Our definition of ''Independence'' of Directors is derived from Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms above said provisions :-
a) Shri Asit Baran Dasgupta (DIN: 02476594)
b) Shri Shyam Bahadur Singh (DIN: 01982407) (demise on 26/03/2016)
c) Smt. Archana Gupta Sha (DIN: 07089290)
Shri Asit Baran Dasgupta (DIN: 02476594), Shri Shyam Bahadur Singh (DIN: 01982407) and Smt. Archana Gupta Sha (DIN: 07089290) has furnished their individual declaration on 1st April, 2015 pursuant to Section 149(7) of the Companies Act, 2013 confirming their status as an Independent Director pursuant to provisions of Section 149(6) of the Companies Act, 2013. Shri Shyam Bahadur Singh (DIN No.01982407), Independent Director ceased to be a Director w.e.f 26/03/2016 due to his unfaithful demise.
The other Board of Directors of your company comprises of Shri Mohan Lal Agarwal (DIN: 01047906), Director (Non - Executive), Shri Mahesh Kumare Agarwal (DIN: 00507690), Director & Chairman (Non-Executive), Shri Jugal Kishore Agarwal (DIN: 00227460) Managing Director (Executive).
In accordance with the provisions of Section 152 of the Act, the Rules prescribed there under and your Company''s Articles of Association, Shri Mahesh Kumar Agarwal (DIN: 00507690) retires by rotation at the ensuing AGM and being eligible, offers himself for reappointment. The Board of Directors recommends the re-appointment of Shri Mahesh Kumar Agarwal (DIN: 00507690) at the ensuing Thirty Seventh Annual General Meeting.
Mr. Chandra Shekhar Jalan (DIN No.- 01023586) has appointed as an Additional Non-Executive Independent Director of the Company on 27th May, 2016 up to the conclusion of 37th Annual General Meeting of the Company.
KEY MANAGERIAL PERSONNEL(KMPs)
During the year under review, no changes occurred in the position of Whole-time Key Managerial Personnel (KMPs) of the Company. Shri Jugal Kishore Agarwal, (DIN: 00227460) Managing Director, Shri Bikash Roychowdhury, Chief Financial Officer and Shri Bharat Agarwal, Company Secretary are the Whole-time Key Managerial Personnel (KMPs) of the Company.
The members had also re-appointed Shri Jugal Kishore Agarwal (DIN: 00227460) as the Managing Director of the Company in the 35th Annual General Meeting held on 18th September, 2014 for a period of three (3) years w.e.f. 30th November, 2014.
COMPANY''S POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION
Pursuant to provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company based on the recommendation of the Nomination and Remuneration Committee, has formulated a Remuneration Policy.
The Remuneration Policy of the Company, inter alia, includes the aims and objectives, principles of remuneration, guidelines for remuneration to Executive Directors and Non-Executive Directors, fixed and variable components in the remuneration package, criteria for identification of the Board Members and appointment of senior management.
The criteria for identification of the Board Members including that for determining qualification, positive attributes, independence etc. are summarily given hereunder:
- The Board member shall possess appropriate skills, qualification, characteristics and experience. The objective is to have a Board with diverse background and experience in business, government, academics, technology, human resources, social responsibilities, finance, law etc. and in such other areas as may be considered relevant or desirable to conduct the Company''s business in appropriate manner.
- Independent Director shall be person of integrity and expertise and experience and/or someone who the Committee/Board believes could contribute to the growth/philosophy/strategy of the Company.
- In evaluating the suitability of individual Board Members, the Committee takes into account many factors, including general understanding of the Company''s business dynamics, global business, social perspective, educational and professional background and personal achievement.
- Director should possess high level of personal and professional ethics, integrity and values. He should be able to balance the legitimate interest and concern of all the Company''s stakeholder in arriving at decisions, rather than advancing the interest of a particular constituency.
- Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities effectively. He must have the aptitude to critically evaluate management''s working as a part of a team in an environment of collegiality and trust.
- The Committee evaluates each individual with the objective of having a group that best enables the success of the Company''s business and achieves its objectives.
PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS
Particulars of loans given, investments made, guarantees given under the provisions of Section 186 read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014 are provided in the notes to the Financial Statements.
Risk management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/ control the probability and / or impact of unfortunate events or to maximize the realization of opportunities.
Management of risk remains an integral part of your Company''s operations and it enables your Company to maintain high standards of asset quality at time of rapid growth of its lending business. The objective of risk management is to balance the trade-off between risk and return and ensure optimal risk-adjusted return on capital. It entails independent identification, measurement and management of risks across the businesses of your Company. Risk is managed through a framework of policies and principles approved by the Board of Directors supported by an independent risk function which ensures that your Company operates within a pre-defined risk appetite. The risk management function strives to proactively anticipate vulnerabilities at the transaction as well as at the portfolio level, through quantitative or qualitative examination of the embedded risks.
Your Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. Your Company''s management systems, organizational structures, processes, standards, code of conduct and behaviour governs how the Group conducts the business of the Company and manages associated risks. There are no risks which in the opinion of the Board may threaten the existence of the company;
The human resource philosophy and strategy of your Company have been designed to attract and retain the best talent, creating a workplace environment that keeps employees engaged, motivated and encourages innovation. Your Company has qualified and talented human resources at all levels of operation. It has put concerted efforts for continuous learning and training to ensure that strong and credible leadership is developed.
The manufacture of steel involves steps that are potentially hazardous if not executed with due care. The Company maintains the highest safety standards within its operating units and is an ISO certified (ISO 9001:2008, 14001:2004 & 18001:2007) organization. Further, there is a team of professional who conducts regular training programs to implement the concept of maintain safe operations among the employees and to educate the team on safety norms and procedures to be followed in an unfortunate situation.
CORPORATE SOCIAL RESPONSIBILITY
In lines with the provisions of Section 135 of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) Policy for the development and benefit of the weaker section of the society and the same is approved by the CSR Committee and the Board of Directors of the Company. The CSR Policy of the Company provides a road map for its CSR activities. The purpose of CSR Policy is to devise an appropriate strategy and focus on its CSR initiatives and lay down the broad principles on the basis of which the Company will fulfill its CSR objectives. As per the said policy, the Company follows the strategy of discharging its CSR responsibilities related to social service through various trusts/societies in addition to its own initiatives and donations made to other non-government organizations.
The CSR Policy has been uploaded on the Company''s website and may be accessed at the link http://www.adhunikindustries.com/images/31433946951.pdf
Pursuant to the requirements under Section 135 of the Companies Act, 2013 and Rules made there under a report on CSR activities and initiatives taken during the year in the prescribed format is given in Annexure-B, which is annexed hereto and forms part of the Board''s Report.
The Company has been playing a pro-active role in the socio economic growth and has contributed to all spheres ranging from health, education, rural infrastructure development, hygiene and empowerment of women, environment conservation etc. The Company becomes the part of some of the social programs in India, touching the lives of hundreds of people positively by supporting social programs. As a part of its CSR programs, the Company had organized various programs for distribution of food to the weaker section of the society on regular basis, organized programs for distribution of clothes and basic necessity items to the weaker section of society on regular basis. The Company had also given donation to M/s. Purvanchal Kalyan Ashram for the purpose of providing primary education to the small children belongs to weaker section of society.
DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES
The names and other particulars of the Directors/Key Managerial Personnel (KMPs)/Employees of your Company as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in the Annexure - C to the Board''s Report and forms part of this report.
None of the employees is covered under provisions of Section 197(12) of Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
RISK AND CONCERN
Risk management is the continuing process to identify, analyze, evaluate and treat loss exposures to monitor risk control and financial resources to mitigate the adverse effects of loss. In today''s complex business environment, effective risk management is critical to success of any business. The Company has a risk management team, which periodically evaluating the risks associated with the business and taking necessary initiatives to minimize its impact. This also helps the Company in taking business decisions with balanced risks and rewards comparison. The risk management framework ensures compliance with the requirements of relevant Regulations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to sub-section 3(p) of section 134 of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India (“SEBI”) under Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The criteria for evaluation of Directors inter alia includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, achievements, understanding and awareness, integrity, ethics, value and openness.
The Board and the Nomination and Remuneration Committee (“NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.
In a separate meeting of Independent Directors, held on 11th February, 2016, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and nonexecutive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.
SUBSIDIARY, JOINT VENTURES AND ASSOCIATES COMPANIES
The Company does not have any subsidiaries, joint ventures and associate companies. So, the disclosure required is not applicable to the Company.
Your Company did not accept any deposits within the meaning of the Companies Act, 2013 and the Rules made there under.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company''s operation in future.
INTERNAL CONTROL AND AUDIT
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
AUDITORS AND AUDITOR''S REPORT
In terms of the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Sudhir Kumar Jain & Associates, Chartered Accountants, the statutory Auditors of the Company holds office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for reappointment.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.
In terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, your Company has appointed M/s. Dipak Lal & Associates, Cost Accountants (a Cost Audit Firm), as Cost Auditor of the Company w.e.f. 1st April, 2016 to 31st March, 2017 to carry out audit of cost records of the Company, who was also the Cost Auditor for the Financial year 2015-16.The remuneration proposed to be paid to them in Financial Year 2016-17 requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing Annual General Meeting. The report issued by the cost auditor for the Financial Year 2015-16 is self-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. M R & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure- D to this Report. The report is self-explanatory and do not call for any further comments.
The Board has also appointed M/s. M R & Associates, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2016-17.
RELATED PARTY TRANSACTIONS
According to the provisions of Section 188 read with Section 2(76) of the Companies Act, 2013, all transactions entered with Related Parties during the financial year 2015-16 were on arm''s length basis and were in the ordinary course of business.
All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee.
The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website and may be accessed at the link http://www.adhunikindustries.com/download/ 1421230517.pdf
Your Directors draw attention of the members to Note 28 to the financial statement which sets out related party disclosures.
As there are no materially significant related party transactions during the year under review entered into 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, so the disclosure of information on transactions with related parties pursuant to Section 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 is not required. However, the Company is in the process of obtaining shareholder''s approval on the proposed material related party transaction.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Companies Act, 2013, the Company has Unclaimed dividend of earlier years aggregating to Rs. 2,72,000/- deposited in separate bank accounts, an amount of Rs 68,000/- which is liable to be transferred to Investor Education and Protection Fund (IEPF) has been duly transferred during the year. Inclusion of the said amount does not have any impact on the profitability of the company.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company in its endeavor to provide a safe and healthy work environment for all its employees has developed a policy as per The Sexual Harassment Of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to ensure zero tolerance towards verbal, physical, psychological conduct of a sexual nature by any employee or stakeholder that directly or indirectly harasses, disrupts or interferes with another''s work performance or creates an intimidating, offensive or hostile environment such that each employee can realize his / her maximum potential. The company has not received any complaints during the financial year.
ii) Adhunik Industries Limited finished products are always set a reputable standard in the market in comparison to its peers. With the adoption various advanced methodology in the production process will help the Company to reduce its cost of production and also the quality and durability of the products are also improved.
iii) The Company had not imported any foreign technology during the period under review.
iv) The Company had not incurred any major expenditure which can specifically appropriated to Research and Development work.
Registered office For and on behalf of the Board
14 Netaji Subhas Road
Kolkata - 700001 Mahesh Kumar Agarwal Jugal Kishore Agarwal
Date: 27.05.2016 Chairman Managing Director