To the Members
Your Directors have pleasure in presenting the 31st Annual Report of the Companytogether with the Audited Accounts for the year ended 31st March 2018.
Your Company's performance during the year as compared with that during the previousyear is summarized below:
(Rs in lakhs)
|Particulars || |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Gross Turnover (including Other Income) ||88487 ||85038 ||88423 ||84977 |
|Profit/(-) Loss before Finance Cost Depreciation and Tax (EBIDTA) ||6768 ||7104 ||6777 ||7113 |
|Finance Charges ||3342 ||3787 ||3342 ||3787 |
|Depreciation and Amortization ||1977 ||2823 ||1977 ||2823 |
|Profit before exceptional items and tax. ||1449 ||494 ||1458 ||503 |
|Exceptional Items ||- ||2557 ||- ||2557 |
|Share of profit from associate ||94 ||- ||- ||- |
|Profit before tax (PBT) ||1543 ||3154 ||1458 ||3060 |
|Provision for Tax ||540 ||842 ||540 ||841 |
|Deferred Tax ||(154) ||(954) ||(154) ||(953) |
|Profit after tax (PAT) ||1157 ||3266 ||1072 ||3172 |
|Other Comprehensive Income ||46 ||(48) ||46 ||(48) |
|total comprehensive income ||1203 ||3218 ||1118 ||3124 |
|Profit for the year ||1203 ||3218 ||1118 ||3124 |
|Balance of profit brought forward from previous year ||16921 ||13891 ||16615 ||13679 |
|total ||18124 ||17109 ||17733 ||16803 |
|appropriation || || || || |
|Dividend on equity shares ||195 ||195 ||195 ||195 |
|Dividend distribution tax ||40 ||40 ||40 ||40 |
|Balance profit carried forward to balance sheet ||17889 ||16921 ||17498 ||16615 |
Your Board of Directors pleased to recommend a dividend of 12.50 paise per equityshares of Rs 1/- each (i.e.12.50% of the paid up share capital) for the financial yearended 31st March 2018. If the dividend as recommended above is approved by the membersat the Annual General Meeting the total outflow towards dividend on Equity Shares for theyear would be Rs 235.55 lakhs (including dividend distribution tax).
Your Directors are pleased to inform that your Company has received the followingawards during the year 201718:
i) Conferred with INDIA'S BEST COMPANY OF THE YEAR AWARD-2017" byInternational Brand Consulting Corporation (IBC) USA. This award is a distinctiverecognition for a company recognized as "BEST COMPANY" in its industry categorybased on current year market standing innovation leadership governance CSR and othersuch factors.
ii) Srikakulam Technical unit and Ethakota Formulation unit have been awarded with the"Best Management Award" by the Government of Andhra Pradesh for ManagementPractices for yet another year 2017.
They were handed over by the Hon'ble Chief Minister of Andhra Pradesh. These awardswere received for the second time for each of the units in last four years. iii)Srikakulam Plant received the prestigious "Suraksha Puraskar" Award by theNational Safety Council of India for the year 2017 in Group-B category for its best SafetyPractices by Hon'ble Minister of the State Labour and Employment Government of India. TheCompany was given the top ranking among various Indian crop protection productsmanufacturing Companies." The Company achieved a consolidated revenues of Rs 88487lakhs during the year under review as against Rs 85038 lakhs achieved in the previousyear. The Company's profit before exceptional item and tax is Rs 1449 lakhs during theyear under review against Rs 494 lakhs during the previous year.The growth in revenue hasbeen mainly attributable to growth in the Exports by 16% and in domestic formulations by11%. The revenue for financial year 2016-17 are inclusive of Excise Duty (ED) whereas inthe financial year 2017-18 ED is included upto 30th June 2017 as GST has been implementedeffective 01st July 2017. The revenue as per the Accounting Standards for the remainigperiod of nine months of the financial year under rview do not include GST.
During the year under review the Company has adopted the Accounting Standards as perthe IndAS. Accordingly the figures are strictly not comparable.
With the overall satisfactory performance during the year under review the Srikakulamtechnical plant has achieved highest ever annual production of 6023 MT as compared to5302 MT in the previous year recording an increase in production by about 14% overprevious year. The plant could achieve the desired results mainly due to growth in theexport segment and its alignment for the production of various intermediates for captiveconsumption as well as marketing both in export and domestic market. The plant hascontinued to take various initiatives for cost savings and capacity utilization besidesregular efforts of streamlining debottle necking and augmenting plant efficiencies andenhancing productivity. Ethakota formulation unit has been able to satisfactorily meet notonly the domestic formulation market demand but also the demand from the newer andexpanding export market. The unit also achieved highest ever production of 24738 MT/KLduring the year under review comparing to the previous year production of 21333 MT/KLregistering a growth of about 16%. The higher production was mainly due to increase indemand of Granules. The unit has been in continuous growth mode being capable of handlingany market demand both in terms of flexibility in product mix and demand in highervolumes. The continued focus on areas of improving enhancing capacities increasedproductivity de-bottlenecking quality control and better supply chain initiatives areyielding results. An amicable working environment in both units has enabled maintainingcordial relationship with workers Unions and other Stakeholders.
The southwest monsoon in 2017 was below normal for India with the countrywide rainfallstanding at 95 percent of the long period average (LPA). Although the same is termed asnormal rainfall keeping in view the long period average (LPA) rainfall that Indiareceived it was not evenly distributed. In the overall comfortable situation whereasexcess monsoon rains were recorded by the states of Andhra Pradesh Gujarat WestRajasthan and NMMT (Nagaland Manipur deficiencies Mizoram and Tripura) there werepockets of with Punjab Haryana Uttar Pradesh and Vidarbha getting less than their usualshare of rains. Adding to it although the northeast monsoon has ended with overall normalfor various parts of south east regions of India with a good rainfall for Tamil Nadu& Puducherry it was not without hiccups. After initial spell of good rains itwitnessed weeks of prolonged dry spells in various pockets of those regions. Despite thevery competitive market conditions your Company achieved domestic sales of Rs 52249lakhs for the year under review (as against Rs 47031 lakhs in the previous year) a netincrease of approximately 11% over the previous year. This growth is mainly attributableto aggressive positioning focus on sale of priority products addition of new productsand improved flexibility of Ethakota formulation plant. Given the favorable monsoonpredicted for the year 2018 the prospects for the domestic market looks promising inquarters ahead.
The normalization of agrochemical inventories in the distribution channels has helpedin resuming the agrochemical business in certain markets. With the inventory situation inBrazil easing out your company's technical business to Brazil has contributed positivelyto the exports sales. Enforcement of increasingly stricter environment norms in China hasprovided trading opportunities to supply Technicals to new customers in Australia NewZealand and Vietnam. Contract manufacturing business was affected due to lack of campaignsof certain products and low off take of one formulation to China due to bleak demand.Delay in the renewal of registrations political situation in Yemen price pressure andinventory levels at distributor level continued to impact the formulation business.However with market and product development activities and branding the outlook for thisbusiness segment looks positive in the coming years. Your company continued its efforts toregister its brands in South East Asia and Africa and got three registrations in Ethiopia.
In spite of inconsistency in the global agrochemical market the performance of Exportsfunction has increased by nearly 16% when compared to that of the last year. The saleswere Rs 12741 lakhs in the year under review as compared to Rs 10989 lakhs in theprevious year. This was possible due to the business development activities that have beeninitiated post fiscal 2013 and your company's continued attempt in maintaining strongrelation with the Contract Manufacturing Customers.
During the year under review the Credit Analysis and Research Limited (CARE) hasupgraded the rating for Long Term and Short Term Bank facilities of the Company asfollows: a) Long-term Bank facilities: CARE A- Stable (Single A minus;Outlook: Stable) from CARE BBB+ positive (Triple B plus: outlook positive) and b)Short-term Bank facilities: CARE A2 (A two) from CARE A3+ (A three Plus)'.
change of Name:
Consequent to the approval of the Shareholders of the Company in the last AnnualGeneral Meeting held on 05th August 2017 the Company has changed its name fromNagarjuna Agrichem Limited' to NACL Industries Limited' vide the ofIncorporation pursuant to change of name' dated 04th September 2017 issued by theRegistrar of Companies Hyderabad for Andhra Pradesh and Telangana Ministry of CorporateAffairs Government of India. However there was no change in the nature of the businessof the Company.
Fire insurance claim:
Further to the Insurance Company's final assessment on account fire accident atSrikakulam Plant on 30th June 2012 and releasing the final payment in the previous yearyour Company has initiated necessary Arbitration process as there were many deductionsmade by the Insurance Company besides not considering claim for Loss of Profit'(LoP) and interest for delayed settlement of claim. Based on the legal opinion andconsultation the Company has filed necessary application under the provisions ofArbitration and Conciliation Act 1996 before the Hon'ble High Court New Delhi in termsof both the policies i.e. Fire Policy & Loss of Profit Policy (LoP) covering thedifferential claims towards Material Damage & Business Interruption respectively. Onhearing both the applications the Hon'ble High Court of Delhi has passed an orderfavoring Arbitration through a sole Arbitrator who is a retired Supreme Court judge forboth the policies. The arbitration proceedings are progressing satisfactorily.
With a view to focus on cost and innovation the
Company's R&D Centre at Shadnagar near Hyderabad continues to develop costeffective processes for manufacture of Active Ingredients (AIs)/Technical andIntermediates for Herbicides Insecticides and Fungicides. To take advantage of the Makein India manufacturing initiative processes for many generic products are under variousstages of development for manufacturing by your Company. Your Directors are pleased toinform that the R&D Centre has received the Certificate of Accreditation from theNational Accreditation Board for Testing and Calibration of Laboratories (NABL). TheCompany has strengthened its Registration department to cater to the growth opportunitiesin India and other countries. It has initiated the process of applying for registration ofvarious Products in countries in Africa and South East Asia. Your Company presently hasaround 360 registrations in India and 84 for exports.
Your Company continues to maintain high standards in environmental management with itsmanufacturing facilities operating well within stipulated norms due to the efficientrunning of the Zero Liquid Discharge (ZLD) facilities in Srikakulam and Ethakota.Srikakulam manufacturing site has an online effluent and emission monitoring devices thatcontinuously upload the data to Pollution Control Board website. These sites have alsoincreased plantation area within the factory premises. Your Company continues to enjoy thecertifications ISO:9001:2008 ISO:140001 and OHSAS: 18001 accredited for its provenstandards covering in the areas of Quality Environment Safety and Health ManagementSystems respectively.
transfer to reserves
The Company does not propose to transfer any amount to General Reserves for thefinancial year ended 31st March 2018.
a) During the year under review your Company has allotted 164376 fully paid equityshares upon exercise of stock options by the eligible Employees of the Company pursuantto the Nagarjuna Agrichem Ltd. - Employee Stock Option Scheme 2015'(ESOS-2015') of the Company and these shares were duly admitted for trading on thestock exchange(s). Subsequent to the above allotment the paid up capital of your Companystand increased from Rs 156144008/-(comprising of 156144008 fully paid up equityshares of Rs 1/- per equity share) to Rs 156308384/- (comprising of 156308384 fullypaid up equity shares of Rs 1/- per equity share).
b) During the year under review the shareholders vide ther resolution passed in theirExtraordinary General Meeting held on 03rd February 2018 approved the increase ofAuthorised Share Capital of the Company has been increased from Rs 200000000/-(consisting 200000000 Equity shares of Rs 1/- each) to Rs 250000000/- (consisting250000000 Equity shares of Rs 1/-each).
employee Stock option Scheme: Your Company implemented "Nagarjuna AgrichemLtd. Employee Stock Option Scheme 2015" (hereinafter referred to as"ESOS-2015") in accordance with the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 as amended from time to time and asapproved by the members of the Company at their Annual General Meeting held on 28thSeptember 2015. In terms of the said ESOS-2015 the Compensation Committee is authorizedand empowered to administer and implement the Company's Employees Stock Option Scheme(ESOS-2015) including deciding and reviewing the eligibility criteria for grant issuanceof stock options under the Scheme allotment of shares upon exercise of the options etc.with regard to the 1150000 (eleven lakhs fifty thousand only) options reserved under theESOS-2015. During the previous years 2016-17 and 2017-18 930000 (nine lakhs thirtythousand only) and 60000 (sixty thousand only) respectively stock options were grantedto the eligible employees with a vesting period spread over a period of five years. Eachoption would entitle the holders of the Option to apply for one equity share of theCompany. Upon exercise of the vested stock options by eligible employees under theESOS-2015 164376 equity shares were allotted during the year under review. Applicabledisclosures relating to Employees Stock Options as at 31st March 2018 pursuant toRegulation 14 and other applicable Regulations of SEBI (Share Based Employee Benefits)
Regulations 2014 as amended from time to time are set out in the Annexure-I to thisReport and the details are also placed on the website of the Company. There has been nomaterial change in the said Scheme i.e. ESOS-2015 during the year under review.
Material changes and commitments:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
Subsidiary companies and consolidation of Financial Statements:
Pursuant to the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") along withother applicable provisions of the Act and as per Indian Accounting Standards (IND AS 110 "Consolidated Financial Statements") which is applicable to the companyfrom the year under review. The Audited Consolidated Financial Statements for the yearended on 31st March 2018 are provided in this Annual Report. The Company has preparedconsolidated financial statements by incorporating the financial statements of its whollyowned subsidiaries
M/s.LR Research Laboratories Private Limited and M/s. Nagarjuna Agrichem (Australia)Pty Ltd (which are yet to commence their operations) with its financial statements online by line basis. The investments of the Company in M/s. Nasense Labs Private Limitedan Associate Company have been accounted for in these consolidated financial statementsunder the equity method in accordance with IND AS 28"Investments in Associatesand Joint Ventures". The Audited Annual Accounts and related information ofSubsidiaries and Associate as applicable will be made available upon request. TheStatement required under Section 134 of the Act is attached as Annexure - II (FormAOC-1) to this Directors' Report.
No other Company has become/ceased to be subsidiary or joint venture or associateCompany during the financial year. There has been no material change in the nature ofbusiness of the aforesaid Subsidiaries and Associate. The Company has no Subsidiary whichcan be considered as material in terms of the Listing Regulations.
In accordance with the provisions of Section 136(1) of the Companies Act 2013(Act') read with Regulation 46 of the Listing Regulations the following have beenplaced on the website of the Company www.naclind.com: a) Annual Report of the Companycontaining therein its standalone and the consolidated financial statements; and b) Annualaccounts of each of the subsidiary Companies.
internal Financial control Systems and their adequacy:
The Company has in place adequate internal financial controls commensurate with thesize and complexity of its operations. During the year such controls were tested and noreportable material weakness in the design or operations were observed. The Company haspolicies and procedure in place for ensuring proper and efficient conduct of its businessthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information.
The Company has adopted accounting policies which are in line with the IndianAccounting Standards and the Act. These are in accordance with generally acceptedaccounting principles in India. Changes in policies if required are made in consultationwith the Auditors and are approved by the Audit Committee.
The Company's internal audit systems are geared towards ensuring adequate internalcontrols commensurate with the size and needs of the business with the objective ofefficient conduct of operations through adherence to the Company's policies identifyingareas of improvement evaluating the reliability of financial statements ensuringcompliances with applicable laws and regulations and safeguarding of assets fromunauthorized use.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors including audit of the internal financial controls overfinancial reporting by the Statutory
Auditors and the reviews performed by Management and the relevant Board and Committeesincluding the Audit Committee the Board is of the opinion that the Company's internalfinancial controls were adequate and effective during the financial year 2017-18.
indian accounting Standards (IND AS): notification The Ministry of CorporateAffairs vide its dated 16th February 2015 has notified the Companies (Indian AccountingStandards) Rules 2015. The Company has adopted Indian Accounting Standards ("IndAS") from April 01 2017 with transition date of April 01 2016 and accordingly thesefinancial statements have been prepared in accordance with the recognition and measurementprinciples laid down in the Indian Accounting Standard (Ind AS) as prescribed underSection 133 of the Companies Act 2013 read with the relevant rules issued there under andother accounting principles generally accepted in India as applicable.
a) Statutory auditors and audit reports:
M/s. Deloitte Haskins & Sells LLP (Deloitte) Chartered Accountants Secunderabad(Firm Registration No.117366W/W100018) Chartered Accountants were appointed as StatutoryAuditors of the Company at the 30th Annual General Meeting held on 05th August 2017 fora period of 5 years commencing form the conclusion of 30th Annual General Meeting till theconclusion of 35th Annual General Meeting to be held in the year 2022 subject to the ofsuch appointment by shareholders every year.
The Audit Report of Deloitte on the Financial Statements of the Company for theFinancial Year 2017-18 is a part of Annual Report and the report does not contain anyqualification reservation adverse remark or disclaimer.
The audit committee and the board of directors recommend to the shareholder theratification of appointment of M/s.Deloitte Haskins & Sells LLP (Deloitte) CharteredAccountants Secunderabad (Firm Registration No.117366W/W100018) Chartered Accountantsas statutory auditors of the Company from the conclusion of the 31st Annual GeneralMeeting till the conclusion of 32nd Annual General Meeting.
b) internal auditors:
The Board of Directors of the Company have appointed M/s. M.Bhaskara Rao & Co.Chartered Accountants Hyderabad as Internal Auditors to conduct internal audit of theCompany for the financial year ended 31st March 2018 and their reports are reviewed bythe Audit Committee from time to time.
c) cost auditors:
M/s. K. Narasimha Murthy & Co. Cost Accountants Hyderabad have been appointed toconduct cost audits relating to Insecticides (Technical Grade and Formulations) of theCompany for the year ended 31st March 2018. Pursuant to the provisions of Section 148 ofthe Act read with Rules made thereunder ratification members are requested to considerthe of the remuneration payable to M/s. K.Narasimha Murthy & Co. Cost AccountantsHyderabad for the financial year 2018-19. As a matter of record relevant cost auditreport for financial year 2017 were filed with the Central Government within a stipulatedtimeline.
d) Secretarial auditor and Secretarial audit report:
As per the provisions of Section 204 of the Act read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board has appointed Mr. K.V.Chalama Reddy Practicing Company Secretary to carry out secretarial audit in terms of theAct for the financial year 2017-18. The secretarial audit report issued by Mr.K.V.ChalamaReddy in form MR-3 is enclosed to this report as Annexure - III. The Secretarial Auditorhas not expressed any qualification or reservation in his report and the report isself-explanatory.
As on the date of this report Company's Board comprises of 8 (Eight) Directors out ofwhich 2 (two) are Non-Executive Non-Independent Directors (NEDs) including 1 (One) WomanDirector. Further out of the remaining Directors 5 (five) are Non-Executive IndependentDirectors and 1 (one) is an Executive Director.
a) director(s) to retire by rotation:
In accordance with the provisions of Section 152 of the Act and Articles ofAssociation of the Company Mrs.K.Lakshmi Raju Director (DIN: 00545776) of the Companyretires by rotation at the forthcoming Annual General Meeting of the Company and beingeligible offer herself for re-appointment.
b) Key Managerial Personnel (KMP):
In terms of Section 203 of the Companies Act 2013 the following are the Key ManagerialPersonnel of the Company:
i) Mr.V.Vijay Shankar Managing Director
ii) Mr.R.K.S Prasad Chief Financial Officer
iii) Mr.Satish Kumar Subudhi Company Secretary & Head-Legal.
During the year no KMP has been appointed or has retired/resigned.
c) independent directors:
In terms of Sections 149 152 Schedule IV and all other applicable provisions of theCompanies Act 2013 read with Companies (Appointment and Qualification of Directors)Rules 2014 (including any statutory modification(s) or re-enactment thereof for the timebeing in force) the Independent Director can hold office for a term of up to five (5)consecutive years on the Board of Directors of the Company and shall not be liable toretire by rotation.
All the Independent Directors have given declaration that they meet the criteria ofindependence laid down under Section 149(6) of the Act read with Regulation 16(b) ofListing Regulations.
d) evaluation of performance of the Board of directors: Pursuant to the provisionsof the Act and Listing Regulations the Board has carried out the evaluation of its ownperformance and Committees of the Board the performances of Directors individually theExecutive Director the Chairman of the Board etc. Various parameters including theguidance note issued by the Institute of Company Secretaries of India were considered forevaluation and after receiving the inputs from the Directors the performance evaluationexercise was carried out. The parameters include attendance of Directors at Board andCommittee meetings integrity credibility expertise and trustworthiness of DirectorsBoard's monitoring of various compliances laying down and effective implementation ofvarious policies level of engagement and contribution of the Directors safeguarding theinterest of all stakeholders etc. The performance evaluation of the Board as a whole wascarried out by the Independent Directors. The performance evaluation of each IndependentDirector was carried out by the Board. The Directors expressed their satisfaction with theevaluation process.
e) Familiarization Programme for the independent directors: In compliance with therequirement of Listing Regulations the Company has put in place a familiarizationprogramme for the Independent Directors to familiarize them with their role rights andresponsibility as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The same is available on the website of theCompany i.e. www.naclind.com. Through the Familiarization programme the Company apprisesthe Independent Directors about the business model corporate strategy business plans andoperations of the Company. These Directors financial are also informed about theperformance annual budgets internal control system statutory compliances etc. They arealso familiarized with Company's vision core values ethics and corporate governancepractices.
At the time of appointment of Independent Director necessary information includingvarious documents such as the information's about Company Memorandum and Articles ofAssociation Annual Reports for previous 2 years Investor Presentations and recent MediaReleases Brochures Organization policies are provided. Further a formal letter ofappointment has also given explaining fiduciary duties roles responsibility and theaccompanying liabilities that come with the appointment as an independent director of theCompany.
criteria for selection of candidates for appointment as directors Key ManagerialPersonnel and Senior Management Personnel
Your Company has laid down well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and Senior Management Personnel.
criteria for making payment to Non-executive directors of the company.
Your Company has laid down well- criteria for making payment to Non-Executive Directorsof the Company. The details of the same are available at the Company's website atwww.naclind.com.
directors' responsibility Statement:
Pursuant to Section 134(3)(c) and 134(5) of the Act the Board of Directors to thebest of their knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures;
b) it has selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2018 and of the Profit/Loss ofthe Company for the year ended on that date;
c) it has taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) it has prepared the Annual Accounts of the Company on a going concern' basis;
e) it has laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; and
f) it has devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
transfer of un-claimed dividend:
Pursuant to Section 124 and other applicable provisions of the Act as amended from timeto time the following un-claimed dividends were transferred to the Investors Educationand Protection Fund during the year under review:
a) Unclaimed dividend amount of Rs 1068609/- pertaining to the final dividend paidduring the year 2009-10.
b) Unclaimed dividend amount of Rs 630108/- pertaining to the interim dividend paidduring the year 2010-11.
corporate Social responsibility: Corporate Social Responsibility (CSR) has been anintegral part of your Company's culture and it has been associated directly orindirectly for contributing towards society's development. For the year under reviewCompany did a number of CSR activities in and around Srikakulam and Ethakota where theCompany's factories are situated. Such activities includes ongoing drinking water suppliesto villages and maintenance of the Company installed RO plants in the neighboringvillages contribution to Vidhya Volunteer Scheme street lightning and bore-wellmaintenance development of school facilities community centers and bus shelters in thesurrounding villages of the factories providing medical services and vocational coursesconducting various medical camps etc. These projects are largely covered under ScheduleVII of the Companies Act 2013 (Act').
In accordance with the CSR provisions in the Act the Company has formed a CSRCommittee and a CSR Policy is in conformity with the provisions of the Act. The CSR Policycan be accessed on the Company's website at http:// www.naclind.com. The Annual Report ofCSR activities are annexed herewith as Annexure-IV and forming part of this Report.
change in the nature of business:
There is no change in the nature of business of the Company.
Significant and or courts:
During the year the Company has not received any significant and material orders passedfrom Regulators or Courts or Tribunals impacting the going concern status and theCompany's operations in future.
Particulars of Loans Guarantees or investments:
The details of Loans Guarantees and Investments made during the financial year ended31st March 2018 in compliance with the provisions of Section 186 of the Act read with theCompanies (Meetings of the Board and its Powers) Rules 2014 have been disclosed in theFinancial Statements forming part of this Annual Report.
extract of annual return:
The Extracts of the Annual Return in form MGT-9 as per the provisions of Section 92 ofthe Act read with Rule 12 of the Companies (Management and Administration) Rules 2014 isenclosed as Annexure-V to this Directors Report.
Number of Board Meetings:
During the year under review five (5) Board Meetings were held during the year underreview. The details of the same are given in Corporate Governance Report which forms partof this Annual Report. The provisions of Act and the Listing Regulations were adhered towhile considering the time gap between two meetings.
The Audit Committee comprising of Mr.D.Ranga Raju as the Chairman and Mr. SudhakarKudva Mr.K.Raghuraman Mr.Raghavender Mateti as the members. The details about AuditCommittee including the brief description of its terms of reference and number of meetingsheld during the year are mentioned in the Corporate Governance Report.
risk Management Policy:
Pursuant to the provisions of Section 134 and other applicable provisions if any ofthe Act and Listing Regulations the Company constituted the Risk Management Committee andframed Risk Management Policy which inter-alia covers implementation and monitoring ofthe risk management plan for the Company. The Committee is responsible for reviewing therisk management plan and ensuring its effectiveness. The details about Committee includingthe brief description of its terms of reference are given in the Corporate GovernanceReport. Major risks by the businesses and functions are systematically addressed throughmitigating actions on a continuing basis.
Meeting of independent directors:
The details on the separate meeting of the Independent Directors are reported in theReport on Corporate Governance.
Related Party transactions:
Material Orders passed by the Regulators
All the related party transactions are entered into during the financial year were onarm's length basis and in the ordinary course of Company's business and are in compliancewith the applicable provisions of the Act and Regulation 23 of Listing Regulations. TheCompany has not entered into any contract arrangement or transactions with any relatedparty which could be considered as material within the meaning of Regulation 23 of theListing Regulations. Related Party Transactions under Accounting Standard-18 (AS-18) aredisclosed in the notes to the financial statement.
As there are no materially significant related party transactions made by the Companywith Promoters Directors or Key Managerial Personnel's etc. which may have potentialconflict with the interest of the Company at large the disclosure in Form AOC-2 is notapplicable. Necessary disclosures and the statement of all related party transactions ispresented before the Audit Committee and the Board of Directors on a quarterly basisspecifying the nature value and terms and conditions of the transactions. All RelatedParty Transactions are approved by the Audit Committee and omnibus approval is obtainedfor the transactions which are foreseen and repetitive in nature. The transactions enteredinto pursuant to the omnibus approval so granted are reviewed on a quarterly basis by theAudit Committee.
The Related Party Transactions Policy as approved by the Board is uploaded on theCompany's website www.naclind. com. The details of the transactions with Related Partiesare provided in the accompanying financial statements.
Vigil Mechanism/Whistle Blower Policy:
The Company has implemented Whistle Blower Policy to deal with any fraud irregularityor mismanagement in the Company. The policy enables any employee or Director to directlycommunicate to the Chairman of the Audit Committee to report any fraud irregularity ormismanagement in the Company. The policy ensures strict confidentiality while dealing withconcerns and also that no discrimination or victimization is meted out to anywhistleblower. The Whistle Blower Policy as approved by the Board is uploaded on theCompany's website www.naclind.com. During the year under review your Company has notreceived any complaints under the said policy of the Company. It is affirmed that nopersonnel of the Company has been denied access to the Audit Committee.
Nomination and remuneration Policy:
Pursuant to Section 178(3) of the Act the Company has adopted a policy on Nominationand Remuneration of Directors Key Managerial Personnel and Senior Management Personnel.The Nomination and Remuneration Committee (NRC) has formulated the criteria fordetermining qualification positive attributes and independence of Directors in terms ofprovisions of Section 178(3) of the Act and as Listing Regulations. The details aboutCommittee including the brief description of its terms of reference are given in theCorporate Governance Report.
In compliance with Regulation 34 read with Para-C of Schedule V of Listing Regulationsa separate report on Corporate Governance has been included in this Annual Report togetherwith the Auditor's Certificate confirming compliance of the Corporate Governance asstipulated under the said Regulations. All the Board members and the senior managementpersonnel have affirmed compliance with the Company's "Code of Conduct for Board andSenior Management Personnel" for the financial year 2017-18. A certificate signed bythe Managing Director and Chief Financial Officer (CFO) certifying the financialstatements and other matters as required under Regulation 17(8) of the ListingRegulations forms part of this Annual Report.
Management discussion and analysis report:
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 16(b) of the Listing Regulations is presented in a separate sectionforming part of this Annual Report.
Policy on Sexual Harassment:
The Company has zero tolerance for sexual harassment at workplace and has adopted a"Policy on Sexual Harassment of Associates" in accordance with the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and the Rules made thereunder. The Policy aims to provide protection to employees atthe workplace and prevent and redress complaints of sexual harassment and for mattersconnected or incidental thereto and framed the policy with the objective of providing asafe working environment where employees feel secure. There were no cases reported duringthe financial year 2017-18 under the said Policy.
Your Company has taken appropriate actions against counterfeits fakes and other formsof unfair competitions/ trade practices.
Your Company has not accepted any fixed deposits from the public during the year underreview and no such amount on account of principal or interest on public deposits wasoutstanding as on the date of the Balance Sheet.
The industrial relations at the factories and head office continued to be cordial.
All the assets and insurable interests of your Company including inventoriesbuildings plant and machinery enactments are adequately insured.
Particulars of employees and remuneration:
The information required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexureVI to this report.
conservation of energy technology absorption and Foreign exchange earnings and outgo:
Disclosures required under the Section 134(3)(m) of the Act relating to conservation ofenergy technology absorption and foreign exchange outgo and earning in terms of Rule 8of the Companies (Accounts) Rules 2014 are set out in a separate statement attachedhereto as Annexure-VII and forms part of this report.
Your Directors thank the Company's Bankers and the Financial Institutions for theirhelp and co-operation extended throughout the year. Your Directors place on record theirappreciation for the support and co-operation that the Company received from itsStakeholders Customers Agents Suppliers Employees various Government/Non-GovernmentDepartments Associates and Community in the vicinity of the plants. Your Directors alsorecord their appreciation for the excellent operational performance of the staff of theCompany that contributed to the achievements of the Company. The Directors alsoacknowledge with much gratitude the continued trust and confidence reposed by theDealers/Customers of the Company. Your Directors look forward to the future withconfidence.
For and on behalf of the Board
|N.Vijayaraghavan ||V.Vijay Shankar |
|Director ||Managing Director |
|(DIN:02491073) ||(DIN:00015366) |
|Place : Hyderabad || |
|Date : 19th May 2018 || |