DIRECTOR'S REPORT TO THE MEMBERS, Your Company's Directors are pleased to present the 28th Annual Report and the audited accounts of the Company for the financial year ended 31st March, 2015. Review of Performance and Management discussion and Analysis Your directors are pleased to report total income of Rs. 41.40 crores for the financial year ended 31st March, 2015 as against Rs.28.59 crores for the financial year ended 31st March, 2014, an increase of 44.80% compared to last financial year. The profit before tax is Rs. 4.88 Lacs for the year ended 2014-15 compared to Rs. 2.63 Lacs for the year ended 2013-14, an increase of 85.55% compared to the last financial year. The Net profit after tax is Rs. 3.13 Lacs for the financial year 201415 as against 1.27 lacs for the financial year 2013-14, an increase of 146.22% compared to last financial year. The Management's Discussion and Analysis on Company's performance - industry trends and other material changes with respect to the Company and its subsidiaries pursuant to Clause 49 of the Listing Agreement is presented in a separate section forming part of this Annual Report. Dividend To conserve the financial resources, no dividend has been recommended for the year under review and no amount are proposed to be transferred to reserves. Internal Financial Control (IFC) System and their adequacy The Company's present Internal Control Systems are commensurate with its size. However, looking at the growth in the size of the Company and its operations it is strengthening these systems further. The Company places great emphasis on the maintenance of effective internal controls, both from the point of view of compliance with statutory requirements as well as supporting the smooth and efficient running of the business. The Management is taking further initiatives in terms of adding more capacities, which would have significant benefit in the coming years. A process driven framework for Internal Financial Control has been designed and implemented by the Company within the meaning of the explanation to Section 134(5)(e) of the Companies Act, 2013. For the financial year ended March 31, 2015, the Board is of the opinion that the Company has sound IFC commensurate with its size and nature of its Business operations and operating effectively and no material weakness exist. Transfer to Reserve No amount is proposed to transfer to the General Reserve Account as required under the Companies Act, 2013. Corporate Governance and Shareholders Information Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on the Corporate Governance is included as a part of this Annual Report. A Certificate from the Practicing Company Secretary, confirming the compliance with the conditions of the Corporate Governance as stipulated under Clause 49 of the Listing Agreement is enclosed as a part of this Report. Subsidiary Company / Associate / Joint Venture Company As on 31st March 2015, your Company has three wholly owned subsidiaries (WOS), namely, 1. Chromatic Ferro Alloys Limited 2. Chromatic Sponge Iron Limited 3. Chromatic International FZE The Company had formed three 100% wholly - owned subsidiary, namely Chromatic Ferro Alloys Limited, Chromatic Sponge Iron Limited and Chromatic International FZE on 13th September, 2011, 12th September, 2011 and 21st October, 2010 respectively. The Company will make available, on request, the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. These documents will also be kept open for inspection during the business hours at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. During the year under review, Company does not have any associate company and joint venture company pursuant to the provisions of Companies Act, 2013. Your company has decided to close the subsidiary Company (ies) which have not yet started operations. The statement pursuant to Section 129 (3) of the Companies Act, 2013 containing the prescribed details of subsidiaries is attached to this report. Listing of Equity Shares The equity shares of your company are listed on Bombay Stock Exchange Limited (BSE), National Stock Exchange of India Limited and the Luxembourg Stock Exchange, Luxembourg. The equity shares of the Company was listed and admitted for dealing on National Stock Exchange with effect from 29th May, 2012. The annual listing fees for the year 2015-16 is already paid to the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, whereas the payment to the Luxembourg Stock Exchange is yet to be made. Human Resource Development Company encourages a culture that develops and empowers people, promotes team building and nurtures new ideas. The Company's recruitment practice ensures that suitable candidates with merit are recruited and provided with the right opportunities to grow within the organization. Depository System Your Company's equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As of 31st March, 2015, 99.63% of the Equity shares were held in demat form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization form either of the Depositories. Company's ISIN No. is INE662C01015. Buy-Back of Shares During the financial year under review, Company has not announced any Buy-back of its Shares. Share Capital During the financial year under review, there is no change in the equity share capital of the Company by way of further issue, bonus, sweat equity share, employee stock option scheme or in any other manner. Pledge of shares As on March 31, 2015, the Promoters of the Company do not have any shares which are encumbered / pledged. Board Meetings During the Financial year, four board meetings were held and the details of which are given in the Corporate Governance Report. The provisions of the Companies Act, 2013 and the Listing Agreement were adhered to while considering the time gap between the two meetings. Directors / Key Managerial Personnel In pursuance of Section 149 of the Companies Act, 2013, three of the Director's of the company namely, Mr. Chirag Shah, Mr. Ajay Singh Sethi and Ms. Diana Joshi were categorized as Independent Directors in terms of the definition contained in the Equity Listing Agreement. The provisions of Section 149 (4) of the Companies Act, 2013, pertaining to the appointment of Independent Directors have been notified by the Ministry of Corporate Affairs with effect from April 01, 2014. Pursuant to the provisions into force of Section 149 of the Companies Act, 2013, from April 01, 2014, the company has re-assessed the status of its Directors with a view of determining their qualification for categorising as Independent Directors in terms of Section 149 (6) of the Companies Act, 2013. Accordingly, Mr. Chirag Shah; Mr. Ajay Singh Sethi and Ms. Diana Joshi fulfills the criteria laid down in Section 149 (6) of the Companies Act, 2013, in this regard. Section 149 (10) of the Companies Act, 2013 restrict the tenure of Independent Director upto two terms, with a single term not exceeding five years, which shall be effective from April 01, 2014. The revised Clause 49 of the Equity Listing agreement issued by Securities and Exchange Board of India (SEBI), pursuant to Circular no. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014, also contains the same provisions. The Company has received declaration from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of section 149 of the Companies Act, 2013 and under clause 49 of the listing agreement with the stock exchange. The Board of Directors had appointed Ms. Diana Joshi as an additional director of the company from 1st September, 2014. Her appointment was regularized in the last Annual General Meeting as an Independent Director for a period of consecutive three years. Ms. Dipti M. Sharma was appointed as Company Secretary and Compliance Officer of the Company effective from 11th June, 2014 by the Board of Directors of the Company. She resigned effective from 28th February, 2015. The Board places on record its appreciation of the immense contribution made by her to the Company. Mr. Vinod Kaushik, Whole-time Director of the Company, retires from the Board by rotation and is being eligible for re-appointment at the forthcoming Annual General Meeting. Familiarization programme for Independent Directors The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. Company's policy relating to Directors Appointment, Payment of Remuneration and discharge of their duties The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and hence the Company has devised a policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013. Board Evaluation In accordance with the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out the annual evaluation of its own performance, the directors individually as well as the evaluation of the working of the Audit, Nomination and Remuneration Committee and Stakeholder relationship committee. Directors Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013with respect to Directors' Responsibility Statement, your Directors hereby confirmed that- (I) In the preparation of Annual Accounts for the year ended March 31, 2015 the applicable Accounting Standard have been followed along with proper explanation relating to material departure and there are no material departures from the same; (II) 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 as at 31st March, 2015, and profit of the company for the year ended on that date; (III) The Directors have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provision of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (IV) The Directors have prepared the Annual Accounts of the Company on a going concern basis; (V) Proper internal financial controls were followed by the Company and such internal financial controls are adequate and were operating effectively and (VI) 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. Auditors and Auditors' Report M/s. S. K. Badjatya & Co., Chartered Accountants (ICAI Firm Registration no. 004017C), Statutory Auditors of the Company, retires at the conclusion of the forthcoming Annual General Meeting and they have consented to continue as the Statutory Auditors of the Company. The Company has received confirmation from M/s S. K. Badjatya & Co., to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) of the Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of Section 141 of the Companies Act, 2013. The Auditors has also submitted peer review certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India, New Delhi as required under the listing agreement. The Board recommends their re-appointment. Members are requested to consider their re-appointment as Statutory Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the third consecutive Annual General Meeting of the Company to be held in the year 2018( subject to the ratification of the appointment by the members at every Annual General Meeting held after this Annual General Meeting), at a remuneration decided by the Board of Directors of the Company in consultation with the Auditors. All observation made by the Auditors in their reports are self explanatory by way of Notes on Accounts and does not require any further clarification. Secretarial Audit According to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel), 2014 , The Board of Directors has appointed Mr. R. N. Gupta, Practicing Company Secretary as the Secretarial Auditor for the financial year ending 31st March, 2015. The Secretarial Audit Report submitted by him is enclosed as a part of this Report as Annexure A. Reporting of Fraud The Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013. Shares in suspense account No equity share of the Company was in suspense account as on 31st March, 2015. Cost Audit As per the Cost Audit Orders, Cost Audit is not applicable to the Company's products /business for the financial year 2014-15. Fixed Deposits Your Company has not accepted any fixed deposits, during the year, under Section 73 of the Companies Act, 2013 and, as such; no amount on account of principal or interest on fixed deposits was outstanding during the period under review. Consolidated Financial Results Your Directors provides Audited Consolidated Financial Statements in this Annual Report. Conservation of Energy, Technology Absorption & Foreign Earnings and Outgo: Information in accordance with the provision of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Account), Rules, 2014 regarding conservation of energy and technology absorption are as per Annexure-B and forms part of this report. Environment and Social Concern Your Company continues its efforts for the betterment of the environment and conservation of scarce natural resources. Details of Policy Developed and Implemented by the Company on its Corporate Social Responsibility Initiatives The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable on the Company for the financial year ending 31st March, 2015. Vigil Mechanism In pursuant to the provisions of the Section 177(9) and (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and Employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.chromatic.in Business Risk Management The principle of Risk Minimization has been followed in the company as is the norm of the every industry, it has now become a compulsion. Therefore, in accordance with Clause 49 of the Listing Agreement, the members of the Board were informed about the risk assessment and the minimization procedures after which the Board formally adopted the steps for framing, implementing and monitoring the risk management plan of the company. In today's competitive environment, strategies for mitigating risk while accomplishing the growth plans of the company are imperative. The common risk interalia are: Business Risk, Technology obsolescence, Investments, Retention of Talent and expansion of facilities. As a matter of policy, these risks are assessed and appropriate steps are taken to mitigate the same. Disclosure under Sexual Harassment of Women & Workplace (Prevention, Prohibition & Redressal) Act, 2013 Our company has in place an Anti Sexual Harassment Policy at workplace. Our policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the year ended 31st March, 2015 no complaints have been received pertaining to sexual harassment. Disclosure of Composition of Audit Committee The provisions of Section 177 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 is applicable to the Company. The Composition is in line with the provisions of Clause 49 of the Listing Agreement read with Section 177 of the Companies Act, 2013. Related Party Transactions The Related Party Transactions that were entered during the Financial year were on the Arm's Length Basis and were in the ordinary course of business. There were no materially significant transactions with the Company's Promoters; Directors; Management or their Relatives which could have a potential conflict with the interests of the company. Transactions with related parties entered by the Company in the normal course of the business are periodically placed before the committee for its omnibus approval. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the company and its related parties, in compliance with the applicable provisions of the Companies Act , 2013, the Rules made there under and the Listing Agreement. Our Company took loan from M/s Easy Access Financial Services Private Limited , whereby the promoter company's shares i.e M/s Cheetah Multitrade Private Limited Shares were pledged as a security towards the loan. During the period under review, the pledged shares of promoter company were invoked and sold to realize the loan. Explanation or Comments on Qualifications, Reservations or Adverse Remarks or Disclaimers made by the Auditors and the Practicing Company Secretary in their Reports: There was no qualification, reservations or adverse remarks made by the Auditors in their report. Particulars of Loans, Guarantees or Investments In pursuance to the provision of Section 186 of the Companies Act, 2013, the details of the Loans, guarantees or investments are given in the notes to the financial statements in this Annual Report. Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - C Particulars of Employees The information required pursuant to Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the Company is as follows: a) Employed throughout the year NIL b) Employed for part of the year NIL The remuneration paid to all the Key Managerial Personnel was in accordance with the remuneration policy adopted by the Company. The details pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - D Remuneration Ratio of the Director's/Key Managerial Personnel (KMP)/Employees Relationship between average increase in remuneration and Company's performance: In line with Company's reward philosophy, merit increases and annual bonus pay-outs of its Employees including Key Managerial Personnel are directly linked to individual performance as well as that of the business. Given the superior business performance and the performance rating of the Key Managerial Personnel, appropriate reward by way of merit increase or variable pay have been awarded to the Key Managerial Personnel for the current year. This was duly reviewed and approved by the Nomination & Remuneration Committee of the Company. Acknowledgement Your Directors take this opportunity to thank all investors, customers, vendors, banks/financial institutions, regulatory and government authorities and Stock Exchanges for their consistent support and encouragement to the Company. The Directors also place on record their sincere appreciation to all employees of the Company for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry. By order of the Board of Directors For Chromatic India Limited Sd/- Chirag Shah Director (DIN06583820) Sd/- Vinod Kumar Kaushik Whole time Director (DIN02586479) Place : Mumbai Dated : 4th August, 2015 |