DIRECTOR'S REPORT Your Directors are pleased to present the 36th Annual Report together with the Audited Accounts of the Company for the financial year ended on 31st March, 2015. 2, PERFORMANCE AND STATE OF COMPANY AFFAIRS 107 TPD Asa hi plant was fully revamped during the year and was recommissioned in February 2015. The plant is operating satisfactorily at desired efficiencies. The Company has been able to recapture the market in a very short span and is operating at above 90% capacity utilization. The company plans to start the revamp of UHDE plant and plans to recommission another 100 TPD in the year 2015-16 taking the total operating capacity to 207 TPD. 3. MARKETING The production of caustic soda in India during the year 2014-15 was approx 27.61 Lakh MT against 26.18 lakh MT during the year 2013-14. The installed capacity of Caustic soda has also increased by 2.44 percent from to 33.90 Lakh MT during the last financial year 2013-14. The installed capacity utilization rate of domestic caustic soda players is 81.5 percent during the period 2014-15. The domestic demand for Caustic Soda has increased by 9.534 percent to 3230.7 Lakh MT during the year 2014-15 from 2952.7 Lakh MT as compared to 2013-14. The capacity utilization of Indian caustic soda industry is also expected to rise to 92 percent from 81 percent in the next four-five year-as per Crisil report 2014. The domestic demand for caustic soda is expected to increase by 6-7% CAGR over the five years. The demand from primary drivers ie. Alumina is likely to increase at a pace of 12-13 percent CAGR. Further Soap, detergent and paper industries are expected to increase by and 5-6 percent CAGR. The above said segments contribute 42 percent of the total demand in the country. CRISIL also forecast that Caustic Soda demand shall continue to grow at healthy pace up to 2018-19. 4 FUTURE OUTLOOK The chemical manufacturing sector is showing continuously positive indication after few years. No major chloro alkali capacity is expected in the coming year due to lack of chlorine outlets. With increasing alumina capacity in Eastern India and insufficient local availability, there will be major import demand of Caustic Soda in that region. The company has already started Caustic Soda facilities of 107 TPD and shall subsequently targeting the total installed capacity of 334 TPD by revamping the balance facilities in the coming year. For this purpose the company will meet out the funds requirement from revenue from existing capacity, investment through internal resources viz-a-viz accruals / profits and balance sourcing from bank loan. Further, the company is also mulling on forward integration in the field of Chlorine by entering into manufacture of value added chlorine derivatives in the coming year. These measures are expected to bring in added advantage and competitive act as a cushion against demand-price fluctuations in the market. 5. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013, Shri Alok Dhir, is retiring and being has offered by rotation at the ensuing Annual General Meeting and himself for re-appointment. During the year under review, the members approved the appointment of Mr. Deepak Mathur as Director (Technical) and re-appointed Mr. Ajay Virmani, as Managing Director of the Company through postal ballot process. The Company has received the declaration from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Act and clause 49 of the listing agreement with the Stock Exchange. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. The Company has considered the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, and accordingly the process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link www. lordschlorocom. The following policies of the Company are attached herewith marked as Annexure A and Annexure B. a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. 6. AUDITORS M/s. Gupta Vigg & Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and are recommended for re-appointment. Certificate from the Auditors have been received to the effect that their re-appointment, if made, would be within the limits prescribed under section 141 of the Companies Act, 2013. 7. COST AUDITORS Provision of section 148 of the Companies Act, 2013, and rules 4 & 5 of the Companies (Cost Audit and Record) Rules, 2014, for maintenance of Cost Records, shall not be applicable to the Company for the financial year 2015-16. 8. SECRETARIAL AUDITOR The Board has appointed Mr. L. N. Taparia, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure C to this Report. 9. AUDITORS' OBSERVATIONS In reference to the Comments mentioned in the Statutory Auditors Report & Secretarial Audit Report for the year 2014-15, we wish to submit the following: (i) Company was registered as a Sick Industrial Company. However the Hon'ble BIFR has sanctioned a scheme for revival of the Company on 30th Nov. 2006. Subsequently the scheme was successfully implemented and the company has been revived. The BIFR accordingly has deregistered the company from its purview in March 2010. All the liabilities have been restructured as per the provisions of the rehabilitation scheme. Company has received confirmation letters from various parties, however we are still waiting confirmation from some of the parties, therefore some balances could not be ascertained. (ii) Company has not received all the records from old Management. We are in the process of reconciliation the records. We shall deposit the whole amount in the Investor Education and Protection Fund (IEPF) as soon as records are reconciled. 10. SAFETY, ENVIRONMENT PROTECTION & POLLUTION CONTROL The Company is implementing new membrane water purifier plant, which will result in recycling of and which will also bring down the dosing of chemicals resulting good environment practice. 11. DIVIDEND AND TRANSFER TO RESERVE During the year, the Company has incurred the losses, therefore not declared any dividend for the financial year 2014-15 and no amount has been transferred to General Reserve during the FY 2014-15. 12. PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES The Industrial Relations scenario continued to be cordial. The Company regards its employees as a great asset and accords high priority to training and development of employees. Number of employees as on March 31, 2015 was 139. In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, presently no employee is drawing remuneration in excess of the limits as set out in the said rules. Disclosures pertaining to remuneration and other details of Directors and KMPs are provided in the Annual Report. 13. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements 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, 2015 and of the loss incurred by the Company for the year ended on that date; c) the Directors have 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; d) the Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of ail applicable laws and that such systems are adequate and operating 14. ENERGYCONSERVATION,TECHNOLOGYABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGOING. In compliance with provisions of clause (m) of sub-section (3) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 the statements giving the required information relating to energy conservation, technology absorption, foreign exchange earnings and outgoings are annexed hereto as Annexure D. 15. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure E to this Report. 16. CORPORATE GOVERNANCE REPORT A Report on Corporate Governance forms part of this Report. The Management Discussion & Analysis Report and the Certificate from the Practicing Company Secretary confirming the compliance with Clause 49 of the Listing Agreement relating to Corporate Governance is annexed herewith to this Report. In compliance with the requirement of clause 49 (V), a certificate from Managing Director and CFO was placed before the Board. 17. RISK MANAGEMENT The Company also has constituted a Risk Management Committee which ensures that the Company has an appropriate and effective Enterprise Risk Management system with appropriate policies and processes which carries out risk assessment and ensures that risk mitigation plans are in place by validating the same at regular intervals. 18. MEETINGS OF THE BOARD Six meetings of the Board of Directors were held during the year. For further details, please refer section of report on Corporate Governance of this Annual Report. 19. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED During the year, there was no loan given by the company. The company has made an investment of Rs. 2 Lacs in PNB Mutual Fund. The company has availed a secured loan of Rs. 12 Crore from SREI Infrastructure Finance Limited (SREI), and provide securities (First Charge on Land, Building, Plant and Machinery and movable assets) to SREI in this regard. 20. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://www.lordschloro.com. Your Directors draw attention of the members to Note B 33 to the financial statement which sets out related party disclosures. 21. VIGIL MECHANISM The company established a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. This mechanism provides adequate safeguards against victimization of director(s) / employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The details of establishment of such mechanism disclosed at the website of the company www.lordschloro.com. 22. GENERAL Your Directors state that during the year under review, there was no case pursuant to the Sexuaf Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. 23. ACKNOWLEDGEMENT Your Directors wish to convey their deep appreciation to all the company's employees/workers for their dedication and hard work as well as their collective contribution to the Company's performance. The Directors would also like to thanks to the Shareholders, Customers, Dealers, Suppliers, Bankers, Financial Institutions, Government Authorities and all other business associates for continued support given by them to the Company and their confidence in its management. For and on behalf of the Board For Lords Chloro Alkali Limited Sd/-(Ajay Virmani) Mg. Director Sd/- (Alok Dhir) Director Sd/ (Yuvraj Ahuja) Director Place : New Delhi Date : 30-05-2015 |