Your Directors are pleased to present their Twentieth Annual Report together with theAudited statement of Accounts along with the Report of the Auditors for the year ended 31st Match, 2012.
|FINANCIAL RESULTS: ||2011-2012 ||2010-2011 |
| ||(Rupees) ||(Rupees) |
|Sales etc. and other income ||214,118,898 ||196,355,678 |
|Profit before Depreciation, Interest and Tax ||10,262,488 ||17,250,510 |
|Less: Depreciation ||4,801,582 ||3,846,031 |
|Interest ||2,068,551 ||1,029,345 |
| ||6,870,133 ||4,875,376 |
|Profit before Tax ||3,392,355 ||12,375,134 |
|Provision for Tax || || |
|Current Tax ||(651,000) ||(4,000,000) |
|MAT Credit / (Set off) ||258,000 ||- . |
|Deferred Tax ||(995,664) ||(174,323) |
| ||(1,388,664) ||(4,174,323) |
|Short Provision Tax ||785,463 ||915,665 |
|Provision for Dimunition in value of investment ||(1,817,628) ||- |
|Prior Period Expenses ||118,288 ||(17,163) |
|Excess Depreciation Charged in previous years ||- ||541,964 |
|Profit after Tax ||1,089,814 ||9,641,277 |
|Add: Balance Brought forward from the previous year ||17,801,632 ||16,257,587 |
|Profit available for Appropriation ||18,891,446 ||25,898,864 |
|Appropriation || || |
|Transfer to General Reserve ||200,000 ||2,500,000 |
|Proposed Dividend ||3,000,000 ||4,800,000 |
|Corporate Dividend Tax Thereon ||463,500 ||797,232 |
|Balance carried forward ||15,227,946 ||17,801,632 |
| ||18,891,446 ||25,898,864 |
With a view to conserve the financial resources for expansion on hand, the Board ofDirectors are pleased to recommend a dividend of Re0.50/-per share on 60,00,000 Equityshares of the nominal value of Rs. 10/-each aggregating to Rs. 30.00 Lacs excludingdividend tax.
Net Sales grew by 8.30% to Rs. 21.41 crores including a growth in exports and domesticmarkets. However, the margins were under tremendous pressure and reduced substantially;the PBT before exceptional items reduced from Rs.123.75 lakhs to Rs.33.92 lakhs. Thedrastic impact on profitability was mainly on account of exorbitant increase in inputprices, fixed costs and also sales and administrative costs and interest. However yourCompany through various cost cutting measures and improved efficiency laid focus onmaintaining the performance in black which was successfully achieved though not to theexpectations.
Mr. Yoshiaki Tagami has resigned as Director w.e.f. 25th December, 2011. The Boardplaces on record its sincere appreciation for valuable services rendered by him during histenure as Director of the Company.
Further the founder promoter director Mr. Jayant G. Patel expired on 1 st June, 2012.The Board places on record its sincere appreciation for valuable services rendered by himduring his tenure as Director of the Company.
Mr. Amit J. Patel and Mr. Sudhir M. Patel, retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for reappointment.
Their re-appointment would immensely benefit the Company looking at their businessknowledge and expertise. CORPORATE GOVERNANCE:
A separate section on Corporate Governance and a certificate from Auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated underClause 49 of the Listing Agreement with Bombay Stock Exchange Limited, forms part of theAnnual Report.
PARTICULARS OF EMPLOYEES:
The Company does not have any employee of the category specified in Section 217 (2A) ofthe Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.
As per the requirements of the Companies Act, 1956 and Listing Agreement, the Companyhas an Audit Committee consisting of two Independent Directors and One Executive Directornamely Mr. Sudhir Patel, Mr. Jagdish J. Vasa and Mr. Sishir Amin.
The Audit Committee met on five occasions on03-05-2011,26-07-2010,12-08-2011,15-11-2011 and 13-02-2012.
Your Company is pleased to inform its members that it has been accorded the GOTS(Global Organic Textile Standard) Version 3.0 March 2011 certification for all its OpticalBrighteners for Textiles by CONTROL UNION CERTIFICATIONS. This would definitely assist theCompany in having a better edge in the market of its optical brighteners both in theexport and domestic markets in the long run and establish its "DIKAPHOR" brandname in the textile segment in the international and local markets.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors wish to inform Members that the Audited Accounts containing FinancialStatements for the Financial Year 2011 -2012 are in full conformity with the requirementof the Companies Act, 1956. They believe that the Financial Statements reflect fairly, theform and substance of transactions carried out during the year and reasonably present theCompany's financial condition and results of operations.
Your Directors further confirm that:
(1) In the preparation of the annual accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(2) 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 or loss of the company for that period;
(3) The directors have taken proper and sufficient care of 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;
(4) The directors have prepared the annual accounts on a going concern basis.
SAFETY AND ECOLOGY:
Your Company continues to accord the highest priority to Environment, OccupationalHealth and Safety with a view to progressively achieve international standards whileensuring compliance with statutory requirements.
The Company has not accepted any Deposit from the Public during the year under review.As on 31st March, 2012, no unclaimed deposits are lying with the Company.
All the Fixed Assets have been adequately insured.
Daika Japan Limited and Kiwa Chemicals Industries (Japan) continue to give their activesupport in the development of the Company and the Directors put on record their fullappreciation for the co-operation being extended by them.
The Company had made investment in Erca Speciality Chemicals Private Ltd., to the tuneof Rs. 26.46 lakhs during the last four years which was in line with the management's longterm perspective of business which was expected to yield good appreciation in the comingyears.
The said investment till date is having negative cash flows, however the management isconfident that considering the product profile and the future economic growth mainly inthe textile segment this particular investment will generate positive cash flow in thenext five years.
However under accounting convention and laws prevailing in India the management hasmade a provision for dimunition in the value of this investment on the recommendation ofthe auditors. The same will be reversed once this investment starts generating positivereturns.
The Members are requested to appoint Auditors for the current year and to fix theirremuneration. M/s Gaurang Merchant & Co., the retiring Auditors, are eligible forre-appointment and have furnished a certificate to the effect that their re-appointment,if made, will be in accordance with the limits specified in Section 224( 1B) of theCompanies Act, 1956.
The Auditors have vide para 4(d) of their Report, made qualification about noncompliances of Accounting Standard 28 in respect of Impairment of Assets.
The Board is of the opinion that no impairment in carrying amount of assets hasoccurred as on the date of the Balance Sheet.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
As required under Section 217(1) (e) of the Companies Act, 1956 read together with theCompanies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988the relevant information is given below.
The Company's operations involve high energy consumption. Wherever possible, energyconservation measures have already been implemented. The Company is making all efforts tooptimise the use of energy improved operational methods. The Company has installed a coalfired IBR Boiler which will result into a considerable saving in the cost on account ofpower and fuel consumption.
Diesel Generating Set worked satisfactorily during the year whenever there was powerfailure on feeder lines of MSEB.
Relevant data in respect of energy consumption is as below.
|(1) ||2011-2012 ||2010-2011 |
|Power & Fuel Consumption || || |
|1. Electricity || || |
|Purchased Units ||6,38,981 ||5,90,488 |
|Total Amount ||Rs. 40,96,733 ||Rs.31,84,265 |
|Rate/Unit (Rs.) ||Rs.6.41 ||Rs.5.39 |
|2. Light Diesel Oil/Furnance Oil || || |
|Quantity (Litres) ||3,000 ||7,400 |
|Total Amount ||Rs. 1,32,570 ||Rs.3,00,976 |
|Average Rate (Rs. / Ltrs) ||Rs.44.19 ||Rs.40.67 |
|3. Coal || || |
|Quantity (Kgs) ||14,99,752 ||11,90,875 |
|Total Amount ||Rs.86,84,430 ||Rs.68,67,756 |
|Average Rate (Rs./ Kgs) ||Rs.5.79 ||Rs.5.77 |
|(II) Consumption per Unit of Production || || |
|1. Electricity ||Rs2.56/kg ||Rs.2.18/kg |
FOREIGN EXCHANGE EARNINGS AND OUTGO:
| ||(Rs. in Lacs) |
|Foreign Exchange Earnings ||: 1528.23 |
|Foreign Exchange Outgo ||661.02 |
LISTING AGREEMENT COMPLIANCE:
Pursuant to the requirements of the Listing Agreement, the Company declares that itsEquity Shares are listed on the Stock Exchange, Mumbai.
Industrial relations at the Company's factory and other establishments remained cordialduring the year. We appreciate the contribution made by the employees towards achievingimproved productivity and flexibility in operation.
The Directors wish to place on record their appreciations for the continued support andco-operations by Government Authorities, Financial Institutions, Banks and our valuedcustomers along with dedicated service of all the workers, staff and the officers, whosecontinuous support is a pillar of strength which have largely contributed to the efficientmanagement of the Company. Suffice it to say, that your co-operation as our shareholdersis hereby acknowledged with gratitude.
For and on behalf of the Board,
AMIT J. PATEL EXECUTIVE CHAIRMAN
Mumbai, August 24, 2012