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Adhunik Industries Ltd.

BSE: 538365 Sector: Metals & Mining
NSE: ADHUNIKIND ISIN Code: INE452L01012
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VOLUME 14742
52-Week high 201.50
52-Week low 53.05
P/E
Mkt Cap.(Rs cr) 503.61
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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OPEN 115.45
CLOSE 114.40
VOLUME 14742
52-Week high 201.50
52-Week low 53.05
P/E
Mkt Cap.(Rs cr) 503.61
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Adhunik Industries Ltd. (ADHUNIKIND) - Director Report

Company director report

DEAR MEMBERS

Your Directors are pleased to present the Thirty Seventh Annual Report together withthe Audited Financial Statements of your Company for the financial year ended 31st March2016.

FINANCIAL HIGHLIGHTS

The summarized financial performance of your Company for the financial year ended 31March 2016 is as under:

(Rs. in Lakhs)
Year ended
Particulars 31st March 2016 31st March 2015
Total Revenue 41075.44 41213.85
Total Expenditure (including depreciation and other expenses etc.) 40580.18 39635.20
Profit Before Tax 495.26 1578.65
Total Tax expense 267.83 502.10
Profit After Tax 227.43 1076.55
Profit brought forward from earlier year 5365.55 4303.60
Less: Depreciation adjustment pertaining to earlier years - 14.60
Profit available for Appropriation 5592.98 5365.55
Paid up Equity Share Capital 4676.38 4676.38
Net Worth 10269.36 10041.93

OPERATIONS

Iron & Steel is indispensable for nation building and has a direct linkage withnation's health and growth. FY 2015-16 continued to be a very challenging year for globaleconomy and in particular for iron and steel industry in India. The key highlights ofCompany's performance during the year under review are:

? In spite of significant fall in prices of finished goods as compared to last yearrevenue from operations decreased by 0.34% to Rs. 41075.44 Lakhs only.

• In spite of significant fall in prices of finished goods in relation to fall inprices of raw materials as compared to last year EBIDTA decreased by 31.27% to Rs.2596.14 Lakhs only as compared to Rs. 3777.29 Lakhs in last year.

? Profit before Tax decreased by 68.63% to Rs. 495.26 Lakhs of current year as comparedto Rs. 1578.65 Lakhs of last year.

? Profit after Tax decreased by 78.87% to Rs. 227.43 Lakhs of Current year as comparedto Rs. 1076.55 Lakhs of last year.

STATE OF THE COMPANY'S AFFAIRS

The financial year 2015-16 has been an average year for the Company. The Company hadfaced many challenges in its operating sector due to falling in prices of finishedproducts spurred by significant imports from countries like China Korea etc. like manyother players operating in the similar sector. With the intervention of government ofIndia and its implementation of various measures and steps in its foreign policy theimpact of the situation was nullified not fully but to some extent. The overall state ofaffairs of the Company keeping in mind the present market scenario is satisfactory.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION

There is no such material change and commitment affecting the financial position ofyour Company which have occurred between the end of the financial year of your company towhich the financial statements relate and the date of the report.

CHANGE(S) IN THE NATURE OF BUSINESS IF ANY

There is no change in the nature of business implemented by the Company during theFinancial Year 2015-16.

INDUSTRY SCENARIO AND OUTLOOK

The year 2015 was marked by deflation of commodity prices globally bringing down steelprices. Globally crude steel production was 385.7 Mt in the first three months of 2016down by -3.6% compared to the same period in 2015. Asia produced 263.6 Mt of crude steela decrease of -3.1% over the first quarter of 2015. The EU produced 40.9 Mt of crude steelin the first quarter of 2016 down by -7.0% compared to the same quarter of 2015. NorthAmerica's crude steel production in the first three months of 2016 was 27.5 Mt a decreaseof -1.1% compared to the first quarter of 2015.

China's crude steel production for March 2016 was 70.7 Mt an increase of 2.9% comparedto March 2015. Elsewhere in Asia Japan produced 8.6 Mt of crude steel in March 2016 adecrease of -6.8% compared to March 2015. India's crude steel production was 8.1 Mt inMarch 2016 up by 3.4% on March 2015.

The steel sector in India contributes nearly two per cent of the country's grossdomestic product (GDP) and employs over 600000 people. India's steel consumption for FY2015-16 has increased to 7 per cent higher than 2 per cent growth last year due toimproving economic activity.

Indian steel industry plays crucial role in development of nation and is considered asthe backbone of civilization and the level of per capita consumption of steel is animportant determinant of the socio-economic development of the country. The Indian steelindustry is divided into primary and secondary sectors. The primary sector comprises a fewlarge integrated steel providers producing billets slabs and hot rolled coils. Thesecondary sector involves small units focused on the production of value-added productssuch as cold rolled coils galvanised coils angles columns beams.

Your company is one of the major key players among the various players in the rollingmill industry in the Durgapur region of West Bengal. It operates with a vision to becomeindustry leader in zone which inspires its stakeholders and a well-defined business planwith planned strategy give hope to achieve its vision.

DIVIDEND AND RESERVES

In view of meeting the capital requirements of the Company through ploughing back ofprofit in the business the Directors of your company are intend to retain the surplusProfits in the business itself. Therefore no dividend is being recommended.

During the period under review no amount was transferred to General Reserve.

SHARE CAPITAL

The Company has not issued and allotted any shares during the financial year ended 31March 2016. As on 31st March 2016 the issued subscribed and paid up share capital ofyour Company stood at Rs. 467637500/- (Rupees Forty Six Crores Seventy Six Lakhs ThirtySeven Thousand and Five Hundred Only) comprising of 46763750 (Four Crores Sixty SevenLakhs Sixty Three Thousand and Seven Hundred and Fifty) number of Equity shares of Rs.10/-each fully paid up.

INDUSTRIAL RELATIONS

During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.

CREDIT RATING

The Company's financial discipline and prudence is reflected in the strong creditratings ascribed by rating agencies as given below:

Instrument Rating Agency Rating Outlook
Long Term Loans and Fund Based and Non Fund Based Limits India Ratings & Research Pvt. Ltd IND BBB/IND A3+ Stable

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required under the provisions of sub-section (3)(m) of section 134 ofthe Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014details relating to Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo are given in the Annexure-A which is annexed hereto and forms part ofBoard's Report.

DETAILS OF BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulationas permitted by law which are confirmed in the subsequent Board meeting.

During the year four Board meetings were held details of which are given below. Themaximum time gap between any two consecutive meetings did not exceed 120 days.

Date of the meeting No. of Directors attended the meeting
29th May 2015 6 (Six)
13th August 2015 6 (Six)
14th November 2015 5 (Five)
11th February 2016 6 (Six)

The Company had passed a circular resolution on 18 January 2016 which was passed withrequisite majority.

COMMITTEES OF BOARD

There are currently five Committees of the Board as per Companies Act 2013 and thesame are as follows:

??Audit Committee

??Nomination and Remuneration Committee ??Corporate Social Responsibility Committee??Stakeholders' Relationship Committee ??Management and Finance Committee

The details of composition of the Committees of Board of Directors are as under:-

a. Audit Committee

During the year under review the Audit Committee had met four times i.e. on 29 May2015 13 August 2015 14 November 2015 and 11 February 2016. The details of compositionof the Audit Committee are as under:-

Sl. No. Name Chairman/ Members
1. Shri Asit Baran Dasgupta Chairman
2. Shri Mahesh Kumar Agarwal Member
3. Shri Shyam Bahadur Singh* Member
4. Smt. Archana Gupta Sha Member

* demise on 26/03/2016.

All the recommendations made by the Committee are duly accepted and approved by theBoard of Directors.

Vigil Mechanism / Whistle Blower Policy

In compliance with provisions of Section 177(9) of the Companies Act 2013 andRegulation 22 of Securities and Exchange Board of India (Listing Obligations AndDisclosure Requirements) Regulations 2015 the Company has framed a Vigil Mechanism /Whistle Blower Policy to deal with unethical behaviour actual or suspected fraud orviolation of the Company's code of conduct or ethics policy if any. The Vigil Mechanism /Whistle Blower Policy has also been uploaded on the website of the Company.

b. Nomination & Remuneration Committee

During the year under review the Nomination and Remuneration Committee had met onetime on 13 August 2015. The details of composition of the Nomination & RemunerationCommittee are as under:-

Sl. No. Name Chairman/Members
1. Shri Archana Gupta Sha Chairman
2. Shri Shyam Bahadur Singh* Member
3. Shri Mahesh Kumar Agarwal Member

* demise on 26/03/2016.

c. Corporate Social Responsibility Committee

The CSR philosophy of your Company is embedded in its commitment to allstakeholders-consumers employees environment and society while your Company's approachextends both to External community as well as to your Company's large and diverse internalemployee base & their families. The Committee had approved the CSR policy and theBudget. The CSR policy is uploaded on Company's website. Further the Report on CSRActivities/ Initiatives is enclosed as Annexure - B.

th

During the year the Committee had met once i.e. on 29 May 2015.The details ofcomposition of the Corporate Social Responsibility

Committee are as under:-

Sl. No. Name Chairman/ Members
1. Shri Mahesh Kumar Agarwal Chairman
2. Shri Shyam Bahadur Singh* Member
3. Shri Mohan Lal Agarwal Member

* demise on 26/03/2016.

d. Stakeholders' Relationship Committee

The Stakeholders' Relationship Committee had not met during the year under review. Thedetails of composition of the Stakeholders' Relationship Committee are as under:-

Sl. No. Name Chairman/ Members
1. Shri Mahesh Kumar Agarwal Chairman
2. Shri Mohan Lal Agarwal Member
3. Smt. Archana Gupta Sha Member

e. Management and Finance Committee

The Management and Finance Committee met 1 (One) time during the Year 2015-16 i.e on 6July 2015. The details of composition of the Management and Finance Committee are asunder:-

Sl. No. Name Chairman/ Members
1. Shri Jugal Kishore Agarwal Chairman
2. Shri Mahesh Kumar Agarwal Member
3. Shri Mohan Lal Agarwal Member

DIRECTORS' RESPONSIBILITY STATEMENT

As required by Section 134(5) of the Companies Act 2013 your Directors state that

(i) In the preparation of the annual accounts for the financial year ended March 312016 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and there are no material departures from the same;

(ii) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent except as otherwisestated in the Notes to Financial Statements so as to give a true and fair view of thestate of affairs of the Company as at March 31 2016 and of the profit of the Company forthe year ended on that date;

(iii) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

(vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

BOARD INDEPENDENCE

Our definition of 'Independence' of Directors is derived from Regulation 16(1) (b) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section149(6) of the Companies Act 2013. Based on the confirmation / disclosures received fromthe Directors and on evaluation of the relationships disclosed the followingNon-Executive Directors are Independent in terms above said provisions :-

a) Shri Asit Baran Dasgupta (DIN: 02476594) b) Shri Shyam Bahadur Singh (DIN: 01982407)(demise on 26/03/2016) c) Smt. Archana Gupta Sha (DIN: 07089290)

DIRECTORS

Shri Asit Baran Dasgupta (DIN: 02476594) Shri Shyam Bahadur Singh (DIN: 01982407) andSmt. Archana Gupta Sha (DIN: 07089290) has furnished their individual declaration on 1stApril 2015 pursuant to Section 149(7) of the Companies Act 2013 confirming their statusas an Independent Director pursuant to provisions of Section 149(6) of the Companies Act2013. Shri Shyam Bahadur Singh (DIN No.01982407) Independent Director ceased to be aDirector w.e.f 26/03/2016 due to his unfateful demise.

The other Board of Directors of your company comprises of Shri Mohan Lal Agarwal (DIN:01047906) Director (Non - Executive) Shri Mahesh Kumare Agarwal (DIN: 00507690)Director & Chairman (Non-Executive) Shri Jugal Kishore Agarwal (DIN: 00227460)Managing Director (Executive).

In accordance with the provisions of Section 152 of the Act the Rules prescribed thereunder and your Company's Articles of Association Shri Mahesh Kumar Agarwal (DIN:00507690) retires by rotation at the ensuing AGM and being eligible offers himself forreappointment. The Board of Directors recommends the re-appointment of Shri Mahesh KumarAgarwal (DIN: 00507690) at the ensuing Thirty Seventh Annual General Meeting.

Mr. Chandra Shekhar Jalan (DIN No.- 01023586) has appointed as an AdditionalNon-Executive Independent Director of the Company on 27 May 2016 upto the conclusion of37 Annual General Meeting of the Company.

KEY MANAGERIAL PERSONNEL(KMPs)

During the year under review no changes occurred in the position of Whole-time KeyManagerial Personnel (KMPs) of the Company. Shri Jugal Kishore Agarwal (DIN: 00227460)Managing Director Shri Bikash Roychowdhury Chief Financial Officer and Shri BharatAgarwal Company Secretary are the Whole-time Key Managerial Personnel (KMPs) of theCompany.

The members had also re-appointed Shri Jugal Kishore Agarwal (DIN: 00227460) as theManaging Director of the Company in the 35th Annual General Meeting held on 18thSeptember 2014 for a period of three (3) years w.e.f. 30th November 2014.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

Pursuant to provisions of Section 178 of the Companies Act 2013 and Regulation 19 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors of the Company based on the recommendation of the Nomination and RemunerationCommittee has formulated a Remuneration Policy.

The Remuneration Policy of the Company inter alia includes the aims and objectivesprinciples of remuneration guidelines for remuneration to Executive Directors andNon-Executive Directors fixed and variable components in the remuneration packagecriteria for identification of the Board Members and appointment of senior management.

The criteria for identification of the Board Members including that for determiningqualification positive attributes independence etc. are summarily given hereunder:

? The Board member shall possess appropriate skills qualification characteristics andexperience. The objective is to have a Board with diverse background and experience inbusiness government academics technology human resources social responsibilitiesfinance law etc. and in such other areas as may be considered relevant or desirable toconduct the Company's business in appropriate manner.

? Independent Director shall be person of integrity and expertise and experience and/orsomeone who the Committee/Board believes could contribute to thegrowth/philosophy/strategy of the Company.

? In evaluating the suitability of individual Board Members the Committee takes intoaccount many factors including general understanding of the Company's business dynamicsglobal business social perspective educational and professional background and personalachievement.

? Director should possess high level of personal and professional ethics integrity andvalues. He should be able to balance the legitimate interest and concern of all theCompany's stakeholder in arriving at decisions rather than advancing the interest of aparticular constituency.

? Director must be willing to devote sufficient time and energy in carrying out theirduties and responsibilities effectively. He must have the aptitude to critically evaluatemanagement's working as a part of a team in an environment of collegiality and trust.

? The Committee evaluates each individual with the objective of having a group thatbest enables the success of the Company's business and achieves its objectives.

PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS

Particulars of loans given investments made guarantees given under the provisions ofSection 186 read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules2014 are provided in the notes to the Financial Statements.

RISK MANAGEMENT

Risk management is the process of identification assessment and prioritization ofrisks followed by coordinated efforts to minimize monitor and mitigate/ control theprobability and / or impact of unfortunate events or to maximize the realization ofopportunities.

Management of risk remains an integral part of your Company's operations and it enablesyour Company to maintain high standards of asset quality at time of rapid growth of itslending business. The objective of risk management is to balance the trade-off betweenrisk and return and ensure optimal risk-adjusted return on capital. It entails independentidenti cation measurement and management of risks across the businesses of your Company.Risk is managed through a framework of policies and principles approved by the Board ofDirectors supported by an independent risk function which ensures that your Companyoperates within a pre-defined risk appetite. The risk management function strives toproactively anticipate vulnerabilities at the transaction as well as at the portfoliolevel through quantitative or qualitative examination of the embedded risks.

Your Company manages monitors and reports on the principal risks and uncertaintiesthat can impact its ability to achieve its strategic objectives. Your Company's managementsystems organizational structures processes standards code of conduct and behaviourgoverns how the Group conducts the business of the Company and manages associated risks.There are no risks which in the opinion of the Board may threaten the existence of thecompany;

HUMAN RESOURCE

The human resource philosophy and strategy of your Company have been designed toattract and retain the best talent creating a workplace environment that keeps employeesengaged motivated and encourages innovation. Your Company has qualified and talentedhuman resources at all levels of operation. It has put concerted efforts for continuouslearning and training to ensure that strong and credible leadership is developed.

SAFETY HEATH AND ENVIREONMENT

The manufacture of steel involves steps that are potentially hazardous if not executedwith due care. The Company maintains the highest safety standards within its operatingunits and is an ISO certified (ISO 9001:2008 14001:2004 & 18001:2007) organization.Further there is a team of professional who conducts regular training programs toimplement the concept of maintain safe operations among the employees and to educate theteam on safety norms and procedures to be followed in an unfortunate situation.

CORPORATE SOCIAL RESPONSIBILITY

In lines with the provisions of Section 135 of the Companies Act 2013 the Company hasframed its Corporate Social Responsibility (CSR) Policy for the development and benefit ofthe weaker section of the society and the same is approved by the CSR Committee and theBoard of Directors of the Company. The CSR Policy of the Company provides a road map forits CSR activities. The purpose of CSR Policy is to devise an appropriate strategy andfocus on its CSR initiatives and lay down the broad principles on the basis of which theCompany will fulfill its CSR objectives. As per the said policy the Company follows thestrategy of discharging its CSR responsibilities related to social service through varioustrusts/societies in addition to its own initiatives and donations made to othernon-government organizations.

The CSR Policy has been uploaded on the Company's website and may be accessed at thelink http://www.adhunikindustries.com/images/31433946951.pdf

Pursuant to the requirements under Section 135 of the Companies Act 2013 and Rulesmade there under a report on CSR activities and initiatives taken during the year in theprescribed format is given in Annexure-B which is annexed hereto and forms part of theBoard's Report.

The Company has been playing a pro-active role in the socio economic growth and hascontributed to all spheres ranging from health education rural infrastructuredevelopment hygiene and empowerment of women environment conservation etc. The Companybecomes the part of some of the social programs in India touching the lives of hundredsof people positively by supporting social programs. As a part of its CSR programs theCompany had organized various programs for distribution of food to the weaker section ofthe society on regular basis organized programs for distribution of clothes and basicnecessity items to the weaker section of society on regular basis. The Company had alsogiven donation to M/s. Purvanchal Kalyan Ashram for the purpose of providing primaryeducation to the small children belongs to weaker section of society.

DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The names and other particulars of the Directors/Key Managerial Personnel(KMPs)/Employees of your Company as required under Section 197(12) of the Companies Act2013 read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in the Annexure - C to the Board's Report and formspart of this report.

None of the employees is covered under provisions of Section 197(12) of Companies Act2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

RISK AND CONCERN

Risk management is the continuing process to identify analyse evaluate and treat lossexposures to monitor risk control and financial resources to mitigate the adverse effectsof loss. In today's complex business environment effective risk management is critical tosuccess of any business. The Company has a risk management team which periodicallyevaluating the risks associated with the business and taking necessary initiatives tominimize its impact. This also helps the Company in taking business decisions withbalanced risks and rewards comparison. The risk management framework ensures compliancewith the requirements of relevant Regulations under the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to sub-section 3(p) of section 134 ofthe Companies Act 2013 and the corporate governance requirements as prescribed bySecurities and Exchange Board of India (“SEBI”) under Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc. The criteria for evaluation of Directors interalia includes factors such as engagement strategic planning and vision team spirit andconsensus building effective leadership domain knowledge management qualities teamwork abilities achievements understanding and awareness integrity ethics value andopenness.

The Board and the Nomination and Remuneration Committee (“NRC”) reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.

In a separate meeting of Independent Directors held on 11 February 2016 performanceof non-independent directors performance of the board as a whole and performance of theChairman was evaluated taking into account the views of executive directors andnon-executive directors. The same was discussed in the board meeting that followed themeeting of the independent Directors at which the performance of the Board itscommittees and individual directors was also discussed.

SUBSIDIARY JOINT VENTURES AND ASSOCIATES COMPANIES

The Company does not have any subsidiaries joint ventures and associate companies. Sothe disclosure required is not applicable to the Company.

DEPOSITS

Your Company did not accept any deposits within the meaning of the Companies Act 2013and the Rules made there under.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operation in future.

INTERNAL CONTROL AND AUDIT

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Auditor reports to the Chairman of the Audit Committee of the Board & to theChairman & Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.

AUDITORS AND AUDITOR'S REPORT

STATUTORY AUDITORS

In terms of the provisions of Section 139 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 M/s. SudhirKumar Jain & Associates Chartered Accountants the statutory Auditors of the Companyholds office till the conclusion of the ensuing Annual General Meeting and are eligiblefor re-appointment. They have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and that theyare not disqualified for reappointment.

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.

COST AUDITORS

In terms of the provisions of Section 148 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014 yourCompany has appointed M/s. Dipak Lal & Associates Cost Accountants (a Cost AuditFirm) as Cost Auditor of the Company w.e.f. 1 April 2016 to 31 March 2017 to carry outaudit of cost records of the Company who was also the Cost Auditor for the Financial year2015-16.The remuneration proposed to be paid to them in Financial Year 2016-17 requiresratification of the shareholders of the Company. In view of this your ratification forpayment of remuneration to Cost Auditors is being sought at the ensuing Annual GeneralMeeting. The report issued by the cost auditor for the Financial Year 2015-16 isself-explanatory and do not call for any further comments.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. M R & Associates Company Secretaries to conduct Secretarial Audit forthe financial year 2015-16. The Secretarial Audit Report for the financial year endedMarch 31 2016 is annexed herewith marked as Annexure- D to this Report. The report isself-explanatory and do not call for any further comments.

The Board has also appointed M/s. M R & Associates as Secretarial Auditor toconduct Secretarial Audit of the Company for the Financial Year 2016-17.

RELATED PARTY TRANSACTIONS

According to the provisions of Section 188 read with Section 2(76) of the CompaniesAct 2013 all transactions entered with Related

Parties during the financial year 2015-16 were on arm's length basis and were in theordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of Audit Committee is obtained for the transactions which are of aforeseen and repetitive nature. The transactions entered into pursuant to omnibus approvalso granted along with a statement giving details of all related party transactions isplaced before the Audit Committee.

The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website and may be accessed at the linkhttp://www.adhunikindustries.com/download/_1421230517.pdf

Your Directors draw attention of the members to Note 28 to the financial statementwhich sets out related party disclosures.

As there are no materially significant related party transactions during the year underreview entered into by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large so the disclosure of information on transactions with related partiespursuant to Section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts)Rules 2014 is not required. However the Company is in the process of obtainingshareholder's approval on the proposed material related party transaction.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of the Companies Act 2013 the Company has Unclaimeddividend of earlier years aggregating to Rs. 272000/- deposited in separate bankaccounts an amount of Rs 68000/- which is liable to be transferred to Investor Educationand Protection Fund (IEPF) has been duly transferred during the year. Inclusion of thesaid amount does not have any impact on the profitability of the company.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013

Your Company in its endeavor to provide a safe and healthy work environment for all itsemployees has developed a policy as per The Sexual Harassment Of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 to ensure zero tolerance towards verbalphysical psychological conduct of a sexual nature by any employee or stakeholder thatdirectly or indirectly harasses disrupts or interferes with another's work performance orcreates an intimidating offensive or hostile environment such that each employee canrealize his / her maximum potential. The company has not received any complaints duringthe financial year.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual return in form MGT-9 as requiredunder Section 92(3) of the Companies Act 2013 is marked as Annexure - E which is annexedhereto and forms part of the Board's Report.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2)(e) of SEBI (Listing

Obligations and Disclosure Requirements) Regulations 2015 is presented in a separatesection forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standard of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under Regulation 34(3) read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms an integral part of thisReport. The requisite certificate from the Auditors of the Company confirming compliancewith the conditions of corporate governance is annexed to the Corporate Governance Reportwhich is a part of Annual Report.

FORWARD LOOKING AND CAUTIONARY STATEMENTS

Certain statement in this Report concerning to our growth prospects particularly thosewhich relate to Management Discussion & Analysis describing the Company's objectivesprojections estimates expectations or predictions may be 'forward looking statements'within the meaning of applicable laws and regulations. Actual results could however differmaterially from those expressed or implied. The risk and uncertainties relating to thesestatements include but are not limited to important factors that could make a differenceto the Company's operations such as global and domestic demand-supply conditions finishedgoods prices raw materials and fuels cost and availability transportation costs changesin Government regulations and tax structure economic developments within India and otherfactors such as litigation and industrial relations. The Company does not undertake toupdate any forward looking statements that may be made from time to time by or on behalfof the Company.

APPRECIATION

Your Directors would take this opportunity to express their sincere appreciation forthe assistance and cooperation received from the Company's customers suppliersgovernment authorities bankers investors financial institutions and shareholders duringthe period under review. Your Directors also sincerely acknowledge the outstanding supportand services of the workers staff and executives of the Company which togethercontributed towards the efficient operation and management of the Company.

For and on behalf of the Board
Registered office
14 Netaji Subhas Road
Kolkata - 700001 Mahesh Kumar Agarwal Jugal Kishore Agarwal
Date: 27.05.2016 Chairman Managing Director
(DIN:00507690) (DIN:00227460)

ANNEXURES TO THE BOARD'S REPORT

Annexure-A

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo as required under the Companies (Accounts) Rules 2014

A. Conservation of Energy

ii) a) Energy conservation measures taken;

Energy conservation dictates how efficiently a Company can conduct its operations. AILhas recognized the importance of energy conservation in decreasing the deleterious effectsof global warming and climate change. The major steps taken by the Company in relation toenergy conservation are as under-

? Use of Coal Based Methane (CBM) Gas exclusively for re-heating Furnace in place ofearlier used Producer Gas generated from coal.

? Replacement of inefficient motor with energy efficient motors coupled with variablespeed drives.

? Replaced old conventional light fittings by latest generation CFL and LED lightfittings in the operational and official floors.

? Effective maintenance and improvement in power factor by installing Capacitor Bank inthe plant.

??Installation of D.C. Drives in Power Panels in place of earlier A.C. Drives in theBlock Mill. b) Impact on conservation of Energy;

The Company observed the following positive impact due to the energy conservationmeasures taken by the Company as under-

? Reduction in Plant specific energy consumption at various levels.

? With the use of CBM Gas in place of coal has lead to reduction in carbon emission tothe green environment to great extent and thus reduces pollution.

? With installation of energy efficient motors efficiency of the Plant is overallimproved.

??Plant availability is also improved. ii) Steps in utilization of alternate sources ofenergy

The Company is exploring the ways and ideas through its efficient technical team thathow it can use the alternate sources of energy in the energy intensive production line inplace of conventional sources of energy its viability and cost effectiveness in relationto the production cost of the products produced by the Company.

iii) Capital investment on energy conservation equipments

The total capital investment on energy conservation equipment's incurred by the Companyduring the financial year ended March 31 2016 is Rs. 38.16 Lacs.

B. Technology Absorption

i) The efforts made by the Company towards technology absorption during the year underreview are as under:

? Installation of advanced Oxygen Analyzer machine to reduce scale loss during theproduction process.

? Installation of various machine based testing system to check the quality of theproduct produced. ii) Adhunik Industries Limited finished products are always set areputable standard in the market in comparison to its peers the adoption various advancedmethodology in the production process will help the Company to reduce its cost of and alsothe quality and durability of the products are also improved.

iii) The Company had not imported any foreign technology during the period underreview.

iv) The Company had not incurred any major expenditure which can specificallyappropriated to Research and work.

C. Foreign Exchange Earnings and Outgo

a) Activities relating to exports initiatives taken to increase exports; developmentof new export markets for product and plans:

The Company is actively exploring the export market and has taken various initiative toincrease exports of its products.

b) Total foreign exchange earned in terms of actual inflow and outgo:

Total foreign exchange used and earned 2015-16 2014-15
Foreign Exchange Inflow (Rs. in Lakhs) - 675.87
Foreign Exchange Outgo (Rs. in Lakhs) 21.28 19.35

 

Registered office For and on behalf of the Board
14 Netaji Subhas Road
Kolkata - 700001 Mahesh Kumar Agarwal Jugal Kishore Agarwal
Date: 27.05.2016 Chairman Managing Director
(DIN:00507690) (DIN:00227460)

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