DIRECTORS’ REPORT The Members, Your Directors have pleasure in presenting the 48th Annual Report on the business and operations of the Company and the audited financial accounts for the year ended March 31, 2016. Year in Retrospect The sales and other income for the financial year under review was Rs.32,162.85 lacs as compared to Rs.19,594.51 lacs during the previous year. The production of Calcined Petroleum Coke (CPC) was 1,49,935 tonnes as compared to 85,866 tonnes during the previous year. The sales of CPC was 1,54,688 tonnes for the period under review as compared to 85,648 tonnes for the previous year. The year under review was one of the difficult and challenging periods not only for the Company, but the industry as a whole due to various global and domestic reasons. The profitability for the year has been affected drastically due to lower realization of the Company’s product as well as volatility in foreign currency. The overall sluggishness in the Aluminium industry, meltdown in commodity prices coupled with global industrial recession particularly in China has affected on all fronts, which contributes towards profitability of the Company. The Company is continuously making efforts to overcome difficulties in the present most competitive environment and is confident to tackle the situation by initiating various steps and cost reduction schemes to show positive results in future. Dividend and Transfer to reserve In view of the losses incurred by the Company: i) your Directors have not recommended any dividend for the financial year ended March 31, 2016; ii) no amount has been transferred to reserve for the financial year ended March 31, 2016. Subsidiary Companies and Consolidated Financial Statements As on March 31, 2016, the Company had a wholly owned subsidiary namely, “GCL Global Resources SGP Pte Limited” Singapore. The Company’s erstwhile step down subsidiary “Goa Carbon (Cangzhou) Company Limited” China was deregistered during the period under review pursuant to the decision taken by the “Cangzhou Economic Development Zone, China to cancel the land allotted to the project in Cangzhou undertaken by the said Company on the grounds that the proposed project falls under the “high energy consuming industries” as well as “heavy polluting enterprise”. Under the circumstances the said Company in China has been compelled to withdraw the proposed project to be set up in China. The Consolidated Financial Statements of the Company and its subsidiary, prepared in accordance with relevant Accounting Standards specified in the Companies Act, 2013 read with the rules made there under, form part of the Annual Report. The necessary information as required to be given in terms of the first proviso of subsection 3 of Section 129 of the Companies Act, 2013 is given in this Annual Report. In terms of – (i) Clause (a) of fourth proviso to sub-section (1) of Section 136 of the Companies Act, 2013, a copy of the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiary company shall be placed on the website of the Company www.goacarbon.com ; (ii) Clause (b) of fourth proviso to sub-section (1) of Section 136 of the Companies Act, 2013, the said documents/details shall be made available, upon request, to any member of the Company. Listing Information The equity shares of your Company are listed on the Bombay Stock Exchange Limited (BSE) and on the National Stock Exchange of India Limited (NSE). The listing fees for the year 2016 – 2017 have been paid to BSE and NSE. Accreditation The Company continues to enjoy ISO 9001 & ISO 14001 accreditation made by BUREAU VERITAS. Public Deposits The Company has not accepted any public deposits during the year under review. Directors’ Responsibility Statement To the best of our knowledge and belief and based on the information and representations received from the operating management, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures; (b) that such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the loss of the Company for the year ended on that date; (c) that 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) that the annual accounts have been prepared on a going concern basis; (e) that proper internal financial controls are in place and that the internal financial controls are adequate and are operating effectively; (f) that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively. Directors During the year, your Board with deep regret noted the sad demise of Late Soiru V. Dempo (DIN 00206062) on September 19, 2015. In his death, the Board has lost a visionary and philanthropist. Mr. Rajesh S. Dempo (DIN 05143106) was appointed as Director on January 8, 2016 to fill up the casual vacancy caused by the demise of Late Soiru V. Dempo. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rajesh S. Dempo retires by rotation at the forthcoming Annual General Meeting, since the Director in place of whom he is appointed in the casual vacany, would have retired if he had not ceased from office due to death. Being eligible, Mr. Rajesh S. Dempo offers himself for re-appointment. Your Board has recommended his re-appointment. The Board of Directors re-appointed Mr. Jagmohan J. Chhabra’s (DIN 01007714) as Whole-time Director of the Company with designation “Executive Director” for a further period of three years effective from April 1, 2016 subject to the approval of the Shareholders at the ensuing Annual General Meeting. A Special Resolution to this effect is included as part of the Notice convening the forthcoming Forty-eighth Annual General Meeting for Shareholders approval. Brief resume of the directors proposed for appointment / re-appointment together with other relevant details form part of the Notice of the ensuing Annual General Meeting. Key Managerial Personnel Mr. Jagmohan J. Chhabra, Whole-time Director (Designated “Executive Director”), Mr. P. S. Mantri, Company Secretary and Mr. K. Balaraman, GM (Finance) & CFO, continued to function as Key Managerial Personnel of the Company during the year under review. Independent Directors’ Declarations The Company has received declarations pursuant to Section 149(7) of the Companies Act, 2013, from all the Independent Directors of the Company viz., Mr. Dara P. Mehta, Mr. Keki M. Elavia, Mr. Raman Madhok, Dr. A. B. Prasad and Ms. Kiran Dhingra confirming that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 in respect of their position as an “Independent Director” of Goa Carbon Limited. Meetings of the Board of Directors A minimum of four Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company’s specific needs. In case of business exigencies or urgency of matters, resolutions are passed by circulation. During the year under review, five Board meetings were held, the details of which are given in the Corporate Governance Report which forms part of this Annual Report. The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations. Audit Committee The Audit Committee comprises of Mr. Dara P. Mehta who serves as the Chairman of the Committee and Mr. Keki M. Elavia and Mr. Raman Madhok as the other members. The terms of reference etc., of the Audit Committee is provided in Corporate Governance Report which forms part of this Annual Report. All the recommendations made by the Audit Committee during the financial year under review were accepted by the Board. Nomination and Remuneration Committee The composition, terms of reference etc., of the Nomination and Remuneration Committee is provided in Corporate Governance Report which forms part of this Annual Report. The Committee has formulated a Nomination and Remuneration Policy and the same has been uploaded on the website of the Company at www.goacarbon.com. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and regulation 17(10) of the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Statutory Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board Culture, Execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. Based on these criteria, the performance of the Board, various Board Committees, Chairman and Individual Directors (including Independent Directors) was found to be satisfactory. Internal Control System The Board has laid down Internal Financial Controls within the meaning of the explanation to section 134 (5) (e) (“IFC”) of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Company’s operations. Statutory Auditors Deloitte Haskins & Sells, Chartered Accountants, Chennai (Registration No. 008072S) have been appointed as the Statutory Auditors of the Company for a period of three years from the conclusion of the 46th Annual General Meeting till the conclusion of the 49th Annual General Meeting. The Board now recommends the appointment of Deloitte Haskins & Sells for ratification by the members at the Annual General Meeting for the Financial Year 2016-17. Statutory Auditors’ Observations The notes on financial statements referred to in the Auditors’ Report are self-explanatory and therefore, do not call for any further explanations or comments. There are no qualifications, reservations or adverse remarks or disclaimer made in the Auditors’ Report which requires any clarification or explanation. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules there under, the Board of Directors of the Company has appointed CS Sadashiv V. Shet, Practicing Company Secretary to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2016 forms a part of this Annual Report. The same is self-explanatory and requires no comments. Vigil Mechanism / Whistle Blower Policy The Company has established a Vigil Mechanism / Whistle blower Policy for the employees to report their genuine concerns or grievances and the same has been posted on the Company’s website www.goacarbon.com. The Audit Committee of the Company oversees the Vigil Mechanism. Risk Management Goa Carbon follows well-established and detailed risk assessment and minimisation procedures, which are periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization’s objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. The Senior Management assists the Board in its oversight of the Company’s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. Particulars of loans, guarantees or investments The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to financial statements. Related Party Transactions All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and as such provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. As required under regulation 23(1) of the Listing Regulations, the Company has formulated a policy on dealing with Related Party Transactions. The Policy has been uploaded on the website of the Company and can be accessed at: http://www.goacarbon.com/ downloads/Related%20Party%20Transaction%20 Policy_GOA%20CARBON%20LIMITED.pdf Significant and material orders passed by the Regulators or Courts There were no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. Particulars of employees and related disclosures In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement of the particulars of the employee(s) drawing remuneration in excess of the limits set out in the said rules are provided in the Annexure – I to this Report. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure – II to this Report. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and outgo The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, required to be disclosed by Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in the Annexure – III to this Report. Corporate Social Responsibility (CSR) Pursuant to Section 135 of the Companies Act, 2013 read with rules made there under, your Directors have constituted the Corporate Social Responsibility (CSR) Committee. The CSR Committee comprises of Mr. Shrinivas V. Dempo who serves as Chairman of the Committee and Mr. Raman Madhok and Mr. Jagmohan J. Chhabra as other members. The said Committee has been entrusted with the responsibility and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities. The CSR policy of the Company has been posted on the website of the Company www.goacarbon.com. As part of its initiatives under CSR, the Company has undertaken programs or activities in the areas of Education and Healthcare. These activities are largely in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is provided in the Annexure – IV to this Report. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of the Companies Act, 2013 is included in this Report as Annexure – V and forms an integral part of this Report. Transfer of unclaimed dividend to Investor Education and Protection Fund Pursuant to Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account have been transferred by the Company, from time-to-time on due dates, to the Investor Education and Protection Fund (IEPF). During the year under review, your Company transferred an amount of Rs. 4,57,734/- (Rupees Four Lacs Fifty Seven Thousand Seven Hundred and Thirty Four only) to the IEPF being the unclaimed dividend for the financial year ended 31.03.2008. Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, your Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 8, 2015 (date of last Annual General Meeting) on the Company’s website www.goacarbon.com, as also on the website of the Ministry of Corporate Affairs’. Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013 In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder, the Company has formulated an internal Policy on Sexual Harassment at Workplace (Prevention, Prohibition and Redressal). The policy aims at educating employees on conduct that constitutes sexual harassment, ways and means to prevent occurrence of any such incident, and the mechanism for dealing with such incident in the unlikely event of its occurrence. The ICC is responsible for redressal of complaints related to sexual harassment of women at the workplace in accordance with procedures, regulations and guidelines provided in the Policy. During the year under review there were no complaints referred to the ICC. Corporate Governance It has been the endeavour of your Company to follow and implement best practices in corporate governance, in letter and spirit. The following forms part of this Annual Report: i) Declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel; ii) Management Discussion and Analysis; iii) Report on Corporate Governance and; iv) Auditors’ Certificate regarding compliance of conditions of corporate governance. Appreciation and Acknowledgement Your Directors would like to express their appreciation for the assistance and co-operation received from the Government authorities, banks, customers, business associates and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company. For and on behalf of the Board of Directors Shrinivas V. Dempo Chairman DIN: 00043413 Place : Panaji, Goa April 29, 2016 |