Your Directors have pleasure in presenting the 23rd Board Report on the business andoperations of the Company and the Audited Accounts for the Financial Year ended 31st March2019.
[Rupees in Lacs]
|PARTICULARS ||2018-19 ||2017-18 |
|Revenue from Operations ||5527.31 ||3146.47 |
|Other Income ||49.47 ||29.52 |
|Total Revenue ||5576.78 ||3175.99 |
|Less: Expenses before Interest and Depreciation ||4185.74 ||2673.55 |
|Less: (a) Interest ||28.04 ||31.09 |
|(b) Depreciation ||125.59 ||67.02 |
|Profit before Tax & Extra Ordinary Items ||1237.41 ||404.33 |
|Less : Prior period expenses ||- ||- |
|Less: Prior years Income Tax Adjustment ||2.65 ||- |
|Profit Before Tax ||1234.76 ||404.33 |
|Less: Tax Expenses || || |
|Current Tax ||385.00 ||104.11 |
|Deferred Tax ||(81.79) ||63.89 |
|Profit after Tax ||931.55 ||236.32 |
|Earnings per Share ||18.87 ||4.79 |
2. KEY FINANCIAL RATIOS :
|Sr. No. Particulars ||FY 18-19 ||FY 17-18 ||% Change |
|1 Debtors Turnover Ratio ||6.42 ||5.9 ||8.81 |
|2 Inventory Turnover Ratio ||13.45 ||10.15 ||32.51 |
|3 Interest Coverage Ratio ||45.13 ||14.01 ||222.13 |
|4 Current Ratio ||2.22 ||1.76 ||26.14 |
|5 Debt Equity Ratio ||0.09 ||0.2 ||-55.00 |
|6 Operating Profit Margin (%) ||24.66 ||14.98 ||64.62 |
|7 Net Profit Margin (%) ||16.85 ||7.51 ||124.37 |
|8 Return on Networth % ||39.24 ||16.38 ||139.56 |
The Key financial ratios have strengthened during the previous year FY19 with OperatingProfit Margin Net Profit Margin and Return on Networth improving due to better salesrealization increase in profitability coupled with declining operational costs. TheDebtors and Inventory Turnover ratio has also improved due to better debtrealization and better inventory management and stock turnover. The decline in Debt EquityRatio demonstrates that your Company is less leveraged and operating with minimal borrowedfund.
Dividend is recommended by your Board taking into consideration the factors likeoverall profitability cash flow capital requirements and other business needs of yourcompany. With this background your Board of Directors is pleased to recommend a dividendat Rs. 00.50/- per equity share (5%) on 4936280 equity shares of Rs.10/- each of yourcompany. This would result in a total outflow of Rs. 2975590/- including the sum of Rs.507450/- as dividend tax.
4. OPERATIONAL HIGHLIGHTS:
Your Companys Revenue increased to Rs. 55.77 crore in FY19 as compared to Rs.31.76 crore in previous year FY18 recording a growth of about 76% (YoY). The Net profit ofthe Company registered a growth of about 294% rising from Rs. 2.36 crore in FY 18 to 9.32crores in FY 19. Key factors which can be attributed to higher topline & bottomlinegrowth in FY19 vis-a-vis FY18 are : FY19 had full 12 months operational period vis-a-visonly 10 months in FY18. During the year production capacity was optimally utilised. Thegrowth in revenue was attributable to increase in production due to full year workingprofitable product selection and better pricing of our niche products which amounted toapprox. 20% share in the revenue growth.
Your Companys financial highlights during preceding three years period can besummarized as follows :
| ||FY16-17 ||FY 17-18 ||FY 18-19 ||% increase (1 year) ||% increase (3 years) ||CAGR% (3 years ) |
|Turnover ||2784.48 ||3175.99 ||5576.79 ||76 ||100 ||26.05 |
|EBDIT ||380.07 ||502.44 ||1391.04 ||177 ||266 ||54.11 |
|Profit before Tax ||285.44 ||404.33 ||1234.76 ||205 ||333 ||62.94 |
|Net Profit ||149.83 ||236.32 ||931.55 ||294 ||522 ||83.88 |
|EPS ||5.15 ||4.79 ||18.87 ||294 ||266 ||54.17 |
Net profit increased to Rs. 9.32 crores in FY19 compared to Rs. 2.36 crore during thesame period of last year representing about 294% growth in profits..
EBIDT increased to Rs 13.91 crores from Rs. 5.02 crore as compared to same period lastyear recording a growth of about 177%.
Earning per Share increased from Rs. 4.79 per share in the FY 18 to Rs. 18.87 per sharein the FY 19 registering a growth of about 294%.
KEY FINANCIALS CHART GROWTH OVER 6 YEARS PERIOD
Revenue grew from Rs. 15.65 crores to Rs. 55.76 crores registering a growth of 256% andEBDITA increased from Rs. 1.59 crores to Rs. 13.91 crores registering a growth of about776 % over the period of 6 years.
PAT has risen from Rs. 43.4 Lacs in FY14 to Rs. 9.32 crores and Networth increased fromRs. 8.57 crores in FY16 to Rs. 23.74 crores in FY 19 registering a growth of around 177%.
5. SHARE CAPITAL:
At present the Company has only one class of share Equity shares of face value of Rs.10 each. The authorized share capital of the company is Rs. 60000000/- divided into6000000 equity shares of Rs. 10 each. The paid up share capital of the company is Rs.49362800/- divided into 4936280 equity shares of Rs. 10 each. The Company had raisedfund through Public Issue of shares in F/Y 2016-17 and the equity shares of the Companyare now listed on SME platform of BSE Limited.
6. TRANSFER TO RESERVE:
The Company proposes to transfer Rs. 91667237 to its General Reserve.
7. CREDIT FACILITIES:
The Company has been optimally utilizing its fund based and non fund based workingcapital requirements as tied up with Kotak Mahindra Bank Limited. The Company wascomfortable in meeting its financial requirements from Kotak Mahindra Bank Limited.Effective financial measures have been continued to reduce cost of interest and bankcharges.
8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:
There was no amount outstanding to be transferred as unclaimed dividend to investoreducation and protection fund during the FY 2018-19.
9. MATERIAL EVENTS OCCURING AFTER BALANCE SHEET DATE :
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which the financialstatement relate and the date of the Board Report. However the Registered office of theCompany was shifted within the city from T-7 National Plaza R.C. Dutt Road AlkapuriVadodara to the present location at 330 TRIVIA Complex Natubhai Circle RacecourseVadodara 390007 Gujarat with effect from 24th May 2019.
10. ORDER OF AUTHORITIES :
During the year 2018-19 order of Regional Director dated 13/03/2019 Ahmedabad wasreceived for condonation of delay in filing Form CHG 4 for satisfaction of Charges inrespect of SBI Charges No. 90112580 9011266 90112878 and 10095499. A penalty of Rs.10000/- per form was also levied for late filing of the satisfaction of the abovecharges. The Company thereafter filed the necessary forms for satisfaction ofabovementioned charges and as on April 1 2019 the Charges were satisfied by the order ofROC Ahmedabad. Other than the above mentioned order no other order of any governmentstate local or statutory authorities were received which could have affected the workingsof the company.
11. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134(3) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished as under:
(A) Conservation of energy:
Steps taken / impact on conservation of energy with special reference to thefollowing:
Steps taken by the company for utilizing alternate sources of energy including wastegenerated :
During the year your Company was selected for Implementation of Bureau of EnergyEfficiency World Bank Funded Project: Implementation of ISO 50001:2018 Energy ManagementSystem. CII - Centre of Excellence for Competitiveness for SMEs has assigned a uniqueproject fully funded by Bureau of Energy Efficiency and World Bank titled Design& Implementation of Energy Management System (ISO 50001). After successfulimplementation and Certification as ISO 50001 Certified Organisation your Company would beenergy efficient company.
(B) Technology absorption:
1. Efforts in brief made towards technology absorption. Benefits derived as a resultof the above efforts e.g. product improvement cost reduction product developmentimport substitution etc.
The Company has not entered into any technology based ventures during the year underreview. However the Companys digitisation of processes of purchase salesmarketing finance & accounts and other operations supported by Tata ConsultancyServices TCS -ION was completed in the last year. The ERP module is aimed to bring aboutdigitization uniformity systemic checks approval mechanism comprehensive reporting inthe Manufacturing Finance and Accounts Human Resource Management Export & ImportSales Procurement Operations functions etc. of the Company thereby enabling smooth andtimely flow of data and reports.
In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished:
The Company has not imported any technology and hence not applicable.
2. Expenditure incurred on Research and Development :
The Company has not incurred any expenditure on research and development.
(C) Foreign exchange earnings and Outgo:
|PARTICULARS ||Amt (In Lacs) |
|Foreign Exchange earned in terms of actual inflows during the year ||588.52 |
|Foreign Exchange outgo during the year in terms of actual outflows ||626.53 |
12. RISK MANAGEMENT:
The Company has framed a sound Risk Management Policy to identify and evaluate businessrisks and opportunities and the same has become integral part of Companys day to dayoperations. The key business risks identified by the Company are as follows viz. IndustryRisk Management and Operations Risk Market Risk Government Policy risk Liquidity riskand Systems risk. The Company has in place adequate mitigation plans for the aforesaidrisks.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The provisions of Section 135 of the Companies Act 2013 read with Rule 9 of theCompanies (Accounts) Rules 2013 was not applicable to the company during the year2018-19. However it has become applicable to the Company from the current financial year2019-20. Hence a Corporate Social Responsibility Committee has been constituted by theBoard of Directors at their meeting held on August 17 2019. The Committee shall consistof directors Mr. Sanjay Marathe Mrs. Sidhdhi G. Shah and Mr. Shailesh Patel (IndependentDirector). The CSR Committee shall formulate and recommend to the Board the CorporateSocial Responsibility Policy which shall indicate the activities to be undertaken by theCompany in areas or subjects specified in schedule VII of the Companies Act 2013.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
There were no loans or guarantees given by the Company under Section 186 of theCompanies Act 2013 during the year under review. Investments in short term UTI MutualFund schemes were made during the year which was within the limits approved by Board ofDirectors and the limits prescribed under section 186 of the Companies Act 2013.
15. RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on anarms length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Companys PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. Transactions with related parties entered by the Company inthe normal course of business are periodically placed before the Board Meeting as per theomnibus approval of Audit Committee and the particulars of contracts entered during theyear as per Form AOC-2 is enclosed as Annexure II.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its relatedparties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthereunder and the Listing Regulations. This policy has been uploaded on the website ofthe Company at www.chemcrux.com/investor-info.php under investors info/Corporate Policylink.
16. DIRECTORS / KEY MANAGERIAL PERSONNEL:
During the year Whole Time Director Mr. Girishkumar Shah and Managing Director Mr.Sanjay Marathe were re-appointed for a term of five years starting from January 1 2019till December 31 2023. No directors were appointed or have resigned during the year. Mrs.Ekta Kumari Srivastava Company Secretary joined office w.e.f. May 8 2018. In accordancewith the provisions of the Companies Act 2013 and in terms of the Memorandum and Articlesof Association of the Company Mrs Sidhdhi G. Shah Director shall retire by rotation inthe ensuing Annual General Meeting and being eligible for re-appointment has offered hercandidature for director. Excepting Mrs. Sidhdhi G. Shah and Mrs. Neela Marathe whosetransactions with the company have been reported under the related parties disclosureunder notes to the accounts none of the other non-executive directors has had anypecuniary relationship or transactions with the company other than the receipt of sittingfee for the meetings of the Board and Committees thereof attended by them.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedan annual performance evaluation of its own performance and the directors individually.
The Board has on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining qualifications positive attributes and independenceof a Director and also a policy for remuneration of directors key managerial personneland senior management. The policy is available at the website of company atwww.chemcrux.com/investor-info.php.
During the year six Board Meetings and four Audit Committee Meetings were convened andheld. The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
17. AUDIT COMMITTEE AND VIGIL MECHANISM:
The Audit Committee comprises of Mr. Shailesh Patel- Independent Director Mr.Bhanubhai Patel- Independent Director and Mrs. Neela Marathe Non Executive Director.During the year four Audit Committee Meetings were held. In pursuance of the provisions ofsection 177(9) & (10) of the Companies Act 2013 a Vigil Mechanism for directors andemployees to report genuine concerns has been established. The Vigil Mechanism Policy hasbeen uploaded on the website of the Company at http://www.chemcrux.com/investor-info.php.
18. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility statement:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
19. ANNUAL RETURN:
Extract of Annual Return of Company pursuant to the provisions of Section 92 read withRule 12 of the Companies (Management and administration) Rules 2014 has been placed atwebsite of the Company. Weblink of the same is ashttp://www.chemcrux.com/investor-info.php
20. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
The Companys Auditors M/s. R.J. Shah & Associates has been appointed as theStatutory Auditor of the Company at the 22nd Annual General Meeting until conclusion of27th Annual General Meeting of the Company for a term of five years. The report of theStatutory Auditors of the Company is annexed herewith as Annexure
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/S. Kashyap Shah & Co. a Practicing Company Secretaries to undertake theSecretarial
Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith asAnnexure.
The Company has appointed Naresh & Co. as the Internal Auditors.
23. OBSERVATION OF AUDITORS:
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors and Secretarial Auditors. The auditors have not reported any frauds under subsection 12 of section 143 other than those which are reportable to the Central Government.
24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorised recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The internal auditor of the company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the company.The Company continues to ensure proper and adequate systems and procedures commensuratewith its size and nature of its business.
a. BUY BACK OF SECURITIES: The Company has not bought back any of its securities duringthe year under review.
b. SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during the yearunder review.
c. BONUS SHARES: The Company has not issued any bonus share during the year underreview.
d. EMPLOYEES STOCK OPTION PLAN:The Company has not provided any Stock Option Scheme tothe employees.
e. FRESH ISSUE OF SHARES: The Company has not issued any shares during the year underreview.
26. CORPORATE GOVERNANCE:
Provisions relating to Corporate Governance Report under Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are not applicable to SMElisted Company hence the same has not been annexed to the Boards Report.
27. AWARDS AND RECOGNITIONS :
Your company has already achieved ISO Certification ISO 9001:2018 for QualityManagement System Standard ISO 14001:2018 for Environmental Management System Standard.Your company has been conferred with the prestigious SKOCH Order of Merit Award for beingamong top 200 MSMEs of India. The award was conferred at the 57th SKOCH Summit held on23rd March 2019 at Constitution Club of India New Delhi.
28. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report is appended as Annexure to this Report.
29. PARTICULARS OF EMPLOYEES:
Disclosure under the provisions of Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014
a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year. Ratio of remuneration of MD and WholeTime Director 12.38 : 1 (Rs. 4200000 : 339123) Other Directors Not Applicable
b) The percentage increase in the remuneration of each director Chief ExecutiveOfficer Chief Financial Officer and Company Secretary if any in the financial yearDuring the FY 2018-19 there was 40 % increase in remuneration of WTD and MD. There was Nil% increase in the remuneration of CFO CS and other Non Executive Directors.
c) The percentage increase in the median remuneration of employees in the financialyear Median Remuneration is Rs. 339123 and average increase is 15% for the F.Y. 2018-19.
d) The number of permanent employees on the rolls of the Company as on 31.03.2019 62
e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration Average 15%increase in salaries of Employees and 40 % increase in Managerial Remuneration during F.Y.2018-19. The increase in remuneration of managerial person is commensurate with theefforts put in by them in leading the Company to greater heights.
f) Affirmation that the remuneration is as per the remuneration policy of the company.
The Companys remuneration policy is driven by the success and performance of theindividual employees and the Company. Through the compensation package the companyendeavors to attract retain develop and motivate high performance staff. The Companyfollows a compensation mix of fixed pay benefits and performance based variable pay. TheCompany affirms that the remuneration is as per remuneration policy of the Company.
g) Details pertaining to remuneration as required under Section 197 (12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 with reference to remuneration of employees in excess ofthe limits prescribed None of the employees were in receipt of remuneration above 8 lakh50 thousand per month or Rs. One crore Two lakhs per annum and above.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION OFPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place a Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. All women employees (permanent contractual temporary trainees) are coveredunder this policy. An Internal complaint committee is formed to look after any complaintsof women employees. During the year four meetings of internal committee for preventionprohibition and redressal of sexual harassment of women at workplace were held. Nocomplaints for sexual harassment were received during the year.
31. COST AUDIT:
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 dated 31/12/2014 cost audit and maintenance ofcost records was not applicable to the Company for the Financial Year 2018-19. However themaintenance of cost records as specified by the Central Government under sub-section (1)of section 148 of the Companies Act 2013 is applicable to the Company from the currentFY 2019-20 and accordingly such records are being maintained
32. COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS :
The Company has complied with the provisions of Secretarial Standards (I & II)issued by the Institute of Company Secretaries of India and approved by the CentralGovernment under section 118(10) of the Companies Act 2013.
33. HUMAN RESOURCES:
During the period under review the personal and industrial relations with theemployees remained cordial in all respects. The management has always carried outsystematic appraisal of performance and imparted training at periodic intervals. TheCompany recognizes talent and has judiciously followed the principle of rewardingperformance.
34. CAUTIONARY STATEMENT :
Statements in these reports describing companys projection statementsexpectations and hopes are forward looking. Though these are based on reasonableassumption the actual results may differ.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their relentless support and confidence reposed on theCompany.
| ||For and on behalf of the Board of Directors |
| ||CHEMCRUX ENTERPRISES LIMITED |
| ||Sd/- |
|Place: Vadodara ||GIRISHKUMAR SHAH |
|Date: 17th August 2019 ||CHAIRMAN |