DIRECTORS' REPORT TO, THE MEMBERS, Your Directors have pleasure in presenting their 40th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015. DIVIDEND: Your directors are pleased to recommend a Dividend of 20 paise per Equity Share of Rs. 2/-each, i.e. 10% aggregating to Rs. 55.02 Lacs subject to approvals. SHARE CAPITAL During the year under review Equity share of Rs. 10/- each was sub divided into 5 Equity shares of Rs. 2/- each. The paid up share capital of the Company as at March 31, 2015 was Rs. 5,50,20,000/- (Rupees Five Crores Fifty Lacs and Twenty Thousand only) comprising of 27510000 Equity shares of Rs. 2/- each. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or Bonus equity. As on 31st March, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. OPERATIONS AND FUTURE PROSPECTS: The Company during the financial year 2014- 15 had performed substantially well, achieving a growth of approximately 23.5% in top line and nearly 52.5% in bottom line. The other highlights of the Company's performance are as under: - Total Revenue increased from Rs. 24364.72 Lacs to Rs. 30085.69 Lacs. - Exports Revenue increased from Rs. 11476.68 Lacs to Rs. 12798.03 Lacs. - Profit before Tax increased from 720.54 Lacs to Rs. 1151.32 Lacs. - Net Profit increased from Rs. 504.06 Lacs to Rs. 768.71 Lacs. The total net revenue on consolidated basis of the Company was Rs. 30214.38/- Lacs which includes revenue from services of Rs. 101.51 Lacs. During the year under review, the revenue generated from the operations from the domestic markets is much higher as compared to last year. Thus, the Company has been able to achieve sizeable growth in the turnover and generated higher profits for the Company. EXPORTS: During year ended 31st March, 2015, your Company's export earning was Rs. 12798.03 Lacs which was higher than the last year being Rs. 11476.68 Lacs. The Company has registered a growth of approximately 12% as compared to the Export earnings in the year 2013-14. The percentage of Export to revenue was more than 42% as compared to 47% in the previous year. SUBSIDIARY COMPANIES: The Management is pleased to report that APL Infotech Ltd's Pipe leak detection software has been customized for an international user. The Company has renewed its arrangement with a major Software Company for marketing this software package and is making steady progress with various prospective customers. Status of Amalgamation of APL Engineering Service Private Limited with Amines & Plasticizers Limited. The proposed amalgamation of APL Engineering Services Private Limited, wholly owned subsidiary of the Company is in its final stages. Both the Transferor and the Transferee Companies are Group Companies and the proposed Amalgamation would result in business synergy and consolidation of business activities of these companies. The Company had taken all necessary steps in order to expedite the process. The Company had received observation letter from the Bombay Stock Exchange (BSE) dated 26.06.2013. The Company had moved applications in Guwahati High Court for confirmation of petition. The Bombay High Court has passed order confirming the petition filed by APL Engineering Services Pvt Ltd. EXTRACT OF ANNUAL RETURN 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 'A' and forms an integral part of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013('the Act') and Company's Articles of Association, Ms. Nimisha Minesh Dutia retires by rotation and being eligible has offered herself for re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement with Stock Exchanges. Pursuant to provisions of section 203 of the Act, the Company has three Key Managerial Personnel viz. Shri Hemant Kumar Ruia as the Chairman & Managing Director, Shri Ajay Puranik as the Sr. Vice President (Corporate Affairs) & Company Secretary and Shri Pramod Sharma as the Chief Financial Officer. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a questionnaire was prepared after taking into consideration various aspects of the functioning of the Board, its Committees and its culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction over the evaluation process. NUMBER OF MEETINGS OF THE BOARD The details of the number of meetings of the Board held during the Financial year 2014-15 forms a part of the Corporate Governance Report. CONSOLIDATED FINANCIAL STATEMENTS: During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with section 129(3) of the Companies Act, 2013, consolidated financial statements of the Company and all its subsidiaries are prepared, which forms a part of the Annual Report. Further, a statement containing the salient features of the financial statement of the subsidiaries in the prescribed format AOC 1 is appended as Annexure 'B' to the Board's Report/ Consolidated Financial statements. The statement also provides the details of performance, financial positions of each of the subsidiary In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.amines.com These documents will also be available for inspection during the business hours on every /working day at our Registered Office in Guwahati, India till the date of the Annual General Meeting of the Company. In accordance with the Companies Act, 2013 ('the Act) and Accounting Standard AS-21 on Consolidated Financial Statements, your Directors provide the Audited Consolidated Financial Statements in the Annual Report. Though only a part of your Company's business is conducted through its subsidiaries, your Directors believe that the consolidated accounts provide a more accurate representation of the performance of your Company. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY Details of Loans, Guarantees and Investments covered under the provisions of section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements. DEPOSITS: The Company has not accepted or renewed any Deposits during the year under review and there is no unpaid or unclaimed deposits lying with the Company. 13% SECURED REDEEMABLE NON CONVERTIBLE DEBENTURES Pursuant to the consent of the shareholders in the 39th Annual General Meeting of the Company, the Company had issued 1335, 13% Secured, Redeemable, Non Convertible Debentures of Rs. 1,00,000/- (Rupees One Lac) each on private placement basis. The said debentures were secured by creating charge over Companies properties situated at Vadval, Raigad. The Company has appointed SBICAP Trustee Company Ltd. as the Debenture Trustee for the said issue. The Debentures are issued for a period of 10 years with call and put option at the end of every twelve months from the date of issue. Total amount raised through the said issue was Rupees Thirteen Crores and Thirty Five Lakhs. The Debenture Trust deed was registered on 27th April, 2015 with Sub-Registrar, Khalapur, Maharashtra RELATED PARTY TRANSACTIONS Related Party Transactions, if any are placed before the Audit Committee as also before the Board for their approval. Omnibus approval was obtained on a quarterly basis for transactions which are repetitive in nature. There are very few such transactions and the transactions entered into with Related Parties for the year under review were at arm's length basis and in the ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 are not attracted. Thus, disclosure in form AOC-2 is not required. The Company has a policy on related Party Transaction and the same is uploaded on the website of the Company at : <http://www>. amines.com/Policy%20on%20Related%20 Party%20Transaction.pdf STATUTORY AUDIT: M/s Bhandari Dastur Gupta & Associates, Chartered Accountants (Firm Registration No. 119739W), Mumbai, Auditors of the Company, hold office until conclusion of the 42nd Annual General Meeting subject to ratification in the Annual General Meeting held in respective years. The requisite certificate under section 139(1) of the Companies Act, 2013 has been received from them as provided under section 139 of the Act, that their appointment, if ratified would be in conformity with the limits specified in the said section COST AUDIT: As per 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 has been carrying out audit of cost records of the Company. The Board of Directors on the recommendation of the Audit Committee has appointed M/s A.G. Anikhindi & Co., Cost Accountants, Kolhapur as Cost Auditors to audit the cost accounts of the Company for the financial year 2015-2016 at a remuneration of Rs. 2,15,000/- per annum plus service tax as applicable and reimbursement of out of pocket expenses. As required under the Companies Act, 2013 a resolution seeking members' approval for the remuneration payable to the Cost Auditor forms a part of the Notice convening the 40th Annual General Meeting of the Company. The Cost Audit Report for the financial year 201314 was filed with Ministry of Corporate Affairs on 27th September, 2014. SECRETARIAL AUDIT Pursuant to the provisions of section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s SK Makhija & Associates, Practicing Company Secretaries (CP No. 13322), Mumbai to carry out the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure C and forms an integral part of this Report. There is no secretarial audit qualification for the year under review. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has designed and implemented a process driven framework for Internal Financial Controls (IFC) within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013. For the year ended 31st March, 2015, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations; wherein controls are in place to continuously monitor the existing controls and indentify gaps, if any, and implement new and/ or improved controls wherever the effect of such gaps would have a material effect on the Company's operation CREDIT RATING: The Credit Analysis and Research Ltd. (CARE) has enhanced the short term credit rating from A4 to A3 (A Three) and long term rating from BB+ to BBB- (Triple B Minus) to the financial facilities availed by the Company. Additionally, the Company has obtained credit rating from Brickwork Ratings India Pvt Ltd(Brickwork Ratings) during the year under review. Brickwork Ratings has assigned short term credit rating A3 (A Three) and long term rating BBB- (Triple B Minus) to the financial facilities availed by the Company. ISO CERTIFICATION: As reported earlier, ISO 9001:2008 certification is valid till 13th January, 2016. Periodic Audit has been conducted by Det Norske Veritas (DNV) in continuation of the certification. QMS (Quality Management System) has focused on continual improvement by implementing the strategic tools for business to gain competitive advantage through products and services that are safe, reliable and trustworthy. Besides QMS (Quality Management System), APL has IMS (Integrated Management System) for ISO 14001:2004 and OHSAS 18001:2007 certifications which are valid up to 9th April 2016. ISO 14001:2004 (Environmental Management System) certifications relates to conservation of natural resources resulting in maintaining clean environment, safe work place, safe operations, commitment to compliance and healthy atmosphere. As such, the Company is committed to ensure minimum impact to environment through its operations. OHSAS 18001:2007 (Occupational Health and Safety Assessment Series) certification relates to safety and health of working people by making Hazards and Risk Analysis of Various Activities and Adopting Effective Control Methods to minimize the Risk. Various measures have been taken by the Company in order to ensure compliance in its true spirit. RS (Responsible Sourcing): APL has become a Member in SEDEX website after going through SMETA 4-Pillar Audit conducted by DNV. The Membership is renewed for continuation of SEDEX. SEDEX is an online database that enables suppliers to share information with their customers on their responsible trading practices (Health, Safety, Labor Standards, the Environment and Business Ethics). REACH COMPLIANCE: The Company has done Pre- Registration of most of the products having export potential to Europe. INSURANCE: All properties and insurable interest of the Company including buildings, plant and machineries, stores and spares have been adequately insured. INDUSTRIAL RELATIONS: The industrial relations remained cordial during the year under review. DIRECTORS' RESPONSIBILITY STATEMENT: To the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statement in terms of Section 134 (3)(c) of the Companies Act, 2013: a) that in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures wherever applicable; b) 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 at the end of the financial year and of the profit of the Company for the year under review; c) The Directors had 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; d) The Directors have prepared the annual accounts on a going concern basis. e) 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. f) That 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. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, prescribed particulars as applicable is annexed hereto as Annexure 'D' and forms part of this Report. PARTICULARS OF EMPLOYEES: None of the employees of the Company attract the provisions of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during the year under report. Statement containing information as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and forming part of the Director's Report for the year ended March 31, 2015 is given in a separate Annexure to this report. The above annexure is not being sent along with this report to the Members of the Company in line with the provision of section 136 of the Act. Members who are interested in obtaining these particulars may write to the Company Secretary at the Corporate Office of the Company. The aforesaid annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before and upto the date of the 40th Annual General Meeting during the business hours on working days. DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is summary of sexual harassment complaints received and disposed off during each Calendar year: - No. of Complaints received : Nil - No. of Complaints disposed off : Nil RISK MANAGEMENT The company has in place a Risk management framework which covers the risk management approach of the Company and includes periodic review of such risk, if any and also documentation, mitigating controls and reporting mechanism of such risks. Some of the risks are as follows: 1. Financial Risk. The two major risks in the financial sector affecting the Company are the foreign exchange fluctuations and higher interest rates on borrowings. The Company endeavors to manage and mitigate the foreign exchange risk by taking prudent steps considering the volatility at the macroeconomic levels. Further, considering the ever increasing financial requirement of the company the rate of interest is another aspect, changes in which affects the Company. The management plans and adopts strategies which manages such fluctuations and variations. 2. Commodity related Risks The Company is into manufacturing, trading and dealing of various chemicals which are sensitive in nature. The risks in such product begins from the time of procuring the raw materials till the delivery of the finished goods because of the volatility and nature of the chemicals which always needs special care and attention. The business of the Company is mainly through various tenders opened by the Government and its companies. The timing of purchase of raw material is important since the price risk has always been a major concern considering the fixed terms of the tenders. 3. Regulatory Risks The legal and regulatory compliances keeps the Company exposed to various risks attached to them. The Company mitigates such risks by periodically reviewing the requirements of applicable statutes and complying with them. 4. Human Resources Risks. The main business of the Company is manufacturing and dealing in specialized chemicals, hence the Company requires human skilled talent which is specialized and trained not only to deal in the chemicals but also to tackle the consequences arising out of dealing in them. The Company always believes in retaining the talent pool and attracting new talent. The Company conducts various training sessions for its employees to transform the human resource to human talent, including encouraging and sponsoring them for various seminars and conferences in India and abroad. ESTABLISHMENT OF VIGIL MECHANISM The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in force. This Policy inter alia enables any employee who observes any unethical and improper practices or alleged wrongful conduct can approach the Department Head or in case it involves Managerial Personnel to the Managing Director through E-mail. After due investigation the matter shall be dealt as per the procedure prescribed in the Policy. CORPORATE SOCIAL RESPONSIBILITY As a part of its initiative, pursuant to section 135 of the Companies Act, 2013 and relevant Rules, the Board has constituted the CSR Committee and has identified a Public Trust which undertakes projects towards promotion of education, medical facilities, women empowerment, sanitation etc. These projects are in accordance with the Schedule VII of the Companies Act, 2013 and the Company's CSR Policy. The Report on CSR Activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure 'E' forming a part of this Report. Certain projects have been identified which are being implemented over a period of couple of years. Amount had been / would be released as and when demanded and expenses incurred on the said projects. NOMINATION AND REMUNERATION POLICY The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy is explained in Corporate Governance. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS. As discussed above, merger of APL Engineering Services Pvt Ltd. with the Company is in its advanced stage and APL Engineering Services Pvt Ltd has received final Order from the Bombay High Court in the merger matter. Minutes of the Order has been uploaded on the website of the Company. A petition of the Transferee Company for confirmation of the merger has also been admitted in the Gauhati High Court, Assam. CORPORATE GOVERNANCE Corporate Governance means the system of rules, practices and processes by which a company is directed and controlled. It essentially involves balancing the interests of many stakeholders in a company - these include its shareholders, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining company's objectives, it encompasses practically every sphere of management from action plans and internal controls to performance measurement and corporate disclosure. Corporate Governance is based on two principles i.e. Transparency and Accountability. It is a reflection of our culture, policies, our relationship with stakeholders and our commitment to values. The Company has complied with the mandatory provisions of Corporate Governance. As prescribed under the Listing Agreement of the Stock Exchanges, a separate Report on Corporate Governance appears after this report. A certificate from M/s. S.K. Makhija & Associates, Practicing Company Secretaries with regard to compliance of the Corporate Governance Code by the Company is annexed hereto and forms part of this report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange is presented in a separate section forming part of the Annual Report. APPRECIATION: Your Directors express their gratitude for the consistent support and co-operation received from all its Customers, Collaborators, Government Agencies, Financial Institutions, Bankers, Debenture Trustees, Suppliers, Shareholders, Debenture holders, Employees and other Associates who have reposed their continued trust and confidence in the Company. For and on behalf of the Board HEMANT KUMAR RUIA Chairman & Managing Director Date : 27.08.2015 Place : Mumbai |