Your Directors submit their 41st Annual Report together with the Audited Accounts forthe financial year ended 31st March 2016.
The financial results of the Company for the financial year ended 31st March 2016 aresummarised below :-
| ||(Rs. in crores) |
| ||2015-16 ||2014-15 |
|Sales Turnover & Other Income ||277.87 ||303.49 |
|Total Expenditure excluding ||280.04 ||307.77 |
|Finance Costs and Depreciation etc. || || |
|Finance Costs ||4.64 ||0.91 |
|Cash Profit /(Loss) ||(6.81) ||(5.19) |
|Depreciation etc. ||7.44 ||7.74 |
|Net Loss before tax ||14.25 ||12.93 |
|Provision for taxation ||- ||- |
|Net Loss after tax ||14.25 ||12.93 |
Your Directors report that the financial year 2015-16 has been another tough year forthe Company because of higher cost of production lower production provisioning ofsurcharge and interest amount on the deferment of power bills and provisioning of Intereston Debentures for the period from 1st July 2015 to 31st March 2016 proposed to be issuedon conversion of last tranche of OTS Amount. The Capacity Utlisation at 82% during theyear under review was lower against 93% in the preceding year 2014-15. However inspite ofthe Company having higher combined average realisation per Electro-Chemical Unit (ECU) atRs.35107 as against the ECU of Rs. 34075 the Net Loss (after tax) was Rs. 14.25 crores.The Company has made a saving of about Rs.10 crores during the financial year on accountof purchase of part of power at cheaper rates through Indian Energy Exchange under OpenAccess System.
In view of the accumulated losses of the Company the Directors regret their inabilityto recommend any dividend for the financial year 2015-16.
Finance and Corporate Debt Restructuring
The CDR Empowered Group had approved the proposal of the Company for One TimeSettlement (O.T.S.) of the outstanding Term Loans and Non Convertible Debentures andsanctioned Working Capital Facilities as on 1st April 2012 on 100% principal basis with acut-off date of 15th November 2012. The final tranche of O.T.S. amount had fallen due on1st April 2015. The Company could not make the payment of the same on due date. At therequest of the Company the CDR Empowered Group has inter alia approved the terms of thesaid terminal payment i.e. (i) The Outstanding amount (as on 1st April 2015) of terminalpayment of OTS amount shall be converted into Equity and Fully Convertible Debentures(FCDs) (ii) Equity Conversion shall be by issuance of fresh equity of 6605246 shares asper applicable SEBI norms (iii) The balance outstanding terminal OTS payment is to beconverted into Fully Convertible Debentures (FCDs) and (iv) The Company shall issue NonConvertible Debentures (NCDs) to Lenders to the extent of Mark to Market Loss in respectof fresh Equity issued by the Company; and these FCDs & NCDs shall carry fixedinterest rate at IDBI Bank Limited's Base Rate as on cutoff date of 30th June 2015 i.e.10% p.a. The CDR Empowered Group further approved waiver of interest on outstanding O.T.S.amount during period April 2015 to June 2015. The Working Capital Banker i.e. PunjabNational Bank (PNB) will continue the working capital facilities by restoring workingcapital limits at 55% of the original level and Punjab and Sind Bank will consider sharingworking capital limits on merits as and when the need arises in line with PNB.
During the financial year under review the Company did not raise funds by way of fixeddeposits.
The Company has become a Sick Industrial Company and Company's Reference under Section15(1) of Sick Industrial Companies (Special Provisions) Act 1985 has been registered bythe Board for Industrial and Financial Reconstruction as BIFR Case No. 152/2015.
Current Operations and Outlook
During the first Four Months of the current financial year the average capacityutilisation of the Plant was 91% as compared to 83% in the corresponding period of thepreceding financial year. The combined average realisation in this period is Rs.36660.The Net Loss (before tax) has been Rs.1.70 crores on a Sales Turnover of Rs.104 crores(Gross) against a Net Loss (before tax) of Rs.3.78 crores on a Sales Turnover of Rs.90.41crores in the corresponding period of the preceding financial year.
The Company's endeavor to reduce costs continued. The major cost is on account ofPower which accounts for about 60% of the total cost of production. The Company isreplacing the Membranes of its Plant Unit-I and Unit-II and getting the Anodes andCathodes recoated in Electrolysers of its Plant Unit-I in a phased manner. These willresult in reduction in power consumption per unit of Caustic Soda Lye and also lead toincrease in capacity utilisation. To save on energy cost the Company's endeavor topurchase power under Open Access System through Indian Energy Exchange continued. RecentlyPSERC has imposed additional charges of Rs.1.13 per unit on the Energy purchase throughOpen Access System.
In view of the Company having become a Sick Industrial Company the Company hadrequested Punjab Government for various Reliefs and Concessions viz. Concessional PowerDeferment of power bills Waiver of Sales Tax/ VAT Electricity Duty PunjabInfrastructure Development Cess Advance Electricity Consumption Deposit and PowerWheeling Charges.
The Chlorinated Paraffin Wax (CPW) Plant set up by M/s. Flow Tech Chemicals Pvt.Limited on B.O.O. basis in the Company's Plant Complex has been commissioned. The same haslifted about 3500 M.T. of Chlorine during the four months ended 31st July 2016 and hasreduced the requirement for additional Chlorine Tonners.
Environment and Energy Conservation
The Company is committed to run its operations in an environment-friendly manner. TheCompany's endeavor is to take all possible measures towards maintaining safety and goodhousekeeping in its Plants. Online Monitoring System has been installed at Works as perthe requirement of Central Pollution Control Board. The Company has achieved ZeroDischarge of Effluents from its Plant by getting its effluents treated in a ReverseOsmosis based Effluent Treatment Plant set up by M/s. J.B.R. Technologies Private Limitedon Build Own and Operate (B.O.O.) basis in the Company's Plant Complex.
The Company continues to place a great emphasis on energy conservation. The Company isgetting the Energy Audit conducted on regular basis. The information relating toConservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo asrequired to be disclosed pursuant to the provisions of Section 134 (3) (m) of theCompanies Act 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is givenin Annexure-I forming a part of this report.
The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited. TheAnnual listing fee for the year 2016-17 has been paid to the Bombay Stock ExchangeLimited.
The Company continues to place great value on its human resources. The process oftraining and development of human resources continued. The industrial relations remainedcordial during the financial year under review. The Company has not received any complaintunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013.
The Particulars of Employees and Managerial Remuneration under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) (2) & (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure II forming a partof this Report.
Having regard to provisions of the first proviso to Section 136(1) of the Act theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information will be available for inspection at the Registered Office ofthe Company during working hours. Members interested in obtaining the said informationwill be furnished the same upon receipt of request.
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 theManagement Discussion and Analysis Report for the financial year 2015-16 is annexedherewith as Annexure III forming a part of this report and the Corporate Governance Reportfor the financial year 2015-16 and Auditors' Certificate regarding compliance ofconditions of Corporate Governance are also annexed. The provisions of section 135 of theCompanies Act 2013 in respect of Corporate Social Responsibility are not applicable tothe Company in view of the losses of the Company.
Directors & Key Managerial Personnel
The PSIDC has nominated Smt. Indu Malhotra IAS as its Nominee on the Board ofDirectors of the Company in place of Shri S.R. Ladhar IAS. Shri S.R. Ladhar IAS resignedas a Director of the Company w.e.f. 16th February 2016. Accordingly the Board hasappointed Smt. Indu Malhotra IAS as Additional Director of the Company on 26th May 2016.Smt. Indu Malhotra IAS holds office till the date of the ensuing Annual General Meeting.A Notice in writing has been received from a member under Section 160 of the CompaniesAct 2013 signifying his intention to propose at the ensuing Annual General Meeting theappointment of Smt. Indu Malhotra IAS as Director of the Company whose period of officeshall be liable to determination by retirement of Directors by rotation.
Shri Anirudh Tewari IAS Chairman and Director of the Company retire as Director byrotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment.
The IDBI Bank Limited had withdrawn the nomination of Shri Rajesh Malhotra as itsNominee on the Board of Directors of the Company w.e.f. 15th July 2016.
Smt. Gurneet Tej IAS has vide her Resignation Letter dated 12th August 2016 tenderedher resignation from the Directorship with immediate effect i.e. with effect from 12thAugust 2016.
The Directors place on record their appreciation of the valuable contribution made byShri S.R. Ladhar IAS Smt. Gurneet Tej IAS and Shri Rajesh Malhotra.
Shri Ajay Pal Singh Chief Financial Officer of the Company ceased to be the ChiefFinancial Officer of the Company with effect from 31st May 2016 on attaining the age ofsuperannuation. The Board of Directors of the Company had appointed Shri Ajay Pal Singh asChief Financial Officer of the Company on 26th May 2016 on Contractual Basis for a periodof one year with effect from 6th June 2016.
The Audit Committee of the Board comprises of Shri D.C. Mehandru Shri J.S. Mann andSmt. Gurneet Tej IAS (till 12th August 2016) with Shri D.C. Mehandru as its Chairman.
Risk Management Committee
The Board of Directors of the Company has constituted a Risk Management Committee tomonitor and review the Risk Management Plan of the Company.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:
(i) In the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for the period under review;
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the annual accounts for the financial year ended 31stMarch 2016 on a going concern basis;
(v) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;
(vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Declaration of Independent Directors
All the Independent Directors have met requirements specified under Section 149 (6) ofthe Companies Act 2013 regarding holding the position of 'Independent Director' andnecessary Declaration from each Independent Director under Section 149(7) of the Act hasbeen received. The Independent Directors have held a separate meeting during the yearunder review.
Performance Evaluation Policy of Directors
The Nomination and Remuneration Committee of the Board of Directors of the Company inits meeting had formulated and recommended to the Board of Directors of the Company'Punjab Alkalies & Chemicals Limited Directors' Performance Evaluation Policy' and theBoard of Directors had adopted the same.
Related Party Transactions
During the year under review the Company has not entered into any arrangement orcontract or transactions with related parties except the remuneration paid to the KeyManagerial Personnel.
The appointment of M/s. S. Tandon & Associates Chartered Accountants and M/s. A.K.Sood & Associates Chartered Accountants as Auditors of the Company from theconclusion of the ensuing Annual General Meeting until the conclusion of 42nd AnnualGeneral Meeting to be held in the year 2017 is subject to ratification by the Members. TheAuditors being eligible have indicated their willingness to the same.
The Board has subject to the approval of the Shareholders appointed M/s. J.K. Kabra& Co. Cost Accountants as Cost Auditors of the Company for conducting an audit of thecost accounting records of the Company in respect of the financial year 2016-17.
M/s. A. Arora & Co. Practising Company Secretaries were appointed as SecretarialAuditors of the Company for the financial year 2015-16. Their Secretarial Audit Report ofthe Company for the financial year ended 31st March 2016 is annexed as Annexure-IV tothis Report. The Report does not contain any qualification. M/s. A. Arora & Co.Practising Company Secretaries were reappointed as Secretarial Auditors of the Company forthe financial year 2016-17.
Extract of Annual Return
Pursuant to Section 134 (3)(a) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 Extract of Annual Return in FormMGT-9 is annexed as Annexure-V to this Report.
The Directors wish to thank the Central and State Governments Financial InstitutionsPunjab State Industrial Development Corporation Limited Punjab State Power CorporationLimited Company's Bankers and Business Constituents for their continued cooperation andsupport to the Company.
The Directors also wish to express their appreciation of the valuable services renderedby the employees of the Company at all levels.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place : Chandigarh ||(ANIRUDH TEWARI) |
|Date : August 12 2016 ||Chairman |