Master Chemicals Ltd Management Discussions.

According to the World Economic Situation and Prospects 2019 by World Bank, Global growth is expected to remain at 2.50% to 3.50% in 2019 and 2020, however, the steady pace of expansion in the global economy masks an increase in downside risks that could potentially aggravate development challenges in many parts of the world. The Financial conditions tightened for not only vulnerable emerging markets but also advanced economies, which added to the global demand pressures. In many developing countries growth rates have risen close to their potential, while unemployment rates have dropped to historical lows.

Year 2018-19 was an encouraging one for the Indian economy; growth was on the rebound, powered by recovery in consumption demand, accompanied by an upswing in private capital investment. However, there were macro headwinds emanating from both domestic as well as external factors. India has become the fastest-growing major economy in the world according to the Central Statistics Organization (CSO) and International Monetary Fund (IMF) Indian economy grew by 7.2% and is projected to grow around 7% in 2019 which is marking as a positive growth. IMF in its World Economic Outlook report projected growth to pick up to 7.3% in 2019 (2019-20) and 7.5% in 2020, supported by the continued recovery of investment and robust consumption amid a more expansionary stance of monetary policy and some expected impetus from fiscal policy."

Discussions were triggered with Members as well as policy makers, on critical topics including the current state of the economy, measures for economic revival, employment generation, enhancing exports, and the monetary policy.

The Indian economy continued to grow strongly, as the economy recovered in the 2nd half post stabilization of the GST regime. Indias GDP growth rate in 2017-18 was 6.6 per cent and is expected to grow to 7.3 per cent in 2018-19 attributing it to an upswing in consumption and investment.

The Government of India through its Budget & Economic Survey has set a target of a $5-trillion economy in 2024-25. For this Modi led Indian Government has taken significant initiatives like to encourage private investment is the key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction, and generates jobs.

Another step taken to create data as a public good while considering the privacy implications and inherent fairness of data being used. Deregulating labour law restrictions can significantly create more number of jobs in the economy.

The Government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally and to increase the digital literacy.

These are the some productive steps to strengthen the economic credentials of the country and make it one of the strongest economies in the world.

Industry Trends and Outlook

Indias gross domestic product (GDP) is expected to keep growing at a rapid pace and achieve upper middle income status on the back of digitization, globalization, favorable demographics, and reforms. India has made progress on structural changes in the recent past and the implementation of the Goods and Services Tax (GST) will help reduce internal barriers to trade, increase efficiency and improve tax compliance. The corporate debt overhang and associated banking sectors credit-quality concerns have exerted a drag on investment in India. The massive bank recapitalization programme will improve the banking sectors ability to support growth.


The company has adequate systems of internal control in place, which is commensurate with its size and the nature of its operations.

Internal Audit function plays a key role in providing to both the operating management and to the Audit Committee of the Board, an objective view and reassurance of the overall control systems and effectiveness of the Risk Management processes across the Company and its subsidiaries. Internal Audit also assesses opportunities for improvement in business processes, systems and controls and provides recommendations designed to add value to the operations.

The Audit Committee meets on a quarterly basis to review and discuss effectiveness of the internal control system. The Audit Committee also meets the Statutory Auditors separately to ascertain their views on the adequacy and efficiency of the internal control systems.

Indias chemical industry accounts for about 10% of the countrys manufactured exports. The chemicals industry of India contributes 2.1% towards the nations gross domestic product (GDP) and accounts for 15.95% of Indias manufacturing sector.

Chemicals industry occupies a pivotal position in meeting basic needs and improving quality of life. The industry is a key enabler for industrial and agricultural development of the country and provides building blocks for several downstream industries, such as textiles, papers, paints, varnishes, soaps, detergents, and pharmaceuticals. It is also among the most diversified industrial sectors and covers over 80,000 commercial products.

The government permits 100% foreign direct investment (FDI) in this sector under the automatic approval route. Manufacturing of most chemical products inter-alia covering organic/inorganic, dyestuff and pesticides is de-licensed.

Factors such as boost to speciality and agrochemicals chemicals due to rapid development in construction and agricultural sector, inadequate per capita consumption and strong demand from paints, textiles and diversified manufacturing base shall aid towards the development of Indian chemicals sector, the same is expected to grow at around 9% per annum and touch US$ 280 billion by 2020.

Government of India has launched several schemes and initiatives to encourage growth of the sector which include:

Petroleum, Chemical and Petrochemical Investment Region (PCPIR) scheme: concept of PCPIR is a cluster approach to promote petroleum, chemicals and petrochemical sectors in an integrated and environmental friendly manner on a large scale.

PCPIRs have already received investments worth US$ 24.68 billion till now, these PCPIRs are expected to attract investment in the tune of US$ 117.42 billion approximately.

PCPIRs are being developed in Andhra Pradesh, Gujarat, Odisha and Tamil Nadu and have already generated direct and indirect employment for 0.2 million people with total potential of 3.4 million.

Swot Analysis


Lack of availability of skilled manpower:-

Despite having a favorable demographic profile, labour and skill shortage continues to be one of the key concerns for the Indian chemical industry. The Government along with Industry bodies are putting their best foot forward to have education and vocational training institution arming the manpower with appropriate skill set. The special mention for development of skilled manpower in the Union Budget 201516 is expected to resolve the dearth of skilled manpower.

Cheap Imports:-

Structural shifts in the Chinese market arising from over capacity coupled with weakening prices are threatening the Indian players. As China threat was partly getting managed through the anti dumping duty route, we now have Russian problem. Russia is a key producer of steel and as its currency has hit rock bottom, the Indian market can see cheap imports.


Corporate Governance is a set of systems and practices to ensure that the affairs of the Company are being managed in a way which ensures accountability, transparency, fairness in all its transactions in the widest sense and meet its stakeholders aspirations and societal expectations. Good governance practices stem from the culture and mindset of the organization and the commitment to meet the aspirations of all the stakeholders. This is demonstrated in shareholder returns, high credit ratings, governance processes and an entrepreneurial, performance focused work environment.

Traditional views of Governance as a Regulatory and compliance requirement have given way to adoption of governance tailored to the specific needs of the Company. Regulation 27 has set the benchmark compliance rules for a listed Company and the baseline for governance standards. It is our endeavor to achieve higher standards and provide oversight and guidance to management in strategy implementation and risk management and fulfillment of stated goals and objectives.

Corporate Governance is the manifestation of personal benefits and values, which configures the organizational values, benefits and actions of employees of the Company. Company is committed to be open and transparent as much as possible with respect to its internal financial reporting, control systems and decision making processes.

Corporate Governance is an integral part of the philosophy of the Company in its pursuit of excellence, growth and value creation. In addition to complying with the statutory requirements, effective governance systems and practices towards improving transparency, disclosures, internal control and promotion of ethics at work place have been institutionalized. The Company recognizes that good governance is a continuing exercise and reiterates its commitment to pursue highest standards of Corporate Governance in the overall interest of all its stakeholders.


The Board of Directors of the Company constituted a committee of Directors in Compliance with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, known as Audit Committee in its meeting held on 20th March, 2015. During the year, Shri Kriti Kumar Ganguly was appointed as Independent Director of the Company in place of Shri Ajay Kumar Dasgupta, who has resigned from the post of Directorship of the Company w.e.f 12.02.2019. Audit Committee was reconstituted after appointment of Shri Kriti Kumar Ganguly w.e.f. 12.02.2019.

As a result of this, the Committee was re-constituted with following members at present:

Shri Nabi Ahamad Chairman
Shri Kriti Kumar Ganguly Member
Smt Rana Zia Member

Out of three committee members, two are Independent Directors. The Chairman of the Audit Committee is an independent Director which is in Compliance with the Regulations 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as well as Section 177 of the Companies Act, 2013.


The Board of Directors of the Company constituted a committee of Directors known as Remuneration Committee in its meeting held on 20th March, 2015 (pursuant to the requirement of Section 177 of the Companies Act, 2013) to deal with matters related to managerial remuneration of company as may be required from time to time.

During the year, Shri Kriti Kumar Ganguly was appointed as Independent Director of the Company in place of Shri Ajay Kumar Dasgupta, who has resigned from the post of Directorship of the Company w.e.f 12.02.2019. Nomination and remuneration Committee was reconstituted after appointment of Shri Kriti Kumar Ganguly w.e.f. 12.02.2019.

As a result of this, the Committee was re-constituted with following members at present:

Shri Kriti Kumar Ganguly Chairman
Shri Nabi Ahamad Member
Smt Rana Zia Member

During the year under review, a meeting of the Nomination and Remuneration Committee of the Company was held on 12.02.2019.


The Board of Directors of Company had constituted Stakeholders Relationship Committee as pursuant to Section 178 of the Companies Act, 2013.

During the year, Shri Kriti Kumar Ganguly was appointed as Independent Director of the Company in place of Shri Ajay Kumar Dasgupta, who has resigned from the post of Directorship of the Company w.e.f 12.02.2019. Stakeholders Relationship Committee was reconstituted after appointment of Shri Kriti Kumar Ganguly w.e.f. 12.02.2019.

As a result of this, the Committee was re-constituted with following members at present:

Shri Nabi Ahamad Chairman
Shri Kriti Kumar Ganguly Member
Smt Rana Zia Member

During the period under review, the Company has not received any complaint from the Shareholders/Investors. No Meetings of Stakeholders Relationship Committee of the Company were held during the financial year 2018-2019.

The Stakeholders Relationship Committee Meetings are held whenever required in case the grievances of investors stand unresolved by the Registrar and Share Transfer Agent of company, Link Intime India Private Limited.


During the F.Y 2018-2019, Meetings of the Board of Directors of the Company were held four times on 29.05.2018, 14.08.2018, 12.11.2018 and 12.02.2019. The gaps between the Board meetings were well within the maximum time gap of 120 days as prescribed in Regulation 27 of SEBI (Listing Obligation and Disclosure Regulations), 2015.

Details of the attendance of the Directors at the Board meetings and Annual General Meeting and also details of Directorship and membership of Committee (s) in other Companies as on 31.03.2019 are as under:

Directors Attendance (Total 4 Board Meetings) Attendance (38 th AGM held on 29.09.2018) Directorship in other Companies Number of membership in other Companies Committee(s) Number of Chairmanship in other Companies Committee(s)
Shri Ajay Kumar Dasgupta DIN:02315693 03 Yes - - -
Shri Nabi Ahamad DIN:07143915 04 Yes - - -
Shri K. K. Ganguly DIN:08214967 01 - - - -
Smt Rana Zia DIN:07083262 04 Yes 09 09

Independent Directors Meeting

During the year, a separate meeting of the Independent Directors was held on February 12, 2019 inter-alia to evaluate the performance of Non-Independent Directors and the Board of Directors as a whole, performance of the Co-Chairpersons of the Company and of the quality, content and timelines of flow of information between the Management and the Board.

CEO/CFO Certification

The Company is fully cognizant of the need to maintain adequate internal control to protect its assets and interests and for integrity and fairness in financial reporting and is committed to lay down and enforcing such controls of appropriate systems and procedures. Towards this the Manager and the CFO have certified to the Board by placing a certificate on the internal control related to the financial reporting process during the year ended March 31,2019.

Code of Conduct

The Company in pursuance of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 has a Code of Internal Procedures and Conduct for Prevention of Insider Trading in place. The Code lays down guidelines, which advise on procedures to be followed and disclosures to be made while dealing with shares of the Company and indicate the consequences of non-compliance. The Company has also laid down a Code of Conduct for Board members and senior management personnel. The Company is committed to conducting its business in accordance with applicable laws, rules and regulations and the highest standards of business ethics and to full and accurate disclosure in compliance with applicable laws, rules & regulations. All the Board members and senior management personnel have affirmed compliance with the Code of Conduct for the current year. The Code of Conduct is also displayed on the website of the Company at

Performance evaluation criteria for Independent and Non-Executive Directors

The performance of Independent and Non-Executive Directors is evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, time devoted etc.


The details of date, time & venue of the last three Annual General Meetings of the Company are as given below:-

AGM Date & Time Venue Special Resolution(s)
36TH AGM 29th September, 2016 at 1:00 P.M. Sahara India Point, CTS 40 - 44, S.V. Road, Goregaon (West), Mumbai 400 104. Adoption of New Set of Articles of Association of Company inter alia pursuant to the Companies Act, 2013
37TH AGM 28th September, 2017 at 11.00 A.M. Sahara India Point, CTS 40 - 44, S.V. Road, Goregaon (West), Mumbai 400 104. Nil
38 th AGM 29th September, 2018 at 01.00 P. M. Sahara India Point, CTS 40 - 44, S.V. Road, Goregaon (West), Mumbai 400 104. Nil



Special Resolution passed through Postal Ballot:

No postal ballot was conducted during the financial year 2018-19. None of the businesses proposed to be transacted at the ensuing Annual General Meeting require passing a resolution through Postal Ballot.

Related Party Transactions

All Related Party Transactions that were entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations (erstwhile Listing Agreement entered into with the Stock Exchanges). There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the Listing Regulations.

All Related Party Transactions are placed before the Audit Committee for approval. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companys website.

Details of the transactions with Related Parties are provided in the accompanying financial statements. There were no transactions during the year which would require to be reported in Form AOC.2.

Compliances By The Company

The Company is in compliance with the various requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters relating to the capital market and other applicable laws.

Electronic Service of Documents to Members at Registered Email Address:

In accordance with Rule 18 of the Companies (Management and Administration) Rules, 2014 notified under the Companies Act, 2013, the Companies may give Notice of the General Meetings through electronic mode. Further, the said Rule provides that advance opportunity should be given at least once in a financial year to the Members / Members for registering their email address and changes therein, as may be applicable. Further Rule 11 of the Companies (Accounts) Rules, 2014 notified under the Companies Act, 2013 provides that in case of listed companies, financial statements may be sent by electronic mode to such members / members whose shareholding is in dematerialized form and whose email Ids are registered with the Depository for communication purposes. As regards Members / Members whose shareholding is held in physical form, the financial statements may be sent in electronic mode to those members who have positively consented in writing for receiving by electronic mode.

In view of the above, the Company shall send all documents to Members like General Meeting Notices (including AGM), Annual Reports comprising Audited Financial Statements, Directors Report, Auditors Report and any other future communication (hereinafter referred as "documents") in electronic form, in lieu of physical form, to all those members, whose email address is registered with Depository Participant (DP)/Registrars & Share Transfer Agents (RTA) (hereinafter "registered email address) and made available to us, which has been deemed to be the members registered email address for serving the aforesaid documents.

To enable the servicing of documents electronically to the registered email address, we request the members to keep their email addresses validated/ updated from time to time. We wish to reiterate that Members holding shares in electronic form are requested to please inform any changes in their registered e-mail address to their DP from time to time and Members holding shares in physical form have to write to our RTA, M/s Link Intime India Private Limited at their specified address, so as to update their registered email address from time to time. It may be noted that the Annual Report of the Company will also be available on the Companys website for ready reference. Members are also requested to take note that they will be entitled to be furnished, free of cost, the aforesaid documents, upon receipt of requisition from the member, any time, as a member of the Company.


M/s. C.P. Shukla & Co., Practicing Company Secretary, Lucknow has issued a certificate as required under the Listing Regulations, confirming that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of the SEBI / Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed with this section as Annexure 5.

Vigil Mechanism / Whistle Blower Policy

The Company is committed to conduct its business in accordance with applicable laws, rules and regulations and the highest standards of business ethics and to full and accurate disclosures. The Company promotes ethical behaviour in its operations and has a vigil mechanism which is overseen though the Audit Committee. A dedicated e-mail id has been established and communicated for reporting under Vigil Mechanism. Under the vigil mechanism, employees are free to report violations of applicable laws and regulations and the Code of Conduct. During the year under review, no employee was denied access to the Audit Committee.

The Company is making adequate disclosure to the shareholders through the Annual Report. Further there is no materially significant related party transactions i.e. transactions of the Company of material nature, with its promoters, the Directors or the management, their subsidiaries or relatives etc that may have potential conflict with the interests of Company at large.


Disclosure of the financial performance is at core of good governance. This includes consistent, comparable, relevant and reliable information on financial performance of the Company. Towards this end, the Company is providing Annual Report on the working of the Company to each of its shareholders. Further the quarterly / half Yearly Financial Results of the Company are forwarded to Bombay Stock Exchange where the Securities of the Company are listed and published in widely circulated newspapers.

In compliance with Regulation 46 of the SEBI (LODR) Regulations, 2015, the Company has furnished relevant details of its business, financial information, shareholding pattern, compliance with corporate governance, contact information of the designated officials of the Company who are responsible for assisting and handling investor grievances, details of agreements entered into with the media companies and/or their associates, statement of shareholders grievances, etc. and the contents of the said website are updated on regular basis.

Further, in view of circular of SEBI, the Company has started the system of processing of investor complaints in a centralized web based complaints redressal system SCORES.

Management Discussion and Analysis Report forms part of this Annual Report. The relevant information is also available at Companys website Investors can also lodge their complaints with the Company at


Total fees for all services paid by the listed entity to the statutory auditor and all entities in the network firm/network entity of which the statutory auditor is a part. Details relating to fees paid to the Statutory Auditors are given in Financial Statements.


Shri Rajan Kumar Singh

Company Secretary & Compliance Officer

Master Chemicals Limited

Sahara India Point, CTS 40 - 44,

S.V. Road, Goregaon (West),

Mumbai - 400 104.

E-mail ID-

Contact No.- 02242931818