Chemcrux Enterprises Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2018

BOARD''S REPORT

The Directors have pleasure in presenting the 22^nd Board Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31^st March 2018.

1. FINANCIALS:

_[Rupees in Lacs]

PARTICULARS	2017-18	2016-17
Revenue from Operations	3146.47	2749.76
Other Income	29.52	34.71
Total Revenue	3175.99	2784.47
Less: Expenses before Interest and Depreciation	2673.55	2404.41
Less: (a) Interest	31.09	35.45
(b) Depreciation	67.02	55.44
Profit before Tax & Extra Ordinary Items	404.33	289.18
Less : Prior period expenses	-	00.30
Less: Prior year''s Income Tax Adjustment	-	3.44
Profit Before Tax	404.33	285.44
Less: Tax Expenses
Current Tax	104.11	80.00
Deferred Tax	63.89	55.61
Profit after Tax	236.32	149.83

2. DIVIDEND:

Your Directors have recommended a final dividend of Rs. 00.25/- per share (i.e. 2.5%) on Company''s paid up equity share capital comprising of 49,36,280 numbers of equity shares of Rs. 10/- each.

3. OPERATIONAL HIGHLIGHTS:

Your Company''s Revenue increased to Rs. 31.76 crore in FY18 as compared to Rs. 27.84 crore in previous year FY17 recording a remarkable growth of 14.06% (YoY) despite operational period of 10 months and volatile raw materials prices which have been well absorbed by higher sales volume and better product value realization. Export Turnover grew remarkably by 36.13% to reach 4.82 crore as compared to P/Y figure of 3.54 crore.

Net profit increased to Rs. 2.36 crore in FY18 compared to Rs. 1.49 crore during the same period of last year, representing 57.73 % increase in profits. The Company managed to register a commendable growth in profits inspite of increasing overhead costs and non-operation of plant for two months.

EBIDTA increased to Rs, 5.02 crore from Rs. 3.80 crore as compared to same period last year recording a growth of 32.20% due to sales growth propelled by increase in demand of its products.

4. 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. 6,00,00,000/- divided into 60,00,000 equity shares of Rs. 10 each. The paid up share capital of the company is Rs. 4,93,62,800/- divided into 49,36,280 equity shares of Rs. 10 each. The Company had raised fund through Public Issue of shares in F/Y 2016-17 and the equity shares of the Company are now listed on SME platform of BSE Limited.

5. IPO FUND UTILISATION:

The Company had raised the fund to meet the working capital requirement and general corporate purpose in the F/Y 2016-17. The amount raised in IPO has been fully utilized for the specified purposes. Particulars of the utilization of fund raised through Public Issue in the month of March, 2017 is as below:

Particulars	Amount allotted for Object, as disclosed in the Prospectus (Rs.)	Utilization of fund received from allotment of shares till September 30, 2017 (Rs.)	Balance amount to be utilized (Rs.)	Deviation (if any) (Rs.)
For IPO Issue Expense	40,00,000	39,76,952		(23,048)
For General Corporate Purpose	40,48000	40,48,000
For Working Capital Purpose	1,60,00,000	1,60,23,048		23,048
Total	2,40,48,000	2,40,48,000	-	-

6. TRANSFER TO RESERVE:

The Company proposes to transfer Rs. 2,21,40,878 to its General Reserve.

7. CREDIT FACILITIES:

The Company has been optimally utilizing its fund based and non-fund based working capital requirements as tied up with Kotak Mahindra Bank Limited. During the year Company transferred its Banking facilities from State Bank of India to Kotak Mahindra Bank Limited. All the dues of State Bank of India were cleared. The Company was comfortable in meeting its financial requirements from Kotak Mahindra Bank Limited. Effective financial measures have been continued to reduce cost of interest and bank charges.

8. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND:

There is no amount outstanding to be transferred as unclaimed dividend to investor education and protection fund.

9. MATERIAL EVENTS OCCURING AFTER BALANCE SHEET DATE :

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statement relate and the date of the Board Report.

10. ORDER OF AUTHORITIES :

At the time of filing Draft Prospectus for public issue of 13,36000 equity shares of the Company, there was a reference of litigation against the Company by Commercial Tax Officer, Ankleshwar relating to pending sales tax liability of Rs. 32,91,032/-.In the aforesaid matter, Deputy Commissioner of Commercial Tax has granted relief by way of setting aside entire sales tax liability of Rs. 32,91,032/vide its order dated 28.02.2018 and has granted refund of Rs. 15,03,636/- to the Company vide its final order dated 23.03.2018. As on date there is no pending Tax liability.

The Company received on 4^th August, 2017 closure notice of the factory located at 4712 -14, GIDC, Road South 10, Ankleshwar, Gujarat form Gujarat Pollution Control Board (GPCB) for noncompliance of LrV I LM LIU. certain technical requirements observed by them. However Company quickly responded to resolve the issue and the factory operations were reinstated vide GPCB order dated 04/10/2017.

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134(3) of the Companies Act, 2013 read 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 the following:

Steps taken by the company for utilizing alternate sources of energy including waste generated : NIL

(B) Technology absorption:

1. Efforts in brief, made towards technology absorption. Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc. The Company has not entered into any technology based ventures during the year under review. However the Company aims for digitization of processes of purchase, sales, marketing and other operations over next year and gradual increase in manpower, facilities and office workspace.

2. In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year), following information may be furnished:

The Company has not imported any technology and hence not applicable.

3. 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 Rs.)
Foreign Exchange earned in terms of actual inflows during the year	4,11,80,272
Foreign Exchange outgo during the year in terms of actual outflows	2,54,64,936

12. RISK MANAGEMENT:

The Company has framed a sound Risk Management Policy to identify and evaluate business risks and opportunities and the same has become integral part of Company''s day to day operations. The key business risks identified by the Company are as follows viz. Industry Risk, Management and Operations Risk, Market Risk, Government Policy risk, Liquidity risk, and Systems risk. The Company has in place adequate mitigation plans for the aforesaid risks.

13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The provisions of Section 135 of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2013 is not applicable to the Company.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence furnishing of above information is not applicable.

15. RELATED PARTY TRANSACTIONS:

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Board Meeting as per the omnibus approval of Audit Committee and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Regulations. This Policy has been uploaded on the website of the Company at www.chemcrux.com/investor-info.php under investors info/Corporate Policy link.

16. DIRECTORS / KEY MANAGERIAL PERSONNEL:

During the year no directors were appointed or have resigned. Mr. Alpesh Makwana, Company Secretary resigned from office w.e.f. March 1^st, 2018.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mrs, Neela Marathe Director retire by rotation and being eligible for re-appointment has offered her candidature for director. The present term of Whole Time Director and Managing Director will expire on 31^st December, 2018. They are eligible for reappointment and hence resolution for re-appointment of Whole Time Director and Managing Director is put forth for approval of members.

- BOARD EVALUATION:

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 carried an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

- REMUNERATION POLICY:

The Board has on the recommendation of the Nomination & Remuneration Committee, formulated criteria for Determining, Qualifications, Positive Attributes and Independence of a Director and also a Policy for remuneration of Directors, Key managerial Personnel and senior management. The details of criteria laid down and the Remuneration Policy are given in the Corporate Governance Report.

- MEETINGS:

During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Details. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. The required particulars of various Committee Meetings held during the year are stated in the Corporate Governance Details.

- DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

17. AUDIT COMMITTEE AND VIGIL MECHANISM:

The composition and other particulars of Audit Committee are provided in the Corporate Governance Details, attached herewith.

In pursuance of the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been 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 the Board hereby submits its responsibility Statement: —

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the company for that period;

(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 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 the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors have devised proper systems to ensure compliance with the provisions of 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 with Rule 12 of the Companies (Management and administration) Rules, 2014 has been placed at website of the Company. We blink of the same is as http://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.

21. DEPOSITS:

The Company has neither accepted nor renewed any deposits during the year under review.

22. AUDITORS:

- STATUTORY AUDITORS

The Company''s Auditors M/s. Talati & Talati Chartered Accountants, Vadodara will retire at ensuring Annual General Meeting of the Company. In terms of section 139 to 141 of the Companies Act, 2013 and the Rules framed thereunder, it has been proposed to make appointment of M/s. R. J. Shah & Associates, Chartered Accountants, as Auditors of the Company to hold the office from the conclusion of ensuing Annual General Meeting until conclusion of 27^th Annual General Meeting. As required under Listing Regulations, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

- SECRETARIAL AUDIT:

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 has appointed M/S. Kashyap Shah & Co., a Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as “Annexure”.

- INTERNAL AUDITORS:

The Company has appointed Naresh & Co. as the Internal Auditors for the F.Y. 2017-18.

23. OBSERVATION OF AUDITORS:

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors and Secretarial Auditors.

24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

25. SHARES:

a. BUY BACK OF SECURITIES: The Company has not bought back any of its securities during the year under review.

b. SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during the year under review.

c. BONUS SHARES: The Company has not issued any bonus share during the year under review.

d. EMPLOYEES STOCK OPTION PLAN: The Company has not provided any Stock Option Scheme to the employees.

e. Fresh issue of shares: The Company has not issued any shares during the year under review.

26. CORPORATE GOVERNANCE:

Provisions relating to Corporate Governance Report under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to SME listed Company. However, as a better corporate practice, a separate Section on Corporate Governance has been annexed.

27. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report is appended as Annexure - to this Report.

28. PARTICULARS OF EMPLOYEES:

Disclosure under the provisions of Section 197 of the Companies Act, 2013 read with Rule 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 the employees of the Company for the financial year.

Ratio of remuneration of MD and Whole Time Director - 8.06 : 1 (Rs. 30,00,000 : 3,72,234)

Other Directors - Not Applicable

b) The percentage increase in the remuneration of each director, Chief Executive Officer, Chief Financial Officer and Company Secretary, if any in the financial year - During the FY 2017-18 there was nil % increase in remuneration of WTD, MD, other Directors, CFO and Company Secretary.

c) The percentage increase in the median remuneration of employees in the financial year - Median Remuneration is Rs. 3,72,234 and average % increase is 15%

d) The number of permanent employees on the rolls of the Company as on 31.03.2018 - 52

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration - Average 15% increase in salaries of Employees and nil % increase in Managerial Remuneration during F.Y. 2017-18.

f) Affirmation that the remuneration is as per the remuneration policy of the company.

The Company''s remuneration policy is driven by the success and performance of the individual employees and the Company. Through the compensation package, the company endeavors to attract, retain, develop and motivate high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. The Company affirms that the remuneration is as per remuneration of the Company.

g) Details pertaining to remuneration as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with reference to remuneration of employees in excess of the limits prescribed - None of the employees were in receipt of remuneration above 8 lakh 50 thousand per month or Rs. One crore Two lakhs per annum and above.

29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION OF, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place a Sexual harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. All women employees (permanent, contractual, temporary, trainees) are covered under this policy. An Internal complaint committee is formed to look after any complaints of women employees. During the year four meetings of internal committee for prevention prohibition and redressal of sexual harassment of women at workplace were held. No complaints for sexual harassment were received during the year.

30. COST AUDIT:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 dated 31/12/2014, cost audit and maintenance of cost records is not applicable to the Company for the Financial Year 2017-18.

31. 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 Central Government under section 118(10) of the Companies Act, 2013.

32. HUMAN RESOURCES:

During the period under review, the personal and industrial relations with the employees remained cordial in all respects. The management has always carried out systematic appraisal of performance and imparted training at periodic intervals. The Company recognizes talent and has judiciously followed the principle of rewarding performance.

33. ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board of Directors

For CHEMCRUX ENTERPRISES LIMITED

Sd/-

Place: Vadodara GIRISHKUMAR SHAH

Date: 24^th August, 2018 CHAIRMAN