INDUSTRY STUCTURE AND DEVELOPMENT:
Your Company is key producer of Ethylene amines based in India having its plant at PCC Area, P.O. Petrochemicals; Vadodara. The Products Ethylene Amines find their application in various industry segments such as Active Pharmaceutical Ingredients & Pharma-Intermediates, Specialty Chemicals, Agro-chemicals, Resins, Water treatment chemicals, Petroleum production chemicals, Additives and in many other vital specific sub applications. The plant facility is equipped with up to date manufacturing equipment and supported by R & D Center and quality assurance department which are equipped with advanced equipment and analytical instruments. The new pilot plant building has been recently constructed replacing old one and will be ready with latest facilities by installation of equipments / machineries in couple of months. The Company has an excellent team of experienced and qualified professional to manage day to day operations efficiently. For more details please visit www.dacl.co.in.
Total standalone revenue (net of taxes) for the year 2021-22 amounted to Rs 6792.85 lakhs compared to Rs 6,536.95 lakhs of the previous year 2020-21. The standalone operating profit after tax amounted to Rs 1672.35 lakhs compared to Rs 2,103.37 lakhs in the previous year.
Earlier, the company has identified and was working in two reportable primary segments viz. Specialty Chemicals and Power Generation segment. After sale of Two Wind Turbine Generation units (Windmills) situated in the state of Maharashtra under Slump Sale transaction in December 2021, the company has only one reportable segment i.e. Specialty Chemicals. Thus, the disclosure particulars as per Ind AS-108 on Operating Segments Reporting are made part of this Annual Report in Note 39 of standalone Financial Statements.
STRENGTHS & OPPORTUNITIES:
Your company is key manufacturer of ethylene amines in India which is a growth market. This offers regular opportunities & helps company to cater to market needs very effectively. Over the years, the company has developed robust Systems which help to maintain and sustain the operations despite sever challenges it faces and able to enjoy the market leadership position. Its geographical position & the vicinity to customers also offer added advantage in servicing the customers.
Ethylene Amines are building blocks for many industries & hence your company believes that this fact will continue to offer potential to grow by exploring manufacturing possibilities of derivatives based on homologues of Ethylene Amines.
CONCERNS & THREATS:
Since companys core business is Ethylene amines, any negative Development or upheavals taking place in the market place may affect the performance of the company. Fluctuating prices of certain key raw materials also has potential to impact the performance in short term.
Company also has to compete with competitors who are either forward or backward integrated & has the advantage of scale of economies & thus can swamp the markets with excess & lower priced or even duty free products.
Since March 2020, the World Health Organisation declared COVID 19 as pandemic. The Company has adopted measures to curb the spread of infection in order to protect the health of its employees and ensure business continuity with minimal disruption including remote working, maintaining social distancing, sanitization of workspaces etc.
The Board of Directors has not identified any material impact on the operations and financials of the company as at March 31, 2022. Considering that the Company deals with Specialty Chemicals and Power Generation (up to December 2021), there has been minimal disruption with respect to operations including production and distribution activities.
The Company has not experienced any difficulties with respect to market demand, collections or liquidity. The Company will continue to closely monitor any material changes to future economic conditions.
Considering the present Covid 19 situation, we do not foresee any significant impact on business of the company. The company is well positioned to fulfill its existing orders/contracts/arrangements.
For the year 2022-23, the Companys focus will continue on sustaining and maintaining the market share in certain industry segment where company enjoys market leadership position. This will be achieved by forging stronger relationship with customers and by negotiating and entering in to beneficial contracts with the suppliers of raw materials.
The Ethylene amines business is going through demand-supply imbalance on global level and this is expected to continue in the year 2022-23 also. Your company is well aware of the challenging scenario lying ahead and taking necessary steps by planning activities properly at operational stages.
KEY DEVELOPMENT DURING THE YEAR:
Your Company has received Final Transfer Order for Industrial Plot, in Dahej Industrial Estate, Dahej, Ankleshwar in December 2021. The said Industrial Plot is acquired under e-auction process held through Liquidator/IP appointed by Honble NCLT, New Delhi.
M/s KLJ Organic Diamines Limited, an intended Associate/Joint Venture Company has been incorporated on December 15, 2021. The shareholding ratio between M/s KLJ Organic Limited (Associate/Joint Venture Partner) and the Company is 65:35 respectively.
Your Company has received Environment Clearance from the State Level Environment Impact Assessment Authority (SEIAA) for setting up expansion in manufacturing plant of ‘Synthetic Organic Chemicals at Plot No. 13, PCC Area, P.O. Petrochemicals, Vadodara.
Human Resources Development, in all its aspects like training in safety and social values is under constant focus of the management. Relations between the management & the employees at all levels remained healthy & cordial throughout the year. The Management and the Employees are dedicated to achieve the corporate objectives and the targets set before the Company. The Company has been regularly monitoring its policy for enhancement in the skills of its employees by providing need-based training.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal. The internal control systems are supplemented by an extensive program of internal audits, review by management guidelines & procedures.
Companys control systems are time tested, documented and recognized under ISO Certification. On the financial side, periodic audits by Internal Auditors and External Auditors provide a means whereby identification of areas of improvement and corrective measures taken whenever applicable.
The Company has an independent internal audit system, covering on a continuous basis, the entire gamut of operations and services spanning major business functions. The internal audit functions include evaluation of all financial & major operating system controls. The internal audit findings and recommendations are reviewed by the Audit Committee and are then reported to the Board.
WHISTLE BLOWER POLICY
The Company has a Whistle Blower policy in place to deal with instances of fraud and mismanagement, if any. The details of the policy are explained in the Corporate Governance Report and the said whistle blower policy is posted on the website of the Company.
KEY FINANCIAL RATIOS:
|Ratio||FY 2021-22||FY 2020-21|
|Debtors Turnover Ratio (times)||6.22||5.74|
|Inventory Turnover Ratio (times)||6.18||4.28|
|Current Ratio (times)||8.41||9.69|
|Operating Profit Margin (%)||36.09||41.26|
|Net Profit Margin (%)||25.30||33.48|
|Dividend Per Share (Rs)||3.00||5.00|
|Earnings Per Share (times)||17.09||21.50|
|P/E Ratio (times)||15.90||12.29|
|Return on Net Worth (%)||16.68||24.74|
Reason for significant change:
- Operating/Net Profit margin has fallen due to Increase in the Cost of Raw Material Consumption of material mix.
- Interest Coverage and Debt Equity Ratio is not relevant here as company has not availed any long term debt during the year. No major utilization of working capital loan during the year.
The statements in this Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations are "forward looking statements". The forward looking statements made in the Management Discussion and Analysis Report are based on certain assumptions and expectations of future events. Actual results might differ materially from those anticipated because of changing ground realities. The Directors cannot guarantee that these assumptions are accurate or these expectations will materialize.
|For and on behalf of the Board|
|Date : May 11, 2022||Executive Chairman|
|Place : Vadodara||DIN: 00073907|
Gold/NCD/NBFC/Insurance and NPS
Gold/NCD/NBFC/Insurance and NPS