Your Directors present herewith the 68th Annual Report of the Company together with theAudited Financial Statements for the year ended 31st March 2016.
The performance of the Company for the year is summarized below:
(Rs. in Lakhs)
|Particulars ||2015-2016 ||2014-2015 |
|Gross Income ||12399.26 ||23129.08 |
|Profit before Interest and Depreciation ||1224.75 ||2212.22 |
|Finance charges ||719.96 ||1669.37 |
|Gross Profit ||504.79 ||542.85 |
|Depreciation and Amortisation expenses ||435.85 ||488.90 |
|Net Profit before tax ||68.94 ||53.95 |
|Provision for tax ||28.57 ||(58.46) |
|Net Profit after tax ||40.37 ||112.41 |
|Balance of Profit brought forward ||(2693.59) ||(2764.33) |
|Surplus carried to Balance Sheet ||(2653.22) ||(2693.59)* |
* - after adjustment of Rs. 41.67 Lakhs due to change in revised useful life of fixedassets.
OPERATIONS AND PERFORMANCE
For the year under review Your Company achieved a gross income of Rs. 12399.26 lakhsand profit before tax of Rs. 68.94 lakhs as against the gross income of Rs. 23129.08lakhs and profit before tax of Rs. 53.95 lakhs for the previous year.
Your Company's operations during the year were impacted by reduced in flow of freshorders due to the continued slowdown in Greenfield/Brownfield investment in customersegments where the Company is present. There was stiff competition in market place for thelimited orders available and due to very low prices offered by competitors Your Companywas not able to secure any major order during the year.
In addition there was pressure on liquidity front resulting from delayed payments bycustomers which in turn affected the pace of execution of the ongoing projects . In fewof the projects where work has been completed the customers delayed the payment due totheir funds position and this in turn had affected the cash flows of the Company.
The company will however continue its efforts for securing fresh orders and alsoimprove the collections from the market.
On the Property Development business Your Company had completed the handing over ofall the projects during the year. The turnover from property development business was atRs. 6944 lakhs for the year as against Rs. 11448 lakhs in the previous year.
The depreciation for the year was at Rs. 435.85 lakhs as compared to Rs. 488.90 lakhsfor the previous year. Due to lower volumes the PBIT for the year was at Rs. 788.9 lakhsas compared to Rs. 1723.32 lakhs during the previous year. However consequent to reducedborrowings the Company could bring down the finance cost from Rs. 1669.37 Lakhs in theprevious year to Rs. 719.96 lakhs in the current year.
During the year Your Company restricted the capital expenditure by utilizing theexisting Plant and Machinery. The Company reviewed the requirement of the available plantand machinery based on the completion of certain projects and took efforts to dispose offspecific surplus and used assets.
Taking into account overall financial performance of the Company and the accumulatedlosses no dividend is considered for the financial year 2015-16.
The Company has not transferred any amount to general reserve.
During the year the unclaimed dividend amounting to Rs. 151998/- pertaining todividend for the year ended 31st March 2008 was transferred to the Investor Education& Protection Fund. The company has uploaded the details relating to unclaimed dividendon its website for the benefit of its shareholders.
The paid up Equity share capital of the Company as on 31.03.2016 was Rs. 3323.36 Lakhs.During the year under review the Company has not issued shares with differential votingrights nor granted stock options nor sweat equity shares. As on 31st March 2016 Mr. M.M.Venkatachalam Chairman was holding 451610 equity shares of Rs. 10/- each and Mr. M.A.MArunachalam Director was holding 361610 equity shares of Rs. 10/- each of the Company.The other Directors of the Company do not hold any shares in the Company.
The paid up Preference Share capital of the Company as on 31.03.2016 was Rs.70000000/-.
DETAILS OF DEPOSITS
The Company has not accepted any Deposits covered under Section 73 of the CompaniesAct 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS / GUARANTEES GIVEN / INVESTMENTS MADE
The Company has not extended any loans guarantees nor made any investments coveredunder the provisions of Section 186 of the Companies Act 2013.
The Board of Directors have established a review and monitoring process with themanagement to ensure that the risks pertaining to the business are identified steps aretaken to manage and mitigate the same and periodical updates are discussed. The Board hadconstituted a Risk Management Committee details of the same and its terms of referenceare set out in the Corporate Governance Report forming part of the Board's Report.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In addition to the Internal Controls on Operations the Board has laid emphasis onadequate internal financial controls to ensure that the financial affairs of the Companyare carried out with due diligence. Apart from Internal Audit function which scrutinizesall the financial transactions the Company has also in place adequate Internal FinancialControls with reference to Financial Statements . During the year such controls weretested and no reportable material weaknesses in the design or operation were observed.
At the 67th Annual General Meeting held on 24th July 2015 Mr. P. Nagarajan (DIN:00110344) was appointed as an Independent Director for a period of 5 years with effectfrom 24th July 2015 for a term upto the conclusion of the 72nd Annual GeneralMeeting to be held in the calendar year 2020 and not liable to retire by rotation. Mr.M.M. Venkatachalam (DIN: 00152619) Chairman retired by rotation pursuant to Section152(6) of the Companies Act 2013 and Article 93 of the Articles of Association and wasappointed as Director liable to retire by rotation. Ms. G. Jalaja (DIN: 00149278) whowas appointed as an Additional Director of the Company on 20th March 2015 wasappointed as Director liable to retire by rotation.
REAPPOINTMENT OF RETIRING DIRECTOR
Based on the recommendation of Nomination & Remuneration Committee and approval ofthe Board Mr. MAM. Arunachalam Director (DIN: 00202958) who retires by rotation pursuantto Section 152(6) of the Companies Act 2013 and Article 93 of the Articles of Associationat the forth coming Annual General Meeting and being eligible offers himself for re-appointment.
APPOINTMENT OF DIRECTORS
During the year Mr. R. Surendran (DIN: 00010017) was appointed as AdditionalDirector(Independent) of the Company on 25th January 2016. On therecommendation of the Nomination & Remuneration Committee and with the approval of theBoard Mr. R. Surendran is proposed to be appointed as an Independent Director for aperiod of 5 years with effect from 25th January 2016 and necessary resolutionseeking the approval of the members for his appointment is included in the Noticeconvening the Annual General Meeting. He is not liable to retire by rotation.
RESIGNATION OF DIRECTORS
During the year Mr. S. S. Rajsekar Independent Director (DIN: 00125641) had resignedfrom the Board of Directors and the same was accepted by the Board with effect from theclose of business hours on 28th October 2015.
Your Directors place on record their grateful appreciation of the valuable servicesrendered and contributions made by Mr. S.S. Rajsekar during his tenure of office asDirector of the Company.
APPOINTMENT OF KEY MANAGERIAL PERSONNEL
During the year Mr. N. Velappan was appointed by the Board as Manager of the Companyand a Key Managerial Person from 01st May 2015 to 30th April 2016under Section 203 of the Companies Act 2013 which was approved by the members at the67th Annual General Meeting of the Company held on 24th July 2015. The Boardhas now extended the tenure of Mr. N. Velappan as Manager for the period from 01stMay 2016 to 30th April 2017 for which the approval of members is being soughtin the ensuing Annual General Meeting.
EVALUATION OF BOARDRs.S PERFORMANCE
As per the provisions of Section 134(3)(p) of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas evaluation of the working of its Audit Committee Nomination and RemunerationCommittee Risk Management Committee and Stakeholders Relationship Committee. The mannerin which the evaluation has been carried out is explained in the Corporate GovernanceReport.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
On their appointment Independent Directors are familiarized about the Company'sbusiness and operations. Interactions with senior executives are facilitated to gatherinsight specific to the Company's operations. Detailed presentations are made available toapprise about Company's history current business plan and strategies. As part of thefamiliarization programme a handbook is provided to all Directors including IndependentDirectors at the time of their appointment. The handbook provides a snapshot to theDirectors of their duties and responsibilities rights process of appointment andevaluation compensation Board and Committee procedures and expectation of variousstakeholders.
The details of familiarization programmes as above are also disclosed on the website ofthe Company at the link: http://www.coromandelengg.com/Inv_ policies.html.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 (Act) stating that the IndependentDirectors of the Company met with the criteria of Independence laid down in Section 149(6)of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Pursuant to Section 178(3) of the Companies Act 2013 the Board on the recommendationsof the Nomination and Remuneration Committee framed a policy for selection and appointmentof Directors Senior Management and other employees and their remuneration. The details ofthe Remuneration Policy are stated in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2016 the Board had met five (5)times on 28th April 2015 24th July 2015 28th October2015 25th January 2016 and 22nd March 2016. Except on 22ndMarch 2016 the Audit Committee had also met on the same dates. The details of the saidmeetings are given in the Corporate Governance Report. The intervening gap between themeetings was within the period as prescribed under the Companies Act 2013.
DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors' make the following Statements in terms ofSection 134 (3) (c) of the Companies Act 2013:
(a) that in the preparation of the annual financial statements for the year ended 31stMarch 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) that the directors had selected such accounting policies as mentioned in Note No.26 of the Financial Statements and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company as at 31st March 2016 and of the profit of the company for theyear ended on that date;
(c) that the directors had taken proper and sufficient care for the maintenance ofadequate account ingrecords in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) that the annual accounts for the year ended 31st March 2016 have been prepared ona "going concern" basis;
(e) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
RELATED PARTY TRANSACTIONS
All transactions with Related Parties entered during the financial year were in theordinary course of business and on an arm's length basis. There were no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. None of the Directors have any pecuniaryrelationships or transactions vis-a-vis the Company other than sitting fees andreimbursement of expenses incurred if any for attending the Board meeting.
The Related Party Transactions are placed before the Audit Committee for review andapproval as per the terms of the Policy for dealing with Related Parties. Prior omnibusapproval of the Audit Committee is obtained on a quarterly basis for transactions whichare foreseen and of repetitive nature. The statement containing the nature and value ofthe transactions entered into during the quarter is presented at every subsequent AuditCommittee meeting by the CFO for the review and approval of the Committee. Furthertransactions proposed in subsequent quarter are also presented. Besides the Related PartyTransactions are also reviewed by the Board on an annual basis. The details of the RelatedParty Transactions are provided in the accompanying financial statements. There are nocontracts or arrangements entered into with Related Parties during the year ended 31stMarch 2016 to be reported under section 188(1) of the Companies Act 2013. The policy ondealing with Related Parties as approved by the Board is uploaded and is available on theCompanyRs.s website at the following link: http://www.coromandelengg.com/Inv_policies.html.
EXPLANATION AND COMMENTS
The reports of statutory auditors and that of the secretarial auditors are selfexplanatory and have no adverse comments.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THE REPORT
There are no material changes or commitments after the closure of the financial year.
COMPOSITION OF AUDIT COMMITTEE
Pursuant to Section 177 of the Companies Act 2013 the Audit Committee wasreconstituted by the Board of Directors and consists of the following members:
|1. Mr. P. Nagarajan ||- Chairman |
|2. Mr. M.A.M. Arunachalam ||- Member |
|3. Mr. N.V. Ravi ||- Member |
|4. Mr.R. Surendran ||- Member |
The Board has accepted the recommendations of the Audit Committee and there were noincidences of deviation from such recommendations during the financial year under review.
The Company has devised a vigil mechanism in pursuance of the provisions of Section177(10) of the Companies Act 2013 for Directors and employees to report genuine concernsor grievances to the Audit Committee in this regard and details whereof are available onthe Company's website.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178 of the Companies Act 2013 the Board has constituted aNomination and Remuneration Committee consisting of the following members:
|1. Mr. N.V. Ravi ||- Chairman |
|2. Mr. M.M. Venkatachalam ||- Member |
|3. Mr. P. Nagarajan ||- Member |
The said committee has been empowered and authorized to exercise powers as entrustedunder the provisions of Section 178 of the Companies Act 2013. The Company had laid outand following the policy on directorRs.s appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under sub section 3 of Section 178 of the Companies Act 2013.
Policy on Criteria for Board Nomination and Remuneration policy is available in thewebsite of the Company http://www.coromandelengg.com/ Inv_policies.html.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company through its Corporate Social Responsibility Committee had formulated a CSRpolicy as required under Section 135 of the Companies Act 2013.
The following is the composition of the Corporate Social Responsibility Committee.
|a) Mr. R. Surendran ||- Chairman |
|b) Mr. M.A.M Arunachalam ||- Member |
|c) Ms G. Jalaja ||- Member |
SCOPE OF CSR POLICY
This policy will apply to all projects/programmes undertaken as part the Company'sCorporate Social Responsibility and will be developed reviewed and updated periodicallywith reference to relevant changes in corporate governance Statutory requirements andsustainable and innovative practices. The policy will maintain compliance and alignmentwith the activities listed in Schedule VII and Section 135 of the Companies Act 2013 andthe rules framed there under.
CSR POLICY IMPLEMENTATION
The Company shall undertake CSR project/ programmes identified by the CSR Committee andapproved by the Board of Directors in line with the CSR Policy.
The CSR Policy of the Company is uploaded in the website of the Company http://www.coromandelengg.com/Inv_policies.html.
REASON FOR NOT SPENDING ON CSR ACTIVITIES
Since the Company had incurred losses in 2 of the 3 preceding financial years theCompany had decided not to spend on the CSR activities during the financial year 2015-16 .
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
The company has not received any significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and company'soperations in future.
The Securities and Exchange Board of India (SEBI) on 2nd September 2015issued SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with theaim to consolidate and streamline the provisions of the Listing Agreement for differentsegments of capital markets to ensure better enforceability. The said regulations wereeffective from 1st December 2015 and accordingly all listed entities wererequired to enter into the listing agreement within six months from the effective date.The Company entered into Listing Agreement with BSE Limited on 14th December 2015.
M/s. Sundaram & Srinivasan Chartered Accountants Chennai bearing FirmRegistration No. 004207S were appointed as Statutory Auditors of the Company to holdoffice from the conclusion of 66th Annual General Meeting until the conclusion of 68thAnnual General Meeting subject to ratification of the appointment by the members at everyAnnual General Meeting held after 66th Annual General Meeting of the Company. The Board ofDirectors based on the recommendation of Audit Committee proposes the appointment ofM/s Sundaram & Srinivasan as Statutory Auditors of the Company to hold office fromthe conclusion of 68th Annual General Meeting until the conclusion of 69thAnnual General Meeting subject to approval of the appointment by the members at the 68thAnnual General Meeting. The Statutory Auditors have confirmed their eligibilityunder Section 141 of the Companies Act 2013 and the Rules framed there under for theirre-appointment as Auditors of the Company. As required under Regulation 33 (1)(d) of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 the Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 Mr. N.V. Thanigaimani Cost Accountant(Membership No.15557) was appointed as Cost Auditor of the Company for the financial year2015-16. The remuneration payable to the cost auditor is required to be placed before theMembers in a general meeting for their ratification. Accordingly a resolution seekingratification for the remuneration payable to Mr. N.V. Thanigaimani is included at item No5 of the Notice convening the Annual General Meeting.
The Company has appointed M/s RGN Price & Co Chartered Accountants Chennai asinternal Auditors of the Company for the financial year 2016-17.
Pursuant to Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company had appointed Mr. R.Sridharan of Messrs. R Sridharan and Associates Company Secretaries Chennai to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith.During the year under review there has been no qualification reservation or adverseremark or disclaimer in their report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report highlighting the business details isattached and forms part of this report.
CORPORATE GOVERNANCE REPORT
All material information was circulated to the directors before their meeting or placedat their meeting including minimum information required to be made available to the Boardas prescribed under Part A of Schedule II of Sub- Regulation 7 of Regulation 17 of theListing Regulations.
In terms of Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) regulations 2015 a report on CorporateGovernance along with a Certificate from a Practicing Company Secretary confirming thecompliance with the conditions of Corporate Governance as stipulated under Part E ofSchedule V of Sub- Regulation 34(3) of the Listing Regulations is attached to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a prevention of Sexual Harassment and Grievance HandlingPolicy in line with the requirements of The Sexual Harassment of Women at the workplace(Prevention Prohibition & Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed offduring the year 2015-16.
No. of complaints received - Nil
No. of complaints disposed off - Not Applicable
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION RESEARCH & DEVELOPMENT ( R&D)& FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company does not have any commercial activity that calls for conservation of energyand/ or technology absorption attracting disclosure in pursuance of Rule 8(3) of theCompanies (Account) Rules 2014. During the year the Company did not have any foreignexchange earnings and the outgo was Rs. 0.14 Lakhs on revenue account.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in the prescribed formMGT.9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies(Management and Administration) Rules 2014 is annexed to and forms part of this Report.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median of employeesRs. remunerationas per Section 197(12) of the Companies Act 2013 and information relating to employees tobe disclosed under Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is annexed to and forms part of this report.
LISTING OF SECURITIES IN STOCK EXCHANGES
The Company's Equity Shares are presently listed on BSE Ltd.
Your Company has been certified under ISO 9001:2008 for quality management system andBS OHSAS 18001:2007 for safety management system in design and establishment of propertydevelopment construction of residential commercial and industrial projects supportingservices like electrical mechanical and plumbing works.
Your Directors place on record their appreciation for the continued co-operationsupport and assistance extended to the Company by its Bankers Shareholders Government ofIndia and Government of Tamil Nadu.
| ||On behalf of the Board |
|Place: Chennai ||M.M. VENKATACHALAM |
|Date: April 25 2016 ||(DIN: 00152619) |
| ||Chairman |