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DIRECTOR'S REPORT

Daikaffil Chemicals India Ltd.

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Market Cap. (₹) 10.26 Cr. P/BV 0.40 Book Value (₹) 42.43
52 Week High/Low (₹) 66/17 FV/ML 10/1 P/E(X) 11.92
Bookclosure 02/08/2019 EPS (₹) 1.43 Div Yield (%) 0.00
Year End :2017-03 

Dear Members,

The Directors have immense pleasure in presenting their 25th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2017.

1. FINANCIAL RESULT

(Rs. in lakhs)

2016-2017

2015-2016

Sales etc. and other income

2697.81

2799.21

Profit before Depreciation, Interest and Tax

507.99

366.50

Less: Depreciation

46.31

39.70

Interest

1.02

8.78

47.33

48.48

Profit before Tax

460.66

318.02

Provision for Tax

Current Tax

(147.00)

(94.00)

Deferred Tax

(5.10)

(13.82)

Earlier Years

0.72

-

(151.38)

(107.82)

Provision for Diminution in value of investment

---

---

Profit after Tax

309.28

210.20

Add: Balance Brought forward from the previous year

428.38

315.47

Profit available for Appropriation

737.66

525.67

Appropriation

Transfer to General Reserve

30.00

25.00

Proposed Dividend

--

60.00

Corporate Dividend Tax thereon

--

12.29

Balance carried forward

707.66

428.38

737.66

525.67

2. OPERATIONS

During the year under review, your Company's Revenue from operations has declined by 4 % i.e. from Rs.27.99 crores in previous year to Rs.26.98 crores.However, the Company has focused on the sales of Products with higher margin, which has resulted in 45% i.e. from Rs.318.02 lacs in previous year to Rs.460.66 lacs in current year.

3. DIVIDEND

The Board of Directors is pleased to recommend the final dividend of Rs.1.70/- per Equity shares of Rs.10/- each, (one-time special dividend of Rs.0.50/- per equity share for the Silver Jubilee year and Rs.1.20/- for the financial year 2016-2017).

4. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committee. A separate meeting of the Independent Directors was convened on 10th February 2017, which reviewed the performance of the Board, the Non-Independent Directors and the Chairman.

5. RISK MANAGEMENT POLICY

The Board has been vested with specific responsibilities in assessing of risk management policy, process and system. The Board has evaluated the risks which may arise from the external factors such as economic conditions, regulatory framework, competition etc. The Executive management has embedded risk management and critical support functions and the necessary steps are taken to reduce the impact of risks. The Independent Directors expressed their satisfaction that the systems of risk management are defensible.

The Risk management policy is available on the website of the Company.

6. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. As on 31st March, 2017, no unclaimed deposits are lying with the Company.

7. CONSOLIDATED FINANCIAL STATEMENT

The Audited Consolidated Financial Statement for the financial year ended March 31, 2017, based on the financial statement received from associate company, as approved by their respective Board of Directors have been prepared in accordance with Accounting Standard (AS) - 21 on ‘Consolidated Financial Statement' read with AS-23 on ‘Accounting for Investments in Associates', notified under the Act, read with the Accounting Standards Rules as applicable is forming part of Annual Report.

8. STATUTORY AUDITORS

At the Annual General Meeting held on August 21, 2015 M/s. Manish Patel and Company, Chartered Accountants, Mumbai, were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2019-20. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

The Company has received Eligibility certificate letter dated 22nd April 2017 from them to the effect that their ratification, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. Your Directors recommend their appointment as Statutory Auditors of the Company.

9. AUDITORS REMARKS AND OBSERVATION

The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Further, during the year, in the course of the performance of their duties as auditor, no fraud were reported by them which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134 (3) (m) of the Companies Act, 2013 read together with the Rule 8 of the Companies (Accounts) Rules, 2014 the relevant information is given below.

Conservation of Energy and Technology Absorption

Your Company has installed a wet scrubber on boiler which will reduce the consumption of coal and more importantly protect the environment. This will minimize the carbon particles being released in the atmosphere. A tertiary treatment plant on line to reduce the water pollution load has also been installed.

The electrical instruments have been connected on line which has reduced the power consumption. Our Japanese collaborators have guided us on regular basis and there by conserve energy and reduce our waste water load.

(Rs. in Lakhs)

Foreign Exchange Earnings: 1880.34

Foreign Exchange Outgo 579.45

11. DIRECTORS:

There were no changes in Board of Directors during the financial year 2016-2017

Mrs. Maithili Siswawala, retires by rotation at this Annual General Meeting and being eligible offers herself for reappointment.

Declaration by Independent Director(s)

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under section (6) of section 149 of the Companies' Act 2013.

12. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS U/S 186:

The Company has not given any loans covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

13. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes / events occurring after balance sheet date till the date of the report to be stated.

14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND AUDIT COMMITTEE

During the financial year under review the Board met 4 times and Audit Committee met 4 times. 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.

15. SUBSIDIARY / ASSOCIATE COMPANY

The Company has an Associate company namely M/s Erca Specialty Chemicals Private Limited.

16. RELATED PARTY TRANSACTIONS:

During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of the related parties were in conflict with the Company's interest. All related party transactions are negotiated on an arm's length basis and are intended to further the Company's interest.

17. DETAILS OF ESTABLISHMENTOF VIGIL MECHANISM FOR DIRECTORS & EMPLOYEES

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Company's website www.daikaffil.com

18. NOMINATION AND REMUNERATION COMMITTEE

During the financial year under review 1 (one) meeting of the Committee was held. The Board has, on the recommendation of the Nomination& Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors make the Directors' Responsibility Statement in terms of Section 134(3) (c) of the Companies Act, 2013 and confirm that—

i) In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

v) The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. PARTICULARS OF EMPLOYEES

The Company does not have any employee whose particulars are required to be given pursuant to Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.

21. PERSONNEL:

Industrial relations at the Company's factory and other establishments remained cordial during the year. We appreciate the contribution made by the employees towards achieving improved productivity and flexibility in operation.

22. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the continued support and co-operation by Government Authorities, Financial Institutions, Banks and our valued customers along with dedicated service of all the workers, staff and the officers, whose continuous support is a pillar of strength which have largely contributed to the efficient management of the Company. Suffice it to say, that your co-operation as our shareholders is hereby acknowledged with gratitude.

For and on behalf of the Board of Director,

DAIKAFFIL CHEMICALS INDIA LIMITED

AMIT PATEL ADITYA PATEL

Managing Director Jt. Managing Director

(DIN: 00005232) (DIN: 00005276)

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