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Gravita India Ltd.

BSE: 533282 Sector: Metals & Mining
NSE: GRAVITA ISIN Code: INE024L01027
BSE LIVE 15:47 | 21 Aug 111.50 1.55
(1.41%)
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111.75

HIGH

113.85

LOW

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NSE 15:58 | 21 Aug 111.35 0.95
(0.86%)
OPEN

111.50

HIGH

114.00

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OPEN 111.75
PREVIOUS CLOSE 109.95
VOLUME 196226
52-Week high 113.85
52-Week low 28.00
P/E 32.79
Mkt Cap.(Rs cr) 766
Buy Price 112.00
Buy Qty 329.00
Sell Price 0.00
Sell Qty 0.00
OPEN 111.75
CLOSE 109.95
VOLUME 196226
52-Week high 113.85
52-Week low 28.00
P/E 32.79
Mkt Cap.(Rs cr) 766
Buy Price 112.00
Buy Qty 329.00
Sell Price 0.00
Sell Qty 0.00

Gravita India Ltd. (GRAVITA) - Director Report

Company director report

The Members of Gravita India Lmited

We are delighted to present on behalf of Board of Directors of the Company the 24thAnnual Report of the Company along with Audited Financial Statements for the year ended 31stMarch 2016.

CONSOLIDATED FINANCIAL PERFORMANCE

Amount (Rs in Lacs)

Particulars 2015-16 2014-15
Total Revenue 43119.58 50128.54
Total Expenditure 41516.62 48245.43
Profit Before Interest Depreciation and Tax (EBITDA) 1602.96 1883.11
Add: Other Income 420.48 463.27
Less: Interest 756.86 987.69
Less: Depreciation 670.91 636.25
Profit Before Tax 595.67 722.44
Profit from Ordinary Activities Before Tax 595.67 722.44
Less: Provisions for Taxation Including Deferred Tax 47.60 (236.03)
Profit After Tax (PAT) 548.07 958.47
Share in Profit of Associates 0.22 2.26
Less: Minority Share in Profit & Loss 111.26 298.87
Profit Available for Appropriation 437.03 661.86
APPROPRIATION:
Depreciation on transition to Schedule II of the Companies Act 2013 on tangible fixed assets - 22.93
Proposed for Dividend 136.83 136.51
Corporate Tax on Dividend 32.44 27.42
Balance Carried to Balance Sheet 267.76 475.00

1. Performance at a Glance

During F.Y. 2015-16 the International Commodity Market has seen downward trend whichwas largely due to slow down in Chinese Market. Although there was a slight recovery in USmarket with respect to Lead commodity. The International Lead prices have seen levels ofbelow $ 1600 and average of $ 1768 during the period. The levels are around 14% down ascompared to last fiscal year. Financial Year 2015-16 proved to be full of global economicuncertainties and disturbances in many parts of the world. The industry was also affectedby currency fluctuations sluggish demand consumer down trend and continued to be fraughtwith challenges. The market expects the similar situation during F.Y. 201617 with Chinamaintaining about 50% share of global Lead consumption. Infrastructure spending and strongautomotive sales globally are likely to boost the demand of Lead in F.Y. 2016-17.Infrastructure and automobile industries are the main demand drivers for Lead in India. Wehave been consistently increasing our production capabilities to make Gravitaself-sufficient. Government's focus on 'Make in India' infrastructure development and'Smart Cities' is expected to provide further impetus to the Indian metal market in F.Y.2016-17. Despite of all odds and unfavorable market conditions the Company performedrationally well and the highlights of the performance are as under:

Consolidated Results:

• Consolidated Total Revenue stood at ' 431.20 crores

• Operating Profit before Interest Depreciation and Tax stood at ' 16.03 croresin financial year 2015-16 as compared to ' 18.83 crores in previous year.

• Net Profit after Tax and Minority Interest during the year stood at ' 4.37crores.

• Earnings Per Share of the Company stood at ' 0.64 per share having face value of' 2 each.

• Cash Profit during the year stood at ' 14.78 crores.

Standalone Results:

• Total Revenue stood at ' 353.84 crores as compared to ' 333.98 crores in theprevious year.

• Operating Profit before Interest Depreciation and Tax stood at ' 8.86 crores infinancial year 2015-16 as compared to ' 5.85 crores in previous year.

• Net Profit after Tax during the year is reported at ' 3.27 crores as compared tolast year's PAT of ' 5.11 crores.

• Earnings Per Share of the Company stood at ' 0.48 per share having face value of' 2 each.

• Cash Profit during the year stood at ' 7.75 crores.

2. Dividend

The Board of Directors of your Company has recommended payment of final dividend @ 10 %(' 0.20 per equity share) amounting to ' 1.37 crores. The dividend will be paid to memberswhose names appear in the Register of Members as at the close of business hours of 31stJuly 2016 and in respect of shares held in dematerialized form it will be paid to memberswhose names are furnished by National Securities Depository Limited and Central DepositoryServices (India) Limited as beneficial owners as on that date. Futher Company has nottransferred any amount to General Reserve.

3. Performance of Subsidiaries Companies and Firms

a. Gravita Infotech Limited (formerly known as Gravita Exim Limited) India: GravitaInfotech Limited is a wholly-owned subsidiary of the Company. Since inception thissubsidiary was engaged in the business of providing comprehensive turnkey solution forcost effective Battery Recycling Process & plant with environment friendly technologybut from F.Y. 201314 the company has ventured in the business of IT Segment for providingfacilities related to IT Software and IT Solutions Web Designing etc. Total revenue ofthe Company for current financial year stood at ' 3.25 crores resulting in Net Loss of '0.49 crores.

b. Gravita Ghana Limited Ghana: Gravita Ghana

Limited is a wholly-owned subsidiary of the Company. The subsidiary is engaged inrecycling of Lead Acid Battery Scrap for producing Re-melted Lead Ingots PP Chips etc.During the year under review this plant produced 3048 MT of Re-melted Lead Ingots anddelivered revenue of ' 36.36 crores coupled with Net Loss of ' 0.62 crores.

c. Gravita Senegal SAU Senegal: Gravita Senegal SAU is a step down subsidiary ofGravita India Limited. The subsidiary is engaged in recycling of Lead Acid Battery Scrapfor producing Re-melted Lead Ingots PP Chips etc. During the year under review this plantproduced 1857 MT of Re-melted Lead Ingots and achieved a Turnover of ' 25.00 crorescoupled with Net Profit of ' 0.46 crores.

d. Gravita Mozambique LDA Mozambique: Gravita Mozambique LDA is a step downsubsidiary of Gravita India Limited and is engaged in the business of Manufacture ofRe-melted Lead & PP Chips. During the year under review this subsidiary has produced2494

MT of Re-melted Lead Ingots and achieved a Turnover of ' 34.77 crores against ' 29.68crores in last year and reported a Net Profit of ' 3.58 crores during the year.

e. Gravita Global Pte. Ltd Singapore: Gravita Global Pte. Ltd is a wholly ownedsubsidiary of the Company and is based at Singapore which is engaged in the tradingbusiness. During the year under review the Company has been able to achieve a Turnover of' 0.64 crores resulting in a Net Loss of ' 0.08 crores. During the year under review thiscompany acquired 3.62% stake of Gravita Mozambique LDA Mozambique from Gravita InfotechLimited.

f. Gravita Netherlands B.V. Netherlands: Gravita

Netherlands B.V. is a step down subsidiary of Gravita India Limited. It is investmentsubsidiary of the Company and during the year under review this subsidiary achieved Incomeof ' 5.51 crores out of which ' 4.72 crores is derived from dividend income from otherbusiness entities/subsidiaries of Gravita Netherlands B.V. During the year under reviewthis company acquired 96.38% stake of Gravita Mozambique LDA Mozambique from GravitaIndia Limited.

g. Navam Lanka Ltd Srilanka: Navam Lanka Limited is a step down subsidiary ofGravita India Limited operating in Sri Lanka for more than a decade. It is the largestproducer of Lead Ingots and PP Chips in Sri Lanka. This subsidiary is engaged in recyclingof Lead Acid Battery Scrap PP Chips/Granules & Refining & Alloying of Lead Ingotsto produce 99.97% Pure Lead and Specific Alloys. During the year under review thissubsidiary produced 2548 MT of Re-melted Lead Ingots and Refined Lead Ingots and achieveda Total Turnover of ' 35.12 crores coupled with Net Profit after Tax of ' 2.32 crores.

h. M/s Gravita Metals India: Gravita India Limited along with its wholly ownedsubsidiary Gravita Infotech Limited (formerly known as Gravita Exim Limited) holds 100%share in this partnership firm. This firm is engaged in manufacturing of Pure Lead and allkind of Lead Alloys like Antimonial Lead Alloy Calcium Selenium Copper Tin ArsenicLead Alloy etc. During the year under review the operations of Gravita Metals remained atvery low level due to some excise duty issues. The topline of the firm stood at ' 1.89crores with a Net Loss of ' 0.16 crores.

i. M/s Gravita Metal Inc India: Gravita India Limited along with its wholly ownedsubsidiary Gravita Infotech

Limited (formerly known as Gravita Exim Limited) holds 100% share in this partnershipfirm. This firm is engaged in Manufacturing of Pure Lead and all kind of Specific LeadAlloys. During the year under review the unit produced 3577 MT of Re-melted Lead Ingotsand achieved a Turnover of ' 49.83 crores coupled with Net Profit of ' 6.92 crores. Thisfirm enjoys fiscal benefits of J&K region.

j. Gravita Nicaragua S.A. Nicaragua: Gravita

Nicaragua S.A. is a step down subsidiary of the Company. This subsidiary is engaged inrecycling of PET waste and having installed capacity of 3600 MTPA. During the year underreview subsidiary achieved Turnover of ' 7.72 crores coupled with Net Loss of ' 0.80crores.

k. Gravita Infotech: Gravita India Limited together with its subsidiary holds 100%share in this firm. This firm is engaged in business of Information Technology. During theyear under review the Total Income of firm stood at ' 0.17 crores with a Net Loss of '0.09 crores.

l. Other Subsidiaries

The Company has some other Subsidiaries/ Step Subsidiaries/LLP which are under processof implementation of projects/commercial production. The details of the same are givenbelow:

• Noble Buildestate Private Limited

• Gravita Jamaica Limited

• Gravita Ventures Limited Tanzania

• Gravita USA Inc.

• Recycling Infotech LLP

4. Sale/Disinvestment/Winding up/ Striking off

During the year under review the Company has made an application for de-registration ofits step down subsidiary Gravita Trinidad & Tobago Ltd T&T due to lack ofoperational ease in T&T. In addition the company has sold its entire stake of 96.32%held in Gravita Mozambique LDA to its step down subsidiary Gravita Netherlands B.V.

Further the company has also closed one of its stepdown subsidiary viz. GravitaMauritania SARL which was incorporated during the year under review due to nonavailabilityof export license.

5. Disclosures under Companies Act 2013

a. Extract of Annual Return: The detail forming part of extract of annual return isenclosed as Annexure-1.

b. Material Subsidiaries: In accordance with SEBI

(Listing Obligations and Disclosure Requirements) 2015 the Company has formulated apolicy for determining material subsidiaries. The policy has been uploaded on the websiteof the Company at http:// www.gravitaindia.com/wp-content/uploads/pdf/material-subsidiaries-policy.pdf.

c. Number of Board Meetings: During the year under review the Board of Directors ofthe company met 9 (nine) times. The details of the Board Meetings and the attendance ofthe Directors are provided in Corporate Governance Report. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013.

d. Committees of the Board: Details of all the

Committees including Audit Committee of Board of Directors along with their terms ofreference composition and meetings held during the year is provided in the CorporateGovernance Report and forms integral part of this report.

e. Directors’ Responsibility Statement: Pursuant to Section 134 of theCompanies Act 2013 the Directors hereby confirm that:

• In the preparation of the Annual Accounts the applicable Accounting Standardshave been followed along with proper explanations relating to material departures if any;

• They have selected such Accounting Policies and applied them consistently andmade judgment and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31st March 2016 and of theprofit and loss of the company for that period;

• To the best of their knowledge and information they have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

• They have prepared the Annual Accounts on a Going Concern basis;

• They have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and are operating effectively; and

• There is a proper system to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

f. Independent Directors: The Company has received declarations from allIndependent Directors of the Company confirming that they meet with the criteria ofindependence as prescribed under Section 149 of the Companies Act 2013 and Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. TheIndependent Directors have also confirmed that they have complied with the Company's Codeof Conduct.

g. Vigil Mechanism: The Company is having an established and effective mechanismcalled the Vigil Mechanism. The mechanism under the Whistle Blower Policy of the companyhas been appropriately communicated within the organization. The purpose of this Policy isto provide a framework to promote responsible whistle blowing by employees. It protectsemployees wishing to raise a concern about serious irregularities unethical behavioractual or suspected fraud within the Company.

h. Familiarisation Programme for Independent Directors: The Company conducts anintroductory familiarisation programme when a new Independent Director joins the Board ofthe Company. New Independent Directors are provided with copy of latest Annual Report theCompany's Code of Conduct the Company's Code of Conduct for Prevention of InsiderTrading to let them have an insight of the Company's present status and their regulatoryrequirements. The induction comprises a detailed overview of the business verticals of theCompany and meetings with business heads / senior leadership team and with the ManagingDirector of the Company. During the year under review Mrs. Chanchal Chadha Phadnis whojoined Board on 24th March 2015 as Independent Director was given introductoryfamilarisation programme by providing basic documents of the company overview ofcompany's business meetings with functional heads and plant visit. The policy onfamiliarisation programmes for Independent Directors is posted on the website of theCompany and can be accessed through the folllowing link http://www.gravitaindia.com/wp-content/uploads/pdf/ familarization-programme.pdf.

i. Remuneration Policy:

The Company follows

a policy on remuneration of Directors and Senior Management Employees. The policy isapproved by the Nomination & Remuneration Committee and the Board. More detail on thesame is given in the Corporate Governance Report which forms part of Annual Report2015-16.

j. Board Evaluation: Pursuant to the provisions of the Companies Act 2013 andRegulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Independent Directors carried out an annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittees. The performance of the Board is evaluated by each individual Director as wellas collectively by the Board on the Annual Basis towards the end of the Financial Year.The Board performance is evaluated on the basis of number of Board and Committee meetingsattended by individual Director participation of Director in the affairs of the companyduties performed by each Director targets achieved by company during the year. The Boardfurther discusses the areas where the performance is not up to the desired level.

k. Internal Financial Controls: The Company has in place adequate internalfinancial controls with reference to financial statements. During the year such controlswere tested and no reportable material weakness in the design or operation were observed.

l. Related Party Transactions: All Related Party Transactions that were enteredinto during the financial year were on an arm's length basis and were in the ordinarycourse of business. However material transactions entered into with Related Parties inthe ordinary course of business and on arm's length basis are disclosed in the form AOC-2as Annexure-2 in terms of provisions of Rule 8 (2) of the Companies (Accounts) Rules 2014which forms part of this report. There are no materially significant Related PartyTransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.

All Related Party Transactions are placed before the Audit Committee and Board forapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are of a foreseen and repetitive nature. The transactions entered into pursuant tothe omnibus approval so granted are audited and a statement giving details of all RelatedParty Transactions is placed before the Audit Committee and the Board of Directors fortheir approval on a quarterly basis. The policy on Related Party Transactions as approvedby the Board is available on the Company's website.

m. Corporate Social Responsibility (CSR): The

Corporate Social Responsibility Committee (CSR Committee) has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board. Thedetails about Committee composition and terms of reference of Committee are given inCorporate Governance Report and forms integral part of this report. A CSR Report onactivities undertaken by the company and amount spent on them is attached as Annexure-3

n. Risk Management: The Company has developed a very comprehensive risk managementpolicy under which all key risks and mitigation plans are compiled into a Risk Matrix. Thesame is reviewed quarterly by senior management and periodically also by the Board ofDirectors. The Risk Matrix contains the Company's assessment of impact and probability ofeach significant risk and mitigation steps taken or planned. For a detailed riskmanagement policy please refer the website link http://www.gravitaindia.com/wp-content/uploads/pdf/risk-management-policy. pdf.

o. Material Changes and Commitments Affecting Financial Position of the Company whichhave occurred between the end of the financial year of the company to which the financialstatements relate and the date of the report: No material changes and commitments haveoccurred after the close of the year till the date of this Report which affect thefinancial position of the Company.

6. Corporate Governance

Corporate Governance is a continuous process at Gravita India Limited. It is aboutcommitment to values and ethical business conduct. Systems policies and frameworks areregularly upgraded to effectively meet the challenges of rapid growth in a dynamicexternal business environment.

Being a Listed Corporate entity our Company is committed to sound corporate practicesbased on openness fairness professionalism and accountability paving the way in buildingconfidence among all its stakeholders for achieving sustainable long term growth andprofitability.

A detailed Corporate Governance Report and a certificate from M/s P Pincha &Associates Practicing Company Secretaries Jaipur regarding compliance with conditions ofCorporate Governance as required under SEBI (LODR) Regulations 2015 are attached andforms an integral part of this report. Further a certificate of CEO/CFO inter aliaconfirming the correctness of the Financial Statements compliance with Company's Code ofConduct adequacy of the Internal Control measures and reporting of matters to the AuditCommittee is also attached and forms integral part of this report.

7. Statutory Auditor

At the Annual General Meeting of the Company held on 02nd August 2014 M/sDeloitte Haskins & Sells Chartered Accountants were appointed as Statutory Auditorsof the Company to hold office till the conclusion of the 27th Annual GeneralMeeting. In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly based on recommendation of Audit Committee and Board of Directorsthe appointment of M/s Deloitte Haskins & Sells Chartered Accountants as StatutoryAuditors of the Company is placed for ratification by the shareholders. In this regardthe Company has received a certificate from the auditors to the effect that if they arereappointed it would be in accordance with the provisions of Section 141 of the CompaniesAct 2013.

Further there are no qualifications or adverse remarks in the Auditors' Report whichrequire any clarification/ explanation. The Notes on financial statements areselfexplanatory and needs no further explanation.

8. Cost Auditor

The Audit Committee and Board of Directors of the Company has appointed M/s K.G. Goyal& Associates Cost Accountants having firm registration no. 000024 as Cost Auditorsfor conducting the audit of Cost Records maintained by the company for the Financial Year201617. The Cost Audit Report for the F.Y. 2014-15 was filed with Registrar of Companies(Central Government) on 28th September 2015 while the due date for filing ofCost Audit Report for F.Y. 2014 -15 was 30th September 2015. There are noqualifications or adverse remarks in the Cost Audit Report which require anyclarification/explanation.

9. Particulars of Loans given Investments made Guarantees given and Securitiesprovided [Reference Section 134 and 186(4)]

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided herein below:

. Name of Person / Body Corporate Nature (Loan / Guarantee/ Security / Acquisition) Particulars of Loan given / Investment made or Guarantee made Purpose for which the loan or guarantee or security is proposed to be utilized by the recipient
1 Recycling Infotech LLP Investment in LLP (Partner of LLP ) ' 102000/- towards 51% of stake of Total Capital Acquiring Stake in LLP
2 M/s Gravita Metal Inc Corporate Guarantee For securing Credit Limits amounting to ' 6.00 crores granted to M/s Gravita Metal Inc For Business Purposes of the firm

10. Secretarial Auditor and Secretarial Audit Report

The Board has appointed M/s P Pincha & Associates Company Secretaries inWhole-time Practice to carry out Secretarial Audit of the Company under the provisions ofSection 204 of the Companies Act 2013. The report does not contain any qualificationreservation or adverse remark. The Secretarial Audit Report is annexed with this report asAnnexure-4.

11. Insider Trading Prevention Code

Pursuant to the SEBI Insider Trading Code the company has formulated a comprehensivepolicy for prohibition of Insider Trading in Equity Shares of Gravita India Limited topreserve the confidentiality and to prevent misuse of unpublished price sensitiveinformation. The Company Secretary has been designated as the Compliance Officer. It hasalso been posted on the website of the Company www.gravitaindia.com.

12. Energy Conservation

A detailed statement on Particulars of Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo as required under Section 134 of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 forms part of this Report asAnnexure-5

13. Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules are provided hereunder. Further thedisclosures pertaining to remuneration and other details as required under Section 197(12)of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report as Annexure-6.

Name Mr. Rajat Agrawal
Age 49 Years
Designation Managing Director
Remuneration ' 650000/- Per Month
Nature of Employment Regular Employment
Qualification B.E. (Mechanical)
Experience (in Years) 24 Years
Date of Commencement of Employment 04.08.1992
Particulars of Previous Employment Started career with Gravita only
% of Equity Shares Held 47.80%
Relation with Director Dr. Mahavir Prasad Agarwal (WTD) is Father of Mr. Rajat Agrawal

14. Appointment/Resignation of KMP’s

• Mr. Naveen Prakash Sharma: During the year under review Mr. Naveen PrakashSharma has been appointed as Chief Executive Officer (CEO) of the company w.e.f. 10thAugust 2015 pursuant to Section 203 of Companies Act 2013 read with SEBI (LODR)Regulations 2015.

Mr. Sharma is associated with the Company since 2006. Considering the qualification andnature of duties being carried out by Mr. Sharma the Nomination & RemunerationCommittee of the Board proposed the appointment of Mr. Naveen Prakash Sharma as CEO of theCompany which was subsequently ratified by Board of Directors in their meeting held on 10thAugust 2015.

• Mr. Rajeev Surana: During the year under review Mr. Rajeev Surana Whole-timeDirector of the company resigned from the post of directorship w.e.f 14th March2016 due to his pre-occupancy.

Further Dr. Mahavir Prasad Agarwal Whole time Director shall be liable for retiringby rotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment and none of the Director is disqualified under Section 164 of the CompaniesAct 2013 and rules made thereunder for the reporting period.

15. Consolidated Financial Statements and Cash Flow Statement

The Consolidated Financial Statements of the Company are prepared as required in termsof Accounting Standards (AS-21) issued by Institute of Chartered Accountants of India andforms part of the Annual Report.

16. Subsidiaries and Associates

The Company has prepared Consolidated Financial Statements in accordance with Section129 (3) of the Companies Act 2013 which form part of the Annual Report. Further thereport on the performance and financial position of each of the subsidiary associate andjoint venture and salient features of the financial statements in the prescribed FormAOC-1 is annexed to this report as Annexure -7.

In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements including the Consolidated Financial Statements and related information of theCompany are available on our website www.gravitaindia.com.

17. Disclosures Regarding ESOPs

The members of the company at its Annual General Meeting held on 27th July2011 had approved issue of 3405000 Stock Options of ' 2/- each (681000 Stock Options of '10/- each) to eligible employees of the company. The Compensation Committee of the Boardof Directors of the Company administers and monitors the Employees' Stock Option Scheme ofthe Company in accordance with the prescribed SEBI Guidelines. The Company has received acertificate from the Auditors of the Company that the Scheme has been implemented inaccordance with SEBI Guidelines and the resolution passed by the shareholders. Thecertificate would be placed at the Annual General Meeting for inspection by members.

The applicable disclosures as stipulated under the SEBI Guidelines as on 31stMarch 2016 with regard to the Employees' Stock Option Scheme (ESOS) are providedhereunder:

Particulars 1st Grant (Effective date being 1st October 2011) 2nd Grant (Effective date being 5th July 2012) 3rd Grant (Effective date being 1st July 2013) 4th Grant (Effective date being 1st April 2015)
a) Options granted 400380 31000 368500 500000
b) The pricing formula ' 2/- per share ' 2/- per share ' 2/- per share ' 2/- per share
c) Options outstanding at the beginning of the year 76448 19250 298325 Nil
d) New options issued during the year Nil Nil Nil 500000
e) Options vested during the year 74361 8250 31850 Nil
f) Options exercised during the year 73421 8250 31850 Nil
g) The total number of shares arising as a result of exercise of option 73421 8250 31850 Nil
h) Options lapsed during the year 2087 3500 6800 47500
i) Variation of terms of options Nil Nil Nil Nil
j) Money realized by exercise of options ' 146842 ' 16500 ' 63700 Nil
k) Total number of options outstanding at the end of the year 940* 11000** 259675*** 452500
l) Employee wise details of options granted to-
Senior Managerial Personnel:
Naveen Prakash Sharma 22500 -— 35000 45000
Sandeep Choudhary 15000 -— 20000 22500
Kishan Gopal Gupta 17500 -— 17500 18000
Sunil Kansal 17500 -— 17500 18000
Kamal Singh 17500 -— 17500 30000
V S Tanwar 25000 -— 20000 20000
Yogesh Malhotra -— 22500 26000 32500
Sanjay Singh Baid -— -— 20000 20000
Vijay Pareek -— -— 20000 35000
Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year Nil Nil Nil Nil
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 Nil Nil Nil
m) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with [Accounting Standard 20 'Earnings Per Share'] ' 0.47

 

n) Method of Calculation of Employee Compensation Cost The employee compensation cost has been calculated using the intrinsic value method of accounting for Options issued under the Company's Employee Stock Option Schemes. The employee compensation cost as per the intrinsic value method for the financial year 2015-16 is Rs 66.31 Lacs.
0) Difference between the employee compensation cost so computed by intrinsic value method and the employee compensation cost that shall have been recognized if it had used the fair value of the options (in Lacs) Rs 29.10 Lacs
p) The impact of this difference on profits and on Earnings Per Share of the Company The effect on the profits and earnings per share had the fair value method been adopted is presented below: (Rs In Lacs)

 

Profit After Tax as reported

326.56

Add: Intrinsic Value Compensation Cost

66.31

Less: Fair Value Compensation Cost

95.41

(Binomial Pricing Model)
Adjusted Profit

297.46

Earnings Per Share Basic (Rs) Diluted (Rs)
As reported 0.48 0.47
As adjusted 0.44 0.43

 

q) Weighted-average Exercise price granted during April 2014 to March 2015

' 2/-

Weighted-average Exercise price granted during April 2015 to March 2016

' 2/-

Weighted-average fair value of options outstanding as on 31st March 2015 Rs 47.38
Weighted-average fair value of options outstanding as on 31st March 2016 Rs 42.63
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: Binomial Pricing Mode -
Risk-free interest rate 7.84%
Expected life (in years) 2.67
Expected volatility 68.67%
Expected dividends N.A.
r) The price of the underlying share in market at the time of option grant Rs 76.95 Rs 176.20 Rs 21.45 Rs 36.30

* This is total number of live options of First Grant. Further 202574 options havebeen exercised till the end of F.Y. 2015-16.

** This is total number of live options of Second Grant. Further 16500 options havebeen exercised till end of F.Y. 2015-16.

*** This is total number of live options of Third Grant. Further 49025 options havebeen exercised till end of F.Y 2015-16.

18. Listing of Equity Shares

The Equity Shares of the Company are listed on the Bombay Stock Exchange Ltd (BSE Ltd)and National Stock Exchange (NSE) of India Ltd. and the listing fees for the FinancialYear 2016-17 has been duly paid.

19. Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulated underSEBI (LODR) Regulations 2015 is presented in a separate section forming part of thisAnnual Report.

20. Fixed Deposit

The Company has not accepted any Fixed Deposits from public shareholders or employeesduring the year under report.

21. Share Capital

The Company has made allotment of 113521 Equity Shares of ' 2/- each to the employeesof the Company and its subsidiaries upon exercise of an equal number of stock optionsgranted to them pursuant to the Stock Option Scheme of the Company. In view of the aboveallotment the outstanding shares of the Company during the year has increased from68254578 Equity Shares of ' 2/- each to 68368099 Equity Shares of ' 2/- each.

22. Policy on Prevention Prohibition and Redressal of Sexual Harassment at Workplace

The Company has adopted a Policy on Prevention Prohibition and Redressal of SexualHarassment at the Workplace in line with the provisions of the "Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013" and the Rulesthere under. Company has formed an "Internal Complaints Committee" forprevention and redressal of sexual harassment at workplace. The Committee is havingrequisite members and is chaired by a senior woman member of the organization. Furtherthe Company has not received any complaint of sexual harassment during the financial year2015-16.

23. Miscellaneous:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of Equity Shares with differential rights as to dividend voting orotherwise.

• Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except ESOP's referred to in this report.

• Neither the Managing Director nor the Whole-time Director of the Company receiveany remuneration or commission from any of its subsidiaries.

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

24. Acknowledgement

The Directors take this opportunity to express their deep sense of gratitude to theBanks Government Authorities Customers Suppliers BSE NSE CDSL NSDL BankersBusiness Associates Shareholders Auditors Financial Institutions and other individuals/ bodies for their continued co-operation and support. Directors would also like to placeon record their sincere appreciation for the commitment dedication and hard work put inby every employee of the Gravita family for the Company's success and achievements.

For and on behalf of the Board
Sd/- Sd/-
Date: 17th June 2016 (Rajat Agrawal) (Dr. Mahavir Prasad Agarwal)
Place: Jaipur Managing Director Whole-time Director
DIN:00855284 DIN:00188179