Your Directors present the 50th Annual Report and Audited Financial Statementsof the Company for the year ended 31st March 2016.
1. Financial Results: ( Rs. In Lakhs)
|PARTICULARS ||For the Financial Year ended 31.03.2016 ||For the Financial Year ended 31.03.2015 |
|Income ||5993.75 ||5665.58 |
|Profit/(Loss) before Interest Depreciation & ||322.09 ||410.88 |
|Less: Interest ||303.22 ||281.56 |
|Depreciation ||48.85 ||46.96 |
|Profit/(Loss) before Tax ||(29.98) ||82.36 |
|Add:Excess/ShortProvisionforTaxinrespectofearlieryear ||6.13 ||NIL |
|Profit/ (Loss) after Taxes ||(36.11) ||82.36 |
|Profit/(Loss) Brought Forward from last year ||(3255.23) ||(3335.85) |
|Depreciation of earlier years ||- ||(1.74) |
|Surplus/Deficit carried to Reserves (3291.34) ||(3255.23) |
2. Issue of Preference Shares:
In pursuance of the scheme of amalgamation ("the Scheme") sanctioned by theHonble High Court of Judicature at Bombay vide its Order dated 16th October 2015between Khatau Capacitors Limited and Indokem Exports Limited (Transferor Companies) withIndokem Limited (Transferee Company) 2070975 8% Non Cumulative Redeemable PreferenceShares) of the Company were issued to the members of the Transferor Companies. As a resultof this the issue Authorised Capital of the Company has been increased from Rs. 25.30crores to Rs. 26.42 crores in F.Y. 2015-2016.
Considering the accumulated losses the Board of Directors of your Company do notconsider it appropriate to recommend any Dividend for the Financial Year ended 31st March2016.
4. Operational Performance:
Revenue from operations for F.Y. 2015-2016 at Rs. 5866.15 lakhs was higher by 8.94 %over last year (5384.55 lakhs). EBITDA at Rs. 322.09 lakhs registered a decline over theEBITDA of Rs. 410.88 lakhs in F.Y. 2014-2015. PAT for the year was Rs. (36.11 lakhs)registering a decline of 143.84% over the PAT of
Rs. 82.36 lakhs in F.Y. 2014-2015.
5. Transfer to Reserves:
In view of inadequate profits for the year under review no amount has been transferredto the reserves.
6. Directors and Key Managerial Personnel:
Pursuant to the provisions of Section 149 of the Act Shri. Kailash Pershad (DIN:00503603) Shri. Rajagopalan Sesha (DIN: 00289643) and Shri. Bhalachandra Sontakke(DIN: 01225753) were ratified as Independent Directors of the Company at the AnnualGeneral Meeting convened on 30th
September 2014. They have submitted a declaration that each of them meets the criteriaof independence as provided in Section 149(6) of the Act and there has been no change inthe circumstances which may affect their status as Independent Director during the year.
Smt. Asha M. Khatau retires by rotation and being eligible has offered herself forre-appointment. During the year the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company other than the sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
Pursuant to the provisions of Section 203 of the Act the key managerial personnel ofthe Company are Shri. Mahendra K. Khatau as Chairman and Managing Director Mr. Manish M.Khatau as Whole-Time Director Shri. Mukund Nagpurkar as Chief Financial Officer and Mr.Bhavik B. Parekh as Company Secretary.
During the year Ms. Sugandha Vaidya resigned as the Company Secretary and ComplianceOfficer of the Company on 19th September 2015 and Smt. Leelabai K. Khatau resigned fromthe Directorship on 29th January 2016.
7. Appointment of Director:
Smt Asha M. Khatau Non- Executive Director of your Company retires by rotation andbeing eligible offers herself for re-appointment. The details regarding Smt. Asha M.Khatau as required under Regulation 36 (3) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 are disclosed in the notice of the Annual General Meeting.None of the other Directors are related inter se except Shri. Mahendra K. Khatau and Mr.Manish M. Khatau who are related to each other.
8. Remuneration of Directors and Key Managerial Personnel:
Pursuant to Section 197(12) of the Companies Act 2013 read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the detailsof remuneration of Directors and Key Managerial Personnel are as furnished in AnnexureC.
9. Training and Familiarization Programme for Directors:
The Company has provided information and made the Independent Directors aware about themajor developments in legal and regulatory areas particularly regarding Companies Act2013 and Regulation
25 (7) of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015. Thedetails of
Familiarization Programme for the Independent Directors are available on theCompanys website at www.indokem.co.in 10. Statement on declaration given byIndependent Directors:
The Independent Directors of the Company have submitted their declaration ofindependence as required under the provisions of Section 149 (7) of the Companies Act2013 stating that they meet the criteria of independence as provided in Section 149 (6) ofthe Act.
11. Particulars of Employees:
None of the employees of the Company fall under the limits laid down in Rule 5 (2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
12. Directors responsibility statement:
Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures; (ii) they have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company at the end of the financial year and of the profitof the Company for thatperiod;
(iii) they have taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down Internal Financial Control to be followed by the Company andsuch internal financial controls are adequate and operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
13. Statutory Auditors:
Pursuant to the provisions of Section 139 of the Companies Act 2013 Sheth Doctor& Associates Chartered Accountants Mumbai were appointed as the Statutory Auditorsof the Company on 30th September 2014 for a period of three years to hold office untilthe conclusion of the Annual General Meeting to be held in the year 2017. of eligibilitypursuant to Section 141 of M/s.ShethDoctor&Associateshaveissued a Certificate theCompanies Act 2013.
The Board of Directors of your Company recommends ratification of the appointment ofM/s Sheth Doctor & Associates Chartered Accountants Mumbai from the conclusion ofthe forthcoming Annual General Meeting of the Company until the conclusion of the nextAnnual General Meeting to be held in the year 2017.
14. Auditors Observations:
As regards the Audit Qualification on the records and valuation of inventory atAnkleshwar Plant the Management is of the view of that the inventories are usable fortrading operations of the Company at Mumbai.
15. Secretarial Audit Report:
Pursuant to the Provisions of Section 204 of Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Ragini Chokshi & Co. Company Secretary in Whole-Time Practice Mumbaito undertake Secretarial Audit of the Company for the Financial Year ended 31st March2016. The Secretarial Audit Report issued by Ragini Chokshi & Co. in the prescribedForm MR-3 forms part of the Annual Report.
There are no-qualifications reservations or adverse remarks inthe Report.
As required under Regulation 34(2) read with Schedule V of SEBI (Listing ObligationsDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis enclosed as a part of the Annual Report.
The Company has taken necessary steps to adhere to all the requirements of SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015. A report on CorporateGernance together with the certificate of the Statutory Auditors confirming compliancewith the conditions of Corporate Governance as stipulated in Regulation 34 (3) read withSchedule V of SEBI (Listing Obligation and Disclosure
Requirements) Regulations is included as a part of the Annual Report.
17. Extract of Annual Return:
Pursuant to Section 134 (3)(a) of the Companies Act 2013 read with Companies(Accounts) Rules 2014 the extract of Annual Return in the prescribed Form MGT-9 isattached herewith and marked as
18. Number of meetings of the Board:
Four (4) meetings of the Board were held during the Financial Year. For details of themeetings of the Board please refer to the Corporate Governance report which forms partof this report.
19. Performance evaluation of the Board:
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The performance of the Board was evaluated bythe Board after seeking inputs from all the Directors on the basis of the criteria such asthe Board composition and structure effectiveness of Board processes information andfunctioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual directors on the basis of the criteria such as the contribution of theindividual directors to the Board and Committee meetings like preparedness on the issuesto be discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
A separate meeting of Independent Directors convened in the month of March 2016 todiscuss the following: (i) Review the performance of Non- Independent Directors and theBoard as a whole; (ii) Review the performance of the Chairperson of the Company taking into account the views of executive Directors and Non-Executive Directors; (iii) Assess thequality quantity and timeliness of flow of information between the Company
Management and the Board that is necessary for the Board to effectively and reasonablyperform their duties.
All Independent Directors were present at the Meeting and discussed above and expressedtheir satisfaction.
20. Policy on Directors appointment and remuneration and other details
The Companys policy on Directors appointment and remuneration and othermatters provided in
Section 178(3) of the Act has been disclosed in the Corporate Governance Report whichforms part of this report.
21. Internal financial control systems and their adequacy
Company is in the process of establishing Internal Financial Control over financialreporting in current financial year 2016-2017.
The details in respect of Internal Financial Control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
22. Audit Committee
The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.
23. Particulars of loans guarantees or investments
Pursuant to Section 186 of the Companies Act 2013 the details of loans giveninvestments made or guarantees or securities given are mentioned in note no: 28 to theFinancial Statements for the Financial Year 2015-16.
The loans investments guarantees and securities provided by the Company during thefinancial year ended 31st March 2016 together with the existing loans investmentsguarantees and securities do not exceed the limits prescribed under sub-section (2) ofSection 186.
24. Transactions with parties:
None of the transactions with related parties fall under the scope of Section 188 (1)of the Act. Information on transactions with related parties pursuant to Section 134(3)(h)of the Act read with Rule 8 (2) of the Companies (Accounts) Rules 2014 are stated in AnnexureA in Form AOC-2 and the same forms part of this report.
All the properties and insurable interests of the Company including the buildingsplant and machineries and stocks have been adequately insured.
26. Material Changes and Commitments:
Previous Financial Year (i.e. 2014-2015) the Company had entered into a Memorandum ofUnderstanding (MOU) with a prospective buyer for sale/ transfer of its asset atAnkleshwar. Pursuant to the MOU the Company has received full payment in advance.Documentation for effecting sale/ transfer with the buyer is under process and will beconcluded shortly.
The Company has entered into a Memorandum of Understanding (MOU) for acquisition ofPlot of Land at MIDC Ambernath together with factory building standing thereon andmachineries installed therein.
27. State of Companys Affairs:
There is no change in the nature of business during the year under review. No Order hasbeen passed by any Regulatory Court or Tribunal which can impact the going concern statusof the Company and its operations in future.
28. The Conservation of Energy Technology Absorption Foreign exchange Earnings andOutgo:
Pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 is as follows. Your Company is engaged in the continuousprocess of energy conservation by way of improved operational and maintenance practices:
A. Conservation of Energy:
(a) Energy Conservation measures taken: (i) Electrical Energy:
Regular preventive/ predictive maintenance of electrical system is carried outto ensure minimum loss of energy/ power supply.
Regular up gradation in electrical system is done so as to minimize consumptionof electrical power supply.
(ii) Furnace Oil/ LDO Consumption:
Considering the above issue there are no major consumption of Furnace Oil/ Light DieselOil. However there are some processing activities carried out limiting the consumption ofenergy.
(b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy:
Apart from the above mentioned strategies your Company is in the process to upgrade andinstall new machineries which will altogether result in energy saving and will add tooperational efficiencyin coming years.
(c) Impact of the measures at (a) and (b) for reduction of consumption of energy andconsequent impact on the cost of production:
There is no such special impact for the same.
(d) Total energy consumption and energy consumption per unit of production:
As per Form "A" forming part of Annexure A B. TechnologyAbsorption:
Your Company has taken positive efforts for technology absorption and its up gradation.
(a) Modification in air conditioning system to improve process conditions.
(b) Modification in existing machines for high value and new products developmentsincluding process simplification.
(c) Up gradation of control system of after-treatment machines.
Due to above factors and measures been considered there are various benefits resultedas such;
(i) Cost reduction (ii) Improvement in quality
(iii) Improvement in operating performance (iv) New product developments
C. Foreign Exchange Earnings and Outgo: Rs. (In 000)
|PARTICULARS ||31.03.2016 ||31.03.2015 |
|I. Expenditure in Foreign Exchange Currency || || |
|Value of Imports on C.I.F. on the basis of Raw ||5510 ||37324 |
|Materials || || |
|Travelling ||1254 ||448 |
|Foreign Bank Charges ||189 ||27 |
|Consultancy charges ||406 ||169 |
|TOTAL ||7359 ||37968 |
|II. Earnings in Foreign Exchange || || |
|F.O.B. Value of Exports ||79831 ||100930 |
|PARTICULARS ||31.03.2016 ||31.03.2015 |
|1. Foreign exchange earned ||79831 ||100930 |
|Export of goods on FOB basis || || |
|2. Outgo of Foreign exchange ||5510 ||37324 |
|CIF value of Imports || || |
|3. Expenditure in Foreign Currencies ||1849 ||644 |
29. Risk Management:
Your Company has a robust risk management framework to identify evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on the business objectives and enhance the Companys competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting. The framework has different riskmodels which help in identifying risk trend exposure and potential impact analysis at aCompany level as also separately for business segments. The key business risksidentifiedby the Company and its mitigation plans are included in Management Discussionand
30. Subsidiary Company Associate Company and Joint Venture Company:
Your Company does not have any Subsidiaries or Associates or Joint Venture Companies.
Your Company has not accepted any deposits from public.
32. Internal Financial Control:
Company is in the process of establishing Internal Financial Control over FinancialReporting in current Financial Year 2016-2017.
33. Committees of Directors and Key Managerial Personnel:
The details pertaining to Composition of Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship/ Grievance Committee number of meetings held ofsuch Committees during the Financial Year 2015-2016 and meetings attended by eachmember of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report forming part of the report.
34. Corporate Social Responsibility (CSR):
Your Company does not fall under the eligibility criteria of Corporate SocialResponsibility as laid down under Section 135 of the Companies Act 2013 and by virtue ofabove your Company has not initiated any initiative for the same.
35. Cost Audit:
Your Company does not fall under the eligibility criteria to conduct Cost Audit and tomaintain Cost Records as required under Section 148 of the Companies Act 2013 during theFinancial Year 2015-2016.
The Directors take this opportunity to thank the Companys employees customersvendors investors for their continuous support and are grateful for the confidence andfaith shown in them and also extends sincere gratitude to the Banks Central and StateGovernment Departments and the Local Authorities for their guidance and support.
| ||By Order of the Board |
| ||For Indokem Limited |
| ||Sd/- |
| ||Shri. Mahendra K. Khatau |
|Place: Mumbai ||Chairman & Managing Director |
|Date: 10th August 2016 ||DIN: 00062794 |