Dear Members,
The Directors take great pleasure in presenting the 6th Annual Report of CHD CHEMICALS LIMITED the "Company" on business and operations of the Company along with the audited financial statements of accounts for the financial year ended 31st March 2018.
1. FINANCIAL SUMMARY
The Company's financial performance, for the year ended March 31, 2018 is summarized below:
The Board's Report shall be prepared based on the stand alone financial statements of the company.
Amount in Lacs.
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Particulars
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2017-2018
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2016-2017
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Revenue from Operation
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3507.25
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4330.34
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Other Income
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74.32
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4.30
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Depreciation & Amortization
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21.83
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15.74
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Profit before tax
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69.41
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52.78
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Provision for Tax/ (Deferred tax)
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17.85
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18.12
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Net Profit After Tax
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51.55
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34.66
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2. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
- The company is engaged in the business of trading of chemicals and dyes.
- The Total revenue for the Current year is Rs. 3507.25 Lacs in comparison to Last year's revenue I.e. Rs. 4330.34 Lacs
- The Profit in the Current year is Rs. 51.55 Lacs which is higher than Rs. 34.69 Lacs last year's.
During the year under review, there has been no change in the nature of the business of the Company. Further, there were no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.
3. MATERIAL CHANGES AND COMMITMENTS
Material changes have occurred between Balance Sheet date and the date on which the financial statement are approved by the Board of Directors.
Company has made allotment of 12,53,000 equity shares on 21st April, 2018 upon the conversion of convertible warrants.
Company has not received listing and trading approval for the 12,53,000 equity shares till the date of approval of Financial statement by the board of directors.
5. TRANSFER TO GENERAL RESERVES IN TERMS OF SECTION 134(3) (J) OF THE COMPANIES ACT, 2013
No amount has been transferred to the general reserve during the year under review.
6. SHARE CAPITAL
During the Financial Year 2017-18,
Company increased its Share Capital on following occasions:
(i) Authorized Share Capital
No Change in the Authorized capital of the company during the year under review.
(ii) Paid up Share Capital:
Pursuant to the Preferential allotment of 49,00,000 convertible warrants on 23rd March, 2017, warrant holders applied for the conversion of some warrants during the year. Subsequently company made allotment of 12,15,000 &11,87,000 equity shares upon the conversion of warrants on 12th April, 2017 and 28th December, 2017.
The paid up share capital of the company increased from Rs 6,45,40,800 to Rs 8,85,60,800 during the year.
Company has received the trading approval from the BSE for the above mentioned equity shares on 30th May, 2017 and 7th March 2018
(iii) ISSUE OF SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued any shares with differential rights during the year under review. Hence the provisions of Section 43 of the Companies Act, 2013 are not applicable.
(iv) ISSUE OF SWEAT EQUITY SHARE
The Company has not issued any sweat equity shares during the year under review. Hence the provisions of Section 54 of the Companies Act, 2013 are not applicable.
7. DEPOSITS
DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
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a
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Accepted during the year
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NIL
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b
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Remained unpaid or unclaimed as at the end of the year
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c
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whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so (default), number of such cases and the total amount involved
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i. at the beginning of the year
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ii. maximum during the year
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iii. at the end of the year
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DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OF THE ACT
During the Financial Year under review, the Company has not accepted any deposit under Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rule, 2014 as amended from time to time which are not in compliance with the requirements of Chapter V of the Act.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors
During the year under review, there was no change in the composition of Directors.
In accordance with Section 152 and other applicable provisions of Companies Act, 2013, Mr. Inder Singh (DIN 06486481), being Non-Executive Director, retires by rotation and being eligible offers himself for re-appointment at the ensuing Annual General Meeting. The Board recommends his appointment.
KEY MANAGERIAL PERSONNEL
There is no change in the Key Managerial Personnel of the company during the year under review.
BOARD COMMITTEES
Details of Board committees and term of reference is provided in the "Annexure V” corporate Governance report of the company.
9. BOARD MEETINGS
The board met 8 times during the financial year. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. Details of the board meeting are provided in the "Annexure V" report on corporate Governance and the same forms part of this report.
10. DECLARATION BY INDEPENDENT DIRECTORS
Mr. Vijender Singh and Mr. Bajrang Lal Kedia, Independent Directors of the Company have given their respective declaration as required under Section 149(7) of the Companies Act, 2013 to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and that they abide by the provisions specified in Schedule IV to the Companies Act, 2013. The Board has, taken on record the declarations received from Mr. Vijender Singh and Mr. Bajrang Lal Kedia.
11. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
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 as at March 31, 2018 and of the profit of the Company for the year ended on that date;
c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the 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;
e) The Directors 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) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
12. CORPORATE SOCIAL RESPONSIBILITY
The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of Section 135 of the Companies Act, 2013 are not applicable.
13. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis, therefore, the provisions of Section 188 of the Companies Act, 2013 were not attracted.
Further, there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, or other designated persons which may have a potential conflict with the interest of the Company at large.
Your Directors draw attention of the members to Note No. 9 in the Accounting Policies to the Financial Statement which sets out related party disclosures as prescribed under Accounting Standard 18.
Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules,2014 are given in “Annexure - 1” Form AOC-2 and the same forms part of this report.
14. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
In accordance with Section 178 of the Companies Act, 2013 the Nomination and Remuneration Committee has formulated Remuneration Policy ("the policy"). The objective of the policy is to ensure that Executive Directors and other employees are sufficiently compensated for their performance. The Policy seeks to provide criteria for determining qualifications, positive attributes and independence of a director.
15. STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s M/s R K Deepak & Co (Chartered Accountants (Firm Registration No. 003145N), were appointed as Statutory Auditor of the Company at the AGM held on 29September 2017 to hold office for a term of five years, i.e. from the conclusion of 5th AGM of the Company till the conclusion of 10th AGM of the Company, subject to ratification of their appointment by members at each Annual General Meeting to be held during the period and fix their remuneration.
Ministry of corporate affairs vides its notification dated 7May 2018 has omitted explanation given below under Rule 3 of the Companies (Audit and Auditors) Rules, 2014:
Provided that the Company shall place the matter relating to such appointment for ratification by members at every annual general meeting.
In context of above notification, modification is required to be made in resolution passed at the AGM held on 29September 2017 related to appointment of Statutory Auditor of the Company.
Resolution seeking your approval on this item is included in the Notice convening the 6th Annual General Meeting. The Members are requested to modify the resolution related tothe appointment of the Statutory Auditor as aforesaid.
The Auditors' Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark.
16. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There was no qualification, reservation or adverse remark made by the statutory Auditor in their report.
As per the Secretarial audit report by the Secretarial Auditor, company did not file the charge form with Registrar of Company for a Vehicle Purchased worth RS 5,43,000 from Mahindra & Mahindra Financial Services Limited secured by the Hypothecation of the vehicle purchased.
Further company did not file charge with the Registrar of company for Vehicle Purchased worth RS 25,00,000 from ICICI Bank since 2016-17.
Company was not able to file the form as the required documents was not received by the company from the Financial Institution.
17. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Company has not granted any loans and made investments, or given guarantees or provided securities to other bodies corporate under the provisions of Section 186 the Companies Act, 2013.
18. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Sect ion 134 (3) (a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March, 2018 made under the provisions of Sect ion 92 (3) of the Act in Form MGT -9 is annexed herewith as Annexure II.
19. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).
20. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal.
21. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS PURSUANT TO RULE 8 (5) (viii) OF COMPANIES (ACCOUNTS) RULES, 2014
The Company has a formal system of internal control testing which examines both the design effectiveness and operational effectiveness to ensure reliability of financial and operational information and all statutory / regulatory compliances. The Company has a strong monitoring and reporting process resulting in financial discipline and accountability.
22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required pursuant to Section 197(12) read with Rule, 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the "Annexure-IV” of the Annual Report.
The Company has not appointed any employee(s) in receipt of remuneration exceeding the limits specified under Rule 5 (2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The following is a summary of sexual harassment complaints received and disposed off during the year 2017-18.
No of complaints received : Nil
No of complaints disposed off: Nil
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND 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)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure “III”
25. DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /TRIBUNAL IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations.
Hence, disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules, 2014 is not required.
26. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has established a vigil mechanism, through a Whistle Blower Policy, where Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct. It provides direct access to the employees of the Company to approach the CFO of the company or the Chairman of the Audit Committee, where necessary. The Company ensures that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment or victimization.
27. SECRETARIAL AUDIT REPORT
The Company has appointed Neeraj Jindal & Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The Report of the Secretarial Auditor is annexed to the Board's Report as Annexure ‘A'.
28. BOARD EVALUATION
Pursuant to applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its own performance and as well as that of its Committees and individual Directors, including the Chairperson of the Board.
29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2(e) of the SEBI (LORD) 2015, is presented in Annexure VI and the same is for the part of this report.
30. BUSINESS RESPONSIBILITY REPORT (BRR)
The Board of Directors of the Company hereby confirms that, according to the provisions of Regulation 34(2)(f) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulation 2015, the give report on Business Responsibility Report (BRR) is not mandatorily applicable to our company, hence not annexed with Annual Report.
31. DISCLOSURE IN RESPECT OF SCHEME FORMULATED UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013
Since the Company has not formulated any scheme in terms of Section 67(3) of the Companies Act, 2013, therefore no disclosures are required to be made.
32. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
There has been no subsidiary/Associate/Joint Venture incorporated/ceased of your company during the financial year 2017-18.
33. DISCLOSURES PURSUANT TO SECTION 197(14) OF THE COMPANIES ACT, 2013:
No disclosure under section 197(14) of the Companies Act, 2013 is required. Company has no Holding or Subsidiary company as on 31st March, 2018.
34. Reporting of Frauds by Auditors
During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Act.
34. ACKNOWLEDGEMENT
The Board of Directors acknowledges with gratitude the co-operation and assistance provided to your company by its bankers, financial institutions, government and other agencies. Your Directors thank the customers, vendors and other business associates for their continued support in the company's growth.
For and on behalf of Board of Directors
SD/- SD/-
Divya Kothari Inder Singh
Managing Director Director
DIN - 03592047 DIN -06486481
Place: CHANDIGARH
Dated: 31st August, 2018
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