| Dear Members,
The Directors have pleasure in presenting the 51st Annual Report of
the Company and the audited financial statements for the financial year
ended 31st March, 2015.
FINANCIAL SUMMARY
The Company's financial performance for the financial year ended 31st
March, 2015 is summarized below:
(Rs. in Crores)
31st March 2015 31st March 2014
Gross operating Profit 67.99 55.43
(before interest and
depreciation)
Profit on sale of Land 2.03 --
Gross Profit before interest, 70.02 55.43
depreciation & tax
Less: Interest 15.85 17.29
Gross Profit before Depreciation 54.17 38.14
Less : Depreciation 13.29 13.48
Profit before tax and 40.88 24.66
exceptional items
Less : Exceptional Items -- --
Tax Expenses :
Current Tax 13.01 9.00
Earlier Year Tax 0.04 --
Deferred Tax 1.44 (0.44)
Profit after Tax 26.39 16.10
To which is added :
- Balance brought forward from 76.30 67.44
the previous year
Leaving a balance of 102.69 83.54
Which your Directors recommend
to be appropriated as under :
Interim Dividend Paid
- Rs. 0.50 (25%) and Rs. 0.50 5.02 --
(25%) per Equity Share of Rs. 2/- each
- Rs. 2.75 and Rs. 5.50 per 2.48 1.65
Preference Share on 30,00,000 11%
Preference Shares of Rs. 100/- each
(last year Rs. 5.50 per
preference share)
Proposed Dividend
- @ Rs. 0.50 per Equity Share of 2.51 1.51
Rs. 2/- each (Last year Rs. 0.30
per Equity Share)
- @ Rs. 2.75 on 30,00,000 11% 0.83 1.65
Preference Shares of
Rs. 100/- each (last year Rs. 5.50
per preference share)
Tax on Dividend 2.07 0.82
Transfer to General Reserve 2.64 1.61
Carried forward to next year's account 87.14 76.30
RESERVES
The Directors of the Company propose to transfer a sum of Rs. 2.64
Crores to General Reserve out of the profits of the current year.
DIVIDEND
The Directors are pleased to recommend a final dividend @ Rs. 0.50
(25%) per Equity Share on 5,02,76,013 Equity Shares, face value of
Rs.2/- each, amounting to Rs. 2,51,38,006.50 and a dividend of 2.75 per
Preference Share on 30,00,000 11% Cumulative Redeemable Preference
Shares, face value of 100/- each, amounting to 82,50,000/-.
During the year the Company had declared and paid two interim dividends
@ Rs. 0.50 (25%)each per equity share on Rs. 5,02,76,013 equity shares
of Rs. 2/- each, total amounting to Rs. 5,02,76,013/- and Rs. 2.75 and
Rs. 5.50 per preference share on 30,00,000 11% Cumulative Redeemable
Preference Shares of Rs. 100/- each, total amounting to Rs.
2,47,50,000/- for the year ended 31st March, 2015.
The total dividend on Equity Shares works out to 1.50 (75%) on Equity
Shares of Rs. 2/- each and 11/- (100%) on Preference Shares of 100/-
each.
The total outgo on account of dividend including dividend tax of Rs.
2,06,75,075/- will be Rs. 12,90,89,095/-, for the financial year ended
31st March, 2015.
STATE OF THE COMPANY AFFAIRS / CHANGES IN THE NATURE OF BUSINESS, IF
ANY
During the year under review, your Company registered a gross operating
profit (EBIDTA) of 67.99 Crores as against Rs. 55.43 Crores in the
previous year ended 31-03-2014, an increase of about 23% over the
previous year; the profit after tax for the year ended 31-03-2015 is
Rs. 26.39 Crores viz-a-viz Rs. 16.10 Crores in the previous year ended
31-03-2014, an increase of about 64% over the previous year.
The total turnover of the Company remained stagnant at Rs. 460.24
Crores for the year ended 31-03-2015 as against Rs. 462.80 Crores in
the previous financial year ended 31-03ª2014. The Company's strategy to
opt out of the low end products where the product lines were not
contributing to the profitability of the Company or causing operating
loss to the Company, resulted in registering the total turnover of the
Company at the same level in current year 2014-15. The low cost of raw
material, chemical and fuel coupled with lower interest cost, largely
contributed to the improved profitability of the Company.
During the year, there is no change in the nature of business of the
Company.
There is no observation of the Statutory Auditors which requires any
comments from the Board of Directors of the Company.
MATERIAL CHANGES EFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments occurred, affecting the
financial position of the Company, between the end of the financial
year of the Company and the date of this report.
There is no order passed by any regulator or court or tribunal against
the Company, impacting the going concern concept or future operations
of the Company.
JOINT VENTURE
During the year, the Company in collaboration with M/s. MAC Group of
Tanzania has incorporated a Joint Venture Company M/s. EIMAC Mining &
Minerals Limited in Tanªzania on 3rd February, 2015. The main object of
the Joint Venture Company is prospecting of minerals in Tanzania and to
assess the project feasibility to set up manufacturing and mining of
Clay (Kaolin) product. The Company will hold 70% shares and MAC Group
will hold 30% shares in that Company.
DELISTING
The Equity Shares of the Company have been delisted from all the Stock
Exchanges where the shares were listed w.e.f. 4th June, 2014. In terms
of Regulation 21 of the SEBI (Delªisting of Equity Shares) Regulation.
2009, the Company has provided a window period of one year i.e. upto
3rd June, 2015, so that the shareholders who have not tendered their
shares to the Company, or the Share Registrar, can surrender their
shares by 3rd June, 2015. The exit price accepted by the Acquirer is
Rs.48/- per share.
PUBLIC DEPOSITS
The Company has not accepted or renewed any public deposits during the
financial year 2014-15.
On 31st March, 2015 fixed deposits amounting to Rs. 3,01,000/-which
became due for repayment had remained unclaimed by 11 depositors.
COMPOSITION AND NUMBER OF MEETINGS OF THE BOARD
The Board of Directors of the Company comprises of well qualified and
experienced persons having expertise in their respective areas. It has
appropriate combination of Execuªtive and Non-Executive Directors.
The Board meets at least Four times in a year. Annual calenªdar for the
Board meetings for the financial year is fixed at the beginning of each
year. If necessary, the Board meetings are also convened beyond the
four meetings. During the financial year 2014-15 the Directors met four
times i.e., on 2nd May, 2014, 29th July, 2014, 31st October, 2014 and
27th February, 2015.
No Director is related to any other Director on the Board.
A STATEMENT ON DECLARATION GIVEN BY INDEªPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act, 2013 each of the
Independent Directors of the Company has given his declaration in 8th
May, 2015 Board meeting confirming that they meet the criteria of
independence.
Majority of the Board, 5 out of 7, are Independent Directors. All the
Independent Directors of the Company at the time of their first
appointment to the Board and thereafter, at the first meeting of the
board in every financial year, give a dec-laration that they meet with
the criteria of Independence as provided under Section 149(6) of the
Companies Act, 2013.
DIRECTORS/KEY MANAGERIAL PERSONNEL
Ms. Shivpriya Nanda and Mr. Joy Kumar Jain were appointªed by the Board
as the Additional Directors of the Company w.e.f. 27-02-2015 and
08-05-2015 respectively and they will hold office upto the date of
ensuing Annual General Meeting of the Company.
Mr. T. Balakrishnan was appointed as an Independent Director subject to
retirement by rotation, under the Companies Act, 1956 (Now govern with
the Companies Act, 2013) and being longest in the Office, is liable to
retire by rotation.
The Company has received Notices U/s 160(1) of the Companies Act, 2013
proposing the appointments of Ms. Shivpriya Nanda and Mr. T.
Balakrishnan for a term upto the conclusion of the Annual General
meeting of the Company in the calendar year 2018 and proposing the
appointment of Mr. Joy Kumar Jain as a Director of the Company, subject
to retirement by rotation.
Their appointments are submitted for your approval.
Mr. Praveen Sachdev was appointed as an Independent Director of the
Company for a period of one year, till the conclusion of ensuing Annual
General Meeting of the Company. As Mr. Praveen Sachdev has attained the
superannuation age of 70 years, he will cease to be a Director
thereafter. The Directors place on record their appreciation for the
invaluable guidance and support rendered by Mr. Praveen Sachdev during
his association with the Company as a Director.
Mr. Jainendar Kumar Jain, Independent Director of the Company
associated with the Company since 14-04-2009 is liable to retire by
rotation. Mr. Jainendar Kumar Jain would attain his age of
superannuation in October, 2015, he does not seek re-election and
consequently will cease to be the Director of the Company at the
conclusion of the ensuing Annual General Meeting. The Directors place
on record their appreciation for the invaluable guidance and support
rendered by Mr. Jainendar Kumar Jain during his association with the
Company as a Director.
Mr. Mahendra Kumar Gupta, G.M. (F&A) was appointed as the Chief
Financial Officer of the Company w.e.f. 02-05-2014.
STATEMENT ON ANNUAL EVALUATION MADE BY THE BOARD
A formal evaluation of the Board, its Committees and of the individual
Director is one potential effective way to respond to the demand for
greater Board's accountability and effectiveness. The effectiveness and
performance of the Board, its Committees and its members are evaluated
and measured, considering the following parameters:
1. Performance of the Board/Committee against the performance
benchmark set.
2. Overall value addition by the discussions taking place at the Board
meetings/Committee meetings.
3. The regularity and quality of participation of the individual
Director in the deliberation of the Board and its Committees, close
monitoring of the various actions taken for the implementation of the
Board's decision.
The performance evaluation of Directors including Independent Directors
is done by the entire Board of Directors excluding the Directors being
evaluated. A questionnaire is prepared and is being circulated amongst
the Directors for their comments. Review of the performance of the
Chairperson of the Company is done by taking into account the views of
Executive and Non-Executive Directors of the Company.
COMPOSITION OF AUDIT COMMITTEE
In compliance with the requirement of Section 177, as applicable to the
Company, the Board of Directors has constituted Audit Committee. The
members of the Audit Committee possess financial/accounting
expertise/exposure. The Audit Committee assists the Board in its
responsibility for overseeing the quality and integrity of the
accounting, auditing and reporting practices of the Company and its
compliance with the legal and regulatory requirements. Apart from the
matters provided under Section 177(4) of the Companies Act, 2013, the
Audit Committee also review the significant legal cases pending and all
material developments are reported to the Board.
The Audit Committee comprises of the Independent Directors of the
company under the Chairmanship of Mr. Vijay Kishore Sharma. The other
Independent Directors of the Committee are:
1. Mr. Praveen Sachdev (upto 8th May, 2015)
2. Mr. Jainendar Kumar Jain (upto 8th May, 2015)
3. Mr. Joy Kumar Jain (appointed w.e.f. 8th May, 2015)
4. Ms. Shivpriya Nanda (appointed w.e.f. 8th May 2015).
Statutory Auditors and the Internal Auditors are the permanent invitees
at the committee meetings. Dr. Venkatesh Padmanabhan, Managing Director
& CEO and Mr. M. K. Gupta, Chief Financial Officer are also the
permanent invitees at the committee meetings. Mr. P.S. Saini, Company
Secretary is the Secretary of the Committee.
For the Financial year 2014-15, the Audit Committee met four times
i.e., on 2nd May, 2014, 28th July, 2014, 30th October, 2014 and 26th
February, 2015.
The recommendations given by the Audit Committee are considered and
reviewed by the members of the Board of the Company. However, there is
no such case where the Board dissented or did not accept the
recommendation of the Audit Committee.
A STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The Company has constituted Strategy, Risk Review and Corporate Social
Responsibility Committee which consist of the following Directors:-
1. Mr.Karan Thapar, Chairman
2. Mr. Vijay Rai, Independent Director
3. Mr.Vijay Kishore Sharma, Independent Director
4. Dr. Venkatesh Padmanabhan, Managing Director & CEO
The Company periodically reviews the Company's risk profile under
'PESTLE' nomenclature and management's plans to mitigate /minimize the
risks.
The Committee evaluates the existing as well as anticipated risks and
the strategy to mitigate those risks within a defined time frame. The
Company has in place the risk identification and mitigation policy. The
Committee does not foresee any material risks which may threaten the
existence of the Company.
During the financial year 2014-15, the Strategy, Risk Review and CSR
Committee met thrice i.e. on 29th July, 2014, 31st October, 2014 and
27th February, 2015 under the Chairmanship of Mr. Karan Thapar.
POLICY ON CORPORATE SOCIAL RESPONSIBILITY
The details about the Corporate Social Responsibility policy developed
and implemented by the company and the various initiatives taken during
the year and other particulars are enclosed in the prescribed form as
Annexure - A.
COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
Pursuant to section 178 of the Companies Act, 2013, as applicable to
the Company, the Company has constituted a "Nomination and Remuneration
Committee" during the financial year 2014-15. The composition of the
Nomination & Remuneration Committee is as under:
1. Mr. Vijay Rai, Chairman of the Committee
2. Karan Thapar
3. Mr. T. Balakrishnan
The Committee met thrice i.e., on 20th June, 2014, 29th July, 2014 and
27th February, 2015.
The Nomination & Remuneration Committee considering the requirement of
the skill sets on the Board, integrity of the persons having standing
in their respective field/profession and who can effectively contribute
to the Company's business and policy decisions, recommend the
appointment to the Board for approval.
The Committee has approved a policy with respect to the appointment and
remuneration of the Directors and Senior Management personnel. The
objectives of this policy are:
(a) to create a transparent system of determining the appropriate level
of remuneration throughout all levels of the Company;
(b) encourage people to perform to their highest level;
(c) allow the Company to compete in each relevant employment market;
(d) provide consistency in remuneration throughout the Company;
(e) align the performance of the business with the performance of key
individuals and teams within the Company;
(f) long term value creation; and
(g) attract and retain the best professionals.
The policy details the types of remuneration to be offered by the
Company and factors to be considered by the Board, Nomination &
Remuneration Committee and management in determining the appropriate
remuneration strategy.
SHARE TRANSFER /SHAREHOLDERS' GRIEVANCE COMMITTEE
The Company has constituted a "Share Transfer / Shareholders' Grievance
Committee" which consist of the following Directors:
1. Mr. Praveen Sachdev, Chairman of the Committee (upto 8th May, 2015)
2. Mr. Karan Thapar
3. Mr. Vijay Rai, Chairman of the Committee (appointed w.e.f. 8th May,
2015)
4. Dr. Venkatesh Padmanabhan, Managing Director & CEO.
During the financial year 2014-15, the Share Transfer/ Shareholders'
Grievance Committee met four times i.e. 06-05-2014, 04-07-2014,
21-07-2014 and 01-08-2014, for the approval of transfer of shares and
redressal of the shareholders' grievances.
STATUTORY AUDITOR
M/s. Walker Chandiok & Co. LLP, Chartered Accountants, the Statutory
Auditors retire at the conclusion of the ensuing Annual General
Meeting. The Board of Directors recommends for your approval the
appointment and remuneration of M/s. Walker Chandiok & Co. LLP as
Statutory Auditors for 5 years, to hold office from the conclusion of
this Annual General Meeting till the conclusion of the Annual General
Meeting held in the calendar year 2020.
INTERNAL AUDITOR
The Company has appointed M/s T.R. Chadha & Co., Chartered Accountants,
as the Internal Auditors of the Company pursuant to Section 138 read
with Rule 13 of the Companies (Accounts) Rules, 2014, for one year to
conduct the internal audit for the financial year 2015-16.
COST AUDITOR
M/s A.R. Narayanan & Co., Cost Accountants, have been appointed as Cost
Auditors for the financial year 2015-16 to conduct the cost audit of
the accounts maintained by the company. They have confirmed their
eligibility for appointment under the provisions of Section 148 of the
Companies Act, 2013. The remuneration proposed to be paid to the Cost
Auditors is submitted for ratification by the shareholders of the
Company.
SECRETARIAL AUDITOR
M/s Manju Laur & Associates, Company Secretaries in pracªtice have been
appointed as Secretarial Auditors to conduct the Secretarial Audit for
the financial year 2014-15 & 2015ª16 of the Company. They have
confirmed their eligibility for appointment under the provisions of
Section 204 of the Comªpanies Act, 2013.
SECRETARIAL AUDIT REPORT
The Secretarial Audit Report in terms of Section 204 has been annexed
to this report as Annexure - B. The Board noted that there was no
qualification or observation in the Secretarial Audit report which
requires any explanation.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of sub-section (3) of Section 92 of the
Companies Act, 2013 read with Rule 12 of the Companies (Management &
Administration) Rules, 2014, an extract of the Annual Return of the
Company for the year ended 31st March, 2015 has been given in the
prescribed Form MGT-9 as Annexure- C.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to section 134(3) (c) and (5) of the Companies Act, 2013, with
respect to Directors' Responsibility Statement, it is hereby confirmed
that:
a) the Company has followed the applicable accounting standards in the
preparation of the annual accounts for the year ended 31-03-2015 and
there is no material deviªation from the previous year.
b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company for the year ended 31st March, 2015 and of the profit
for the year ended 31st March, 2015.
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in acªcordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregulariªties and;
d) the Directors have prepared the annual accounts of the company on a
going concern basis.
e) the Directors have devised proper system to ensure comªpliance with
the provisions of all applicable laws and that such systems were
adequate and operating effecªtively.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Under Section 186 of the Companies Act, 2013 the Company has neither
given any Loan, Guarantee nor provided any Security in connection with
a loan, directly or indirectly, to any person or other body corporate.
The company has also not made any investments by way of subscription,
purchase or otherwise, in the securities of any other body corporate
during the financial year ended 31st March, 2015.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The details of the related party transactions, as per requirement of
Accounting Standards-18 are disclosed in notes to the financial
statements of the Company for the financial year 2014-15. All the
directors have disclosed their interest in Form MBP-1 pursuant to
Section 184 of the Companies Act, 2013 and as & when any changes in
their interest take place, such changes are placed before the Board at
its meetings. None of the transactions with any of the related parties
was in conflict with the interest of the Company. A statement in the
prescribed Form AOC-2 is annexed to this report as Annexure - D.
VIGIL MECHANISM POLICY
The company has a "Vigil Mechanism Policy" to facilitate the Directors
and employees at all levels, to voice their conªcerns or observations
to the Chairman of Audit Committee. The policy provide a framework to
promote responsible and secure whistle blowing.
The Company has provided a dedicated email ID which can be accessed
only by the Chairman of the Audit Committee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has put in place an Anti-Sexual Harassment mechanism in
line with the requirements of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal
Complaints Committees have been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. The Company has not
received any complaint of sexual harassment during the year 2014-15.
HUMAN RESOURCES
Your Company has successfully aligned human capital with business and
organizational objectives. The emphasis has been on team work, skill
development and development of leadership and functional capabilities
of the employees.
INDUSTRIAL RELATIONS
The Board of Directors places on record the active, dedªicated and
valuable contribution made by employees of the Company at all levels in
achieving the results in the operªations of the Company. The Industrial
relations remained cordial at all units of the Company.
ACKNOWLEDGEMENT
The Board of Directors places on record their appreciation for the
continued support and confidence received from Banks viz. Axis Bank
Ltd., State Bank of India, ICICI Bank Ltd., Indus Ind Bank Ltd. and
Central and State Governments and other Government authorities.
The Directors are also thankful to all other stakeholders for their
valuable sustained support to the Company.
FOR AND ON BEHALF OF THE BOARD
Sd/-
Karan Thapar
Chairman
DIN: 00004264
Place: Gurgaon
Date: 08-05-2015
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