DIRECTORS' REPORT To The Members, Barak Valley Cements Limited The Directors of your Company are pleased to present the 16th Annual Report together with the Audited Accounts of the Company for the Financial Year ended 31st March 2015. 2. SUBSIDIARIES Your Company has seven wholly owned subsidiaries viz. (i) Cement International Limited, (ii) Badarpur Energy Private Limited, (iii) Meghalaya Minerals and Mines Limited,(iv) Singlacherra Tea Company Private Limited, (v) Goombira Tea Company Limited, (vi) Chargola Tea Company Private Limited and (vii) Valley Strong Cements (Assam) Limited during the year under review. The annual accounts of the subsidiary companies will also be kept open for inspection at the Head Office of the Company and of the subsidiary Companies concerned. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiary Companies & Associate Companies. Your Company has formulated a policy for determining material subsidiaries and is available at the Website of the at the below mentionedlink:"<http://www.barakcement.com/PDF/Company%20Policies/POLICY%20FOR%20DETERMINING%25> 20MATERIAL%20SUBSIDIARIES.pdf". The statement containing the salient features of the financial statements of subsidiaries in pursuant to the proviso of subsection (3) of Section 129 of the Companies Act, 2013, read with rule 5 of the Companies (Accounts) Rules, 2014 relating to subsidiaries is annexed with the financial statements. 3. ASSOCIATE COMPANIES During the year under report, your Company has disinvested/sold 1,20,000 Equity shares of North East Power and Infra Limited its Associate Company. However, out of 1,20,000 Equity shares of North East Power and Infra Limited 40,000 equity shares were sold to Astir Impex Private Limited and remaining 80,000 shares were sold to Karbi Trade and Industries Limited. Hence, North East Power and Infra Limited ceases to be the Associate Company of your Company and in pursuant to Section 2(6) of the Companies Act, 2013 your Company does not have any other Associate Company during the year under report. 4. CHANGES IN CAPITAL STRUCTURE The Equity Shares of the Company are being traded on National Stock Exchange of India Limited and BSE Limited, since 23rd November, 2007. As at 31st March, 2015 the paid-up capital of the Company was Rs. 22,16,00,000/- divided into 2,21,60,000 Equity Shares of Rs. 10/- each and there was no change in capital structure of your Company during the year under report. 5. OPERATIONS 5.1 Standalone The Standalone turnover of the Company stood at Rs. 12843.22 Lakhs during the year 2014-15, which has been increased in comparison to previous year turnover of Rs. 10360.88 Lakhs. Your Company has earned a profit of Rs. 359.10 Lakhs during the financial year 2014-15, in comparison with the previous year losses of Rs. 64.37 Lakhs. 5.2 Consolidated Pursuant to the requirements of Clause 32 of the Listing Agreement, the audited consolidated financial results along with the standalone financial results in this Annual Report. During the year 2014-15 the consolidated revenue from operations has been increased to Rs. 15739.49 Lakhs as compared to Rs. 12,391.86 Lakhs in the period 2013-14. The consolidated loss has also decreased from Rs. 763.96 Lakhs in 2013-14 to Rs. 98.54 Lakhs during the financial year 2014-2015. 6. DIVIDEND The Board of Directors after considering the performance of the Company for the Financial Year 2014-15 have decided to not to recommend dividend this financial year 2014-2015. 7. PUBLIC DEPOSITS AND BUY BACK OF SHARES During the period under review, your Company has not accepted any deposit from public/ shareholders in accordance with Section 73 of the Companies Act, 2013 and rules made there under and hence no amount of principal or interest was outstanding as on 31st March, 2015. No Buy Back of Shares was proposed or pending during the Financial Year ended on 31st March, 2015. 8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the notes to the Financial Statements as prescribed in the Annual Report. 9. TRANSFERRED TO RESERVES The Company neither transfers nor proposes to transfer any amount to the Reserves. 10. STATE OF COMPANY'S AFFAIRS The Company is principally engaged in the business of manufacturing of cement of different grades and is marketing its product under the brand name "Valley Strong Cement" and has also diversified its business in Power Generation and Tea Cultivation lines through its subsidiaries. All of these Business activities are carried out by the Company in the North East Region. The financials of your Company along its subsidiaries had already been mentioned in this report. 11. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY There has been no such material change(s) and commitment(s) incurred during the financial year i.e. affecting the financial position of the Company during the year under report. 12. RELATED PARTY TRANSACTIONS In the view of the provision of Section 188 of the Companies Act, 2013 read with rules made there under and the Listing Agreement, all the Related Party Transactions placed before the Audit Committee and also before the Board for approval. All the related party transactions that were entered into during the financial year with subsidiaries were on an arm's length basis and were in the ordinary course of business, hence no approval of shareholders in the General Meeting were obtained for executing such transactions. Your Company had developed a policy on materiality of Related Party Transactions for the purpose of identification and monitoring of such related transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at the below mentioned Link: <http://www.barakcement.com/PDF/Company%20Policies/POLICY%20FOR%20DETERMINING%20> MATERIAL%20RELATED%20PARTY%20TRANSACTION.pdf. In Pursuant to clause (h) of sub-section (3) of Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the disclosures with respect to contracts/arrangements/transactions of its related parties has been prescribed Form-AOC-2 i.e. given separately as "Annexure A" and forms part of this Report. 13. VIGIL MECHANISM / WHISTLE BLOWER POLICY Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. Pursuant to clause 49 of the listing agreement, your Company has formulated a Whistle Blower Policy for directors, senior executives and employees to report the concerns about the unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct and ethics policy. The Whistle Blower Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. The Whistle Blower Policy is provided on the website of the Company at the following link: <http://www.barakcement.com/> index384c.html. The contact details of the Vigilance and Ethics Officer is as under:- Name - Shri Mukesh Agarwal Address -Debendra Nagar, Jhoombasti, P.O. Badarpur Ghat, Distt. Karimganj,Assam-788803 Email-magarwal.bvcl@gmail.com Contact No.- +91-9435078960 14. RISK MANAGEMENT Business Risk evaluation and management is an ongoing process within the Company and in order to cater the risk factors associated with business environment, your Company had framed Risk Management Policy. The detailed exercise on the framed policy was carried out covering the entire gamut of business operations involving identification, assessment, and classification of areas involving high risk/low risk and in view of these activities, Board has arrived on the conclusion that there has been no such major business risks that may threaten the existence or the going concern basis of the Company. As per Clause 49 VI of the Listing Agreement, your Company has laid down policy to inform Board members about the risk assessment and minimization procedures. 15. CORPORATE SOCIAL RESPONSIBILITY (CSR) Your Company does not fall within the ambit of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. 16. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources as required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, your Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. During the year under review, there has been no complaint received or outstanding from any employee as on 31.03.2015 for redressal. 17. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Existing Directors Composition of the Company has an adequate mix of Executive and Independent Directors to ensure and maintain the independence of the Board, and separate its functions of Governance and management. As on March, 31 2015, the Board comprises of 10 members 5 (Five) of whom are Executive and 5 (Five) are Independent Directors (including One Women Director in pursuant to the compliance of Section 149 of the Companies Act, 2013). The Board periodically evaluates the need for its change in its composition and size. The policy of the Company on director's appointment, remuneration, including criteria for determining qualification, positive attributes, independence of director and other matters provided under sub-section (3) of section 178 along has been described in the Corporate Governance Report. We affirm that the Remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company. 18. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board shall monitor and review the board evaluation framework. The Companies Act, 2013 states that a formal evaluation is need to be made by the board of its own performance and the performance of its committees and individual directors. Schedule IV of the Companies act, 2013 states that the performance evaluation of the Independent director shall be done by the entire Board of Director excluding the Director being evaluated. The criteria in which the evaluation has been carried out has been explained in the Corporate Governance Report. 19. DIRECTORS Pursuant to provisions of Section 152 of Companies Act, 2013 and the Articles of Association of the Company Sh. Bijay Kumar Garodia and Sh. Santosh Kumar Bajaj, Executive Directors of the Company are liable to retire by rotation and being eligible, offers themselves for re-appointment. The term of existing Independent Directors has not expired, Hence none of the Independent Directors are stands for Re-appointment. As per the provisions of Sections 196, 197, 203 of the Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, Sh. Bijay Kumar Garodia was appointed as whole time director of the Company for a period of 3 years w.e.f. 01.06.2014, and Sh. Kamakhya Chamaria was appointed as Managing Director of the Company for a period of 3 years w.e.f. 30.09.2014 and Sh. Santosh Kumar Bajaj was appointed as whole time director of the Company for a period of 3 years w.e.f. 30.09.2014 a period of 3 years, in last Annual General Meeting of members. 20. DECLARATION BY INDEPENDENT DIRECTOR The Company has received declarations from each independent director under section 149(7) of the Companies Act, 2013, that he/she meets the criteria defined under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 21. BOARD MEETINGS The Board met 4 (four) times during the financial year 2014-15. The 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 and Listing Agreement. 22. DIRECTORS RESPONSIBILITIES STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: (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 proper internal financial controls were in place and that the financial controls were 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. 23. AUDITORS 23.1Statutory Auditors The Statutory Auditors of the Company M/s Kumar Vijay Gupta & Co., Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting of the Company and have confirmed that their re-appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013. They also satisfy the qualifications laid under section 141 of the Companies Act, 2013. They have sought re-appointment and have confirmed that their appointment, if made, shall be within the limits laid down under Section 141(3) (g) of the Companies Act, 2013. Further M/s Kumar Vijay Gupta & Co. has subjected themselves to the peer review process of ICAI and holds a valid certificate issued by the Peer Review Board of ICAI. Considering their work experience, knowledge and profile the Board of Directors proposes the Re-appointment of M/s Kumar Vijay Gupta & Co., Chartered Accountants, as Statutory Auditors of the Company on the recommendation of Audit Committee, to hold the office from the conclusion of ensuing Annual General Meeting until the conclusion of 18th Annual General Meeting and to fix their remuneration. 23.2Cost Auditors and Cost Audit Report Cost audit records have been maintained for the financial year 2014-15 and pursuant to Section 148 of the Companies Act, 2013. The Board of Directors on the recommendation of the Audit Committee has proceeded to appoint Sh. Nirmalendu Kar Purkayastha Cost Accountants, as the Cost Auditors of the Company for the Financial Year 2015-16 and Remuneration paid to the Cost Auditor shall be subject to the ratification of Members in the Annual general Meeting The Audit Committee has also received a Certificate from the Cost Auditor Certifying their independence and arm's length relationship with the Company. 24. AUDIT COMMITTEE Your Company has an Audit Committee, in terms of Companies Act, 2013 and that of Listing Agreement, further details of Audit Committee are given in the Corporate Governance Report. 25. INDEPENDENT AUDITORS' REPORT Statutory Auditor had on the basis of examination and scrutiny of books, records, financial statements and other information thereon had ratified that there has been No Qualifications, Reservation or Adverse Remarks or Disclaimer in the Independent Auditor's Report. However, notes on Accounts referred to the Independent Auditor's Report are self explanatory and thereafter do not call for further comments. The Board considering the aforesaid acclaimed the conduct of business operation and management of the Company. 26. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, are given separately as "Annexure B" and forms part of this Report. 27. SECRETARIAL AUDITOR & AUDIT REPORT In pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules there under, the Company considered and appointed M/s Vishal Lochan Agarwal & Associates, Company Secretary in Practice (C.P No. 7622) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report enclosed herewith this report as "Annexure C" does not encompass any Adverse Remarks, Reservations and Qualifications. 28. INSURANCE All the properties of the Company including building, plant and machinery and stocks, where necessary and to the extent required have been adequately insured against major risks. 29. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure D". 30. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure E". 31. PARTICULARS OF EMPLOYEES The information on pursuant to Section 197(12) read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been annexed herewith as "Annexure F" 32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Audit Department 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 and its subsidiaries. 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 corrective actions thereon are presented to the Audit Committee of the Board. 33. CORPORATE GOVERNANCE REPORT Your Directors reaffirm their continued commitment to good corporate governance practices. During the year under review, your Company was in compliance with the provisions of Clause 49 of the Listing Agreement with the stock exchange relating to corporate governance The Report on Corporate Governance in terms of clause 49 of the Listing Agreement is annexed and forms part of the Annual Report of the Company. A certificate from the Auditors confirming compliance with the conditions of Corporate Governance is also annexed. 34. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS During the year, No significant orders have been passed by any regulatory authority or by any court. 35. APPRECIATION Your Directors would like to express their appreciation to the Investors, Banks, Financial Institutions, Clients, Vendors, Central and the State Government and other Regulatory Authorities for their assistance, continued support, co-operation and guidance during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For BARAK VALLEY CEMENTS LIMITED Sd/- (Bijay Kumar Garodia) Chairman and Whole Time Director DIN : 00044379 Add: CF-366, Salt Lake City, Kolkata-700064 Place: Delhi Date : 30.05.2015 |