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Elantas Beck India

BSE: 500123|NSE: DRBECK|ISIN: INE280B01018|SECTOR: Chemicals
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Directors Report Year End : Dec '16    Dec 15

To the Members, of ELANTAS Beck India Limited

The Directors have pleasure in presenting the Sixty First Annual Report and the Audited Accounts for the financial year ended 31 December 2016.

Financial Highlights (Rs. inlakhs)

Particulars

Year ended 31.12.2016

Year ended 31.12.2015

Total Revenue

37,288.88

34,976.89

Profit before Interest, Depreciation & Tax

8,628.36

6,786.53

Depreciation

518.65

594.43

Interest

20.54

18.79

Profit Before Tax

8,089.17

6,173.31

Provision for tax

2,640.35

1,997.75

Net Profit

5,448.82

4,175.56

Profit & Loss Account brought forward

10,008.34

6,727.43

Profit available for appropriation

15,457.16

10,902.99

Appropriations:

Proposed dividend

356.75

396.39

Tax on Dividend distributed

74.16

80.69

Transfer to General Reserve

544.88

417.56

Carried to Profit & Loss Account

14,481.37

10,008.34

15,457.16

10,902.98

Performance

The sales at Rs. 36525.15 Lakhs for the year ended 31 December 2016 registered a 6 % growth over the sales of Rs. 34,416.06 Lakhs achieved in the previous year ended 31 December 2015. In terms of sales quantity, the tonnage sold during the year ended 31 December 2016 increased by 9 % over the previous year. The profit before tax showed an increase of Rs.1,915.86 Lakhs over the profit before tax posted last year.

The Profit before Tax and Profit after Tax were Rs. 8,089.17 Lakhs and Rs. 5448.82 Lakhs respectively.

Share Capital

Share Capital Audit as per the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (Listing Regulations 2015) is conducted on a quarterly basis by V.R. Associates, Practicing Company Secretaries. The Share Capital & Audit Reports are duly forwarded to BSE Ltd. where the equity shares of the Company are listed. During the year ended 31 December 2016, there was no change in the issued and subscribed capital of the Company, the outstanding capital as on 31 December 2016 was Rs. 792.77 Lakhs comprising of 79.28 Lakhs shares of Rs. 10/- each.

Dividend

The Directors are pleased to recommend a dividend of Rs. 4.50 per equity share of 710/- each, for the year ended 31 December 2016.

Company has kept entire surplus in Profit & Loss Account for the purpose of payment of Dividend and has not transferred any amount to Reserves for the purpose of payment of Dividend.

Directors and Key Managerial Personnel

Dr. Guido Forstbach Non-Executive Director, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of Section 152 of the Companies Act, 2013 read with Companies (Appointment and Qualifications of Directors) Rules, 2014 and the Articles of Association of the Company and being eligible has offered himself for reappointment.

All Independent Directors have given Declaration that they meet criteria for Independence as laid down under Section 149 (6) of the Companies Act, 2013.

None of the Directors is disqualified from being appointed as or holding office as Director, as stipulated under Section 164 of the Companies Act, 2013.

No Key Managerial Personnel resigned during the year under review.

Separate Meeting of Independent Director

The Independent Directors were fully kept informed of the Company''s activities in all its spheres. During the year under review, a separate meeting of Independent Directors was held on 25 October 2016 and the Independent Directors reviewed the performance of (i) non- Independent Directors and (ii) the board as a whole.

They also assessed the quality, quantity and timelines of flow of information between the Company''s Management and the Board that are necessary for the Board to effectively and reasonably perform their duties. All the Independent Directors were percent at the meeting.

Constitution of Audit Committee

The Audit Committee comprises Mr. Ravindra Kulkarni (Chairman /Independent Director), Dr. Guido Forstbach, Mr. Suresh Talwar (Independent Director) and Mr. Ranjal Laxmana Shenoy (Independent Director). All members of the Audit Committee are Non-Executive Directors, satisfying the conditions for composition of Audit Committee such as at least three directors as members, two third of the members being independent, and the Chairman of the Audit committee is an independent director thus satisfying the conditions for composition of Audit Committee stipulated under Listing Regulations 2015.

Other information relating to Company''s Audit Committee is given separately in Corporate Governance Report forming part of this Annual Report.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee of Directors reviews the composition of the board, to ensure that there is an appropriate mix of abilities, experience and diversity to serve the interests of all shareholders and the Company.

In accordance with the requirements under Section 178 of the Companies Act 2013, the Committee formulated a Nomination and Remuneration Policy to govern the terms of nomination /appointment and remuneration of (i) Directors, (ii) Key Managerial Personnel (KMPs) and (iii) other employees of the Company. The same was approved by the Board at its meeting held on 29 July 2014.

The process of appointing a director / KMPs/ Senior Management Personnel is, that when a vacancy arises, or is expected, the Committee will identify, ascertain the integrity, qualification, appropriate expertise and experience, having regard to the skills that the candidate will bring to the board / company, and the balance of skills added to that of which the existing members hold. The Committee will review the profile of persons and the most suitable person is recommended for appointment by the board. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position. The Committee will ensure that any person(s) who is / are appointed or continues in the employment of the Company as its Director or Key Managerial Person shall comply with the conditions as laid out under the Companies, Act 2013 and Listing Regulations, 2015.

The Remuneration Policy is stated in the Corporate Governance Report. The Policy is also available on the website of Company i.e. http://www.elants.com/beck.india.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015, the Board during the Year 2016 has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee for the Year 2015. The evaluation has been carried out on the basis of criteria defined by the Nomination and Remuneration Committee in its meeting 29 July 2014. Independent Directors in their separate meeting held on 25 October 2016 reviewed and evaluated performance of the Board for the Year 2016.

Number of Meetings held

During the year 2016, four Board Meetings and four Audit Committee Meetings were convened and held. Details of the same are given in the Corporate Governance Report.

Secretarial Audit Report

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 Prajot Tungare & Associates, Practicing Company Secretaries, to undertake Secretarial Audit of the Company. The Secretarial Audit Report issued by them is annexed to this report as ‘Annexure A’.

Related Party Transactions

All Related Party Transactions (RPT) entered into by the Company during the year under review were at arms'' length basis and in the ordinary course of business. There were no materially significant RPT with Parent Company and its subsidiaries, Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest of the Company at Large.

All RPT are placed before the Audit Committee for its review and approval. Prior omnibus approval of the Audit Committee is obtained for transactions which are of a foreseen and repetitive nature. Pursuant to the provisions of the Listing Regulations 2015 as well as the Rule 6 A of the Companies (Meetings of Board and its Powers) Rules 2014, Audit Committee in its meeting held on 28 October 2015 had granted omnibus approval for the proposed Related Party Transactions to be entered into during the year 2016. Since there are no material Related Party Transactions and also all the transactions with related parties are at arm''s length and are in the ordinary course of business, no transactions need to be reported in AOC - 2.

The Board of Directors of the Company, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its related parties, in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations 2015. The Policy as approved by the Board is uploaded and can be viewed on the Company’s website htt://www.elantas.com/beck-india.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

Details of Loans, Guarantees and Investment

The Company has not entered into any transaction relating to Loan, Guarantee or Investments which attracts the provisions of Section 186 of the Companies Act, 2013.

Corporate Governance

Report on Corporate Governance and the Auditors'' Certificate thereon, as stipulated under Listing Regulations, 2015, is given separately in this Annual Report.

Vigil Mechanism/Whistle Policy

The Company has established a vigil mechanism named as ''Whistle Blower Policy'' within the Company in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 4 (2)(d)(iv) of the Listing Regulations, 2015.

The policy of such mechanism has been circulated to all employees within the Company, which provides a framework to the employees for guided & proper utilization of the mechanism. The Whistle Blower Policy has been published on the Company''s website htt://www.elantas.com/beck-india.

Corporate Social Responsibility (CSR)

''Inclusive growth is not the sole responsibility of the Government-Private Sector to come forward''.

''Business should supplement Government''s efforts in addressing social challenges faced today''.

The Company is trying to put its best foot forward to live up to this philosophy of ‘Giving back to the Society'' in spirit and intent, by making a positive statement in this direction. As a vigilant and a socially responsible corporate citizen, it has been getting updated itself on the happenings and developments in the changed environment.

Here''s a look at the Projects which the Company undertook with the help of its partnering NGO''s

Projects in Year 2016:

- Partnered with a NGO, Shelter Associates, Pune for construction of 100 toilets under ''One house-one toilet'' project in the nearby slum area in Kate Vasti & Balajinagar Locality- Project completed.

- An initiative in cooperation with Surhud Mandal, for helping over 20 schools run in Pune District for ''Hearing Impaired Children'' by providing support in printing text books for their competitive learning from bringing them into the social mainstream – Project will be complete early next year.

- A dual initiative of supporting education and health and hygiene with the help of a NGO named Vanarai, Pune for Assisting in Village Development in 2 villages viz. Bhivari & Patharwadi in Pune District by ways of providing better educational infrastructure to the Primary School and construction of 125 toilets to make the tenements self-sufficient – 3 year development program.

The Company officials are very strictly monitoring the projects implementation through frequent site visits, meeting officials.

The CSR Policy Statement and Report on the activities undertaken during the year including reasons for lesser spending is annexure to the Board’s Report in Annexure B’.

Risk Management Policy

The Board has established a Risk Management Committee which formalizes the Company''s approach to overview and manage material business risks. The Company has its own Risk Management Manual and Risk Management Policy to identify, assess, monitor and manage key risks across the Company''s business units. Risks and effectiveness of their management are internally reviewed and reported regularly to the Board. The management has reported to the board that the Company''s risk management and internal compliance and control systems are operating efficiently and effectively in all material respects. The board is satisfied that there are adequate systems and procedures in place to identify, assess, monitor and manage risks.

Internal Financial Controls and its adequacy

The Company has an established internal financial control framework including internal controls over financial reporting, operating controls and anti-corruption framework. The framework is reviewed regularly by the management and tested by internal audit team and presented to the audit committee. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial Controls.

Subsidiary, Associates and Joint Venture

The Company does not have any Subsidiary or Associate or Joint Venture Company as on date of this Report. Therefore separate Section for Report on the performance and Financial position of Subsidiaries, Associates and Joint Venture Companies is not required.

Extract of Annual Return

The details forming part of Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 are set out herewith as ''Annexure C''.

Listing on Bombay Stock Exchange

The Company’s Shares are listed on BSE Ltd.

Directors’ Responsibility Statement

In terms of Section 134 (3)(c) of the Companies Act, 2013, the Directors hereby state that:

a) in the preparation of Annual Accounts for the Year ended 31 December 2016, the applicable accounting standards and Schedule III of the Companies Act, 2013 have been followed along with proper explanation relating to material departures , if any.

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at 31 December 2016 and of the profit of the Company for the year ended 31 December, 2016.

c) the proper and sufficient care has been taken 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 fraud and other irregularities.

d) the Directors have prepared the Annual Accounts of the Company on a ''going concern'' basis.

e) the Company has proper Internal Financial Controls in place and they are adequate and were operating effectively.

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Cost Audit

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records & Audit) Amendment Rules 2014, the cost records maintained by the Company in respect of its products are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed Dhananjay V Joshi & Associates, Cost Accountants, to audit the cost records of the Company for the financial year 2016 on a remuneration to be fixed by the Members, in the forthcoming Annual General Meeting. Accordingly, a resolution for payment of remuneration to Dhananjay V Joshi & Associates, Cost Accountants, is included in the Notice convening the Annual General Meeting.

The Cost Audit Report for the financial year ended 31 December 2015 was filed with the Ministry of Corporate Affairs on 7 June 2016 within the stipulated time mandated in the Companies Cost Records Rules.

Auditors

The Members in its meeting held on 03.06.2016, have appointed Price Waterhouse, Chartered Accountants LLP as the Statutory Auditors of the Company till the conclusion of the Annual General Meeting (AGM)to be held in Y 2017.

On the basis of recommendations of Audit Committee, the Board has appointed Price Waterhouse, Chartered Accountants LLP as the Statutory Auditors of the Company for the remaining period of four years forming part of the first term of five years i.e. up to the conclusion of the Annual General Meeting for the financial year ended 2020, to be held in the year 2021, subject to ratification of the appointment at every intervening Annual General Meeting held after this Annual General Meeting, pursuant to the provisions of Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

Information as required by Section 134(3) (m) of the Companies Act, 2013 relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo, is given in Annexure D to this report.

Green Initiative

The Company has taken the initiative of going green and minimizing the impact on the environment. The Company has been circulating the copy of its Annual Report and other shareholders'' communication, if any, in electronic format to all those Members whose email address is available with the Company. The Company would also encourage other Members to register themselves for receiving Annual Report and other communication in electronic form. Members are requested to refer the contact details and ways to register the email address given under the heading ‘Request to the Members'' in the Notice of the Annual General Meeting.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act, 2013 The Company has in place Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act, 2013. The internal committee is set up to redress complaints received regarding sexual harassment. All employees are covered under this Policy. The following is the summary of sexual harassment complaints received and disposed off during the Financial Year 2016.

No. of Complaints received

Nil

No. of Complaints disposed of

N.A.

Particulars of Employees

Details of employees receiving the remuneration in excess of the limits prescribed under Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as a statement and given in ''Annexure E‘.

Compliance Certificate

Compliance Certificate pursuant to Regulation 17(8) of the Listing Regulations, 2015 is given in ''Annexure F'' to this Report.

Deposits

Company has not accepted any deposits from public / members under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

Introduction

During the year under review, industrial relations continued to remain cordial. During the year, Company entered into wage settlement agreement with its workmen at Pimpri and Ankleshwar which concluded amicably after due discussions and negotiations. These wage settlement are for a three year period from 1 January 2016 to 31 December 2018 concluded separately for the two sites on the basis of “ Region cum Industry ‘ principle.

General

Your Directors state that no disclosure or reporting is required in respect of following items as either there were no transactions on these items or these items are not applicable to the Company during the year under review.

1. No material changes or commitments, if any, affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. 31 December 2016 and the date of this report.

2. No Company has become or ceased to be Subsidiary, Associate, Joint Venture of the Company during the year under review.

3. No significant and material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

4. There were no frauds reported by auditors as per Sections 134(3) (c) and 143 (12) of the Act

Acknowledgement

The Board wishes to place on record its appreciation to all employees for their continued contribution to the performance of the Company. The Board would also like to recognize its sincere appreciation to the contribution made by its Members.

For and behalf of the Board

Mumbai Suresh Talwar Ravindra Kumar

21 February 2017 Director Managing Director

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