To the Members of Adhunik Metaliks Limited
Your Directors are pleased to present the Fourteenth Annual Report and AuditedStatement of Accounts for the yearended 30th June 2015.
| || |
(Rs. in Lacs)
|Particulars || |
| ||2014-15 ||2013-14 ||2014-15 ||2013-14 |
|Revenue from operations (gross) ||64737.09 ||178133.80 ||121054.45 ||271104.62 |
|Less: Excise duty ||4926.15 ||8987.46 ||10224.54 ||15535.53 |
|Revenue from operations (net) ||59810.94 ||169146.34 ||110829.91 ||255569.09 |
|Other income ||1215.73 ||6700.58 ||1641.19 ||9168.65 |
|Revenue from operations (including other income) ||61026.67 ||175846.92 ||112471.10 ||264737.74 |
|Profit before Interest and Depreciation ||26811.62 ||30019.14 ||13177.08 ||56469.32 |
|Less: Interest ||24946.07 ||21182.40 ||45289.28 ||37644.67 |
|Less: Depreciation ||9743.31 ||9870.84 ||14709.77 ||14587.74 |
|Add: Exceptional item ||- ||- ||- ||- |
|Profit/ Loss before Tax ||(61501.00) ||(1034.10) ||73176.13 ||4236.91 |
|Taxes ||(20640.74) ||(1064.96) ||24810.13 ||191.43 |
|Profit/ Loss for the year ||(40860.26) ||(30.86) ||48366.00 ||4045.48 |
|Net Profit/loss after tax but before minority interest ||- ||- ||7.42 ||4.97 |
|Profit/ Loss for the year ||(40860.26) ||(30.86) ||48358.58 ||4040.51 |
During the year under review total revenue on standalone basis declined sharply fromRs. 175846.92 Lacs in FY 2013 -2014 to Rs. 61026.67 Lacs due to suspension of productionand low capacity utilisation driven by poor demand and raw material constraints. Higherraw material costs increase in working capital cycles higher holding cost of rawmaterial and finished goods increased operating losses from Rs. 1034.10 Lacs to Rs.61501.00 Lacs. EarningPer Share (EPS Basic & Diluted) stood at Rs. (-) 33.090as compared to Rs. 0.02.
The Company's consolidated net sales decreased from Rs. 264737.74 Lacs in FY 2013-2014 to Rs. 112471.10 Lacs and operating profit decreased from Rs. 4236.91 Lacs duringthe previous year to Rs. (-) 73176.13 Lacs during the current year.
During the year under review financial and operational performance of the Company hasbeen adversely affected due to various external factors non availability of raw materialsat viable prices due to mine closures weak product prices due to over capacity anddumping of Steel mainly by China & Russia Global Crash in Steel and commodity priceshigh interest costs logistics costs infrastructure bottlenecks etc. for domestic SteelCompanies. The overcapacity and excess production in China resulting in cheap imports inthe country and adverse duty structure domestically have further impacted the specialsteel business. The ferroalloy business has been affected due to frequent stoppage in thesupply of chrome ore and concentrate due to closure of various chrome ore mines.
According to the Ministry of Steel Government of India the current per capitaconsumption of finished steel in the country is onlyaround 52 kg against the world averageof 203 kg and therefore there is a huge growth potential in steel consumption in India.
Your Company is committed to its vision to emerge as an efficient producer of highquality value added products including Coke Ferro Alloy and Special Steel. Going forwardthe Company expects the revenues and margins from Metallurgical Coke Ferro Alloy&Special Steel Businesses to remain challenging in the short term but is positive onthe outlook over the medium to long term.
The world economic growth remained modest at 3.4% in 2014. Mixed trends were noticedacross the globe with Europe & US economies showing signs of recovery while largeeconomies like China showed signs of stress and decline. Crude oil prices fell sharplyputting the oil economies under massive stress thereby setting in a phase of decliningconsumption levels. China's softening infrastructure spends and bleak outlook on growthrates created significant over capacity in steel and metals.
Indian economy sprang a surprise with growth at 7.3% as compared to 6.9% in theprevious year largely fuelled by low crude oil prices growth oriented reforms. With theformation of a new government it is estimated that within a short span of time theeconomy would be reenergised. Further fluidity in the mining sector would bekey to suchrevival. However sluggish global steel demand coupled with large surplus remains aserious threat in the form of surging imports. It calls for an immediate recourse toincrease import tariffs as well as enforce trade remedial actions to stall the dumping ofsteel into India. This is essential to realise the government's 'Make-In-India' steelcampaign. It is also necessary to enforce a strong set of technical regulations to ensurethe supply of quality products to consumers and prevent the entry of substandard steelinto India.
In view of the losses for the year ended June 30 2015 and accumulated losses theBoard of Directors of your Company is constrained not to recommend any dividend for theyear under review.
TRANSFER TO RESERVES
In view of losses incurred by the Company during the year no amount has beentransferred to the General Reserve for thefinancial year ended 30th June 2015.
CHANGE IN NATURE OF BUSINESS
During the year under review there has been no change in the nature of business of theCompany.
Your Company did not accept any deposits within the meaning of Section 73 of theCompanies Act 2013 and the rules made there under. The Company does not hold any depositsfrom the public shareholders and employees as on 30th June 2015.
IMPLEMENTATION OF CORPORATE DEBT RESTRUCTURING
During the year under review Corporate Debt Restructuring was undertaken by theLenders of the Company to bring about financial viability. Principle reasons which led tofinancial un-viability are:
Temporary Closure of Mines:-Temporary closure of mines (iron ore and manganese ore)led to shortage of raw material and in turn has led to reduced capacity utilization ofsteel/pellet making facilities.
Shortage of fuel: Reduction in quantity of e-auction by Coal India Ltd has led toshortage of coal availability which in turn has aggravated the price rise. Cost ofimported coal is higher than the auction price of coal sold by Coal India Ltd. This hasalso forced the Company to go for importing higher cost coal.
Impact on Pellet Plant at Jharkhand:- Due to sudden closure of iron ore mines inOdisha & Jharkhand production at OMML's pellet plant was impacted. With the crash incommodity prices globally iron ore lumps supplemented the market of iron ore pellets.Selling price of iron ore pellets fell below cost of production resulting in shrinking ofbottom lines.
All the above affecting margins made it difficult for the Company to plan productionand forced debt restructuring. Thus The Corporate Debt Restructuring Empowered Groupapproved debt restructuring on 20th March 2015 and the same was implemented on 30thMarch 2015.
SCHEME OF AMALGAMATION
During Financial year 2013-14 your Directors approved amalgamation of the Company withits wholly owned subsidiary i.e Orissa Manganese & Minerals Limited. The Company hasfiled the confirmation Petition before the Hon'ble High Court Cuttack (Odisha) and thesame is pending for approval at present. The amalgamation if approved will beadvantageous and beneficial to all stakeholders of your Company.
The Company's paid up equity share capital remained at Rs.1234995360 (Rupees OneHundred Twenty Three Crores Forty Nine Lacs Ninety Five Thousand Three Hundred Sixty only)comprising of 123499536 equity shares of Rs. 10 each. There was no change in the Company'sshare capital during the year under review.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Your Company has subsequent to year end transferred a sum of Rs. 125596 to InvestorEducation and Protection Fund in compliance with the provisions of Section 124 125 andother applicable provisions of the Companies Act 2013 (corresponding to Section 205C ofthe Companies Act 1956).
The said amount represents dividend for the year 2006 07 which remainedunclaimed for a period 7 years from its due date of payment.
Your company's wholly owned subsidiary namely Orissa Manganese & Minerals Limited(OMML) operates Ghatkuri Iron ore mines in the state of Jharkhand and Patmunda and OrahuriManganese Mines in the state of Odisha. OMML operates a iron ore pellet plant at KandraJharkhand and an another wholly owned subsidiary Global Commodity and Resources Limitedbased at Hongkong SAR which was set up to boost the trading activity of the company.During the year under review there was no major activity of the subsidiary.
The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with applicable AccountingStandards.
A statement containing the salient features of the financial statement of the Company'ssubsidiaries in the prescribed form AOC-1 pursuant to first proviso to Section 129(3) ofthe Companies Act 2013 read with the Companies (Accounts) Rules 2014 is annexedseparately to the financial statements. The Annual Accounts of the subsidiary companieswill be made available to the shareholders of the aforesaid subsidiaries and the Companyas and when they demand and will also be kept for inspection by any investor at theregistered office of the Company and these subsidiaries. The Financial statements of theCompany and its subsidiaries are also available on the website of the Company.
EXTENSION OF DATE FOR HOLDING ANNUAL GENERAL MEETING OF THE COMPANY
In accordance with provisions of Section 96 read with Section 129 of the Companies Act2013 the Annual General Meeting (AGM) of the Company for the financial year ended 30thJune 2015 was due to be held on or before 31st December 2015.Since the company is in theprocess of Amalgamation it had approached the Registrar of Companies Orissa to extendtime by three months for holding the Annual General Meeting i. e. upto 31st March2016.Necessary approval was granted by the Registrar of Companies Orissa vide theirletter dated 24th December 2015.
The Board met 5 times during the year the details of which are given in the CorporateGovernance Report that forms part of the Annual Report. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013 and the ListingAgreement.
Further the Independent Directors at their meeting reviewed the performance of theBoard Chairman of the Board and of Non Independent Directors as required under the Actand the Listing Agreement.
In accordance with the provisions of Section 152 of the Companies Act 2013 and interms with the Articles of Association of the Company Mr. Jugal Kishore Agarwal (DIN -00227460) who retires by rotation and being eligible offers himself for re-appointment.The Board has recommended his re-appointment.
The Company has received declarations from Mr. Nihar Ranjan Hota (DIN 01173440) Mr.Amerendra Prasad Verma (DIN 00236108) Mr. Nandanandan Mishra (DIN 00031342) Mr. GopalDikshit (DIN 00090579) Mr. Raghaw Sharan Pandey (DIN 02306586) and Mr. Ramgopal Agarwala(DIN 02054856) Independent Directors of the Company confirming that they meet thecriteria of independence as prescribed both under Section 149 (6) of the Companies Act2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.
Ms. Uttara Dasgupta (DIN 06570950) was appointed as Nominee Director (Nominee of StateBank of India as Lead Lender acting for itself and for the consortium of Lendersproviding financial assistance to the Company) on 28th August 2015.
Mr. Mahesh Kumar Agarwal (DIN :- 00507690) Director of the company resigned fromDirectorship of the company on 23rd October 2015 due to his other business engagements.He was appointed as Additional Director on 12th February 2016 on the Board of Directorsof the Company.
Mr. Manoj Kumar Agarwal (DIN :- 00227871) Managing Director has expressed his desireon 7th September 2015 to resign from the Board due to health issues. The Board hasaccordingly accepted his request and he was relieved from the services of the Company fromthe close of business hours on Saturday 14th November 2015.
Mr. Nirmal Kumar Agarwal (DIN: 00605669) has been appointed as the Managing Director ofthe Company w.e.f 14th November 2015 for a period of 3 years w.e.f 14th November 2015.The appointment and remuneration payable to him require the approval of the Members at theensuing Annual General Meeting.
Brief resume of the above Directors nature of their expertise in their specificfunctional areas details of directorships in other companies and the chairmanship /membership of committees of the Board as stipulated under Clause 49 of the ListingAgreement with the Stock Exchanges are given in the Notice for the ensuing Annual GeneralMeeting.
KEY MANAGERIAL PERSONNEL
The Board appointed Mr. Sanjay Dey as the Company Secretary and Compliance Office ofthe company w.ef 12th February 2015. Mr. Manoj Agarwal Managing Director of the Companystepped down from his position with effect from 14th November 2015 owing to healthissues.
Mr. Nirmal Agarwal Director of the Company has been appointed as Managing Director ofthe Company with effect from 14th November 2015. His employment terms needs approval ofthe Shareholders of the Company at the ensuing Annual General Meeting. Board of Directorsrecommends and has approved his terms of employment.
The financial year of the Company is from 1st July 2014 to 30th June 2015. As perrequirements of Companies Act 2013 the next financial year of the company shall be for aperiod of 9 months concluding on 31st March 2016.
DIRECTORS RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and the reviews performed by the Management and the relevantBoard Committees including the Audit Committee the Board is of the opinion that theCompany's internal financial controls were adequate and effective during the financialyear 2014-15.
Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:-a) In the preparationof the annual accounts the applicable accounting standards had been followed along withproper explanation relating to material departures; b) The Directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; c) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;d) The Directors had prepared the annual accounts on a going concern basis; e) TheDirectors had laid down proper internal financial controls and such internal financialcontrols are adequate and wereoperating effectively; f) The Directors had devised propersystems to ensure compliance with the provisions of all applicable laws and that suchsystems were adequate and operating effectively.
The Board carried out an annual performance evaluation of its own performance theindividual Directors as well as the Board Committees in due compliance with theprovisions of the Companies Act 2013 and the Listing Agreement. The performanceevaluation of the Independent Directors was carried by the entire Board and theperformance evaluation of the Chairman and Non Independent Directors was carriedout by the Independent Directors.
The Board evaluation was carried out in accordance with the criteria laid down in theNomination and Remuneration policy of the Company.
The Audit committee comprises of 5 (five) members of which 4 (four) members areindependent including Chairman Mr. Nandanandan Mishra is the Chairman of the AuditCommittee. The members of the Committeepossess adequate knowledge of Accounts Audit andFinance. The composition of the Audit Committee meets the requirements as per Section 177of the Companies Act 2013 and of Clause 49 of the Listing Agreement and is detailed inthe Corporate Governance Report forming part of this Annual Report. All recommendationsmade by the Audit committee were accepted by the Board during FY 2014-15. During the yearunder review Audit Committee was reconstituted owing to vacancy created due toresignation of Shri Manoj Kumar Agarwal on 14th November 2015.
DISCLOSURE REGARDING RECEIPT OF COMMISSION BY DIRECTOR
During the year under review none of the Directors has received any commission fromholding / subsidiary Company.
AUDITORS & AUDITOR's REPORT
M/s. Das & Prasad Chartered Accountants having registration number FRN 303054Eallotted by The Institute of Chartered Accountants of India (ICAI) retires as Auditor ofyour Company at the ensuing Annual General Meeting (AGM) and have confirmed theireligibility and willingness to accept the office of Auditors if re-appointed. Pursuant tosection 139 of the Companies Act 2013 and rules framed thereunder it is proposed toappoint M/s. Das & Prasad Chartered Accountants as Statutory Auditors of the Companyfrom the conclusion of the ensuing AGM till the conclusion of the 15th AGM to be held forF.Y. 2015-16.
The observations of the Auditors are dully dealt in Notes to Accounts attached toBalance Sheet and are self explanatory in nature and do not call for any further commentsexcept:-a) The Management of the Company is reasonably certain that the Company would behaving Future Taxable Income and deferred tax assets are only recognized to the extentthat their utilization is probable i.e. tax benefit is expected in future periods and thesame is further supported by the Technical & Economical Valuation conducted by Dun& Bradstreet as a part of CDR Implementation. b) The company has locked out its plantat Rourkela in the month of February 2015 owing to adverse business condition. The lockout was declared in accordance with the procedures laid down in the state of Odisha. Inthe opinion of the management since the lock out was declared in accordance with lawfulprocedures the salary and other statutory liabilities do not accrue during the period oflockout and hence no provision has been made in the books of account of the company. c)The observation of the Auditors for the subsidiary company Orissa Manganese &MineralsLimited has been dealt in Notes to Accounts which are self explanatory and do not requireany further elucidation.
In terms of the provisions of Section 138 of the Act M/s More Aditya & AssociatesIndependent Chartered Accountants were appointed as Internal Auditors of the Company forthe financial year 2014-15. The Audit Committee in consultation with the Internal Auditorsformulates the scope functioning periodicity and methodology for conducting the InternalAudit. The Audit Committee interalia reviews the Internal Audit Report.
In respect of financial year ended 30th June 2015 your Company has re-appointed M/s.Saroj K Babu & Co. Cost Accountants as Cost Auditor of the Company w.e.f. 1st July2014 to 30th June 2015 to carry out audit of cost records of the Company in compliancewith the requirements of section 148 and all other applicable provisions of the CompaniesAct 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 (includingany statutory modification(s) or re-enactment thereof for the time being in force).
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration ofManagerial Personnel) Rules 2014 the Company appointedMr. Pramod Kumar Pal Practicing Company Secretary to undertake the Secretarial Audit ofthe Company for the year ended 30th June 2015. The Secretarial Audit Report is annexed(Annexure - C) herewith and forms part of this report.
CONSOLIDATED FINANCIAL STATEMENT
In terms of Clause 32 of the Listing Agreement with Stock Exchanges ConsolidatedFinancial Statement conforming to Accounting Standard 21 issued by the Institute ofChartered Accountants of India is attached as a part of the Annual Report.
The Company is committed in maintaining the highest standards of Corporate Governanceand adheres to the stipulations prescribed under Clause 49 of the Listing Agreement withthe Stock Exchanges. Report on Corporate Governance & Shareholder Information togetherwith the Practising Company Secretary Certificate thereon is annexed as part of thisAnnual Report.
DIRECTORS' APPOINTMENT & REMUNERATION POLICY
The Company's policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of this Annual Report.
MANAGEMENT DISCUSSION & ANALYSIS
A detailed analysis of the Industry and Company Outlook Company's operations projectreview risk management strategic initiatives and financial review & analysis asstipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presentedunder a separate section titled "Management Discussion and Analysis" formingpart of the Annual Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT -9 (Annexure -D) as per provisions of the Companies Act 2013 and rules framed thereunder are annexed tothis Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
EMPLOYEE STOCK OPTION SCHEME (ESOP)
The Company has in place Adhunik Employee Stock Option Plan ('ESOP 2012') for employeesof the Company as well as employees of the subsidiaries which continue with the Company'sphilosophy of encouraging the employees to be partners in the growth of the organization.ESOP Scheme is administered by the RemunerationCommittee of the Board of Directors of theCompany.
During the year under review 764332 Stock Options have vested with the employees ofthe Company and its subsidiaries and 620694 Stock Options have been forfeited till 30thJune 2015. As on 30th June 2015 none of the Options have been exercised. The disclosuresrequired to be made under Clause 12.1 of the Securities and Exchange Board of India(Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 asamended from time to time together with a certificate obtained from the StatutoryAuditors confirming compliance thereto areprovided in Annexure B forming part of thisReport.
The volatility in the global economy and the increasingly complex interplay of factorsinfluencing the business makes Risk Management an inevitable exercise and to cater to thesame your Company has identified major focus areas for risk management to ensureorganisational objectives are achieved and has a robust policy along with well-defined anddynamic structure and proactive approach to assess monitor and mitigate risks associatedwith the business. The risk management framework is aimed at effectively mitigatingbusiness risks and operational risks through effective strategic implementation. TheCompany believes that the risks faced by the Company are within its risk capacity.
INTERNAL CONTROL SYSTEM
Your Company has adequate system of internal control procedures commensurate with itssize and the nature of its business. The internal control systems of the Company aremonitored and evaluated by the Internal Auditors and their audit reports are periodicallyreviewed by the Audit Committee of the Board of Directors of the Company.
Your Company manages and monitors the various risks and uncertainties that can haveadverse impact on the Company's Business. Your Company is giving major thrust indeveloping and strengthening its internal audit so that risk threat can be mitigated.Internal control systems are integral to the Company's corporate governance policy. Someof the significant features of internal control systems includes:
Documenting of policies guidelines authorities and approval proceduresencompassing the Company's all primary functions.
Deploying of an SAP system which covers most of its operations and is supportedby a defined on-line authorisation protocol.
Ensuring complete compliance with laws regulations standards and internalprocedures and systems.
De-risking the Company's assets/resources and protecting them from any loss.
Ensuring the accounting system's integrity proper and authorised recording andreporting of all transactions.
Preparing and monitoring of annual budgets for all operating and servicefunctions.
Ensuring the reliability of all financial and operational information.
Forming an Audit committee of the Board of Directors comprising IndependentDirectors. The Audit Committee regularly reviews audit plans significant audit findingsadequacy of internal controls and compliance with accounting standards and so on.
Forming a comprehensive Information Security Policy and continuous up-gradationof IT Systems.
The internal control systems and procedures are designed to assist in theidentification and management of risks the procedure-led verification of all complianceas well as an enhanced control consciousness.
Your Company obtained a Credit Rating of BWR BB - from Brickwork Ratings in the monthof November 2015.
RELATED PARTY TRANSACTIONS
All related party transactions entered into during FY 2014-15 were on arm's lengthbasis and also in the ordinary course of business and provisions of section 188 of theCompanies Act 2013 are not attracted. Further there are no materially significantrelated party transactions during the year under review made by the company withpromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. Thus disclosure in FormAOC-2 is not required.
The transactions entered into pursuant to the omnibus approval so granted were auditedand a statement giving details of all relatedparty transactions was placed before theAudit Committee for its approval on a quarterly basis. The statement was supported by aCertificate duly signed by the Managing Director and the Head (Finance & Accounts).The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at the link www.adhunikgroup.com.
None of the Directors or KMP has any pecuniary relationships or transactions vis--visthe Company during FY 2014-15.
SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS / COURTS ETC.
There were no significant and material orders passed by the Regulators / Courts /Tribunals impacting the going concern statusand company's operations in future.
There were also no material changes and commitments occurred after the closure of theyear till the date of this report whichaffect the financial position of the company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of energy conservation technology absorption and foreign exchange earnings andoutgo are annexed to this report (Annexure - A).
PARTICULARS OF LOANS GUARANTEES ORINVESTMENTS
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the financial Statements.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to this Report (Annexure - E).
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 a statement showing the names and other particulars ofemployees drawingremuneration in excess of the limits set out in the said Rules are provided in the Report.
The Company has adopted Vigil Mechanism policy that provides a formal mechanism for allDirectors employees and vendors ofthe Company to approach the Ethics Counsellor/Chairmanof the Audit Committee of the Board and make protective disclosuresabout the unethicalbehaviour actual or suspected fraud. The Vigil Mechanism comprises of whistle blowerpolicy for directors employees and vendors.
CORPORATE SOCIAL RESPONSIBILITY POLICY
The Corporate Social Responsibility (CSR) policy recommended by the Corporate SocialResponsibility Committee had been approved by the Board of Directors. The CSR policy isavailable on the website of the Company at www.adhunikgroup.co.in. During the year theCSR initiatives undertaken by the Company although not mandatory under Section 135 of theAct read with Companies (Corporate Social Responsibility Policy) Rules 2014 are detailedin the Annual Report.
Since your Company's last three financial years average net profit was negative therequirement of spending 2% for CSR initiative was not needed for 2014-15. But as aresponsible corporate your Company has already initiated various CSR activities in thesurrounding villages of its plant at ChadriHariharpur Odisha. However no separatereporting is made in this regard.
NOMINATION AND REMUNERATION POLICY
In terms of the requirement of Section 178 of the Companies Act 2013 the Board ofDirectors has approved the Nomination and Remuneration policy of the Company and the sameis available on the website of the company.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder. The Companyhas not received any complaint of sexual harassment during the financial year 2014-15.
Your Directors wish to place on record their appreciation for the continuous supportand guidance of all Governmental Authorities Central and States. It further acknowledgesand wishes to place on record the deep appreciation for support of Financial InstitutionsBanks and various stakeholders such as shareholders customers and suppliers amongothers. The Directors also commend the continuing commitment and dedication of theemployees at all levels which has been critical for the Company's success. The Directorslook forward to their continued support in future.
| ||For and on behalf of the Board |
|Place: Kolkata ||Ghanshyam Das Agarwal |
|Date: 12.02.2016 ||Chairman |
Annexure "A" to the Directors' Report
Information in Accordance with the Provisions of Section 134(3) (M) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regarding Conservationof Energy Technology Absorption and Foreign Exchange Earnings and Outgo
A. CONSERVATION OF ENERGY
(i) the steps taken or impact on conservation of energy;
1. Using of Waste bag filter Dust in ABC to increase the steam generation in WHRB.- JobCompleted in K#2(Trail Basis)
2. Maximum utilisation of High Grade South African Coal in DRI kilns with high FC andlow fines. This has helped in reducing the specific consumption of Coal as well as cost ofproduction. Reduced specific coal Consumpation from 1.2 ton to 0.8 ton
3. Ignition furnace and sinter machine Flue gas analysis for O2 % detection. This issaving the coke consumption in sinter. The coke consumption is being saved in tune of 10Kgs/mt from existing 85 Kgs to 75 Kgs/Mt.
4. Screening of all IBRM having higher percentage of +10 mm particles. This reducesreturn sinter & increase the sinterability of the burden reducing coke consumption
5. Installation of Moisture analyser in PMD/SMD of sinter plant. Analyses the optimummoisture in burden which saves the coke consumption during sintering process.
6. EAF is being run in BOF mode in which the Electrical energy replaced with low energycost of O2
(ii) the steps taken by the company for utilising alternate sources of energy;
Use of char in CPP- Modification in Captive power plant to use maximum % return charfrom DRI plant (Inhouse generated) and purchased char. This has reduced the coalconsumption per GCV in power plant.
Now char consumption is up to 50-60% in charge mix.
(iii) the capital investment on energy conservation equipment's- Rs. 68 lacs
B. TECHNOLOGY ABSORPTION
(i) the efforts made towards technology absorption;
Higher intensity magnetic separator for the not magnetic separation in CHP plant
(ii) the benefits derived like product improvement cost reduction product developmentor import substitution;
1. Increase in the yield of the liquid steel in SMS
2. Reduces the tap to tap time
3. Increase the productivity of the shop
4. Reduces the refractory consumption and cost
5. Increase the campaign life of the electric arc furnace
6. Decrease in the flux consumption of the SMS shop
(iii) the expenditure incurred on Research and Development- No major expenditure. Allthe R&D related work was done inhouse.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Activities relating to exports initiatives taken to increase exports; development ofnew export markets for products and services; and export plans;
|Total foreign exchange used and earned ||2014-15 ||2013-14 |
| ||( Rs. in Lakhs) ||(Rs. in Lakhs) |
|- Foreign exchange earnings ||4439.44 ||15272.74 |
|- Foreign exchange outgo ||1295.98 ||2405.65 |
Annexure 'B' to Director's Report
Statement as at June 30 2015 pursuant to Clause 12 (Disclosure in the Directors'Report) of the Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 as amended:
|Sl. No. ||Particulars ||Employee Stock Option Scheme 2012 |
|a. ||Total number of Options granted ||Options granted during : |
| || ||Financial Year 2014-15 - NIL |
| || ||Financial Year 2013-14 - NIL |
| || ||Financial Year 2012-13 -3708643 |
|b. ||The pricing formula ||The options are granted at an exercise price equal to prevailing market price per equity shares on the National Stock Exchange being the Stock Exchange with highest trading volume prior to the date of the meeting of the Compensation Committee in which options have been granted. |
|c. ||Options vested (as on 30 June 2015) ||808262 |
|d. ||Options exercised during the year ||NIL |
|e. ||The total number of Equity Shares arising as a result of exercise of option ||NIL |
|f. ||Options lapsed/forfeited during the year ||931375 |
|g. ||Variation of terms of options ||Not Applicable |
|h. ||Money realised by exercise of options during the year (in _.) ||NIL |
|i. ||Total number of options in force ||2156574 |
|j. ||Employee wise details of options granted || |
| ||I. Key Managerial Personnel during the year; ||Nil |
| ||II. any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year; ||Nil |
| ||III. identified employees who were granted option during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant ||Nil |
|k. ||Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Option calculated in accordance with Accounting Standard (AS) 20 'Earnings Per Share' ||Nil |
|l. ||Where the company has calculated the employee compensation cost using the intrinsic value of the stock options the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the options shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed ||The employee compensation cost has been computed based on fair value of the option on the grant date using the Black Scholes formula. |
|m. ||Weighted-average exercise prices and weighted- average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock ||Weighted average exercise price of Options whose: |
| || ||Exercise price equals market price Rs. 30.15 |
| || ||Exercise price is greater than market price N.A. |
| || ||Exercise price is less than market price N.A. |
| || ||Weighted average fair value of Options whose: |
| || ||Exercise price equals market price Rs. 9.54 |
| || ||Exercise price is greater than market price N.A. |
| || ||Exercise price is less than market price N.A. |
|n. ||A description of the method and significant assumptions used during the year to estimate the fair values of options including the following weighted-average information: ||Fair Value of Options has been calculated by using Black Schole's Method with the following underlying assumptions: |
|o. ||risk-free interest rate ||The interest rate applicable for a maturity equal to the expected life of the option based on the zero- coupon yield curve for Government Securities which as on the grant date was approx. 8.21%. |
|p. ||expected life ||The expected life is equal to vesting period plus half of the exercise period of the ESOPs issued which is approx. 3.66 years. |
|q. ||expected volatility ||The expected volatility has been equal to the volatility in the stock price of the Company prior to the grant date which is approx. 39.29%. |
|r. ||expected dividends and ||The estimated dividends of the Company over the estimated life of the option taking into account the company's past dividend policy as well as the mean dividend yield of an appropriate comparable peer group which is approx. 3.08%. |
|s. ||the price of the underlying share in market at the time of option grant ||The market price is the latest closing price prior to the meeting of the Compensation Committee in which options are granted on the stock exchange on which the shares of the company are listed. Since the shares of the Company are listed in more than one stock exchange the stock exchange where there is highest trading volume on the said date has been considered which is approximately Rs. 30.15/-. |
The Company has received a Certificate from the Auditors of the Company that the Schemehas been implemented in accordance with Securities and Exchange Board of India (EmployeeStock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and theresolution passed by the Members on August 29 2012.