1) Your Directors are pleased to present the One Hundred Ninth (109th) AnnualReport together with the Audited Financial Statements (Standalone & Consolidated) forthe year ended 31st March 2017.
2) Financial Results
|Particulars ||For the year ended on 31.3.2017 ||For the year ended on 31.3.2016 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Profit before interest & depreciation ||2461.93 ||1914.38 |
|Less: Interest ||1544.78 ||1318.13 |
|: Depreciation ||541.86 ||504.94 |
|Profit before Tax ||375.29 ||91.31 |
|Less: Provision for Taxation ||207.39 ||32.62 |
|Net Profit for the year ||167.90 ||58.69 |
|Add: Amount of Profit & Loss Account brought forward ||12473.13 ||12547.55 |
|Amount available for Appropriation ||12641.03 ||12606.24 |
|Less: Appropriations: || || |
|Transfer to General Reserve ||- ||- |
|Provision for Proposed Dividend (including tax) ||220.48 ||133.11 |
|Balance of Profit & Loss Account transferred to Balance sheet ||12420.55 ||12473.13 |
3) Review of Operations FSRU
During the year Long Term Terminal User Agreements were signed with Indian OilCorporation (IOC) Bharat Petroleum (BPCL) ONGC and GSPC for 4.5 MMTPA out of the firstphase capacity of 5 MMTPA. Engineering Procurement and Construction (EPC) Contractsfor the Port Terminal was finalized and issued during August 2016. After obtainingpermission from Gujarat Maritime Board in Dec. 2016 the Site construction activities havestarted. The EPC contractor has completed a major portion of the Dredging work and onsiteworks are on full swing. Letter of Intent has been issued to the EPC Contractor for theTopside during May 2017.
Seeing the Progress of the Project we are glad to inform that Gujarat Government hasagreed to increase their Equity in the Project to 26% from 11%. The incremental 15% Equityis being taken by Gujarat Maritime Board.
Ongoing discussions with the Foreign Partner in the Project has culminated in signingof Term Sheets in April 2017 with them for Equity as well as Technical Collaboration. FullTechnical details of the FSRU has also been finalized and discussions with the Shipyardfor signing the Ship Building Contract is on after issue of Letter of Intent.
The Kurla project (Commercial Complex) involved construction of 4 towers of which 3towers have been handed over to the buyer i.e. Equinox. For the 4th tower with an areaof around 447370 sq. ft. the company is in the process of handing over the same onreceipt of Occupation Certificate (OC). One of the 100% subsidiary company CardinalEnergy & Infrastructure Pvt Ltd (CEIPL) have two completed commercial properties oneat Whitefield Bangalore and second at Gachibowli Hyderabad. Both the properties havebeen leased out to multinational companies.
CEIPL has entered into a Joint Development Agreement (JDA) to develop a land for a HighEnd Residential Apartment Complex at Bangalore housing 126 Luxury 3 BHK & 4BHKApartments. The total constructed area in the project will be around 500000 sqft with apotential top line sale of Rs. 300 cr. Excavation work has already started and the projectis due to be completed in the last quarter of 2020.
During the current financial year the Process House of the Company at Ahmedabad hasposted profit before tax of Rs. 1107.87 lakhs (Previous year Rs. 1045.64 lakhs).
On standalone basis revenue from operations for the financial year 2016-17 was Rs.33076.19 lakhs as compared to Rs. 31725.84 lakhs in the previous year. Earning beforeinterest tax depreciation and amortization (EBITDA) for the year was Rs. 2461.93 lakhsas compared to Rs. 1914.38 lakhs in the previous year. Profit after Tax (PAT) for the yearwas Rs. 167.90 lakhs as compared to Rs. 58.69 lakhs in the previous year. On consolidationbasis revenue from operations for the financial year 2016-17 was Rs. 34863.86 lakhs ascompared to Rs. 33174.41 lakhs in the previous year. Earning before interest taxdepreciation and amortization (EBITDA) for the year was Rs. 4421.60 lakhs as compared toRs. 3526.13 lakhs in the previous year. Profit after Tax (PAT) for the year was Rs. 44.96lakhs as compared to Rs. (18.52) lakhs in the previous year.
4) Material changes and commitments:
During the month of April 2017 the company has issued 23077000 equity shares offace value of Rs. 1/- each to M/s 2i Capital PCC a foreign company at a price of Rs.195/- each on a preferential basis. Post issue equity share capital of the company is244257000 equity shares of face value of Rs. 1/- totaling to Rs. 2442.57 lakhs.
5) Dividend & Reserve
Your company needs to conserve its resources for its various upcoming projectsincluding FSRU Project. Yet as a investor friendly measure your Directors haverecommended payment of dividend @ Rs. 0.075 per Equity Share (7.5%) on 244257000 EquityShares of Rs. 1/- each for the year ended 31st March 2017 subject to approval of themembers. The amount of dividend and the tax thereon will be Rs. 18319275/- and Rs.3729373/- (tax rate being @ 20.36%) respectively.
The company has not transferred any amount to the General Reserve during the year.
6) Fixed Deposits
The Company has not accepted any fixed deposits from public during the year underreview.
Your Company has been regular in meeting its obligation towards payment ofPrincipal/Interest to the Banks and other institutions.
During the year under review the Company has neither issued shares with differentialvoting rights nor has granted stock options/sweat equity. The paid up Equity share capitalas on 31st March 2017 was Rs. 2211.80 lakhs.
8) Statutory Disclosures :
8.1 Management Discussion and Analysis:
As required under Regulation 34(2)(e) of the SEBI (LODR) Regulations 2015 aManagement Discussion and Analysis is annexed to this Report Annexure A.
8.2 Corporate Governance
As required under Regulation 17(7) of the SEBI (LODR) Regulations 2015 a report onthe Corporate Governance' together with a certificate of statutory auditorsconfirming compliance of the conditions of the Corporate Governance is annexed to thisreport Annexure B.
Further in compliance of Regulation 17(5) of the SEBI (LODR) Regulations 2015 yourCompany has adopted a Code of Conduct and Ethics' for its Directors and SeniorExecutives.
8.3 Extract of Annual Return:
An extract of the Annual Return in Form MGT 9 is annexed to this Report -Annexure - C. 8.4 Conservation of energy technology absorption and foreign exchangeearnings and outgo: Information under Section 134 (3) (m) of the Companies Act 2013(the Act') read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed tothis Report - Annexure D.
8.5 Corporate Social Responsibility (CSR) Policy:
The Report on CSR is annexed to this Report - Annexure - E. 8.6 Particulars ofEmployees:
Pursuant to provisions of Section 136 (1) of the Act and as advised the statementcontaining particulars of employees under Section 197 (12) of Act read with Rule 5 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will beavailable for inspection at the registered office of the Company and will be madeavailable to a shareholder on request. 8.7 Number of Board Meetings and composition ofAudit Committee: During the year under review 11 (Eleven) Board Meetings were convenedand held. The required details are given in the Corporate Governance Report forming partof this report.
8.8 Directors Responsibility Statement:
Pursuant to Section 134 (3) (c) of the Act the Directors confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed; (b) appropriate accounting policies have been selected and appliedconsistently. Judgments and estimates that are reasonable and prudent have been made so asto give a true and fair view of the state of affairs of the company as on 31st March 2017and of the profit of the Company for that period; (c) proper and sufficient care has beentaken for the maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) the Annual accounts have been prepared on a goingconcern basis; (e) internal financial controls have been laid down and followed by thecompany and that such controls are adequate and are operating effectively; (f) propersystems have been devised to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.
8.9 Statement on declaration given by independent Directors:
The Independent Directors of the Company have submitted their Declaration ofIndependence as required under the provisions of Section 149(7) of the Act stating thatthey meet the criteria of independence as provided in section 149(6) of the Act.
8.10 Disclosure regarding Company's policies under Companies Act 2013: i- Remunerationand Nomination Policy
The Board of Directors has framed a policy which lays down criteria forselection/appointment and framework in relation to remuneration of Directors KeyManagerial Personnel (KMPs) and Senior Management of the Company. ii- Whistle BlowerPolicy The Company has a Whistle Blower policy to deal with instances of fraud andmismanagement which is posted on the website of the Company. iii- Risk Management PolicyThe Company has a structured Risk Management policy. The Risk Management process isdesigned to safeguard the organization from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are integrated with the management processsuch that they receive the necessary consideration during decision making. 8.11Particulars of loans Guarantees or investments by Company: Details required to bedisclosed pursuant to the provisions of Section 186 of the Act are disclosed in the notesto Financial Statements.
8.12 Related Party Transactions:
All transactions entered with Related Parties for the year under review were on armRs.slength basis and in the ordinary course of business. There are no materially significantrelated party transactions during the year which may have potential conflict with theinterest of the company at large. The details of the transactions with the related partiesare disclosed in the Accounts.
8.13 Subsidiary Company:
A statement in Form AOC 1 pursuant to Section 129(3) of the Act relating tosubsidiary companies is attached to the Accounts. The financial statements andrelated documents of the Subsidiary companies shall be kept open for inspection at theregistered office of the Company.
8.14 Significant and material orders passed by the Regulators or courts:
There were no significant and material orders passed by the Regulators or Courts orTribunals during the year under review which would impact the going concern status of theCompany and its future operations.
At the ensuing Annual General Meeting Mr. Paresh V. Merchant retires by rotation andbeing eligible offers himself for re-appointment. Mr. Vilas A. Gangan resigned as wholetime director of the Company with effect from 1st August 2016. The Board has placed onrecord its sincere appreciation and gratitude for his valuable services in variouscapacities to the company and group as a whole during his long tenure since 1993. TheBoard with deep regret noted the sad demise of Late Nagardas H. Panchal an independentdirector on 5th July 2016 and placed on record its deepest condolence. The Board alsoplaced on record its sincere appreciation and gratitude for his contribution to thecompany since 2004. 8.16 Performance evaluation of the Board: Pursuant to the Section 134of the Act and SEBI (LODR) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of all the Committees of the Board. 8.17 Prevention of SexualHarassment of Women at workplace: The Company has a constituted Committee in compliance ofthe provisions of "Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013'. However no case was reported to the Committee during the yearunder review.
9.1 Statutory Audit
M/s. V. R. Renuka & Co. Chartered Accountants (ICAI Registration No. 108826W) theretiring Auditors have completed the maximum tenure as Statutory Auditors of the Companyand hence are not eligible for re-appointment pursuant to Section 139(2) of the Act.
Pursuant to the recommendation of the Audit Committee the Board recommends to appointM/s N. N. Jambusaria & Co. Chartered Accountants (ICAI Registration No. 104030W) whohave given consent and eligibility certificate to act as a Statutory Auditors of yourCompany for one term of five consecutive years from the conclusion of the ensuing AGMsubject to annual ratification by members at every AGM.
9.2 Cost Audit
Pursuant to the recommendation of the Audit Committee the Board has appointed M/s V.H. Shah Cost Accountants (Registration No. 100257) as the Cost Auditor for the financialyear ended 31st March 2018 at a remuneration of Rs. 55000/- (Rupees Fifty Five thousandonly) plus applicable taxes who have given consent and eligibility certificate to act asa Cost Auditors of your Company. The remuneration payable is required to be ratified atthe ensuing AGM.
9.3 Secretarial Audit
The Board has appointed M/s Jignesh M. Pandya & Co. (CP No. 7318) a practicingCompany Secretary to undertake the Secretarial Audit of the Company for the year ended31st March 2017 and their report is annexed to this Report - Annexure F.
10) Auditors' Report:
Report of the auditors read with the notes to the financial statements isself-explanatory and need no elaboration.
11) Industrial relations:
The relationship with all the concerned continued to remain harmonious and cordialthroughout the year under review.
The Directors place on record their appreciation for support and timely assistance fromFinancial Institutions Banks Government Authorities and above all its Shareholders whohave extended their valuable support to the Company.
The Directors also wish to appreciate sincere and dedicated efforts and services by allthe employees/ staff.
| ||For and on behalf of the Board of Directors |
| ||Navinbhai C. Dave |
|Mumbai 30th May 2017 ||Chairman |
Annexure D' Information pursuant to Section 134 (m) of the Companies Act 2013read with Rule 8 (3) of the Companies (Accounts) Rules 2014:
A) CONSERVATION OF ENERGY
a) Energy conservation measures taken at Process House Ahmedabad:
It has been the Company's endeavour to ensure that it is engaged in continuous processof energy conservation through improved operational and maintenance practices.Accordingly and in line with the company's commitment to conserve natural resources theProcess House at Ahmedabad continued with its endeavour to make more efficient use ofenergy by continuous up-gradation and installation of latest technology machineries andenergy saving equipments.
b) Additional investments and proposals if any being implemented for reduction ofconservation of energy:
The Company is continuously striving and making all possible efforts to reduce energyconsumption in all its energy intensive equipments.
c) Impact of the measure (a) & (b) above for reduction of Energy Consumption andconsequent impact on cost of production of goods
The above measures initiated have resulted in energy saving and reduced consumption ofelectricity and fuel oils. Total energy consumption & energy consumption per unit ofproduction are as per Form A' below:
FORM A - PARTICULARS WITH RESPECT TO ENERGY CONSERVATION
|Particulars ||Units ||2016-17 ||2015-16 |
|A. Power and fuel consumption || || || |
|1. Electricity || || || |
|(a) Purchased || || || |
|i) Connected Load ||KWH ||1175 ||1175 |
|ii) Purchase of Units ||Units ||5242720 ||5554730 |
|iii) Total Amount ||Rs. ||38551161 ||42799460 |
|iv) Rate per unit (Average) ||Rs. ||7.35 ||7.71 |
|(b) Own generation || || || |
|i) Through diesel Generator ||KWH ||480 ||2048 |
| ||Rs. ||8769 ||44534 |
|ii) Through steam turbine/generator || ||NIL ||NIL |
|2. Coal/Furnace Oil/Others || ||NIL ||NIL |
|B. Consumption per unit of production || || || |
|1. Processed Fabrics ||Mtrs ||22114119 ||24455843 |
|Electricity/Meter Fabric processed ||Unit ||0.24 ||0.23 |
B) TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT (R&D)
1. Specific areas in which R & D carried out by the Company:
Quality Improvement in Products; Development of new Products and Designs; Cost controlmeasures; Energy Conservation etc.
2. Benefits derived as a result of above R & D: Sustained Quality at economizedcost.
3. Future Plan of Action:
Continuous focus on innovations in processing Textile products & developmenttowards Quality enhancement & reduction in operational cost.
4. Expenditure on R & D : NIL
5. Technology absorption adaptation and innovation:
For consistent production through State of the Art Machinery and Equipments ourmanufacturing facility is equipped with well trained Personnel and high-tech qualitycontrol equipments.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs. In lakhs)
| ||2016-17 ||2015-16 |
|Earnings - Export ||1043.07 ||1722.12 |
|Outgo - Stores & Spares ||38.09 ||9.59 |
|Travelling Expenses ||22.81 ||64.65 |
| ||For and on behalf of the Board of Directors |
| ||Navinbhai C. Dave |
|Mumbai May 30 2017 ||Chairman |