Directors Report of Indsil Hydro Power and Manganese Ltd.
Mar 31, 2018
Dear Shareholders,
The Board of Directors of your Company are pleased to present the 28th Annual Report on the operations and business of the Company along with the Audited Financial Statements of the Company for the Financial Year ended 31st March,2018.
FINANCIAL HIGHLIGHTS
The Standalone & Consolidated performance for the financial year ended 31st March, 2018 is as under:
(R in Lakhs)
|
Particulars |
Standalone |
Consolidated |
||
|
Current Year 2017-18 |
Previous Year 2016-17 |
Current Year 2017-18 |
Previous Year 2016-17 |
|
|
Total Revenue |
30,409 |
12,134 |
75,140 |
22,819 |
|
Operating Expenses |
(28,435) |
(11,449) |
(67,623) |
(21,565) |
|
Gross Profit |
1,974 |
684 |
7,517 |
1,254 |
|
Depreciation |
(615) |
(439) |
(2,587) |
(1,096) |
|
Profit before Tax |
1,359 |
245 |
4,930 |
157 |
|
Provision for Tax |
(176) |
5 |
(182) |
-6 |
|
Net Profit after Tax |
1,183 |
250 |
4,748 |
151 |
FINANCIAL PERFORMANCE
During the period under review, the Company has achieved, on Standalone basis, revenue of R 30,409 Lakhs and net profit of Rs. 1,183 Lakhs. During the same period, the Company, on Consolidated basis, has achieved revenue of Rs.75,140 Lakhs and net profit of Rs.4,748 Lakhs
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the financial year ended 31st March, 2018.
STATE OF AFFAIRS
Operations
During the year under review, the Company has achieved a turnover of Rs.30,409 Lakhs (2016-17: Rs. 12,134 Lakhs) resulting in a Profit before tax of Rs. 1,359 Lakhs.
The year under review saw a generation of power of 29.46 million units as against 11.82 million units during the previous year.
The Raipur Thermal Power division is temporarily suspended due to lack of availability of coal from Government owned Coal India Limited.
FUTURE PROSPECTS
The outlook and future prospects of the Company are presented in the âManagement Discussion and Analysis
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. For the Company, Ind AS is applicable from 1st April 2017, with a transition date of 1st April, 2016. The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in the notes to accounts in the Standalone and Consolidated Financial Statements.
SCHEME OF AMALGAMATION OF M/S INDSIL ENERGY AND ELECTROCHEMICALS PRIVATE LIMITED (âTRANSFEROR COMPANYâ) WITH M/S INDSIL HYDRO POWER AND MANGANESE LIMITED (âTRANSFEREE COMPANYâ)
The National Company Law Tribunal, Chennai Bench has vide its order dated 4th May, 2018 & 8th May, 2018 sanctioned the Scheme of Amalgamation of M/s Indsil Energy and Electrochemicals Private Limited with M/s Indsil Hydro Power and Manganese Limited with effect from the appointed date of 1st April, 2017. The said order was filed with the Registrar of Companies, Coimbatore on 23rd May, 2018 pursuant to which the Scheme has come into effect.
Accordingly, the financial statements for the year ended 31st March, 2018 have been presented giving effect to the said amalgamation.
M/S AL-TAMMAN INDSIL FERROCHROME LLC (ATIFC)
M/s Al-Tamman Indsil Ferro Chrome LLC had a sound performance on account of a turnaround in the fortunes of the chrome industry.
Your Company is planning to expand its capacity in Oman by 40%.
M/S SREE MAHALAKSHMI SMELTERS PRIVATE LIMITED - WHOLLY OWNED SUBSIDIARY OF THE COMPANY
The Company had a 51% stake in M/s Sree Mahalakshmi Smelters Private Limited and was a subsidiary of the Company. Consequent to merger of M/s Indsil Energy and Electrochemicals Private Limited with the Company vide order of the National Company Law Tribunal dated 4thMay, 2018 & 8th May, 2018, M/s Sree Mahalakshmi Smelters Private Limited has become the Wholly Owned Subsidiary of the Company.
M/s Sree Mahalakshmi Smelters Private Limited having leased a part of Land & Building and Plant & Machinery to M/s Indsil Hydro Power and Manganese Limited earned a lease income of Rs. 60/- Lakhs for the year under review.
M/S INDSIL HYDRO GLOBAL FZE & M/S INDSIL ENERGY GLOBAL FZE, SHARJAH AIRPORT INTERNATIONAL FREEZONE (SAIF) - WHOLLY OWNED SUBSIDIARIES
M/s Indsil Hydro Global (FZE), a Wholly Owned Subsidiary of the Company, has earned a profit of Rs. 247.45 Lakhs in the current reporting period as against a profit of Rs. 308.27 Lakhs during the previous reporting period. The operations of the Company are expected to improve further in the forthcoming reporting period.
M/s Indsil Energy Global (FZE) was a Wholly Owned Subsidiary of the erstwhile M/s Indsil Energy and Electrochemicals Private Limited. Consequent to the merger of M/s Indsil Energy and Electrochemicals Private Limited with the Company, M/s Indsil Energy Global (FZE) has become a Wholly Owned Subsidiary of the Company.
M/s Indsil Energy Global (FZE), has earned a profit of R252.70 Lakhs in the current reporting period as against a profit of Rs.314.80 Lakhs during the previous reporting period.
TRANSFER TO RESERVES
The Company has not transferred any amount to its reserves during the year under review. However, an amount of Rs.1182.51/- Lakhs of the current profit has been carried forward under the head retained earnings.
DIVIDEND
The Board of Directors has recommended a dividend of Rs.0.70 per equity share of R 10/- each (7%) on the Paid-up Equity Share Capital of Rs.27,76,97,140/- for the financial year ended 31st March, 2018 aggregating Rs.1,94,38,799.80/-. The total dividend pay-out works out to 9.40% of the net profit of the Standalone results.
The dividend on Equity Shares is subject to the approval of the Shareholders in the Annual General Meeting. The dividend, if approved, will be payable to those Shareholders whose names appear in the Register of Members as on 20th September, 2018, the date fixed for the purpose.
TRANSFER OF UNCLAIMED DIVIDEND/ SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of Section 124 & 125 of the Companies Act, 2013, unclaimed / unpaid dividend relating to the financial year 2011-12 will be remitted on 16.01.2020 to the Investor Education and Protection Fund established by the Central Government.
Further, pursuant to Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 99,497 Equity Shares of Rs.10/- each on which dividend had remained unclaimed for a period of 7 (seven) years have been transferred to the credit of the demat account identified by the IEPF Authority during the year under review.
SHARE CAPITAL
The issued, subscribed and paid-up share capital of the Company as at 31st March, 2018 stood at Rs.15,88,67,920/divided into 1,58,86,792 Equity Shares of Rs.10/- each. During the year under review the Company has not made any fresh issue of shares.
However, pursuant to the Scheme of Amalgamation of M/s Indsil Energy and Electrochemicals Private Limited (Transferor Company) with M/s Indsil Hydro Power and Manganese Limited (Transferee Company) sanctioned by the National Company Law Tribunal, Chennai Bench vide order dated 4th May, 2018 & 8th May, 2018, an amount of Rs.26,88,29,220/- representing the value of Equity and Preference Shares to be allotted to the Shareholders of M/s Indsil Energy and Electrochemicals Private Limited as consideration for merger has been shown under the head ''Share Capital Suspense Account'' in the financial statements.
Subsequently, pursuant to the said Scheme of Amalgamation, the Board of Directors of the Company at their meeting held on 29th May, 2018 allotted the following shares as consideration for the merger:
- 1,18,82,922 Equity Shares of Rs.10/- each to the Equity Shareholders of M/s Indsil Energy and Electrochemicals Private Limited
- 1,50,00,000 10% Cumulative Redeemable Preference Shares of Rs.10/- each to the Preference Shareholders of M/s Indsil Energy and Electrochemicals Private Limited
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is furnished in Annexure 1 and is attached to this Report.
BOARD MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 7 (seven) Meetings of the Board of Directors, 6 (six) Meetings of the Audit Committee, 4 (four) Meetings of the Nomination and Remuneration Committee, 4 (four) Meetings of the Stakeholders Relationship Committee and 4 (four) Meetings of the Corporate Social Responsibility Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of Indian on Meeting of the Board of Directors (SS-1) and General Meetings (SS-2).
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, the Board hereby confirms that-
a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departure from those standards;
b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) 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
f) the Directors had devised proper system to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively;
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
COMPANY''S POLICY RELATING TO DIRECTORS'' APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing the remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and Employees of the Company. The Nomination and Remuneration Policy of the Company is annexed herewith as Annexure 2 and can also be accessed on the Company''s website at the link http:// www. indsil. com/ policies/
COMMENTS ON AUDITOR''S REPORT
There are no qualifications, reservations or adverse remarks or disclaimers made by M/s Raja & Raman, Statutory Auditors and Sri M D Selvaraj, FCS of MDS & Associates, Practising Company Secretaries, Secretarial Auditors in their report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
During the year under review the Company has not granted any loan or given any security, pursuant to the provisions of Section 186 of the Companies Act, 2013. The details in respect of loans & investments made by the Company in the earlier years are disclosed in the notes to the Financial Statements.
Further, pursuant to the Scheme of Amalgamation of M/s Indsil Energy and Electrochemicals Private Limited (Transferor Company) with M/s Indsil Hydro Power and Manganese Limited (Transferee Company) sanctioned by the National Company Law Tribunal, Chennai Bench vide order dated 4th May, 2018 & 8th May, 2018, the investments of the Transferor Company comprising of investments in M/s Al-Tamman Indsil Ferro Chrome LLC, M/s Indsil Energy Global (FZE) and M/s Sree Mahalakshmi Smelters Private Limited have been transferred to the Company with effect from the appointed date i.e., 1st April, 2017.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions entered into by the Company with related parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18 were in the ordinary course of business and on arms'' length basis.
The particulars of contract and arrangement entered into by the Company with related parties referred to in Sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm''s length transactions under third proviso thereto are disclosed in Annexure 3 (Form No. AOC-2) and forms part of this Report.
The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the Company''s website and may be accessed through the link at ''http://www.indsil.com/policies/â
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
The National Company Law Tribunal, Chennai Bench vide order dated 4th May, 2018 & 8th May, 2018 sanctioned the Scheme of Amalgamation of M/s Indsil Energy and Electrochemicals Private Limited (Transferor Company) with M/s Indsil Hydro Power and Manganese Limited (Transferee Company) pursuant to which all the assets and liabilities of the Transferor Company have been vested with the Company with effect from the appointed date i.e., 1st April 2017.
Subsequently, pursuant to the said Scheme of Amalgamation, the Board of Directors of the Company at their meeting held on 29th May, 2018 allotted the following shares as consideration for the merger
- 1,18,82,922 Equity Shares of Rs.10/- each to the Equity Shareholders of M/s Indsil Energy and Electrochemicals Private Limited
- 1,50,00,000 10% Cumulative Redeemable Preference Shares of Rs. 10/- each to the Preference Shareholders of M/s Indsil Energy and Electrochemicals Private Limited
Other than that mentioned above, there have been no material changes and commitments affecting the financial position of the Company which has occurred between the financial year ended 31st March, 2018 and the date of the report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 4 and is attached to this report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY
The risk management and minimization procedure adopted and followed by the Company is adequate in relation to the nature and size of the business. The same is reviewed periodically for improvement.
Though it is not applicable, the Company has constituted a Risk Management Committee. The Committee has formulated a Risk Management Policy for Risk Management.
The Risk Management Committee duly constituted by the Board of Directors consists of:
1) Sri S N Varadarajan, Vice-Chairman as Chairman of the Committee
2) Sri Vinod Narsiman, Managing Director as Member of the Committee
3) Dr A K Sreedharan, Director as Member of the Committee
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Corporate Social Responsibility (CSR) Committee was constituted by the Board of Directors to undertake and administer Corporate Social Responsibility of the Company.
CSR Committee consists of:
1) Sri S N Varadarajan, Vice-Chairman as Chairman of the Committee
2) Sri Vinod Narsiman, Managing Director and
3) Dr A K Sreedharan, Independent Director as Members of the Committee
The Company''s CSR objective is promoting education, including special education and employment enhancing vocational skills to children, medical aid, health care, sanitation, drinking water, rural development, employment opportunities, old age homes, protection of natural resources, public libraries, human rights and such other initiatives prescribed under Schedule VII of the Companies Act, 2013. The Company has developed Corporate Social Responsibility Policy in line with the activities mentioned in Schedule VII of the Companies Act, 2013.
The prescribed amount of CSR expenditure could not be spent totally due to the Company not being able to identify suitable local area projects for CSR activities despite its constant efforts to identify suitable projects. Thus, there was a short fall of Rs.6,18,443/- The Company would continue its pursuit and strengthen the mechanism to execute all identified local area projects in future and adopt constant monitoring.
The annual report on CSR activities has been given in Annexure 5.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS AND COMMITTEES
On the advice of the Board of Directors, the Nomination and Remuneration Committee of the Board of Directors of the Company formulated the criteria for evaluation of the performance of the Board of Directors & its Committees, Independent Directors, Non-Independent Directors and the Vice-Chairman / Managing Director of the Board. Based on that, performance evaluation has been undertaken. The Independent Directors of the Company have also convened a separate meeting for this purpose.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review, the Board of Directors on the recommendation of the Nomination and Remuneration Committee and approval of the Members have re-appointed Sri Vinod Narsiman as the Managing Director of the Company for a further period of 5 (five) years with effect from 6th November, 2017.
Further, Sri K Annamalai and Sri V Dharmaraj were appointed as the Independent Directors of the Company for a period of 5 (five) years with effect from 13th November, 2017 at the Annual General Meeting held on 21st December, 2017.
Dr T C P Nambiar and Sri K S Mahadevan (DIN: 00043314) resigned from the Board of Directors of the Company with effect from 13th November, 2017 & 2nd March, 2018 respectively. The Board wishes to place on record their sincere appreciation for the valuable contributions made by them during their tenure as Directors.
Sri B Balchand (DIN: 00035878) and Sri S N Varadarajan (DIN: 00035693), Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.
Sri S N Varadarajan (DIN: 00035693) has been re-designated as Non-Executive Vice-Chairman of the Company with effect from 29th May, 2018.
Smt R Saroja (DIN: 08134556) was appointed as Additional Director of the Company with effect from 29th May, 2018 and she shall hold office upto the date of this Annual General Meeting. Accordingly, necessary resolution proposing her appointment as an Independent Director of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the Members.
Sri K Ramakrishnan was appointed as an Independent Director of the Company with effect from 19th December, 2014. Consequent to the amalgamation of M/s Indsil Energy and Electrochemicals Private Limited with the Company, he ceased to be an Independent Director of the Company. Sri K Ramakrishnan has given a declaration to this effect that he does not meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013. Subsequently, he resigned from the post of Independent Director of the Company with effect from 29thMay, 2018.
Sri K S Mahadevan & Sri K Ramakrishnan were appointed as Additional Directors of the Company with effect from 29th May, 2018 & 30th May, 2018 respectively and they shall hold office upto the date of this Annual General Meeting. Accordingly, necessary resolution proposing their appointment as Non-Executive Directors of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the Members.
Subsequently, Sri K Ramakrishnan was also appointed as Whole-Time Director of the Company with effect from 1st June, 2018. Accordingly, necessary resolution proposing his appointment as Whole-Time Director of the Company has also been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the Members.
Your Directors recommended their appointment/ re-appointment.
Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Sri Vinod Narsiman, Managing Director, Sri K Ramakrishnan, Whole-time Director, Sri S Mahadevan, Company Secretary and Sri R Murali, Chief Financial Officer.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has three Wholly Owned Subsidiaries namely, M/s Sree Mahalakshmi Smelters Private Ltd, M/s Indsil Hydro Global (FZE), Sharjah Airport International Freezone (SAIF) and M/s Indsil Energy Global (FZE), Sharjah Airport International Freezone (SAIF).
Pursuant to the Scheme of Amalgamation of M/s Indsil Energy and Electrochemicals Private Limited (Transferor Company) with M/s Indsil Hydro Power and Manganese Limited (Transferee Company) sanctioned by the National Company Law Tribunal, Chennai Bench vide order dated 4th May, 2018 & 8th May, 2018, the stake of the Company in M/s Al-Tamman Indsil Ferro Chrome LLC, Sultanate of Oman has increased to 50%. Accordingly, in accordance with the applicable accounting standards, M/s Al-Tamman Indsil Ferro Chrome LLC has been considered as a subsidiary for the purpose of consolidation in the financial statements.
The Board has approved a policy for determining material subsidiaries, which has been uploaded on the Company''s website and can be accessed at the link ''http ://www.indsil.com/policies/''.
A report containing the salient features of the Subsidiaries and Joint Venture as required under Section 129(3) of the Companies Act, 2013 in Form AOC-1 is attached herewith as Annexure 6 to this report.
The consolidated financial statements of the Company and its Subsidiaries prepared in accordance with the applicable accounting standards have been annexed to the Annual Report.
The annual accounts of the Subsidiary Companies are posted on the website of the Company viz. www.indsil.com and will also be kept open for inspection by any shareholder at the Registered Office of the Company. The Company shall also provide copy of the annual accounts of Subsidiary Companies to the Shareholders upon their request.
FIXED DEPOSITS
The Company has not accepted any Fixed Deposits covered under Chapter V of the Companies Act, 2013 and hence, there are no deposits remaining unclaimed or unpaid as on 31st March, 2018. Accordingly, the question of default in repayment of deposits or payment of interest thereon, during the year, does not arise.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company''s operation in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has put in place proper systems and procedures to detect and protect the Organizational resources both tangible and intangible. The Company has also put in place the following to ensure the adequacy of internal financial controls:
- The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP:
- The Company has appointed Internal Auditor to check the Internal Controls and also check whether the workflow of the Organization is in accordance with the approved policies of the Company. In every quarter, during approval of Financial Statements, Internal Auditor will present to the Audit Committee, the Internal Audit Report and Management Comments on the Internal Audit observations;
The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.
MAINTENANCE OF COST RECORDS AS MANDATED BY THE CENTRALGOVERNMENT
Pursuant to the provisions of Section 148 (1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company has duly made and maintained the Cost Records as mandated by the Central Government.
AUDITORS
STATUTORY AUDITORS
M/s Raja & Raman (Firm Registration No. 003382S), Chartered Accountants, Coimbatore were appointed as Statutory Auditors of the Company for a period of 5 years at the 27th Annual General Meeting held on 21st December, 2017 and they hold office till the conclusion of the 32ndAnnual General Meeting of the Company. The Auditors'' Report on the Standalone and Consolidated Financial Statements for the year ended 31st March, 2018 has been annexed to the financial statements.
Vide notification dated 7th May, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of Statutory Auditors by Members at each Annual General Meeting has been done away with. Accordingly, no resolution is being proposed for ratification of appointment of Statutory Auditors at this Annual General Meeting.
COST AUDITOR
Pursuant to the provision of Section 148 of the Companies Act, 2013 read with notifications/circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 29th May, 2018, have appointed Sri. B Venkateswar, (Membership No. 27622), Cost Accountant, Coimbatore as Cost Auditor of the Company for the financial year 2018-19. The remuneration payable to the Cost Auditor is subject to the ratification of the Members in General Meeting.
SECRETARIAL AUDITORS
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 Sri M D Selvaraj, FCS of MDS & Associates, Practising Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2017-18. The report of the Secretarial Auditor is annexed herewith as Annexure 7.
INTERNAL AUDITOR
Ms. K R Divya (Membership No. 228896), Chartered Accountant, Coimbatore has been appointed as the Internal Auditor of the Company to undertake internal audit of the records of the Company.
PARTICULARS OF EMPLOYEES
The disclosure as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure 8.
EMPLOYEE STOCK OPTION SCHEME
The Company has in place an Employee Stock Option Scheme (ESOS) named âINDSIL ESOS, 2015â pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014. The Company has not allotted any stock options during the year under review and there are no outstanding options which are yet to be exercised by the employees of the Company.
The Compensation Committee of the Board of Directors of the Company and the Indsil ESOS Trust, inter alia, administers and monitors the Employees'' Stock Option Plan of the Company. Details of Employee Stock Options pursuant to SEBI (Share Based Employee Benefits) Regulations, 2014 is given in Annexure 9 to this Report.
The Board of Directors of the Company at their meeting held on 10th August, 2018 have proposed to wind-up the old Scheme and cancel the options which were not granted under the old Scheme. Accordingly, Indsil ESOS 2015 stands cancelled. The Indsil ESOS Trust constituted for administration of the Indsil ESOS 2015 shall also be wound-up.
The Board of Directors at the said meeting have also, subject to the approval of the Members, proposed to put in place a new Scheme namely Indsil ESOS 2018. The necessary resolution seeking the approval of the Members for the proposed new Scheme has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the Members. Once the approval has been obtained, the Company shall seek necessary approvals of the Statutory Authorities and Regulators for issue of options under the new Scheme.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has been employing women employees in various cadres within the Office / factory premises. The Company has in place an Anti-harassment policy and has complied provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no compliant received from any employee during the financial year 2017-18 and hence no complaint is outstanding as on 31.03.2018 for redressal.
MANAGEMENT DISCUSSION AND ANALYSIS
The report on Management Discussion and Analysis is annexed herewith as Annexure 10 to this report.
CORPORATE GOVERNANCE
A report on Corporate Governance is annexed and forms part of this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in Regulation 27 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
AUDIT COMMITTEE
The Company has an Audit Committee in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Kindly refer to the Section on Corporate Governance, under the head ''Audit Committee'' for matters relating to the composition, meetings and functions of the Committee. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure as required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board is necessary.
VIGIL MECHANISM (WHISTLE BLOWER POLICY)
The Company has constituted a Vigil Mechanism as required under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has adopted a formal mechanism to the Directors and employees to report about unethical behaviour, suspected fraud or violation of Code of Conduct and ethics. The Policy aims at conducting the affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour.
The policy can be accessed on the Company''s website at the link ''http://www.indsil.com/policies/''.
CEO/CFO CERTIFICATION
As required under SEBI (Listing Obligations and Disclosure Requirements) Rules, 2015, the Managing Director and the Chief Financial Officer have furnished necessary certificate to the Board on the financial statements presented.
DEPRECIATION
Depreciation on fixed assets is provided on Straight Line method in accordance with the rates specified under Schedule II of the Companies Act, 2013, except the useful life of the Plant and Machinery based on the technical evaluations. As per the technical evaluations such useful life has been taken as 20 years.
INSURANCE
All the properties of the Company including buildings, plant & machinery and stocks have been adequately insured.
INDUSTRYSAFETY
Your Company has laid high emphasis on safety of all the personnel and mitigation of damage to equipments, the Company has thoroughly followed all the safety measures.
ACKNOWLEDGEMENTS
Your Directors are extremely thankful to State Bank of India, Export Import Bank of India, ICICI Bank Limited, IDBI Bank Limited, Yes Bank Limited, RBL Bank Limited, Axis Bank Limited, Karnataka Bank Limited and the Federal Bank Limited for their continued support.
Your Directors acknowledge and express their grateful appreciation for the co-operation and support received from Government Authorities, Kerala State Industrial Development Corporation, employees, customers and suppliers. They also thank the Shareholders for the confidence reposed by them in the management of the Company and for their continued support and co-operation.
For and on behalf of the Board
Sd/- Sd/-
S. N.VARADARAJAN VINOD NARSIMAN
Vice-Chairman Managing Director
DIN:00035693 DIN: 00035746
Place: Coimbatore
Date: 10th August, 2018
Mar 31, 2016
BOARD OF DIRECTORS'' REPORT TO SHAREHOLDERS :
Dear Shareholders,
The Board of Directors of your Company are pleased to present the 26th Annual Report on the business of the Company along with the Audited Financial Statements of the Company for the year ended 31 stMarch, 2016.
THE FINANCIAL PERFORMANCE
During the period under review, the Company has achieved, on standalone basis, revenue of Rs, 7304 Lakhs and net profit of Rs, 399 Lakhs. During the same period, the Company, on consolidated basis, has achieved revenue of Rs, 18092 Lakhs and net profit of Rs, 66 Lakhs.
FINANCIAL RESULTS :
(for 9 months from 1st July, 2015 to 31st March, 2016)
A. STANDALONE
The Standalone performance for the Financial Year ended 31st March, 2016 is as under:
The Financial Summary
Rs, in Lakhs
|
Sl. No. |
Particulars |
Current Year 2015-16 (for 9 months) |
Previous Year 2014-15 (for 12 months) |
|
1. |
Revenue from Operations |
7304 |
12344 |
|
2. |
Operating Expenses |
(6519) |
(10416) |
|
3. |
Gross Profit |
785 |
1928 |
|
4. |
Depreciation |
(326) |
(427) |
|
5. |
Profit Before Tax |
459 |
1501 |
|
6. |
Provision for Tax |
(60) |
(286) |
|
7. |
Net Profit after Tax |
399 |
1215 |
|
8. |
Dividend |
(95) |
(191) |
|
9. |
Tax on Dividend |
Nil |
38 |
|
10. |
Carried to Profit & Loss A/c |
304 |
1062 |
B. CONSOLIDATED:
The Consolidated performance for the Financial Year ended 31st March, 2016 is as under:
The Financial Summary Rs, in Lakhs
|
Sl. No. |
Particulars |
2015-16 (for 9 months) |
2014-15 (for 12 months) |
|
1. |
Revenue from Operations |
18092 |
24296 |
|
2. |
Operating Expenses |
(17064) |
(22811) |
|
3. |
Gross Profit |
1028 |
1485 |
|
4. |
Depreciation |
(903) |
(931) |
|
5. |
Profit Before Tax |
125 |
554 |
|
6. |
Provision for Tax |
60 |
105 |
|
7. |
Net Profit after Tax |
66 |
659 |
|
8. |
Dividend |
(95) |
(191) |
|
9. |
Tax on Dividend |
Nil |
38 |
|
10. |
Carried to Profit & Loss A/c |
(29) |
506 |
DIVIDEND & RESERVES :
The Board recommends a dividend of Rs, 0.60 per equity share of Rs, 10/- per share (6%) on the Equity Share Capital of Rs, 15,88,67,920/- for the Financial Year ended 31st March, 2016 (for the period of 9 months under review) aggregating Rs, 95,32,075/- (on annualized basis this dividend works out to 8%). The total dividend payout works out to 23.86% of the net profit of the Standalone results. The dividend on equity shares is subject to the approval of the shareholders in the Annual General Meeting. The dividend, if approved, will be payable to those shareholders whose names appear in the Register of Members as on Wednesday, the 7th September, 2016 the date fixed for the purpose.
In terms of the Companies Act, any unclaimed or unpaid dividend relating to the financial year 2008-09, is due for transfer on 28th January, 2017 to the Investor Education and Protection Fund established by the Central Government.
The Company does not propose to transfer any amount to the General Reserves for the financial year ended 31st March, 2016.
STATE OF AFFAIRS
OPERATIONS :
During the year under review (for 9 months), the Company has achieved a turnover of Rs, 7304 Lakhs (2014-15 : Rs, 12,344 Lakhs ) resulting in a Profit before tax of Rs, 459 Lakhs.
The year under review saw comparatively poor monsoon cycles which resulted in lower generation of power of
26.85 million units (9 months) as against 50.53 million units (12 months) during the previous year.
The Company undertook shut down for long maintenance work during the last quarter of the year under review which further deteriorated the performance of the smelting division. Apart from the above, the year under review reflects a 9 months working performance compared to that of 12 months during the previous years.
FUTURE PROSPECTS:
The outlook and future prospects of the Company are presented in the "Management Discussion and Analysis Report" forming part of this Report.
RENEWABLE ENERGY CERTIFICATES (REC) :
The Central Electricity Regulatory Commission has unfortunately withdrawn the eligibility of RE status to all captive power plants that commenced before 2010. Therefore, from 1st April, 2016, your Company will no longer be eligible for REC Certificates and this will result in a deterioration of power price realization to the tune of Rs, 1.5 per kwhr.
AL-TAMMAN INDSIL FERROCHROME LLC (ATIFC) - JOINT VENTURE COMPANY
Ferro Chrome markets during the past year have exhibited the same trends as that of manganese alloy markets. The global steel and stainless steel recession took its toll on the ferro chrome industry as well. However, due to certain inherent cost advantages that ATIFC possesses, it managed to break even during the year 2015 and post a negligible profit as well. The second half of the year 2016 is looking extremely good for ATIFC since ferro chrome demand and price realization has improved considerably. The year 2016 is expected to witness a reasonable profit figure from the Joint Venture.
SREE MAHALAKSHMI SMELTERS (P) LTD (SMS) - SUBSIDIARY OF THE COMPANY
Due to recessionary trends in manganese alloy industry and a very high power charges, the Company was forced to shut down its smelting operations in May 2015. Smelting operations has not resumed yet. However, the Andhra Pradesh Government has come out with a policy measure to boost manufacturing sentiments in the State. This policy measure entails reduction in power charges which if effected in the form of lower electricity cost to the Company on a monthly basis, will prove to be a boost and a strong case for reopening of the smelting division. In such an event, your Company plans to take on lease the smelting plant of Sree Mahalakshmi Smelters Private Limited and operate that plant to produce silico manganese or ferro chrome production as the case may be. However, the said Company did not have operations for major part of financial year 2015-16 and hence it is not a material subsidiary for the financial year 2016-17.
INDSIL HYDRO GLOBAL FZE, SHARJAH AIRPORT INTERNATIONAL FREEZONE (WHOLLY OWNED SUBSIDIARY)
The consolidated financial results incorporating the financial statement of the Wholly Owned Subsidiary, Indsil Hydro Global FZE is attached to the Annual Report as required under the Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.
DISCLOSURE ON SUBSIDIARY / JOINT VENTURE
As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Subsidiary Company / Joint Venture is attached (Form AOC-1) to this Report along with the financials (Annexure-1). No other Company has become Subsidiary, Associate or Joint Venture Company during the financial year 2015-16.
CONSOLIDATED FINANCIAL STATEMENTS :
The consolidated financial statements by consolidating the accounts of the Company, Sree Mahalakshmi Smelters Private Limited (Subsidiary of the Company), Al-Tamman Indsil Ferro Chrome LLC, Sultanate of Oman (the JV) and Indsil Hydro Global FZE, Sharjah Airport International Freezone (Wholly Owned Subsidiary of the Company) under the Accounting Standards 21 issued by the Institute of Chartered Accountants of India forms part of this Annual Report.
CHANGE OF FINANCIAL YEAR
The Board of Directors, at its meeting held on 17th August, 2015, approved alignment of financial year of the Company to 31st March every year as required by Companies Act, 2013. The same was also informed to Bombay Stock Exchange Ltd and requisite Form MGT-14 was filed with the Ministry of Corporate Affairs.
Therefore, this financial year under review of the Company is for a period of 9 months from 1st July, 2015 to 31st March, 2016 and thereafter each financial year will be for 12 months from 1st April to 31stMarch.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details as per the provisions of Section 186 of the Companies Act, 2013 are given under Note No. 2.32 to Financial Statements .
PARTICULARS OF CONTRACTS WITH RELATED PARTY
All the transactions of the Company with related parties are at arms length and have taken place in the ordinary course of business. Provisions of Section 188 of the Companies Act, 2013 are not applicable.
Form No. AOC-2 pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is attached as Annexure - 2.
OTHER DISCLOSURES
As per Rule 8(5) of the Companies Accounts Rules, 2014 the following additional information are provided :
1. The financial summary or highlights The financial highlights including State of Affairs of
the Company, Dividend and Reserves are provided in this Report to the shareholders.
2. The change in the nature of business, There is no change in the nature of business. if any
3. The details of Directors or Key Managerial Personnel Sri S. Mahadevan and Sri R.Murali were appointed as Company who were appointed or have resigned during the year Secretary and Chief Financial Officer respectively on 02.11.2015
4. a) The names of Companies which are Subsidiaries, Sree Mahalakshmi Smelters Private Limited
Joint Venture - Subsidiary
Indsil Hydro Global FZE,
Sharjah Airport International Freezone (SAIF)
- Wholly Owned Subsidiary
Al-Tamman Indsil Ferrochrome LLC, Sultanate of Oman
- Joint Venture
b) Any of the above have become ceased No
during the year.
5. The details of deposits under Chapter V of the Act The Company has not accepted deposits
6. The details of deposits which are in Compliance Not Applicable with requirement of Chapter V of the Act
7. The details of significant and material orders passed Nil by the Regulators / Courts or Tribunals impacting the going concern status and Company''s operation
8. The details of adequacy of internal controls with Systems and procedures are in place to detect and protect reference to the financial statements the organizational resources both tangible and intangibles.
The financial statements are prepared in accordance with the Accounting Standards issued by the ICAI.
DEPRECIATION
Depreciation on fixed assets is provided on Straight Line Method in accordance with the rates specified under schedule II of the Companies Act, 2013, except the useful life of the Plant and Machinery based on the technical evaluation. As per the technical evaluation such useful life has been taken as 20 years.
EXTRACTS OF ANNUAL RETURN
As per the requirements of provisions of the Companies Act, 2013, the Extract of the Annual Return in the prescribed Form MGT-9 is annexed to this Report (Annexure - 3)
COMMITTEES OF THE BOARD OF DIRECTORS A. AUDIT COMMITTEE
Audit Committee was constituted by the Board of Directors of the Company to handle the activities as set out in Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 with the Stock Exchange read with Section 177 of the Companies Act, 2013.
COMPOSITION OF AUDIT COMMITTEE
The Board constituted the Audit Committee which comprises of Dr. A.K.Sreedharan as Chairman, Dr. T.C.P.Nambiar and Sri Vinod Narsiman as Members. All the recommendations of the Audit Committee were accepted by the Board. More details on the Committee like terms of reference are given in the Corporate Governance Report.
B. SHARE TRANSFER COMMITTEE
Share Transfer Committee was constituted by the Board of Directors of the Company to expedite the process of Share Transfers in respect of shares held in physical form and to take on record the volume of shares transacted in the Demat segment periodically. The Board constituted the Share Transfer Committee which consists of Sri S.Inderchand as Chairman and Smt. D.Pushpa Varadarajan as Member.
C. STAKEHOLDERS'' RELATIONSHIP COMMITTEE
This Committee considers and resolves the grievances of shareholders of the Company. The said Committee comprises of Sri S.Inderchand as Chairman and Smt D.Pushpa Varadarajan as Member.
D. COMPENSATION COMMITTEE
Compensation Committee was constituted to administer Indsil Hydro Power and Manganese Limited Employee Stock Option Scheme. The Committee consists of Dr. A.K.Sreedharan as Chairman and Sri Vinod Narsiman and Dr. T.C.P.Nambiar as Members.
E. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) Committee was constituted by the Board of Directors to undertake and administer Corporate Social Responsibility of the Company. CSR Committee consists of Sri S.N.Varadarajan, Executive Vice-Chairman as Chairman of the Committee and Sri Vinod Narsiman, Managing Director and Dr. A.K.Sreedharan, Independent Director as Members of the Committee.
The preference for spending CSR funds has been in and around the area where the Company''s plants are situated. However, the Company could not identify the Agencies / Trusts suitable in line with CSR Policy of the Company for spending the entire amount.
Expenditure of 2% of average net profit could not be fulfilled totally due to the Company not being able to identify suitable local area projects for CSR activities despite its constant efforts to identify suitable projects. Thus there was a short fall of '' 10,66,297/-. The Company would continue its pursuit and strengthen the mechanism to execute all identified local area projects in future and adopt constant monitoring.
CSR Policy was adopted by the Board of Directors on the recommendation of CSR Committee. Report on CSR as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this Report (Annexure - 4).
F. NOMINATION AND REMUNERATION COMMITTEE
Nomination and Remuneration Committee was framed by the Board of Directors as per the requirements of the provisions of the Companies Act, 2013. This Committee consists of :
1) Dr. A.K.Sreedharan, Chairman (Non-Executive, Independent)
2) Sri B.Balchand, Member (Non-Executive, Non-Independent)
3) Dr. T.C.P.Nambiar, Member (Non-Executive, Independent)
The said Committee has been empowered and authorized to exercise the powers as entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company has a policy on Directors'' appointment and remuneration including criteria for determining the positive attributes, independence of a Director and other matters provided under Section 178(3) of the Act.
G. RISK MANAGEMENT COMMITTEE
Though it is not applicable, the Company has constituted a Risk Management Committee. The Committee has formulated a Risk Management Policy for Risk Management. The Risk Management Policy is periodically reviewed for improvement.
The Risk Management Committee duly constituted by the Board of Directors consists of :
1) Sri S.N.Varadarajan, Executive Vice-Chairman as Chairman of the Committee
2) Sri Vinod Narsiman, Managing Director as Member of the Committee
3) Dr. A.K.Sreedharan, Director as Member of the Committee VIGIL MECHANISM
The Board has constituted Vigil Mechanism as per Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Audit Committee has been authorized to oversee the Vigil Mechanism. Sri Vinod Narsiman, Managing Director has been nominated to facilitate the Vigil Mechanism.
The Vigil Mechanism is intended to provide adequate safeguards against victimization of employees and to facilitate to report the genuine concerns or grievances.
WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report about unethical behaviour, suspected fraud or violation of Code of Conduct and ethics. The Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.
BOARD APPROVED POLICIES
The Board of Directors approved and adopted the following policies which are published in the Company''s website www.indsil.com.
|
Sl. No |
Name of the Policies |
Weblink |
|
1. |
Code of Conduct applicable to the Board of Directors including Key Managerial Personnel (KMP) & Senior Managerial Personnel (SMP) |
|
|
2. |
IHPML Whistle Blower Policy |
|
|
3. |
Related Party Transactions Policy |
|
|
4. |
Policy on Material Subsidiary |
|
|
5. |
Code of Conduct to regulate, monitor and report trading by Insiders |
|
|
6. |
Code of Practices for Fair Disclosure of Unpublished Price Sensitive Information, SEBI (Prohibition of Insider Trading) Regulations, 2015 |
|
|
7. |
Familiarisation Programme for Independent Directors |
|
|
8. |
Corporate Social Responsibility Policy |
|
|
9. |
Enterprise Risk Management Policy |
|
|
10. |
Policy on Determination of Materiality |
EVALUATION OF BOARD''S PERFORMANCE
On the advice of the Board of Directors, the Nomination and Remuneration Committee consisting of three Directors of the Company formulate the criteria for the evaluation of the performance of the Board of Directors & its Committees, Independent Directors, Non-Independent Directors, Executive Director, Chairman and Managing Director.
The Board of Directors are aware of the performance and are familiar with the business of the Company.
A Policy on succession planning for the Board and Senior Management was adopted by the Board of Directors in its meeting held on 27th August, 2014.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL :
Statement pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Particulars of Employees Rule, 1975 and Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Annual Report (Annexure-5)
RESIGNATION OF DIRECTOR(s) & RE-APPOINTMENT OF INDEPENDENT DIRECTOR(s)
There was no resignation and re-appointment of Independent Director(s) during the year under review.
MEETING OF INDEPENDENT DIRECTORS
Pursuant to Regulation 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a meeting of the Independent Directors to review the performance of Non-Independent Directors, Board of Directors and to assess the quality, quantity and timeliness of flow of information between the Management and the Board of Directors to effectively and reasonably perform their duties was conducted on 21st March, 2016 and all the Independent Directors attended this meeting.
AUDITORS
The Board of Directors of the Company recommends M/s Raja & Raman (Firm''s Registration No. 003382S) Chartered Accountants, 1055/1, First Floor, Gowtham Centre, Avanashi Road, Coimbatore 641 018, the retiring Auditors to be reappointed as Statutory Auditors of the Company from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting for the financial year 2016-17 subject to the approval of the shareholders in the ensuing Annual General Meeting. The said item regarding appointment of M/s Raja & Raman, Auditors is placed before the shareholders for their approval.
The Auditors have consented and confirmed their eligibility and desire to continue as Statutory Auditors of the Company. INTERNAL AUDITOR
Ms. K.R.Divya (Membership No. 228896), Chartered Accountant, No. 37, P.M.Samy Colony,1st Street, R.S.Puram, Coimbatore 641 002 was appointed as Internal Auditor pursuant to the provisions of Section 138 of the Companies Act, 2013 by the Board of Directors of the Company to conduct the internal audit functions.
COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 Sri B.Venkateswar, Cost Accountant was appointed by the Board of Directors of the Company for conducting audit of the Cost Account Records of the Company for the year 2016-17. He was the Cost Auditor of the Company for the year 2015-16 as well.
SECRETARIAL AUDITORS
KSR & Co, Company Secretaries LLP, a firm of Company Secretaries is the Secretarial Auditors of the Company. The Secretarial Audit Report submitted by them forms part of this Report (Annexure-6).
AUDITOR''S REPORT & ACCOUNTING POLICIES & SECRETARIAL AUDIT REPORT
The Auditors'' Report read with the Notes on Accounts are self-explanatory and does not require any further clarification.
A statement detailing significant Accounting Policies of the Company is annexed to the Accounts.
The Reports of the Statutory Auditors and the Secretarial Audit Report (both appearing elsewhere in this Annual Report) are without any adverse comments.
EMPLOYEE STOCK OPTION SCHEME
Pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014 issued by SEBI on October 28, 2014, the Company has obtained approval of the shareholders through Postal Ballot replacing the INDSIL ESOS, 2008 with "INDSIL ESOS, 2015" in conformity with such regulations and accordingly executed Variation Deed of Trust with the concerned Registering Authority in Coimbatore. The results of the Postal Ballot passing the resolution to this effect by the shareholders were furnished to the Bombay Stock Exchange accordingly and such results were published in the newspapers and website of the Company http://www.indsil.com/news/
A copy of the INDSIL ESOS, 2015 and the registered Variation Deed were furnished to the Bombay Stock Exchange for the Exchange to take the same on record. A Corporate announcement to this effect was published in the Bombay Stock Exchange website.
CORPORATE WEBSITE
The website of the Company, www.indsil.com carries a comprehensive database of information of interest to the stakeholders including the corporate profile, information with regard to products, plants and financial performance of the Company and Policies.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as applicable under the provisions of Section 149(6) of the Companies Act, 2013 read with relevant rules and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
A familiarization programme for Independent Directors was conducted on 23rd March, 2016 and the details are available in the Company''s website: http://www.indsil.com/policies/
INSURANCE
All the properties of the Company including buildings, plant & machinery and stocks have been adequately insured. MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis for the year under review as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed to this Annual Report (Annexure - 7).
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors based on the representations received from the Management and pursuant to Sub-section 3(c) of Section 134 of the Companies Act, 2013 hereby confirm that :
(i) in the preparation of Annual Accounts, the applicable accounting standards have been followed and wherever required, proper explanation relating to material departures have been given.
(ii) have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that year.
(iii) have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.
(iv) have prepared the Annual Accounts on a going concern basis
(v) have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively ; and
(vi) have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CODEOFCONDUCT
The Board of Directors approved a code of conduct which is applicable to the Members of the Board and all designated employees in the course of day to day business operations of the Company. The code is posted in the Company''s website : http://www.indsil.com/policies/
All the Board Members and the Senior Management Personnel have confirmed compliance with the code.
PREVENTION OF INSIDER TRADING
The Company adopted a Code of Conduct for Prevention of Insider Trading in order to regulate the trading in Securities by the Directors and designated persons of the Company as per SEBI (Prohibition of Insider Trading Regulations, 2015). The details of the Code of Conduct and Fair Disclosure is published in the Company''s website : http://www.indsil.com/policies/
CORPORATE GOVERNANCE
As per Regulation 34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate disclosure on Corporate Governance Practices followed by the Company together with a certificate from the Company''s Secretarial Auditors KSR & Co, Company Secretaries LLP, Practicing Company Secretaries, Coimbatore on such compliance are attached.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and mitigation of damage to equipments. The Company has thoroughly followed all the safety measures.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Act read with the Companies (Accounts) Rules 2014 is enclosed to this Report (Annexure - 8).
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments in the business operations of the Company for the financial year ended 31st March, 2016 up to the date of signing of the Directors'' Report.
NUMBER OF BOARD MEETINGS
The Board of Directors met 4 times in the financial year 2015-16. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.
LISTING FEE
Listing fee for the financial year 2016-17 has been paid to Bombay Stock Exchange where the shares of the Company are listed.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
1. The Company maintains all its records in ERP System and the work flow and approvals are routed through ERP ;
2. The Company has appointed Internal Auditors to check the Internal Controls and also check whether the workflow of the organization is in accordance with the approved policies of the Company. In every quarter, during approval of Financial Statements, Internal Auditors will present to the Audit Committee, the Internal Audit Report and Management Comments on the Internal Audit observations ; and
3. The Board of Directors of the Company have adopted various policies like Corporate Social Responsibility Policy, Code of Conduct to Regulate, Monitor and Report Trading by Insiders, Code of Practices for Fair Disclosure of Unpublished Price Sensitive Information, Code of Conduct applicable to the Board of Directors including Key Managerial Personnel and Senior Management Personnel, Enterprise Risk Management Policy, Performance Evaluation, Board Diversity and Professional Code of Conduct, Policy for Related Party Transactions, Policy on Determination of Materiality for Disclosure of events or information, Policy on Material Subsidiary, Prevention of Sexual Harassment at Workplace, Professional Code of Conduct for Independent and Non-executive Directors including Senior Managerial Personnel (SMP), Succession Planning for the Board and Senior Management, Whistle Blower Policy and such other procedures for ensuing the orderly and efficient conduct of its business for safeguarding of its assets, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
DECLARATION
The Company has been regular in filing all forms and returns with the Registrar of Companies as required under the Companies Act, 2013 and has not defaulted in payment of dividends.
REPORT ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressel) Act, 2013.
During the financial year ended 31st March, 2016, the Company has not received any complaints pertaining to Sexual Harassment of Women.
ACKNOWLEDGEMENTS
Your Directors are extremely thankful to State Bank of Travancore, Export Import Bank of India, IDBI Bank Limited, Yes Bank Limited, Standard Chartered Bank and The Federal Bank Limited for their continued support.
Your Directors acknowledge and express their grateful appreciation for the co-operation and support received from Government Authorities, Kerala State Industrial Development Corporation, employees, customers and suppliers. They also thank the shareholders for the confidence reposed by them in the management of the Company and for their continued support and co-operation.
For and on behalf of the Board
Place : Coimbatore
Date : 5th August, 2016 Sd/- Sd/-
VINOD NARSIMAN S.N. VARADARAJAN
Managing Director Executive Vice-Chairman
DIN:00035746 DIN:00035693
Jun 30, 2015
Dear Shareholders,
The Board of Directors of your Company are pleased to present the 25th
Annual Report on the business of the Company along with the Audited
Financial Statements of the Company for the year ended 30th June, 2015.
THE FINANCIAL PERFORMANCE
During the period under review, the Company has achieved, on standalone
basis, revenue of Rs, 12,344 lakhs and net profit of Rs,1,215 lakhs.
During the same period, the Company, on consolidated basis, has
achieved revenue of Rs, 24,296 lakhs and net profit of Rs, 659 lakhs.
FINANCIAL RESULTS :
A. STANDALONE
The Standalone performance for the financial year ended 30th June, 2015
is as under:
The Financial Summary
Rs, in Lakhs
Sl. Current Year Previous Year
Particulars
No. 2014-15 2013-14
1. Revenue from Operations 12344 12404
2. Operating Expenses (10416) (10900)
3. Gross Profit 1928 1504
4. Depreciation (427) (398)
5. Profit Before Tax 1501 1106
6. Provision for Tax (286) (20)
7. Net Profit after Tax 1215 1086
8. Dividend (191) (191)
9. Tax on Dividend 38* (38)
10. Carried to Profit & Loss A/c 1062 857
* The tax on dividend was provided in the year 2013-14, the same is
reversed and this amount is set-off against tax on dividend due to
dividend received from foreign subsidiary.(viz) Indsil Hydro Global
(FZE). This amount of Rs,38,12,449 is transferred back to surplus
account.
B. CONSOLIDATED
The consolidated performance for the Financial Year ended 30th June,
2015 is as under:
The Financial Summary
Rs, in Lakhs
Sl. Current Year Previous Year
Particulars
No. 2014-15 2013-14
1. Revenue from Operations 24296 15848
2. Operating Expenses (22811) (14744)
3. Gross Profit 1485 1104
4. Depreciation (931) (701)
5. Profit Before Tax 554 403
6. Provision for Tax 105 105
7. Net Profit after Tax 659 508
8. Dividend (191) (191)
9. Tax on Dividend 38* (38)
10. Carried to Profit & Loss A/c 506 279
* The tax on dividend was provided in the year 2013-14, the same is
reversed and this amount is set-off against tax on dividend due to
dividend received from foreign subsidiary.(viz) Indsil Hydro Global
(FZE). This amount of Rs,38,12,449 is transferred back to surplus
account.
DIVIDEND & RESERVES
The Board recommends a dividend of Rs, 1.20 per equity shares of Rs, 10 per
share (12%) on the equity share capital of Rs, 15,88,67,920/- for the
financial year ended 30th June, 2015 aggregating Rs, 1,90,64,150/-. The
total dividend payout works out to 15.69% of the net profit of the
Standalone results. The dividend on equity shares is subject to the
approval of the shareholders in the Annual General Meeting. The
dividend, if approved, will be payable to those shareholders whose
names appear in the Register of Members as on 9th December, 2015, the
date fixed for the purpose.
In terms of the Companies Act, any unclaimed or unpaid dividend
relating to the financial year 2007-08, is due for transfer on
11.01.2016 to the Investor Education and Protection Fund established by
the Central Government.
The Company does not propose to transfer any amount to the General
Reserves for the financial year ended 30th June, 2015.
STATE OF AFFAIRS
OPERATIONS :
During the year under review, the Company has achieved a turnover of Rs,
12344 Lakhs (2013-14 : Rs, 12404 Lakhs) resulting in a profit before tax
of Rs, 1501 Lakhs before tax for the current year (2013-14 : Rs,1106
Lakhs).
The increase in profit is due to the decent performance of the Hydro
Electric Power division of the Company which produced 50.53 million
units of electricity during the year under review as against 38.23
million units for the previous year. Thus, your Company could manage a
reasonable financial performance, though the Ferro Alloy division of
your Company could not perform as expected during the year as a result
of your Company unable to cope up with the sluggish market conditions.
Generally, the stainless steel industry globally went through a
prolonged phase of demand slow down and still such situation continues.
FUTURE PROSPECTS :
The outlook and future prospects of the Company are presented in the
"Management Discussion and Analysis Report" forming part of this
Report.
RENEWABLE ENERGY CERTIFICATES (REC) :
As the shareholders are aware, your Company is a registered Renewable
Energy (RE) generator under the new REC mechanism promulgated by the
Central Government. This status entitles the Hydro Power Project (HPP)
of your Company to receive Renewable Energy Certificates for every 1000
units of renewable energy produced. These certificates are tradable in
the Indian Energy Exchange (IEX) and Power Exchange India Limited
(PXIL). During the year under review, your Company could realize Rs,
2,58,43,500/- being the sale proceeds of 17229 REC units. As on date,
your Company has RECs for a total value of Rs,13,78,60,137/-.
It is expected that the scope for demand for RECs would improve as
there is a momentum towards complying with Renewable Purchase
Obligations (RPO) of RECs. With RPO compliance drive initiated by
various State Regulators in the Country, it is expected that the
buyer's participation for RPO's would increase in the forthcoming
trading sessions.
JOINT VENTURE AL-TAMMAN INDSIL FERROCHROME LLC
As the shareholders are aware, the ferro-chrome manufacturing
operations of the Company's Joint Venture Al-Tamman Indsil Ferrochrome
LLC in Sultanate of Oman commenced full scale commercial production
from April, 2014 onwards. The Joint Venture, has been performing
reasonably well during the year under review and it is expected,
barring unforeseen circumstances, your Company's financial parameters
will improve substantially when the Joint Venture declares dividends.
Meanwhile, your Company has started receiving returns by way of
dividend from its Wholly Owned Subsidiary viz., Indsil Hydro Global
FZE, Sharjah Airport International Freezone, after it receives
marketing fee from the JV for every ton of Ferrochrome sold by the JV.
SREE MAHALAKSHMI SMELTERS (P) LTD (SMS) - SUBSIDIARY OF THE COMPANY
As the shareholders are aware, the capacity of SMS plant was upgraded
from 5 MVA to 7.5 MVA for the manufacture of Low Carbon Silico
Manganese from that of High Carbon Silico Manganese. A huge hike in
power tariff during the period under review resulting in
under-utilisation of operations making it difficult for the Subsidiary
to operate its plant at its capacity.
This, in turn, coupled with adverse market conditions, caused severe
constraints resulting in the Subsidiary suffering huge financial
losses. As a result, the management was constrained to declare
temporary suspension of its plant with effect from 22nd May, 2015.
INDSIL HYDRO GLOBAL FZE, SHARJAH AIRPORT INTERNATIONAL FREEZONE (WHOLLY
OWNED SUBSIDIARY)
The consolidated financial results incorporating the financial
statement of the Wholly Owned Subsidiary, Indsil Hydro Global FZE is
attached to the Annual Report as required under the Accounting
Standards and Listing Agreement.
DISCLOSURE ON SUBSIDIARY/JOINT VENTURE
As per the provisions of Section 129 of the Companies Act, 2013 read
with Companies (Accounts) Rules, 2014, a separate statement containing
the salient features of the Subsidiary Company / Joint Venture is
attached (Form AOC-1) to this Report along with the financials
(Annexure-1).
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements by consolidating the accounts of
the Company, Sree Mahalakshmi Smelters Private Limited (Subsidiary of
the Company) Al-Tamman Indsil Ferro Chrome LLC, Sultanate of Oman (the
JV) and Indsil Hydro Global FZE, Sharjah Airport International Freezone
(Wholly Owned Subsidiary of the Company) under the Accounting Standards
21 issued by the Institute of Chartered Accounts of India forms part of
this Annual Report.
CHANGE OF FINANCIAL YEAR
It is mandatory that every Company shall, within the period of two
years from 1st April, 2014 the date of commencement of the Act, should
align its financial year end to 31st March as per the provisions of
Section 2 (41) of the Companies Act, 2013.
Accordingly, the Board of Directors at its meeting held on 17th August,
2015 approved alignment of financial year of the Company to 31st March
every year. The same was also informed to Bombay Stock Exchange Ltd and
requisite Form MGT-14 was filed with the Ministry of Corporate Affairs.
Therefore, the next financial year of the Company will be for a period
of 9 months from 1st July, 2015 to 31st March, 2016 and thereafter each
financial year will be from 1st April to 31st March.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details as per the provisions of Section 186 of the Companies Act, 2013
are given under Notes to Financial Statements.
PARTICULARS OF CONTRACTS WITH RELATED PARTY
All the transactions of the Company with related parties are at arms
length and have taken place in the ordinary course of business.
Provisions of Section 188 of the Companies Act, 2013 is not applicable.
Form No. AOC - 2 pursuant to Clause (h) of Sub-section (3) of Section
134 of the Companies Act, 2013 and Rule 8(2) of the Companies
(Accounts) Rules, 2014 is attached as Annexure-2.
MATTERS AS MAY BE PRESCRIBED
As per Rule 8(5) of the Companies Accounts Rules, 2014 the following
additional information are provided :
1. The financial summary or highlights The financial highlights
including state of affairs of the Company, Dividend and Reserves is
provided in the Board of Directors Report to the shareholders forming
part of this Annual Report.
2. The change in the nature of business, There is no change in the
nature of business. if any
3. The details of Directors or Key Managerial Personnel Sri S.
Mahadevan and Sri R.Murali were appointed as Company who were appointed
or have resigned during the year Secretary and Chief Financial Officer,
respectively on 13.11.2014
4. a) The names of Companies which are Subsidiaries, Sree Mahalakshmi
Smelters Private Limited
Joint Venture - Subsidiary
Indsil Hydro Global FZE,
Sharjah Airport International Freezone (SAIF)
- Wholly Owned Subsidiary
Al-Tamman Indsil Ferrochrome LLC, Sultanate of Oman
- Joint Venture
b) Any of the above have become ceased No during the year
5. The details of deposits under Chapter V of the Act The Company has
not accepted deposits
6. The details of deposits which are in Compliance Not Applicable with
requirement of Chapter V of the Act
7. The details of significant and material orders passed Nil by the
Regulators / Courts or Tribunals impacting the going concern status and
Company's operation
8. The details of adequacy of internal controls with Systems and
procedures are in place to detect and protect reference to the
financial statements the organizational resources both physical and
intangibles.
The financial statements are prepared in accordance with the Accounting
Standards issued by the ICAI.
DEPRECIATION
Depreciation on fixed assets is provided on Straight Line Method in
accordance with the rates specified under Schedule II of the Companies
Act, 2013, except the useful life of the Plant and Machinery based on
the technical evaluation. As per the technical evaluation such useful
life has been taken as 20 years.
EXTRACTS OF ANNUAL RETURN :
As per the requirements of provisions of the Companies Act, 2013, the
Extract of the Annual Return in the prescribed Form MGT-9 is annexed to
this Report (Annexure-3).
COMMITTEES OF THE BOARD OF DIRECTORS :
A. AUDIT COMMITTEE
An Audit Committee has been constituted by the Board of Directors of
the Company to handle the activities as set out in Clause 49 of the
Listing Agreement with the Stock Exchange read with Section 177 of the
Companies Act, 2013.
COMPOSITION OF AUDIT COMMITTEE:
The Board constituted the Audit Committee which comprises of Dr. A K
Sreedharan as Chairman, Dr. T C P Nambiar and Sri Vinod Narsiman as
Members. All the recommendations of the Audit Committee were accepted
by the Board. More details on the Committee like terms of reference are
given in the Corporate Governance Report.
B. SHARE TRANSFER COMMITTEE
A Share Transfer Committee was constituted by the Board of Directors of
the Company to expedite the process of Share Transfers in respect of
share held in physical form and to take on record the volume of shares
transacted in the Demat segment periodically. The Board constituted the
Share Transfer Committee which consists of Sri S. Inderchand as
Chairman and Smt D.Pushpa Varadarajan as Member.
C. STAKEHOLDERS' RELATIONSHIP COMMITTEE
This Committee considers and resolves the grievances of the
shareholders of the Company. The said Committee comprises of Sri
S.Inderchand as Chairman and Smt. D.Pushpa Varadarajan as Member.
Earlier the Committee was known as Shareholders Grievance Committee and
subsequently changed to "Stakeholders Relationship Committee" in the
meeting of the Board of Directors held on 17/8/2015.
D. COMPENSATION COMMITTEE
A Compensation Committee has been constituted to administer Indsil
Hydro Power and Manganese Limited Employee Stock Option Scheme. The
Committee consists of Dr. A.K. Sreedharan as Chairman and Sri. Vinod
Narsiman and Dr. T.C.P. Nambiar as Members.
E. CORPORATE SOCIAL RESPONSIBILITY
The objective of Corporate Social Responsibility (CSR) Committee is to
improve the quality of life of the communities through long-term value
creation for all stakeholders. Towards achieving this, the Company has
commenced its CSR initiatives. The Company continues to remain focused
on improving the quality of life and encouraging communities through
health, education, old age homes and drinking water facilities in and
around the area where the plants of the Company are situated.
CSR Committee consisting of Directors namely Sri S.N. Varadarajan,
Executive Vice-Chairman as Chairman of the Committee and Sri Vinod
Narsiman, Managing Director and Dr. A.K.Sreedharan, Independent
Director as Members of the Committee was constituted by the Board of
Directors of the Company .
The preference for spending CSR funds has been in and around the area
where the plant is situated. However, the Company could not identify
the Agencies / Trusts suitable in line with CSR Policy of the Company
for spending the entire amount. The Company would endeavour to spend
the entire CSR amount in the current year.
Expenditure of 2% of average net profit could not be fulfilled totally
due to the Company not being able to identify suitable local area
projects for CSR activities. Thus there was a short fall of Rs,
4,91,276/-. A mechanism to execute all identified local area projects
in future is being put in place and will be monitored by CSR Committee.
CSR Policy was adopted by the Board of Directors on the recommendation
of CSR Committee. Report on CSR as per Rule 8 of Companies (Corporate
Social Responsibility Policy) Rules, 2014 is annexed to this Annual
Report (Annexure-4).
F. NOMINATION & REMUNERATION COMMITTEE
Nomination and Remuneration Committee was framed by the Board of
Directors as per the requirements of the provisions of the Companies
Act, 2013. This Committee consists of :
1) Dr. A.K.Sreedharan, Chairman (Non-Executive, Independent)
2) Sri B.Balchand, Member (Non-Executive, Non-Independent)
3) Dr. T.C.P.Nambiar, Member (Non-Executive, Independent)
The said Committee has been empowered and authorized to exercise the
powers as entrusted under the provisions of Section 178 of the
Companies Act, 2013. The Company has a policy on Directors' appointment
and remuneration including criteria for determining the positive
attributes, independence of a Director and other matters provided under
Section 178(3) of the Act. Nomination and Remuneration Policy was
adopted by the Board of Directors. The concerned Policy is annexed to
this Report (Annexure-5).
G. RISK MANAGEMENT COMMITTEE
The Company follows a risk appraisal mitigation and management process.
As per the requirements of Clause 49 of the Listing Agreement, the
Company has constituted a Risk Management Committee. The Committee has
formulated a Risk Management Policy for Risk Management. The Risk
Management Policy is periodically reviewed for improvement.
The Risk Management Committee duly constituted by the Board of
Directors consists of :
1) Sri S.N.Varadarajan, Executive Vice-Chairman as Chairman of the
Committee
2) Sri Vinod Narsiman, Managing Director as Member of the Committee
3) Dr. A.K. Sreedharan, Director as Member of Committee
H. POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
(PREVENTION, PROHIBITION & REDRESSEL) ACT, 2013
The Company has adopted policy on Prevention of Sexual Harassment of
Women at Workplace in accordance with the Sexual Harassment of women at
Workplace (Prevention, Prohibition and Redressal) Act,2013.
A Committee in this regard has been constituted in accordance with
Sexual Harassment of Women at the Workplace (Prevention, Prohibition &
Redressel) Act, 2013.
During the financial year ended 30th June, 2015, the Company has not
received any complaints pertaining to Sexual Harassment of women.
VIGIL MECHANISM
The Board has constituted Vigil Mechanism as per Rule 7 of the
Companies (Meetings of Board and its Powers) Rules, 2014. The Audit
Committee has been authorized to oversee the Vigil Mechanism. Sri Vinod
Narsiman, Managing Director has been nominated to facilitate the Vigil
Mechanism.
The Vigil Mechanism is intended to provide adequate safeguards against
victimization of employees and to facilitate to report the genuine
concerns or grievances.
WHISTLE BLOWER POLICY
A Whistle Blower Policy was adopted by the Board of Directors in its
meeting held on 17 August, 2015. The details of Whistle Blower Policy
is published in the Company's website www.indsil.com.
POLICY ON MATERIAL SUBSIDIARY
The Board of Directors adopted a policy on Material Subsidiary and the
same is published in the Company's website www.indsil.com.
EVALUATION OF BOARD'S PERFORMANCE
On the advice of the Board of Directors, the Nomination and
Remuneration Committee consisting of three Directors of the Company
formulated the criteria for the evaluation of the performance of the
Board of Directors & its Committees, Independent Directors,
Non-Independent Directors, Executive Director, Chairman and Managing
Director. According to the evaluation, the Independent Directors of the
Company have also convened a separate meeting for this purpose.
All the Board of Directors are aware of the performance and are
familiar with the business of the Company.
STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL
PERSONNEL:
Statement pursuant to Section 134 of the Companies Act, 2013 read with
the Companies (Particulars of Employees Rule, 1975 and section 197(12)
of the Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
annexed to this Annual Report (Annexure-6).
RESIGNATION OF DIRECTOR & REAPPOINTMENT OF INDEPENDENT DIRECTOR
There was no resignation and re-appointment of Independent Director(s)
during the year under review.
MEETING OF INDEPENDENT DIRECTORS
Pursuant to Clause 49 (II)(6) of the Listing Agreement, a meeting of
the Independent Directors to review the performance of the Chairman and
that of the Board was conducted on 26th June, 2015 and all the
Independent Directors attended this meeting.
AUDITORS:
The Board of Directors of the Company recommended M/s Raja & Raman,
(Firm's Registration No.003382S) Chartered Accountants, 1055/11, First
Floor, Gowtham Centre, Avanashi Road, Coimbatore 641018, the retiring
Auditors to be reappointed as Statutory Auditors of the Company from
the conclusion of this Annual General Meeting till the conclusion of
the next Annual General Meeting for the financial year 2015-16 subject
to the approval of the shareholders in the ensuing Annual General
Meeting. The said item regarding appointment of M/s Raja & Raman,
Auditors is placed before the shareholders for their approval.
The Auditors have consented and confirmed their eligibility and desire
to continue as Statutory Auditors of the Company.
INTERNAL AUDITOR
Ms. K.R.Divya, (Membership No. 228896) Chartered Accountant, No.37,
P.M.Samy Colony, 1st Street, R.S.Puram, Coimbatore 641 002 was
appointed as Internal Auditor pursuant to the provisions of Section 138
of the Companies Act, 2013 by the Board of Directors of the Company to
conduct the internal audit functions.
COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 Sri B.Venkateswar,
Cost Accountant was appointed by the Board of Directors of the Company
for conducting audit of the Cost Account Records of the Company for the
year 2015-16. He was the Cost Auditor of the Company for the previous
year 2014-15 as well.
SECRETARIAL AUDITOR
KSR & Co, Company Secretaries LLP, a firm of Company Secretaries is the
Secretarial Auditors of the Company. The Secretarial Audit Report
submitted by them forms part of this Report (Annexure-7) .
AUDITOR'S REPORT & ACCOUNTING POLICIES & SECRETARIAL AUDIT REPORT
The Auditors' Report read with the Notes on Accounts are
self-explanatory and does not require any further clarification.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
The Reports of the Statutory Auditors and the Secretarial Audit Report
(both appearing elsewhere in this Annual Report) are without any
adverse comments.
EMPLOYEE STOCK OPTION SCHEME :
Pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014
(the ESOP Regulations) issued by SEBI on October 28, 2014, the Company
has obtained approval of the shareholders through Postal Ballot
replacing the INDSIL ESOS 2008 with "INDSIL ESOS 2015" in conformity
with such regulations and accordingly executed Variation Deed of Trust
with the concerned Registering Authority in Coimbatore. The results of
the Postal Ballot passing the resolution to this effect by the
shareholders were furnished to the Bombay Stock Exchange accordingly
and such results were published in the newspapers and website of the
Company www.indsil.com.
A copy of the INDSIL ESOS 2015 and the registered Variation Deed was
furnished to the Bombay Stock Exchange for the Exchange to take the
same on record. A corporate announcement to this effect has been
published in the Bombay Stock Exchange website.
A disclosure with regard to ESOS of the Company as on 30th June, 2015
is covered in the Corporate Governance Report.
The Company has already obtained a certificate from Raja & Raman,
Chartered Accountants and Statutory Auditors with respect to the
implementation of the Company's ESOS. A copy of the same is also be
available for inspection during the working days of the Registered
Office of the Company between 9.30 am to 5.30 pm.
CORPORATE WEBSITE:
The website of the Company, www.indsil.com carries a comprehensive
database of information of interest to the stakeholders including the
corporate profile, information with regard to products, plants and
financial performance of the Company, Policies and other matters.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
Independence as applicable under the provisions of Section 149(6) of
the Companies Act, 2013 read with relevant rules and Clause 49 of the
Listing Agreement.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
A familiarization programmer for Independent Directors was conducted on
11th May, 2015.
INSURANCE:
All the properties of the Company including buildings, plant &
machinery and stocks have been adequately insured.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis report for the year under review as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s) is enclosed to this Annual Report as ( Annexure-8).
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors based on the representations received from the Management
and pursuant to Sub-section 3 (c) of Section 134 of the Companies Act,
2013 hereby confirm that :
(i) in the preparation of Annual Accounts, the applicable accounting
standards have been followed and wherever required, proper explanation
relating to material departures have been given
(ii) 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 at the end of the financial year and of the profit or loss
of the Company for that year:
(iii) have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and deducting frauds and other irregularities.
(iv) have prepared the Annual Accounts on a going concern basis:
(v) have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and
operating effectively: and
(vi) have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate
and operating effectively.
CODE OF CONDUCT
The Board of Directors approved a code of conduct which is applicable
to the members of the Board and all designated employees in the course
of day to day business operations of the Company. The code is posted in
the Company's website www.indsil.com.
All the Board members and the Senior Management Personnel have
confirmed compliance with the code.
PREVENTION OF INSIDER TRADING
The Company adopted a Code of Conduct for Prevention of Insider Trading
in order to regulate the trading in Securities by the Directors and
designated persons of the Company as per SEBI (Prohibition of Insider
Trading Regulations, 2015).
CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchange, a
separate section on Corporate Governance Practices followed together
with a certificate from the Company's Secretarial Auditors KSR & Co,
Company Secretaries LLP, Practicing Company Secretaries, Coimbatore
confirming compliance (provided elsewhere in the Annual Report) form an
integral part of the Directors' Report.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and
mitigation of damage to equipment. The Company has thoroughly followed
all the safety measures.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information with respect to conservation of energy, technology
absorption, foreign exchange earnings and outgo pursuant to Section 134
(3) (m) of the Act read with the Companies (Accounts) Rules 2014 is
enclosed to this report (Annexure-9).
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments in the business
operations of the Company for the financial year ended 30th June, 2015
upto the date of signing of the Director's Report.
NUMBER OF BOARD MEETINGS:
The Board of Directors met five 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.
LISTING FEE
Listing fee for the financial year 2015-16 has been paid to Bombay
Stock Exchange where the shares of the Company are listed.
DECLARATION
The Company has been regular in filing all forms and returns with the
Registrar of Companies as required under the Companies Act, 2013 and
has not defaulted in payment of dividends.
ACKNOWLEDGEMENTS
Your Directors are extremely thankful to State Bank of Travancore,
Export Import Bank of India, IDBI Bank Limited, Yes Bank Limited,
Standard Chartered Bank and The Federal Bank Limited for their
continued support.
Your Directors acknowledge and express their grateful appreciation for
the co-operation and support received from Government Authorities,
Kerala State Industrial Development Corporation, employees, customers
and suppliers. They also thank the shareholders for the confidence
reposed by them in the management of the Company and for their
continued support and co-operation.
For and on behalf of the Board
Place : Coimbatore
Date : 2nd November, 2015 Sd/- Sd/-
VINOD NARSIMAN S.N. VARADARAJAN
Managing Director Executive Vice-Chairman
DIN: 00035746 DIN: 00035693
Jun 30, 2014
Dear Members,
The Directors have great pleasure in presenting the 24th Annual Report
of your Company together with the Audited statements of account for the
year ended 30th June 2014.
FINANCIAL RESULTS:
Rs in lakhs
Particulars 2013-14 2012-13
Profit before depreciation and Financial charges 1875.25 718.63
Less:Financial Charges 371.04 295.52
Profit before Depreciation 1504.21 423.11
Less:Depreciation 397.84 379.55
Profit before taxes and extraordinary items 1106.37 43.56
Less:Extraordinary items -- --
Profit before tax 11069.37 43.56
Less:Provision for Tax 221.36 8.30
Add/Less:Deferred Tax asset/liability (-)200.87 7.01
(MAT Credit)
Profit after tax 1085.88 28.25
Add:Balance brought forward 4641.73 4706.41
Surplus available for appropriation 5727.61 4734.66
Less : Transfer to General Reserve -- --
MAT Credit Reserve
Less : Proposed Dividend 190.64 79.43
Less : Tax on proposed Dividend 38.12 13.50
Balance carried over to Balance Sheet 5498.84 4641.73
Paid-up equity share capital 1588.68 1588.68
Earnings per share (Rs.) 6.84 0.18
Book value per share (Rs.) 53.20 47.80
REVIEW OF OPERATIONS:
Your Company''s financial performance for the year was reasonable when
compared to the rest of the ferro alloy industry. This is on account of
the decent performance by the hydro electric power division during the
year under review. This resulted in lower cost of electricity for the
Company for the year as a whole. Therefore, your Company could manage a
reasonable financial performance.
The power plant produced 38.23 million units of electricity during the
year as against 14.96 million units for the previous year. The Company
registered a PBDIT of Rs.1875.25 lakhs for the current year as against Rs.
718.63 Lakhs in the previous year. The Company registered a PBT of Rs.
1106.37 lakhs for the current year as against Rs. 43.56 Lakhs for the
previous year.
FUTURE PROSPECTS:
The outlook and future prospects of the Company are presented in the
"Management Discussion and Analysis Report" forming part of this
Report.
RENEWABLE ENERGY CERTIFICATES (REC):
As the members are aware, your Company got successfully registered as
an RE generator under the new REC mechanism promulgated by the Central
Government. This status entitles the Hydro Power Project of your
Company (HPP) to receive Renewable Energy Certificates for every 1000
units of renewable energy produced. These certificates are tradeable in
the Indian Energy Exchange (IEX) and Power Exchange India Limited
(PXIL). During the year under review, your Company could realize Rs.
2,42,58,000/- being the sale proceeds of 16172 REC units. As on date,
your Company has RECs for a total value of Rs. 6,51,78,000/-
As per current indications there is scope for demand for RECs as there
is a momentum towards complying with Renewable Purchase Obligations
(RPO) of RECs. With RPO compliance drive initiated by various State
Regulators in the Country, it is expected that the buyer''s
participation for RPO''s would increase in the forthcoming trading
sessions.
JOINT VENTURE - AL-TAMMAN INDSIL FERRO CHROME LLC
The Joint Venture ferro chrome manufacturing operations in Sultanate of
Oman commenced full scale commercial production from April, 2014
onwards.
SREE MAHALAKSHMI SMELTERS (P) LTD (SMS) - SUBSIDIARY OF THE COMPANY:
The capacity of SMS plant was upgraded from 5 MVA to 7.5 MVA for the
manufacture of Low Carbon Silico Manganese from that of High Carbon
Silico Manganese. The State of Andhra Pradesh faced severe powercut
during the period under review resulting in under-utilisation of
operations resulting in the subsidiary not being able to operate at its
full capacity. This, in turn, resulted in the subsidiary suffering
financial losses.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements by consolidating the accounts of
the Company, Sree Mahalakshmi Smelters Private Limited (Subsidiary of
the Company) & the JV Company M/s Al-Tamman Indsil Ferro Chrome LLC,
Sultanate of Oman under the applicable Accounting Standards of the
Institute of Chartered Accountants of India form part of this Annual
Report.
DIVIDEND:
Your Directors recommend payment of dividend at 12% on the equity share
capital of Rs.15,88,67,920 for the year ended 30th June, 2014. The
dividend, if approved, will be paid to those members whose names appear
on the Register of members of the Company as on 15th December, 2014 the
date fixed for the purpose, subject to the approval of the
shareholders.
The aggregate dividend payout for the year 2013-14 amounts to Rs. 228.76
Lakhs including corporate dividend tax.
BOARD COMMITTEES
During the year, your Directors have re-constituted the Committees of
the Board, as mandated under the Companies Act, 2013 and revised Clause
49 of Listing Agreement.
a. Corporate Social Responsibility Committee :
The Committee is being constituted. Meanwhile, your Company has already
commenced its Corporate Social Responsibilities even from last year. As
part of its socio-economic activities and to emphasize integral
development of societal needs in and around its areas of operations,
your Company had made its humble contributions to institutions viz:
Swami Vivekananda Medical Mission, Palakkad, Kerala, Divine Province
Funding Home, Rajakkad, Idukki District, Kerala. St. Benedict Church,
Kuthungal, Idukki District, Kerala, Government Higher Secondary School,
Rajakkad, Idukki District, Kerala and Unnadhi Training Centre,
Coimbatore which are engaged in Community Mental Health Programme, Eye
camps, Mobile Medical Utilities, protection, welfare and development of
abandoned children and uplifting the below poverty-line children and
such other social activities.
The amount so far contributed including that of last year is Rs. 21.69
Lakhs and your Company will continue its pursuit to fulfill its
Corporate Social Responsibilities in future as well, as and when the
Company''s budget allows.
b. Audit Committee:
The Audit Committee has been reconstituted with the scope of activities
set out in Clause 49 of the Listing Agreement with the Stock Exchange
read with section 177 of the Companies Act, 2013. The Committee
consists of Dr. A.K. Sreedharan, Chairman, Dr.T.C.P. Nambiar and Sri
Vinod Narsiman, Members.
c. Stakeholders'' Relationship Committee
This Committee considers and resolves the grievances of security
holders of the Company. The said Committee comprises of Sri
S.Inderchand as Chairman and Smt. D.Pushpa Varadarajan as Member.
d. Nomination & Remuneration Committee :
The scope of work and/or terms of reference for the said Committee,
inter alia, includes matters as stated under Section 178(2) and 178(3)
of the Companies Act, 2013 read with applicable provisions of the
Listing Agreement. The Committee comprises of Dr. A.K.Sreedharan as
Chairman and Dr. T.C.P. Nambiar & Sri B.Balchand as Members.
e. Compensation Committee :
The Compensation Committee deals with the allocation of ESOS under
Indsil ESOS scheme to the eligible employees. The Committee consists
of Dr. A.K. Sreedharan as Chairman and Sri Vinod Narsiman and Dr.
T.C.P. Nambiar as members.
f. Vigil Mechanism :
The Board has constituted Vigil Mechanism as per Rule 7 of the
Companies (Meetings of Board and its Powers) Rules, 2014. The Audit
Committee has been authorized to oversee the Vigil Mechanism. Sri Vinod
Narsiman, Managing Director has been nominated to facilitate the Vigil
Mechanism.
The Vigil Mechanism is intended to provide adequate safeguards against
victimization of employees and to facilitate to report their genuine
concerns or grievances.
EMPLOYEE STOCK OPTION SCHEME :
The Company implemented the Employee Stock Option Scheme ("Scheme") in
accordance with the Securities Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The
Compensation Committee, constituted in accordance with the SEBI
Guidelines, administers and monitors the Scheme.
The applicable disclosures as stipulated under the SEBI Guidelines as
at 30th June, 2014 are given below: The total number of options
in force:
On 28.1.2009 On 30.4.2010
Options granted 64,500 18,500
Exercise Price Rs 10 Rs 10
For options granted on 28.1.2009 :
As per the Scheme, the following options were exercised by the first
set of eligible employees as per details shown below :
A. First set of eligible employees
Tranche No.of options No of shares Bonus Shares
exercised transferred transferred
@ 25% for from ESOS from ESOS
each tranche Trust to eligible Trust to eligible
employees employees
I st Tranche 16125 16125 -
II nd Tranche 16125 16125 10750
III rd Tranche 16125 16125 10750
IV th Tranche 11750 11750 7833
TOTAL 60125 60125 29333
Tranche Total shares No. of
transferred from ESOS options lapsed
Trust to eligible employees
I st Tranche 16125 NIL
II nd Tranche 26875 NIL
III rd Tranche 26875 NIL
IV th Tranche 19583 4375*
TOTAL 89458 NIL
along with 2,917 bonus shares
Balance shares in Trust account 7,292
Money realized by exercise of options Rs6,01,250/-
Any employee who received grant of options in any one year
amounting to 5% or more of options granted during the year : NIL
Identified employees, who were granted options, during
any one year, equal to or exceeding 1% of the issued
capital of the Company at the time of grant : NIL
Diluted Earnings Per Share (EPS) pursuant to issue of
share on exercise of options calculated in accordance
with Accounting Standard (AS) 20 "Earnings per Share" :Rs6.84
The issue of equity shares pursuant to exercise of options will affect
the statement of Profit & Loss of the Company, as the exercise has been
made at par value of Rs. 10/- per share.
For options granted on 30.4.2010
As per the Scheme, the following options were exercised by the second
set of eligible employees as per details shown below:
B. Second Set of eligible employees
Tranche No.of options No of shares Bonus Shares
exercised re-issued re-issued
@25% for from ESOS from ESOS
each tranche Trust to eligible Trust to eligible
employees employees
I st Tranche 4625 4625 3081
II nd Tranche 4625 4625 3081
III rd Tranche 4625 4625 3081
IV th Tranche 4000 4000 2665
TOTAL 17875 17875 11908
Tranche Total shares No. of
re-issued from ESOS options lapsed
Trust to eligible employees
I st Tranche 7706 NIL
II nd Tranche 7706 NIL
III rd Tranche 7706 NIL
IV th Tranche 6665 625*
TOTAL 29783 625
* alongwith 416 bonus shares
Balance shares in Trust account : 1050
Money realized by exercise of option : Rs. 1,78,750/-
Balance number of shares in Trust Account : 8342 (A B)
C.5000 options were granted to Sri : 5000
Rajan Jose, General Manager (Works)
under Accelerated Vesting. Accordingly
shares were transferred from ESOS Trust
Account on receipt of remittance of
Rs. 50,000/- from him to ESOS Trust
Account which was subsequently
transferred from ESOS Trust Account
to the Company.
Balance number of shares in Trust Account : 3342
as on 11th October, 2014
The Company has received a Certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for
inspection by members.
The audited accounts placed before the shareholders in this meeting
have been prepared recognizing the employee compensation cost using the
intrinsic value.
INSURANCE:
All the properties of the Company including buildings, plant &
machinery and stocks have been adequately insured. CORPORATE WEBSITE :
The website of your Company, www.indsil.com carries a comprehensive
database of information of interest to the stakeholders including the
corporate profile, information with regard to products, plants and
various depots, financial performance of your Company and other
details.
DIRECTORS:
Dr. Rama Iyer resigned from the Board with effect from 27th May, 2014.
The Board of Directors took on record the same at their meeting held on
27th August, 2014 and expressed their appreciation to Dr. Rama Iyer for
his contribution to the Company as Director during his tenure of
Office.
Dr. T.C.P.Nambiar was co-opted as an Additional Director with effect
from 27th August, 2014. The appointment of Dr. T.C.P.Nambiar as an
Independent Director of the Company is placed before this meeting for
your approval.
Dr. A.K.Sreedharan and Sri B. Balchand are retiring by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
Dr. A.K.Sreedharan, Sri K. Ramakrishnan and Dr. T.C.P.Nambiar are
proposed to be appointed as Independent Directors and such proposals
are placed before the members in this Annual General Meeting for
approval.
AUDITORS:
The Board of Directors of the Company recommend M/s Raja & Raman,
Chartered Accountants, Coimbatore, the retiring Auditors to be
reappointed as Statutory Auditors of the Company from the conclusion of
this Annual General Meeting till the conclusion of the next Annual
General Meeting for the financial year 2014-15 subject to the approval
of the shareholders in the ensuing Annual General Meeting. The said
item regarding appointment of M/s Raja & Raman, Auditors is placed
before the shareholders for their approval.
INTERNAL AUDITOR
The Board has appointed Ms. K.R.Divya, Chartered Accountant, 1055/11
Gowtham Centre, 1st Floor, Avanashi Road, Coimbatore 641 018 as
Internal Auditor pursuant to the provisions of Section 138 of the
Companies Act, 2013 to conduct the internal audit functions and to
report to the Audit Committee.
AUDITOR''S REPORT & ACCOUNTING POLICIES
The Auditors'' Report read with the Notes on Accounts are
self-explanatory and do not require any further clarification.
A statement detailing significant Accounting Policies of the Company is
annexed to the Accounts.
SECRETARIAL AUDIT REPORT :
Pursuant to Section 204 of the Companies Act, 2013, a Company is
required to appoint a Practising Company Secretary as Secretarial
Auditor for the financial year ending 30th June, 2015.
Accordingly the Board of Directors have appointed KSR & Co Company
Secretaries LLP, a Firm of Practising Company Secretaries in Coimbatore
as the Secretarial Auditor for the aforesaid financial year.
COST AUDITOR
Pursuant to Order No. F.NO.52/26/CAB-2010 dated 2nd May, 2011 read with
provisions as contained under Cost Accounting Records (Petroleum
Industry) Rules, 2002 and General Circular No. 15/2011 dated 11th
April, 2011 as issued by Cost Audit Branch of the Ministry of Corporate
Affairs, your Company had appointed Sri B.Venkateswar, Cost Accountant
for conducting audit of the Cost Accounting Records of the Company for
the year 2013-14. The said appointment, has been made pursuant to
Section 233B of the Companies Act, 1956 (presently Section 148 of
Companies Act, 2013) and the audit is underway.
FIXED DEPOSITS
There were no Fixed Deposits from the public outstanding with the
Company at the end of the financial year.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as
stipulated under Clause-49 of the Listing Agreement with the Stock
Exchange is presented in a separate section forming part of this Annual
Report.
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000
The Board of Directors report that:
1. in the preparation of the annual accounts, the applicable Accounting
Standards have been followed along with proper explanation relating to
material departures.
2. 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 fair view of the state of affairs of the
Company at the end of the year and of the profit of the Company for
that year.
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
4. the Directors have prepared the annual accounts on a going concern
basis.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from KSR &
Co Company Secretaries LLP regarding compliance of conditions of
Corporate Governance form part of this Annual Report.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and
mitigation of damage to equipment. The Company has thoroughly followed
all the safety measures.
PARTICULARS REQUIRED UNDER SECTION 217 (1)(e) & SECTION 217(2A) OF THE
COMPANIES ACT, 1956
Particulars required under Section 217 (1)(e) of the Companies Act,
read with relevant rules are annexed in Annexure-A. Information in
accordance with Section 217 (2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975 is given in
Annexure-B of this Report.
DECLARATION
The Company has been regular in filing all forms and returns with the
Registrar of Companies as required under the Companies Act, 2013 and
has not defaulted in payment of dividends. Accordingly, the Company has
not committed any of the defaults specified under Section 184 (1) read
with Rule 9 (1) of the Companies Act, 2013 disqualifying its Directors
to act as Directors of other companies.
ACKNOWLEDGEMENTS
Your Directors are extremely thankful to State Bank of Travancore, The
Federal Bank Limited, IDBI Bank Limited, Yes Bank Limited and Standard
Chartered Bank for their continued support.
Your Directors acknowledge and express their grateful appreciation for
the co-operation and support received from Government Authorities,
Kerala State Industrial Development Corporation, Employees, Customers
and Suppliers. They also thank the Shareholders for the confidence
reposed by them in the management of the Company and for their
continued support and co-operation.
Place : Coimbatore For and on behalf of the Board
Date : 13.11.2014
Sd/-
S.N. VARADARAJAN
Executive Vice Chairman
Jun 30, 2013
The Directors have great pleasure in presenting the 23rd Annual Report
of your Company together with the Audited statements of account for the
year ended 30th June 2013.
FINANCIAL RESULTS:
Rs.in lakhs
Particulars 2012-13 2011-12
Profit before depreciation and
Financial charges 718.63 1557.60
Less : Financial Charges 295.52 248.44
Profit before Depreciation 423.11 1309.16
Less : Depreciation 379.55 367.08
Profit before taxes and extraordinary items 43.56 942.08
Less : Extraordinary items
Profit before tax 43.56 942.08
Less : Provision for Tax 8.30 183.09
Add/Less : Deferred Tax asset/liability
(MAT Credit) 7.01 -244.48
Profit after tax 28.25 1003.47
Add : Balance brought forward 4706.41 3887.59
Surplus available for appropriation 4734.66 4891.05
Less : Transfer to General Reserve
MAT Credit Reserve
Less : Proposed Dividend 79.43 158.87
Less : Tax on proposed Dividend 13.50 25.77
Balance carried over to Balance Sheet 4641.73 4706.41
Paid-up equity share capital 1588.68 1588.68
Earnings per share (Rs.) 0.18 6.32
Book value per share (Rs.) 47.80 48.20
REVIEW OF OPERATIONS:
Your Company''s financial performance for the year was drastically
affected due to an acute drought situation at your Company''s hydro
electric power station in Rajakkad, Idukki Dist., Kerala. In fact, the
drought conditions enveloped the entire State of Kerala and affected
all the electric power stations in that State. The drought has been
considered to be one of the worst in the past 2 decades. This resulted
in the Company having to procure high cost power from the Kerala State
Electricity Board to sustain its smelter operations and with a steep
increase in the KSEB power tariff which occurred during the year
2012-13, the Company''s operating margins were severely affected. As a
result, your Company could register a PBDIT of only Rs. 718.63 Lakhs as
against Rs.1557.60 Lakhs for the previous year.
The PBT is only Rs. 43.56 Lakhs as against Rs. 942.08 Lakhs in the previous
year.
The hydro electric power generated only 14.96 million units as compared
to 43.52 million units in the previous year.
FUTURE PROSPECTS:
The outlook and future prospects of the Company are presented in the
"Management Discussion and Analysis Report" forming part of this
Report.
RENEWABLE ENERGY CERTIFICATES (REC):
As the members are aware, your Company got successfully registered as
an RE generator under the new REC mechanism promulgated by the Central
Government. This status entitles the Hydro Power Project of your
Company (HPP) to receive Renewable Energy Certificates for every 1000
units of renewable energy produced. These certificates are tradeable in
the Indian Energy Exchange (IEX) and Power Exchange India Limited
(PXIL). During the year under review, your Company could realize Rs.
54,27,000/- being the sale proceeds of 3618 REC units. As on date, your
Company has RECs for a total value of Rs. 2,55,95,141/-.
As per current indications there is scope for demand for RECs as there
is a momentum towards complying with Renewable Purchase Obligations
(RPO) of RECs by the end of FY 2013-14. With RPO compliance drive
initiated by states like Punjab, Uttarakhand, Maharashtra and
Chhattisgarh State Regulators, it is expected that the buyer''s
participation for RPO''s would increase in the forthcoming trading
sessions.
JOINT VENTURE PROJECT IN OMAN:
As reported in the last year''s Directors Report, the JV Project in Oman
(Al-Tamman Indsil Ferro Chrome LLC) established in the Sohar Free Zone
in Sultanate of Oman has built a world-class Ferro Chrome Smelter with
an initial capacity to produce 75,000 tpy of Ferro Chrome.
The Company uses 2 x 24 MVA submerged arc furnaces to smelt the
chromite. The two furnaces have been commissioned and production
commenced during the second half of the year 2013. Both the furnaces
are working currently.
Your Company receives enormous support from the Sohar Free Zone, and
therefore there should be no bottle-necks in achieving the objectives
of the Company in terms of its full scale commercial production.
The key markets for the JV project of your Company are the Far East and
Europe.
SREE MAHALAKSHMI SMELTERS (P) LTD (SMS) - SUBSIDIARY OF THE COMPANY:
As the members are aware, the capacity of SMS plant was upgraded from 5
MVA to 7.5 MVA for the manufacture of Low Carbon Silico Manganese from
that of High Carbon Silico Manganese. The State of Andhra Pradesh faced
severe power cut during the period under review resulting in
under-utilisation of operations resulting in the subsidiary not being
able to operate at its full capacity. This, in turn, resulted in the
subsidiary suffering financial losses.
CONSOLIDATED FINANCIAL STATEMENTS:
The consolidated financial statements by consolidating the accounts of
the Company, Sree Mahalakshmi Smelters Private Limited (Subsidiary of
the Company) & the JV Company M/s Al-Tamman Indsil Ferro Chrome LLC,
Sultanate of Oman under the applicable Accounting Standards of the
Institute of Chartered Accountants of India form part of this Annual
Report.
DIVIDEND:
Your Directors recommend payment of dividend at 5% on the equity share
capital of Rs.15,88,67,920 for the year ended 30th June 2013. The
dividend, if approved, will be paid to those members whose names appear
on the Register of members of the Company as on 9th December 2013, the
date fixed for the purpose, subject to the approval of the
shareholders.
The aggregate dividend payout for the year 2012-13 amounts to Rs. 93
Lakhs including corporate dividend tax.
CORPORATE SOCIAL RESPONSIBILITY:
Your Company has commenced its Corporate Social Responsibilities. As
part of its socio-economic activities and to emphasize integral
development of societal needs in and around its areas of operations,
your Company had made its humble contributions to institutions viz:
Swami Vivekananda Medical Mission, Palakkad, Kerala, Divine Province
Funding Home, Rajakkad, Idukki District, Kerala. St. Benedict Church,
Kuthungal, Idukki District, Kerala, Government Higher Secondary School,
Rajakkad, Idukki District, Kerala and Unnadhi Training Centre,
Coimbatore which are engaged in Community Mental Health Program, Eye
camps, Mobile Medical Utilities, protection, welfare and development of
abandoned children and uplifting the below poverty line children and
such other social activities.
The amount so far contributed is Rs. 12.56 Lakhs and your Company would
continue its pursuit to fulfill its Corporate Social Responsibilities
in future as well, as and when the Company''s budget allows.
EMPLOYEE STOCK OPTION SCHEME :
The Company implemented the Employee Stock Option Scheme ("Scheme") in
accordance with the Securities Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. The
Compensation Committee, constituted in accordance with the SEBI
Guidelines, administers and monitors the Scheme.
The applicable disclosures as stipulated under the SEBI Guidelines as
at 30th June, 2013 are given below: The total number of options in
force:
On 28.1.2009 On 30.4.2010
Options granted 64,500 18,500
Exercise Price Rs. 10 Rs. 10
For options granted on 28.1.2009 :
As per the Scheme, the following options were exercised by the first
set of eligible employees as per details shown below :
* alongwith 2,917 bonus shares
Balance shares in Trust account 7,292
Money realized by exercise of options Rs. 6,01,250/-
Any employee who received grant of options in any one year
amounting to 5% or more of options granted during the year : NIL
Identified employees, who were granted options, during
any one year, equal to or exceeding 1% of the issued capital
of the Company at the time of grant : NIL
Diluted Earnings Per Share (EPS) pursuant to issue of share on
exercise of options calculated in accordance with
Accounting Standard (AS) 20 "Earnings per Share" : Rs. 6.32
The issue of equity shares pursuant to exercise of options will affect
the statement of Profit & Loss of the Company, as the exercise has been
made at par value of Rs. 10/- per share.
For options granted on 30.4.2010
As per the Scheme, the following options were exercised by the second
set of eligible employees as per details shown below:
Valuation of options :
As required, the employee compensation cost as a result of calculations
made under Black Scholes model is Rs.15.21 and Rs. 63.66 per share having
regard to the fact that the strike price is Rs. 10 per share and the
stock price (price on the date of grant i e., 28.01.2009 & 30.04.2010)
are Rs. 23.95 & Rs. 72.40 respectively.
The Company has received a Certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for
inspection by members.
The audited accounts placed before the shareholders in this meeting
have been prepared recognizing the employee compensation cost using the
intrinsic value.
INSURANCE:
All the properties of the Company including buildings, plant &
machinery and stocks have been adequately insured.
DIRECTORS:
Smt. D. Pushpa Varadarajan and Sri K.S. Mahadevan are retiring by
rotation at the forthcoming Annual General Meeting and being eligible,
offer themselves for re-appointment.
AUDITORS:
M/s. K S G Subramanyam & Co Chartered Accountants are one of the
Statutory Auditors of the Company till the financial year 2012-13 along
with M/s Haribhakti & Co, as the Joint Statutory Auditors.
M/s. K S G Subramanyam & Co, due to their pre-occupation, had submitted
their letter of resignation from the office of the Statutory Auditors
of the Company with effect from 13th August 2013 and their resignation
was informed to the Bombay Stock Exchange on 26th August, 2013.
The present Statutory Auditors M/s Haribhakti & Co, Chartered
Accountants, Coimbatore had expressed their unwillingness to continue
as the Statutory Auditors of the Company and they will cease to be the
Statutory Auditors of the Company from the forth coming Annual General
Meeting of the Company.
The proposed retirement of the Statutory Auditors M/s Haribhakti & Co
was informed to the Bombay Stock Exchange on 7th November, 2013.
M/s Raja & Raman, Chartered Accountants, 1055/11, Gowtham Centre, 1st
Floor, Avinashi Road, Coimbatore 641 018 are willing to get appointed
as Statutory Auditors of the Company and in this connection, they have
submitted a letter to the Company, stating that their appointment is
valid as it will be within the limit prescribed under sub section (1-B)
of Section 224 of the Companies Act, 1956.
The Board of Directors of the Company recommend M/s Raja & Raman,
Chartered Accountants, Coimbatore to be appointed as Statutory Auditors
of the Company from the conclusion of the ensuing Annual General
Meeting till the conclusion of the next Annual General Meeting for the
financial year 2013-14 subject to the approval of the shareholders in
the ensuing Annual General Meeting. The said item regarding appointment
of M/s. Raja & Raman, Auditors is placed before the shareholders for
their approval.
COST AUDITORS
The Board has appointed Sri B. Venkateswar, Cost Accountant, Coimbatore
as Cost Auditor of the Company pursuant to section 233B of the
Companies Act, 1956 for the financial year 2011-12 & 2012-13. The cost
Audit Report for the financial year 2011-12 approved by the Board of
Directors of the Company on 5th November 2013 was filed on 1st February
2013 and for the financial year 2012-13, such a report will be filed.
POSTAL BALLOT
Board of Directors at their meeting held on 3rd July 2013 had adopted a
resolution for Postal Ballot pursuant to Section 192 A of the Companies
Act, 1956 in order to transfer the shares held by the Company in
Al-Tamman Indsil Ferro Chrome LLC to its own arm "Indsil Hydro Global
(FZE)", a 100% subsidiary of the Company in the Sharjah Airport
International Free Zone.
The Postal Ballots received from the shareholders upto 6.8.2013 were
scrutinized and result declared in favour of the resolution. Details of
the Results were published on 9.8.2013 in The Mint and Makkal Kural.
The result was also informed to The Bombay Stock Exchange Ltd and
posted in the Company''s website.
ENTERPRISE RESOURCE PLANNING (ERP) IMPLEMENTATION :
Your Company has successfully implemented an Oracle Enterprise Resource
Planning (ERP) System. Your Company considers IT-Enterprise Resources
Planning Integrated platform to be pivotal for ensuring smooth
functioning of processes and has a crucial role in fulfilling
operational as well as the functional information requirements of the
organisation.
Besides facilitating integration across all business functions
including Financial Accounting, it will facilitate informed decision
making on a faster basis.
DEPOSITS
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956.
MANAGEMENT DISCUSSION & ANALYSIS
Management Discussion and Analysis for the year under review as
stipulated under Clause-49 of the Listing Agreement with the Stock
Exchange(s) is presented in a separate section forming part of this
Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000:
The Board of Directors report that :
1. in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures.
2. the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a fair view of the state of affairs of the
Company at the end of the year and of the profit of the Company for
that year.
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
4. the Directors have prepared the annual accounts on a going concern
basis.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and a Certificate from KSR &
Co Company Secretaries LLP regarding compliance of conditions of
Corporate Governance forms part of this Annual Report.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and
mitigation of damage to equipment. The Company has thoroughly followed
all the safety measures.
PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT, 1956 :
Particulars required under Section 217 (1) (e) of the Companies Act,
read with relevant rules are annexed in Annexure-A. Information in
accordance with Section 217 (2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975 is given in
Annexure-B of this Report.
DECLARATION:
The Company has been regular in filing all forms and returns with the
Registrar of Companies as required under the Companies Act, 1956 and
has not defaulted in payment of dividends. Accordingly, the Company has
not committed any of the defaults specified under Section 274(1)(g) of
the Companies Act, 1956 (as amended by the Companies Amendment Act,
2000) disqualifying its Directors to act as Directors of other
companies.
ACKNOWLEDGEMENTS:
Your Directors are extremely thankful to State Bank of Travancore, The
Federal Bank Limited, IDBI Bank Limited, Yes Bank Limited and Standard
Chartered Bank for their continued support.
Your Directors acknowledge and express their grateful appreciation for
the co-operation and support received from Government Authorities,
Kerala State Industrial Development Corporation, Employees, Customers
and Suppliers. They also thank the Shareholders for the confidence
reposed by them in the management of the Company and for their
continued support and co-operation.
Place : Coimbatore For and on behalf of the Board
Date : 07.11.2013 Sd/-
S.N. VARADARAJAN
Chairman
Jun 30, 2011
The Directors have great pleasure in presenting the 21st Annual Report
of your Company together with the Audited statements of account for the
year ended 30th June 2011.
FINANCIAL RESULTS:
Rs. in lakhs
Particulars 2010-11 2009-10
Profit before depreciation and
Financial charges 1789.61 2044.38
Less : Financial charges 66.32 148.92
Profit before Depreciation 1723.30 1895.46
Less : Depreciation 354.45 348.53
Profit before taxes and extraordinary
items 1368.85 1546.93
Less : Extraordinary items 22.50 ---
Profit before tax 1346.35 1546.93
Less : Provision for Tax 280.00 210.00
Add/Less : Deferred Tax asset/liability 11.85 22.05
Profit after tax 1054.50 1358.98
Add : Balance brought forward 3017.73 2825.48
Surplus available for appropriation 4072.23 4184.46
Less: Transfer to General Reserve - 1000.00
Less: Proposed Dividend 158.87 142.98
Less: Tax on Proposed Dividend 25.77 23.75
Balance carried over to Balance sheet 3887.59 3017.73
Paid-up equity share capital 1588.68 951.36
Earnings per share (Rs.) 7.55 14.34
Book value per share (Rs.) 43.03 62.61
REVIEW OF OPERATIONS:
Your Company's financial performance was on expected lines this year.
Your Company's increased exposure to the European markets for its core
product low carbon silicon manganese and most of the business were
contractual in nature with price formula clause.
The Company registered a PBDIT of Rs.1,790 lakhs as compared to
Rs.2,044 lakhs in the previous year. The PBT is Rs.1,346 lakhs as
compared to Rs.1,547 lakhs in the previous year.
The hydro electric power generated 43.12 million units in the previous
year. More detailed view is given in the "Management Discussion and
Analysis Report" forming part of this Annual Report.
FUTURE PROSPECTS:
The outlook and future prospects of the Company are presented in the
"Management Discussion and Analysis Report" forming part of this
Report.
LOCK-OUT:
A lock-out was declared in the Company's Smelter division with effect
from August 11, 2011. This lock-out was pursuant to industrial unrest
in the factory which in turn was a consequence of temporary breakdown
in talks for a long term settlement of wages. The situation is expected
to be resolved any time soon and the factory is expected to commence
normal operations from 1st November 2011. It is to be noted here that
the Company's Hydro Electric Power Plant was unaffected and operations
were normal.
JOINT VENTURE PROJECT IN OMAN :
As reported in the last year's Directors' Report, your Company along
with a group sister company, was in the process of promoting a 75,000
tpy Ferro Chrome smelter in the Sultanate of Oman. Indusial group has a
50% interest in the JV with the Sultanate's largest chrome ore miner
viz., the Muscat Overseas Group.
As shareholders are aware, the JV called Al-Tamman Indsil Ferro Chrome
LLC was established in the Sultanate of Oman and the project was
earlier expected to go on stream in its FIRST phase by December 2011.
Your Company's stake is 25% in the entire venture.
Due to delay in environmental clearance, the project implementation
scheme got delayed.
Having obtained the environmental clearance, your Company signed an
agreement with the Sohar Free Zone in mid September this year.
The new JV Al-Tamman Indsil Ferro Chrome LLC is coming up in a 15
hectare plot in Sohar Free Zone and this is the FIRST Ferro Chrome
Project in the Sultanate of Oman.
The JV will be building a world class ferro chrome smelter within Sohar
Free Zone with an initial capacity to produce 75,000 tpa.
In the initial phase, two smelters with an investment of USD 35 million
are expected to commence production by December 2012. The Second phase
will follow with an additional investment of USD 45-50 million for
building two additional smelters to produce ferro chrome which is the
key ingredient in making stainless steel.
By the turn of 2014, around 1,50,000 tons of ferro chrome and 20,000
tons of low carbon ferro chrome are expected to be produced and the
expected revenue will be in the range of USD 200 million.
ACQUISITION OF SREE MAHALAKSHMI SMELTERS (P) LTD (SMSPL):
Your Company, on October 24, 2011 has acquired a 51% stake in SMSPL and
subsequently SMSPL would become a material subsidiary of your Company.
SMSPL operates a 8400 tpy silico manganese smelter at Garbham,
Vizianagaram-Dist., Andhra Pradesh. The two key advantages that SMSPL
enjoys are proximity to the Vizag Port and access to economical
electric power from the Andhra Pradesh grid.
More than 80% of your Company's products are sold in the global markets
and more than 50% of the main feed stock, manganese ore is imported.
Consequent to the acquisition, your Company plans to carryout
de-bottlenecking and capacity enhancement measures to increase the
existing capacity by around 50%. The acquisition has been financed
purely by internal accruals.
DIVIDEND:
Your Directors recommend payment of dividend at 10% on the equity share
capital of Rs.15,88,67,920/-for the year ended 30th June 2011. The
dividend, if approved, will be paid to those members whose names appear
on the Register of members of the Company as on 8th December 2011, the
date fixed for the purpose, subject to the approval of the
shareholders.
The aggregate dividend payout for the year 2010-11 amounts to Rs
1,85,64,027/- including Corporate dividend tax.
KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION (KSIDC) AWARD:
KSIDC had honored your Company with "Outstanding Entrepreneurship
Award" and the award was presented by Sri Oommen Chandy, Hon'ble Chief
Minister of Kerala to our Chairman Sri S. N. Varadarajan during the
Golden Jubilee function of KSIDC held on 30th July 2011 at the Le
Meridien Convention Centre, Kochi.
FORBES RANKING:
The global magazine, Forbes came out with the list of top 200 Companies
having revenues "Under a Billion in the Asia Pacific Region". Your
Company has been selected as one amongst them. Specifically, the
magazine points out to your Company's consistent profitability,
dividend track record and low indebtedness as key factors behind this
selection.
EMPLOYEE STOCK OPTION SCHEME:
The Company implemented the Employee Stock Option Scheme ("Scheme") in
accordance with the Securities Exchange Board of India (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 the
SEBI (Guidelines). The Compensation Committee, constituted in
accordance with the SEBI Guidelines, administers and monitors the
Scheme.
The applicable disclosures as stipulated under the SEBI Guidelines as
at 30th June, 2011 are given below:
The total number of options in force:
On 28.1.2009 On 30.4.2010
Options granted 64,500 18,500
Exercise Price Rs.10 Rs.10
For options granted on 28.1.2009 :
As per the Scheme, 1st tranche of 16,125 options (being 25% of 64,500
options granted) were exercised by the Eligible Employees and shares
were issued to them accordingly from the ESOS Trust. This was before
bonus issue.
Consequently the 2nd tranche of 16,125 options (being 25% of 64,500
options granted) were vested with Eligible Employees, which were
exercised by them in full. As a result, 16,125 shares and 10,750 Bonus
shares were re-issued by way of transfer from ESOS Trust. There were no
options lapsed which were vested with the Eligible Employees as a
result of not being exercised by the Eligible Employees.
Number of Options Granted (First Batch of
Eligible Employees) 64,500
1st tranche of 25% transferred from Trust
on 13.05.2010 16,125
2nd tranche of 25% transferred from Trust
on 31.5.2011 16,125*
Balance number of shares in Trust account 32,250**
*10,750 Bonus shares were also transferred proportionately.
** Proportionate Bonus Shares already allotted and credited to ESOS
Trust will be transferred to Eligible Employees as and when they
exercise their balance 50% of options.
Money realized by exercise of options : Rs. 3,22,500/-
Any Employee who received a grant of
options in any one year amounting to
5% or more of options granted during
the year : NIL
Identified Employees, who were
granted options, during any one
year, equal to or exceeding 1% of the
issued Capital of the Company at the
time of grant : NIL
Diluted Earnings per share (EPS)
pursuant to issue of share on exercise
of options calculated in accordance
with Accounting Standard (AS) 20
"Earnings per Share" : Rs. 7.55
The issue of equity shares pursuant to exercise of options will affect
the Profit & Loss A/c of the Company, as the exercise has been made at
par value of Rs. 10/- per share.
For options granted on 30.4.2010
As per the Scheme, out of 18,500 options granted to 2nd set of eligible
employees, 25% of the options were vested on 30.04.2011. Accordingly,
4,625 shares were transferred to the eligible employees. There were no
options lapsed which were vested with the Eligible Employees as a
result of not being exercised by the Eligible Employees.
Number of Options Granted to second set of employees 18,500
1st tranche of 25% transferred from Trust on 12.8.2011 4,625*
Balance number of shares in Trust account 13,875**
*3,081 Bonus shares were also transferred proportionately.
Proportionate Bonus Shares already allotted and credited to ESOS Trust,
will be transferred to eligible employees as and when they exercise
their balance 75% of options.
Money realized by exercise of options Rs. 46,250
Valuation of options:
As required, the employee Compensation Cost as a result of calculations
made under Black Scholes model is Rs. 15.21and Rs. 63.66 per share
having regard to the fact that the strike price is Rs. 10 per share and
the stock price (price on the date of grant ie., 28.1.2009 & 30.4.2010)
are Rs.23.95 & Rs.72.40 respectively.
The Company has received a Certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for
inspection by members.
The Audited accounts placed before the shareholders in this meeting
have been prepared recognizing the employee compensation cost using the
intrinsic value.
INSURANCE:
All the properties of the Company including buildings, plant &
machinery and stocks have been adequately insured.
DIRECTORS:
Sri B. Balchand and Dr. S. Rama Iyer are retiring by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
AUDITORS:
M/s. K.S.G. Subramanyam & Co., Company's existing Auditors are to
retire at the ensuing Annual General Meeting and being eligible for
reappointment, they have consented to continue to be the Auditors of
the Company.
The Company has received a letter from them to the effect that their
appointment, if made, would be within the prescribed limits under
Section 224(1-B) of the Companies Act, 1956.
DEPOSITS:
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956.
MANAGEMENT DISCUSSION & ANALYSIS:
Management Discussion and Analysis for the year under review as
stipulated under Clause-49 of the Listing Agreement with the Stock
Exchange(s) is presented in a separate section forming part of this
Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000:
The Board of Directors report that
1. in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures.
2. 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 fair view of the state of affairs of the
Company at the end of the year and of the profit of the Company for
that year.
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
4. the Directors have prepared the annual accounts on a going concern
basis.
CORPORATE GOVERNANCE:
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance forms part of this Annual Report.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and
mitigation of damage to equipment. The Company has thoroughly followed
all the safety measures.
PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT, 1956:
Particulars required under Section 217 (1) (e) of the Companies Act,
read with relevant rules are annexed in Annexure-A.
Information in accordance with Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 is
given in Annexure-B of this Report.
"GROUP" FOR INTER-SE TRANSFER OF SHARES:
As required under Clause 3(1) of the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulation
1997, persons constituting "Group" (within the meaning as defined under
the Monopolies and Restrictive Trade Practices Act, 1969) for the
purpose of availing exemption from applicability of the provisions of
Regulations 10 to 12 of the aforesaid SEBI Regulations are given in
Annexure-C attached herewith and the said Annexure-C forms part of this
Report.
DECLARATION:
The Company has been regular in filing all forms and returns with the
Registrar of Companies as required under the Companies Act, 1956 and
has not defaulted in payment of dividends. Accordingly, the Company
has not committed any of the defaults specified under Section 274(1) of
the Companies Act, 1956 (as amended by the Companies Amendment Act,
2000) disqualifying its Directors to act as Directors of other
companies.
ACKNOWLEDGEMENTS:
Your Directors are extremely thankful to State Bank of Travancore, The
Federal Bank Limited, IDBI Bank Limited, Axis Bank Limited , Standard
Chartered Bank and Yes Bank Limited for their continued support.
Your Directors acknowledge and express their grateful appreciation for
the co-operation and support received from Government Authorities,
Kerala State Industrial Development Corporation, Employees, Customers
and Suppliers. They also thank the shareholders for the confidence
reposed by them in the management of the Company and for their
continued support and co-operation
Place : Coimbatore For and on behalf of the Board
Date : 28.10.2011
Sd / -
S.N. VARADARAJAN
Chairman
Jun 30, 2010
The Directors have great pleasure in presenting the 20th Annual Report
of your Company together with the Audited statements of accounts for
the year ended 30th June 2010.
FINANCIAL RESULTS
Rs.in lakhs
Particulars 2009-10 2008-09
Profit before depreciation and Financial
charges 2,044.38 1,053.54
Less: Financial charges 148.92 235.14
Profit before Depreciation 1,895.46 818.41
Less: Depreciation - 348.53 350.07
Profit before taxes and extraordinary items 1,546.93 468.33
Less: Irrecoverable advances written off - 91.97
Profit before tax 1,546.93 376.36
Less: Provision for Tax 210.00 115.00
Add : Deferred Tax asset 22.05 24.74
Less: Fringe benefit tax - 3.00
Profit aftertax 1,358.98 283.10
Add: Balance brought forward 2,825.48 2,652.93
Surplus available for appropriation 4,184.46 2,936.03
Less: Transfer to General Reserve 1,000.00 -
Less: Proposed Dividend 142.98 94.49
Less: Tax on Proposed Dividend 23.75 16.06
Balance to be carried over to Balance Sheet 3,017.73 2,825.48
Paid-up Equity Share Capital 951.36 944.91
Earnings per Share Rs. 14.34 Rs. 3.00
Book value per Share Rs. 64.36 Rs.50.30
REVIEW OF OPERATIONS:
Your Companys financial performance significantly improved this year
on account of a highly value added product mix coupled with strong
demand from European markets for its core product viz., low carbon
silico manganese.
The Company registered a PBDIT of Rs. 2,044.38 lakhs as compared to Rs.
1,053.54 lakhs in 2008-09. PBT is Rs. 1,546.93 lakhs as compared to Rs.
376.36 lakhs in 2008-09.
A more detailed view is given in the "Management Discussion and
Analysis Report" forming part of this Annual Report.
FUTURE PROSPECTS
The outlook and future prospects of the Company are presented in the
"Management Discussion and Analysis Report" forming part of this
Report.
PROJECT IN CHHATTISGARH STATE & EXPANSION OF CAPACITY IN KERALA:
Your Company is in the process of expanding its manufacturing facility
of Low Carbon Sillico Manganese by setting up a green field 9 MVA SAF
smelter in the State of Chhattisgarh and it is expected to go
operational by June 2011. Your Company has also decided to carry out
de-bottle-necking operations at its existing Palakkad, Kerala
facilities, as a result of which the smelter would undergo a capacity
expansion of around 25%.
With both the above projects in place, the capacity for production of
low carbon sillico manganese is expected to go up from 14,400 tons per
annum to 28,500 tons per annum.
JOINT VENTURE PROJECT IN OMAN :
Your Company, along with a Group sister Company is promoting a 75,000
tpy ferro chrome smelter in the Sultanate of Oman. The Indsil Group
would be having a 50% interest in the JV with the Sultanates largest
chrome ore miner viz., the Muscat Overseas Group.
A Joint Venture Company called Al-Tamman Indsil Ferro Chrome LLC has
been established and the project is expected to go on-stream in its
first phase by December 2011. Indsil Hydro Power & Manganese Ltd is
expected to hold 25% stake in the entire venture.
The Company considers this investment an exciting opportunity because
the project would have access to captive chrome ore from its JV
partners mines. This factor coupled with the fact that electricity in
Oman is available at economical levels would make the proposed chrome
smelter a globally competitive one.
FINANCE:
The Companys debt equity ratio as on 30.6.2010 is 0.04 and the long
term debt outstanding is Rs. 261 lakhs. The Company would become
completely debt free this year.
DIVIDEND:
Your Directors recommend payment of dividend at 15% on the Equity Share
Capital of Rs.9,53,20,750/-. The dividend, if approved, will be paid to
those members whose names appear on the Register of members of the
Company as on 13 September, 2010, the subject to the approval of the
shareholders.
The aggregate dividend payout for the year amounts to Rs 1,66,72,851
including Corporate dividend tax.
ISSUE OF BONUS SHARES:
The Board of Director at its meeting held on 23ra August, 2010 approved
to issue bonus Shares by capitalising the reserves, at the rate of two
fully paid up equity shares for every three equity Shares held by the
members on a record date which would be announced to the Bombay Stock
Exchange.
EMPLOYEE STOCK OPTION SCHEME:
The Company implemented the Employees Stock Option Scheme ("Scheme") in
accordance with the Securities Exchange Board of India (Employees Stock
Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 the
SEBl (Guidelines). The Compensation Committee, constituted in
accordance with the SEBl Guidelines, administers and monitors the
Scheme.
Details of the total number of options are as shown below:
On 28.1.2009 On 30.4.2010
Options granted 64,500 18,500
Exercise Price Rs.10 Rs.10
For options granted on 28.1.2009:
As per the Scheme, INDSIL ESOS TRUST has been formed to manage and
administer the Scheme and accordingly 64,500 shares were allotted to
the said Trust on 28.1.2009. As per the Scheme, the vesting being
graded, 16,125 options (being 25% of 64,500 options granted) were
vested with eligible employees, which were exercised by them in full.
As a result, 16,125 shares were re-issued as detailed below. There were
no options lapsed which were vested with the eligible employees as a
result of not being exercised by the eligible employees.
Name of the
eligible No. of Date of 25% of the Date of
Employee Options grant options vesting
Granted vested
Sri V. Nat
arajan* 10,000 28.1.09 2,500 29.1.10
Smt. B. Mee
nakshi* 10,000 28.1.09 2,500 -
Sri S. Maha
devan* 10,000 28.1.09 2,500 -
Sri K. Rajan
Jose* 7,500 28.1.09 1,875 -
SriM. Kannan* 7,500 28.1.09 1,875 -
Sri K. Ramak
rishnan* 7,500 28.1.09 1,875 -
Sri S. Chakr
apani* 5,000 28.1.09 1,250 -
Sri M. P.L.
Sukumar 3,000 28.1.09 750 -
Sri K. Jaya
suriyan 2,000 28.1.09 500 -
Sri N. Sunda
rarajan 2,000 28.1.09 500 -
64,500 16,125
Name of the eligible Exercise Shares Date of
Employee price transferred transfer
(Per to eligible
Share) employees
by ESOS Trust
Sri V. Natarajan* Rs.10 2,500 13.5.10
Smt. B. Meenakshi Rs.10 2,500 13.5.10
Sri S. Mahadevan* Rs.10 2,500 13.5.10
Sri K. Rajan Jose* Rs.10 1,875 15.5.10
Sri M. Kannan* Rs.10 1,875 13.5.10
Sri K. Ramakrishnan* Rs.10 1,875 04.6.10
Sri S. Chakrapani* Rs.10 1,250 31.5.10
Sri M. P.L.Sukumar Rs.10 750 13.5.10
Sri K. Jayasuriyan Rs.10 500 13.5.10
Sri N. Sundararajan Rs.10 500 13.5.10
16,125
64,500 shares allotted to INDSIL ESOS TRUST were listed on the Bombay
Stock Exchange on 27" July 2010.
There is no variation in terms of the options granted as per the
Scheme.
Money realized by exercise of options : Rs. 1,61,250/-
* No. of employees who received a grant of
options in any one year
amounting to 5% or more of options granted
during the year : SEVEN
Identified employees, who were granted options,
during any one year,
equal to or exceeding 1 % of the issued Capital
oftheCompanyatthetimeofgrant : NIL
Diluted Earnings Per Share (EPS) before except
ional items
pursuant to issue of share on~exercise of options
calculated
in accordance with Accounting Standard (AS) 20 : Rs. 14.34
"Earnings per Share"
The issue of Equity Shares pursuant to exercise of options will affect
the Profit & Loss Account of the Company, as the exercise has been made
at par value of Rs. 10/- per share.
For options granted on 30.4.2010
As recommended by the Compensation Committee, the Board of Directors of
the Company at its meeting held on 30.4.2010 has approved the grant of
18,500 options to another batch of eligible employees of the Company as
per the Scheme. The details of options granted are given below as
required under the Guidelines:
SI.
No. Name of the employee Designation No.of Options
granted
1 Sri C.J.Andappan Advisor (Electrical) 3,000
2 Sri S.Varadarajan Manager (Admn.) 3,000
3 Sri V. D.Johnson Asst. Manager (Prodn.) 2,500
4 Sri V. Pushparajan Asst. Manager (Prodn.) 2,500
5 Sri N.Hariharan Pillai Deputy Chief Engr. (Elec.) 5,000
6 Sri K. Balamurugan Manager(Electrical) 2,500
TOTAL 18,500
The options were granted at face value of Rs.10/- each. All the
eligible employees to whom the options are granted are senior
managerial personnel.
As per the Scheme, the granted options will be vested from 30.4.2011 as
graded vesting and hence the Company is not required to issue any
shares during the year to these eligible employees. To this extent the
disclosure relating to details of issue of shares under the Scheme and
other disclosure to be made as per the Guidelines in the Directors
Report will not arise during the year. These 18,500 options granted to
another set of eligible employees were allotted as 18,500 fully paidup
Equity Shares to INDSIL ESOS TRUST on 23rd August, 2010. The said
shares will be re-issued to the eligible employees as and when they are
entitled to exercise their options as per the Scheme.
Valuation of options:
As required, the employee compensation cost as a result of calculations
made under Black Scholes model is Rs 15.21 per share having regard to
the fact that the strike price is Rs. 10 per share and the stock price
(price on the date of grant i.e., 28.1.09) is Rs.23.95 in respect of
64,500 shares.
The Company has received a Certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for
inspection by members.
The Audited accounts placed before the shareholders in this meeting
have been prepared recognizing the employee compensation cost using the
intrinsic value.
INSURANCE:
All the properties of the Company including buildings, plant &
machinery and stocks have been adequately insured.
DIRECTORS:
Sri K.S. Mahadevan and Dr. A.K. Sreedharan are retiring by rotation at
the forthcoming Annual General Meeting and being eligible, offer
themselves for re-appointment.
AUDITORS:
M/s. K.S.G. Subramanyam & Co., Companys existing Auditors are to
retire at the ensuing Annual General Meeting and being eligible for
reappointment, they have consented to continue to be the Auditors of
the Company.
The Company has received-a letter from them to the effect that their
appointment, if made, would be within the prescribed limits under
Section 224(1-B) of the Companies Act, 1956.
DEPOSITS:
Your Company has neither invited nor accepted any fixed deposits from
the public as per the provisions of Section 58A of the Companies Act,
1956.
MANAGEMENT DISCUSSION & ANALYSIS:
Management Discussion and Analysis Report for the year under review as
stipulated under Clause-49 of the Listing Agreement with the Stock
Exchange(s) is presented in a separate section forming part of this
Annual Report.
DIRECTORS" RESPONSIBILITY STATEMENT UNDER SECTION 217 (2AA) OF THE
COMPANIES (AMENDMENT ACT) 2000:
The Board of Directors Report that
1. in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures.
2. 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 fair view of the state of affairs of the
Company at the end of the year and of the profit of the Company for
that year.
3. the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
4. the Directors have prepared the annual accounts on a going concern
basis.
CORPORATE GOVERNANCE:
A separate section on Corporate Governance and a Certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance forms part of this Annual Report.
INDUSTRIAL SAFETY
Your Company has laid high emphasis on safety of all the personnel and
mitigation of damage to equipment. The Company has thoroughly followed
all the safety measures.
PARTICULARS REQUIRED UNDER SECTION 217 OF THE COMPANIES ACT, 1956:
Particulars required under Section 217 (1)(e) of the Companies Act,
read with relevant rules are annexed in Annexure-A of this Report.
Information in accordance with Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 is
given in Annexure-B of this Report.
"GROUP" FOR INTER-SE TRANSFER OF SHARES:
As required under Clause 3(1) of the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers) Regulation
1997, persons constituting "Group" (within the meaning as defined under
the Monopolies and Restrictive Trade Practices Act, 1969) for the
purpose of availing exemption from applicability of the provisions of
Regulations 10 to 12 of the aforesaid SEBI Regulations are given in
Annexure-C attached herewith and the said Annexure-C forms part of this
Report.
DECLARATION:
The Company has been regular in filing all forms and returns with the
Registrar of Companies as required under the Companies Act, 1956 and
has not defaulted in payment of dividends. Accordingly, the Company has
not committed any of the defaults specified under Section 274(1) of the
Companies Act, 1956 (as amended by the Companies Amendment Act, 2000)
disqualifying its Directors to act as Directors of other companies.
ACKNOWLEDGEMENTS:
Your Directors are extremely thankful to State Bank of India, State
Bank of Travancore, The Federal Bank Limited, IDBI Bank Limited, Axis
Bank Ltd and Standard Chartered Bank for their continued support.
Your Directors acknowledge and express their grateful appreciation for
the co-operation and support received from Government Authorities,
Kerala State Industrial Development Corporation, Employees, Customers
and Suppliers. They also thank the shareholders for the confidence
reposed by them in the management of the Company and for their
continued support and co-operation
Place : Coimbatore For and on behalf of the Board
Date : 23.08.2010
Sd/-
S.N. VARADARAJAN
Chairman
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