| Dear Members,
The Directors take pleasure in presenting the Thirtieth Annual Report
together with the audited financial statements for the year ended March
31,2015.
The performance of the Company for the year ended 31st March 2015 is
summarized below
(Rs. in Lakhs)
Particulars 2014-2015 2013-2014
Revenue from operations and 39,272.70 50,097.70
Other Income
Profit/(Loss) before Interest, (2,607.24) (443.46)
Depreciation and Tax
Interest & Finance Charges 1,531.47 1,592.29
Depreciation 1,295.35 1,490.72
Provision forTax - 9.10
Deferred Tax (69.53) 76.72
Net Profit/(Loss) for the year (5,364.53) (3,612.29)
Accumulated Profit/(Loss) (5,969.71) (2,357.42)
Brought forward From Balance
Sheet
Transfer from Accumulated (11.39) -
Depreciation
Total Distributable profit/(Loss) (11,345.63) (5,969.71)
Dividend Nil Nil
Dividend Tax Nil Nil
Profit/(Loss) Carried over to (11,345.63) (5,969.71)
the Balance Sheet
Revenue from operations and other income for the year under review was
Rs. 39,272.70 lacs and for previous year Rs. 50,097.70 lacs and the
loss before tax was Rs. (5,434.05) and for previous year (3,526.48)
lacs. The loss after tax including loss carried over to the Balance
Sheet stands at Rs. (11,345.63) and for previous year (5,969.71) lacs.
BUSINESS REVIEW
Indian Metallurgical Coke Industry is in developing stage and demand
and supply gap met by imported coke and merchant coke plants. The
Indian steel industry needs about 35 million tonnes of coke per year,
out of which about 20 to 25 million tonnes are met from captive
capacities leaving a balance of 10 million tonnes. The installed
capacity of merchant met coke is said to be 10 million tonnes per annum
but the actual plant utilisation is said to be only 30%-35%, due mostly
to cheaper imports from China. India lacks locally available coke
displacement options that exist in other countries. It is likely to
remain the world's single largest import market for coke. The
government is pushing towards phased de-regulation of the coal sector
to tap its full potential and it also provide incentive for new
technologies in underground mining.
The global economy is exhibiting strong signals of recovery and the
Indian economy with a GDP forecast of over 7% suggests that the worst
is behind us and we are seeing a revival all around. Indian steel
consumption is growing at the rate of 6%. Met coke, the demand of which
is directly linked to steel production, is obviously going to share the
same fortune. India has a severe shortfall of good quality hard coking
coal, which is being primarily met by imports. This demand supply gap
is further going to increase in days to come with India trying to meet
its target of 300 million tonnes by 2020 from current levels of around
53 million tonnes perannum.
It is estimated that by 2018 as per the current projections, India
would need more than 75 million tonnes of coking coal. With China
closing some of its coal mines and becoming a net importer of coking
coal, it has become a commodity in global short supply and hence there
is an increased demand for coke in the market. All these spell a
wonderful future for your company.
OPERATIONS & FUTURE PROSPECTS
* The present aggregate manufacturing capacity of your Company is
130,000 TPA and expansion plans are in place to increase the capacity
to 500,000 TPA by 2018 and by 1 Million TPA by 2020. Your Company has
shifted the strategy of Product Sales from Whole Sale to Retail in
order to achieve maximum realisation. Your Company is focused on
manufacturing highest quality metallurgical coke from the existing/
upcoming plants by sourcing finest grade of coking coal across the
world and introduce Best Operating Practices across all functions in
delivering consistent quality products and services offerings to the
market
* To improve the sale and maximize the realisation, your Company's key
strategies is
i) focusing on continue improvement on capacity utilization and product
quality/services from the existing plants.
ii) Install Power Co-Generation Unit in all Coking Plants. Maximize
availability and utilisation of power plant and re-negotiate
powertariffs.
iii) Increase the coke manufacturing capacity in terms of brownfield
and greenfield expansion to economise the cost of products. De-risking
of product profile by expanding into the fragmented dealer markets.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed review of the operations, performance and outlook of the
company and its business is given in the Management Discussion and
Analysis Report, which forms a part of this report.
DEPOSITORY SYSTEM
Your Company's Equity Shares are available in dematerialized form
through National Securities Depository Limited (NSDL) and Central
Depository Services (India) Ltd. (CDSL). As at 31s' March 2015, 99.91%
of the Equity Shares of the Company were held in demat form.
DIVIDEND
Your Directors have not recommended dividend in view of the losses
incurred by the company during the year.
DEPOSITS
The Company has not accepted any deposits either from the shareholders
or public within the meaning of The Companies (Acceptance of Deposits)
Rules, 2014 as amended.
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 -1.
ii) Numberof Board Meetings
The Board of Directors met 8 (Eight) times in the year 2014-15. The
details of the board meetings and the attendance of the Directors are
provided in the Corporate Governance Report.
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.R.
Ramakrishnan as the Chairman and Mr. K.U. Sivadas and Mr. Aravind
Subramaniam as the members. More details on the committee are given in
the Corporate Governance Report.
v) Related Party Transactions
All the related party transactions are entered on arm's length basis
and are in compliance with the applicable provisions of the Act and the
Listing Agreement. There are no materially significant Related Party
transactions made by the Company with Promoters, Directors or Key
Management Personnel etc. which may have potential conflict with the
interest of the company at large
All Related Party Transactions are presented to the Audit Committee and
the Board. A statement of all related party transactions is presented
before the Audit Committee specifying the nature, value and terms and
conditions of the transactions.
The Related Party Transactions Policy as approved by the Board is
uploaded on the Company's website at the Web
Link:http://www.ennorecoke.com/ investors/Policy on Related Party
transactions
Disclosure of particulars of contracts/arrangements entered into by the
company with related parties referred to in sub-section (1) of section
188 is enclosed as Annexure - D in Form AOC-2.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2015 AND MAY 22, 2015
(DATE OF THE REPORT)
There were no material changes and commitments affecting the financial
position of the Company between the end of the financial year (March
31,2015) and the date of the Report (May 22,2015).
INTERNAL CONTROL SYSTEM
The Company has in place an adequate system of internal controls
commensurate with its size, requirements and the nature of operations.
These systems are designed, keeping in view the nature of activities
carried out at each location and the various business operations. The
company has documented a robust and comprehensive internal control
system for all the major processes to ensure reliability of financial
reporting, timely feedback on achievement of operational and strategic
goals, compliance with policies, procedures, laws and regulations,
safeguarding of assets and economical and efficient use of resources.
The formalised systems of control facilitate effective compliance as
per Clause 49 of the Listing Agreement. The Company also has well
documented Standard Operating Procedures (SOPs) for various processes
which is periodically reviewed for changes warranted due to business
needs.
The Internal Auditor monitors and evaluates the efficacy and adequacy
of internal controls system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company and its subsidiaries.
Based on the report of internal audit, process owners undertake
corrective action in their respective areas and thereby strengthen the
controls. During the year, the Audit Committee met regularly to review
reports submitted by the Internal Audit. All significant audit
observations and follow-up actions thereon were reported to the Audit
Committee. The Audit Committee also met the Company's Statutory
Auditors to ascertain their views on the financial statements,
including the financial reporting system, compliance to accounting
policies and procedures, the adequacy and effectiveness of the internal
controls and systems followed by 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 Clause
49 of the Listing Agreement, the Board of Directors had approved the
Policy on Vigil Mechanism/Whistle Blower and the same was hosted on the
website of the Company. The Policy inter-alia provides Whistle Blower,
a direct access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/employee has been denied
access to the Chairman 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 website at the Web Link:
http://www.ennorecoke.com/lnvestors/Corporate Governance/Whistle Blower
Policy.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
In terms of Section 135 and Schedule VII of the Companies Act, 2013,
the Board of Directors of your Company have constituted a CSR
Committee. The Committee comprises of all Independent Directors. Since
the average net profits of the company made during the three
immediately preceding financial years was negative, the Company was not
required to spend any money on CSR activities during the previous year.
DIRECTORS AND KEY MANAGERIAL PERSON
1. CESSATION
Mr. G. Natarajan has resigned from the Board with effect from 31 "March
2015. The Board placed on records its appreciation forthe valuable
services rendered by Mr. G. Natarajan.
2. APPOINTMENT
Ms. J. Kotteswari (DIN No. 02155868) has been appointed as an
Additional Director under Section 161 of the Companies Act, 2013 with
effect from March 31,2015.
Ms. J. Kotteswari is a Chartered Accountant and she has over 20 years
of experience in Project Cost Management, Banking, Management
Information Systems, Internal Audit, Review of Capex and Consolidation
of financials, Treasury, and Cost control. She has also handled
Manufacturing accounts in factory, Marketing finance and corporate
finance and M&A activities. Prior to joining our Group Ms. J.
Kotteswari was working as Vice President Finance and Accounts at M
AChidambaram Group.
Ms. J. Kotteswari is the Chief Financial Officer of M/s. Shriram
Industrial Holdings Limited, our Group Company since January 2013 and a
key member of the management team.
As an Additional Director of the Company shall hold office upto the date
of ensuing Annual General Meeting. The Company has received a notice as
per the provisions of Section 160(1) ofthe Companies Act, 2013, from a
member proposing her appointment as Director. The Board of Directors
recommends herappointment.
Further details about the above directors are given in the Corporate
Governance Report as well as in the Notice of the ensuing Annual
General Meeting being sent to the shareholders along with Annual
Report.
3. RETIREMENT BY ROTATION
In accordance with the provisions of Section 152(6) and the Articles of
Association of the Company Ms. J Kotteswari (DIN No.02155868) will
retire by rotation at the ensuing Annual General Meeting of the company
and being eligible, offer herself for re-appointment. The Board
recommends her re-appointment.
4. APPOINTMENT OF INDEPENDENT DIRECTORS
Mr. K.U. Sivadas was appointed as an Independent Director at the Board
meeting held on May 20,2015 for a period of five years subject to the
approval of Shareholders. He has submitted the declarationsof
Independence as required pursuant to Section 149(7) of the Companies
Act, 2013, stating that he meet the criteria of Independence as
provided in Sub Section (6). The profile of the Independent Director
forms part of the Corporate Governance Report.
5. KEY MANAGERIAL PERSON
During the year under review, the Board took on record Mr. M Natarajan
Chief Executive Officer, Mr. A Ganesh Chief Financial Officer and Mr. M
Saravanan - Company Secretary as the Whole-time Key Managerial
Personnel of the Company under Section 203 of the Companies Act, 2013.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act, 2013 and Clause 49 of the Listing
Agreement, the performance evaluation of the Board was carried out
during the year under review. More details on the same is given in the
Corporate Governance Report.
REMUNERATION POLICY
The Remuneration Policy of the Company comprising the appointment and
remuneration of the Directors, Key Managerial Personnel and Senior
Executives of the Company including criteria for determining
qualifications, positive attributes, independence of a director and
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 and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3) (c) of the Companies
Act, 2013.
i) in the preparation of the annual accounts for the year ended 31st
March 2015, the applicable accounting standards have been followed
along with proper explanation relating to material departures if any;
(ii) the Directors had 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 as at 31st March 2015 and Profit and Loss and cash flow
of the Company forthe year ended on that date;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safe guarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts of the Company on
a 'going concern' basis.
(v) the Directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
(vi) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has always provided a congenial atmosphere for work to all
the employees that is free from discrimination and harassment including
sexual harassment. It has provided equal opportunities of employment to
all without regard to their caste, religion, colour, marital status and
sex. The Company has also framed a policy on "Prevention of Sexual
Harassment at workplace. There were no cases reported during the
financial year under review under the said policy.
AUDITORS
a) STATUTORY AUDITORS
M/s Sreedhar, Suresh & Rajagopalan, (Registration No. 003957S)
Chartered Accountants, Chennai, Statutory Auditors of the Company has
been appointed as Statutory Auditors of the Company as per Section 139
of the Companies Act, 2013 for a period of 3 years from the conclusion
of Twenty Ninth Annual General Meeting till the conclusion of Thirty
First Annual General Meeting by the members at the Annual General
Meeting held on September 22,2014.
As per Section 139(1) of the Companies Act, 2013 the company shall
place such appointment of the Statutory Auditors for ratification by
members at ensuing 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. Ravindran &
Associates, Chartered Accountants, Chennai for evaluating the adequacy
of internal controls and concurrently reviews majority of the
transactions in value terms.
Independence of the firm and compliance is ensured by the direct
reporting of the firm to 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 has appointed Ms. B. Chandra,
Company Secretary in Practice to undertake the Secretarial Audit of the
Company. The Report of the Secretarial Audit Report is annexed herewith
as "Annexure - E "
CORPORATE GOVERNANCE
Corporate Governance is based on some fundamental and basic principles
such as conducting the business with integrity and fairness, ensuring
transparency in all the transactions, making all relevant disclosures
as per the various Regulations in force and complying with all the laws
of the land, ensuring accountability and responsibility in all dealings
with the various stakeholders and commitment for conducting the
business in an ethical and transparent manner.
Your Company is committed to achieving and maintaining these high
standards of Corporate Governance and places high emphasis on business
ethics. The Report on Corporate Governance as stipulated under Clause 49
of the Listing Agreement forms part of the Annual Report.
The Company has laid down a well- defined Code of Conduct, which fairly
addresses the issues of integrity, conflict of interest and
confidentiality and stresses the need of ethical conduct, which is the
basis of good governance. This Code of Conduct is applicable to all the
members of the Board and the Senior Management Personnel. The
declaration regarding compliance with Ennore Coke Limited Code of
Conduct and Ethics for all Board Members and Senior Management
Personnel of the Company forms part of the Report on Corporate
Governance.
The Company is complying with all the norms laid down by the Regulatory
Authorities in all its functional areas. The Company Secretary is also
the Compliance Officer under Clause 47 of the Listing Agreement entered
into with the Stock Exchanges, to comply with various guidelines of
Securities and Exchange Board of India and Stock Exchanges.
The Company is promptly submitting a "Quarterly Compliance Report on
Corporate Governance" as per Clause 49 of the Listing Agreements with
the Stock Exchanges.
As part of the good Corporate Governance, the Company ensures that all
Investor Grievances are attended to and resolved in a timely manner as
per the records maintained by our Registrar and Transfer Agent.
The certificate from the Statutory Auditors, M/s Sreedhar, Suresh &
Rajagopalan, confirming compliance with the conditions of Corporate
Governance as stipulated under Clause 49 is reproduced in a separate
section elsewhere in the Annual Report.
INSIDERTRADING
In compliance with the SEBI (Prohibition of Insider Trading)
Regulations, 1992, as amended, your Company has instituted a
comprehensive Code titled as "Ennore Coke Limited - Code of Conduct"
which lays down guide lines and advises the Directors and Employees of
the Company on procedures to be followed and disclosures to be made
while dealing in securities of the Company.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts)
Rule 2014, is annexed herewith as "AnnexureA".
PARTICULARS OF EMPLOYEES
None of the employees of the Company was in receipt of remuneration in
excess of the limits prescribed under the 2013 Act and the rules framed
thereunder. The information required 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
employees of the Company, is provided in Annexure B forming part of
this Report.
AUDIT REPORT AND EXPLANATION UNDER SECTION 134 OFTHE COMPANIES ACT,
2013
The Auditors' Report is self-explanatory and does not require any
further comments except that:
Point (a) of "Emphasis of Matter" in Auditors' Report:
The Company has intiated steps for transferring the Title in the name
of the Company
Point (b) of "Emphasis of Matter" in Auditors' Report:
The Management is of the opinion that the company is optimistic of
earning profits in the ensuing financial years and hence no adjustment
for reversal of Deferred Tax Asset is considered necessary.
Point (c) of "Emphasis of Matter" in Auditors' Report:
The Management is of the opinion that the balances due to the Company
are good and fully realisable and dues by the Company are fully payable
and will be settled in due course.
Point (d) of "Emphasis of Matter" in Auditors' Report:
The Management is confident that there is a fair chance of succeeding
in the appeal and the amount is fully recoverable and hence no
provision is warranted.
Point (e) of "Emphasis of Matter" in Auditors' Report:
The change in the accounting policy on accounting the inventory of
Stores consumables resulting in the understatement of loss by Rs.
20,31,788/-, the management has decided to account for inventory of
stores consumables for better control.
Point (f) of "Emphasis of Matter" in Auditors' Report:
The change in the accounting policy on accounting the finance charges
on pro rata basis resulting in understatement of losses by Rs.
5,30,991./-, the management has decided to adopt the matching concept
principle.
Point (g) of "Emphasis of Matter" in Auditors' Report:
The Company has not recognised, interest on loans advanced to/ loans
availed from a fellow subsidiary taking a prudent and conservative
view.
Point (vi) of the Annexure to the Auditors' Report:
The Company has since appointed Cost Auditor for the financial year
2014-15 and maintained the Cost Records under sub- section (1) of
Section 148 of the Companies Act, 2013.
Point (vii) (a) and (b) of the Annexure to the Auditors' Report:
The Company is in the process of regularising all statutory remittances
to the concerned department. A substantial level of taxes has been paid
subsequently as on the date of this report.
Point (xi) of the Annexure to the Auditors' Report:
The company had initiated the process of regularizing the bank dues and
as on the date of this report all dues have been updated.
ACKNOWLEDGEMENTS
Your Directors wish to express their appreciation for the assistance,
support and cooperation extended by the Banks, Financial Institutions,
Government Authorities, Customers, Suppliers and all Members during the
year under review. Your Directors also wish to place on record their
appreciation for the committed services by all employees of the
Company.
For and on behalf of the Board
Ennore Coke Limited
Place: Chennai R. Ramakrishnan K.U. Sivadas
Date: 22.05.2015 Director Director
DIN 00809342 DIN 00498594
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