DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasures in presenting the 24th Annual Report together with the Audited Statements of Accounts for the financial year ended 31st March 2015. Dividend In order to conserve existing resources of the Company, your directors do not recommend any dividend for the financial year 2014-15. Reserves The Company has not proposed any transfer to its Reserves Review of operations The fiscal year 2014-15 was a year full of struggle for the cigarette industry and in particular for the Company as it had to face many variable constraints from marketing to the regulatory authority. Despite facing stiff competition in market, hike in the duties on the cigarettes and rise in prices of the raw materials, your company has still managed to maintain the same performance as compared to last year. During the year under review, the Company has promoted 4 new wholly owned subsidiaries and shifted some of its land bank and buildings into them which resulted reduction in PBT from Rs. 97.17 Lacs as compared to Rs. 183.28 Lacs in the financial year 2013-14. However, Your Company's total turnover from cigarettes business has increased to Rs. 2607.85 Lacs as compared to Rs 1982.02 Lacs in the financial year 2013-14. Exports sales also increase to Rs 1549.55 Lacs from Rs 900.84 Lacs and domestic sales increased to Rs 1058.29 Lacs from Rs. 966.16 Lacs. The Consolidated PBT stands at Rs. 243.01 Lacs. Change in nature of business, if any During the year, there was no change in the nature of business of the Company. Subsidiaries, Joint Ventures And Associate Companies During the year under review, your company has incorporated 4 new wholly owned subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared a Consolidated Financial Statement of the Company and all its subsidiary and associate companies, which is forming part of the Annual Report. The Annual accounts of the subsidiary will be kept at the Registered Office of the Company and also at the Registered Office of the subsidiary companies and will be available to the investors seeking information at any time during the working hours of the Company except Saturday. Further as per section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of the subsidiaries are available at our website at www.ntcind.com . The Company does not have any Joint Venture or Associate company. Pursuant to proviso to Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company. The Company has also formulated a Policy for determining material subsidiaries as approved which can also be accessed on the Company's website at the link: <http://www.ntcind.com/pdf/STLD/ntc%20Policy%20on%20Material%20Subsidiary.pdf> Directors: A. Details of Directors and Key Managerial Personnel Appointment of Independent Directors: At the Annual General Meeting of the Company held on 5th September, 2014, the Members of the Company appointed Mr. Gaurav Somani (DIN: 06368949), Sri Ravi Prakash Pincha (DIN 00094695) and Sri Dilip Chakraborty (DIN : 01839950) as Independent Directors under the Act for a term of up to 31st March, 2019. Appointment of Non- Independent Directors: The Board of Directors have re-appointed Mr. Nilotpal Deb as the Managing Director of the Company w.e.f 14.02.2015 for a period of 1(One) year subject to the approval of members in the ensuing Annual General Meeting of the Company. As per the provisions of Section 149(1) of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement, the Company is required to have atleast one Woman Director on its Board. The Company complies with the aforesaid requirement with the appointment of Miss Vembi Krishanamurthy Radha as a non-executive Non-Independent woman Director who is liable to retire by rotation on the board. Retirement By Rotation: In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of your Company, Mr. Nilotpal Deb, Director of the Company, is due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment. A brief profile of the above Directors seeking appointment/re-appointment required under Clause 49 of the Listing Agreement is given in the Notice of AGM. Statement on Declaration Given By Independent Directors Under Sub-Section (6) of Section 149: The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. Key Managerial Personnel: The Board of Directors of the Company in their meeting held on 29th May, 2014 approved the continuation of office of the existing KMP, Mr. Prem Chand Khator as the Chief Financial Officer of the Company and Mr. Sunil Kumar Varma as Company Secretary cum Compliance Officer of the CompanyYour Board of Directors is of opinion that the continued association of the above directors with the Company will be beneficial to the Company and hence recommend their re-appointment for approval of the members. B. Nomination & Remuneration Policy The Board of Directors have framed a policy which lays down a framework in relation to appointment, remuneration and other matters provided in Section 178(3) of the Act for Directors, Key managerial Personnel and senior Management Personnel of the Company. The same has been enclosed as an annexure "A". C. Board evaluation The Board of Directors have carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreement ("Clause 49"). 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 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 31.03.2015, 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 non-executive 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. D. Familiarisation Programme: The Company has devised a programme for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters and the same has been put up on the website of the Company at the link: <http://www.ntcind.com/pdf/STLD/ntc%20Familiarisation%20programme.pdf> Committees Audit Committee The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee. Nomination and Remuneration Committee The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. Share Transfer cum Stakeholders Relationship Committee The composition and terms of reference of the Share transfer cum Stakeholders Relationship Committee has been furnished in the Corporate Governance Report forming a part of this Annual Report. Auditors and Explanation to Auditor's Remarks Statutory Auditors M/s S. M. Daga & Co, Chartered Accountants were appointed as Statutory Auditors of your Company at the last Annual General Meeting held on 5th September, 2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting. Accordingly, the Board recommends to the Members of the Company for ratification of the appointment of M/s S. M. Daga & Co, Chartered Accountants as the Statutory Auditors of the Company for the financial year 2015-16. In this regard, M/s S. M. Daga & Co, Chartered Accountants have submitted their written consent that they are eligible and qualified to be continue as Statutory Auditors of the Company in terms of Section 139 of the Companies Act, 2013 and also satisfy the criteria provided in Section 141 of the Companies Act, 2013. The Auditors' Report to the shareholders for the year under review does not contain any qualifications or adverse remarks. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. Secretarial Auditors The Board has appointed Mr. Ram Mohan Goenka of M/s MR & Associates, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as annexure "B" to this Report. Explanation to the Observation raised in the Secretarial Audit Report The Secretarial Audit Report contains an observation as follows: Observation: Suit had been filed by shareholders of the Company in Sealdah Civil & Criminal Court against Resolution passed in pursuance of Section 180(1)(a) and 180(1)(b) of the Companies Act, 2013 and the matter is subjudice. Board Reply: On 05.01.2015 some minority shareholders had filed a suit against the Company in the court of Learned Fourth Civil Judge (Junior Division) at Sealdah, West Bengal. Since the matter is subjudice in the court, any disclosures given at this moment would be prejudicial to the interest of the company and that of the stakeholders. Extract of the Annual Return The details forming part of the extract of Annual Return in form MGT-9 as required under section 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management & Administration) Rules, 2014 is annexed hereto as annexure "C". Number of meetings of the Board of Directors During the financial year 2014-15 Board Meetings were convened and held details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Directors' Responsibility Statement To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) and 134(5) of the Companies Act, 2013. (a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards had 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 a true and fair view of the state of affairs of the company at the end of the financial year and the statement of profit and loss of the company for that period; (c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors have prepared the annual accounts on a going concern basis; and (e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively (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. Particulars of Loans, Guarantees and Investments under Section 186 Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to standalone financial statement. Particulars of Contracts or Arrangements with Related Parties All contracts / arrangements / transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement by the Company during the financial year were in the ordinary course of business and on an arm's length basis. There are no materially significant related party transactions 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. The details of the related Party transaction in Form AOC-2 is enclosed and marked as Annexure "D". All related party transactions are placed before the Audit Committee for its approval. In accordance with Accounting Standard 18, the Related Party Transactions are disclosed under Note No 2.29 of the Standalone Financial Statements. Your Company has framed a Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board. The same can be accessible on the Company's website at the link:<http://www.ntcind.com/pdf/STLD/ntc%20Policy%20on%20Material%20Subsidiary.pdf> Management Discussion and Analysis A separate report on Management Discussion and Analysis containing a detailed analysis of the Company's performance as per Clause 49 of the Listing Agreement is annexed hereto. Corporate Governance A separate report on Corporate Governance along with the Certificate from the Auditors of the Company for its due compliance is annexed hereto, forming part of this Annual Report. A certificate of the CEO and CFO of the Company in terms of sub-clause (v) of Clause 49 of Listing Agreement, inter alia, confirming the correctness of the financial statement, adequacy of the internal control measures and reporting of the matters to the Audit Committee is also annexed. Material Changes and Commitments Affecting the Financial Position of the Company There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are provided in annexure "E" to this Report. Risk Management Policy Your Company has developed and implemented a Risk Management framework which consist of Plan & Policies pursuant to requirement of the provisions of Section 134(3)(n) of the Companies Act, 2013 read with Clause 49(VI) of the Listing agreement. In this ever changing economic environment, your company is exposed to various risks such as market risk, financial risk, liquidity risk, principally interest rate risk, credit risk and risks associated with the economy, regulations, competition among others. The aforesaid Risk Management framework helps in identifying, assessing, monitoring and mitigation of various risks to key business objectives. The Audit Committee of the company periodically review and evaluate overall risk management framework to ensure that the executive management controls the risk as per decided policy. The risk management issues are discussed in detail in the Management Discussion and Analysis. Adequacy of Internal Financial Controls The Company's internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems are routinely tested and certified by Statutory as well as Internal Auditor and cover all offices, factories and key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company's risk management policies and systems. Vigil Mechanism fl The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the revised Clause 49 of the Listing Agreements with stock exchanges (URL: <http://www.ntcind.com/pdf/STLD/ntc%20Vigilance%20Mechanism.pdf>). Human Resources Your Company believes in best HR practices by providing its employees a world class working environment, giving them equal opportunities to rise and grow. We continue to implement the best of HR policies so as to ensure that talent retention is ensured at all levels. Employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company during the year. Particulars Of Employees Details pursuant to section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed herewith as annexure "F". None of the employees of the Company is in receipt of remuneration exceeding the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Health, Safety and Environmental Protection Your Company has complied with all the laws applicable to the Company. The Company has been complying with relevant laws and has been taking all necessary measures to protect the environment and maximize worker protection and safety. Deposits The Company has not invited or accepted deposits from the public covered under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. Details of Significant & Material Orders Passed By The Regulators or Courts or Tribunal There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. Disclosures Under Sexual Harassment of Women At Workplace (Prevention, Prohibition & Redressal) Act, 2013 An Internal Complaints Committee has been constituted under the Anti Sexual Harassment Policy approved by the Board of Directors of the Company, which provides a forum to all female personnel to lodge complaints (if any) therewith for redressal. Your directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Acknowledgements Your Directors wish to place on record their deep sense of appreciation to the shareholders, bankers, business associates, retailers, suppliers, customers, government and other regulatory agencies for their continued support and faith in the Company. Your Board is grateful to the Independent Directors for their valuable contributions. All of them despite other business exigencies have shared their rich experience and knowledge with the management to take your Company forward. Your Directors also wish to place on record their appreciation for the whole-hearted co-operation, dedication, commitment and contribution made by all the employees and look forward to their continued support. Inspired by this vision, driven by values and powered by internal vitality, your Directors and employees look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders. ./f^ For & on behalf of the Board Nilotpal Deb Managing Director Ravi Prakash Pincha Director Place: Kolkata Date : 30th Day of May, 2015 |