DIRECTORS' REPORT The Directors are pleased to present the Fifty-first Annual Report together with the audited accounts of the Company for the year ended 31st March, 2015. DIVIDEND In view of the accumulated losses, and losses during the current year, the Directors do not recommend any dividend on the Equity share capital and Preference share capital of the Company for the Financial Year ended 31st March, 2015. MANAGEMENT DISCUSSION & ANALYSIS a) Overview of operations Chemical Division The Company has achieved a Sales turnover of Rs.4671 M Lacs for the Financial Year of nine months ended on 31/03/2015 as against the Turnover of Rs.6621.17 Lacs in the previous year of fifteen months ended on 30th June, 2014. During the current Financial year of nine months.your company has completed major shifting of the operations of the Ambernath to Dahej in the state of Gujarat and consequently the operations at Ambernath have been suspended. The Dahej operations are expected to be profitable during the next Financial Year. The main reason for the lower turnover during the year is uneven availability of raw material as also the increased cost of imported raw material and resultant pressure on Cash-flow. Though the company has been able to transfer the major increase in the cost of raw material to the customers, this has an adverse effect on the total sales of the company. Your company, therefore through its own R & D is working on new products Development as also improve production processes for achieving cost effectiveness with increasing emphasis on cost reduction. b) Industry Structure and outlook The long-term outlook of the company's products continues to be encouraging butthe shortage of Working capital finance and non availability of raw material has adversely affected the performance of the company. With a view to overcome these difficulties, your Management has now developed additional new sources of supplies for raw materials which are expected to reduce cost of raw materials and improve the supply chain efficiency. Your company is also contemplating Custom manufacturing of Speciality chemicals at Dahej. With the above efforts barring unforeseen circumstances your Management expects to improve the Financial and operational performance of the company during the next few years. Adequacy of internal controls The Company has an established independent and adequate system of internal controls commensurate with nature of its business and size of its operation to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and those transactions are authorized, recorded and reported correctly. This system also complies with the suggestions of the Statutory Auditors of the Company, if any, from time to time. The internal control systems are supplemented by regular reviews by the by the management of the Company. Human Resource Development Asa matter of routine, the Company undertakes periodic review of its HR policies and encourages the best performance at all times. The Company also provides regular training to its workforce which allows employees to keep themselves abreast of the changing environment as well as develop new skills. Cautionary Statement Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectation are* forward looking statements". Actual results might differ materially from those anticipated because of changing ground realities. BOARD EVALUATION The Board of Directors has carried out an annual evaluation of it's own performance, Board Committees and individual directors pursuant to the provisions of the Companies Act,2013(the Act) and the corporate governance requirements as prescribed by the securities and Exchange Board of lndia("SEBI") under the Listing Agreement ("Clause 49") The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as Board composition and structure, effectiveness of board process, information and functioning etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees .effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed.meaningful and constructive contribution and inputs in meetings ,etc. In addition.the Chairman was also evaluated on the key aspects of his role . In a separate meeting of independent Directors, performance of non-independent directors. performance of the Board as a whole and performance of the chairman was evaluated .taking in to account the views of non-executive directors at which the performance of the Board, its committee and individual directors were also discussed. NOMINATION AND REMUNERATION POLICY The Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and other employees has evolved and has been formulated in terms of the provisions of the Companies Act, 2013 and the listing agreement with a view to pay equitable and commensurate remuneration to the Directors, Key Managerial Personnel and other Employees of the Company. The Company had been passing through adverse financial condition which had an inevitable impact on the existing compensation and pay structure rather than the qualification, experience and the industry standards. In view of the inadequacy of profits, the Directors of the Company are not being paid any remuneration/commission etc. except the normal sitting fees. The Committee will therefore take in to consideration the various applicable factors such as qualification, experience, industry standards etc. and evolve an appropriate policy in course of time once the Company starts making adequate profits. PARTICULARS OF LOANS.GUARANTEES OR INVESTMENTS BY COMPANY During the financial year 2014-15, the Company has not provided any loan to any person or body corporate or given any guarantee or provided security in connection with such loan or made any investment in the securities of anybody corporate pursuant to Section 186 of the Companies Act, 2013. SEXUAL HARASSMENT During the year under review, there was not a single incident pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the extract of annual return is Annexed in the prescribed Form MGT-9 which forms part of this report WHISTLE BLOWER POLICY The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company (www.boraxmorarji.com >) RELATED PARTY TRANSACTIONS Al related party transactions that were entered into during the financial year were on an arm's 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 the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnious approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board Of Directors for their approval on a quarterly basis. The statement is supported by a Certificate for the Managing Director & the CFO. The Company has developed a Related Party Transactions Manual, Standard Operating Procedures for purpose of identification and monitoring of such transactions. The Policy on Related Party Transactions as approved by the Board in uploaded on the Company's website. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. RISK MANAGEMENT POLICY The Company has formulated a Risk Management Policy which reflects the over all risk management philosophy, the Company's over all approach to risk management, risk assessment, risk mitigation mechanism and the roll and responsibilities for risk management. Risk management forms an integral part of the business planning and review cycle. The Company's Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safe guarding the integrity of the Company's financial reporting and its related disclosures. The identification and analysis of and putting in place the process for mitigation of these risks is an ongoing process. The Company has also laid down procedure to Inform the Audit Committee and the Board about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management control risks by means of a properly defined frame work. The monthly review meetings of ail the functional/departmental heads interalia discuss the relative risk management issues. POLLUTION & SAFETY Stringent controls and strict monitoring of liquid effluents are carried out regularly to restrict pollution to the minimum and keep it within the limits prescribed by the statutory authorities SUBSIDIARY COMPANY Borax Morarji (Europe) GmbH is a 100% wholly owned subsidiary Company in Germany. Primarily it takes care of complying with the German Regulations for exports of Speciality boron products to Germany and Europe. In terms of exemption granted by the Ministry of Corporate Affairs vide its Order No. 2/2011 dated 8th February, 2011 Balance Sheet of Borax Morarji (Europe) GmbH, Germany is not attached to the account of the Company. However, the annual accounts of the subsidiary are available for inspection at the office of the Company and the related detailed information will be made available to the Shareholders when asked for. CONSOLIDATION OF ACCOUNTS In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements for the year under Report, consolidating its Accounts with the Accounts of its Wholly Owned Subsidiary Company, viz., Borax Morarji (Europe) GmbH, Germany. A separate Report of the Statutory Auditors on the Consolidated Financial Statements also forms part of the same. FIXED DEPOSITS Under the Companies Act, 2013, our Company is not eligible to invite and renew fixed deposits. All the fixed deposits are being repaid according to the provision of the Companies Act, 2013. DIRECTORS In accordance with the provisions of Companies Act and Article of Association of the Company, Mr. Laxmikumar Narottam Goculdas (DIN:00459347) retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for reappointment. Mr.Bimal Lalitsingh Goculdas (DIN:00367792)is being reappointed as Managing Director with effective from 1st April, 2015 for a period of three years, He is B.Chem. Engg., from Institute of Chemical Technology(ICT), Mumbai and M.S. (Chemical) from U.S.A. He has in-depth knowledge of chemical industry in India and Abroad. He is associated with the Company as Director for last 15 years. He is also C.E.O of The Dharamsi Morarji Chemical Company Limited DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134, of the Comoanies Act, 2013 (hereinafter referred to as the "Act") your Directors confirm that:- a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) Appropriate accounting policies have been selected and applied consistently and have 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 as at March 31, 2015 and of the profit and loss of the Company for the year ended March 31, 2015; (c) 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; (d) The annual accounts have been prepared on a going concern basis; (e) Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively; AUDITORS Messers.K.S.Aiyar & Co., Chartered Accountants , holding ICAI Firm Registration Number 100186W, who are the Statutory Auditors of your Company, hold office until the conclusions of the 53rt Annual General Meeting of the Company to be held in the year 2017 ( subject to ratification of their appointment at every AGM). It is proposed to ratify the appointment of Messers. K.S.Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W as Statutory Auditors of the Company from the conclusion of this AGM till the conclusion of the 52nd AGM. Messrs .K.S.Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W has, under Section 141 of the Act; furnished a certificate of its eligibility for re-appointment. The Members year on year will be requested, to ratify their appointment as Statutory Auditors and to authorize the Board of Directors to fix their remuneration. In this connection , the attention of the Members is invited to item No. 3 of the Notice. Observations of the Auditors in their Report to the Members With regards to the observation of the Auditors under Sr. No.1 in their report to the Members of the Audited Accounts for the year ended 31s1 March, 2015, in respect of Rs.28.00 lacs deposited by the Company in the Court in respect of certain issues raised by Customs Authorities related to DEPB License against which Company has preferred an appeal and the same is pending before CESTAT. The Management is hopeful of decisions in favour of Company in respect this matter. Under Sr.No. 2 regarding no provision made against receivables from parties amounting to Rs. 119.25 lacs. The management is hopeful of recovery with amicable settlement. COST AUDITOR AND COST AUDIT REPORT The Board Of Directors, on the recommendation of Audit Committee has appointed Shri S. S. Dongre , Cost Accountant, as Cost Auditor of your Company to audit the cost accounts of the Company for Financial Year 2015 - 16 at remuneration of Rs. 60,000/-(Rupees Sixty Thousand Only) inclusive of out of pocket expenses incurred in connection with the aforesaid audit. As required under the Companies act, 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. In accordance with the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company carries out an audit of cost records maintained by the Company every year. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri S.R.Padhye Fellow Member of Institute of Company Secretaries of India (F 4270) and holding certificate of practice No. 1559 is appointed to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is Annexed- and forms integral part of this Report. There is no secretarial audit qualification for the year under review. PARTICULARS OF EMPLOYEES The particulars of employees as required under section 197 and rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules , 2014 have not been furnished as there are no employees falling within the purview of the provisions of said section and the said rule during the period under review . (CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under section 134 (3) (m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014 , is annexed herewith. CORPORATE GOVERNANCE The Company has complied with the provisions of Corporate Governance under the Listing Agreement with the Stock Exchange for the year 2014-15. A separate report on Corporate Governance is sent herewith as part of the Annual Report along with the Auditors' Certificate on compliance. ACKNOWLEDGMENTS The Directors are thankful to all the Stakeholders various Government Departments, Financial Institutions, Banks and Employees for their valuable co-operation and assistance during the year. For and on behalf of the Board of Directors L. N. Goculdas (Chairman) Place: Mumbai Date: 13th August, 2015. |