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Chemfab Alkalis

BSE: 541269|NSE: CHEMFAB|ISIN: INE783X01023|SECTOR: Chemicals
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Directors Report Year End : Mar '19    Mar 18

Dear Shareholders,

The Directors have pleasure in presenting the Tenth Annual Report of Chemfab Alkalis Limited along with the Audited financial statements for the Financial Year ended 31st March 2019. The summarized financial results for the Financial Year ended are as under:

Financial Summary:

(Rs. In Lakhs)

Particulars

Year ended 31 March 2019

Year ended 31 March 2018

Total Revenue

19,791.66

18,780.23

Profit before Finance Cost and Depreciation

6,502.92

5,483.07

Less: Finance Cost

199.20

307.79

Profit before Depreciation

6,303.72

5,175.28

Less: Depreciation

1,492.12

1,197.71

Profit Before Exceptional Items

4,811.60

3,977.57

Exceptional Items

(1,963.25)

-

Profit before Tax

2,848.35

3,977.57

Less: Tax including Deferred Tax

1,172.77

1,430.12

Profit after Tax

1,675.58

2,547.45

Other Comprehensive Income

0.47

(29.40)

Total Comprehensive Income

1,676.05

2,518.05

Balance brought forward from last year

(13,386.62)

(14,513.86)

Less: Impact of change in tax

rate on Deferred Tax Asset on the items recognised

in the reserves

221.00

Less: Appropriations

Capital Redemption Reserve

960.00

OCI Reserve

1.72

(31.14)

Final Dividend

173.63

172.88

Tax on Dividend

35.69

35.19

Balance Carried to Balance Sheet

(11,918.64)

(13,386.62)

Performance and State of Affairs of the Company:

During the year, the realization for Chemical Division increased; further the PVC O plant was commissioned. Both these factors resulted in increase in the Sales turnover and Profitability for the year. However, an amount of Rs. 1,963.25 Lakhs was recognized as impairment loss (as an exceptional item) on account of suspension of the operations of Ongole Plant. During the year under review, the Company achieved Total revenue of Rs. 19,791.66 Lakhs and made a Profit Before Tax (PBT) of Rs. 2,848.35 Lakhs.

Dividend:

Your Directors recommended the payment of Dividend of Rs.1.25/- per share (12.50%) for the year ended March 31, 2019, absorbing a sum of Rs.173.63 Lakhs, subject to the approval of the Members at the ensuing Annual General Meeting.

Transfer of profit to reserves:

The Company has not proposed to transfer any of its profits to reserves.

BOARD OF DIRECTORS AND ITS COMMITTEES

A. Composition of the Board of Directors

The Board of Directors of the Company comprises of Non - Executive Chairman who is a promoter of the Company along with him other Five Non - Executive Directors, including three Independent Directors. The Company has two women Independent Directors. The composition of the Board of Directors in compliance with regulation 17(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 149 of the Companies Act, 2013.

The Company has received necessary declarations from the Independent Directors under section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as specified in Section 149(6) of the Companies Act, 2013 and as per Regulation of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

Board Composition:

The Board is well constituted with a composition of 3 Non - Independent Directors and 4 Independent Directors (up to 28.03.2019), all are Non - Executive Directors.

Category

Name of Directors

Non - Independent Director

Mr. Suresh Krishnamurthi Rao Mr. C S Ramesh Mr. R Mahendran

Independent Director

Mr. A Janakiraman Mrs. Drushti Desai Mrs. Sujatha Jayarajan Mr. T Ramabadran (up to 28.03.2019)

Currently the Board strength has Six Directors, with the composition of Three Non - Independent and Three Independent Directors (with Two Women Independent directors) all are Non - Executive Directors constituted in line with the terms of Section 149 of the Companies Act 2013 and in terms of Regulations 17(1)(b) of the SEBI (LODR) Regulations, 2015.

B. Meetings

Number of Board Meetings held during the year along with the dates of the meetings:

(Disclosure in pursuant to 134 (3)(b) of the Companies Act, 2013)

During the Financial Year 2018 - 19, the Board of Chemfab Alkalis Limited met six times as under:

Sl.

No

Dates of meetings of the Board

Quarter

No. of Directors on the date of Meeting

Total No. of Directors attended

1

04-04-2018

First

7

5

2

10-05-2018

First

7

7

3

25-07-2018

Second

7

6

4

24-10-2018

Third

7

7

5

30-01-2019

Fourth

7

7

6

28-03-2019

Fourth

7

6

The meetings of the Board were held periodically, with not more than one hundred and twenty days intervening between two consecutive meetings of the Board, as prescribed under Section 173(1) of the Act.

C. Re-appointment of Director Retiring by Rotation

In terms of Section 152 of the Companies Act, 2013, Mr. Suresh Krishnamurthi Rao (DIN- 00127809) liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors based on the recommendation of Nomination and Remuneration Committee, has recommended the re-appointment of Mr. Suresh Krishnamurthi Rao (DIN- 00127809) retiring by rotation.

D. Committees of the Board

The constitution and terms of reference of Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee were also aligned with the requirements of regulations 18 to 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013.

The Company has also constituted Corporate Social Responsibility Committee. A detailed note on the Committees of the Board of Directors is given in the Corporate Governance Report forming part of the Annual Report.

E. Performance Evaluation

Section 134 of the Companies Act, 2013 states that formal evaluation needs to be made by the Board, of its own performance and that of its committees and the individual Directors. Schedule IV of the Companies Act, 2013 and regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Directors being evaluated.

Pursuant to the provisions of section 134 (3)(p) of the Companies Act, 2013 and SEBI (LODR) regulations, 2015, the Board has carried out an evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The Board of Directors at its meeting held on May 07, 2019 has evaluated the performance of the Board, its Committees and the Individual Directors as per the Nomination and Remuneration Policy as provided in our website available in the following link www.chemfabalkalis.com, as prescribed under first proviso of sec. 178 of the Companies Act, 2013.

F. Directors’ Responsibility Statement

(Disclosure in pursuant to 134(3)(c) of the Companies Act, 2013)

As required under Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirm, that -

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had 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 the affairs of the Company at the end of the Financial Year and of the profit of the Company for that Financial Year;

(iii) the Directors had 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;

(iv) the Directors had prepared the Annual Accounts on a going-concern basis;

(v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

G. Changes in Directors and Key Managerial Personnel

The SEBI has amended its Securities and Exchange Board of India (SEBI) (LODR) Regulations, 2015 to give effect to the suggestions/recommendations provided by the Committee under the Chairmanship of Mr. Uday Kotak with a view to enhancing the standards of corporate governance of listed entities in India, w.e.f April 01, 2019.

One of the significant amendments is insertion of sub-regulation in Regulation 17(1), restricting the age limit to seventy-five (75) years for appointment or continuation of non-executive Directors in the Board, beyond which shareholders special approval is required.

Consequent to the amendment of SEBI (LODR) Regulation 2015, Non - Executive and Independent Director Mr. T. Ramabadran, submitted his resignation to the board w.e.f March 28, 2019.

Further he has also submitted his confirmation stating that there are no other material reasons for his resignation other than age restriction.

Mr. Somasundaram, Company Secretary and Compliance Officer submitted his resignation w.e.f., 28.02.2019 and upon the recommendation of Nomination and Remuneration Committee, the Board appointed Dr. V. RAJESH, fellow member of Institute of Company Secretaries of India (FCS:9213) holding prescribed qualification under Rule 2(1) (Appointment and Qualification of Company secretary) Rules 1988, as a Whole time Secretary of the Company w.e.f. March 28, 2019.

H. Changes in Subsidiaries, Joint Ventures and Associates

Your Company does not have any Subsidiaries, Joint Venture or Associates during the year 2018-19.

I. Significant or Material Orders Passed by Regulators / Courts

The case filed by the NGO with National Green Tribunal (NGT) with respect to the consent quantities and alleged excess production, has been disposed off by the Hon’ble forum i.e., NGT in favour of the Company vide its order dated 29.01.2019.

J. Declaration by Independent Directors

The Company has received necessary declarations from Mr.A. Janakiraman, Mrs.Drushti Desai and Mrs. Sujatha Jayarajan independent directors under Section 149 (7) of the Companies Act 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act 2013 and regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and their Declarations have been taken on record.

K. Details in respect of Frauds

The Company’s auditors’ report does not have any statement on suspected fraud in the company operations to explain as per Sec. 134(3)(ca) of the Companies Act 2013.

L. Fixed Deposits:

During the year under review, the Company did not raise funds, by way of fixed deposits, from the public.

M. Details of contracts or arrangements with related parties:

The contracts or arrangements entered into with related parties along with justification for entering into such contract or arrangement, referred to in sub-section (1) of section 188 in the prescribed form no. AOC 2 are as per Annexure 3.

N. Code of Conduct for prevention of Insider Trading:

The Company has a policy viz., “Code of Conduct for prevention of Insider Trading” and the same has been posted on its website www.Chemfabalkalis.com.

O. Development and implementation of a Risk Management Policy:

The main objective of Risk Management is risk reduction and avoidance, as also identification of the risks faced by the business and optimizing of the risk management strategies. The Company has put in place a well-defined Risk Management framework.

The Company has constituted a Risk Management Committee even though the constitution of Risk Management Committee is NOT applicable to the Company since it is mandatory only for the top 100 listed Companies as per the listing regulations. The Risk Management Committee assists the Board in drawing up, implementing, monitoring and reviewing the Risk Management Plan. The Committee lays down the Risk Assessment and Minimization Procedures and it reviews the Procedures periodically to ensure that the Executive Management controls the risks through properly defined framework.

The composition of the Risk Management Committee is as under

S. No

Name of the Member

Category

1)

Mr. A. Janakiraman

Chairman, Non Executive Independent Director

2)

Mrs. Drushti Desai

Member, Non Executive Independent Director

3)

Mr. C.S. Ramesh

Member, Non Executive Non Independent Director

4)

Mr. R. Mahendran

Member, Non Executive Non Independent Director

5)

Mr. V.M. Srinivasan

Member, Chief Executive Officer

The Company has obtained certification for ISO 14001 and OHSAS 18001 systems to take care of critical operational areas. The Company has also implemented Process Safety Management (PSM). We are the first company in our industry to implement the same. We are continuing with the publishing of sustainability report, enhancing our commitment to sustainable development.

P. Technology absorption, Conservation of energy and Research and development:

The Company has an in-house Research and Development Department, where the main areas of focus are Energy Conservation, Process Upgradation and Environmental Preservation. The Ministry of Science and Technology, Department of Scientific and Industrial Research, Government of India, has recognized the Company’s in- house R & D facilities.

The Company has a sophisticated Quality Assurance (QA) Laboratory recognized by DuPont, USA for the analysis of Chlor- Alkali brine. The Brine from various Chlor- Alkali Industries in India is being analyzed at CAL - QA Laboratory and this laboratory is NABL accredited.

The Company continues to take all possible steps to conserve energy in every area of its operations. Brief details on Conservation of Energy and Technology Absorption are given in Annexure 4.

Q. Cost Records

Your Company is maintaining cost records and reports in pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub - section (1) of Section 148 of the Companies Act, 2013.

AUDIT RELATED MATTERS:

A. Statutory Auditors

As per the provisions of Sections 139, 142 and other applicable provisions of the Companies Act, 2013, if any, read with the Companies (Audit and Auditors) Rules, 2014, the Auditors, M/s. Deloitte Haskins & Sells LLP (Firm Registration No 117366W /W-100018) were appointed as Statutory Auditors of the Company at the Annual General Meeting held on 04.09.2017 for a period of Five(5) consecutive Financial Years from 2017-18 to 2021-22.

B. Cost Auditor:

As per Sec. 148 (6) of Companies Act 2013 and rule 6(6) of the Companies (Cost records and audit) Rules, 2014, the applicability of Cost audit is based on being the overall annual turnover of the company from all its products and services during the immediately preceding financial year rupees one hundred crore or more and the aggregate turnover of the individual product or products or service or services, being for which cost records are required to be maintained under rule 3, is Rupees thirty five crore or more.

In conformity with the said provisions of the Companies Act, 2013, the Company has appointed Shri. A. Madha-van, Cost Accountant, Chennai, as the Cost Auditor, for the audit of cost accounts for your Company for the year ending 31st March 2020. The remuneration paid to him is being ratified at this Annual General meeting.

C. Secretarial Audit Report:

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. M.R. Thiagarajan, Company Secretar-ies-in-Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report in Form No.MR.3 for Financial year 2018-19, is annexed herewith, as Annexure - 8.

A Certificate from a Company Secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is annexed herewith, as Annexure - 9.

There are no qualifications or adverse remarks in the Secretarial Audit Report which require any explanation from the Board of Directors.

D. Internal Financial Controls

Your Company has well defined and adequate internal controls and procedures, commensurate with its size and the nature of its operations. This is further strengthened by the Internal Audit done concurrently. During the year, the Company got its internal controls over financial reporting and risk management process evaluated by independent Consultants.

Besides, the Company has an Audit Committee, comprising Independent and Non-Executive Directors, which monitors systems, controls, financial management and operations of the Company.

The Audit committee at its meeting held on May 07, 2019 has evaluated the internal financial controls and risk management system accordingly.

E. Internal Auditor

The board appointed, M/s. Mukesh Manish & Kalpesh, Chartered Accountants as internal auditor for the Financial Year 2019 - 20 based on the recommendation of the Audit Committee.

BOARD COMMITTEE COMPOSITION

The Board has constituted the following committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee.

A. Audit Committee

Pursuant to regulation 18 of SEBI (LODR) Regulations 2015 and the provision of Section 177(8) read with Rule 6 of the companies (Meeting of Board and its Powers) Rules 2014, the Company has duly constituted a qualified and independent Audit Committee. The Audit Committee of the Board, consists three “Independent Directors” and One “Non - Independent Director” as members having adequate financial and accounting knowledge. The composition, procedures, powers and role/functions of the audit, committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report.

During the period under review, the suggestions put forth by the Audit Committee were duly considered and accepted by the Board of Directors. There were no instances of non-acceptance of such recommendations.

Consequent to the resignation of Mr. T. Ramabadran, the board reconstituted the committee w.e.f.,28th March 2019 in terms of Section 177 of the Companies Act, 2013 and in terms of Regulation 18 of SEBI (LODR) Regulations, 2015 is under:

S.

No

Name of the Member

Category up to 28.03.2019

Category from 28.03.2019

Mr. T. Ramabadran

Chairman,

Independent Director

Resigned

2

Mr. A. Janakiraman

Member,

Independent Director

Chairman,

Independent, Director

3

Mrs. Drushti Desai

Member,

Independent Director

Member,

Independent Director

4.

Mrs. Sujatha Jayarajan

Member,

Independent Director

Member,

Independent Director

5.

Mr. C.S. Ramesh

Member,

Non-Independent Director

Member,

Non-Independent Director

The Audit Committee acts in accordance with the terms of reference specified by the Board of Directors in terms of Section 177(4) of the Act and in terms of Regulation 18 of the SEBI (LODR) Regulations, 2015. It also oversees the vigil mechanism and is obliged to take suitable action against the Directors or employees concerned, when necessary.

B. Nomination and Remuneration Committee:

Consequent to the resignation of Mr. T. Ramabadran, the Board reconstituted the committee w.e.f.,28th March 2019 in terms of Section 178 of the Companies Act, 2013 and in terms of Regulation 19 of SEBI (LODR) Regulations, 2015, as under:

Composition:

S.

No

Name

of the Member

Category up to 28.03.2019

Category from 28.03.2019

1

Mr. T. Ramabadran

Chairman,

Independent Director

Resigned

2

Mr. A. Janakiraman

Member,

Independent Director

Member,

Independent, Director

3

Mrs. Drushti Desai

Member,

Independent Director

Chairperson, Independent Director

4.

Mr. C.S. Ramesh

Member,

Non-Independent Director

Member,

Non-Independent Director

Accordingly, the Company has set up a Nomination and Remuneration Committee which has formulated the criteria for determining the qualifications, positive attributes and independence of a Director and ensures that:

1) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

2) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

3) Remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and variable pay, reflecting short- and long-term performance, objectives appropriate to the working of the Company and its goals.

The Nomination and Remuneration Policy of your Company is set out and available in your company website www.chemfabalkalis.com.

C. Stakeholders’ Relationship Committee:

Consequent to the resignation of Mr. T. Ramabadran, the Board reconstituted the committee w.e.f.,28th March 2019 in terms of Section 178 of the Companies Act, 2013 and in terms of Regulation 19 of SEBI (LODR) Regulations, 2015, as under:

Composition:

S.

No

Name

of the Member

Category up to 28.03.2019

Category from 28.03.2019

Mrs. Drushti Desai

Chairperson,

Independent Director

Chairperson, Independent, Director

2

Mr. C.S. Ramesh

Member,

Non-Independent Director

Member,

Non-Independent Director

3

Mr. Suresh Krishnamurthi Rao

Member,

Non-Independent Director

Member,

Non-Independent Director

4.

Mr. T. Ramabadran

Member,

Independent Director

Resigned

D. Risk Management Committee:

The Company has constituted a Risk Management Committee even though the constitution of Risk Management Committee is NOT applicable to the Company since it is mandatory only for the top 100 listed Companies as per the listing regulations. The Risk Management Committee assists the Board in drawing up, implementing, monitoring and reviewing the Risk Management Plan. The Committee lays down the Risk Assessment and Minimization Procedures and it reviews the Procedures periodically to ensure that the Executive Management controls the risks through properly defined framework.

Composition:

S. No

Name of the Member

Category

1)

Mr. A. Janakiraman

Chairman, Independent Director

2)

Mrs. Drushti Desai

Member, Independent Director

3)

Mr. C.S. Ramesh

Member, Non-Independent Director

4)

Mr. R. Mahendran

Member, Non-Independent Director

5)

Mr. V.M. Srinivasan

Member, Chief Executive Officer

E. Corporate Social Responsibility (CSR) Committee:

According to Section 135 of the Companies Act, 2013 (“the Act”), a Company having a Net Worth of Rs.500 Crores or more, or Turnover of Rs.1,000 Crores or more, or Net Profit of Rs. 5 Crores or more during any financial year shall constitute a Corporate Social Responsibility (CSR) Committee of the Board consisting of three or more Directors, of which at least one shall be an Independent Director.

The Board constituted the Corporate Social Responsibility Committee in terms of provisions of the Companies Act 2013, as under:

S.

No

Name

of the Member

Category up to 28.03.2019

Category from 28.03.2019

1

Mr. C.S. Ramesh

Chairman,

Non-Independent Director

Chairman,

Non-Independent Director

2

Mr. A. Janakiraman

Member,

Independent Director

Member,

Independent, Director

3

Mr. R.Mahendran

Member,

Non-Independent Director

Member,

Non-Independent Director

4.

Mrs. Sujatha Jayarajan

Member,

Independent Director

Member,

Independent Director

5.

Mr. T. Ramabadran

Member,

Independent Director

Resigned

As your Company’s Net Profit is more than Rs 5 Crores, the Board has constituted the Corporate Social Responsibility Committee in accordance with Section 135 of the Companies Act, 2013. The Company is committed to operate in a socially responsible manner in terms of protecting the environment and conserving water resources and energy. Details of the CSR Policy drawn up by the Company and the CSR expenditure and initiatives taken during the year 2018 - 19 are given in Annexure - 5 to this Report.

OTHER MATTERS

A. Particulars of loans, guarantees or investments u/s 186 of the Companies Act, 2013

During the year under review, the Company did not provide loans, guarantees or investment u/s 186 of the Companies Act 2013.

B. Remuneration details of Directors and Employees

The Company’s policy on Directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178, is posted in our company website in the following linkhttps://chemfabalkalis.com/wp-content/up-loads/2019/04/policies-Policy-for-Nomination-and-Remu neration.pdf and forms part of this Report pursuant to first proviso of Sec. 178 of the Companies Act 2013.

C. Debentures

During the year under review, the Company has not issued any debentures. As on date, the Company does not have any outstanding debentures.

D. Bonus Shares

During the year under review, the Company has not issued any bonus shares.

E. Borrowings

The Company has outstanding borrowings including IND AS accounting adjustment entries and interest accrued of Rs. 3417.05 Lakhs during the financial Year ended March 31, 2019.

F. Deposits

The Company has not accepted any deposit in terms of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014, during the year under review and as such, no amount on account of principal or interest on public deposits was outstanding as of the balance sheet date.

G. Transfer to Investor Education and Protection Fund

As required under the provisions of Sections 124(5) and 125(2)(c) of the Companies Act, 2013, final dividends pertaining to the financial year 2010 -11 which were lying unclaimed with the Company for the past seven years was transferred to the Investor Education and Protection Fund during the Financial Year 2018-19.

The details of unclaimed dividend transferred to the Investor Education and Protection Fund has been detailed in the Corporate Governance Report forming part of the Annual Report, which is also available in the company’s website.

H. Credit Ratings

CARE has re-affirmed its rating of “CARE A - Stable” for Long term Bank facilities; and CARE A2 for Short term Bank facilities.

I. Code of Corporate Governance

In compliance with the requirement of regulations 24 to 27 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a detailed report on Corporate Governance is annexed to this report as Annexure - 7 together a Certificate from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants affirming compliance with the said Code is appended as Annexure - 9 .

J. Code of conduct for Directors and Senior Management:

The Board of Directors had adopted a code of conduct for the Board Members and employees of the company. This Code helps the Company to maintain the standard of Business Ethics and ensure compliance with the legal requirements of the Company.

The Code is aimed at preventing any wrong doing and promoting ethical conduct at the Board level and by employees. The Compliance Officer is responsible to ensure adherence to the Code by all concerned.

The Code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

K. Management Discussion and Analysis Report

In accordance with the requirement of the Listing regulations, the Management Discussion and Analysis Report is presented in a separate section of the Annual Report, is appended as Annexure - 1

L. Disclosure on Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013:

Presently the Company does not have any woman employee at the work place. Hence the company has not constituted a separate committee under the sexual harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

However, the company has zero tolerance for sexual harassment at work place.

M. Vigil Mechanism:

The Company has established a vigil mechanism, also called the Whistle Blower Policy, which has been adopted by the Board for Directors and employees, to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. It provides for adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. Confidentiality of Whistle Blower shall be maintained to the greatest extent possible. Details of the vigil mechanism is available in our Company’s website.

N. Extract of the Annual Return:

An extract of the Annual Return as prescribed under subsection (3) of Section 92 and as per Sec. 134(3)(a) of the Companies Act, 2013 (“Act”) is prepared and posted in our Company website in the following link www.chem-fab.alkalils.com and forms part of this Report is appended as Annexure - 2

O. Employees’ Stock Option Scheme:

The Shareholders of the Amalgamated entity Chemfab Alkalis Limited had approved the Employees’ Stock Option Scheme titled as “CAESOS - 2015” through Postal Ballot on March 05, 2016. “CAESOS-2015” is compliance with, SEBI (Share Based Employee Benefits) Regulations, 2014. The details are available on our website www.chemfabalkalis.com

The purpose of the Scheme is:

i) to attract, retain and motivate talented and critical employees.

ii) to encourage employees to align Individual performance with the Company’s Objectives; and

iii) to reward employee performance with ownership.

The details of CAESOS - 2015 form part of the Notes to Accounts of the Financial Statements in this Annual Report.

As per the approval given by the Shareholders of Chem-fab Alkalis Limited, the Options granted to the employees of the amalgamated Company Chemfab Alkalis Limited also carry the eligibility of application of the Swap ratio of 1 0: 7 (i.e., 10 shares of Rs.10 each for every 7 shares of Rs . 5 each held) mentioned in the Scheme of Amalgamation of erstwhile Chemfab Alkalis Limited to the Company approved by the NCLT vide its Order dated 30.03.2017.

Shares allotted under employee stock option scheme during the report period (ESOS) and as at 07.05.2019: 99.000 number of shares. Out of the same, 1st tranche of 60.000 shares were allotted during the fY 2018-19 and 2nd tranche of 39,000 shares were allotted subsequent to the FY 2018-19 and before the Board report dated 07.05.2019

Price at which shares were issued: Rs.52.43

Employee wise details (Name - Designation - No. of shares)

Sl. No

Name of the Employees

Designation

1st Tranche

2nd Tranche

01.

Mr. V M Srinivasan

CEO

35,714 shares

35,714 Shares

02.

Mr. Nitin S Cowlagi

CFO

14,286 shares

3286 shares

03.

Mr. V R Raguraman

VP - Admin

10,000 shares

-

Consideration received

Rs. 31,45,800/-

Rs.20,44,770/-

Diluted EPS - Rs.11.96/-

Equity Shares with differential voting rights: NA Sweat

Equity Shares: NA

Details of Voting rights not exercised: NA

P. Listing of Equity Shares of the Company after the amalgamation of erstwhile listed Company Chemfab Alkalis Limited with the Company:

After the Amalgamation of erstwhile listed Company Chemfab Alkalis Limited with the Company, the listing application was made, and the Company’s Equity Shares got listed in BSE and NSE on 25.04.2018. The Company has paid the listing fee for the financial year 2018-19 to the Stock Exchanges.

Q. Green initiatives

Electronic copies of the Annual Report 2018-19 and Notice of the Tenth Annual General Meeting are sent to all the members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2018 - 19 and the Notice of the Tenth Annual General Meeting are sent in the permitted mode. Members requiring physical copies can send a request to the Company. Further, the soft copy of the Annual Report (in pdf format) is also available on our website www.chemfabalkalislimited.com

Pursuant to Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014, and Listing Regulations, the Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the notice. The instructions for e-voting are provided in the notice.

R. Human Resources

Employee relation continues to be cordial and harmonious at all levels and in all the division of the Company. The Board of Directors would like to express their sincere appreciation to all the employees for their continued hard work and dedication.

The number of employees as on March 31, 2019 was 216.

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure - 6 to the Board''s Report.

ACKNOWLEDGEMENT

The Directors thank the Shareholders, Customers, Dealers, Suppliers, Bankers, Financial Institutions and all other business associates for their continued support to the Company and the confidence reposed in its Management. The Directors also thank the Government authorities for their co-operation. The Directors wish to record their sincere appreciation of the significant contribution made by the CCAL mates at all levels to its profitable and successful operations.

For and on behalf of Board of Directors of

CHEMFAB ALKALIS LIMITED

(formerly known as Teamec Chlorates Limited)

Sd/-

Suresh Krishnamurthi Rao

CHAIRMAN

DIN No: 00127809

Place: Chennai

Date : 07.05.2019

Source : Dion Global Solutions Limited
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