Your Directors have pleasure in presenting the 31st Annual Report on thebusiness and operations of the Company together with audited accounts for the financialyear ended March 31 2016.
1. Financial Results and Appropriations
|Particulars ||2015-16 ||2014-15 |
|(a) Turnover (excluding excise duty) ||9535.86 ||8868.05 |
|(b) Gross Profit after Finance Cost but before Exceptional Items Depreciation and Tax ||776.67 ||680.46 |
|(c) Depreciation / Amortization ||160.38 ||173.32 |
|(d) Profit before Exceptional Items and Tax ||616.29 ||507.14 |
|(e) Exceptional Items ||(370.05) ||(107.02) |
|(f) Profit before Tax ||246.24 ||400.12 |
|(g)Provision for Current Ta. ||188.57 ||148.56 |
|(h) Provision for Deferred Tax Charge / (Credit) ||(28.63) ||14.78 |
|d) Profit after Tax ||86.30 ||236.78 |
|(j) Balance of Profit Brought Forward ||1482.89 ||1390.86 |
|(k) Profit available for Appropriation ||1569.19 ||1627.64 |
|(l) Appropriations: || || |
| General Reserve ||- ||50.00 |
| Proposed Dividend on Equity Shares ||79.08 ||79.08 |
| Tax on Dividend ||16.10 ||16.10 |
| Proposed Dividend on Equity Shares held by Trust ||- ||(0.43) |
| Reversal of Dividend on Equity Shares held by Trust related to earlier years ||1.73 ||- |
| Saving on payment of Dividend Distribution Tax ||(0.96) ||- |
|(m) Balance Carried Forward to Balance Sheet ||1473.24 ||1482.89 |
The Company has two business segments viz. Fertilisers and other Agri-inputs andShipping. During the year under review the Company has completed the sale of its textilebusiness i.e. Birla Textile Mills to Sutlej Textiles and Industries Limited as a goingconcern on slump sale basis with effect from April 1 2015. The Fertiliser and otherAgri-inputs Division registered an increase in the turnover mainly on account of highersales of products like imported fertilisers and own manufactured Single Super Phosphate.The traded products continued to make significant contribution to the bottom-line of theCompany. The Shipping Division has also registered higher turnover mainly on account ofbetter realisations from own vessels and achieved much better performance in comparison toprevious Sear
During the year under review your Company has decided to set up new Urea plant atGadepan for production of 1.34 Million MT of Urea per annum at a cost of approximately USD900 Million ("Gadepan - III Project"). The Company has awarded contracts to ToyoEngineering Corporation Japan and Toyo Engineering India Pvt. Limited India forimplementation of Gadepan - III Project. The Company has fully tied up the debt portion ofthe cost of Gadepan - III Project and the aforesaid contractors have startedimplementation of Gadepan - III Project. The commercial production of Urea from Gadepan -III Project is scheduled to start in January 2019. This project will be a stepping stonein the journey of growth of your Company as there will be an increase of about 63% in thepresent Urea production capacity of the Company.
The Approval of the shareholders of the Company was taken during the year for sale ofone or more than one or all five ships/ vessels or the entire shipping business of theCompany.
During the year under review the Company has made a provision of Rs. 296.19 Crore onaccount of impairment in the value of its investment in CFCL Technologies Limited CaymanIslands a subsidiary of the Company. In addition to this the Company has made aprovision for impairment loss of Rs. 111.99 Crore as a result of sale transaction of thevessel - Ratna Puja. In view of this the Profit after Tax during the year under reviewwas much lower in comparison to the previous year.
The detailed information on the business segments of the Company and the respectiveindustries are given in the Management Discussion and Analysis Report attached as Annexure"A" to this report.
The Board recommends dividend @ Rs. 1.90 per equity share of Rs. 10 each (Previous Year- Rs. 1.90 per equity share) for the financial year ended March 31 2016. The total outgoon this account will be Rs. 95.18 crore including dividend distribution tax.
4. 'Corporate Governance Report' and Code of Conduct
Your Company is committed to maintain highest standards of Corporate Governance andstrives to improve the corporate governance standards and practices. Corporate GovernanceReport for the Financial Year 2015-16 is attached as Annexure "B". Thedeclaration of the Managing Director confirming compliance with the 'Code of Conduct andEthics' is enclosed as Annexure "C" and Auditors' Certificate confirmingcompliance with the conditions of Corporate Governance is enclosed as Annexure"D".
5. Joint Venture : Indo Maroc Phosphore S. A. Morocco (IMACID)
IMACID is a joint venture of your Company with Tata Chemicals Limited and OCP Moroccowith equal stake of each partner. IMACID is engaged in the manufacture of phosphoric acidin Morocco.
During the year 2015 IMACID achieved revenue of Moroccan Dirham (MAD) 2777.42 million(Rs. 18527.70 million) against revenue of MAD 2376.30 million (Rs. 16686.12 million)achieved during the year 2014. The profit after tax of IMACID was MAD 194.01 million (Rs.1294.21 million) during the year as against MAD 90.09 million (Rs. 632.20 million) in theyear 2014.
During the quarter ended March 31 2016 IMACID achieved operating income of MAD 419.22million (Rs. 2861.75 million).
The financial position of IMACID as at December 31 2015 was as under:
Share Capital - MAD 620 million (Rs. 4135.92 million)
Total Assets - MAD 1266.18 million (Rs. 8446.47 million)
Reserves and Surplus - MAD 256.09 million (Rs. 1708.33 million)
Total Liabilities - MAD 1266.18 million (Rs. 8446.47 million)
Investments - NIL
(i) Chambal Infrastructure Ventures Limited and its Subsidiaries
Chambal Infrastructure Ventures Limited ("CIVL") is a wholly owned subsidiaryof your Company which was incorporated to pursue the business opportunities in Powersector. CIVL had established two down-stream wholly owned subsidiaries viz. Chambal Energy(Chhattisgarh) Limited ("CECL") and Chambal Energy (Orissa) Limited("CEOL"). The Hon'ble High Court of Delhi has granted its sanction to the schemeof amalgamation of CECL and CEOL with CIVL. The order of the Hon'ble High Court has beenfiled by the aforesaid companies with the concerned Registrar of Companies. AccordinglyCECL and CEOL stand amalgamated with CIVL with effect from the appointed date of April 12015.
The new site for CIVL's power project in Odisha has been approved by the Government ofOdisha and the matter is being pursued with the concerned authorities for renewal ofMemorandum of Understanding for setting up power project.
(ii) CFCL Technologies Limited Cayman Islands and its Subsidiaries
CFCL Technologies Limited a subsidiary of the Company operates business through itsstep-down subsidiaries mainly in USA and India. ISGN Corporation USA is a wholly ownedsubsidiary of CFCL Technologies Limited. ISGN Solutions Inc. USA is a wholly ownedsubsidiary of ISGN Corporation USA. ISGN Corporation is engaged in designing developingmarketing and distribution of software products for mortgage lending industry in USA. ISGNSolutions Inc. is mainly engaged in providing loan fulfillment solutions in USA such asclosing and settlement services valuation services mortgage processing services vendormanagement solutions for residential mortgage lenders etc. These businesses are beingsupported by ISG Novasoft Technologies Limited India (a downstream subsidiary of CFCLTechnologies Limited) through its centres in India.
The decline in the performance of Software Business continued in the Year 2015 due tothe mortgage market seeing significant dip in business volumes across the industry.Considering the market scenario financial condition and future prospects ISGNCorporation USA has entered into a stock purchase agreement on January 28 2016 for saleand transfer of its entire shareholding in ISGN Solutions Inc. USA to Firstsource GroupUSA Inc. USA for a sale consideration of USD 12.56 million (subject to closing and otheradjustments). The shareholders of the Company has approved the aforesaid transactionthrough postal ballot on May 3 2016. On completion of the transaction ISGN SolutionsInc. and its two subsidiaries viz. ISGN Fulfillment Services Inc. USA and ISGNFulfillment Agency LLC USA will cease to be subsidiaries of the Company.
Further ISG Novasoft Technologies Limited has signed an agreement on January 28 2016for sale of its Business process outsourcing business to Firstsource Process ManagementServices Limited India on slump sale basis at a consideration of Rs. 3 crore.
The aforesaid transactions are expected to be completed by end of May 2016.
(iii) India Steamship Pte. Limited Singapore
India Steamship Pte. Limited Singapore is a wholly owned subsidiary of your Companyand it has operated during the year by in-chartering the vessels.
(iv) India Steamship International FZE UAE
India Steamship International FZE UAE ("ISS UAE") was a wholly ownedsubsidiary of India Steamship Pte. Limited Singapore. During the year your Company hadacquired entire shareholding of ISS UAE from India Steamship Pte. Limited Singapore.Consequently ISS UAE became direct subsidiary of your Company. ISS UAE has commencedthe in-chartering of ships during second half of the Financial Year 2015-16.
(v) India Steamship Limited India
India Steamship Limited is a wholly owned subsidiary of your Company. There was nobusiness activity in this subsidiary during the year under review.
The four downstream subsidiaries of the Company namely Richmond Title Services LPUSA Richmond Title Genpar LLC USA Richmond Investors LLC USA and ISGN FulfillmentServices Inc. Arizona USA were dissolved during the year under review.
Save and except as mentioned above no other subsidiary associate or joint venturehave been acquired/ included or ceased during the year under review.
The performance and financial position of the subsidiaries of the Company is summarizedin Form AOC - 1 attached to the Financial Statements of the Company in pursuance ofSection 129 of the Companies Act 2013. The Company shall place the audited financialstatements of its subsidiaries on its website in pursuance of Section 136 of the CompaniesAct 2013 and shall provide a copy of these statements to any shareholder seeking it.These documents will also be available for inspection by members during business hours atthe registered office of the Company at Gadepan Dist. Kota Rajasthan.
7. Health Safety Quality and Environmental Protection
Your Company gives highest priority to Environment Protection and Safety with awell-defined Environment Health and Safety ("EHS") policy. The adherence to EHSpolicy is continuously monitored by senior management through regular reviews.
Your Company has established on a sustainable basis an Integrated Management Systembased on OHSAS-18001:2007 ISO-14001:2004 and ISO-9001:2008. It has also adopted ProcessSafety Management and guidelines of British Safety Council. Your Company has achieved themile-stone of Zero reportable accident during the financial year 2015-16.
The details of various activities and achievements of the Company in this regard are asunder:
(a) Health & Hygiene
There is a strong focus on health assessment and occupational disease monitoring ofemployees and associates through periodic medical examinations and hygiene monitoring atwork place. Apart from two full time Doctors and trained nursing staff specialist doctorslike child specialist Eye specialist dental surgeon Gynecologist ENT surgeon etc.visit the Health Centre at Gadepan regularly. There are three ambulances available onround the clock basis at the plant location of the Company.
The Health Centre at Gadepan provides its services round the clock to employees theirfamilies contractor work force and villagers in the vicinity of the plants. For enhancingawareness towards health related matters periodical training and awareness programs areorganized through e-ternai e-perts.
(b) Safety Management
A robust occupational health and safety management system is in place in your Companyat Gadepan to take care of all the employees contractor workforce as well as equipmentand machinery. Effective implementation of the safety system is ensured through Hazardidentification risk assessment & mitigation procedures safety work permit systemetc. Before executing any maintenance job in the plant a cross functional team of seniormanagement members review the jobs on a daily basis from a safety perspective to ensurethat all recommended actions to prevent hazards are taken.
The extensive trainings and drills were conducted by internal and external experts onrescue work at height working inside confined space fire-fighting emergency handlingelectrical safety material handling road safety use of Breathing Air sets etc. Toencourage safety awareness and involvement among employees and contractor workforcescheme of "Near-Miss" & "Make- to Good" reporting is in place inthe fertiliser plants.
In order to create more awareness on Safety & Environment various programmes wereorganized throughout the year like National Safety Week Road Safety Week Fire ServicesDay World Environment Day etc. involving employees their families and sontrastorworkforce.
Your Company has a well-defined "Onsite Disaster Management Plan" and MARG(Mutual Aid and Response Group) arrangement with neighboring industry. Regular mockdrills fire drills and table top drills were conducted to verify emergency preparedness.Prompt fire-fighting services were provided to villages surrounding Gadepan plants. As apart of safety improvement initiative online monitoring and reporting system - UttamSuraksha Setu is in place.
(c) Environment Management
Your Company is conscious of its responsibility towards environment protection. Thishas led to an increasing focus over the years on reduction of environmental impact withrespect to natural resource consumption (including raw materials fuels and water) wastegeneration and emissions to the atmosphere. Your Company has taken concrete steps toachieve zero liquid effluent discharge after implementation of Gadepan - III Project.
Investors suppliers customers local communities as well as government and regulatoryagencies are vital stakeholders in our efforts towards green manufacturing. Your Companyhas a robust mechanism in place to ensure that all environmental parameters are maintainedwithin the permissible limits. A dedicated Environment Management Cell is in place atGadepan to monitor the environmental compliances.
The Company's Gadepan complex made a positive change in ecology due to development of adense green belt / forest comprising of variety of fruits and shrubs. This has provided asoothing & healthy environment for people to live and work and habitat to many speciesof birds. Only treated waste water is used in maintaining the green belt throughirrigation network spread all over the Gadepan complex
(d) Quality Management
Your Company is ISO 9001:2008 certified and maintains high quality of product andprocesses. The quality assurance is ensured at all stages of manufacturing processesmaintenance and support services. Quality reviews are regularly conducted and feedbackfrom end users (farmers) is accorded utmost importance. Sophisticated instruments are inplace for monitoring of critical quality parameters.
Your Company regularly participates in national and international benchmarking surveysand awards for independent assessment and opportunity for continual improvement. YourCompany has received following awards during the year under review:
Environmental Protection Award (Winner) in the SSP Fertiliser Plants Categoryfor the year 2014-15 from Fertiliser Association of India.
"Rajasthan Energy Conservation Award-2015" by Govt. of RajasthanDepartment of Energy Jaipur.
8. Corporate Social Responsibility ("CSR")
Your Company is conscious of its responsibility towards its stakeholders including thecommunity at large and makes continuous efforts to contribute to their well-being. YourCompany has taken several initiatives for sustainable development of rural community inthe vicinity of its plants in partnership with local administration at Village Block andDistrict level.
The Company has made meaningful impact in the areas of education healthcareinfrastructure development soil health and skill development through its CSR programmes /projects. The CSR programmes / project of the Company are implemented directly as well asthrough KK Birla Memorial Society (KKBMS) and other Non-Governmental Organisations whichare engaged in specific areas.
The major highlights of the CSR projects/ programmes of the Company during theFinancial Year 2015-16 are as under:
a) School Education
The education is a flagship programme of the CSR activities of the Company. The Companyis creating an impact in the lives of the children and youths by extending supports frompre-school education to job oriented courses at Industrial Training Institutes.
The Company has adopted 31 Balwadis in 26 villages of District Kota in partnership withPratham Education Foundation. The Balwadis play an important role in preparing thechildren for pre-primary education. As a part of its CSR initiative your Company hasadopted 7 more schools during the year taking the total number of adopted schools to 39Government Primary Upper Primary Secondary and Senior Secondary Schools in 26 villagesin the vicinity of its plants in Kota and Baran Districts of Rajasthan. The objective ofthis programme is to improve the education standards in these schools. Pratham EducationFoundation a renowned Non-Governmental Organisation has been engaged to improve thelearning level of students from nursery to 8th standard. Kumar Classes - acoaching institute from Kota has been engaged for remedial education for students ofsecondary and senior secondary classes. A significant improvement has been observed in thelearning level of students in these schools post adoption by the Company. The renovationof 6 adopted schools was carried out during the year. Further girls toilets wereconstructed in 6 schools in Sultanpur Block. The Company also provided stationery schoolbags note books and winter wears to around 3500 students. Your Company is also impartingbasic computer courses to rural students through its 4 Community Information TechnologyCentre's located in villages contiguous to its urea plants.
CFDAV School is being run in the Gadepan complex for Nursery to Class 10 students incollaboration with DAV Trust and Management Society. Around 64% students in CFDAV Schoolare from adjoining rural areas.
b) Technical Education
The Company had adopted Industrial Training Institute (ITI) at Sangod and Sultanpur in2011 and 2014 respectively under Public Private Partnership scheme ("PPP"). ITISangod has become one of the best institutions of Rajasthan and has received variousaccolades at state and national level. ASSOCHAM has awarded Gold Trophy to ITI Sangodadjudging it as best ITI under PPP model category in India. During last 4 years ITISangod has been able to achieve almost 100% placement of students in the Industry. Tofurther strengthen the Company's commitment towards skill education your Company hasadopted Government ITIs at Jhalawar and Baran during the year under review. The renovationwork of these ITIs is under progress. The senior employees of the Company are involved inthe management of these ITIs and Company's engineers also take extra classes for studentstherein.
In addition to the above your Company is running four vocational training centers inthe villages near Gadepan. These centers are in operation in partnership with DistrictAdult Education Association (supported by Jan Shikshan Sansthan). During the year around255 youths were trained in various skills.
c) Community Health Care
The Company provides free of charge healthcare in adjoining villages of Kota districtand villages near Mussoorie (Uttarakhand) in collaboration with Manorama Devi BirlaCharitable Trust. During the year under review the Company has collaborated with the NGO- School Health Annual Report Programme (SHARP) to provide health services in the villagesof Kota district.
d) Infrastructure Development
Your Company has continued to contribute towards village rural infrastructuredevelopment. During the year under review the Company has constructed 8 cement concreteroads / pavements in the villages near Gadepan under PPP scheme. Construction of 5basketball courts and 10 pathways were carried out in the adopted Government Schools.
e) Soil Health
The Company is running two state-of-the-art agriculture development laboratories inAgra and Kota. During the year under review the Company has started operating a MobileSoil Testing Van in Varanasi to facilitate farming community. This initiative has receivedaccolades from the Prime Minister of India. Three soil testing vans operated by theCompany reach to the farmlands deep into the rural area.
The composition of Corporate Social Responsibility Committee is given in the CorporateGovernance Report. The details of the development and implementation of the CorporateSocial Responsibility Policy and Annual Report on CSR activities as prescribed underSection 135 of the Companies Act 2013 and the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 which is annexed herewith as Annexure "E".
For the purpose of Section 135 of the Companies Act 2013 the amount equivalent to 2%of the average net profits of the Company made during the immediately preceding threefinancial years works out to Rs. 8.45 crore. As against this the Company spent Rs. 9.06crore on CSR projects / programmes.
9. Directors and Key Managerial Personnel
The Board consists of eight directors - seven non-executive directors including fourindependent directors and a Managing Director. Mr. Shyam S. Bhartia (DIN: 00010484) is duefor retirement at the forthcoming Annual General Meeting and has offered himself forre-appointment.
Mr. Aditya Narayan (DIN 00012084) had been appointed as an Independent Director of theCompany at the Annual General Meeting of the Company held on September 15 2015 to holdoffice from April 01 2015 for a term upto the conclusion of the Annual General Meeting ofthe Company to be held in the calendar year 2018.
The Board of Directors at its meeting held on May 11 2016 had re-appointed Mr. AnilKapoor (DIN 00032299) as Managing Director of the Company for a period of 3 years witheffect from February 16 2017 and the Board commends the re-appointment of Mr. Anil Kapoorfor approval of the shareholders.
During the year the Managing Director has not received any commission or remunerationfrom any subsidiary of the Company.
All the Independent Directors have submitted declarations that they meet the criteriaof independence as provided under Section 149 of the Companies Act 2013 and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations").
The Board met six times during the Financial Year 2015-16.
Other information on the Directors and the Board Meetings is provided in the Report onCorporate Governance annexed to this Report as Annexure "B".
(ii) Key Managerial Personnel
Mr. M.S Rathore ceased to be Secretary of the Company with effect from May 01 2015.The Board of Directors had appointed Mr. Rajveer Singh as Secretary of the Company anddesignated him as Key Managerial Personnel in such capacity with effect from May 012015.
10. Internal Financial Controls
The Company has policies and procedures in place for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation. The details of internal control system are given in the Management Discussionand Analysis Report attached hereto as Annexure "A".
11. Remuneration Policy
The Remuneration Policy of the Company including criterion for determiningqualifications positive attributes independence of Directors and other matters asprescribed under Section 178 of the Companies Act 2013 and Listing Regulations is annexedto this Report as Annexure "F"
12. Disclosures under the Companies Act 2013 and Rules thereunder
a) Your Company has not issued any shares during the Financial Year 2015-16.
b) No significant and material orders have been passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.
c) All Related Party Transactions entered during the year were on arm's length basis.No material Related Party Transaction (transaction exceeding ten percent of the annualconsolidated turnover of the Company as per last audited financial statements) wasentered during the year by the Company.
The Company has sold and transferred its Textile Business i.e. Birla Textile Mills("BTM") to Sutlej Textiles and Industries Limited ("STIL") as a goingconcern on slump sale basis with effect from April 12015. The discussions were held withdifferent parties for sale / disposal of BTM but same did not reach any fruitfulconclusion. Then STIL evinced their interest in purchasing BTM from the Company. It wasdecided to sell and transfer BTM in light of (i) there being limited scope for expansionof BTM at the current location in the State of Himachal Pradesh as the land in the factorypremises was fully utilized (ii) necessity of further capital expenditure of around Rs.50 -60 Crore in coming years to maintain the productivity and keep the unit costcompetitive; and (iii) downward trend in the textile business.
The Company has treated the said transaction as related party transaction and theshareholders of the Company has approved the said transaction at the Annual GeneralMeeting held on September 15 2015. The details of this transaction are given in FormAOC-2 attached to this report as Annexure "G".
d) The extract of Annual Return is attached to this Report as Annexure "H"
e) The following information is given in the Corporate Governance Report attached tothis Report as Annexure "B".
i. The Performance evaluation of the Board the Committees of the Board Chairpersonand the individual Directors;
ii. The Composition of Audit Committee; and
iii. The details of establishment of Vigil Mechanism.
f) The particulars of loans and guarantees given and investments made under Section 186of the Companies Act 2013 are given in the Notes to the Financial Statements.
g) During the year the auditors have not reported any fraud under Section 143(12) ofthe Companies Act 2013 and the Companies '(Audit and Auditors) Rules 2014.
13. Directors Responsibility Statement Directors hereby state that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and no material departures have been made from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the profitand loss of the Company for the year ended March 31 2016;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Notes to the Financial Statements read with the Auditors' Report areself-explanatory and therefore do not call for any further comments or explanations.
M/s. S. R. Batliboi & Co. LLP Auditors (Registration No. 301003E/ E300005) andM/s. Singhi & Co. Chartered Accountants (Registration No. 302049E) Branch Auditors ofShipping Business of the Company are retiring at the ensuing Annual General Meeting("AGM") of the Company and being eligible offered themselves forre-appointment. Your Directors are seeking re-appointment of M/s. S.R. Batliboi & Co.LLP Auditors and M/s. Singhi & Co. Branch Auditors of Shipping Business of theCompany from the conclusion of the ensuing 31st AGM of the Company till theconclusion of 32nd AGM of the Company.
The Board of Directors of the Company appointed M/s. K.G. Goyal & Associates CostAccountants for conducting audit of cost accounts of the Company as applicable for thefinancial year 2016-17. As required under the Companies Act 2013 and Rules framedthereunder your directors are seeking ratification of the members for the remunerationpayable to M/s K.G. Goyal & Associates Cost Accountants.
15. Secretarial Audit
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 of Directorsof the Company has appointed M/s. RMG & Associates Company Secretaries for conductingsecretarial audit of the Company for the financial year 2015-16. The Secretarial AuditReport issued by the aforesaid Secretarial Auditors is annexed herewith as Annexure"I".
There is no qualification reservation observation disclaimer or adverse remark inthe Secretarial Audit Report.
16. Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The Company continuously endeavors to make its plants energy efficient and reviewsvarious options to conserve energy on regular basis. The energy conservation is ofparamount importance for sustainable business and it also results into saving of naturaland financial resources. The Company has four double hull Aframax Tankers and these shipsare more energy efficient as compared to the old vessels. The requisite information withregard to conservation of energy technology absorption and foreign exchange earnings andoutgo in terms of the Companies (Accounts) Rules 2014 is set out in Annexure"J" attached hereto.
17. Risk Management
Your Company has developed and implemented a Risk Management Policy. The Company hasconstituted Risk Management Committee which periodically reviews all risks finalise therisk document and monitors various risks of the Company including the risks if any whichmay threaten the existence of the Company. The composition and terms of reference of theRisk Management Committee are given in the Corporate Governance Report.
The risk document containing Key and Non-Key risks including way forward for mitigationthereof as approved by the Risk Management Committee is also circulated to the AuditCommittee and the Board of Directors for their review periodically.
During the year the Company has not accepted deposits from the public under Chapter Vof the Companies Act 2013. Your Company has not defaulted in repayment of deposits orpayment of interest during the year. There was no public deposit outstanding as on March31 2016.
19. Particulars of employees
Your Company recognizes that people are the most valuable resource of the Company. Thecommitted work force has played an important role in the growth of the Company over theyears. The Company always strives to keep its human resource motivated and encouragesmerit and healthy relations. Information required to be disclosed in pursuance of Section197 of the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report and is attached hereto asAnnexure "K".
20. Employees Stock Option Scheme
The members of the Company had approved CFCL Employees Stock Option Scheme 2010 onAugust 27 2010 (as amended on September 13 2013) for issue and allotment of optionsexercisable into not more than 4162000 equity shares of face value of Rs. 10/- each toeligible employees and Managing Director of the Company. Each option when exercised wouldbe converted into one fully paid up equity share of Rs. 10/- of the Company. Consequentupon promulgation of Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014 ("ESOP Regulations") the shareholders of theCompany had approved the revised CFCL Employees Stock Option Scheme 2010 ("ESOS2010") on September 15 2015 in compliance with the ESOP Regulations.
The details of material changes made in CFCL Employees Stock Option Scheme 2010 duringthe year are as under:
a) Provision has been made for 'CFCL Employees Welfare Trust' ("Trust") topurchase shares from the secondary market.
b) The provision for direct subscription of shares by the employees upon exercise ofstock options has been deleted as ESOS 2010 envisaged secondary acquisition of shares andin such case as per ESOP Regulations it has to be implemented through Trust only.
c) In order to give more time to the employees for exercise of options the exerciseperiod has been increased from five years to eight years from the date of retting.
d) Certain other changes were made mainly to align ESOS 2010 with the requirementsunder ESOP Regulations The Company has not granted any stock options during the year.
ESOS 2010 is in compliance with ESOP Regulations and implemented through the Trust. TheTrustee of the Trust is holding 2253402 equity shares (0.54% of the paid up sharecapital) of the Company for the purpose of ESOS 2010. The ownership of these shares cannotbe attributed to any particular employee till he / she exercises the stock options grantedto him / her. Hence the concerned employees to whom the stock options were granted underESOS 2010 cannot exercise voting rights in respect of aforesaid shares held by the Trusteeof the Trust as such employees are not holders of such shares. The Trustee has notexercised the voting rights in respect of the aforesaid shares in the Annual GeneralMeeting of the Company held during the Financial Year 20 15-16.
The disclosures required to be made under ESOP Regulations read with SEBI circular no.CIR/CFD/Policy Cell/2/2015 dated June 16 2015 are given on the website of the Company atthe weblink http://www.chambalfertilisers.com/pdf/esop-2016.pdf. The disclosures inrespect of ESOS 2010 are also given in the notes to the Financial Statements.
21. Consolidated Financial Statements
In pursuance of the provisions of the Companies Act 2013 Rules thereunder ListingRegulations and the applicable Accounting Standards the Company has prepared ConsolidatedFinancial Statements. The Audited Consolidated Financial Statement alongwith Auditors'Report and the Statement containing salient features of financial statements ofsubsidiaries and joint venture (Form AOC -
1) forms part of the Annual Report.
22. Investor Service Centre
The In-house Investor Service Centre of your Company located at New Delhi providesprompt service to the investors. The Company takes various measures for investorsatisfaction such as reminders to investors about new corporate benefits undeliveredshares unclaimed dividend etc.
The equity shares of your Company are listed at National Stock Exchange of IndiaLimited and BSE Limited. The Company has paid annual listing fees to these Stock Exchangesfor the Financial Year 2016-17.
The members are requested to refer to general shareholders' information given inCorporate Governance Report appended hereto.
Your Directors wish to place on record their appreciation of the support andco-operation received from all stakeholders including the Department of FertilisersGovernment of India State Governments Domestic and International Financial Institutions& Banks. Your Directors also convey their sincere appreciation of the commitment hardwork and devotion of every employee of the Company which has enabled the Company toachieve sustained performance.
| ||For and on behalf of Board of Directors |
|Place: New Delhi ||S. K. Poddar |
|Date: May 11 2016 ||Chairman |