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Your Directors present herewith the 68th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2016.
OPERATIONS AND PERFORMANCE
For the year under review, Your Company achieved a gross income of Rs. 12399.26 lakhs and profit before tax of Rs. 68.94 lakhs, as against the gross income of Rs. 23129.08 lakhs and profit before tax of Rs. 53.95 lakhs , for the previous year.
Your Company's operations during the year were impacted by reduced in flow of fresh orders due to the continued slowdown in Greenfield/Brownfield investment in customer segments where the Company is present. There was stiff competition in market place for the limited orders available and due to very low prices offered by competitors, Your Company was not able to secure any major order during the year.
In addition, there was pressure on liquidity front resulting from delayed payments by customers, which in turn affected the pace of execution of the ongoing projects . In few of the projects where work has been completed, the customers delayed the payment due to their funds position and this in turn had affected the cash flows of the Company.
The company will however continue its efforts for securing fresh orders and also improve the collections from the market.
On the Property Development business, Your Company had completed the handing over of all the projects during the year. The turnover from property development business was at Rs. 6944 lakhs for the year as against Rs. 11448 lakhs in the previous year.
The depreciation for the year was at Rs. 435.85 lakhs as compared to Rs. 488.90 lakhs for the previous year. Due to lower volumes, the PBIT for the year was at Rs. 788.9 lakhs as compared to Rs. 1723.32 lakhs during the previous year. However consequent to reduced borrowings, the Company could bring down the finance cost from Rs. 1669.37 Lakhs in the previous year to Rs. 719.96 lakhs in the current year.
During the year, Your Company restricted the capital expenditure by utilizing the existing Plant and Machinery. The Company reviewed the requirement of the available plant and machinery based on the completion of certain projects and took efforts to dispose off specific surplus and used assets.
Taking into account overall financial performance of the Company and the accumulated losses , no dividend is considered for the financial year 2015–16.
The Company has not transferred any amount to general reserve.
During the year, the unclaimed dividend amounting to Rs. 1,51,998/– pertaining to dividend for the year ended 31st March, 2008 was transferred to the Investor Education & Protection Fund. The company has uploaded the details relating to unclaimed dividend on its website for the benefit of its shareholders.
The paid up Equity share capital of the Company as on 31.03.2016 was Rs. 3323.36 Lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity shares. As on 31st March, 2016, Mr. M.M. Venkatachalam, Chairman, was holding 4,51,610 equity shares of Rs. 10/– each and Mr. M.A.M Arunachalam, Director, was holding 3,61,610 equity shares of Rs. 10/– each of the Company. The other Directors of the Company do not hold any shares in the Company.
The paid up Preference Share capital of the Company as on 31.03.2016 was Rs. 7,00,00,000/–.
DETAILS OF DEPOSITS
The Company has not accepted any Deposits covered under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS / GUARANTEES GIVEN / INVESTMENTS MADE
The Company has not extended any loans, guarantees nor made any investments covered under the provisions of Section 186 of the Companies Act, 2013.
The Board of Directors have established a review and monitoring process with the management to ensure that the risks pertaining to the business are identified, steps are taken to manage and mitigate the same and periodical updates are discussed. The Board had constituted a Risk Management Committee, details of the same and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In addition to the Internal Controls on Operations, the Board has laid emphasis on adequate internal financial controls to ensure that the financial affairs of the Company are carried out with due diligence. Apart from Internal Audit function which scrutinizes all the financial transactions, the Company has also 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.
At the 67th Annual General Meeting held on 24th July, 2015, Mr. P. Nagarajan (DIN: 00110344) was appointed as an Independent Director for a period of 5 years with effect from 24th July, 2015 for a term upto the conclusion of the 72nd Annual General Meeting to be held in the calendar year 2020 and not liable to retire by rotation. Mr. M.M. Venkatachalam, (DIN: 00152619), Chairman retired by rotation pursuant to Section 152(6) of the Companies Act, 2013 and Article 93 of the Articles of Association and was appointed as Director, liable to retire by rotation. Ms. G. Jalaja (DIN: 00149278), who was appointed as an Additional Director of the Company on 20th March, 2015, was appointed as Director, liable to retire by rotation.
REAPPOINTMENT OF RETIRING DIRECTOR
Based on the recommendation of Nomination & Remuneration Committee and approval of the Board, Mr. M.A.M. Arunachalam, Director (DIN: 00202958) who retires by rotation pursuant to Section 152(6) of the Companies Act, 2013 and Article 93 of the Articles of Association at the forth coming Annual General Meeting and being eligible, offers himself for re– appointment.
APPOINTMENT OF DIRECTORS
During the year, Mr. R. Surendran (DIN: 00010017) was appointed as Additional Director(Independent) of the Company on 25th January, 2016. On the recommendation of the Nomination & Remuneration Committee and with the approval of the Board, Mr. R. Surendran is proposed to be appointed as an Independent Director for a period of 5 years with effect from 25th January, 2016 and necessary resolution seeking the approval of the members for his appointment is included in the Notice convening the Annual General Meeting. He is not liable to retire by rotation.
RESIGNATION OF DIRECTORS
During the year, Mr. S. S. Rajsekar, Independent Director (DIN: 00125641) had resigned from the
Board of Directors and the same was accepted by the Board with effect from the close of business hours on 28th October, 2015.
Your Directors place on record their grateful appreciation of the valuable services rendered and contributions made by Mr. S.S. Rajsekar, during his tenure of office as Director of the Company.
APPOINTMENT OF KEY MANAGERIAL PERSONNEL
During the year, Mr. N. Velappan, was appointed by the Board as Manager of the Company and a Key Managerial Person from 01st May ,2015 to 30th April, 2016 under Section 203 of the Companies Act, 2013, which was approved by the members at the 67th Annual General Meeting of the Company held on 24th July, 2015. The Board has now extended the tenure of Mr. N. Velappan as Manager for the period from 01st May, 2016 to 30th April 2017, for which the approval of members is being sought in the ensuing Annual General Meeting.
EVALUATION OF BOARD'S PERFORMANCE
As per the provisions of Section 134(3)(p) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as evaluation of the working of its Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out is explained in the Corporate Governance Report.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
On their appointment, Independent Directors are familiarized about the Company's business and operations. Interactions with senior executives are facilitated to gather insight specific to the Company's operations. Detailed presentations are made available to apprise about Company's history, current business plan and strategies. As part of the familiarization programme, a handbook is provided to all Directors including Independent Directors at the time of their appointment. The handbook provides a snapshot to the Directors of their duties and responsibilities, rights, process of appointment and evaluation, compensation, Board and Committee procedures and expectation of various stakeholders.
The details of familiarization programmes as above are also disclosed on the website of the Company at the link: <http://www.coromandelengg.com/Inv_> policies.html.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (Act) stating that the Independent Directors of the Company met with the criteria of Independence laid down in Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Pursuant to Section 178(3) of the Companies Act, 2013, the Board on the recommendations of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and other employees and their remuneration. The details of the Remuneration Policy are stated in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2016, the Board had met five (5) times on 28th April, 2015, 24th July, 2015, 28th October, 2015, 25th January, 2016 and 22nd March, 2016. Except on 22nd March, 2016, the Audit Committee had also met on the same dates. The details of the said meetings are given in the Corporate Governance Report. The intervening gap between the meetings was within the period as prescribed under the Companies Act, 2013.
DIRECTOR'S RESPONSIBILITY 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) that in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) that the directors had selected such accounting policies as mentioned in Note No.
26 of the Financial Statements 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 as at 31st March, 2016 and of the profit of the company for the year ended on that date;
(c) that the directors had taken proper and sufficient care for the maintenance of adequate accountingrecords 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 for the year ended 31st March, 2016 have been prepared on a 'going concern' basis;
(e) that 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) that 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.
RELATED PARTY TRANSACTIONS
All transactions with Related Parties entered during the financial year were in the ordinary course of business and on an arm's length basis. There were 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. None of the Directors have any pecuniary relationships or transactions vis–a–vis the Company other than sitting fees and reimbursement of expenses incurred, if any, for attending the Board meeting.
The Related Party Transactions are placed before the Audit Committee for review and approval as per the terms of the Policy for dealing with Related Parties. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for transactions which are foreseen and of repetitive nature. The statement containing the nature and value of the transactions entered into during the quarter is presented at every subsequent Audit Committee meeting by the CFO for the review and approval of the Committee. Further, transactions proposed in subsequent quarter are also presented. Besides, the Related Party Transactions are also reviewed by the Board on an annual basis. The details of the Related Party Transactions are provided in the accompanying financial statements. There are no contracts or arrangements entered into with Related Parties during the year ended 31st March, 2016 to be reported under section 188(1) of the Companies Act, 2013. The policy on dealing with Related Parties as approved by the Board is uploaded and is available on the Company's website at the following link: <http://www.coromandelengg>. com/Inv_policies.html.
EXPLANATION AND COMMENTS
The reports of statutory auditors and that of the secretarial auditors are self explanatory and have no adverse comments.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There are no material changes or commitments after the closure of the financial year.
COMPOSITION OF AUDIT COMMITTEE
Pursuant to Section 177 of the Companies Act, 2013, the Audit Committee was reconstituted by the Board of Directors and consists of the following members:
1. Mr. P. Nagarajan – Chairman
2. Mr. M.A.M. Arunachalam – Member
3. Mr. N.V. Ravi – Member
4. Mr.R. Surendran – Member
The Board has accepted the recommendations of the Audit Committee and there were no incidences of deviation from such recommendations during the financial year under review.
The Company has devised a vigil mechanism in pursuance of the provisions of Section 177(10) of the Companies Act, 2013 for Directors and employees to report genuine concerns or grievances to the Audit Committee in this regard and details whereof are available on the Company's website.
NOMINATION AND REMUNERATION COMMITTEE
Pursuant to Section 178 of the Companies Act, 2013, the Board has constituted a Nomination and Remuneration Committee consisting of the following members:
1. Mr. N.V. Ravi – Chairman
2. Mr. M.M. Venkatachalam – Member
3. Mr. P. Nagarajan – Member
The said committee has been empowered and authorized to exercise powers as entrusted under the provisions of Section 178 of the Companies Act, 2013. The Company had laid out and following the policy on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub section 3 of Section 178 of the Companies Act, 2013.
Policy on Criteria for Board Nomination and Remuneration policy is available in the website of the Company <http://www.coromandelengg.com/> Inv_policies.html.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY
The Company through its Corporate Social Responsibility Committee had formulated a CSR policy as required under Section 135 of the Companies Act, 2013.
The following is the composition of the Corporate Social Responsibility Committee.
a) Mr. R. Surendran – Chairman
b) Mr. M.A.M Arunachalam – Member
c) Ms G. Jalaja – Member
SCOPE OF CSR POLICY
This policy will apply to all projects/programmes undertaken as part the Company's Corporate Social Responsibility and will be developed, reviewed and updated periodically with reference to relevant changes in corporate governance, Statutory requirements and sustainable and innovative practices. The policy will maintain compliance and alignment with the activities listed in Schedule VII and Section 135 of the Companies Act, 2013 and the rules framed there under.
CSR POLICY IMPLEMENTATION
The Company shall undertake CSR project/ programmes identified by the CSR Committee and approved by the Board of Directors in line with the CSR Policy.
The CSR Policy of the Company is uploaded in the website of the Company, <http://www>. coromandelengg.com/Inv_policies.html <http://coromandelengg.com/Inv_policies.html>.
REASON FOR NOT SPENDING ON CSR ACTIVITIES
Since the Company had incurred losses in 2 of the 3 preceding financial years, the Company had decided not to spend on the CSR activities during the financial year 2015–16 .
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
The company has not received any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.
The Securities and Exchange Board of India (SEBI), on 2nd September, 2015 issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from 1st December, 2015 and accordingly all listed entities were required to enter into the listing agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited on 14th December, 2015.
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai bearing Firm Registration No. 004207S were appointed as Statutory Auditors of the Company to hold office from the conclusion of 66th Annual General Meeting until the conclusion of 68th Annual General Meeting, subject to ratification of the appointment by the members at every Annual General Meeting held after 66th Annual General Meeting of the Company. The Board of Directors , based on the recommendation of Audit Committee, proposes the appointment of M/s Sundaram & Srinivasan as Statutory Auditors of the Company, to hold office, from the conclusion of 68th Annual General Meeting until the conclusion of 69th Annual General Meeting, subject to approval of the appointment by the members at the 68th Annual General Meeting. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for their re–appointment as Auditors of the Company. As required under Regulation 33 (1)(d) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Mr. N.V. Thanigaimani, Cost Accountant (Membership No.15557) was appointed as Cost Auditor of the Company for the financial year 2015–16. The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking ratification for the remuneration payable to Mr. N.V. Thanigaimani is included at item No 5 of the Notice convening the Annual General Meeting.
The Company has appointed M/s RGN Price & Co, Chartered Accountants, Chennai, as internal Auditors of the Company for the financial year 2016–17.
Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. R. Sridharan of Messrs. R Sridharan and Associates, Company Secretaries, Chennai to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith. During the year under review, there has been no qualification, reservation or adverse remark or disclaimer in their report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report, highlighting the business details, is attached and forms part of this report.
CORPORATE GOVERNANCE REPORT
All material information was circulated to the directors before their meeting or placed at their meeting, including minimum information required to be made available to the Board as prescribed under Part A of Schedule II of Sub– Regulation 7 of Regulation 17 of the Listing Regulations.
In terms of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) regulations, 2015, a report on Corporate Governance along with a Certificate from a Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under Part E of Schedule V of Sub– Regulation 34(3) of the Listing Regulations is attached to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a prevention of Sexual Harassment and Grievance Handling Policy in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy.
The following is the summary of sexual harassment complaints received and disposed off during the year 2015–16.
No. of complaints received – Nil
No. of complaints disposed off – Not Applicable
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENT ( R&D) & FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company does not have any commercial activity that calls for conservation of energy and/ or technology absorption, attracting disclosure in pursuance of Rule 8(3) of the Companies (Account) Rules, 2014. During the year, the Company did not have any foreign exchange earnings and the outgo was Rs. 0.14 Lakhs on revenue account.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in the prescribed form MGT.9 as per Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed to and forms part of this Report.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median of employees' remuneration as per Section 197(12) of the Companies Act, 2013 and information relating to employees to be disclosed under Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 is annexed to and forms part of this report.
LISTING OF SECURITIES IN STOCK EXCHANGES
The Company's Equity Shares are presently listed on BSE Ltd.
Your Company has been certified under ISO 9001:2008 for quality management system and BS OHSAS 18001:2007 for safety management system, in design and establishment of property development, construction of residential, commercial and industrial projects, supporting services like electrical, mechanical and plumbing works.
Your Directors place on record their appreciation for the continued co–operation, support and assistance extended to the Company by its Bankers, Shareholders, Government of India and Government of Tamil Nadu.
On behalf of the Board
Date: April 25, 2016