Your Directors are pleased to present the 28th Annual Report together withthe Audited Financial Statements and the Auditors Report thereon for the financialyear ended 31 March 2016.
State of affairs of the Company
The financial performance of the Company for the financial year ended 31 March 2016 issummarized below:
| || || || |
Amount in Rs. Lakhs
| ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Gross Turnover ||128995.18 ||155359.62 ||132154.69 ||161408.21 |
|Other Operating Income ||82.92 ||167.96 ||82.92 ||167.96 |
|Other Income ||1240.17 ||1495.92 ||1033.84 ||1309.05 |
|Total Revenue ||116424.03 ||139245.78 ||119377.21 ||145107.50 |
|Operating Profit ||14942.47 ||13050.04 ||14939.39 ||13732.76 |
|Less: Finance Costs ||10221.83 ||10150.66 ||10334.05 ||10263.02 |
|Depreciation ||6371.56 ||5535.87 ||6704.74 ||5917.62 |
|Profit / (Loss) before exceptional item and tax ||(1650.92) ||(2636.49) ||(2099.40) ||(2447.88) |
|Add: Exceptional Item Profit on sale of Investment in subsidiary ||- ||- ||- ||- |
|Profit / (Loss) before tax ||(1650.92) ||(2636.49) ||(2099.40) ||(2447.88) |
|Provision for tax || || || || |
|Net Current Tax ||(5.31) ||64.10 ||(5.31) ||64.10 |
|Deferred Tax Charge / (Credit) ||(438.01) ||(1260.52) ||(438.01) ||(1260.52) |
|Profit / (Loss) after tax (before adjustment of minority interest) ||(1207.60) ||(1440.07) ||(1656.08) ||(1251.46) |
|Minority Interest ||- ||- ||(32.37) ||(8.45) |
|Profit / Loss for the year ||(1207.60) ||(1440.07) ||(1623.71) ||(1243.01) |
|Add: Surplus brought forward ||25545.49 ||28055.02 ||21814.49 ||24128.64 |
|Add: Depreciation charge (Net of deferred tax of H125.51 lakhs) ||- ||(237.14) ||- ||(238.82) |
|Surplus available for appropriation ||24337.89 ||26377.81 ||20190.78 ||22646.81 |
|Appropriations || || || || |
|Transfer to Debenture Redemption Reserve ||(678.57) ||(832.32) ||(678.57) ||(832.32) |
|Proposed Equity Dividend ||(209.20) ||- ||(209.20) ||- |
|Corporate Equity Dividend Tax ||(42.59) ||- ||(42.59) ||- |
|Balance carried to Balance Sheet ||23407.53 ||25545.49 ||19260.42 ||21814.49 |
Debenture Redemption Reserve (DRR)
In terms of Section 71(4) of the Companies Act 2013 the Company has transferred a sumof H678.57 lakhs to the credit of Debenture Redemption Reserve out of its profits from theprevious years for the purpose of redemption of Non-Convertible Debentures issued by theCompany.
During the year 12300 Deep Discount Debentures (DDD) were converted into 32675297equity shares of the Company at a price of H19/- per share with the approval ofShareholders by passing a special resolution at the Extra-Ordinary General Meeting held on
22 March 2016 and upon such conversion the resulted amount aggregating to H2152.50lakhs lying in Debenture Redemption
Reserve Account against such DDD was reversed and taken back into the credit of GeneralReserve Account of the Company.
The Board considering the consistency in the payment of Dividend and with a view toreward the shareholders has recommended payment of dividend of 5% (H0.05 per share) on418407867 equity shares of H1/- each for the financial year 2015-16 out of itsaccumulated profits subject to approval of members at the ensuing annual general meeting.The total payout on account of dividend (including dividend tax) will be H251.79 lakhs(previous year: Nil).
Financial summary or highlights
i) Financial Performance - Standalone
Total Revenue of the Company was H116424.03 lakhs for the year ended 31 March 2016 asagainst H139245.78 lakhs for the year ended 31 March 2015 - a reduction of 16.39%primarily on account of decline in realization of prices. EBITDA for the year excludingthe effect of foreign exchange fluctuation loss/ gain and other income was H15514.45lakhs as compared to
H12279.18 lakhs for the previous year. EBITDA for the year is increased mainly onaccount of higher operating efficiencies and increase in capacity utilization. During FY2015-16 the Company incurred a loss after tax of H1207.60 lakhs as compared to lossafter tax of H1440.07 lakhs in previous year.
ii) Financial Performance Consolidated
On consolidated basis the total revenue from operations in FY 2015-16 marginallydecreased by 17.73% to H119377.21 lakhs from H145107.50 lakhs in the previous year.EBITDA for the year excluding the effect of foreign exchange fluctuation loss/gain andother income was H16041.51 lakhs as compared to H13105.69 lakhs for the previous year.During FY 2015-16 the Company incurred a loss after tax of H1623.71 lakhs as compared toa loss of H1243.01 lakhs in the previous year.
The Company has an unlisted non-material wholly owned Indian subsidiary Company EqualCommodeal Private Limited (ECPL). The Company also has further two subsidiaryCompanies 1) AAT Global Limited in Hong Kong in which the Company holds 100% equitythrough its wholly owned Indian Subsidiary 2) Shandong Dawn Himadri Chemical IndustryLimited ("SDHCIL") in China in which the Company holds 94% equity through itswholly owned subsidiary Company AAT Global Limited.
A report on the performance and financial position of each of the aforementionedsubsidiaries as per provisions of sub section (3) of Section 129 the Companies Act 2013read with rule 5 of Companies (Accounts) Rules 2014 in Form AOC-1 is annexed to theAnnual Report and hence not repeated here for the sake of brevity.
During FY 2015-16 no Company has become or ceased to be subsidiary joint venture orassociate of the Company.
Consolidated Financial Statements
In accordance with Accounting Standard 21 - "Consolidated FinancialStatements" issued in the Companies (Accounting Standard) Rules 2006 notified by theCentral Government and as per General instruction for preparation of consolidatedfinancial statements given in Schedule III of the Companies Act 2013 and in compliancewith the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as SEBI ListingRegulations) the Company has prepared consolidated financial statements. TheAudited Consolidated Financial Statements along with the Auditors Report thereonforms part of the Annual Report.
Melting Plant at Sambalpur Odisha
During the previous year the Company had started setting up a Melting Plant (Coal tarPitch) at Sambalpur in the state of Odisha to cater the demand of the customers located inthe surroundings of Sambalpur. The construction work is in progress and the plant isexpected to be operational by the end of Q2 FY 2016-17.
During FY 2015-16 the performance of the windmills at Dhule in Maharashtra remainedsatisfactory and it generated 2840726 kwh units of wind energy as compared to 3081708kwh units in the previous year. The revenue generated by the windmills for the yearremained at H136.76 lakhs as compared to H143.59 lakhs in previous year.
The Company continued to enjoy working capital facilities under multiple bankingarrangements including State Bank of India Central Bank of India ICICI Bank The HongKong and Shanghai Banking Corporation (HSBC) DBS Bank Citibank Axis Bank Yes BankIndusind Bank Union Bank of India and IDBI Bank Ltd. The Company has been regular inservicing these debts.
Revision of Credit Rating
The Credit Analysis & Research Ltd (CARE) has revised the rating assigned to theCompanys various credit facilities and debt instruments during FY 2015-16 and thoseare as follows:
|Facilities ||Rating |
|Long-term Bank Facilities ||CARE A- (Single A Minus) |
|Short-term Bank Facilities ||CARE A2+ (A Two Plus) |
|Non-Convertible Debentures ||CARE A- (Single A Minus) |
During FY 2015-16 Cash outflow on account of addition to fixed assets was aggregatingto H1325.07 lakhs (including Capital work in-progress and capital advances).
Directors and Key Managerial Personnel
In accordance with the provisions of the Companies Act 2013 Mr. Vijay Kumar Choudhary(DIN: 00173858) and Mr. Shyam Sundar Choudhary (DIN: 00173732) the directors of theCompany will retire from the office by rotation and being eligible offer themselves forre-appointment.
During the year Mr. Rahul Kumar Yadav (DIN: 01649493) Nominee Director of VCIGPM Ltdand Mr. Chandra Shekhar Sarda (DIN: 01649493) an Independent Director of the Company hasresigned from the Board. The Board has placed on record its warm appreciation for thevaluable contributions made by them during their tenure.
The Company was not required to fill-up the vacancy in the office of IndependentDirectors as the number of Independent Director are sufficient to comply with theprovision of Companies Act 2013 and also the provisions of SEBI Listing Regulations. TheBoard met 5 (Five) times during FY 2015-16 with a maximum time gap not exceeding 120 daysin between two consecutive meetings.
The constitution of the Board is in Compliance with the provisions of Section 149 ofthe Companies Act 2013 and the SEBI Listing Regulations.
The brief resume and other details relating to the Directors who are to be appointed /re-appointed as stipulated under Regulation 36(3) of the SEBI Listing Regulations areprovided in the Notice of Annual General Meeting forming part of the Annual Report.
The number and dates of meetings held by the Board and its Committees attendance ofDirectors and remuneration paid to them is given separately in the attached CorporateGovernance Report in terms of Section 134(3)(b) of the Companies Act 2013.
Further the Company in compliance of the provisions of Section 203 of the CompaniesAct 2013 and designated Mr. Bankey Lal Choudhary Managing Director Mr. Shyam SundarChoudhary Whole-time director Mr. Vijay Kumar Choudhary Whole-time director Mr. AnuragChoudhary Chief Executive Officer Mr. Kamlesh Kumar Agarwal Chief Financial Officer andMr. Bajrang Lal Sharma Company Secretary as the Key managerial Personnel of the Companywith effect from 1 April 2014. The above mentioned Key Managerial Personnel do not holdWhole-Time Key Managerial Position in any other Company.
Directors Responsibility Statement
As required under Section 134(3)(c) read with section 134(5) of the Companies Act2013 and as per Schedule II Part C(A)(4)(a) of the SEBI Listing Regulations yourdirectors confirm that:
a. In the preparation of the annual accounts for the year ended 31 March 2016 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;
b. The Directors have selected suitable accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for the year under review;
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 such internal financial controls are adequate and are operating effectively;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;
Declaration from Independent Directors
All the Independent Directors of the Company have given necessary declaration of theirIndependence to the Board as stipulated in Section 149(6) of the Companies Act 2013 asrequired in terms of Section 134(3)(d) of the Companies Act 2013.
Nomination & Remuneration Policy
The Company pursuant to the provisions of Section 178 of the Companies Act 2013 and interms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy onNomination and Remuneration for its Directors Key Managerial Personnel and seniormanagement which inter-alia provides the diversity of the Board and provides the mechanismfor performance evolution of the Directors and the said policy is annexed herewith andmarked as Annexure I forming part of this report.
Material Changes and commitments affecting the financial position of the Company
There were no material changes and commitments occurred after the close of the yeartill the date of this Report which affect the financial position of the Company.
Loans Guarantee or Investments u/s 186 of the Companies Act 2013
The Company has provided a loan of H200 lakhs to Equal Commodeal Private Limited awholly owned subsidiary of the Company during FY 2015-16 for business purpose. Furtherthe Company has not made any investments or provided any guarantees during the year underreview. However the details of Loans investments made or guarantee given are provided inthe notes to the financial statements.
Related Party Transactions
The Company has formulated a Policy on Materiality of and Dealing with Relating PartyTransaction in terms of Regulation 23 of the SEBI Listing Regulations and the said Policyis posted on the Website of the Company and during FY 2015-16 there were no transactionswith related parties which qualify as material transactions under the SEBI ListingRegulations.
All the Related Party Transactions (not material in nature) entered into by the Companyduring the financial year were in ordinary course of business and on arms lengthbasis. There have been no materially significant related party transactions between theCompany and the Directors the management the subsidiaries or relatives. The details ofthe related party transactions are disclosed as per Accounting Standard 18 and setout in Note 39 to the standalone financial statements forming part of this annual report.
Extracts of the Annual Return
Pursuant to the provisions of Section 92(3) of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 an Extract of AnnualReturn as on the financial year ended on 31 March 2016 in Form No. MGT-9 is annexedherewith and marked as Annexure II forming part of this report.
Particulars of Remuneration of Managerial Personnel and Employees and relateddisclosure
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed herewith and marked as Annexure III formingpart of this Report.
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 annexed herewith and marked as AnnexureIV forming part of this Report.
Auditors and Auditors Report
Joint Statutory Auditors
The joint statutory auditors M/s S. Jaykishan Chartered Accountants and M/s B.S.R.& Co. LLP Chartered Accountants retire at the ensuing Annual General Meeting (AGM)and are eligible for re-appointment. The Company has received necessary written consentand certificates under Section 139 of the Companies Act 2013 from them to the effect thattheir appointment if made shall be in accordance with the conditions specified thereinand they satisfies the Criteria as prescribed in Section 141 of the Companies Act 2013read with Companies (Audit and Auditors) Rules 2014. However M/s S. Jaykishan CharteredAccountants one of the Joint Statutory Auditors has expressed their unwillingness tobe re-appointed at the ensuing annual general meeting they would be completing a tenor often years as Auditors at the ensuing annual general meeting since their first appointmentwas made at the AGM held on 18 September 2006 hence the remaining Statutory Auditors M/sBSR & Co. LLP Chartered Accountants will be re-appointed and ratified at the ensuingAnnual general Meeting.
M/S BSR & Co. LLP Chartered Accountants would be completing their fourth year atthe ensuing AGM since their initial appointment made at AGM held on 29 September 2012.
The Board has placed on record its deep sense of appreciation for the services renderedby M/s S. Jaykishan Chartered Accountants during their tenure as the Auditors ofthe Company.
The Auditors Report and notes to financial statements are self-explanatory andtherefore do not call for any further explanation.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board has appointedM/s MKB & Associates Practising Company Secretaries to conduct Secretarial Audit forFY 2015-16. The Secretarial Audit Report pursuant to Section 204(1) of the Companies Act2013 for the financial year ended 31 March 2016 is given in Annexure V attachedhereto and forms part of this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
The Cost Auditor Mr. Sambhu Banerjee appointed by the Board has submitted the CostAudit Report within the time limit prescribed under the Act and Rules made thereunder.
As per Section 148 and other applicable provisions if any of the Companies Act 2013read with Companies (Audit and Auditors) Rules 2014 the Board of Directors of yourCompany has appointed Mr. Sambhu Banerjee as the Cost Auditor for the FY 2015-16 on therecommendations made by the Audit Committee. Your Company has received consent from Mr.Sambhu Banerjee to act as the Cost Auditor of Your Company for the FY 2015-16 along with acertificate confirming his independence.
Vigil Mechanism / Whistle Blower Policy
The Company has formulated a Vigil Mechanism / Whistle Blower Policy in terms ofSection 177 of the Companies Act 2013 and as per Regulation 22 of the SEBI ListingRegulations for the employees to report their grievances / concerns about instances ofunethical behavior actual or suspected fraud or violation of Companys Code ofConduct by means of Protected Disclosure to the Vigilance Officer or the Chairman of theAudit Committee.
The vigil mechanism / whistle blower policy may be accessed on the Companyswebsite at the link: www.himadri.com/Himadri_ Policy_on_Vigil_Mechanism_Amended.pdf
Conservation of energy technology absorption and foreign exchange earnings and outgo
Information on conservation of energy technology absorption foreign exchange earningsand outgo as required to be given pursuant to Section 134(3)(m) of the Companies Act2013 read with the Rule 8 (3) of the Companies (Accounts) Rules 2014 is annexedherewith and marked as Annexure VI forming part of this Report.
Risk Management (Risk Assessment and Minimization Procedure)
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk treatment plans in its strategy business and operational plans. TheCompany has formulated a Policy on Risk Management (Risk Assessment and MinimizationProcedure) in consultation with Senior Management to identify various kinds of risk inbusiness of the Company and its process to minimize the same. There are no risks which inthe opinion of the Board threaten the existence of your Company. However some of therisks which may pose challenges are elaborately described in the Management Discussion andAnalysis which forms part of this Report.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference to thefinancial statements. During the year such controls were reviewed and no reportablematerial weakness was observed.
Corporate Social Responsibility (CSR)
The Board in compliance with the provisions of Section 135(1) of the Companies Act2013 and rules made thereunder has a Committee to be known as CSR Committee with Mr.Santimoy Dey Independent Non-executive Director Mr. Sakti Kumar Banerjee IndependentNon-executive Director and Mr. Shyam Sundar Choudhary Whole time director of the Companyas its members. The CSR policy has been placed on the Website of the Company and can beaccessed through the following link: http://www.himadri.com/Himadri_CSR_ Policy.pdf.
During FY 2015-16 the provisions of Section 135 of the Companies Act 2013 were notapplicable to the Company however the Company has voluntarily expended a sum of H24.16lakhs on CSR activities covered within the scope of the CSR Policy. The Annual Report onCSR activities in terms of Rule 8 of Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed herewith and marked as Annexure VII forming part of this report
Annual Evaluation of the Members of the Board
The Board upon recommendation of the Nomination and Remuneration Committee and as perthe criteria and manner provided for the annual evaluation of each member of the Board andits committee has evaluated the performance of the entire Board its committee andindividual directors. All the members of the Board and its committee met the criteria ofperformance evaluation as set out by Nomination and Remuneration Committee.
During FY 2015-16 the Company has not accepted any deposits from public within themeaning of Section 73 and Section 74 of the Companies Act 2013 therefore the disclosureunder rule 8 (5)(v) & (vi) of Companies (Accounts) Rules 2014 are not applicable tothe Company.
Significant and material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Companys operation in future
There were no significant and material orders passed by any Regulatory authority orCourts or Tribunals impacting the going concern status and Companys operation infuture therefore the disclosure under rule 8 (5)(vii) of Companies (Accounts) Rules2014 is not applicable to the Company.
Transfer to Investor Education & Protection Fund
The Company sends intimations to all shareholders whose dividends are unclaimed so asto ensure that they receive their rightful dues. Efforts are also made to co-ordinate withthe Registrar to locate the shareholders who have not claimed their dues.
During the year the Company has transferred a sum of H1068206 to Investor Education& Protection Fund the amount which was due and payable and remained unclaimed andunpaid for a period of seven years. Despite the reminder letters sent to each shareholderthis amount remained unclaimed and hence was transferred.
In terms of the provisions of Regulation 34(3) of the SEBI Listing Regulations theCorporate Governance Report together with a certificate from a Practicing CompanySecretary confirming compliance is annexed herewith and marked as Annexure VIII formingpart of this report.
Management Discussion and Analysis
The Management Discussion and Analysis as required under Schedule V of the SEBI ListingRegulations forms an integral part of this report
Listing on Stock Exchanges
The equity shares of the Company continue to be listed on the BSE Ltd. (BSE) and theNational Stock Exchange of India Limited (NSE). The Company has remitted the listing feeto these stock exchanges up to date.
The Non-Convertible Debentures (NCD) issued by the Company aggregating H250 Crorescontinue to be listed at BSE and the Company has been regular in the remittance of thelisting fee to the exchange for such debentures.
Dematerialisation of Shares
There were 377546325 equity shares of the Company held by the shareholders indematerialised form as on 31 March 2016 representing 90.23% of the total paid-up sharecapital of the Company consisting of 418407867 equity shares of H1/- each. The Companyhas issued and allotted 32675297 equity shares of H1/- each to one of the Promoter GroupCompany on preferential basis on 25 March 2016 and as on the close of financial year theseshares were under process of dematerialization and Lock-in as per the provisions of SEBI(ICDR) Regulations 2009 and accordingly the Promoters shareholding standsincreased.
The Companys equity shares are compulsorily required to be traded indematerialised form; therefore members are advised to expedite the process of convertingthe physical shareholding into dematerialised form through their D/P(s).
E-voting facility at AGM
In terms of Regulation 44 of SEBI Listing Regulations and in pursuance of theprovisions of Section 108 of the Companies Act 2013 (the Act) read with Rule 20 and 21(1)(a) to (h) of the Companies (Management and Administration) Rules 2014 (these amends)and the Items of Business specified in the Notice convening the 28th AnnualGeneral Meeting of the Company may be transacted through electronic voting system and theCompany is providing e-Voting facility to its members who will be the members of theCompany as on 24 September 2016 fixed for the purpose) for exercising their right to voteby electronic means through the e-Voting platform provided by National SecuritiesDepository Limited (NSDL). The detailed process and guidelines for e-voting has beenprovided in the notice convening the meeting.
Disclosure as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has an Internal Compliant Committee as required to be formed under Section4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made thereunder which were notified on 9 December 2013.
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.
During FY 2015-16 the committee submitted its Annual Report as prescribed in thesaid Act and no complaints of sexual harassment were received by the Committee.
Your Board of Directors are thankful to our customers vendors dealers investorsbusiness associates and bankers for their continued support during the year. We place onrecord our appreciation of the contribution made by employees at all levels. Ourresilience to meet challenges was made possible by their hard work solidaritycooperation and support. We thank the Government of India the State Governments where wehave operations and other government agencies for their support and look forward to theircontinued support in the future.
| ||For and on behalf of the Board |
| ||Sd/- ||Sd/- |
| ||Bankey Lal Choudhary ||Shyam Sundar Choudhary |
|Place: Kolkata ||Managing Director ||Executive Director |
|Date: 23 May 2016 ||(DIN: 00173792) ||(DIN: 00173732) |
Annexure I of the Boards Report
Nomination & Remuneration Policy of the Company
Pursuant to Section 178 of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board of Directors of every listed Company shall constitute the Nominationand Remuneration Committee. The Company already constituted the Committee comprising ofthree non-executive Independent Directors as required under Listing Agreement. In order tocomply with the provisions of the Companies Act 2013 and the amended Listing Agreementfrom time to time the Board on 13th November 2013 changed of the nomenclatureof the "Remuneration Committee" as "Nomination and RemunerationCommittee" and further the same was re-constituted the Committee on 11thAugust 2014 with three non-executive Independent Directors as Member of the Committee. TheCommittee has reviewed and formulated "Remuneration Policy" in compliance withthe provisions of Section 178 of the Companies Act 2013 read with the applicable rulesthereto and Clause 49 of the Listing Agreement.
Section 178 of the Companies Act 2013 inter-alia provides that the Committee shallformulate the criteria for determining qualifications positive attitudes and independenceof a Director and recommend to the Board a policy relating to remuneration for Directorskey managerial personnel ( KMP) and other employees;
The Remuneration Policy of Himadri Chemicals & Industries Limited and itssubsidiaries (the "Company") is designed to attract motivate and retainquality people in a competitive market. The policy reflects the Company's objectives forgood corporate governance as well as sustained long-term value creation for shareholders.
The Remuneration Policy applies to Directors Key Managerial Personnel and otheremployees of the Company as per the provisions of the Companies Act 2013.
Terms that have not been defined in this Policy shall have the same meaning assigned tothem in the Companies Act 2013 Listing Agreement and/or any other SEBI ListingRegulations as amended from time to time.
a) To make recommendations to the Board in relation to appointment and removal ofDirectors Key Managerial Personnel and Senior Management;
b) To ensure that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run theCompany successfully;
c) To evaluate the performance of the members of the Board and provide necessaryreports to the Board for further evaluation and to ensure relationship of remuneration toperformance is clear and meets appropriate performance benchmarks; and
d) To recommendations to the Board on Remuneration payable to the Directors KeyManagerial Personnel and Senior Management and to ensure that such remuneration involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.
"Board" means Board of Directors of the Company.
"Company" means "Himadri Chemicals & Industries Limited ""Employees Stock Option" means the option given to the directors officersor employees of a Company or of its holding Company or subsidiary Company or companies ifany which gives such directors officers or employees the benefit or right to purchaseor to subscribe for the shares of the Company at a future date at a pre-determined price.
"Independent Director" means a director referred to in Section 149 (6) of theCompanies Act 2013 and in clause 49 of the Listing Agreement;
"Key Managerial Personnel" (KMP) means;
(i) Chief Executive Officer or the Managing Director or the Manager (ii) CompanySecretary
(iii) Whole-time Director (iv) Chief Financial Officer and
(v) Such other officer as may be prescribed.
"Nomination and Remuneration Committee" shall mean a Committee of Board ofDirectors of the Company constituted in accordance with the provisions of Section 178 ofthe Companies Act 2013 and the Listing Agreement.
"Policy or This Policy" means "Nomination and RemunerationPolicy."
"Remuneration" means any money or its equivalent given or passed to anyperson for services rendered by him and includes perquisites as defined under theIncome-tax Act 1961.
"Service rules/HR Policy" means "Service Rules/HR Policy" as framedby the Management which are applicable to all employees may be amended or modified formtime to time by the management.
"Senior Management" means personnel of the Company who are members of itscore management team excluding Board of Directors comprising all members of management onelevel below the executive directors including the functional heads. An Organisation Chartdefining the Core Management Team and managerial personnel "one Level below theexecutive Director" is annexed hereto forming the part of this policy and marked asAnnexure "A" .
V. APPOINTMENT AND REMOVAL:
A. Appointment criteria and qualifications:
1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.
2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person are sufficient /satisfactory for the concerned position.
3. The Company shall not appoint or continue the employment of any person as ManagingDirector/ Whole-time Director/Manager who has attained the age of seventy years. Providedthat the term of the person holding this position may be extended beyond the age ofseventy years with the approval of shareholders by passing a special resolution based onthe explanatory statement annexed to the notice for such motion indicating thejustification for extension of appointment beyond seventy years.
B. Term / Tenure:
1. Managing Director/Executive Director/Whole-time Director/Manager: The Company shallappoint or re-appoint any person as its Managerial Person for a term not exceeding fiveyears at a time. No reappointment shall be made earlier than one year before the expiry ofterm.
2. Independent Director: An Independent Director shall hold office for a term up tofive consecutive years on the Board of the Company and will be eligible for re-appointmenton passing of a special resolution by the Company and disclosure of such appointment inthe Board's report.
No Independent Director shall hold office for more than two consecutive terms but suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly. However if a person who hasalready served as an Independent Director for 5 years or more in the Company as on 1October 2014 or such other date as may be determined by the Committee as per regulatoryrequirement he/she shall be eligible for appointment for one more term of 5 years only.
At the time of appointment of Independent Director it should be ensured that number ofBoards on which such Independent Director serves is restricted to seven listed companiesas an Independent Director and three listed companies as an Independent Director in casesuch person is serving as a Whole-time Director of a listed Company.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management at regular interval (yearly).
Due to reasons for any disqualification mentioned in the
Companies Act 2013 rules made thereunder or under any other applicable Act rules andregulations the Committee may recommend to the Board with reasons recorded in writingremoval of a Managing Director / Executive Director / Whole Time director KMP or SeniorManagement subject to the provisions and compliance of the said Act rules and regulationsmade thereunder and Service rules/HR Policy of the Company as prevalent at that time .
The Managing Director / Executive Director / Whole Time director KMP and SeniorManagement shall retire as per the applicable provisions of the Companies Act 2013 andthe prevailing policy of the Company. The Board will have the discretion to retain theManaging Director / Executive Director / Whole Time director KMP Senior Management inthe same position / remuneration or otherwise even after attaining the retirement age forthe benefit of the Company subject to such approvals as may be required in this regard.
VI. PROVISIONS RELATING TO REMUNERATION:
1. The remuneration / compensation / commission etc. to Managing Director Executive /Whole Time Directors KMP and Senior Management Personnel will be determined by theCommittee and recommended to the Board for approval. The remuneration / compensation /commission etc. shall be subject to the prior/post approval of the shareholders of theCompany and Central Government wherever required.
2. The remuneration and commission to be paid to Managing Director Executive / WholeTime Directors shall be as per the statutory provisions of the Companies Act 2013 andthe rules made thereunder for the time being in force and in accordance with and subjectto the relevant provisions of the Articles of Association of the Company.
3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Managerial Person.
4. Where any insurance is taken by the Company on behalf of its Managing DirectorExecutive / Whole
Time Directors KMP and any other employees for indemnifying them against anyliability the premium paid on such insurance shall not be treated as part of theremuneration payable to any such personnel.
B. Remuneration to Non-Executive / Independent Director:
1. Remuneration / Commission: The Committee may recommend the payment of remuneration /commission in accordance with the statutory provisions of the Companies Act 2013 and therules made thereunder for the time being in force.
2. Sitting Fees: The Non- Executive / Independent Director may receive remuneration byway of fees for attending meetings of Board or Committee thereof. Provided that the amountof such fees shall not exceed the maximum amount as provided in the Companies Act 2013per meeting of the Board or Committee or such amount as may be prescribed by the CentralGovernment from time to time.
3. Limit of Remuneration /Commission: Remuneration /Commission may be paid within themonetary limit approved by shareholders subject to the limit not exceeding 1% of the netprofits of the Company computed as per the applicable provisions of the Companies Act2013.
4. Stock Options: An Independent Director shall not be entitled to any stock option ofthe Company.
C. Executive / Whole Time Directors
I. Appointment/ Re-appointment Remuneration and Terms and Conditions:
Appointment and Re-appointment if any of Executive Directors/ Whole time Directorsincluding remuneration and other terms and conditions thereof shall be in accordance withthe provisions of Section 196 197 of the Companies Act 2013 read with Schedule Vappended thereto. The Committee will recommend the appointment or re-appointment if anyof any of the Executive/ Whole time Directors to the Board and same will be approved bythe shareholders at General meetings by passing the necessary resolution in terms ofprovisions of Companies act 2013.
The components of remuneration package may include the following:
Any other perks and benefits.
II. Minimum Remuneration
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Executive/ Whole Time Directors in accordancewith the provisions of Schedule V of the Companies Act 2013 and if it is not able tocomply with such provisions with the prior approval of the Central Government.
III. Over all Maximum Managerial Remuneration
The total managerial remuneration payable by the Company to its Directors includingManaging Director and whole time Directors and its Managers in respect of any financialyear shall not exceed 11% of the net profit of the Company for that financial yearcalculated in the manner as laid down in Section 198 of Companies Act. 2013 except thatthe Remuneration of the Directors shall not be Deducted from the Gross profit.
In the event of Payment of Remuneration exceeding 11% of net profit necessaryformalities to be complied with as per the said Act.
IV. Provisions for excess remuneration
If any Executive/ Whole Time Directors draws or receives directly or indirectly by wayof remuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he / sheshall refund such sums to the Company and until such sum is refunded hold it in trust forthe Company. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.
Remuneration of KMP and Senior Management Personnel is proposed by the Company'sNomination and Remuneration Committee and subsequently approved by the Board of Directors.The remuneration is evaluated annually against performance of the Company individualperformance/ contribution and decides Remuneration rationally. The remuneration of KMP andSenior Management Personnel may comprise of the following:
A fixed base salary set at a level aimed at attracting and retaining executiveswith professional and personal competences required to drive the Company's performance.
Variable pay linked with Performance in respect of certain positions
Allowances (HRA Conveyance etc.)
Perquisite and benefits
Coverage on Mediclaim
Retirement benefits including Superannuation
The KMP (s) and Senior Management Personnel shall be eligible for a monthlyremuneration as may be approved by the Board on the recommendation of the Committee. Thebreak-up of the pay scale and quantum of perquisites including employerscontribution to P.F pension scheme medical expenses club fees etc. shall be decided andapproved by the Board on the recommendation of the Committee and approved by theshareholders and Central Government wherever required.
VII. Policy on diversity of Board:
The Board of Directors shall have the optimum combination of executive andnon-executive Directors including Independent Directors from the different fields likePlanning Strategy Production Management Engineering Quality Assurance Finance &Accountancy Legal Sales and Marketing Supply chain Research and Development HumanResources etc or as may be considered appropriate by the Committee from time to time.
The Board shall have at atleast one member who has accounting or related financialmanagement expertise and atleast three members who are financially literate. And the Boardshould have atleast one women director as its member.
1Amended by the Nomination and Remuneration Committee at its meeting held on26th March 2015
VIII. ASSISTANCE FROM OUTSIDE AGENCY
The committee may take the assistance of External expert/ agency. as and when requiredto ensure that recommendations are based on rationale as also parameter to judge theperformance level through a process .
IX. AMENDMENT / REVISION
Any policy including Remuneration Policy is dynamic concept. Hence it will be reviewedperiodically & bring changes/ amendment as and when required based on business needbenchmark with comparable Industries and any other factors relevant in the context offormulation of Remuneration policy that has direct linkage between business growth &attract retain & motivate people on sustainable basis.
X. Disclosure of Information
Information as required in terms of Section 197 (12) of the Companies Act 2013 readwith Rule 5 of Company (Appointment & Remuneration) Rules 2014 shall be disclosed inthe Board in the manner as provided therein.
Annexure III of the Boards Report
Details pursuant to Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
1. The ratio of remuneration of each Director to median remuneration of employees ofthe Company for the financial year 2015-16:
|Name ||Designation ||Ratio |
|Mr. Bankey Lal Choudhary ||Managing Director ||29.33 : 1 |
|Mr. Shyam Sundar Choudhary ||Wholetime Director ||29.33 : 1 |
|Mr. Vijay Kumar Choudhary ||Wholetime Director ||29.33 : 1 |
2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer and Company Secretary in the financial year 2015-16:
|Name ||Designation ||% increase in remuneration |
|Mr. Bankey Lal Choudhary ||Managing Director ||- |
|Mr. Shyam Sundar Choudhary ||Wholetime Director ||- |
|Mr. Vijay Kumar Choudhary ||Wholetime Director ||- |
|Mr. Anurag Choudhary ||Chief Executive Officer ||- |
|Mr. Kamlesh Kumar Agarwal ||Chief Financial Officer ||- |
|Mr. Bajrang Lal Sharma ||Company Secretary ||- |
* Refer Note
3. The percentage increase in the median remuneration of employees in the financialyear 2015-16:
The percentage increase in the median remuneration of employees is 3%
4. The number of permanent employees on the rolls of the Company:
There were 677 number of permanent employees on the rolls of the Company as on 31 March2016.
5. The explanation on the relationship between average increase in remuneration and theCompany performance:
During the previous FY2014-15 the Company incurred a loss of H1440.07 lakhs whereas inthe FY 2015-16 its loss reduced to H1207.60 lakhs. The Company considering thechallenging year has not provided hike in comparison to market trend to all itshigher grade employees but however keeping in view the inflation in market the Companyhas provided the hike in remuneration to other category of employees across the Company.The average increase in median remuneration was 3%. The average increase in medianremuneration was justifiable.
6. Comparison of the remuneration of the Key Managerial Personnel against performanceof the Company:
During the previous FY 2014-15 the Company incurred a loss of H1440.07 lakhs whereasin the FY 2015-16 its loss reduced to
H1207.60 lakhs. Hence there was an improvement representing 16%. Thereforeremuneration of Key Managerial Personnel was in line with performance of the Company.
7. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer:
(a) The market capitalisation as on 31 March 2016 was H657.74 Crores (H578.60 Crores ason 31 March 2015)
(b) Since the Earnings per Share (EPS) of the Company in FY 2014-15 and FY 2015-16 isnegative therefore the Price Earnings ratio is negative.
The Companys last public offer was in the year 1994 at a price of H15 per sharefor face value of H10 each/- (including premium of H5/- per share). In the year 2010 theface value of each equity share of H10 each was sub-divided into 10 shares of H1 each.Therefore the cost price of the shares has been re-calculated to H1.5 per share. And themarket price as 31 March 2016 is H15.72 per Share therefore the present value ofinvestment of H1500 made in the year 1994 in the said Public Offer would be worthH15720.
8. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Average percentage increase made in the salaries of employees other than the managerialpersonnel in FY 2015-16 was 6% whereas the increase in the managerial remuneration for thesame financial year was Nil
9. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company:
Remuneration Paid to KMPs are as follows:
i) Mr. Bankey Lal Choudhary Managing Director: H60.68 lakhs ;
ii) Mr. Shyam Sundar Choudhary Whole time Director: H60.68 lakhs ;
iii) Mr. Vijay Kumar Choudhary Whole time Director: H60.00 lakhs;
iv) Mr. Anurag Choudhary Chief Executive Officer: H73.80 lakhs;
v) Mr. Kamlesh Kumar Agarwal Chief Financial Officer: H25.42 lakhs;
vi) Mr. Bajrang Lal Sharma Company Secretary: H12.45 lakhs.
The remuneration paid to KMPs are in line with the Companys performance andpresent market trend.
10. The key parameters for any variable component of remuneration availed by thedirectors:
The key parameters for the variable component of remuneration availed by the directorsare considered by the Board of Directors based on the recommendations of the Nominationand Remuneration Committee as per the Nomination and Remuneration Policy for DirectorsKey Managerial Personnel and other Employees.
11. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: 1 : 6.04(Note: there were five employees drawing remuneration in excessof highest paid Director)
12. Afirmation that the remuneration is as per the remuneration policy of the Company.
The remuneration paid to Directors Key Managerial Person and other employees are asper the Nomination and Remuneration Policy for Directors Key Managerial Personnel andother Employees
Note: The Non-Executive Directors of the Company are entitled for sitting fee as perthe statutory provisions and within the limits approved by the shareholders. The detailsof remuneration of Non -Executive Directors are provided in the Report on CorporateGovernance and are governed by the Remuneration Policy of the Company as provided in theAnnual Report. In view of this the calculation of the ratio of remuneration andpercentage increase in remuneration of Non-Executive Directors would not be meaningful andhence not provided.
Annexure IV of the Boards Report
Details pursuant to Rule 5 (2) & (3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
Name of the Employee employed throughout the financial year was in receipt ofremuneration at a rate which in the aggregate was not less than five lakh rupees permonth;
|Name ||Designation Nature of Duties ||Remuneration H ( In lakhs) ||Qualification Experience (yrs) ||Date of commencement of employment ||Age (years) ||Last employer designation ||Relative of any director of the Company |
|Mr. Anurag Choudhary ||Chief Executive officer ||73.80 ||B.Com 25 ||01.04.1991 ||44 ||None ||Mr. Shyam Sundar Choudhary |
|Mr. Tushar Choudhary ||President Operations ||73.80 ||B.Com 17 ||01.05.1999 ||40 ||None ||Mr. Bankey Lal Choudhary |
|Mr. Amit Choudhary ||President Projects ||73.80 ||B.Com 17 ||01.05.1999 ||41 ||None ||Mr. Shyam Sundar Choudhary |
|Mr. Monojit Mukherjee ||Business Head- CBD ||75.00 ||PGDM (Marketing) from IIM Ahmedabad B. Tech in Chemical 32 ||16.04.2014 ||58 ||Philips Carbon Black Limited Executive Director (Marketing & New Projects) ||Nil |
|Mr. Somesh Satnalika ||VP- Strategy and Business Development ||70.00 ||PGPM (Finance) CA ||09.06.2014 ||34 ||Booz & Co. ||Nil |
1. Remuneration includes salary Companys contributions to provident fund bonusallowances performance bonus and monetary value of perquisites. However provision forgratuity including settlements during the year has been excluded.
2. None of the employees are covered under Rule 5(2)(iii) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
Annexure V of the Boards Report
SECRETARIAL AUDIT REPORT
Form No. MR-3
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Himadri Chemicals & Industries Limited
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s Himadri Chemicals &Industries Limited (hereinafter called "the Company"). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.
The Companys Management is responsible for preparation and maintenance ofsecretarial records and for devising proper systems to ensure compliance with theprovisions of applicable laws and Regulations.
Based on the verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit we hereby report that in our opinion the Company has during the auditperiod covering the financial year ended on 31st March 2016 generally compliedwith the statutory provisions listed hereunder and also that the Company has proper Boardprocesses and compliance mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March2016 to the extent applicable according to the provisions of:
i) The Companies Act 2013 (the Act) and the rules made thereunder;
ii) The Securities Contracts (Regulation) Act 1956 and Rules made thereunder;
iii) The Depositories Act 1996 and Regulations and Bye-laws framed thereunder;
iv) Foreign Exchange Management Act 1999 and the Rules and Regulations made thereunderto the extent of Overseas Direct Investments Foreign Direct Investments and ExternalCommercial Borrowings;
v) The following Regulations and Guidelines prescribed under the Securities &Exchange Board of India Act 1992 ("SEBI Act") to the extent applicable:
a) The Securities Exchange Board of India (Substantial Acquisition of Shares andTakeover) Regulations 2011
b) The Securities Exchange Board of India (Prohibition of Insider Trading) Regulations2015
c) The Securities Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009
d) The Securities Exchange Board of India (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines 1999 and Securities and Exchange Board of India (ShareBased Employee Benefits) Regulations 2014
e) The Securities Exchange Board of India (Issue and listing of Debt securities)Regulations 2008
f ) The Securities Exchange Board of India (Registrars to an Issue and Share TransferAgents) Regulations 1993
g) The Securities Exchange Board of India (Delisting of Equity Shares) Regulations2009
h) The Securities Exchange Board of India (Buyback of Securities) Regulations 1998
vi) Other than fiscal labour and environmental laws which are generally applicable toall manufacturing/ trading Companies the following laws/ acts are also applicable to theCompany: a) Petroleum Act 1934 and Rules made thereunder; b) Legal Metrology Act 2009;c) Bengal Electricity Duty Act 1935 and rules thereunder;
d) West Bengal Ground Water Resources (Management Control and Regulation) Act 2005;
e) Indian Boiler Act 1923;
f ) West Bengal Mollasses Control Act 1973 and West Bengal Mollasses Control(Regulation Storage and Transport) Notified Order 1986;
g) Hazardous Waste (Management Handling and Transboundary Movement) Rules 2008 asamended;
We have also examined compliance with the applicable clauses of the following:
a) Secretarial Standards issued by The Institute of Company Secretaries of India[Applicable from 1st July 2015];
b) The Listing Agreements entered into by the Company with BSE Limited (BSE) andNational Stock Exchange of India Limited (NSE) and the provisions of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015. [Applicable from 1st December 2015];
During the period under review the Company has generally complied with the provisionsof the Act Rules Regulations Guidelines Standards etc. mentioned above.
We further report that a) The Board of Directors of the Company is duly constitutedwith proper balance of Executive Directors Non-Executive Directors and IndependentDirectors. The changes in the composition of the Board of Directors that took place duringthe period under review were carried out in compliance with the provisions of the Act.
b) Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
c) None of the directors in any meeting dissented on any resolution and hence there wasno instance of recording any dissenting members view in the minutes.
We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the period under audit the Company has issued andallotted 3 2675297 equity shares of H1/- each fully paid up on 25th March2016 on preferential basis under section 62 of Companies Act 2013 & Chapter-VII ofSEBI (Issue of Capital and Disclosure Requirement) Regulations 2009 to Himadri Coke& Petro Limited in lieu of 12300 Deep Discount Debentures with the necessaryconsent of shareholders at an Extra Ordinary General Meeting convened on 22ndMarch 2016.
| ||For MKB & Associates |
| ||Company Secretaries |
| ||Sd/- |
| ||Manoj Kumar Banthia |
| ||[Partner] |
|Date: 20th May 2016 ||ACS no. 11470 |
|Place: Kolkata ||COP no. 7596 |
Annexure-I to Secretarial Audit Report
HIMADRI CHEMICALS & INDUSTRIES LIMITED
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Wherever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
| ||For MKB & Associates |
| ||Company Secretaries |
| ||Sd/- |
| ||Manoj Kumar Banthia |
|Date: 20th May 2016 ||[Proprietor] |
|Place: Kolkata ||ACS no. 11470 |
Annexure VI of the Boards Report
Information as per Section 134(3)(m) read with the Rule 8(3) of Companies (Accounts)Rules 2014 for the year ended 31 March 2016:
A. Conservation of energy
i) Steps taken or impact on conservation of energy
The Company has taken various steps to save the energy by replacing the traditionallightning system with Led lightning system to improve the system so that air blowershould not function during idle hour which resulted to save the energy electric motors ofmicro pulverizer which were running with two motors of 75Kw has been converted with 55Kwby improving the process study commissioning of boiler blow down steam recovery systemwhich was early a waste Variable Frequency Drive (VFD) were installed in most of themotors having higher rating by which speed of the motor optimized to save the power autosleeping mode activated in air compressor and all other electrical equipments so as toreduce the load of the electricity installation of capacitor bank in all Low Tension (LT)transformers to maintain steady power factor resulting in saving of energy and utilizationof soft black reactor to soot blowing cooling system at all which increased the powergeneration as a on-going job.
ii) Steps taken by the Company for utilizing alternate source of energy
The Company has 20MW power generating plant based on waste heat recovery systemderived during the process of manufacturing of Carbon Black at Mahistikry DistrictHooghly W.B. and substantial amount of power has been utilized by the Company to back upthe manufacturing process at its Plant and the surplus power is supplied to Grid onregular basis.
iii) The capital investment on energy conservation equipments
The Company has already made necessary expenditure on energy conservation equipments.
B. Technology absorption
i) Efforts made towards technology absorption
The Research and Development (R&D) department of the Company continued to play avital role in the various thrust areas:
a) New products development and higher value addition to existing line of products; b)Actively working on graphitised Advanced Carbon Material and Developing In-Housetechnology for manufacturing the same;
c) Constantly working on optimising the Cost of Production and improving the Quality offinished product;
d) Focus on re-cycling of waste and research on the utilisation of waste on continuebasis.
The Companys R & D unit(s) at Mahistikry Unit P.S Haripal District Hooghly (W.B) has been accorded renewal of recognition upto 31 March 2019 by the Ministryof Science and Technology Department of Scientific and Industrial Research New Delhi forcarrying In-House Research & Development for its various products.
ii) The benefits derived like product improvement cost reduction product developmentimport substitution
Benefits derived as a result of the above R&D:
a) Developed certain new products in its R&D Centre such as special grade carbonblack from Coal Tar based raw material special grade of carbon black for different gradesof printing carbon black for special engineering plastic master batch;
b) Also developed Mesophase Pitch for anode material developed High SP pitch forrefractory applications;
c) Achieved the targets of production of superior quality of different grades of carbonblack with maximum flexibility of using available raw material;
d) R&D wing has worked extensively and have developed technology for using variousblends of different quality of Coal Tar Coal Tar based Oil of various grades in differentproportion on standalone basis and/or along with the petroleum based feed stock in variousratios;
e) Improvement in the existing production process such as Implementation of AdvanceFailure Mode Analysis and Advance Product Quality Planning in the processes raw materialand finished goods quality enhancement in Naphthalene yield from Coal Tar focused onlowering down of Naphthalene slippage in heavy oil; f ) Successfully derived benefits onthe basis of above R&D activities which have helped in achieving better efficiency infuel consumption better control on inputs and thereby improving the quality of the outputto match with international specifications.
iii) Expenditure incurred on Research and Development
Capital expenditure as well as recurring expenditure incurred from time to time duringthe year on laboratory items tools spares handling equipments and salaries of researchpersonnel remain merged with various heads as per established accounting policy andexpenditures incurred during the year under review on Research & Development are asfollows :
a) Capital expenditure: Nil; b) Revenue expenditure: H238.20 lakhs;
c) Total Research & Development expenditure: H238.20 lakhs;
d) Total R&D expenditure as a percentage of total turnover: 0.21%
C. Foreign Exchange Earnings and Outgo
| ||Amount in Rs. Lakhs |
| ||FY 2015-16 ||FY 2014-15 |
|Total foreign exchange outgo in terms of actual outflow ||32685.91 ||53000.41 |
|Total foreign exchange earned in terms of actual inflows ||11880.96 ||11037.04 |
Annexure VII of the Boards Report
[Pursuant to Section 135 of the Companies Act 2013]
Annual Report on CSR Activities
1. Brief outline of the Corporate Social Responsibility (CSR) Policy of the Company
The Company adopted CSR Policy as recommended by the CSR Committee and the scopes ofthe Policy are given hereunder:
(i) eradicating hunger poverty and malnutrition promoting health care includingpreventive healthcare and sanitation including contribution to the Swach Bharat Koshset-up by the Central Government for the promotion of sanitation and making available safedrinking water;
(ii) promoting education including special education and employment enhancing vocationskills especially among children women elderly and the differently abled and livelihoodenhancement projects;
(iii) promoting gender equality empowering women setting up homes and hostels forwomen and orphans; setting up old age homes day care centres and such other facilitiesfor senior citizens and measures for reducing inequalities faced by socially andeconomically backward groups;
(iv) ensuring environmental sustainability ecological balance protection of flora andfauna animal welfare agroforestry conservation of natural resources and maintainingquality of soil air and water including contribution to the Clean Ganga Fund set-up bythe Central Government for rejuvenation of river Ganga;
(v) protection of national heritage art and culture including restoration of buildingsand sites of historical importance and works of art; setting up public libraries;promotion and development of traditional arts and handicrafts;
(vi) measures for the benefit of armed forces veterans war widows and theirdependents;
(vii) training to promote rural sports nationally recognised sports paralympic sportsand Olympic sports;
(viii) contribution to the Prime Minister's National Relief Fund or any other fund setup by the Central Government for socio-economic development and relief and welfare of theScheduled Castes the Scheduled Tribes other backward classes minorities and women;
(ix) contributions or funds provided to technology incubators located within academicinstitutions which are approved by the Central Government;
(x) rural development projects;
(xi) slum area development.
The following kinds of Expenditures were approved by the CSR Committee to be undertakenby the Company including ongoing expenditures or expenditure to be made by the Companyduring FY 2015-16 directly or made through Company Trusts :-
a. Expenditure on promotion of education including undertaking of recurring expenditureof running a School and expenditure on distribution of Mid day meal among the poorchildren situated at Village area surrounding the Companys Factory at Mahistikry;
b. Expenditure on running a dispensary (Medical Services) within the surrounding areaof Companys Plant situated at Mahistikry including cost of medicine free healthcheck up facility etc;
c. Expenditure on eradicating hunger and distribution of food drinking water andcloth;
d. Expenditure on setting up homes / Ashram for orphans and to undertake day-to-dayrunning expenditures thereof.
2. The Composition of CSR Committee
The Corporate Social Responsibility Committee (the CSR Committee) of theBoard is responsible for overseeing the execution of the Companys CSR Policy andensuring that the CSR objectives are met. The CSR committee comprise of the followingDirectors:
i) Mr. Santimoy Dey Independent Non-executive Director
ii) Mr. Sakti Kumar Banerjee Independent Non-executive Director
iii) Mr. Shyam Sundar Choudhary Whole time Director
|3. Financial Details || |
| ||Amount in Rs. Lakhs |
|Particulars ||Amount |
|Average Net Profit / (Loss) of the Company for the last three financial years ||(998.73) |
|Prescribed CSR Expenditure (2% of the average net profits) ||NIL |
|Details of CSR Expenditure during the financial year || |
|Total amount to be spent for the financial year ||NIL |
|Amount spent ||24.16 |
|Amount unspent ||NIL |
The Company has voluntarily spent a sum of H24.16 lakhs on CSR Activities during theFY 2015-16.
4. Manner in which the amount spent during the financial year is detailed below
| || || || || || ||Amount in Rs. Lakhs |
|CSR Project or activity identified ||Sector in which the project is covered ||Projects or Programmes (1) Local area or other (2) Specify the State and district where projects or programs was undertaken ||Amount outlay (budget) project or programs wise HIn lakhs ||Amount spent on the projects or programs Sub heads: (1) Direct expenditure on projects or programs. (2) Overheads ||Cumulative expenditure upto the reporting period ||Amount spent: Direct or through implementing agency |
|1 Expenditure on Promotion of Education ||(a) ||Mahistikry Dist-Hooghly (WB) ||- ||2.00 ||2.00 ||Direct |
|2 Expenditure on running a dispensary ||(b) ||Mahistikry Dist- Hooghly (WB) ||- ||5.31 ||5.31 ||Direct |
|3 Expenditure on eradicating hunger and distribution of food drinking water and cloth ||(c) ||Surrounding area of the District and the State in which the Companys Plant is situated ||- ||11.84 ||11.84 ||Direct |
|4 Expenditure on setting up homes / Ashram ||(d) ||In the state of West Bengal East Midnapore ||- ||5.00 ||5.00 ||Direct |
|TOTAL || || ||- ||24.16 ||24.16 || |
5. Responsibility Statement
We hereby affirm that the CSR policy as approved by the Board has been implementedand the CSR committee monitors the implementation of the projects and activities incompliance with our CSR objectivities.
| ||For and on behalf of the Board |
| ||Bankey Lal Choudhary ||Santimoy Dey |
|Place: Kolkata ||Managing Director ||Chairman CSR Committee |
|Date: 20 May 2016 ||(DIN: 00173792) ||(DIN: 06875452) |