretarial Audit Report given by a Company Secretary in practice, in prescribed form.
The Board of Directors appointed Mr. Rakesh Sanghani, Practising Company Secretary as Secretarial Auditor to Conduct Secretarial Audit of the Company for the Financial Year 2014–15. Their Secretarial Audit report, is annexed to the Directors Report as Annexure – II.
Audit & Risk Management Committee
The Company has an Audit & Risk Management committee comprising Mr. Anand Taggarsi, Mr. Ashok G Rajani, and Ms. Kalpana Tirpude. Mr. Virendra Singh Khurana ceased to be the member of the Committee on January 5, 2015 due to his resignation as a Director of the Company. The Board has accepted the recommendations made by the Audit & Risk Management Committee from time to time.
Risk management policy of the Company promotes a proactive approach in reporting, evaluating and resolving risks associated with the business. Mechanisms for identification and prioritisation of risks include risk survey, business risk environment scanning, and inputs from the Materiality Assessment Report and focused discussions in Risk Management workshops.
Identified risks are used as one of the key inputs for the development of strategy and business plan. The respective risk owner selects a series of actions to align risks with the Company's risk appetite and risk tolerance levels to reduce the potential impact of the risk should it occur and/or to reduce the expected frequency of its occurrence.
Mitigation plans are finalised, owners are identified and progress of mitigation actions are monitored and reviewed. The risk assessment update is provided to the Audit & Risk Management Committee (ARMC) on periodical basis. ARMC is appointed by the Board and comprises Directors and executives from the Company and is chaired by an Independent Director. ARMC assists the Board of Directors in overseeing the Company's risk management processes and controls.
Internal Financial Control
Internal financial control systems of the Company are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable accounting standards and relevant statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. The Company has a well–defined delegation of authority limits for approving revenue as well as expenditures. Processes for formulating and reviewing annual and long term business plans have been laid down. The Company uses an established ERP system to record day to day transactions for accounting and financial reporting.
The Audit Committee deliberated with the members of the management, considered the systems as laid down and met the statutory auditors to ascertain, inter alia, their views on the internal financial control systems. The Audit Committee satisfied itself on the adequacy and effectiveness of the internal financial control system as laid down and kept the Board of Directors informed.
The Internal Financial Controls and its adequacy are included in the Management Discussion and Analysis, which forms part of this Report.
In accordance with the provisions of Section 177 (9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, your Company has a vigil mechanism which has been adopted in the form of Whistle Blower Policy. The policy has been formulated with a view to provide a mechanism for Directors and employees of the Company to report genuine concerns. The Whistle Blower Policy also provides for adequate safeguards against victimization of persons who use vigil mechanism and for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy is uploaded on the website of your Company.
Share Registrar and Transfer Agents
The Company's Registrar & Transfer agents for shares are M/s. Universal Capital Securities Private Limited (RTA). RTA is duly registered with SEBI. The contact details of RTA are mentioned in the Report of Corporate Governance.
Investors are requested to address their queries, if any, to RTA; however in case of difficulties, as always, they are welcome to contact the Company's' Investor Services Department, the contact particulars of which are contained in the Report of Corporate Governance.
Consolidated Financial Statements
There being no subsidiaries and associates companies, disclosure requirement pursuant to the provisions of Clause 32 of the Listing Agreement entered into with Stock Exchanges, is not applicable.
Subsidiaries / Joint Ventures / Associate Companies
As on March 31, 2015, the Company did not have any subsidiary, join venture or associate company. Since the Company doesn't have any subsidiary, a policy on material subsidiary has not been formulated.
Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013, during FY 2014–15
During the period under review, the Company has not given any loans, guarantees or Made investments under Section 186 of the Companies Act, 2013
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information pursuant to Section 134 (3) (m) of the Companies act, 2013, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is given as Annexure III to this report
Research and Development
The Company recognizes the need to have well equipped R&D Facilities to meet customer requirements and developing cutting edge products. Detailed report on Research and Development carried out by your Companies given as an Annexure III of this report.
Human Resources Management
Your company considers human resources as the main assets of the Company. Your company continuously focus on training requirements of its employee on a continuing basis. With a view to increase the productivity, the management periodically organises various training programmes and lectures which boosts and motives the employee to give their best to the organisation.
Particulars of Employees
The Information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 are given as Annexure IV to this Report.
None of the Company's Employees were covered by the disclosure requirement pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Rules 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The Company is committed to maintain the highest standards of corporate governance & follow the corporate governance requirements set out by SEBI.
Pursuant to clause 49 of the listing agreement, the Report on Corporate Governance forms an integral part of this report. The requisite certificate from the Auditors of the Company certifying the compliance with the conditions of corporate Governance is attached to the Corporate Governance Report.
A declaration signed by the Managing Director in regards to the Compliance with the Code of Conduct by the Board Member and senior Management Personnel also forms part of the annual report.
Statement of Company's Affairs
The state of Company's affairs is given under the heading 'Seya at a Glance' and various other headings in this Report and in the Management Discussion and Analysis Report annexed to the Directors' Report.
Environment, Health and Safety
The Company's Management believes that environment and safety of all its stakeholders including those who associated with the projects sites and manufacturing facilities is of prime importance. We believe that it's our responsibility to protect its employees, property and environment in which it operates. As your Company deals in Chemicals, it has to make sure that the highest degree of safety measures is maintained in order to avoid any risk at the workplace.
The employees are continuously educated and trained to improve their awareness and skills. Environment, Health and Safety (EHS) targets assigned to each division to reduce resource consumption and are regularly monitored through an EHS scorecard which is reviewed at monthly business review meetings. EHS initiatives have been strengthened further due to formation of a core group for exchange of knowledge and standardising of systems and procedures. This core group also assess the Plants' Safety and Environment protection improvement activities. Periodic audits were conducted by the core group to ensure compliance with the statutory requirements.
All safety statutory requirements like licenses, mock drills under emergency conditions and testing of manufacturing equipments etc. are being complied with. Requirements of environmental acts and regulations are complied with. Effluent treatment of waste streams and suppression of fugitive emissions through sprinklers is also carried out effectively. Massive tree plantation has been undertaken to improve the greenery all around the plant.
Electronic copies of the Annual Report and Notice of the 25th Annual General Meeting are sent to all the Members whose email addresses are registered with the Company for communication purposes. For members who have not registered their email addresses, physical copies of the Notice and Annual Report are sent in the permitted mode. Members requiring physical copies can send a request to the Company.
Prevention of Sexual Harassment at Workplace
You company has zero tolerance towards any act which may fall under the ambit of Sexual Harassment at work place. Policy framed by the Company in this regards, provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints.
The following is the summary of the Complaints received and disposed–off during the financial year 2014–15: No. of Complaints received: NIL
No. of Complaints Disposed–off: NIL
Extract of the Annual Return
Pursuant to Section 92(3) and 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 the extract of Annual Return in prescribed Form No. MGT–9 is given as Annexure V to this report.
The Notes forming part of the Accounts are self explanatory or to the extent, necessary, have been dealt with in the preceding paragraphs, of the Report.
Financial year 2014–15 has been a successful year for the Company. In the very first succeeding financial year of commissioning of its forward integrated products, the performance of the Company has increased considerably. Future of Fine and Specialty chemicals segment on domestic as well as International level is very bright.
Specialty chemical industry is a knowledge driven industry. In India it has been growing rapidly at 1.2–1.3x of GDP growth rate. Domestic demand of specialty chemicals is expected to follow an accelerated growth path. This demand is mostly driven by the strong growth outlook for end use industries. This along with increased adoption of specialty chemicals and newer usages can propel the growth further.
Looking at the present scenario and future outlook of Fine and Specialty Chemicals Industry, your director sees ample of opportunities, also it has started exploiting the said opportunities which is evident from the contribution of 91% of the said segment to the total revenue of the Company.
Your Directors wish to express their gratitude and appreciation to all of the Company's employees at all its locations who through their competence, tremendous personal efforts as well as their collective dedication have contributed to the Company's performance.
It is our strong belief that caring for our Business constituents has ensured our success in the past and will do so in future. Your Directors acknowledge with sincere gratitude the co–operation and assistance extended by the Banks, Suppliers, Vendors, Customers and all the Central and State Government authorities and all other Business associates.
The Board also takes this opportunity to express its deep gratitude for the continued co–operation and support received from its valued shareholders.
With your support and encouragement your Directors are confident that this journey of our success shall continue till infinity.
For & on behalf of the Board of Directors
ASHOK G RAJANI
Chairman & Managing Director
Mumbai, August 14, 2015