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Arcotech Ltd.

BSE: 532914 Sector: Metals & Mining
NSE: ARCOTECH ISIN Code: INE574I01035
BSE 00:00 | 30 Aug Arcotech Ltd
NSE 05:30 | 01 Jan Arcotech Ltd
OPEN 2.34
PREVIOUS CLOSE 2.34
VOLUME 59268
52-Week high 2.34
52-Week low 1.17
P/E
Mkt Cap.(Rs cr) 25
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2.34
CLOSE 2.34
VOLUME 59268
52-Week high 2.34
52-Week low 1.17
P/E
Mkt Cap.(Rs cr) 25
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Arcotech Ltd. (ARCOTECH) - Director Report

Company director report

Dear Members

Your Directors have immense pleasure in presenting the 33rd Annual Report on thebusiness and operations of the Company together with Audited Statement of Accounts of yourCompany for the financial year ended the 31st March 2014.

1. FINANCIAL HIGHLIGHTS

(Rs. in Crores)

PARTICULARS 2013-2014 2012-2013
Sales 702.45 412.36
Profit Before Interest Depreciation & Tax (PBIDT) 86.18 48.90
Less : Interest & Finance Charges 31.63 15.39
Profit Before Depreciation & Tax (PBDT) 54.55 33.51
Less : Depreciation 3.87 2.79
Profit Before Tax (PBT) 50.68 30.72
Less : Provision for Current Tax /Deferred Tax 17.58 7.81
Profit After Tax (PAT) 33.10 22.91

Key Financial Indicators

PARTICULARS 2013-2014 2012-2013
OPBDITA/ OI 14.6% 14.0%
ROCE 29.1% 24.9%
RONW 27.5% 25.2%

2. DIVIDEND

Your Directors have recommended dividend of Re. 1/- per share on equity shares at theface value of Rs. 10/- each for the financial year ended 31st March 2014

3. BUSINESS AND OPERATIONS REVIEW

Your Company has continued its growth story during fiscal 2014 and achieved 70% growthin turnover crossing Rs 700 crore turnovers during the year. The operating profit grew by69% to Rs 49.39 crores from Rs 29.16 crores during the previous year. The EPS of theCompany also grew from 11.43 to 15.76 while achieving CAGR of more than 47% during lastfive years. During the year under review your company has successfully executed the IndiaGovernment Mint order for Rs. 5/- coin. The Company has also started regular supplies tovarious ordnance factories i.e. Katni Khirki Warangaon & Ambernath etc.

To further widen the product range as well as value addition the company is looking tomanufacture plated material as well as coin blanks & bullet cups. This will be a steptowards forward integration and therefore improve margins.

Shareholders will be glad to note that your Company is contemplating to setup a greenfield project in the state of Gujarat India to manufacture Aluminum semis. This will bean integrated facility and will prove to be a synergy to our Copper unit. Your Company isin advanced stage of discussion with all the stakeholder involved for setting up thisplant. Aluminum demand has been growing at 10% CAGR since last 5 years and is expected togrow at 15-17% for the next five years. Since Arcotech has strong team with knowledge ofmelting & casting of non ferrous metals and enjoys established credibility in copperand copper based alloy material market with strong customer as well as supply chainrelationship the setting up of Aluminum plant would be complemented by existing businessactivity of the company.

4. DIRECTORS

In pursuance with the provisions of Companies Act 1956 Shri Rameshwar Dayal Tayal whoretires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment as director not liable to retire by rotation . In terms ofClause 49 of the Listing Agreement with the Stock Exchange(s) the details of the Directorto be re-appointed are being provided in the notice of the 33rd Annual General Meeting.

During the year Shri Maninder Kohli Non Executive-Non Independent director ShriSuresh Thakur Independent director and Ms Sonia Dube Independent Women director havejoined the board of the Company. In terms of Clause 49 of the Listing Agreement with theStock Exchange(s) the details of these Directors have provided in the notice of the 33rdAnnual General Meeting.

During the year under review Shri. Gautam Khaitan Independent Director of the companyresigned from the Board and Audit Committee & Remuneration Committee of the Companywith effect from 22.11.2013. The Board placed on record its appreciation for theinvaluable contribution made by him during his tenure and association with the company.

5. DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES ACT1956

The Board of Directors hereby confirms in terms of Section 217(2AA) of the CompaniesAct 1956:

a) That in the preparation of the Annual Accounts the applicable Accounting Standardshave been followed along with proper explanation relating to material departures if any;

b) That appropriate accounting policies have been selected and applied consistentlyand judgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit or loss of the Company for that period.

c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

d) That the Annual Accounts have been prepared on a going concern basis.

6. FIXED DEPOSITS

During the Year under review your Company has not accepted any fresh deposit withinthe meaning of Section 58A and 58B of the Companies Act 1956

7. AUDITORS' REPORT AND AUDITORS

M/s. Shwetank Joshi & Associates Chartered Accountants 66 Ezra StreetKolkata-700001 Statutory Auditors of the Company hold office till the conclusion of the33rd Annual General meeting and are eligible for re-appointment.

The Company has received Peer Review Certificate along with the Certificate from theauditors to the effect that their re-appointment if made would be within the limitprescribed under Section 141(3)(g) of the Companies Act 2013 and they are notdisqualified for re-appointment . The Board of your Company recommends theirre-appointment to hold office till the conclusion of the next Annual General Meeting (AGM)of the Company.

The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.

8. LISTING OF SHARES

As shareholders are already aware Company's shares are listed at Bombay Stock Exchange(BSE). Now the equity shares of the company are also listed on the National StockExchange of the India Limited (NSE) with effect from April 16 2014 vide their letterdated April 11 2014 bearing Ref No.: NSE/LIST/236029-W.

9. STATUTORY STATEMENTS

A. Conservation of energy and technology absorption

The information relating to Conservation of Energy and Technology Absorption asrequired to be disclosed under Section 217(1)(e) of the Companies Act 1956 read withRule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules 1988 is annexed herewith as Annexure - 'A'.

B. Foreign Exchange Earnings and outgo

During the year under review your Company has dealt with foreign exchange earning andoutgo pursuant to section 217(1)(e) of the Companies Act 1956 read with Rule 2(c) of theCompanies (Disclosure of Particulars in Report of Board of Directors) Rules 1988 isannexed herewith in 'Form-B'.

C. Particulars of Employees

Information in accordance with the provisions of Section 217(2A) of the Companies Act1956 read with the Companies Particulars of Employees Rules 1975 as amended regardingemployees is given in the Annexure to the Directors' Report.

10. CORPORATE GOVERNANCE

A report on Corporate Governance together with a certificate from the practicingcompany secretary as per Clause 49 of the Listing Agreement is given separately in theAnnexure-B which forms part of this Report.

11. CORPORATE SOCIAL RESPONSIBILITY

The Board of Directors has constituted a committee under Section-135 of the CompaniesAct 2013 to be named as Corporate Social Responsibility Committee (CSR) to undertake theCSR activities as per the Schedule VII of the Companies Act 2013. The terms of referenceof the CSR Committee are as per the provisions of the Companies Act 2013. Shri ArvindKumar Saraf shall act as chairman of the committee.

The composition of CSR Committee is as Follows:-

NAME OF THE DIRECTOR CATEGORY
Shri Arvind Kumar Saraf Non Independent Non Executive
Shri Radha Nath Pattanayak Executive
Shri Rameshwar Dayal Tayal Independent

Your Company always endeavors towards woman empowerment their safety and respect inthe society. Your Company has a policy to evolve strategies of education and empowermentof women so as to enable them to participate as equal citizens in the society.

As a responsible corporate citizen your Company has a work environment policy coveringhealth safety and workplace environment. Arcotech subscribes to protecting theenvironment and to minimizing impact of its manufacturing process on the environment byproper installation of chimneys in the factory. Your Company has adopted a value-basedapproach to corporate sustainability management by incorporating environmental and socialaspects.

Your Company assures all stakeholders that it will continue to comply with its socialresponsibilities in future as well.

12. MANAGEMENT DISCUSSION AND ANALYSIS

(a) Industry Scenario & Future Challenges

Industrial output has shown some sign of recovery and your company is hopeful that withthe improvement in micro as well as macroeconomic indicators rate of interest would see adownward trend and accordingly it is expected that the industrial scenario will improve.

(b) Human Resources / Industrial Relations

Your Company acknowledges the commitment competence and dedication of its employees atall areas of business. The Company is committed to nurturing enhancing and retaining besttalent through investment in its people to upgrade their technical domain and leadershipcapability. To retain leadership position the Company continuously innovates andcustomizes its Human Resource (HR) strategy to meet changing employee need.

(c) Adequacy of Internal Controls

The company has a proper and adequate system of internal controls to ensure that allassets are safeguarded and protected against loss from unauthorized use or disposition andthat all transactions are authorized recorded and reported correctly.

(d) Operating Performance Future Outlook etc.

The foregoing paragraphs under the head - Financial Results Operations and FutureOutlook have discussed and analyzed other requisite issues mentioned in Clause 49 of theListing Agreement.

13. ACKNOWLEDGMENT

Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to remain at the forefront of the Industry. Directorsalso take this opportunity to thank all Investors Clients Vendors Banks Governmentauthorities and Stock Exchange(s) for their continued support.

On behalf of the Board
For Arcotech Limited
Place : New Delhi (Arvind Kumar Saraf)
Date : 12th August 2014 Chairman
.