To the Members of GOCL Corporation Limited
Your Directors have pleasure in presenting their Fifty Eighth Annual Report and AuditedAccounts for the year ended
March 31 2019. There were no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which these financial statements relate and the date of this Report.
|1. FINANCIAL RESULTS || || || || |
| || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
| ||Rs Lakhs ||Rs Lakhs ||Rs Lakhs ||Rs Lakhs |
|Profit after providing for Depreciation and before ||4573.16 ||4374.18 ||2040.39 ||2470.08 |
|extraordinary items and taxation || || || || |
|Exceptional Items ||817.78 ||402.23 ||817.78 ||407.65 |
|Profit Before Taxation ||5390.94 ||4776.41 ||2858.17 ||2877.73 |
|Taxation: || || || || |
|Current Tax Current Year ||1431.24 ||1264.25 ||326.09 ||458.14 |
|Deferred Tax including MAT credit ||(96.15) ||101.38 ||(253.94) ||129.46 |
|Profit After Taxation ||4055.85 ||3410.78 ||2786.02 ||2290.13 |
|Other Comprehensive Income ||10465.19 ||27863.90 ||(9.63) ||27.58 |
|Total Comprehensive Income for the year ||14521.04 ||31274.68 ||2776.39 ||2317.71 |
|Appropriations: || || || || |
|Interim Dividend ||991.45 ||793.16 ||991.45 ||793.16 |
|Tax on dividend ||201.99 ||161.47 ||17.88 ||- |
|Transfer to General Reserve || ||- || ||- |
|Balance carried to Balance Sheet ||13327.60 ||30320.05 ||1767.06 ||1524.55 |
|EPS (of Rs. 2/- each) ||8.18 ||6.88 ||5.62 ||4.62 |
Consolidated Financial Statements
The Consolidated Financial Statements of the Company prepared in accordance withrelevant Accounting Standards issued by the Institute of Chartered Accountants of Indiaform part of this Annual Report. These statements have been prepared on the basis ofaudited financial statements received from the subsidiary companies as approved by theirrespective Board of Directors. There is no change in the nature of business of the Companyor the Subsidiaries.
The Board had declared on March 26 2019 an interim dividend of Rs. 2.00 per equityshare of face value of Rs. 2 each @ 100% ( Final Dividend of 80% for previous year ) theRecord Date for which was April 9 2019 and the same was accordingly paid to theShareholders out of the profits of the Company for the current year. The Board hasdecided to treat the interim dividend as the final dividend and hence has not recommendedany additional dividend for the year. The interim dividend excluding tax on dividendaggregating to Rs. 9.92 crores has been given effect to in the financial statements for2018-19 after setting off the applicable dividend distribution tax.
3. CREDIT RATING
Since the operations have improved Infomerics Valuation and Rating Private Limited (IVR ) has assigned an improved long term rating of IVR A - with Stable Outlook and shortterm rating of IVR A2+ for the Company and its wholly owned subsidiary IDL Explosives Ltd.
The net income of the CompanywasRs.130crores ( previous year Rs.before exceptionalitems 121 crores ). The profit and taxation was Rs. 20.40 crores ( Rs. 24.70 crores ). Theprofit before tax was Rs. 28.58 crores (Rs. 28.77 crores). The profit after provision forcurrent tax of Rs. 3.26 crores and deferred tax of Rs. ( 2.53 ) crores was Rs.27.86 crores( Rs. 22.90 crores ) resulting in an EPS of Rs. 5.62 for the year ( Rs. 4.62 ).
On a consolidated basis the net Income of the Company was Rs. 593 crores ( Rs. 551crores ). Profit after tax was at Rs. 40.56 crores ( Rs. 34.11 crores ) and EPS of Rs.8.18 ( Rs. 6.88 ).
The wholly owned subsidiary IDL Explosives Limited achieved a total Income of Rs 460crores ( Rs. 428 crores ). Profit Before Tax was Rs. 30.47 crores ( Rs. 21.53 crores ).Profit After Tax was Rs. 18.80 crores ( Rs.13.88 crores ).
5. DIVISIONAL PERFORMANCE
5.1 Business Operations
The gross turnover of the Division was Rs. 97.76 crores 6% higher than the previousyear despite the lower prices in the tender-driven domestic market. Production of electricdetonators increased by 15% whilst electronic detonator by 21% as compared to the previousyear. Detonating fuse which is mainly for the export market was lower due to indentsgetting delayed from export customers.
The large diameter explosives plant which produces explosives for the local marketsaround Hyderabad was in line with the previous year whilst pentolite boosters were lowerby around 10% due to supply constraints to customers in the North. New products developedby R&D are currently undergoing production trials and should be ready for meetingcustomer demands in India and abroad from next year. Testing and authorization by PESO ofsome of these products is in progress.
Overall the market demand was sluggish on account of slowdown in infrastructure largemining and irrigation projects..
5.3 Bulk and Cartridge Explosives
Bulk and cartridge explosives are manufactured by IDL Explosives Ltd. a wholly ownedsubsidiary. Several initiatives taken this year resulted in benefits in this year itself.We have implemented continuous slurry plant at Rourkela and produced more than 16000 MTsof explosives from this plant which increased throughput with improved consistency of theproducts. The Rourkela Plant achieved capacity utilization of 102% ( 36711 Tons against36000 MT ) while the average capacity utilization of the all Bulk Plants was higher. Wehave crossed sales of one Lakh Tons of Bulk Explosives ( 101819 Tons ) worth Rs 290.36crores for the first time this year ( F19 ) and growth in value of 11% over previous year.We have received additional Industrial Licenses increased from 203500 tonnes to331000 tonnes in F-19 63% increase over previous year. It will help us to take majororders from PSUs Institutional Private sector customers and improve market shares.
Exports revenue was Rs 44.32 crores as against Rs 35.26 crores in the previous yearrecording a growth of 26% both in the Energetics and IDL Explosives products. The Companyestablished and consolidated new business in Africa. The upgraded packaged Emulsionexplosives were successfully launched in the export market giving us additional reach.Fresh initiatives are planned for the coming year with the introduction of new productsand entry into new markets / regions.
5.5 Property Development Bengaluru
Ecopolis' a mixed-use commercial project is a joint development projectof the Company with Hinduja Realty Ventures Ltd. The Project is located in the projectedgrowth corridor of North Bangalore. The 38.15 acres techpark comprises of
SEZ and commercial office space which will be constructed in phases.
Completed Phase 1 construction of over 14.54 lac sft comprising of office building e3'and Multi Level Car Parking space ( MLCP ) with a leasable area of over 7.64 lac sft. e3'is a LEED Gold certified building which is operational with IT/
ITES clients having commenced working in a part of the building. This building has 3levels of basement to accommodate clients' car parking requirement with ground floor and10 upper floors. The MLCP is designed as an infrastructure bank which accommodates DGsets on the ground level hybrid HVAC chillers on the terrace level and additionalcarparks in the remainder levels which will cater to three buildings in the campus.Construction LEED Gold on the rated with a constructedsecond building e2' isals area o green building and certified of 10.60 lac sft. with a leasable area ofover 7.34 lac sft e2' will be ready for fit-outs in Q4 2019.
Lease has already commenced in the building e3' The Company's 100-acreintegrated mixed use township is located in Kukatpally which is easily accessible to allthe hotspots of the city. This township comprises of IT/ITeS office space Retail segmentEducational Institution Hotel Hospital Clinics and Residential apartments. The masterplan has been redesigned and a detailed design for Phase 1 of the development is currentlybeing developed part of the scheme has been put up for approval.
6. OVERSEAS HOLDING
The Company through its UK based subsidiary HGHL Holdings Limited UK holds 10% stakein Houghton International Inc. USA a subsidiary of the Hinduja Group's Gulf OilInternational.
Houghton International had in the month of April 2017 entered into adefinitiveagreement to merge with Quaker Chemical (NYSE: KWR) to create a global leader inthe space of process fluids chemical specialties and technical expertise to the globalprimary metals and metal working industries. The Hinduja conglomerate will be the largestshareholder in the combined public company. On completion of the merger your Company willbe entitled to around 2% in the combined entity.
The merger process is in the last phase of statutory approvals in the USA. Thevaluation of our holding as at March 31 2019 stands at Rs. 540.72 crores ( Previous year: Rs. 439.72 crores ).
Your Company continues to receive commission towards providing security of its propertyfor the loan availed by its wholly owned subsidiary in the UK for the aforesaidacquisition.
7. PROMOTER OF THE COMPANY
Hinduja Power Limited Mauritius continued to reinforce their confidence in the longterm prospects of your Company with their shareholding in the Company at 74.93%.
8. PUBLIC DEPOSITS
The Company has during earlier financial year repaid / prepaid all the public depositsand there were no outstanding public deposits at the beginning of the year under review.The Company has not accepted any public deposits during the year. The Board of Directorsof the Company may consider accepting fresh public deposits at the appropriate time asper the regulatory changes under the Companies Act 2013.
Goods & Services Tax ( GST )
During the current financial year all the processes in the SAP system have beenstabilized ensuring compliance with
GST Act and Rules.
The cash flow position of the Company has improved as a result of free flow of inputtax credits by reducing delays in availing credits which had been experienced at the timeof introduction of the GST procedures in 2017.
The lead time involved in movement of goods has also improved owing to efficient andintegral e-way bills mechanism introduced by the Government in the current financial year.
Odisha Sales Tax
The Sales Tax cases pertain to branch transfer of finished goods from Rourkela factory( since transferred to IDL
Explosives Limited as part of the Demerger ) situated in the State of Odisha to CoalIndia Limited subsidiaries in other States.
Writ Petitions for assessment years 1976-77 to 1983-84 were filed in March 2013 in theOdisha High Court against the order of the Commissioner of Commercial Taxes. The HighCourt of Odisha has granted stay on the tax re-computation order and the order ofCommissioner of Commercial Taxes. The Writ Petitions are pending.
In respect of other assessment years 1998-99 2002-03 2004-05 & 2005-06 thepetitions are pending before the Odisha Sales Tax Tribunal and Odisha High Court.
Pursuant to the Scheme of Arrangement sanctioned by the Hon'ble National Company LawTribunal ( NCLT ) Hyderabad Bench two of the wholly owned subsidiaries namely IDLBuildware Limited and Gulf Carosserie India Limited stand amalgamated with the Companywith effect from November 30 2018.
The Company at present has two material subsidiaries of which one is in India namelyIDL Explosives Limited. The other subsidiary is in the UK namely HGHL Holdings Limitedand is an SPV incorporated for the purpose of overseas acquisition of Houghton. Theannual performance of the subsidiaries is as under:
- IDL Explosives Limited reported a net profit of Rs. 1879.48 lakhs ( Rs. 1388.04 lakhs).
- HGHL Holdings Limited UK reported a net profit of Rs. 330.73 lakhs ( Rs. 565.99lakhs ).
In accordance with section 136 of the Companies Act 2013 the audited financialstatements including consolidated financial statements and related information of theCompany and audited accounts of the each of its subsidiaries are available on our website www.goclcorp.com.These documents will also be available for inspection till the date of AGM during workinghours at our Registered Office. A statement containing salient features of the financialstatement of the above subsidiaries are disclosed in Form AOC-1 as Annexure-A tothis Report.
11. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In terms of the requirements of the Companies Act 2013 and Regulation 22 of ListingRegulations the Company has a vigil mechanism to deal with instances of fraud andmismanagement if any. The details of the vigil mechanism are displayed on the website ofthe Company. The Audit Committee reviews the functioning of the vigil / whistle blowermechanism from time to time. There were no allegations / disclosures / concerns receivedduring the year under review in terms of the vigil mechanism established by the Company.
12. P ARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particulars of loans guarantees securities and investments made by the Company mostof which are to / in its wholly owned subsidiaries are in the notes to the financialstatements forming part of this report.
13. INVESTOR EDUCATION AND PROTECTION FUND
During the year under review your Company transferred unclaimed dividend amount (pertaining to dividend for the year 2010-11 ) to the Investor Education and ProtectionFund in compliance with the applicable provisions of the Companies Act 2013. Your Companyalso transferred during the year 20787 shares to the IEPF Authority in respect of whichdividend had remained unclaimed for a consecutive period of 7 years.
14. HUMAN RESOURCES / INDUSTRIAL RELATIONS
The Corporate Human Resources Department and Industrial Relations Department atHyderabad and Rourkela continued to maintain cordial working relations across the spectrumof employees in the Company.
As part of its strategic initiatives the HR department has carried forward theLeadership program for the Senior Management team and continued to engage them acrossvaried programs related to strategic management aimed at honing their leadership skills.The Management is also introducing Managerial Effectiveness programs for the middlemanagement group to develop the next level of Managers and Leaders in the Company.
In its continuing focus on safety the Company has conducted several programs on Safetyand Safe Working practices for employees in Hyderabad and Rourkela factories. In thisregard programs on Safety Health Productivity and Safe Manufacturing practices wereconducted at Hyderabad and Rourkela. Training program on Statistical Quality ControlQuality Management were also conducted for new team members and seniors were deputed toattend workshop on National Industrial Security.
As part of new Strategic HR initiatives a new cadre of technical employees was createdin the Company to handle technical roles in manufacturing plants and to develop talent forsupervisory roles in manufacturing plants with upgraded processes.
Safety awareness has been enhanced by way of training on safety health productivityquality and implementation of tools like hazard programs on PESO SETT identificationbar-coding implementation and statutory compliances. Regular training to the employees onGSD's SOP's and mock drills on emergency preparedness and mitigation exercises wereconducted; in addition to internal and external safety audits and compliances. Technicalpapers were presented in workshops on Safety in Explosives
Manufacturing & Handling conducted by Explosive Manufacturing
Welfare Association ( EMWA ) in technical collaboration with PESO.
Safety and Security review is being held monthly by the top management. At factoriesCentral Safety Committee Meetings are being held on quarterly basis to bring out thesafety issues from the shop floors and follow-up actions from the previous meetingsSafety performance actions for improvement and recommendations are reviewed and recorded.Safety walk through audits by cross functional teams have helped to strengthen theoverall safety processes at Hyderabad Works. Hazard Identification & Risk Assessmentsstudies Hazop studies etc. are part of project management procedures.
The ISO system in the organization was transformed to a new level by implementing thenew standards of ISO 9001:2015 ISO 14001:2015 and BS OHSAS 18001 : 2007 certificationsthereby integrating the management systems covering quality occupational health safetyand environmental standards. Metal Cladding was included in the existing scope of GOCL IMSCertifications.
The Hyderabad factory received the "Certificate of Appreciation" fromNational Safety Council of India under NSCI Safety
Awards 2018 ( Manufacturing Sector ) for consistent and meritorious Occupational Safety& Health ( OSH ) performance and implementing effective OSH management systemspractices and procedures in Hyderabad Works Factory. GOCL is the active member of theNational Safety Council Telangana Chapter and has a senior officer
Preventive Health Check-ups
In order to ensure healthy work atmosphere and to create necessary awareness among allthe employees on health aspects the Hyderabad Factories organized several medical campsand preventive medical check-ups with the association of reputed Multi - Specialty andSuper Specialty hospitals located in Hyderabad. The camps have been focused on the areasof ophthalmology cardiology gynaecology dental and general medicine during the year atour Occupational Health Center.
Security was further strengthened at the manufacturing facilities storage magazinesand outer periphery walls at the
Company's factory. Installation of security watch towers strengthening of illuminationalong the walls setup of QRT team to attend to any emergencies strengthening of entry /exit gates Monthly security review by Plant In-charge in accordance with the Ministry ofHome Affairs New Delhi recommendations was undertaken.
Employment Practices & Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal ) Act 2013
The Company believes in fair employment practices and is committed to provide anenvironment that ensures that every employee is treated with dignity and respect and isprovided equitable treatment. The Company has a large proportion of women in the workforceand has adopted a Policy in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules there under.Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees are covered under this policy. No complaint wasreceived in this regard during the year.
15. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 of the Companies Act 2013:
(a) that in the preparation of the annual accounts / financial statements for thefinancial year ended March 31 2019 the applicable accounting standards had been followedalong with proper explanation relating to material departures if any;
(b) that the accounting policies as mentioned in the financial statements were selectedand applied consistently and reasonable and prudent judgments and estimates were made soas to give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the Company for that period; (c) that properand sufficient care had been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; (d) that theannual accounts were prepared on a going concern basis;
(e) that proper internal financial controls were in place and that such internalfinancial controls are adequate and were operating effectively; and (f) that propersystems to ensure compliance with the provisions of all applicable laws were in place andthat such systems were adequate and operating effectively.
16. CORPORATE SOCIAL RESPONSIBILITY ( CSR ) INITIATIVES
In compliance with Section 135 of the Companies Act 2015 and other applicableprovisions the Company has constituted Corporate Social Responsibility Committeeconsisting of Mr. Ashok Kini Chairman of the Committee & Independent Director Mr.Ajay Hinduja Non-Executive Director and Chairman of the Company Mr.K.N.Venkatasubramanian Independent Director ( upto March 31 2019 ) and Mr. SudhanshuTripathi ( effective February 8 2019 ) as the other Members of the Committee. TheCommittee met once during the year and reviewed the policy on Corporate SocialResponsibility which includes the objectives implementation and other issues pertainingto the achievement of the CSR objectives of the Company. The CSR Policy of the Company isdisplayed on the website of the Company.
The CSR Committee recommended CSR expenditure of Rs. 23.18 lakhs for the year 2018-19and the same was spent / committed for CSR purposes. The Annual Report on CSRactivities is annexed herewith as Annexure - B'.
Statutory / Financial Audit
M/s. BSR & Associates LLP Chartered Accountants ( ICAI Firm Registration Number:116231W/ W-100024 ) was appointed as Auditors of the Company at the 56th AnnualGeneral Meeting of the Company held in 2017 for a period of five years from conclusion ofthe 56th Annual General Meeting subject to ratification by the members at everyAGM. However the Companies (Amendment) Act 2017 has done away with the requirement ofannual ratification of appointment of Auditors. Accordingly the term of M/s BSR &Associates LLP will be upto the conclusion of 61st AGM of the Company andrevenue streams have started since December 2018.
The Developer is working with international property consultants and local brokers andhave received many requirements on behalf of their client for sale or lease and built tosuit requirements.
Hyderabad is steadily growing its IT commercial space with large campus of ITcompanies and entry of MNC developers Real Estate Fund and large Indian developers.According to Oxford Economics Hyderabad should be the fourth fastest growing city in theworld from 2019 to 2035 with GDP growth of 8.5%. Expected to have a positive impact onreal estate sector with office demand likely to rise further du ring the period.
The Ministry of Corporate Affairs had vide its Order dated December 31 2014 directedaudit of cost records of the companies covered under the Companies ( Cost Records &Audit ) Amendment Rules 2014. The said Order is applicable to the Company beingmanufacturer of Detonators Detonating Fuse Explosives etc. Accordingly the Board ofDirectors has appointed M/s Narasimha Murthy & Co. Cost Accountants Hyderabad as theCost Auditors of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies( Appointment and Remuneration of Managerial Personnel ) Rules 2014 the Board hasappointed M/s BS & Company Company Secretaries LLP Company Secretaries Hyderabad toundertake the Secretarial Audit of the Company for the financial year 2018-19. The
Report of the Secretarial Audit Report is annexed herewith as Annexure - C'.
There was no qualification reservation or adverse remark or disclaimer in the auditorsreport cost audit report or the secretarial audit report.The Auditors have not reportedany frauds.
18. DIRECTORS AND KEY MANAGERIAL PERSONS ( KMPs )
During the year there were some changes in the composition of the Board of Directorsand KMPs of the Company. In accordance with the provisions of the Companies Act 2013 andthe Articles of Association of the Company Mr. Ajay P. Hinduja retires by rotation at the58th Annual General Meeting of the Company and is eligible for re-appointment.The Board recommends his re-appointment.
Mr. Ramkrishan P Hinduja resigned from the Board effective from January 16 2019 andMr. Sudhanshu Tripathi was appointed by the Board of Directors on February 8 2019 in thecasual vacancy caused by the resignation of Mr. Ramkrishan P Hinduja. Mr.K.N.Venkatasubramanian resigned from the Board effective from close of March 312019. Mr. Debabrata Sarkar was appointed as Additional-cum-Independent Director of theCompany with effect from May 30 2019. The Board recommends their appointment.
The number and details of the meetings of the Board and other Committees are furnishedin the Corporate Governance Report.
The Independent Directors have furnished declaration of independence under Section 149of the Companies Act 2013 and Regulation 25 of SEBI ( LODR ) Regulations 2015.
Mr. M.S.Ramachandran Mr. Ashok Kini and Ms. Kanchan Chitale the Independent Directorswho were appointed as Independent Directors in the AGM of 2014 under the Companies Act2013 would complete their term at the ensuing AGM. The Board therefore recommends that theaforesaid Independent Directors be re-appointed for another term of 5 years or theirattaining 75 years of age whichever is earlier by passing of a Special Resolution by theShareholders.
Disclosure of Expertise / Skills of the Board of Directors
The list of core skills / expertise / competencies identified by the Board of Directorsof the Company as required in the context of its business(es) and sector(s) for it tofunction effectively and those actually available with the board is as under: The Companybeing engaged in manufacture of Energetics Industrial / Commercial Explosives and Realtybusinesses and dealing with PSU companies would require the skills / expertise /competencies in management and leadership experience functional and managerialexperience manufacturing and marketing; public sector practices; financial management;chemicals and energy industries; etc. which are available with the Board.
Directors' Appointment and Remuneration Policy
The Nomination and Remuneration Committee is responsible for developing competencyrequirements for the Board based on the industry and strategy of the Company andformulates the criteria for determining qualificationspositive attributes andindependence of Directors in terms of provisions of Section 178 (3) of the Act and theListing Regulations. The Board has in an earlier year on the recommendations of theNomination & Remuneration Committee framed a policy for remuneration of the Directorsand Key Managerial Personnel. The objective of the Company's Remuneration Policy is toattract motivate and retain qualified and expert individuals that the company needs inorder to achieve its strategic and operational objectives whilst acknowledging thesocietal context around remuneration and recognizing the interests of Company'sstakeholders.
The Non-Executive Directors ( NED ) are remunerated by way of Sitting Fee for eachmeeting attended by them and an annual commission on the profits of the Company.Commission to respective non-executive directors is determined on the basis of anobjective criteria discussed and agreed upon by the Committee Members unanimously. NEDsare reimbursed any out of pocket expenses incurred by them in connection with theattendance of the Company's Meetings.
Particulars of Employees and Remuneration
The information required under Section 197 (12) of the Act read with Rule 5 of theCompanies ( Appointment and Remuneration of Managerial Personnel ) Rules 2014 is annexedas Annexure - D. The information required under Rule 5 (2) and (3) of the Companies( Appointment and Remuneration of Managerial Personnel ) Rules 2014 is provided in theAnnexure forming part of the Report.
None of the employees listed in the said Annexure is related to any Director of theCompany.
19. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure -E'.
20. INFORMATION ON STOCK EXCHANGES
The Equity shares of the Company are listed on BSE Limited and the National StockExchange of India Limited and the Listing Fees have been paid to them uptodate.
21. CORPORATE GOVERNANCE
A detailed report on the subject forms part of this Report. The Statutory Auditors ofthe Company have examined the Company's compliance and have certified the sameasrequiredundertheSEBIRegulations.Suchcertificateis reproduced in this Annual Report.
22. RELA TED PARTY TRANSACTIONS
All related party transactions / arrangements that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course of business.During the year under review there were no material significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel whichmay have a potential conflict with the interest of the Company at large.
All related party transactions / arrangements mostly with the wholly ownedsubsidiaries are on arm's length basis and are in the ordinary course of business. TheAudit Committee / Board reviews all the related party transactions on annual basis. Thepolicy on Related Party Transactions as approved by the Board is displayed on theCompany's website. None of the Directors has any pecuniary relationships or transactionsvis--vis the Company. Details of the transactions with Related Parties are provided inthe accompanying financial statements.
23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there were no significant material orders passed by theRegulators / Courts which would impact the going concern status of the Company and itsfuture operations.
Pursuant to a complaint filed before the Competition Commission of India ( CCI ) byCoal India Limited CCI had vide their
Order dated April 16 2012 held that the Company had along with a few other explosivemanufacturers were alleged to have contravened the provisions of Section 3 of theCompetition Act 2002. The CCI had on that basis imposed a penalty on the Company of Rs.29.84crores. The Company had filed an Appeal before the Competition Appellate Tribunal (COMPAT ) and the COMPAT had vide its Order dated April 18 2013 reduced the amount ofpenalty to Rs. 2.89 crores;
The Company has also filled a Civil Appeal in the Supreme Court of India. The matter issubjudice. Based on expert legal advice the Company believes that it has a good case andexpects a favourable decision in the matter.
24. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure - F'. 25. RISK MANAGEMENT
Details of development and implementation of risk management policy for the Companyincluding identification of elements of risks form part of the Management Discussion andAnalysis and Corporate Governance Report.
Your Directors would like to express and place on record their appreciation for thecontinued co-operation and support received during the year under review from thefinancial institutions banks Government of India and various State Governmentauthorities and agencies customers vendors and members. Your Directors also place onrecord their deep appreciation to the employees for their continued dedicationcommitment hard work and significant contributions to the Company in very competitivemarket conditions. The Directors also thank the Company's investors bsiness associatesfor their continued co-operation and support.
| ||for and on behalf of the Board of Directors |
|Place : Hyderabad ||Ajay P. Hinduja |
|Date : May 30 2019 ||Chairman |