Ennore Coke Ltd.
|BSE: 512369||Sector: Others|
|NSE: N.A.||ISIN Code: INE755H01016|
|BSE 00:00 | 10 May||Ennore Coke Ltd|
|NSE 05:30 | 01 Jan||Ennore Coke Ltd|
|BSE: 512369||Sector: Others|
|NSE: N.A.||ISIN Code: INE755H01016|
|BSE 00:00 | 10 May||Ennore Coke Ltd|
|NSE 05:30 | 01 Jan||Ennore Coke Ltd|
Dear Share holders
The Directors take pleasure in presenting the Thirty First Annual Report together withthe audited financial statements for the year ended March 31 2016.
The performance of the Company for the year ended 31st March 2016 is summarized below:
Revenue from operations and other income for the year under review was reduced to Rs.8152.79 lacs as compared to the previous year Rs. 39272.70 lacs due to non-operations ofthe factory from July 2015 till the end of the financial year and the loss before tax wasRs. (7312.24) lacs and for previous year Rs. (5434.05) lacs. The Board at its meetingheld on 20th May 2016 approved the Company to refer and file an application with theBoard for Industrial and Financial Reconstruction (BIFR) due to negative net worth as atMarch 31 2016.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed review of the operations performance and outlook of the company and itsbusiness is given in the Management Discussion and Analysis Report which forms a part ofthis report.
Your Company's Equity Shares are available in dematerialized form through NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Ltd. (CDSL).As at 31st March 2016 99.91% of the Equity Shares of the Company were held in demat form.
Your Directors have not recommended dividend in view of the losses incurred by thecompany during the year.
The Company has not accepted any deposits either from the shareholders or public withinthe meaning of The Companies (Acceptance of Deposits) Rules 2014.
DISCLOSURES UNDER THE COMPANIES ACT 2013 i) Extract of Annual Return:-
The extract of the Annual Return in the form MGT - 9 as required under Section 92 (3)and 134 (3) of the Act is attached to this Report as Annexure - A. ii) Number of BoardMeetings
The Board of Directors met 6 (Six) times in the year 2015-16. The details of the boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport. iii) Change in Share Capital
During the year under review there is no change in the Share Capital of the Company. iv)Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Mr. K.U. Sivadas asthe Chairman and Ms. J Kotteswari and Mr. Aravind Subramaniam as the members. More detailson the committee are given in the Corporate Governance Report. v) Related PartTransactions
All the related party transactions are entered on arm's length basis and are incompliance with the applicable provisions of the Act and the SEBI LODR. There are nomaterially significant Related Party transactions made by the Company with PromotersDirectors or Key Management Personnel etc. which may have potential conflict with theinterest of the company at large All Related Party Transactions are presented to the AuditCommittee and the Board. A statement of all related party transactions is presented beforethe Audit Committee specifying the nature value and terms and conditions of thetransactions. The Related Party Transactions Policy as approved by the Board is uploadedon the Company's website at the Web Link: http://www.ennorecoke.com/ investors/Policy onRelated Party transactions.
Disclosure of particulars of contracts/arrangements entered into by the company withrelated parties referred to in sub-section (1) of section 188 is enclosed as Annexure - Bin Form AOC-2.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2016 AND MAY 20 2016 (DATE OF THE REPORT)
There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year (March 31 2016) and the date of the Report(May 20 2016).
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in AnnexureC and is attached to this report.
INTERNAL CONTROL SYSTEM
The Company has in place an adequate system of internal controls commensurate with itssize requirements and the nature of operations. These systems are designed keeping inview the nature of activities carried out at each location and the various businessoperations. The company has documented a robust and comprehensive internal control systemfor all the major processes to ensure reliability of financial reporting timely feedbackon achievement of operational and strategic goals compliance with policies procedureslaws and regulations safeguarding of assets and economical and efficient use ofresources. The formalised systems of control facilitate effective compliance as per SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Company also haswell documented Standard Operating Procedures (SOPs) for various processes which isperiodically reviewed for changes warranted due to business needs. The Internal Auditormonitors and evaluates the efficacy and adequacy of internal controls system in theCompany its compliance with operating systems accounting procedures and policies at alllocations of the Company and its subsidiaries. Based on the report of internal auditprocess owners undertake corrective action in their respective areas and therebystrengthen the controls. During the year the Audit Committee met regularly to reviewreports submitted by the Internal Audit. All significant audit observations and follow-upactions thereon were reported to the Audit Committee. The Audit Committee also met theCompany's Statutory Auditors to ascertain their views on the financial statementsincluding the financial reporting system compliance to accounting policies andprocedures the adequacy and effectiveness of the internal controls and systems followedby the Company.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies(Meeting of Board and its Powers) Rule 2014 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors had approved the Policy on VigilMechanism/Whistle Blower and the same was hosted on the website of the Company. The Policyinter-alia provides Whistle Blower a direct access to the Chairman of the AuditCommittee.
Your Company hereby affirms that no Director/employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy as approved by the Board is uploaded on the Company's websiteat the Web Link: http://www.ennorecoke.com / Investors / Corporate Governance / WhistleBlower Policy.
CORPORATE SOCIAL RESPONSIBILITY (CSR) :
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company have constituted a CSR Committee. The Committee comprises of allIndependent Directors. Since the average net profits of the company made during the threeimmediately preceding financial years was negative the Company was not required to spendany money on CSR activities during the previous year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. R Ramakrishnan has resigned from the Board with effect from 12.02.2016. The Boardplaced on records its appreciation for the valuable services rendered by Mr. RRamakrishnan.
There were no appointments made during the financial year 2015-16
3. RETIREMENT BY ROATION
In accordance with the provisions of Section 152(6) and Article 121 of the Articles ofAssociation of the Company
Ms. J Kotteswari (DIN No.02155868) will retire by rotation at the ensuing AnnualGeneral Meeting of the company and being eligible offer herself for re-appointment. TheBoard recommends her re-appointment.
4. APPOINTMENT OF INDEPENDENT DIRECTORS
There were no appointment of Independent Directors during the Financial Year 2015-16.
5. KEY MANAGERIAL PERSON
During the year under review the Board appointed Ms. M Kirithika - Company Secretaryas the Whole-time Key Managerial Personnel of the Company under Section 203 of theCompanies Act 2013.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the performance evaluation of the Board was carried outduring the year under review. More details on the same is given in the CorporateGovernance Report.
The Remuneration Policy of the Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining qualifications positive attributes independence of a directorand other related matters has been provided in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013.
(i) in the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any ;
(ii) the Directors had 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 as at 31st March 2016 and Profit and Lossand cash flow of the Company for the year ended on that date;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities ; and
(iv) the Directors have prepared the annual accounts of the Company on a goingconcern' basis.
(v) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company is committed to provide equal opportunities at all levels safe and healthyworkplaces and protecting human health and environment. The Company provides opportunitiesto all its employees to improve their skills and capabilities. Your Company is an equalopportunity employer and does not discriminate on the grounds of race religionnationality ethnic origin color gender age citizenship sexual orientation maritalstatus or any disability not affecting the functional requirements of the position held.The Company has also framed a policy on "Prevention of Sexual Harassment atworkplace. There were no cases reported during the financial year under review under thesaid policy
a) STATUTORY AUDITORS
M/s. Sreedhar Suresh & Rajagopalan (Registration No. 003957S have beenStatutory Auditors of the Company for 5 years. Considering the requirement of rotation ofauditors as per the provisions of the Companies Act 2013 the statutory auditorshave expressed their inability to continue as a Statutory Auditors and have accordinglyinformed their decision tostep down. In their place Board has appointed M/s. K.Rajagopal & Associates Chartered Accountants Chennai as the StatutoryAuditor for a period of 5 years from who shall hold office from the conclusion of this31stAnnual General Meeting for term of five consecutive years till conclusion of the36thAnnual General Meeting (subject to ratification of the appointment by the members atevery Annual General Meeting held after this Annual General Meeting.
Members' attention is invited to the observation made by the Auditors under"Emphasis of Matter" appearing in the Auditors Reports.
b) INTERNAL AUDIT
Internal Audit of the company is handled by M/s. Raveendran & Associates CharteredAccountants Chennai for evaluating the adequacy of internal controls and concurrentlyreviews majority of the transactions in value terms.
Independence of the firm and compliance is ensured by the direct reporting of the firmto the Audit Committee of the Board.
c) SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. B. Chandra Company Secretary in Practice to undertake the Secretarial Auditof the Company. The Report of the Secretarial Audit Report is annexed herewith as"AnnexureD"
Corporate Governance is based on some fundamental and basic principles such asconducting the business with integrity and fairness ensuring transparency in all thetransactions making all relevant disclosures as per the various Regulations in force andcomplying with all the laws of the land ensuring accountability and responsibility in alldealings with the various stakeholders and commitment for conducting the business in anethical and transparent manner.
Your Company is committed to achieving and maintaining these high standards ofCorporate Governance and places high emphasis on business ethics. The Report on CorporateGovernance as stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms part of the Annual Report.
The Company has laid down a well- defined Code of Conduct which fairly addresses theissues of integrity conflict of interest and confidentiality and stresses the need ofethical conduct which is the basis of good governance. This Code of Conduct is applicableto all the members of the Board and the Senior Management Personnel. The declarationregarding compliance with Ennore Coke Limited Code of Conduct and Ethics for all BoardMembers and Senior Management Personnel of the Company forms part of the Report onCorporate Governance.
The Company is complying with all the norms laid down by the Regulatory Authorities inall its functional areas. The Company Secretary is also the Compliance Officer under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 entered into with theStock Exchanges to comply with various guidelines of Securities and Exchange Board ofIndia and Stock Exchanges.
The Company is promptly submitting a "Quarterly Compliance Report on CorporateGovernance" as per SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 with the Stock Exchanges. As part of the good Corporate Governance the Companyensures that all Investor Grievances are attended to and resolved in a timely manner asper the records maintained by our Registrar and Transfer Agent.
The certificate from the Statutory Auditors M/s Sreedhar Suresh & Rajagopalanconfirming compliance with the conditions of Corporate Governance as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is reproduced in aseparate section elsewhere in the Annual Report.
In compliance with the SEBI (Prohibition of Insider Trading) Regulations 1992 asamended your Company has instituted a comprehensive Code titled as "Ennore CokeLimited - Code of Conduct" which lays down guidelines and advises the Directorsand Employees of the Company on procedures to be followed and disclosures to be made whiledealing in securities of the Company.
PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of remuneration in excess of thelimits prescribed under the 2013 Act and the rules framed thereunder. The informationrequired pursuant to Section 197 of the 2013 Act read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company. Details pursuant to the provisions of Section 197(12) of the CompaniesAct 2013 is annexed herewith as "Annexure E".
AUDIT REPORT AND EXPLANATION UNDER SECTION 217 (3) OF THE COMPANIES ACT 1956
The Auditors' Report is self-explanatory and does not require any further commentsexcept that:
Point (a) of "Emphasis of Matter" in Auditors' Report :
The going concern concept is still valid as the Company is confident thatrehabilitation/restructuring proposal for continuing the operations of the Company willfructify.
Point (b) of "Emphasis of Matter" in Auditors' Report :
The amounts stated in the Balance Sheet are fully realisable / payable
Point (c) of "Emphasis of Matter" in Auditors' Report :
The transaction is based on mutual agreement between the parties concerned and balanceconfirmation from the respective parties is also available.
Point (d) of "Emphasis of Matter" in Auditors' Report :
There is a fair chance of succeeding in the appeal and the amount is fully recoverableand hence no provision is required to be made.
Point (e) of "Emphasis of Matter" in Auditors' Report :
Regarding amount of Rs.10 36 84 384/- written back in respect of dues to a creditorwithout confirmation from the party in the opinion of the management the amount is notpayable. '
Point (f) of "Emphasis of Matter" in Auditors' Report :
Regarding adjustment of Input Credit Excise duty of Rs. 3 88 99 944/- the managementis confident of the full recovery/adjustment in the ensuing years.
Point (g) of "Emphasis of Matter" in Auditors' Report :
The management is of the view that the amount is fully recoverable.
Point (h) of "Emphasis of Matter" in Auditors' Report :
The management is of the view that the amount is fully recoverable.
Point (i) (c) of the Annexure to the Auditors' Report:
The Company has filed an application for title change subsequent to the amalgamationwith HDA (Haldia Development Authority) which is still pending approval .
Point (iii) (a) of the Annexure to the Auditors' Report :
The Company does not pay any interest on loans received from the related parties andthe same policy is adopted for loans given to the related parties .
Point (vi) of the Annexure to the Auditors' Report:
The company has since appointed Cost Auditor for the financial year 2014-15.The Companyhas initiated the process of maintenance of the cost records prescribed.
Point (vii) (a) and (b) of the Annexure to the Auditors' Report:
The Company is in the process of regularising all statutory remittances to theconcerned departments.
Point (viii) of the Annexure to the Auditors' Report :
The company had submitted a restructuring proposal to the banks and discussions areunderway for approval of the same by banks. As on date the approval is pending.
Your Directors wish to express their appreciation for the assistance support andcooperation extended by the Banks Financial Institutions Government AuthoritiesCustomers Suppliers and all Members during the year under review. Your Directors alsowish to place on record their appreciation for the committed services by all employees ofthe Company.
ANNEXURE - B TO THE DIRECTORS REPORT
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies(Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto1. Details of contracts or arrangements or transactions not at arm's length basis : Nil 2.Details of material contracts or arrangement or transactions at arm's length basis :
ANNEXURE - C TO THE DIRECTORS REPORT
ANNEXURE TO THE DIRECTORS' REPORT
Information pursuant to Section 134 (3) (m) of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 in respect of conservation of energy technologyabsorption foreign exchange earnings and outgo.
A. CONSERVATION OF ENERGY
The Company has implemented non recovery coke oven facility of capacity 130000 MT perannum and is in the verge of integrating it with 12 MW waste heat power generationfacility at Haldia. The coke making facility through non recovery coke oven technology andgeneration of electricity using the waste heat from waste gases of the coke ovens wouldcontribute towards reduction of emissions of clean gases to atmosphere when compared withby product recovery type coke making facility and production of the same power through abase technology of conventional coal based thermal power plant.
1. The coke making process when integrated with co generation power plant facilityqualifies as a Clean Development Mechanism under KYOTO PROTOCOL of United Nationsframework.
2. Energy saving through installation of Energy Saving motor.
3. By replacing existing street lights by Light Emitting Diod (LED) types.
B. TECHNOLOGY ABSORPTION
1. Specific areas in which R& D is carried out by the Company :
The Company has not carried out any specific R&D activities.
2. Benefits derived as a result of the above R&D
The Company has not carried out any R&D activities and hence the question ofreceiving benefits does not arise.
3. Future Plan of Action :
Under process of implementation
4. Expenditure on R & D : Nil
5. FOREIGN EXCHANGE EARNINGS AND OUTGO
ANNEXURE - E TO THE DIRECTORS REPORT
DETAILS PURSUANT TO THE PROVISIONS OF SECTION 197(12) OF THE COMPANIES ACT 2013 READWITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014