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Dharamsi Morarji Chemical Company Ltd.

BSE: 506405 | NSE: DHARAMORAR | Series: NA | ISIN: INE505A01010 | SECTOR: Chemicals

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

The Directors’ are pleased to present their Ninety Seventh Annual Report together with the audited financial statements of the Company for the financial year ended 31st March, 2018.


Financial Year ended 31st March, 2018

Financial Year ended 31st March, 2017

Rs. in lakhs

Rs. in lakhs

Sales Turnover



Gross Profit / (Loss)



Less : Depreciation



Profit / (Loss) before taxation



Less : Provision for Taxation (MAT)



Add: Tax impact due to OCI



Profit (Loss) after Taxation



Add : Other Comprehensive income



Total Comprehensive Income



The following is the Sales Turnover

Commodity Chemicals



Speciality Chemicals









The Financial results for the year ended 31st March, 2018 are in compliance with the Indian Accounting Standards (Ind-AS) and accordingly the results for the year ended 31st March, 2017 have been re-stated.

Consequent to the introduction of Goods and Services Tax (GST) with effect from 1st July 2017, Central Excise, Value Added Tax (VAT) etc. have been replaced by GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule III of the Companies Act, 2013, GST, GST Compensation Cess, VAT etc. are excluded from Gross Revenue from sale of products and services for applicable periods. In view of the aforesaid restructuring of indirect taxes, Gross Revenue from sale of products and services and Excise duty for the year ended 31st March, 2017 and year ended 31st March, 2018 are not comparable with the previous periods. The following additional information is being provided to facilitate such comparison:


For the year ended

For the year ended



Rs. In Lakhs

Rs. In Lakhs

- Sales Turnover (Including Excise)



(-) Taxes - Excise duty



Sales Turnover



There has been no material change which have occurred between end of the Financial year 2017-18 and the date of this report.


In view of reasonable improvement in the financial performance of the Company, your Directors have recommended a dividend of Rs. 0.50 per Equity share of Rs. 10/- each (i.e. 5%) for the Financial Year ended 31st March, 2018, subject to the approval of the members at the 97th Annual General Meeting of the Company scheduled to be held on 26th September, 2018. The dividend will absorb Rs. 124.70 Lakhs and the Dividend Distribution Tax to be borne by the Company would amount to Rs. 25.40 Lakhs. The amount towards payment of dividend will be distributed from profits of the company for the current year in compliance with the provisions of the Companies Act, 2013.

Your company has also paid the Cumulative arrears of the Dividend aggregating to Rs. 71.74 Lakhs upto 31.03.2018 on 2,80,000 2.5% cumulative non-convertible redeemable preference shares of Rs. 100/- each aggregating to Rs. 2.80 Crores. The company has also paid Dividend Distribution Tax payable on the amount of dividend paid to Preferential shareholders.


The board of directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 (the Act) and the corporate governance requirements as prescribed by Securities and Exchange Board of India ( “ SEBI ” ) under Clause 49 of the Listing Agreement.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning etc.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the “Chief Executive Officer” and “Manager” of the Company under the Companies Act, 2013.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of non-executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performances of the Board, its committees and individual Directors were also discussed.


The Policy on Nomination and Remuneration of Directors, Key Managerial Personnel and other employees have evolved and have been formulated in terms of the provisions of the Companies Act, 2013 and the listing agreement with a view to pay equitable and commensurate remuneration to the Directors, Key Managerial Personnel and other Employees of the Company, based on the Qualification, experience and industry standard.

In view of the inadequacy of profits, the Directors of the Company were not being paid any remuneration/commission etc. except the normal sitting fees.

The Managing Director, & Chief Executive Officer (CEO) of the Company is being paid in accordance with the provisions of the Companies Act, 2013 and Schedule V of the Companies Act, 2013 which prescribes the ceiling on the maximum permissible remuneration in respect of Companies having inadequate profits.

The Management of the Company has taken into consideration the various applicable factors such as qualification, experience, industry standards etc. and evolved an appropriate Remuneration policy.


The Company has not provided any loan to any person or body corporate or given any guarantee or provided security in connection with such loan or made any investment in the securities of anybody corporate pursuant to Section 186 of the Companies Act, 2013. The Company has given advance against salary to some employees in terms of the applicable policies of the Company.


During the year under review, there was not a single incident under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013.


A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year five Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.


The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.


Shri Laxmikumar Narottam Goculdas (holding 00459347), Director, is retiring by rotation in accordance with the requirements of the Act and under the Article 135 of the Articles of Association of the Company, and being eligible, offers himself for re-appointment.

Shri Laxmikumar Narottam Goculdas, Chairman of the Company has wide knowledge and experience in industry, trade, finance, commerce, corporate affairs and international trade.

Based on the Report of the Committee on Corporate Governance chaired by Mr. Uday Kotak, the Securities and Exchange Board of India (SEBI) amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as “Listing Regulations”). According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. The said provision comes into effect from 1st April, 2019.Shri Laxmikumar Narottam Goculdas would attain the age of seventy-five years on 16th September, 2018, the approval of the Shareholders is being sought for the continuation of directorship.

Shri Haridas Tricumdas Kapadia

Shri Haridas Tricumdas Kapadia, Director of the company has vide knowledge and experience in industry, trade, commerce, corporate affairs and International Trade,. He is B.Sc. and Diploma in Chemical Engineering.

Shri Haridas Tricumdas Kapadia, Non-Executive Independent Directors whose appointment for a period of five years commencing from 18th September, 2014 and ending on 17th September, 2019, was approved by the Shareholders at the 93rd Annual General Meeting of the company held on 18th September, 2014.

According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. Accordingly the approval of the Shareholders is being sought for the continuation of directorship of Shri Haridas Tricumdas Kapadia,.

Shri Arvind Wasudeo Ketkar

Shri Arvind Wasudeo Ketkar, is B.Com (Hons), A.C.A., Practising Chartered Accountant for over 44 Years and has indepth knowledge in finance and accounting. Sshri Arvind Wasudeo Ketkar, Non-Executive Independent Directors whose appointment for a period of five years commencing from 18th September, 2014 and ending on 17th September, 2019, was approved by the Shareholders at the 93rd Annual General Meeting of the company held on 18th September, 2014.

According to the new provisions, a listed entity is required to avail approval of shareholders by way of Special Resolution to appoint or continue the directorship of any Directors who have attained the age of seventy-five years. Accordingly the approval of the Shareholders is being sought for the continuation of directorship of Shri Arvind Wasudeo Ketkar,.

Shri Mukul Manoharlal Taly

Shri Mukul Manoharlal Taly is B.Sc., LL.M practicing over 34 years as Senior in S. Mahomedbhai & Co., Advocate & Solicitors, High Court, Mumbai. He has been a Gold Medallist ( 1st in the University of Mumbai in LLB) in the year 1983. He has LL.M. degree from the University of Mumbai in Commercial Law and Constitutional Law during the year 1983-85.

Shri Mukul Manoharlal Taly taught various subjects such as Commercial Laws, Civil Procedure Code, Bankruptcy etc., at the Government Law College as Fellow and as a Professor from 1983 to 1991.

Shri Mukul Manoharlal Taly has appeared in his matters before the Mumbai and Gujarat High Courts, various District Courts, Powered Committee and Tribunals and also in the Supreme Court of India.

Shri Sanjeev Vishwanath Joshi

Shri Sanjeev Vishwanath Joshi is B.Com, Practising Chartered Accountant for over 34 years.

Shri Sanjeev Vishwanath Joshi has in-depth knowledge in finance and accounting and taxation.

Shri Bimal Lalitsingh Goculdas

Shri Bimal Lalitsingh Goculdas ( DIN 00367792) is a Chemical Engineer from The Institute of Chemical Technology (ICT), Mumbai and has done M.S. in Chemical Engineering from University of Wyoming, U.S.A. Shri Bimal Laitsingh Goculdas is a leading professional with wide experience in business , commercial, technical, corporate finance both in India and Abroad.

Shri Bimal Lalitsingh Goculdas has been associated with the Company holding various senior Management positions for over last 20 years and has handled production, technology, supply chain management, marketing both domestic & export and finance.

Shri Bimal Lalitsingh Goculdas, Chief Executive Officer and Manager of the Company is related to Shri Laxmikumar Narottam Goculdas and Ms. Mitika Laxmikumar Goculdas.

His existing term of appointment as CEO and Manager of the Company would have normally come to an end on 31.03.2019. His appointment as the Managing Director, and CEO of the Company is for five years w.e.f. 01.04.2018 upto 31.03.2023.

The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

During the year, the non-executive Directors of the Company had no pecuniary relationship or transactions with the Company.

Shri D.K. Sundaram, Chief Finance Officer of the company left the company w.e.f. 31/12/2017 and Shri D.G. Patil was appointed as Chief Finance Officer of the company. On his relieving w.e.f. 1st July, 2018 Shri Chirag Jaswant Shah, Chartered Accountant joined as Chief Finance Officer of the company w.e.f. 6th July, 2018. The Company continues its operations under the leadership of the Senior Corporate Management Team comprising of Shri Bimal Lalitsingh Goculdas, Managing Director, & Chief Executive Officer, Shri D. T. Gokhale, Sr. Executive Vice President and Company Secretary and Shri Chirag Jaswant, Chief Finance Officer, who are the Key Managerial Personnel.


The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower policy has been posted on the website of the Company (www.dmcc.com).


All related party transactions that were entered into during the financial year under review were at arm’s length basis and were in the ordinary course of business.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The Audit Committee and the Board of Directors at their meetings have reviewed and approved all the related party transactions undertaken by the Company during the Financial Year. The related party transactions entered into by the Company are disclosed in Note no. 43 of the Notes to Accounts. All Related Party Transactions are placed/routed through the Audit Committee and the Board of Directors. None of the Directors has any pecuniary relationships or transactions with the Company.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website.


The Company has formulated a Risk Management Policy which reflects the overall risk management philosophy, the Company’s overall approach to risk management, risk assessment, risk mitigation mechanism and the roll and responsibilities for risk management. Risk management forms an integral part of the business planning and review cycle. The Company’s Risk Management Policy is designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safe guarding the integrity of the Company’s financial reporting and its related disclosures.

The identification and analysis of and putting in place the process for mitigation of these risks is an ongoing process. The Company has also laid down procedure to inform the Audit Committee and the Board about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management control risks by means of a properly defined frame work. The monthly review meetings of all the functional/ departmental heads inter alia discuss the relative risk management issues.


In compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulation 2015 and to preserve the confidentiality and prevent misuse of unpublished price sensitive information, the Company has adopted a code of conduct to Regulate, Monitor and Report Trading by Insiders (‘Insider Trading Code’) and code of Practices and Procedures for Fair Disclosure of unpublished Price Sensitive Information (‘Code of Fair Disclosure’).

The Insider Trading Code is intended to prevent misuse of unpublished price sensitive information by insiders and connected persons and ensure that the Directors and specified persons of the Company and their dependents shall not derive any benefit or assist others to derive any benefit from access to and possession of price sensitive information about the Company which is not in the public domain, that is to say, insider information.

The code of Fair Disclosure ensures that the affairs of the Company are managed in a fair, transparent and ethical manner keeping in view the need and interest of all the Stakeholders.


The prime endeavor of our Management is to achieve Environment Health and Safety (EHS). Your Company has various EHS management processes and methodologies being deployed and implemented under the EHS to ensure that our employees become more safety conscious . The Company has a system of in- house EHS training for employees and workmen at the factory as also the practice of sending the employees/workmen to various external EHS programmes.


Responsible care® is a global voluntary initiative of the Chemical Industry, the objective of which is continuous improvement in the areas of environmental protection, health, safety and security. It is the endeavor of your Company that our products - both raw material and finished goods pose no risk to employees, society and environment as well. This is sought to be achieved by minimizing the negative influence of our products along the entire supply chain, right from procurement, storage and manufacturing right upto sale. Your Company is one of the few in India authorized to use the Responsible care® logo. This has been achieved after extensive site and systems improvement, third party mentoring, and a series of audits. Logo usage validity is upto November 2018, renewable thereafter.


REACH regulation is adopted by the European union to improve protection of human health and environment from the risks of that can be posed by the Chemicals. REACH stand for Registration, Evaluation, and Authorisation of all Chemical Substances. Borax Morarji ( Europe ) GmbH has registered several products under the REACH Regulations and with merger of BML with DMCC, your company will be able to take advantage of this registration.


In the 96th Annual General Meeting (AGM) held on 26th day of December, 2017 Messrs Rahul Gautam Divan & Associates (RGD & Associates), Chartered Accountants (ICAI Firm Registration No.120294W), was appointed as Statutory Auditors of the Company for a tenure of five years subject to ratification of their appointment at every subsequent AGM. The Ministry of Corporate Affairs has vide notification dated May 7, 2018 obliterated the requirement of seeking Member’s ratification at every AGM on appointment of Statutory Auditor during their tenure of five years.

Messrs Rahul Gautam Divan & Associates (RGD & Associates), Chartered Accountants (ICAI Firm Registration No.120294W), have under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility.

The report of the Statutory Auditor forming part of the Annual Report, does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditor’s Report are self-explanatory and therefore do not call for any further comments.

Rahul Gautam Divan & Associates is a member of Kreston International, a worldwide network of accounting firms, offering high quality accounting, auditing, legal and consultancy services. The combined experience of the partners in the chartered accountancy profession within the associated firms is over 50 years. RGD & Associates have associated offices in Bangalore and Ahmedabad, with residential partners at both associated offices. RGD & Associates have been involved in the Statutory Audits and also Internal Audits of various companies, and have the necessary experience to conduct the statutory audit of the Company. RGD & Associates have consented to the said appointment and confirmed that their appointment, if made, would be in accordance with Section 139 read with Section 141 of the Act.

As you are aware that Messrs. K.S. Aiyar & Co., Chartered Accountants, holding ICAI Firm Registration Number 100186W, who were the Statutory Auditors of your Company for last so many years till the year ended 31st March, 2017. The Company would like to express our deep appreciation for the cooperation, guidance and support extended by them during their tenure as the statutory auditors of the Company.


The Board of Directors, on the recommendation of Audit Committee has appointed Shri S.S. Dongare, Cost Accountant, as Cost Auditor of your Company to audit the cost accounts of the Company for Financial Year 2018-19 at remuneration of Rs. 66,000/- (Rupees Sixty Six Thousand Only) as also the payment of taxes as applicable and re-imbursement of actual out-of-pocket expenses incurred in connection with the aforesaid audit. As required under the Companies act, 2013, a resolution seeking members’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting. In accordance with the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company carries out an audit of cost records (Sulphuric Acid) maintained by the Company every year.

The Cost Audit Report and the Compliance Report of your Company for the Financial Year ended 31st March, 2017, by Shri S.S. Dongare, Cost Accountant, which was due for filing with the Ministry of Corporate Affairs, was duly filed on 03rd November, 2017, accepted by the Government as filed in time.


The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as “Annexure I”.


A Corporate Social Responsibility Committee of the Directors was constituted earlier consisting of Ms. Mitika Laxmikumar Goculdas as Chairman, Shri H. T. Kapadia, Shri M. T. Ankleshwaria and Shri A. W. Ketkar as members of the Committee.

The Committee met once during the year and due to the average net profit of last three years being negative, your Company is not required to spend any amount towards Corporate Social Responsibility activities during the year under review, the report is annexed herewith as “Annexure II”.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri A. D. Gupte, FCS No.300, and C.P. No. 1210 to undertake the Secretarial Audit of the Company. The

Secretarial Audit Report is included as “Annexure III” and forms integral part of this Report.

There is no qualification in the report of Secretarial Auditor, for the year under review.


The particulars of employees as required under section 197 and rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been furnished as there are no employees falling within the purview of the provisions of said section and the said rule during the period under review.

Information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in “Annexure IV” to this Report.


Borax Morarji (Europe) GmbH is a 100% wholly owned subsidiary Company in Germany. Primarily it takes care of complying with the German Regulations for exports of Specialty Boron products to Germany and Europe.

In terms of exemption granted by the Ministry of Corporate Affairs wide its order No. 2/2011 dated 8th February, 2011 Balance Sheet of Borax Morarji (Europe) GmbH, Germany is not attached to the accounts of the Company. However, the annual accounts of the subsidiary are available for inspection at the office of the Company and the related detailed information will be made available to the Shareholders when asked for.


In pursuance of the mandatory compliance of the Accounting Standard 21, as issued by the Institute of Chartered Accountants of India, the Company has presented Consolidated Financial Statements for the year under report, consolidating its accounts with the accounts of its Wholly Owned Subsidiary Company, viz. Borax Morarji (Europe) GmbH, Germany (Change of name under process). A separate report of the Statutory Auditor on the consolidated Financial Statements also forms part of the same.


During the year 2017-18, your Company has not accepted/renewed any fixed deposit. Post Merger the unclaimed matured deposits as on 31.03.2017 were Rs. 31.69 Lakhs . As on 31.03.2018 the unclaimed matured deposits is Rs. 28.68 Lakhs.


Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, external agencies and Secretarial Auditor, including audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by the Management and the relevant Board committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the Financial Year ended 31st March, 2018. Accordingly, to the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013:

(i) that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable Accounting Standards have been followed and that there are no 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 affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis;

(v) that the Directors have 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) that 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.


Your Company has been practicing the principles of good Corporate Governance over the years and the Board of Directors lay strong emphasis on transparency, accountability and integrity. Your Company has adopted a Code of Conduct which is approved by the Board of Directors as required under the Listing Agreement with the BSE Limited, Mumbai. The Directors and the Management Staff have confirmed their adherence to the provisions of the said code. A separate report on Corporate Governance is annexed as a part of the Annual Report, along with the Auditors’ Certificate on its compliance.


The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure-V and forms an integral part of this Report.


The Directors are thankful to your Company’s shareholders, customers, suppliers, and contractors, various departments of Central and State Governments and Banks for their continued valuable support. The relations between the employees and the management continue to be cordial. Your Directors place on record their appreciation of the sincere and devoted efforts of the employees at all levels and their continued co-operation and commitment.

For and on behalf of the Board



Registered Office

Prospect Chambers, 317/321,

Dr. Dadabhoy Naoroji Road, Fort,

Mumbai 400 001.

Date : 10th August, 2018

Director’s Report