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Adhunik Metaliks Ltd.

BSE: 532727 | NSE: ADHUNIK | Series: BZ | ISIN: INE400H01019 | SECTOR: Steel - Sponge Iron

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Annual Report

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Director’s Report

The Directors are pleased to present the Fourteenth Annual Report and Audited Statement of Accounts for the year ended 30th June, 2015. (Rs, in Lacs) Particulars Standalone Results Consolidated Results 2014-15 2013-14 2014-15 2013-14 Revenue from operations (gross) 64,737.09 1,78,133.80 1,21,054.45 2,71,104.62 Less: Excise duty 4,926.15 8,987.46 10,224.54 15,535.53 Revenue from operations (net) 59,810.94 1,69,146.34 1,10,829.91 2,55,569.09 Other income 1,215.73 6,700.58 1,641.19 9,168.65 Revenue from operations (including other income) 61,026.67 1,75,846.92 1,12,471.10 2,64,737.74 Profit before Interest and Depreciation 26,811.62 30,019.14 13,177.08 56,469.32 Less: Interest 24,946.07 21,182.40 45,289.28 37,644.67 Less: Depreciation 9,743.31 9,870.84 14,709.77 14,587.74 Add: Exceptional item - - - - Profit/ Loss before Tax (61,501.00) (1,034.10) 73,176.13 4,236.91 Taxes (20,640.74) (1,064.96) 24,810.13 191.43 Profit/ Loss for the year (40,860.26) (30.86) 48,366.00 4,045.48 Net Profit/loss after tax but before minority interest - - 7.42 4.97 Profit/ Loss for the year (40,860.26) (30.86) 48,358.58 4,040.51 OPERATIONAL REVIEW During the year under review, total revenue on standalone basis, declined sharply from '' 175,846.92 Lacs in FY 2013 2014 to '' 61,026.67 Lacs due to suspension of production and low capacity utilization, driven by poor demand and raw material constraints. Higher raw material costs, increase in working capital cycles, higher holding cost of raw material and finished goods increased operating losses from '' 1034.10 Lacs to '' 61,501.00 Lacs. Earning Per Share (EPS - Basic & Diluted) stood at'' (-) 33.090 as compared to '' 0.02. The Company''s consolidated net sales decreased from '' 264,737.74 Lacs in FY 2013 2014 to '' 112,471.10 Lacs and operating profit decreased from'' 4,236.91 Lacs during the previous year to '' (-) 73,176.13 Lacs during the current year. During the year under review, financial and operational performance of the Company has been adversely affected due to various external factors, non availability of raw materials at viable prices due to mine closures, weak product prices due to over capacity and dumping of Steel mainly by China & Russia, Global Crash in Steel and commodity prices, high interest costs, logistics costs, infrastructure bottlenecks etc. for domestic Steel Companies. The overcapacity and excess production in China resulting in cheap imports in the country and adverse duty structure domestically have further impacted the special steel business. The ferroalloy business has been affected due to frequent stoppage in the supply of chrome ore and concentrate due to closure of various chrome ore mines. FUTURE OUTLOOK According to the Ministry of Steel, Government of India, the current per capita consumption of finished steel in the country is onlyaround 52 kg against the world average of 203 kg and therefore, there is a huge growth potential in steel consumption in India. Your Company is committed to its vision to emerge as an efficient producer of high quality value added products including Coke, Ferro Alloy and Special Steel. Going forward, the Company expects the revenues and margins from Metallurgical Coke, Ferro Alloy & Special Steel Businesses to remain challenging in the short term, but is positive on the outlook over the medium to long term. The world economic growth remained modest at 3.4% in 2014. Mixed trends were noticed across the globe with Europe & US economies showing signs of recovery while large economies like China showed signs of stress and decline. Crude oil prices fell sharply putting the oil economies under massive stress thereby setting in a phase of declining consumption levels. China''s softening infrastructure spends and bleak outlook on growth rates, created significant over capacity in steel and metals. Indian economy sprang a surprise with growth at 7.3% as compared to 6.9% in the previous year, largely fuelled by low crude oil prices, growth oriented reforms. With the formation of a new government, it is estimated that within a short span of time, the economy would be reenergized. Further, fluidity in the mining sector would bekey to such revival. However, sluggish global steel demand, coupled with large surplus remains a serious threat in the form of surging imports. It calls for an immediate recourse to increase import tariffs as well as enforce trade remedial actions to stall the dumping of steel into India. This is essential to realize the government''s ''Make- In-India'' steel campaign. It is also necessary to enforce a strong set of technical regulations to ensure the supply of quality products to consumers and prevent the entry of substandard steel into India. DIVIDEND In view of the losses for the year ended June 30, 2015 and accumulated losses, the Board of Directors of your Company is constrained not to recommend any dividend for the year under review. TRANSFER TO RESERVES In view of losses incurred by the Company during the year, no amount has been transferred to the General Reserve for the financial year ended 30th June, 2015. CHANGE IN NATURE OF BUSINESS During the year under review, there has been no change in the nature of business of the Company. DEPOSITS Your Company did not accept any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under. The Company does not hold any deposits from the public, shareholders and employees as on 30th June, 2015. IMPLEMENTATION OF CORPORATE DEBT RESTRUCTURING During the year under review, Corporate Debt Restructuring was undertaken by the Lenders of the Company to bring about financial viability. Principle reasons which led to financial un-viability are: Temporary Closure of Mines:-Temporary closure of mines (iron ore and manganese ore) led to shortage of raw material and in turn has led to reduced capacity utilization of steel/pellet making facilities. Shortage of fuel: Reduction in quantity of e-auction by Coal India Ltd has led to shortage of coal availability which in turn has aggravated the price rise. Cost of imported coal is higher than the auction price of coal sold by Coal India Ltd. This has also forced the Company to go for importing higher cost coal. Impact on Pellet Plant at Jharkhand:- Due to sudden closure of iron ore mines in Odisha & Jharkhand, production at OMML''s pellet plant was impacted. With the crash in commodity prices globally, iron ore lumps supplemented the market of iron ore pellets. Selling price of iron ore pellets fell below cost of production resulting in shrinking of bottom lines. All the above affecting margins made it difficult for the Company to plan production and forced debt restructuring. Thus, The Corporate Debt Restructuring Empowered Group approved debt restructuring on 20th March, 2015 and the same was implemented on 30th March, 2015. SCHEME OF AMALGAMATION During Financial year 2013-14, your Directors approved amalgamation of the Company with its wholly owned subsidiary i.e Orissa Manganese & Minerals Limited. The Company has filed the confirmation Petition before the Hon''ble High Court, Cuttack (Odisha) and the same is pending for approval at present. The amalgamation, if approved will be advantageous and beneficial to all stakeholders of your Company. SHARE CAPITAL The Company''s paid up equity share capital remained at Rs,1,234,995,360 (Rupees One Hundred Twenty Three Crores Forty Nine Lacs Ninety Five Thousand Three Hundred Sixty only) comprising of 123499536 equity shares of Rs, 10 each. There was no change in the Company''s share capital during the year under review. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) Your Company has, subsequent to year end, transferred a sum of Rs, 125,596 to Investor Education and Protection Fund, in compliance with the provisions of Section 124, 125 and other applicable provisions of the Companies Act, 2013 (corresponding to Section 205C of the Companies Act, 1956). The said amount represents dividend for the year 2006 07 which remained unclaimed for a period 7 years from its due date of payment. SUBSIDIARY Your company''s wholly owned subsidiary namely, Orissa Manganese & Minerals Limited (OMML) operates Ghatkuri Iron ore mines in the state of Jharkhand and Patmunda and Orahuri Manganese Mines in the state of Odisha. OMML operates a iron ore pellet plant at Kandra, Jharkhand and an another wholly owned subsidiary, Global Commodity and Resources Limited based at Honking SAR, which was set up to boost the trading activity of the company. During the year under review there was no major activity of the subsidiary. The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards. A statement containing the salient features of the financial statement of the Company''s subsidiaries in the prescribed form AOC-1 pursuant to first proviso to Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed separately to the financial statements. The Annual Accounts of the subsidiary companies will be made available to the shareholders of the aforesaid subsidiaries and the Company as and when they demand and will also be kept for inspection by any investor at the registered office of the Company and these subsidiaries. The Financial statements of the Company and its subsidiaries are also available on the website of the Company. EXTENSION OF DATE FOR HOLDING ANNUAL GENERAL MEETING OF THE COMPANY In accordance with provisions of Section 96 read with Section 129 of the Companies Act, 2013, the Annual General Meeting (AGM) of the Company for the financial year ended 30th June 2015, was due to be held on or before 31st December 2015.Since the company is in the process of Amalgamation, it had approached the Registrar of Companies, Orissa to extend time by three months for holding the Annual General Meeting i. e. up to 31st March, 2016.Necessary approval was granted by the Registrar of Companies, Orissa vide their letter dated 24th December, 2015. BOARD MEETINGS The Board met 5 times during the year, the details of which are given in the Corporate Governance Report that forms part of the Annual Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. Further, the Independent Directors at their meeting, reviewed the performance of the Board, Chairman of the Board and of Non Independent Directors, as required under the Act and the Listing Agreement. DIRECTORS In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms with the Articles of Association of the Company, Mr. Jugal Kishore Agarwal (DIN - 00227460) who retires by rotation and being eligible offers himself for re-appointment. The Board has recommended his re-appointment. The Company has received declarations from Mr. Nihar Ranjan Hota (DIN 01173440), Mr. Amerendra Prasad Verma (DIN 00236108), Mr. Nandanandan Mishra (DIN 00031342), Mr. Gopal Dikshit (DIN 00090579), Mr. Raghaw Sharan Pandey (DIN 02306586) and Mr. Ramgopal Agarwala (DIN 02054856), Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149 (6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. Ms. Uttara Dasgupta (DIN 06570950) was appointed as Nominee Director (Nominee of State Bank of India as Lead Lender acting for itself and for the consortium of Lenders, providing financial assistance to the Company) on 28th August, 2015. Mr. Mahesh Kumar Agarwal (DIN :- 00507690), Director of the company resigned from Directorship of the company on 23rd October, 2015 due to his other business engagements. He was appointed as Additional Director on 12th February, 2016 on the Board of Directors of the Company. Mr. Manoj Kumar Agarwal (DIN :- 00227871), Managing Director has expressed his desire on 7th September, 2015 to resign from the Board due to health issues. The Board has accordingly accepted his request and he was relieved from the services of the Company from the close of business hours on Saturday, 14th November, 2015. Mr. Nirmal Kumar Agarwal (DIN: 00605669) has been appointed as the Managing Director of the Company w.e.f 14th November, 2015 for a period of 3 years w.e.f 14th November, 2015. The appointment and remuneration payable to him require the approval of the Members at the ensuing Annual General Meeting. Brief resume of the above Directors, nature of their expertise in their specific functional areas, details of directorships in other companies and the chairmanship / membership of committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges are given in the Notice for the ensuing Annual General Meeting. KEY MANAGERIAL PERSONNEL The Board appointed Mr. Sanjay Dey as the Company Secretary and Compliance Office of the company w.ef 12th February, 2015. Mr. Manoj Agarwal, Managing Director of the Company stepped down from his position with effect from 14th November, 2015 owing to health issues. Mr. Nirmal Agarwal, Director of the Company, has been appointed as Managing Director of the Company with effect from 14th November, 2015. His employment terms needs approval of the Shareholders of the Company at the ensuing Annual General Meeting. Board of Directors recommends and has approved his terms of employment. FINANCIAL YEAR The financial year of the Company is from 1st July, 2014 to 30th June, 2015. As per requirements of Companies Act, 2013, the next financial year of the company shall be for a period of 9 months concluding on 31st March, 2016. DIRECTORS RESPONSIBILITY STATEMENT Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2014-15. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:- a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss 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 this 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 proper internal financial controls and such internal financial controls are adequate and were operating effectively; f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. BOARD EVALUATION The Board carried out an annual performance evaluation of its own performance, the individual Directors as well as the Board Committees, in due compliance with the provisions of the Companies Act, 2013 and the Listing Agreement. The performance evaluation of the Independent Directors was carried by the entire Board and the performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors. The Board evaluation was carried out in accordance with the criteria laid down in the Nomination and Remuneration policy of the Company. AUDIT COMMITTEE The Audit committee comprises of 5 (five) members of which 4 (four) members are independent including Chairman Mr. Nandanandan Mishra is the Chairman of the Audit Committee. The members of the Committee possess adequate knowledge of Accounts, Audit and Finance. The composition of the Audit Committee meets the requirements as per Section 177 of the Companies Act, 2013 and of Clause 49 of the Listing Agreement and is detailed in the Corporate Governance Report forming part of this Annual Report. All recommendations made by the Audit committee were accepted by the Board during FY 2014-15. During the year under review, Audit Committee was reconstituted owing to vacancy created due to resignation of Shri Manoj Kumar Agarwal on 14th November, 2015. DISCLOSURE REGARDING RECEIPT OF COMMISSION BY DIRECTOR During the year under review, none of the Directors has received any commission from holding / subsidiary Company. AUDITORS & AUDITOR''s REPORT M/s. Das & Prasad, Chartered Accountants, having registration number FRN 303054E allotted by The Institute of Chartered Accountants of India (ICAI) retires as Auditor of your Company at the ensuing Annual General Meeting (AGM) and have confirmed their eligibility and willingness to accept the office of Auditors, if re-appointed. Pursuant to section 139 of the Companies Act, 2013 and rules framed there under, it is proposed to appoint M/s. Das & Prasad, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the ensuing AGM till the conclusion of the 15th AGM to be held for F.Y. 2015-16. The observations of the Auditors are dully dealt in Notes to Accounts attached to Balance Sheet and are self explanatory in nature and do not call for any further comments except: a) The Management of the Company is reasonably certain that the Company would be having Future Taxable Income and deferred tax assets are only recognized to the extent that their utilization is probable, i.e. tax benefit is expected in future periods and the same is further supported by the Technical & Economical Valuation conducted by Dun & Bradstreet as a part of CDR Implementation. b) The company has locked out its plant at Rourkela in the month of February 2015 owing to adverse business condition. The lock out was declared in accordance with the procedures laid down in the state of Odisha. In the opinion of the management, since the lock out was declared in accordance with lawful procedures, the salary and other statutory liabilities do not accrue during the period of lockout and hence no provision has been made in the books of account of the company. c) The observation of the Auditors for the subsidiary company, Orissa Manganese & Minerals Limited has been dealt in Notes to Accounts which are self explanatory and do not require any further elucidation. INTERNAL AUDITORS In terms of the provisions of Section 138 of the Act, M/s More Aditya & Associates, Independent Chartered Accountants were appointed as Internal Auditors of the Company for the financial year 2014 15. The Audit Committee in consultation with the Internal Auditors formulates the scope, functioning, periodicity and methodology for conducting the Internal Audit. The Audit Committee, interlaid, reviews the Internal Audit Report. COST AUDITORS In respect of financial year ended 30th June, 2015, your Company has re appointed M/s. Saroj K Babu & Co., Cost Accountants, as Cost Auditor of the Company we.f 1st July, 2014 to 30th June, 2015 to carry out audit of cost records of the Company in compliance with the requirements of section 148 and all other applicable provisions of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications) or re enactment thereof for the time being in force). SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Mr. Pramod Kumar Pal, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the year ended 30th June, 2015. The Secretarial Audit Report is annexed (Annexure C) herewith and forms part of this report. CONSOLIDATED FINANCIAL STATEMENT In terms of Clause 32 of the Listing Agreement with Stock Exchanges, Consolidated Financial Statement, conforming to Accounting Standard 21 issued by the Institute of Chartered Accountants of India, is attached as a part of the Annual Report. CORPORATE GOVERNANCE The Company is committed in maintaining the highest standards of Corporate Governance and adheres to the stipulations prescribed under Clause 49 of the Listing Agreement with the Stock Exchanges. Report on Corporate Governance & Shareholder Information together with the Practicing Company Secretary Certificate thereon is annexed as part of this Annual Report. DIRECTORS'' APPOINTMENT & REMUNERATION POLICY The Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of this Annual Report. MANAGEMENT DISCUSSION & ANALYSIS A detailed analysis of the Industry and Company Outlook, Company''s operations, project review, risk management, strategic initiatives and financial review & analysis, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented under a separate section titled Management Discussion and Analysis forming part of the Annual Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT -9 (Annexure - D) as per provisions of the Companies Act, 2013 and rules framed there under are annexed to this Annual Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The particulars of loans, guarantees and investments have been disclosed in the financial statements. EMPLOYEE STOCK OPTION SCHEME (ESOP) The Company has in place Adhunik Employee Stock Option Plan (''ESOP 2012'') for employees of the Company as well as employees of the subsidiaries which continue with the Company''s philosophy of encouraging the employees to be partners in the growth of the organization. ESOP Scheme is administered by the Remuneration Committee of the Board of Directors of the Company. During the year under review, 764,332 Stock Options have vested with the employees of the Company and its subsidiaries and 620,694 Stock Options have been forfeited till 30th June 2015. As on 30th June 2015, none of the Options have been exercised. The disclosures required to be made under Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended from time to time, together with a certificate obtained from the Statutory Auditors, confirming compliance thereto, are provided in Annexure B forming part of this Report. RISK MANAGEMENT The volatility in the global economy and the increasingly complex interplay of factors influencing the business makes Risk Management an inevitable exercise and to cater to the same, your Company has identified major focus areas for risk management to ensure organizational objectives are achieved and has a robust policy along with well-defined and dynamic structure and proactive approach to assess, monitor and mitigate risks associated with the business. The risk management framework is aimed at effectively mitigating business risks and operational risks through effective strategic implementation. The Company believes that the risks faced by the Company are within its risk capacity. INTERNAL CONTROL SYSTEM Your Company has adequate system of internal control procedures commensurate with its size and the nature of its business. The internal control systems of the Company are monitored and evaluated by the Internal Auditors and their audit reports are periodically reviewed by the Audit Committee of the Board of Directors of the Company. Your Company manages and monitors the various risks and uncertainties that can have adverse impact on the Company''s Business. Your Company is giving major thrust in developing and strengthening its internal audit so that risk threat can be mitigated. Internal control systems are integral to the Company''s corporate governance policy. Some of the significant features of internal control systems includes: - Documenting of policies, guidelines, authorities and approval procedures, encompassing the Company''s all primary functions. - Deploying of an SAP system which covers most of its operations and is supported by a defined on-line authorization protocol. - Ensuring complete compliance with laws, regulations, standards and internal procedures and systems. - De-risking the Company''s assets/resources and protecting them from any loss. - Ensuring the accounting system''s integrity proper and authorized recording and reporting of all transactions. - Preparing and monitoring of annual budgets for all operating and service functions. - Ensuring the reliability of all financial and operational information. - Forming an Audit committee of the Board of Directors, comprising Independent Directors. The Audit Committee regularly reviews audit plans, significant audit findings, adequacy of internal controls, and compliance with accounting standards and so on. - Forming a comprehensive Information Security Policy and continuous up-gradation of IT Systems. The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness. CREDIT RATING Your Company obtained a Credit Rating of BWR BB - from Brickwork Ratings in the month of November, 2015. RELATED PARTY TRANSACTIONS All related party transactions entered into during FY 2014-15 were on arm''s length basis and also in the ordinary course of business and provisions of section 188 of the Companies Act, 2013 are not attracted. Further, there are no materially significant related party transactions during the year under review made by the company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, disclosure in Form AOC-2 is not required. The transactions entered into pursuant to the omnibus approval so granted were audited and a statement giving details of all related party transactions was placed before the Audit Committee for its approval on a quarterly basis. The statement was supported by a Certificate duly signed by the Managing Director and the Head (Finance & Accounts). The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link www.adhunikgroup.com. None of the Directors or KMP has any pecuniary relationships or transactions vis--vis the Company during FY 2014-15. SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS / COURTS ETC. There were no significant and material orders passed by the Regulators / Courts / Tribunals impacting the going concern status and company''s operations in future. There were also no material changes and commitments occurred after the closure of the year till the date of this report, which affect the financial position of the company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Details of energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this report (Annexure - A). PARTICULARS OF LOANS, GUARANTEES ORINVESTMENTS Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial Statements. PARTICULARS OF EMPLOYEES Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report (Annexure - E). In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Report. VIGIL MECHANISM The Company has adopted Vigil Mechanism policy that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Ethics Counselor/Chairman of the Audit Committee of the Board and make protective disclosures about the unethical behavior, actual or suspected fraud. The Vigil Mechanism comprises of whistle blower policy for directors, employees and vendors. CORPORATE SOCIAL RESPONSIBILITY POLICY The Corporate Social Responsibility (CSR) policy recommended by the Corporate Social Responsibility Committee had been approved by the Board of Directors. The CSR policy is available on the website of the Company at www.adhunikgroup.co.in. During the year, the CSR initiatives undertaken by the Company, although not mandatory under Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules 2014, are detailed in the Annual Report. Since your Company''s last three financial years average net profit was negative, the requirement of spending 2% for CSR initiative was not needed for 2014-15. But as a responsible corporate, your Company has already initiated various CSR activities in the surrounding villages of its plant at ChadriHariharpur, Odisha. However, no separate reporting is made in this regard. NOMINATION AND REMUNERATION POLICY In terms of the requirement of Section 178 of the Companies Act, 2013, the Board of Directors has approved the Nomination and Remuneration policy of the Company and the same is available on the website of the company. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Company has not received any complaint of sexual harassment during the financial year 2014-15. APPRECIATION Your Directors wish to place on record their appreciation for the continuous support and guidance of all Governmental Authorities, Central and States. It further acknowledges and wishes to place on record the deep appreciation for support of Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company''s success. The Directors look forward to their continued support in future. For and on behalf of the Board Place: Kolkata Ghanshyam Das Agarwal Date: 12.02.2016 Chairman

Director’s Report