Haldia Petrochemicals · PDF fileNotice is hereby given that the Adjourned 29th Annual...
152
1 Haldia Petrochemicals Limited Annual Report -2014-15 REGISTERED OFFICE 1, Auckland place Kolkata - 700017
Transcript of Haldia Petrochemicals · PDF fileNotice is hereby given that the Adjourned 29th Annual...
1
Haldia Petrochemicals Limited
Annual Report -2014-15
REGISTERED OFFICE
1, Auckland place
Kolkata - 700017
2
CORPORATE OVERVIEW
BOARD OF DIRECTORS Dr. S Kishore, IAS Director
Dr. Krishna Gupta, IAS Director
Mr. A K Pandey Director
Mr. H K Dwivedi , IAS Director
Dr. P Chatterjee Director
Mr. S Chatterjee , Director
Mr. Vijay K Chaudhry Director
Mrs. Sreoshi Palchoudhuri Director
Mr. Sumit Sanghai Nominee Director, ICICI
Mr. Sisir Kr Mukherjee Nominee Director, SBI
Mr. S K Arora Nominee Director, IFCI
Dr. S S Banerjee Nominee Director, IDBI
Mr. Subrata Gupta Nominee Director, IDBI
CFO and Company Secretary Mr Ashutosh Bose
AUDITORS M/s N C Banerjee & Co., Chartered Accountants, M/s Singhi & Co, Chartered Accountants
INTERNAL AUDITORS HPL’s Management Audit Team
SECRETARIAL AUDITOR M/s S Sarkar & Associates
ANNUAL GENERAL MEETING
30.12.2015 at 5.30 pm at the Board Room, 5th Floor,
West Bengal Industrial Development Corporation
Limited, 23 Abanindranath Thakur Sarani, Kolkata-700
017
REGISTERED OFFICE
1, Auckland Place
Kolkata 700 017
3
REGD. OFFICE 1, AUCKLAND PLACE CALCUTTA – 700 017 TEL : (033) 2283 1640/43/45 FAX : (033) 2280 6220 / 2283 1673 CIN of HPL: U23209WB1985SGC039487
Website:www.haldiapetrochemicals.com
NOTICE OF THE ADJOURNED TWENTY NINTH ANNUAL GENERAL MEETING
Notice is hereby given that the Adjourned 29th Annual General Meeting of Haldia Petrochemicals Limited will be held on Thursday, 31st December 2015 at 5.30 pm at Board Room, 5th Floor, West Bengal Industrial Development Corporation Limited, 23 Abanindranath Thakur Sarani, Kolkata-700 017 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Financial Statements including the Audited Consolidated Financial Statements of the Company for the Financial Year ended March 31, 2015 together with the Reports of the Directors and the Auditors thereon and Comments of the Comptroller & Auditor General of India, in terms of Section 143(6) of the Companies Act, 2013.
2. To appoint a Director in place of Dr. S Kishore (DIN 00062396), who retires by rotation and being eligible offers himself for re-appointment.
3. To appoint a Director in place of Mr. S K Arora (DIN 00061420) who retires by rotation and being eligible offers himself for reappointment.
4. To approve the remuneration of Statutory Auditors for the financial year 2014–15 and in connection therewith, to pass, with or without modification, the following as Ordinary Resolution :
“RESOLVED that approval of the Company be and is hereby accorded to payment of remuneration aggregating 32.40 Lacs ( 16.20 lacs each) to the two joint Statutory Auditors of the Company, namely M/s Singhi & Co., Kolkata and M/s N.C. Banerjee & Co, Kolkata, appointed by The Comptroller & Auditor General of India (“CAG”) for the Audit of Accounts of the Company including consolidation of Accounts with its subsidiaries, for the financial year 2014-15, plus applicable service tax, and other out of pocket expenses incurred by them in connection with the aforesaid Audit.”
SPECIAL BUSINESS
5. Authority to the Board to borrow u/s 180(1)(c) of the Companies Act, 2013 To consider, and if thought fit, to pass with or without modification(s), the following resolution as
a Special resolution:
4
“RESOLVED that in supersession of the resolution passed by the shareholders at the Extra-
Ordinary General Meeting of the Company held on 28th August2014, pursuant to Section
180(1)(c) and other applicable provisions, if any, of the Companies Act, 2013, read with the Rules
thereunder, and as amended from time to time, the consent of the Shareholders be and is hereby
accorded to the Board of Directors for borrowings (including by way of issue of
debentures/bonds) in Indian and/or foreign currency from time to time, such sum or sums of
monies, as it may consider fit, for the purpose of the business of the Company, notwithstanding
that the monies to be borrowed together with the monies already borrowed by the Company
(apart from temporary loans obtained or to be obtained from the Company’s lenders/investors in
the ordinary course of business), may exceed the aggregate of the paid-up capital of the Company
and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that
the total amount of such borrowing outstanding at any given point of time shall not at any time
exceed the limit of Rs.1,10,00,00,00,000 (Rupees Eleven Thousand crores).
RESOLVED FURTHER that the Board of Directors be and is hereby authorized and empowered to
arrange or settle the terms and conditions on which all such monies are to be borrowed from
time to time as to interest, repayment, security or otherwise howsoever as it may think fit and to
do all such acts, deeds and things to execute all such documents, instruments and writings as may
be required.”
6. Authority to Board to mortgage and/or create charge on assets of the Company in favour u/s
180(1) (a) of the Companies Act, 2013
To consider, and if thought fit, to pass with or without modification(s), the following resolution as
a Special resolution:
“RESOLVED that in supersession of the resolution passed by the shareholders at the Extra-
Ordinary General Meeting of the Company held on 28th August2014, pursuant to Section
180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013, as amended from
time to time the consent of the Shareholders be and is hereby accorded to the Board of Directors
towards creation of such mortgages, charges and hypothecations, etc., as may be necessary on
the assets of the Company, both present and future in favour of Financial Institutions, banks,
other lenders, the holders of debentures/ bonds and/or other instruments to secure rupee term
loans/foreign currency loans, debentures/ bonds and other debts(hereinafter referred to as the
“Lending Agencies”) and Trustees and/or agents, if any, for and on their behalf to secure rupee
term loans/foreign currency loans, debentures/ bonds and other debts, Guarantees and/or any
other dues/ overdues up to an outstanding aggregate value not exceeding Rs.11000,00,00,000
(Rupees eleven Thousand crores) together with interest compound interest, additional interest,
liquidated damages, guarantee commission, commitment charges, premia on pre-payment or on
redemption, gains /losses arising from fluctuations in foreign exchange rates, costs, charges,
expenses and all other monies payable by the Company.
RESOLVED FURTHER that the Board of Directors be and is hereby authorized to finalize with the
Lending Agencies/Trustees, the documents for creating the aforesaid mortgages, charges and/or
hypothecation and to accept any modifications to or to modify, alter or vary, the terms and
5
conditions of the aforesaid documents and to do all such acts, deeds and things and to execute all
such documents and writings as it may consider for giving effect to this Resolution.”
7. Appointment of Mr. H.K.Dwivedi as a Director of the Company
To consider and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 152, 160, 161(1) and all other applicable
provisions of Companies Act, 2013, and Companies (Appointment and Qualification of Directors) Rules, 2014,(including any statutory modification(s) or re-enactment thereof for the time being in force), Mr. H K Dwivedi (DIN: 01952502) who was appointed as an Additional Director by the Board of Directors and who holds office up to the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director, subject to retirement by rotation.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is
hereby authorized to do all such acts, deeds and things as it may be deemed necessary in this regard, including filing of necessary statutory forms with Registrar of Companies, Ministry of Corporate Affairs, as may be required from time to time”.
8. Appointment of Ms. Sreoshi Palchoudhuri as a Director of the Company
To consider and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 152, 160, 161(1) and all other applicable provisions of Companies Act, 2013, and Companies (Appointment and Qualification of Directors) Rules, 2014,(including any statutory modification(s) or re-enactment thereof for the time being in force), Ms. Sreoshi Palchoudhuri (DIN: 07256987) who was appointed as an Additional Director by the Board of Directors and who holds office up to the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing her candidature for the office of Director, be and is hereby appointed as a Director, subject to retirement by rotation.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorized to do all such acts, deeds and things as it may be deemed necessary in this regard, including filing of necessary statutory forms with Registrar of Companies, Ministry of Corporate Affairs, as may be required from time to time”.
9. Approve remuneration of Cost Auditors for the financial year 2015-16 To consider and approve the remuneration of Cost Auditors for the financial year 2015–16 and to pass, with or without modification, the following as Ordinary Resolution :
"RESOLVED that pursuant to the provisions of Section 148(3) and such other applicable
provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules 2014, as amended from time to time, the remuneration of Rs. 2,00,000/- (Rupees Two Lakhs)
6
plus service tax, out-of- pocket, travelling and living expenses incurred in connection with the audit, as recommended by the Audit Committee and approved by the Board payable to M/s Mani & Co., Cost Accountants (Firm Registration No. 000004) as Cost Auditors to conduct the Audit of the relevant Cost records of the Company as prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, for the financial year ending March 31, 2016, be and is hereby ratified and confirmed."
"RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorised to
do all acts, deeds and things and take all such steps as may be necessary, proper or expedient to give effect to this Resolution."
10. Adoption of the new Articles of Association of the Company
To consider, and if thought fit, to pass with or without modification(s), the following resolution
as a Special resolution:
“RESOLVED THAT pursuant to the provisions of Section 14 and other applicable provisions, if any,
of the Companies Act, 2013, (including any amendment thereto or re-enactment thereof) and
subject to such other conditions as may be required, consent of the members be and is hereby
accorded for adoption of the new set of Articles of Association of the Company as placed before
the meeting in substitution of the existing Articles of Association of the Company.”
RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to perform all acts,
deeds and things, execute documents, and make all filings, as may be necessary to give effect to
the above resolution and to take all such steps for giving any such direction as may be necessary
or desirable and to settle any questions or difficulties whatsoever that may arise for the purpose
of giving effect to this resolution.”
11. Increase in the number of directors of the Company
To consider, and if thought fit, to pass with or without modification(s), the following resolution as
a Special resolution:
“RESOLVED THAT pursuant to the provisions of section 149(1) of the Companies Act, 2013 and such other applicable provisions of the Act, the maximum number of Directors in the Company be increased from 15 to 21.”
Registered Office: By Order of the Board 1, Auckland Place For Haldia Petrochemicals Limited Kolkata 700 017 Ashutosh Bose Date: 30th December 2015 EVP, CFO and Company Secretary
7
NOTES:
1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote on a poll instead of himself/ herself and the proxy need not be a member of the company. The instrument appointing the proxy should, however, be deposited at the registered office of the company not less than forty-eight hours before the commencement of the meeting.
2. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company and carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.
3. Corporate members intending to send their authorized representatives to attend the Meeting are requested to send to the Company a certified true copy of the Board resolution authorizing their representative to attend and vote on their behalf at the Meeting.
4. The Statement as required under Section 102 of the Companies Act, 2013 in respect of all items of Special Business as set out in the notice is annexed hereto.
5. All relevant documents referred to in the Notice and accompanying statement shall be available for inspection at the Registered Office of the Company between 11.00 A.M. to 2.00 P.M. on all working days and will also be available for inspection at the meeting
6. The Notice of the AGM is being sent by electronic mode to all the Members, whose e-mail addresses are available with the Company, unless any Member has requested for a physical copy of the same.
8
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT 2013
ITEM NO. 5 AND 6 The members may kindly note that in the matter relating to non-fulfillment of Export Obligations on
imports made under Advance Licenses, Customs Authorities, vide Order dated 31st March, 2015
(issued on 6th April, 2015) directed your company to pay Customs duty of Rs.1656,12,89,764/- plus
accrued interest @ 15% p.a. However, based on your company's appeal, Customs Appellate Authority
has remanded the order and the matter is now being heard by CESTAT.
Based on the representations made before Ministry of Finance, Government of India (GOI), GOI, vide
their letter dated 14.12.2015,requested Government of West Bengal to consider providing a Guarantee
or alternatively, the Company to furnish a Bank Guarantee for an amount aggregating to about Rs.
3171 crores.
The Company's lenders favourably considered the request and conveyed their willingness to consider
sanction of additional lines for issuance of Bank Guarantee subject to certain conditions including
security over assets of HPL and BCCL as applicable.
In view of the foregoing, it is proposed to avail Bank Guarantee facility upto Rs 3200 crores from HPL’s
lenders secured by extension of charge over assets of the Company and Bengal Cracker Complex Ltd.
The existing limits of borrowing and encumbrances over assets of the Company as approved by the
shareholders are Rs 7500 crore and Rs 7000 crore respectively.
In order to facilitate issuance of Bank Guarantee, approval of the shareholders is sought under Section
180(1)(a) & 180(1)(c) of the Companies Act, 2013 for enhancing the earlier approved limits to Rs.
11,000 crores.
The Board recommends the Special Resolutions set out at Item No.5 and 6 of the Notice for approval
by the Members.
None of the Directors, Key Managerial Personnel or their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No. 5 & 6 of the Notice.
ITEM NO. 7 Pursuant to the nomination received from WBIDC vide letter dated June 2, 2015, Mr H K Dwivedi, IAS, Principal Secretary, Finance Department, Government of West Bengal was appointed on your Company’s Board as an Additional Director w.e.f. 3.6.2015 representing West Bengal Industrial Development Corporation Limited, as per Section161 of the Companies Act, 2013 read with Articles of Association of the Company.
He holds office as Director upto the date of the ensuing Annual General Meeting. A notice under Section 160 of the Companies Act, 2013, along with necessary deposit, has been received from a member of the Company proposing the candidature of Mr. Dwivedi as a Director who retires by rotation.
9
The Board considers that the appointment of Mr. Dwivedi would be beneficial for the Company’s business and accordingly recommends acceptance of the Resolution set out in item No. 7 of the Notice. Mr. Dwivedi is concerned or interested in the relative resolution concerning his respective appointment. Save as aforesaid, none of the Directors and Key Managerial Personnel of the Company or their respective relatives is concerned or interested in the passing of the Resolutions as item No. 7.
ITEM NO 8
Pursuant to the nomination received from CP(M)C vide its letter dated 6th August, 2015,Ms Ms. Sreoshi Palchoudhuri was appointed w.e.f. 20.08.2015on your Company’s Board as an Additional Director representing Chatterjee Petrochem (Mauritius) Company and woman Director, as per Section 149 and 161 of the Companies Act, 2013 read with Article of Association of the Company.
She holds office as Director upto the date of the ensuing Annual General Meeting. A notice under
Section 160 of the Companies Act, 2014, along with necessary deposit, has been received from a
member of the Company proposing the candidature of Ms Palchoudhuri as a Director who retires by
rotation.
The Board considers that the appointment of Mrs S Palchoudhuri would be beneficial for the
Company’s business and accordingly recommends acceptance of the Resolution set out in item No. 8
of the Notice.
Ms Palchoudhuri is concerned or interested in the resolution concerning her appointment. Save as
aforesaid, none of the Directors and Key Managerial Personnel of the Company or their respective
relatives is concerned or interested in the passing of the Resolutions as item No. 8.
ITEM NO. 9
Based on the recommendation of the Audit Committee, the Board had In accordance with the
provisions of Section 148(3) of the Act read along with Rule 10 of the Companies (Audit and Auditors)
Rules, 2014 made thereunder on 11th September, 2015 approved the appointment and remuneration
of M/s Mani & Co., the Cost Auditors (Firm Registration No 000004) to conduct the audit of the Cost
records pertaining to relevant products prescribed under the Companies (Cost Records and Audit)
Rules, 2014 as amended from time to time for the Financial Year ending March 31, 2016 at a
remuneration of Rs. 2,00,000/- (Rupees Two Lakhs) plus service tax, out-of-pocket, travelling and other
expenses incurred for the purpose.
In accordance with the provisions of Section 148 of the Act read along with Rule 14 of the Companies
(Audit and Auditors) Rules, 2014 made thereunder, ratification for the remuneration payable to the
Cost Auditors to audit the cost records of the Company for the Financial Year ending March 31, 2016 by
way of an Ordinary Resolution is being sought from the Members as set out at Item No. 9 of the
Notice.
The Board commends the Ordinary Resolution set out at Item No.9 of the Notice for approval by the
Members.
10
None of the Directors, Key Managerial Personnel or their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No. 9 of the Notice.
ITEM NO. 10 A Share Purchase Agreement (“SPA”) dated 11th September 2014, as amended by Variation
Agreements dated 30thJanuary 2015, 22nd July 2015, 22nd September 2015 and 21st December
2015had been executed between CPMC, Essex, WBIDC, GoWB and the Company pursuant to which
WBIDC has agreed to sell its entire shareholding in HPL to Essex, a nominee of CPMC, at the price
stated in the SPA. Pursuant to the SPA, the management control of HPL is to be transferred to CPMC
upon completion of the transfer of the first tranche of 260 million shares. The major provisions of the
SPA in relation to the transfer of shares and management have been incorporated in the proposed
Articles.
With the promulgation of the Companies Act, 2013, together with various Schedules thereto and the
Rules framed hereunder (collectively referred to as “Act”) in replacement of the Companies Act, 1956
and the various amendments thereto, it has become necessary to amend the existing Articles of
Association of the Company by adoption of new Articles of Association, so as to have the effect of
bringing the Articles in consonance with the provisions of the Act, to the extent they are repugnant to
and/or at variance with the provisions thereof.
Pursuant to the provisions of section 14 of the Companies Act, 2013, amendment of articles requires
approval of the members of the Company by way of a Special Resolution at a general meeting. The
Directors, therefore, recommend the Resolution to be passed as a Special Resolution by the Members.
A copy of the proposed new Articles of Association of the Company would be available for inspection
by the Members at the Registered Office of the Company.
None of the Directors and Key Managerial Personnel of the Company or their respective relatives is
concerned or interested in the passing of the Resolutions at item No. 10.
ITEM NO. 11 In view of new requirements under the Companies Act, 2013 like appointment of Independent
Directors, it has become imperative to strengthen and induct new Directors in the Board. It is, thus,
proposed to increase the maximum number of directors for the time being from 15 to 21, the limit set
out in the amended Articles of Association of the Company.
The Board recommends the Special Resolution set out at Item No.11 of the Notice for approval by the
Members.
None of the Directors, Key Managerial Personnel or their relatives are, in any way, concerned or
interested, financially or otherwise, in the resolution set out at Item No. 11 of the Notice.
By Order of the Board
11
` For Haldia Petrochemicals Limited Registered Office: Sd/- 1, Auckland Place Ashutosh Bose Kolkata 700 017. EVP, CFO and Company Secretary Date: 30th December 2015
ATTENDANCE SLIP
Venue of the Meeting Board Room, 5th Floor, West Bengal Industrial Development Corporation Limited, 23 Abanindranath Thakur Sarani, Kolkata-700 017
Date and Time 31st December, 2015 at 5.30 P.M.
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING VENUE
I certify that I am a registered shareholder/proxy for the registered Shareholder of the Company and hereby record my presence at the Adjourned 29th Annual General Meeting of the Company on Wednesday, 31st of December 2015 at 5:30 pm at Board Room, 5th Floor, West Bengal Industrial Development Corporation Limited, 23 Abanindranath Thakur Sarani, Kolkata-700 017
________________________________
__________________________________
Member’s/Proxy’s Signature
Note: Please fill this attendance slip and hand it over at the entrance of the hall.
12
13
Haldia Petrochemicals Limited
Directors’ Report -2014-15
14
OVERVIEW
HPL AT A GLANCE
Haldia Petrochemicals Ltd is an integrated naphtha based Petrochemical manufacturing Company. The major
products of HPL are HDPE (High Density Polyethylene), LLDPE (Liner low density polyethylene), PP
(Polypropylene), Benzene, Butadiene, Motor Spirit, CBFS (Carbon Black Feed Stock).
HPL is a customer focused organization, recognized as a leading supplier of quality products and services. A
symbol of industrial resurgence in West Bengal, HPL has led the economic growth of the region by propelling
significant investments in downstream processing industries, which generate huge employment opportunities
for skilled and unskilled workers. Through strategic market focus, innovative product application development
and excellent customer support services, HPL has played the role of a catalyst in emergence of several
downstream processing industries in West Bengal.
The Financial Year 2014-15 was a roller-coaster ride for HPL. The manufacturing unit was under shutdown for
almost seven months due to the shortage of working capital. The Company could re-start its business operation
after the consortium of bank, led by SBI, approved a working capital limit of 900 Rs. Cr. after infusion of Rs. 100
Cr. arranged by the Chatterjee Group in February 2015. The Company had a dramatic turn-around in
performance since February 2015. The plant operation was stabilized in very short period of time and capacity
utilization was gradually increased and it reached full scale operation by end of March-2015. Customer
confidence was regained and product selling was keeping pace with the production level without blocking excess
fund in inventory. With the improvement in business operating level, the Company started making profit from
March 2015 onwards.
Several initiatives are underway to ensure sustained operation at enhanced capacity utilization. New projects
are also being conceived to leverage HPL’s business strength and improve competitiveness.
There was no change in the nature of the business of the Company during the year.
FORMATION OF BENGAL CRACKER COMPLEX LIMITED
Your Company has formed a wholly owned subsidiary in the name of Bengal Cracker Complex Limited (BCCL)
incorporated on 23rd day of February, 2015 with an authorized capital of Rs.30000 million. The paid up share
capital of BCCL Is Rs.20300 million.
As a part of the business restructuring initiative, your Company has done a business transfer of its Naphtha
Cracker Unit (NCU) to BCCL at the close of business hours on 31st March 2015, pursuant to a Business Transfer
Agreement.
15
Financial Performance & Review
The summarized standalone and consolidated results of your Company and its subsidiaries are given in the table
below.
Rs in million
Particulars
Financial Year ended
Standalone Consolidated
31/03/2015 31/03/2014 31/03/2015
Total Income 31,130.09 81,315.76 31,131.10
Profit/(loss) before Interest, Depreciation & Tax (EBITDA)
(1,324.35) (2,053.93) (1280.20)
Finance Charges 6,337.47 5,027.90 6,349.02
Depreciation 2,435.43 4,286.56 2,471.38
Add : Exceptional items 15,083.09 7,095.59 0
Profit / (Loss) before tax 4,985.84 (4,272.80) (10,100.60)
Current Income Tax (including for earlier years)
- 373.5 4.40
Reversal of MAT Credit 1,330.65 - 1330.65
Net Profit / (Loss) After Tax 3,655.19 (4,646.30) 11,435.65
Profit/(Loss) brought forward from previous year
(19,309.38) (14,663.08) (25,181.22)
Profit/(Loss) carried to Balance Sheet (15,654.19) (19,309.38) (36,616.87)
*previous year figures have been regrouped/rearranged wherever necessary.
Summary of Operations
During the year, the net revenue from operations of your Company decreased by 62%, from Rs 81,298.32
million to Rs 30,965.37 million. Decrease is attributable to the fact that plant was under shutdown for 7 months
(July 2014 to January 2015). The plant however restarted its operations in the 1st week of February 2015 with
support from lenders and promoters. Since restart, your Company has recorded positive results till date.
Your Company recorded Earnings before Interest, Tax and Depreciation & Amortization (EBITDA) of Rs (1,324.35)
million in FY 14-15 against Rs (2,053.93) million for the corresponding previous period.
16
For FY2014-15, your Company’s profit before tax stood at Rs 4985.84 million vis-à-vis loss after tax of Rs
4,272.80 million recorded in the previous year, registering a swing of 218%.
The above may be attributable to the following reasons:
1. Post restart, your Company has recorded positive EBITDA amounting to Rs 1,302.85 million in February and March 2015.
2. During the financial year, your Company had undertaken a business restructuring whereby its Naphtha Cracker Unit (NCU) was sold to a newly incorporated wholly owned subsidiary Company Bengal Cracker Complex Limited (BCCL), as a separate business undertaking, at a value as determined by an independent valuer appointed for the purpose. The difference between the value as determined and the (net) book value of all assets and liabilities taken over by BCCL as part of undertaking, resulted in an additional income of Rs 15,083.09 million.
3. Depreciation charge for the financial year 2014-2015 was Rs 2,435.43 million as against Rs 4,286.56 million recorded in the previous year. Reason for lower depreciation charge during the current financial year is attributable to re-computation of depreciation based on revised useful lives of items of fixed assets as recommended in Schedule II of Companies Act, 2013 which became mandatory from the current financial year.
4. The Directors are not recommending any dividend for the year.
Financial / Liquidity position of the Company
Shrinking liquidity coupled with scarce working capital financing lead to curtailed operations making it
uneconomical and ultimately dearth of working capital impacted resulting in the resumption of Plant operations
only after a long period for about 7 months.
However, with active intervention of Promoters, Lenders decided to consider a revival package, including interim
finance, for restart of the plant. The revival package, as devised, included refinancing of existing dues including
novation of a portion to Bengal Cracker Complex Limited and grant of additional facilities.
With infusion of Rs. 100 cr by The Chatterjee Group, Promoter and consequent grant of Interim Working Capital
Facilities, your Company could not only recommence its operations during end January 2015 but also
demonstrated once again its ability to perform on a sustainable basis, which resulted in triple digit EBIDTA per
month after a long gap.
The Final Refinancing cum Additional Funding package has also since been approved by CDR-EG in March 2015,
paving the way for a long term solution for sustenance and growth of the Company. With execution of Joint
documents on 29.6.2015 by lenders, the Package stands implemented
Meanwhile, MSTC Ltd, being another important source of working capital is continuing to facilitate procurement
of raw material with agreed repayment programme.
With these financing arrangements in days to come and prudent liquidity management, we are hopeful that the
company will fully turn around and continue scaling new heights in terms of better returns and perpetual
prosperity of all stakeholders.
17
Recently, lenders agreed for the Company’s exit from CDR aegis with negotiated settlement of Right of
Recompense as per agreed terms and conditions.
I. MANAGEMENT’S DISCUSSION AND ANALYSIS
A. OVERVIEW
Your Company has overcome one of the most difficult phases of its existence since inception. The plant
operations remain crippled in the beginning of the financial year due to unavailability of adequate working
capital. Further in July-14, your Company was forced to take a shutdown to repair high axial displacement in
Charge Gas Compressor (CGC) HP module. Even though repairing was complete by end Jul, plant could not be
restarted for want of working capital.
The overall scenario despite uncertainties regarding the plant re-start was managed well by your Company. The
employees extended their whole hearted support to keep the plant in safe and working conditions. The top
management, including promoter directors, took special initiatives to allay fears and communicate measures
being taken to re-navigate the Company on growth path.
During the year, a “Share Purchase Agreement (SPA)” was signed between your Company and the two major
promoters on 11th September, 2014. RBI approved a special dispensation, wherein, financial institutions were
allowed to carry out second financial restructuring of the Company for its revival on the principle that the
proposed restructuring is on account of change in management control. Thereafter, all financial institutions, led
by IDBI and SBI, initiated the process of refinancing.
In absence of sufficient working capital for start-up, the Company explored several options, like product
swapping and simultaneous buy-sell agreement with International trading house but your Company could not
start its operation until consortium of banks agreed to award interim financial package to meet working capital
requirements. The consortium of banks, led by SBI, approved a working capital limit of Rs. 900 Crore subject to
infusion of Rs. 100 crore to be arranged by Chatterjee Petrochem (Manutius) Company in January 2015.
Subsequently, plant start-up activities were initiated and production re-commenced on 2nd February 2015 after a
gap of almost 7 months.
This was the turning point for the Company. The employees and associates worked together in achieving start-
up and stabilization of all plants in shortest possible time despite the plants remaining idle for seven months. Full
scale operations were achieved after a gap of almost 2.5 years with minimum working capital blockage. Your
Company regained its market share despite such long gap due to its strength of product quality and customer
focused approach. After a long gap, your Company started making cash profit from its operations since March
2015.
The business environment has been quite favorable for your Company. Looking forward the Company wants to
improve on business volume by enhancing capacity utilization, so that maximum benefit can be reaped during
the favorable business environment. Your Company is also taking initiatives to improve on business efficiencies
by various measures so that steady profits can be sustained in future years.
B. BUSINESS ENVIRONMENT IN FY 14-15
18
The petrochemical industry passed through another turbulent year in terms of price volatility in feedstock and
product prices. In the beginning of the year, Brent crude prices were moving in 100-110 $/bbl range despite
ample supplies and tame demand. However, prices started correcting from Sep-15 onwards driven by industry
fundamentals. Ample supplies and tame demand led Brent crude prices to correct up to 45 $/bbl in Jan-15.
The impact of the crude price movements on petrochemical industry has been profound. Naphtha, one of the
derivatives of the crude processing, also corrected from ~900 $/T to 360 $/T. As a result of this, cost
competitiveness of naphtha based crackers improved sharply.
Naphtha based petrochemicals production account for nearly 50% of the global ethylene capacity. Prior to price
corrections, cost competitiveness of US shale based ethane/propane and Middle East ethane based crackers
were significantly better vis-à-vis naphtha based crackers. Even coal/methanol based capacities in China also had
better economics vis-à-vis naphtha crackers. As a result, naphtha cracker operating rates were sufficient enough
to bridge the demand-supply gap. Profitability was low despite healthy product spreads. However, after price
corrections by 2014 end, ethylene cost curve for all feedstock flattened leading to increased competition
amongst the different producers
Another significant aspect of industry development has been the saturation of capacity addition and its nature.
Incremental global ethylene capacity additions are lagging the incremental demand growth, as a result, capacity
utilization of ethylene capacities is increasing gradually over years. It is estimated that global ethylene operating
rates were ~87.8% in 2014 compared to ~80-82% in 2010. Moreover, new capacity additions in recent years
were mostly based on naphtha or coal/methanol, which doesn’t have similar cost advantage as that of ethane.
As a result of these developments, product prices remained strong. Last year, when naphtha prices reduced by
~60%, polymer price corrections were only 30-35%, highlighting the change in industry structure. This is the
reason for high polymer spread over naphtha leading to favorable business environment for the naphtha based
petrochemicals players.
The industry dynamics also improved due to lowering of energy costs in production of petrochemical products.
Most of the producers use derivatives of crude oil as fuel for energy generation. The cost of the fuel declined
over time, thereby increasing the profitability of the petrochemical producers.
While polymer demand and margins improved over the year, product prices and spread for co-products like
Benzene and Butadiene still underperformed vis-à-vis other monomers. The automobile sector, the prime mover
of Butadiene derivative demand, is still to recover. The situation is further compounded by the huge capacity
additions in China within a very short timeline.
C. MANUFACTURING PERFORMANCE
Plant operation remained steady since 31st of January’12 until 6th of July’2014 excepting two short duration
shutdowns caused from Power supply interruption, one in December’2013 and another in January’2014. In Q1
(April –June’ 2104), NCU operated at 128.4 TPH throughput level on account of shortage of naphtha supply.
Thereafter following a prolonged shutdown, plant restart activities were initiated on 21st of January’2015 when
one auxiliary boiler in captive power plant (CPP) was put into operation. Blowing of steam headers commenced
and thereafter mother plant NCU started up on 28th of January’2015. Plant restart operation was very smooth,
and entire complex along with the NCU downstream got stabilized in record time. Subsequently complex
throughput was raised in tandem with naphtha supply plan. NCU throughput for Feb 2015 was 163 TPH and then
in March 2015 went up-to 226 TPH.
Production summary of NCU and polymers for four year at a glance:
19
PLANT PRODUCTION (T)
2011-12 2012-13 2013-14 2014-15
NCU 754,949 717,716 624,820 261,811
LLDPE Plant 263,343 233,166 217,204 79,338
HDPE Plant 241,334 244,893 205,029 92,794
PP Plant 248,367 237,532 205,828 83,173
During the period when plant was forced to remain idle due to lack of working capital, the shutdown
opportunity was utilized to its fullest extent and maintenance jobs were taken up to improve operational
efficiency.
The plant was preserved in good health during the shutdown period to ensure smooth run during start-up.
Systems like CGC, Lube oil tanks/accumulator, Process vessels, reactors, columns/towers, pipeline, tanks kept
under N2 environment were continuously monitored and documented. Steam headers ISBL/OSBL across the
complex were kept under nitrogen (N2) environment where the system pressure was being maintained through
make-up of fresh N2 time to time. Systems like C3/C2 refrigeration, De-ethanizer/Propylene/Ethylene towers and
associated system in NCU were kept under hydrocarbon environment under pressure. Inventory of hydrocarbon
in sphere/tanks was maintained. Lube oil circulation was carried out on regular basis on critical equipment like
CGC, C3R, EBR, C2R, K-410, Extruders, GT-1/2, BPSTG/CSTG etc. Barring of major steam turbines/STG’s by
TG/manually is being performed by running lube oil pumps time to time. Pumps were rotated manually by 180
degree on monthly basis. Fan/blowers oil chamber kept filled with lube oil, forced lubrication performed on
fortnight basis where provision existed. Steam drums, de-aerators and BFW system of NCU/CPP were kept under
wet-lay with preservative chemicals.
Complex Start-up & Highlights
NCU start-up activity started on 22nd Jan’15 and cracking was done on 30th January 2015 after a gap of seven
months. Stabilization was done in short span of time without any problem even though start up after long
shutdown and on spec ethylene received on 1st Feb 2015 evening and on spec Propylene was received on 3rd
Feb2015 evening.
Downstream plants were started sequentially with HDPE Tr-1 on 3rd Feb and Tr-2 on 4th Feb 2015. PP Plant
started on 4th Feb 2015 and LLDPE Plant startup done on 9th Feb 2015 night.
Liquid products Benzene, Butadiene and Py-Gas receiving started from 3rd Feb 2015.
NCU operation without EBR got stabilized at 180 TPH by 2nd week of Feb. EBR and new chilling train was taken in
line in 3rd week of February 2015, which was out of operation for 30 months approx., and then gradually Plant
load was further increased to 198 TPH by 25th Feb 2015. By 15th of March 2015, plant load was round 224 TPH
and maintained until 18th Mar 2015 due to Naphtha shortage. Naphtha cracker load was further increased from
238 TPH on19th March 2015 and then to 254 TPH on 31st March 2015. Average load in this period was 247 TPH
(19th March to 31st March 2015).
CPP operated with CSTG in line along with other power generating assets. Liquid fuel requirement got optimized,
on overall basis complex operation was smooth. The product quality parameters from plant operation were
very consistent even after a long outage from production.
20
D. PROCUREMENT PERFORMANCE
Market Movements 2014-15
Crude & naphtha market has been extremely volatile during last one year. Crude Market: Crude oil price (Dated Brent) began the year at USD 106 per bbl which peaked at USD 115 per bbl in mid June 2014 on concerns over oil supply disruption from the major OPEC exporter due to escalation of violence in Iraq.
Later market started to collapse on excess supply, weak demand & mixed global economic signals which sustained throughout the year and touched min USD 45 per bbl in Jan’15. The main pressure on the crude market came from global oversupply amid US shale gas boom and OPEC’s refusal to cut output. Feb’15 onwards, crude price was seen to rise ahead of OPEC’s 2015 demand projection and weakened dollar which again turned down in March’15 owing to strong dollar amid a weak demand & oversupply. Finally year ended at USD 54 per bbl.
Naphtha Market:
International price marker for Naphtha - MOPAG (Mean of Platts Arab Gulf) also followed the crude price trend. The first quarter of the year between April-July, 2014 saw bullish market trend, MOPAG touched peak $956/MT in June, 2014 from $900/MT on 1st Apr’14. This was due to tight supply on refinery turnaround resulting in lower export from India & West. But from July, 2014 onwards market started to crash drastically on abundant supply from West and new condensate splitter units in South Korea, Singapore, Saudi Arabia & the United Arab Emirates (UAE) . Weak demand from petrochemical sector owing to several cracker maintenance in Asia and continuous replacement of naphtha by LPG due to favorable economics, also weighed on the market. The bearish market trend continued till mid January, 2015, MOPAG plummeted to $360 /MT on 13th Jan’2015. Second half January ’15 onwards market again saw increasing trend with naphtha price moving around $500/MT. MOPAG went up to $521/MT on 2nd March’15, supported by demand from petrochemical manufacturers and restricted supply. Naphtha market again turned softer in mid March `15 owing to oversupply ahead of the cracker maintenance season and the year ended at USD 484 PMT.
HPL’s Feedstock Sourcing in 2014- 2015
In FY ‘14-15 HPL plant was under shutdown for seven months from 6th July’14 to end Jan’15. In remaining five months HPL purchased total 540 thousand tonnes of feed naphtha from import as well as domestic sources. Out of this domestic purchase was around 410 000 tonnes (76%) and Import 130 thousand tonnes (24%). During April-July’14, severe cash crunch situation forced HPL to stop import sourcing and start procuring from domestic sources only on spot basis to make up the shortfall at very low throughput. Subsequently Plant shutdown was taken from early July ’14 to Jan’15. After resumption of plant operation in end Jan ‘15 with fresh financial support, plant throughput went up to almost 100% of its capacity and to support plant at such level HPL started to import. However such imports were restricted to Traders only on spot basis. Major Middle East Term suppliers of HPL like KPC, ADNOC and BAPCO did not renew contracts with HPL due to HPL’s cash crunch. With improved business performance post restart of plant operation in February `15, imports of Naphtha are now being planned on regular term contracts basis.
Market Outlook 2015-2016
21
910 720
510 650
2665
340 600 440
RIL HPL GAIL IOCL HMEL
Indian Polyolefin Capacity
PE PP
From end March’15 onwards strong demand from Taiwan & South Korea , tight supply and high LPG prices triggered naphtha market to turn around and moved price up to USD 554 PMT towards April’15 end.
Opportunities
Improvement in cash flow has provided scope for introduction of new potential sources. This, coupled with reinstatement of previous sources has given opportunity for cost optimization using flexibility in naphtha sourcing.
High throughput operation has provided opportunity for Logistics cost reduction using COA and/ or Time Charter route.
Threat
Uncertainty over issuance of L/C over and loading schedule due to liquidity crisis faced by HPL in the last two years resulted in several failures of shipments. As a result Major Middle East National Oil Companies like KPC, ADNOC and BAPCO did not renew term contracts with HPL. Presently HPL’s naphtha term supply line up is constrained to annual Domestic Term contracts. Attempts are however, on to enter in term supply contracts with some overseas Oil Companies and it is expected that this would be feasible with improved financial condition of HPL and plant operation at full capacity, reinstatement of Term volume through rebuilding of relationship with previous/ new term import suppliers would have to be undertaken to ensure supply stability.
E. POLYMER BUSINESS PERFORMANCE
Industry Structure and Developments The domestic Polyolefin Industry consists of the following manufacturers - Haldia Petrochemicals Ltd. (HPL), Indian Oil Corporation (IOC), Reliance Industries Ltd. (RIL), Gas Authority of India Ltd. (GAIL), and HPCL-Mittal Energy Ltd. (HMEL), with RIL being the largest manufacturer amongst the domestic suppliers.
HMEL with its PP capacity of 440 KTA is the latest manufacturer in the polyolefin market in India. They produce only PP Homo polymer. Proposed capacity additions in near future are:
Figs. In KTA PE PP Probable Timeline
MRPL - 440 2015-16
Opal 1060 340 2016-17
Source: Company websites and brochures
Vol. in KTA
22
GAIL 470 - 2015
BCPL 220 60 2015-16
RIL 950 - 2016-17
Source: CPMA Country Report APIC 2015 Industry Performance 2014-15 Domestic demand and industry growth rate estimated by CPMA are:
PE (KTA) PP (KTA)
Domestic Demand 3,687 3,515
Demand growth 7% 8%
Product margins remained healty and peaked during Oct-Dec 2014, when sharp corrections in naphtha prices
occurred without commensurate decline in Polyolefin prices.
Polyolefin Prices & Spread over Naphtha
Source: Platts Performance in FY 14-15
In 2014-15, your Company sold a total volume of 253 KT polymers. HPL Polymer Sales Performance Figures in KT
Product
Opening
Stock
As on
Production Sales
Closing
Stock
As on
0
200
400
600
800
1000
1200
1400
1600
1800
400
500
600
700
800
900
1000
Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15
Nap
hth
a/P
O P
rice
(U
S$/M
T)
Spre
ad
(US$
/MT)
Naphtha - PO Spread Naphtha Price Avg. SEA PO Price
23
01.04.14 31.03.15
Domestic Export Total
PE 3.8 172 160 8 167 8.2
PP 3.7 84 85 0.1 85 2.6
HPL exported about 8 KT of Polymer in FY 2014-15. Export volume was less due to the prolonged shut down.
Although booking volume was very low for 2014-15, HPL booked polymer volumes at higher prices than the prevailing international price bench mark of Platts in order to bring higher contribution.
Market Outlook 2015-2016
Opportunities
Naphtha-Polyolefin (PO) spread level remained high throughout 2014-15. Average spread level was
approximately US$ 720/MT for the year. Such high numbers were last observed in FY 2010-11 for Polypropylene
and FY 2009-10 for Polyethylene.
An increased import duty of 7.5% as well as a low plastic consumption base represents a tremendous opportunity of growth for the plastics industry.
Threats
Import remains a threat to the Domestic Polymer Industry. Huge volumes of import from the Middle East and
Asian countries like Singapore, South Korea and others keep on arriving at Indian shores.
About 7 mMT of ethylene capacity has been planned for expansion by 2017 in the US too, based on the
availability of Shale gas. Apart from this ICIS also estimates capacity addition of approximately 5 mMT of
Polyolefin in China.
With the Coal to Olefin projects coming online in China and the lifting of embargoes on Iran, big volume of
cargoes are expected to be re-routed to other markets like India which may trigger a price war creating a
downward pressure on the import parity.
Outlook
From geopolitical turmoil, crude oil price plunge, China’s continuing growth slowdown and uncertain outlook –
2015 has got everything going in it. Substantially lower oil prices may take most chemical and polymers prices
down worldwide. How the net margins would be affected by these forces remains to be seen.
1300
1223
1000
1050
1100
1150
1200
1250
1300
1350
Avg. booking Price for Yarn Platts CFR FEA Avg. HDPEPrice
US$
/MT
HPL Booking Price vs. Platts
24
However, the overall global picture still looks positive. The manufacturing Purchasing Managers’ Indexes (PMIs)
of the US, Eurozone and China all are in expansion mode (above 50), with the US strongly ahead and the
Eurozone and China barely above the threshold.
Lower Oil prices however could bust a number of marginal US shale oil exploration and production companies.
According to ICIS, certain major planned projects such as ethane crackers in the US may be put on the shelf.
They have been based on both low NGL prices and high crude oil prices.
At home, however, the new government’s ‘Swach Bharat’ and ‘Make in India’ programs are poised to increase
the consumption of plastics in the near future.
According to CPMA, Polyolefin industry in India is expected to grow 8% in 2015-16.
F. CHEMICAL BUSINESS PERFORMANCE
Business Environment in FY 14-15
Basic Chemical Prices:
Basic chemical product basket consists of four products namely Benzene, Butadiene, C4 Raffinate and
Cyclopentane.
Benzene prices (FOB SEA) tracked crude and Naphtha prices closely and registered steep drop by Q3. The
excellent spread with Naphtha witnessed during FY2013-14 saw a gradual decline during FY 2014-15 due to
slowdown of downstream Styrene monomer and Phenol sectors. The average Benzene-Naphtha spread
remained around ~337 $/MT during the whole year with seasonal upward and downward swings.
Butadiene prices (CFR SEA), remained very subdued and crashed at the end of the year. The year began with a
price of ~$1220/MT in Apr’14 and ended at $ 830/MT in Mar’15, sliding as low as $600/MT in Jan’15. Average
Butadiene price in FY14-15 (~$1122/MT) decreased by 18% over FY13-14 levels (~$1360/MT). Consequently, the
average Butadiene spread with Naphtha MOPAG in FY14-15 decreased to $405/MT from $480/MT in FY13-14.
Due to increased supply of Natural Rubber and the depressed automobile market, the demand for synthetic
rubber had been subdued throughout the year. As a result, synthetic rubber producers were in no position to
increase the prices of their end products and resisted any cost push from Butadiene to the extent of cutting
down their production rates and even going for shutdowns.
C4 Raffinate sale to PIB manufacturers in the chemical sector was limited and irregular and finally discontinued
for most of the period of the financial year due to plant stoppage. This stream catering to PIB manufacturers as
feedstock is a better value added option, compared to conventional LPG sale for fuel application. Based on
limited availability, 4.4 KT C4 Raffinate sales could be achieved in FY 2014-15.
Cyclopentane with limited volume has pricing linked to Naphtha MOPAG. Your Company continued its export
focus to EU and SEA, and could manage ~ 2.0 KT sales, lower by 62% than the previous year. The average margin
realized over MOPAG Naphtha reduced to ~$675/MT from $733/MT in the previous year in the face of strong
competition from North East Asian (NEA) producers. Your Company has also been able to secure supply
contracts with appliance companies like Samsung, Haier & Videocon India for their domestic demand doubling
domestic sales in FY 13-14.
Energy Prices
25
The Company’s energy product basket consists of Liquefied Petroleum Gas (LPG), Hydrogenated Pyrolysis
Gasoline (PyGas), Motor Spirit (MS) and Carbon Black Feed Stock (CBFS) for fuel application.
LPG prices (SACP Butane) movement saw starting the year at $ 845/MT in Apr’14 and finishing at $ 460/MT in
Mar’15 in line with crude oil trend. Average price in FY14-15 ($ 684/MT) decreased by $209/MT over FY13-14
($893/MT). LPG prices touched a low of USD 460/MT in Mar’15 due to fall of crude prices. However your
Company was not affected as captive LPG had been recycled to Naphtha Cracker as feed instead of sale to
support plant operating rate. Based on availability, limited sale was undertaken only in higher realizing
commercial sector with recycling as the main outlet in most of the months.
PyGas prices are linked to Naphtha MOPAG for export and Refinery transfer price of Naphtha for domestic sale.
With limited availability and compulsion of recycling C5 & C6 stream for supporting operating rates, neat Pygas
sale was preferred to MS conversion, thus resulting in HPL remaining out of MS market completely. 26.5 KT was
sold to domestic oil PSU’s, thereby helping to partially set off Naphtha payable and balance production of 12 KT
was exported thereby enabling recycling of C5 & C6 Raffinate. The domestic realization was to the tune of
MOPAG plus $140/MT and export realization was MOPAG plus $ 84/MT during FY 14-15.
MS prices (MOPS MOGAS 92) followed Crude Oil prices and more or less remained steady. Average prices in
FY14-15 ($95/bbl) decreased by 17% over FY13-14 ($114/bbl).
CBFS was mostly consumed internally as fuel to power plant replacing Fuel Grade Naphtha as it fetches the
highest realization as compared to sale. Inconsistent & reduced availability due to fluctuating plant load and
stoppage of plant resulted in your Company gradually withdrawing the product from market ending with
miniscule sale in FY 14-15. As with other energy linked prices, CBFS marker MOPS HSFO 180 CST 2% remained
steady at around $ 510/MT levels. Only 1155 MT CBFS sale was done in FY 14-15 as against 8000 MT sales in FY
13-14.
Performance
Your Company registered a decrease of 65% in chemicals sales volume to 102 KT in FY14-15 as compared to 294
KT in FY13-14 mainly due to lower Plant operating rate in Q1 followed by shutdown from July’14 to Jan’15
reducing product availability for sale.
Chemical sales accounted for 29% of the overall sales volume and contributed 18% to overall GSV of your
Company in FY 14-15.
Benzene sales volume reported a decrease of 64% to 32 KT in FY14-15 as compared to 89 KT in FY13-14.
Butadiene sales volume also decreased by 58% to 23 KT in FY14-15 from 55 KT in FY13-14.
Price fall caused by steep slide in upstream energy price and weak demand also contributed to lower GSV in
both Benzene and Butadiene.
Outlook
With the beginning of this financial year (2015-16), Crude and Naphtha prices have slowly begun to rise due to
geopolitical flare-up in different regions like Ukraine & Middle East. OPEC’s decision to maintain crude output in
the face of rising shale oil production and fall in crude price seems to have some desired effect in restricting new
drilling of shale oil. Though drawdown in US crude inventory has bolstered crude prices, geopolitical
developments, particularly how the nuclear deal with Iran evolves, will decided the direction and limit to crude
prices in the short to medium term. Polymer- Naphtha spread has been very healthy hovering in the region of
26
$650-750/MT, which was last seen in the 4th quarter of FY 2009-10. If the margins remain same, naphtha
crackers will recuperate some of the losses of last few years provided they run the plant at full throughput.
Benzene
Benzene price collapsed due to capacity expansions in Korea, India and Singapore and sharp drop of oil and
naphtha prices. Large volume moved from Asia to US acting as a sink. Benzene-Naphtha spread has been
narrowing down from over USD 400 per MT in 2013-14 to around USD 250-300 per MT now after dropping
below USD 200 for a short period.
Asian demand is expected increase to 25.6 million tonnes in 2015, considering operating rates of the benzene
derivatives units, as opposed to 27.4 million tonnes of benzene production, ICIS reported the difference in the
production and demand would support the continuation of Asia exporting to other regions such as the US,
Middle East and Europe.
Asia's benzene prices are expected to remain under pressure in the first half of 2015 as a result of excessive
supply because of new capacities in the region despite the start-up of new derivative plants. This was partly
attributed to the lower-priced alternative coal-based benzene in the Chinese domestic market, adding on to the
already abundant supplies of crude-based benzene.
With two largest benzene derivatives – Styrene Monomer (SM) and phenol [accounting for close to 70% of total
benzene demand] facing margin threats, operating rates of such units will unlikely stay high in 2015. So, average
benzene operating rates in 2015 are expected to decrease to about 76% from 2014 level of ~80%, taking into
account producers cutting benzene output for toluene disproportionation (TDP) units and condensate splitters,
subject to co-product–paraxylene (PX) performance. Some players estimate that in 2015, the benzene-naphtha
spread may stay at around $200-250 per tonne. This was on top of a few turnaround schedules of Asian benzene
units in 2015, as compared to 2014.
Butadiene
Butadiene prices collapsed due to the plunge in the crude and naphtha prices and weak macroeconomic
conditions. Weak demand from downstream synthetic rubber sector owing to oversupply in natural rubber
coupled with bearish growth forecasts, kept a lid on key Asian demand and pricing.
Though growth of the tire demand is around 3.5-4% in 2014, the butadiene demand is estimated to be lower
than tire demand growth rate because of rise in natural rubber production. On the other hand, supply of
butadiene was in plenty because of high operating rate of the crackers and start-up of the new butadiene plants
(255KTA) which caused over-supply of butadiene in 2014. As a result, the spread between Naphtha and
butadiene prices is expected to remain narrow, unlike the large spread (in the range of $480/MT (FY13-14) to
$1100/MT (FY12-13)) observed in recent years.
Asian demand would increase to 6.3 million tonnes in 2015, considering operating rates of the butadiene
derivatives units, as opposed to 6.5 million tons of butadiene production, and this difference in the production
and demand would keep the price of butadiene under pressure.
Overcapacity of butadiene downstream became remarkable in Asia particularly in China recently. Among those,
polybutadiene rubber (PBR) appears to be the worst. Due to over-competition, rubber price is always below the
appropriate cost level. Natural rubber production is expected to be increasing till 2015, which will keep putting
pressure on BD/Synthetic rubber price.
27
Energy Products
Prices of Energy products like LPG, PyGas, MS & CBFS will mostly track Naphtha price. CBFS internal usage as CPP
fuel will be continued as value addition initiative replacing Fuel Grade Naphtha fetching highest realization as
compared to sale. Lower plant load resulted in maximization of recycling of various product streams to maintain
plant throughput restricting product availability for sale, thus affecting regular supply of products like MS, CBFS
LPG and C4 Raffinate to customers. This has resulted in some CBFS, LPG and MS customers shifting over to
alternative sources. With restart of the plant and gradual ramp-up, regaining customers’ confidence in HPL as a
consistent supplier will be a challenging task.
Cyclopentane domestic sale is expected to rise with more domestic refrigerator manufacturers switching from
import to HPL’s product as they have adopted Cyclopentane complying with environmental mandate to replace
ozone depleting HCFCs as a blowing agent for Polyurethane foam. However export of Cyclopentane to Europe is
expected to face stiff competition in coming days, with aggressive pricing from European and Korean producers.
G. PRODUCT DEVELOPMENT & TECHNICAL SUPPORT
The focus of Product Development and Technical Support (PDTS) group was in enhancing margin by cost
reduction of polymer grades, providing customer support to resolve technical issue and retain customer loyalty,
reduce compensation claims from customer complaints, up-gradation of transition materials to retain value,
evaluation of new and alternative additives for wider procurement options and benchmarking with competitor
products to remain competitive in terms of product quality.
The PDTS group is actively engaged in the development of new grade recipes and modification of existing products to meet the changing demands of the Indian plastics processors and end- use industries. During the year, the Polypropylene Tubular Quench Film grade design and specifications have been modified to suit the higher throughput processing machines that are increasingly replacing the older machinery used by the industry. The automotive, appliances, furniture and industrial container segments are increasingly demanding higher stiffness in Polypropylene Impact Copolymers without sacrificing the impact strength. The PDTS group is developing formulations to enhance the stiffness of the PPiCP grades using various nucleating additives. The product development activities reported in the last year’s report are also being carried forward after a brief intermission due to non availability of reactor powder from the plant. Key achievements during the year under review:
1. Optimization of additive recipe & Product Modifications were carried out to remain technically competitive.
2. Development of a new & cost-effective additive recipe for Polypropylene Homopolymer Thermoforming grade based on a new additive & source.
3. Development of alternative and new sources of polymer additives has widened the vendor base for sourcing. Eleven New / alternative additives were selected and evaluated.
4. During the Shut Down period between July ’14 to Jan ’15, PDTS along with Regional Technical Services, engaged with customers in a continuous manner in the Eastern Region to track the performance feedback of competitor products. This provided insight into competitor product performances and trends in the market which helped in re-establishment of HPL grades after production resumed in Feb ’15.
5. Special Focus was given on providing Technical Support to customers in the Eastern Region.
28
6. The PDTS group has worked collaboratively with Technology and Manufacturing teams to identify alternative sources of catalysts for the polymer plants.
7. The PDTS group has rendered technical services and various regulatory compliance support to 155 customers. Technical support was also provided to
Business Development group in Relief Film vendors’ capacity assessment & inspection of relief tarpaulins for supplies to GoWB;
Materials Department in developing vendor for HPL’s polymer packaging bags & in identification & technical qualification of new sources of additives & chemicals.
8. Majority of customer complaint were addressed to customer’s satisfaction and retain customer loyalty.
9. An extensive benchmarking exercise was undertaken to test & analyze ~ 60 different grades of polyethylene and polypropylene products that were being used by customers in different application segments during the absence of HPL from the market. The data generated along with the customers’ shared experiences are being used to further improve HPL’s grades. Product training modules have been prepared incorporating the comparative data & highlighting the competitive advantages of HPL grades. The information has been disseminated among the marketing staffs in the head office & regional offices through Product Knowledge Programs.
H. BUSINESS DEVELOPMENT
Business Development Group’s (BDG) main focus is expansion of consumption base of Polymer products in Eastern India with special thrust on West Bengal by servicing and generating new interest for investment. With the catalytic role of Business Development Group, sizable processing capacity has been added with generation of employment opportunities.
Downstream Capacity Addition:
218 new processing machines were added in Eastern India in 143 units with additional downstream
processing capacity of approx. 82.5 KTA.
Addition of processing capacity in West Bengal has been 46 KTA through 127 no. of new machines in 76 units.
The largest capacity addition was in the extrusion sector , comprising of HD/LLD film, liner and lamination sectors at 25.6 KTA.
I. TRADING OF PROCESSED PLASTICS
Procured order for 6.48 lakh pcs of Fabricated Polyethylene Tarpaulin from Department of disaster
management, GoWB and completed the supply of the same during May- Nov’14 period through procurement
from HPL downstream units. The turnover was Rs 38.5 Cr with trading margin of 5% (Rs 1.96 Cr).
J. PROJECT SUPERMAX
Your Company has made attempts for the settlement of pending claims and also for payment of the outstanding
dues for service contracts. Many of them have been settled or are in the process of being settled.
K. New Projects
Your Company has worked on several project schemes which have potential to increase profitability in future. In-
house feasibility studies are carried out for several such projects such as:
29
Coal Based Energy Generation
Butene-1
Propylene Recovery from FCC Stream of Haldia IOCL Refinery
Phenol & Acetone
HPL board has sanctioned a budget to engage external consultants for preparing Detailed Feasibility Report
(DFR) and to help in environmental clearance by MoEF for the above projects.
Actions are in progress for conducting DFR of Coal Based Energy Project and Butene-1 Project by external
consultant. Your Company is also in the process of finalizing consultant for initiating environmental clearance
process from MoEF.
L. HUMAN RESOURCE MANAGEMENT
HPL has witnessed large scale attrition during last few years resulting in serious difficulties not only in Plant operation but also a number of other areas.
Year-wise Attrition in Different Work Levels
Year/Work level 2011-12 2012-13 2013-14 2014-15
WL - IV 86 97 83 92
WL III 14 13 16 15
WL-II 3 6 8 7
Major factors affecting employee retention are:
Payment of annual increment and payment of PLP (constituting a significant part of the compensation
package) etc. has become inconsistent over the last few years, resulting in low compensation package.
Delay in granting Promotions has increased dissatisfaction among employees.
Job markets are opening up and salaries have increased, prompting our employees to look for better
opportunities.
Industry Pattern: Overall salary increase was 10.4% for FY ’14-’15 and is projected at 10.6% for FY ’15-’16 (Ref: Hewitt India Salary Increase Survey 2013-14, Chemical Sector).
The current focus of Human Resources in these times is on Recruitment. Your Company is now focused on hiring Management and non-management Trainees through campus interviews, lateral hires with some industry experience and also recruiting ex-employees.
Proactive IR Management The major challenge was to manage the expectation of the Contractors’ Employees (CEs) in respect of the pending Charter of Demand (COD) since 1st July 2012. The affiliated Union of the INTTUC extended all possible support to make the Contractors’ Employees understand the condition of HPL and its operations. Management, on the other hand, showed its benevolence by continuing disbursement of existing wages for 7 months when there was no production. However, a 2nd Union emerged and got registration from the Registrar of Trade Union, West Bengal, although it is yet to get affiliation from any political group. The 2nd Union became active by giving high promises to the
30
Contractors’ Employees. The expectation level became very high for the settlement of the pending Charter of Demand of the Contractors’ Employees. The Memorandum of Understanding (MOU) between the Non-Management staff and the Management ended on 31st December 2014. The Non-Management staff expressed their desire to have the due 25% impact of the AICPI increase for the entire period of understanding (01.01.2011 to 31.12.2014) at the earliest and also to initiate dialogue for the new MOU.
The expectation of the Management staff of the Company was also very high in respect of pending increments and Performance Linked Pays (PLPs). Constant communication at individual level and group level were conducted to minimize the discontent and maintain motivation. However, at the time of Plant startup, all possible cooperation was extended by all the categories of employees including the Contractors’ Employees.
Training Programs
Two engagement programs, namely, “Awareness Session on Work Culture & Discipline” were conducted. However, due to financial crisis, further engagement activities for the Contractors’ Employees and their families were discontinued. Constant communication was on in respect of the status of the Company.
M. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year, the provisions relating to CSR in the Companies Act, 2013 were not applicable to the Company. However, in line with the previous years, the Company took several measures in the area of Corporate Social Responsibility: HPL helped in organizing a Blood Donation Camp for Thalassemia Society. HPL continued its support in fighting AIDS by organizing AIDS awareness and health clinic for truck drivers in truck parking area with the help of M/s TCI foundation. The Company also extended proactive support to District Administration in managing different scenarios such as:
Crowd Management during Vishwakarma Puja: Vishwakarma Puja is a big festival in Haldia Industrial zone which is enjoyed by local population along with their family. To control the crowd and manage law and order, HPL supported local police by providing puja guide map displayed in Flex banner.
Operation Smile: In January 2015, a major drive “Operation Smile” was taken by district police against the child trafficking and child labour. HPL provided printed hand bills and helped in distribution of information material through HPL security personnel in nearby schools. HPL also provided Flex banner
which were displayed at major locations in Haldia under this initiative.
Deployment of Fire Tenders: HPL supported government agencies in fire fighting and management by
deploying its fire tenders for fire incidents in M/s Tina Industry, DPTL and fire in market near BDO office in Brajalalchak.
N. HEALTH, SAFETY, ENVIRONMENT & FIRE (HSEF)
31
Your Company continued its focus on Health, Safety & Environment Management practices meeting international standards – ISO 14001:2004 & OHSAS 18001: 2007 A number of new initiatives were taken up and continued during the year:
HEALTH
Your Company took several measures to provide preventive healthcare to all employees including contract workers and spread awareness amongst the society. Periodic Medical Examinations (PME) for 1481 numbers of contract workers continued at Occupational Health Center. Exposure check-up with personal samplers for workers exposed to noise and dust were continued. A total of 13 noise studies and 9 dust studies were completed. 68 numbers of urinary phenol tests were done to measure the exposure to benzene. All the kitchen staff have been vaccinated against typhoid to prevent spread of typhoid disease. Hypertension control program continued among contract employee of HPL. Fifty three new persons were detected and treated regularly with medicines and monitoring at free of cost. Diabetic control program continued for contract employee of HPL. Nine new cases were detected and treated regularly with medicine and monitoring at free of cost. Health check-up for workers exposed to Hazardous chemicals in plants continued. Awareness sessions on heat stroke for contractual workers was organized
SAFETY
17,307 man-hours of HSEF training were imparted to HPL and Contractors employees. It was ensured that no person without safety training can take up any job inside plant. In order to promote awareness of confined space hazards as well as working at height, no one is allowed to enter into Confined Space and to work at height without Safety training in plant. Your Company has achieved longest period in days (1595 days as on 31.03.2015) without Lost time injury (LTI) compared to previous longest period of 426 days. Behavior based safety training is being provided to both HPL & contractor employees to reduce accidents at zero level. Safety training is being imperted to drivers transporting hazardous chemicals. Safety promotional activities like safety slogan, safety poster competition, safety quiz & safety crossword puzzle contest is organized for motivation of employees of both HPL and Contractors towards safety. Safety videos related to major accidents were shown to HPL employees of Work level II, Work Level III, Work Level IV and Work Level V during Central Safety Committee and Plant Management HSE committee meeting. 200 internal safety inspection / cross functional audits were done to identify hazards and take control measures to prevent incident & accidents. Job Hazard Analysis / Critical Task Analysis are carried out for all critical and high risk jobs to prevent accidents. Road Safety Week and National Safety Day / Week campaigns were done in January, 2015 & March, 2015 respectively with a number of safety programmes and contests arranged for the employees working at HPL as well as for the “Nearby units” to promote safety awareness. Prizes were also distributed to all winners & runners who participated in various promotional activities.
ENVIRONMENT
Your Company maintained 100 % compliance level in environmental parameters as per statutory requirements.
32
Guidelines were received from the Central Pollution Control Board (CPCB) and West Bengal Pollution Control Board (WBPCB) regarding implementation of continuous monitoring system of industrial effluent & stack-emission and subsequent transfer of real time data to CPCB/WBPCB server within 31.03.15. HPL appealed to WBPCB & CPCB to extend the last date of installation & commissioning of the system by two years, i.e. till 31.03.17 due to severe financial crisis & shutdown in the plant for about 7 months. The 1st meeting of Sectoral Standing Committee of the National Task Force: Petrochemicals Industry, convened by CPCB, was held in your plant on 27.03.15 regarding implementation status of Online Monitoring System of Effluent & Emission. As per our commitment, we made the real time data for two on-line parameters i.e pH & Flow of treated effluent available to our internal server. The same online data will be sent to CPCB/WBPCB servers shortly. The HPL Community Celebrated World Environment Day 2014 with a lot of promotional activities throughout the week viz.
Plantation inside the plant as well as at the premises of Paura Pathabhaban School in association with Haldia Vigyan Mancha.
Arrangement of Seminar/Lecture by (a) Dr. Asish Kumar Ghosh, founder-Director, Centre for Environment & Development, JU on “Small Islands Developing States and Climate Change”& (b) Mr. T. K. Dasgupta, GM-HSE, Mr. Sunil Kapoor, DGM-HSE & Mr. Ranjit Paul, SPSE from IOCL, Haldia Refinery on “Environment Management System in IOCL, Haldia”
Documentary Film Show for the employees
DQT based Environment-Quiz through professional Quiz Master for own employees
Organisation of Environmental Presentation & Environmental Quiz in Bhavan’s NSCBV School, Haldia
Sit & Draw competition for HPL Kids at Haldia Riverside Estates Ltd.
Corporate Green Biz Quiz 2014, conducted by Indian Chamber of Commerce at Kolkata (Prices won – Champion and 1st Runners up).
Participated & won 7 nos. of prizes in the Annual Flower Show 2015 conducted by IOCL, Haldia and 8 nos. of prizes organized by HDA in Haldia Mela 2015.
FIRE:
Your Company observed the National Fire Services Day (14th April) with several shop floor fire safety training programs spread throughout the year and ensured compliance of fire safety guidelines/procedures during all critical jobs in plants.
Your Company is maintaining most modern Fixed Fire Protection System and Appliances viz. Fire Tenders, DCP tender; Foam Nurser, with a Hydraulic Platform of 42 meter high, regularly honed for instant and right attack by well qualified and trained emergency management team.
Process plants shop-floor training being conducted ISBL (In Side Battery Limit) of all units; thereby reducing fear of usage of extinguisher during real fire.
Emergency Management Control Room (EMCR) is manned by trained Fire Crew persons, wherein Fire & Gas Leak detection alarm system is monitored on 24 hour basis by trained Fire professionals, there by any untoward incident viz.gas leak, equipment failure which may cause for Fire; would possible to identify and preventive measures would possible to execute with shortest possible time.
33
Rehearsal for the Process plants Mock Drill &ON-SITE Emergency Management Plan was organized twice successfully. All improvement scopes which came up during post drill discussion session were/are also implemented.
Your Company is maintaining a Mutual Aid Agreement for emergency management with three major neighboring industries viz. M/S- IOCL- Haldia Refinery, MCPI and PHBPL.
O. Information systems:
Your Company’s major business functions were mapped and integrated in SAP Enterprise Resource Planning system and Lotus Note office automation application tool. The business need of the Company is continuously assessed and IT system is continuously innovated and updated to enable the business changes. The system and platform is continuously being used to enable faster and informed decision making process. A high level of Information Security policy, system and awareness is being ensured to protect Information Assets in your Company.
The major enhancement in Information Systems during the financial year were:From Feb 2015, all financial transactions are through TRA account, this required changes in SAP system. TRA system was promptly implemented in SAP with new Bank account and ensured smooth transaction.
1. There was a change in asset life guide line 2014 effective from 1stapril 2014. This required change in depreciation keys in SAP, which was promptly implemented and new depreciation rules are effective in SAP.
2. Implementation of SAP in HCCL from April’14
3. The SAP configuration for BCCL, the newly formed subsidiary, is under implementation
4. Active directory implemented in 2014-15 in all locations of HPL.
5. Lotus note mail upgraded from 7 to 8version in Dec’14. In the new version one additional feature was mobile access. The mobile access feature is successfully implemented and the feature has been given to users on request.
6. Delhi and Mumbai mail access directly connected plant mail services with ‘local mail access’ concept which helps reduce hardware / software and maintenance cost.
7. Biometrics attendance system for contract employee is under implementation and will be completed shortly.
8. Score card system of Safety implemented through lotus notes e_application.
Corporate Governance
Details of Board Meetings
During the year, Nine Board meetings were held, details of which are given below:
Date of the meeting No. of Directors who attended the meeting
19.06.2014 9
30.07.2014 9
06.09.2014 9
13.11.2014 11
01.12.2014 5
34
11.12.2014 5
03.01.2015 8
20.01.2015 6
14.03.2015 6
As on 31st March, 2015, the issued, subscribed and paid up share capital of your Company comprised of
Rs.16,879,385,320 Equity share Capital and Rs.2710,818,180 Preference Capital, aggregating to Rs.
19,590,203,500. All shares are of Rs 10/- each.
Extract of Annual Return
Pursuant to section 92(3) of the Companies Act, 2013 (‘the Act’) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as Annexure II.
Committees of Board Committees
The details of composition of the Committees of the Board of Directors are as under:-
a. Audit Committee
Sl. No. Name Chairman/ Members
1 Mr. Sisir Kumar Mukherjee Chairman
2 Dr. Krishna Gupta Member
3 Mr. S K Arora Member
4 Mr S Chatterjee Member
5 Mr. Subroto Gupta Member
6 Managing Director (Permanent Invitee)
During the year, the Committee had met on 30.07.2014.
Vigil mechanism Pursuant to the requirement of the Act, your Company has established a Vigil Mechanism Policy in order to provide a framework to secure Vigil Mechanism. Your Company has already adopted a Code of Conduct, Discipline and Appeal Rules (CDA) for it’s Management Personnel, which lays down the principles and standards that should govern the actions of the Management Personnel. This Policy is an extension of the CDA and Code of Conduct for Directors. Such a vigil mechanism shall provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Nomination & Remuneration Committee
Sl. No. Name Chairman/ Members
1 Dr. P Chatterjee Member
2 Dr. S Kishore Member
35
3 Dr. S S Banerjee Member
4 Managing Director Permanent Invitee
During the year, the Committee had met on 12.6.14 and 19.6.14.
Statutory Auditors, their Report and Notes to Financial Statements
The office of the Comptroller and Auditor General of India has vide its letter no.CA.V/COY/WEST BENGAL.HLDIAP(2)/23 dated 26.07.2014 appointed the following firms of Chartered Accountants as joint Statutory Auditors of the Company for the financial year 2014-15: M/s N C Banerjee & Co., Chartered Accountants, M/s Singhi & Co, Chartered Accountants While appointing the statutory auditors, CAG advised that the remuneration and other allowances payable to the auditors may be regulated as per the provisions of the Companies Act, 2013 read with the Guidelines issued by the Ministry of Corporate Affairs.
Cost Audit
As per the Cost Audit Orders, Cost Audit is applicable to the Company's Chemicals business for the FY 2014-15.
M/s. M/s Mani & Co., Cost Accountants was appointed as Cost Auditors for FY 2014–15 to conduct the audit of
cost records of your Company for the financial year 2014-15. The remuneration proposed to be paid to them
requires ratification of the shareholders of the Company. In view of this, your ratification for payment of
remuneration to Cost Auditors is being sought at the ensuing AGM.
Your Company has submitted its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated
time period.
Secretarial Auditor
In terms of Section 204 of the Act and Rules made there under, M/s. S Sarkar & Associates, Practicing Company
Secretary was appointed the Secretarial Auditor of the Company. The report of the Secretarial Auditor is
enclosed as Annexure VII to this report. The report is self-explanatory and does not call for any further
comments.
Demand from Customs/DGFT issue
Your Company received an Order dated 31st March, 2015 (issued on 6th April, 2015) passed by the Deputy
Commissioner of Customs on the grounds of non-fulfillment of Export Obligations under Advance License under
the Foreign Trade Policy. Vide the aforesaid Order, bonds executed at the clearance of the imported goods were
enforced and HPL was directed to pay a duty of Rs.1656,12,89,764/- which was exempted at the time of
clearance of the imported goods under Advance Authorization, along with applicable interest at the rate of 15%
p.a.
HPL filed an appeal to Commissioner of Customs (Appeal) on 05.06.15 for setting aside the above order and not
to initiate any coercive action against HPL. In response to that appeal, Commissioner (Appeals) has remanded
back the demand to the Deputy Commissioner ‘for re-examination, re-verification of the various documents and
re-quantification of the duty payable, and also to direct the original authority to issue a fresh order, if need be,
after following these observations and in keeping with the Board guidelines issued in this matter’.
36
Meantime, an appeal and stay application was filed by the Customs against the order of the Commissioner of
Customs (Appeals) vide Notice dated 14.10.2015. No unfavorable order was passed and the next date of hearing
was fixed for 10.2.2016.
In the meantime, GOI has suggested that it will consider HPL’s application for extension of EOP if GoWB gives a
guarantee against HPL’s failure to satisfy the outstanding obligation with the extended time or if HPL can provide
a Bank Guarantee against such failure. HPL has already conveyed to GoWB and GOI that it is prepared to
organize such Bank Guarantee and further that the Company’s lender banks have also agreed to issue
Guarantee.
Based on such application and subsequent series of interactions with the concerned ministries, Ministry of
Finance, Government of India, vide their letter dated 29th December 2015 has advised the licensing authority
for extension of export obligation. Further, DGFT vide their letter dated 29th December, 2015 has granted an
extension of period for four years from 23rd December, 2015 subject to fulfillment of certain conditions which
inter alia includes export obligation of additional 20% of the existing obligation, furnishing of bank guarantee to
the tune of Rs 31,710 million with periodic reduction in the amount of such bank guarantee on meeting the
export obligations.
Related Party Transactions
The Company has not entered into any related party transactions as defined in the Companies Act 2013, during
the year.
Further, there are no materially significant related party transactions during the year under review 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. Thus, disclosure in Form AOC-2 is not required
Statement containing salient features of financial statements of subsidiaries
Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the
financial statement of a Company’s subsidiary or subsidiaries, associate Company or companies and joint
venture or ventures is given as Annexure III.
Risk Management Policy
Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated
efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to
maximize the realization of opportunities. The Company has laid down a comprehensive Risk Assessment and
Minimization Procedure which is reviewed by the Audit Committee of the Board periodically. These procedures
are reviewed to ensure that executive management controls risk through means of a properly defined
framework. The major risks have been identified by the Company and its mitigation process/measures have
been formulated in the areas such as business, project execution, event, financial, human, environment and
statutory compliance.
Internal Financial Controls
HPL has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and all transactions are duly authorized, recorded and reported correctly. We use the advanced ERP (Enterprise Resource Planning) tool ‘SAP’, duly customised, and incorporating a comprehensive structure of authorization controls. The integrated SAP R/3 financial and business management system provides a high level of system-based checks and controls and therefore, forms an
37
effective and integral part of the overall internal control system of the Company. The internal control systems are supplemented by an extensive programme of internal audits, reviews by management, and documented policies, guidelines and procedures. The internal control systems are designed to ensure that financial and other records are reliable for preparing financial statements and other documentation, and for maintaining accountability of assets. HPL has strong and independent internal audit systems covering, on a continuous basis, the entire gamut of operations and services spanning all locations, businesses and functions. It encompasses evaluation of all financial, operating and other controls. Also, the statutory auditors, in the course of their audit, routinely review such controls. Internal audit findings and recommendations are reviewed by management and the Audit Committee of the Board. For proper risk assessment and management, your Company has a Commodity Risk management Policy and Foreign Exchange Risk Management Policy in place.
Directors and Key Managerial Personnel – changes during the year
Directors During the period under review, the following changes took place in the Board of Directors:
Mr U K Basu Managing Director was re-appointed for 2 months w.e.f. 01.05.2014 and for another period of six months w.e.f. 01.07.2014. He resigned as the Managing Director and Director w.e.f. 11.12.2014
Mr. Ajay Kumar Pandey was appointed as an additional Director of the Company as a nominee of WBIDC in the Board Meeting held on 30.07.2014.
Mr S K V Srinivasan resigned w.e.f. 26.08.14.
Mr Subroto Gupta was appointed as Director of the Company in casual vacancy w.e.f. 26.08.2014 vice Mr S K V Srinivasan.
Mr R Vasudevan, Director passed away on 4.11.2014.
Mr J N Godrej, Director resigned from the Company w.e.f 01.03.2015.
Mr S.Kishore was appointed a Director in casual vacancy vice Mr C.M.Bachhawat as a nominee of WBIDC on 3.06.2015.
Mr K H Dwivedi appointed as additional director of the Company as a nominee of WBIDC w.e.f. 3.6.2015.
Ms. Sreoshi Palchoudhuri appointed as an Additional Director as a nominee of CPMC on 20.08.15.
Key Managerial Personnel (KMP)
Mr Bhaswar Mukherjee joined as CFO on 1.6.2014 and resigned w.e.f. 05.02.2015.
Mr A K Chattopadhyay, Head-Legal and VP & Company Secretary resigned w.e.f. close of business hours of 30.09.14.
Mr Ashutosh Bose was appointed as Chief Financial Officer and Company Secretary in the rank of Executive
Vice President from 02.02.2015.
Mr Ashutosh Bose, CFO and CS was re-appointed for a period of three months w.e.f. 01.04.2015 and for
further period of three months w.e.f. 01.10.2015
38
Retirement by rotation
Mr S P Arora and Mr.S Kishore, Directors retire by rotation at the forthcoming Annual General Meeting and
being eligible, offer themselves for reappointment.
The Board recorded its sincere appreciation for valuable contributions made by the directors who have resigned/ retired, during their tenure as HPL Director and expressed deep sense of satisfaction for their commendable support to the Company. Directors liable to retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment
Directors’ Responsibility Statement The Directors’ Responsibility Statement in terms of Section 134(3) and (5) of the Companies Act 2013 is given in Annexure I.
Particulars of Employees
A statement as required as per Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement of particulars of employees is Annexed as Annexure IV
Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Statement on conservation of energy, Technology absorption, foreign exchange earnings and outgo under sec
143(3) of the Companies Act, 2013 is enclosed (Annexure – V and VI). Explanation to Auditors’ Observations Directors’ explanation to Auditors observations in terms of sec 134(3) of the Companies Act, 2013 is enclosed as
Addendum to the Directors’ Report (Annexure VIII). Deposits
The Company has not accepted any public deposits and as such, no amount on account of principal or interest
on public deposits was outstanding as on the date of the balance sheet.
Details of significant & material orders passed by the regulators or courts or tribunal
There were no significant and material orders passed by the regulators or courts or tribunals impacting the going
concern status and company’s operations.
Acknowledgements
The Directors of your Company take this opportunity to express their gratitude to all individuals and institutions that have helped and supported HPL.
39
Your Company is grateful to the Reserve Bank of India, Financial Institutions and Banks led by IDBI, and the Banks for their support in providing ‘Term Finance’. Your Company is also grateful to State Bank of India and other members of the Working Capital consortium who made Working Capital finance available to your Company. Your Directors also place on record their sincere appreciation for the support your Company has received from the Government of West Bengal and Government of India. Your Directors also record deep appreciation for the HPL Team for their dedication and commitment towards the success and growth of your Company. Your Company is thankful to customers, vendors and business associates for their support.
For and on behalf of the Board
Haldia Petrochemicals Limited
(Director/Company Secretary)
Date : 30th day of December 2015
Place : Kolkata
40
Annexure-I
Directors’ Responsibility Statement
the directors accept the responsibility for the integrity and objectivity of the profit & loss account for the financial year ended 31st March 2015 and the balance sheet as at that date (“financial statements”) and confirm pursuant t0 section 134 (5) that: (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;
(a) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by the Company and that such internal
financial controls are adequate and were operating effectively.
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and
that such systems were adequate and operating effectively.
For and on behalf of the Board
Sd/-
For and on behalf of the Board
Sd/-
Director Director
41
Annexure II
Form No. MGT-9 EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31st March, 2015 of
HALDIA PETROCHEMICALS LIMITED
[Pursuant to Section 92(1) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
i) CIN: U23209WB1985SGC039487
ii) Registration Date: 16/09/1985
iii) Name of the Company: Haldia Petrochemicals Limited
iv) Category / Sub-Category of the Company: Petro Chemical
v) Address of the Registered Office and contact details: 1 Auckland Place, Kolkata-700017
vi) Whether listed Company : No
vii) Name, Address and contact details of Registrar & Transfer Agents (RTA), if any: Karvy Computershare Pvt. Ltd, Karvy Selenium Tower B | Plot number 31 & 32 | Financial District |Nanakramguda | Serilingampally Mandal | Hyderabad - 500032 | India P : +91 040 67161603
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the Company shall be stated:-
Sl. No.
Name and Description of main products / Services
NIC Code of the Product/ service
% to total turnover of the Company
1. High Density Polyethylene (HDPE) 390120 40.01%
2. Linear Low Density Polyethylene (LLDPE) 390110 11.86%
3. Polypropylene (PP) 390210 26.56%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -
S. N0
NAME AND ADDRESS OF
THE COMPANY
CIN/GLN
HOLDING/ SUBSIDIARY/ ASSOCIATE
% of shares held
Applicable Section
1. Haldia Cracker 45201WB1998PLC086768 Subsidiary 100 2(87)
42
Complex Limited
2. Haldia River Side Estate Limited
U45202WB1998PLC087462 Subsidiary 99.99% held by HCCL (a 100% subsidiary of HPL), rest held by HPL
3. Bengal Cracker Complex Limited
U24100WB2015PLC205383
Subsidiary 100 2(87)
(iv). Shareholding of Directors and Key Managerial Personnel:
Sl. No.
For Each of the Directors and KMP
Shareholding at the beginning
of the year
Cumulative Shareholding during the year
No. of shares % of total shares of
the Company
No. of shares % of total shares of
the Company
At the beginning of the year
VIJAY K. CHAUDHRY 4500000 0.27% 4500000 0.27%
AJAY PANDEY 1 0.00% 1 0.00%
Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc)
NA
At the end of the year
VIJAY K. CHAUDHRY 4500000 0.27% 4500000 0.27%
AJAY PANDEY 1 0.00% 1 0.00%
43
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Secured Loans
excluding deposits Unsecured Loans Deposits Total Indebtedness
Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Prepaid interest iv) Interest accrued but not due
17,377,805,825.93 559,945,049.46 (372,771,625.33) 15,512,294.03
1,000,000,000.00
29,835,618.00
-
-
18,377,805,825.93
589,780,667.46
(372,771,625.33)
15,512,294.03
Total (i+ii+iii+iv) 17,580,491,544.09 1,029,835,618.00
-
18,610,327,162.09
Change in Indebtedness during the financial year
• Addition
• Reduction
52,587,582,605.69 (31,251,807,316.18)
2,046,783,177.97
(870,800,000.00)
54,634,365,783.66
(32,122,607,316.18)
Net Change 21,335,775,289.51 1,175,983,177.97
-
22,511,758,467.48
Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Prepaid interest iv) Interest accrued but not due
38,281,178,177.17 703,133,357.87 (107,839,692.24) 39,794,990.80
2,012,060,800.00
193,757,995.97
-
-
40,293,238,977.17 896,891,353.84 (107,839,692.24) 39,794,990.80
Total (i+ii+iii+iv) 38,916,266,833.60 2,205,818,795.97 - 41,122,085,629.57
Note: Addition includes: Bills discounted with parties, previously grouped under Trade Payables financed by loans received against Rupee Loan Facilitation Agreement. Interest due on term loans financed by loans received against Rupee Loan Facilitation Agreement. Reduction includes Rs 875 cr transferred to wholly owned subsidiary BCCL as part of sale of business undertaking.
44
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
In case any item is not applicable, write "NA"
Sl
No. Name of the Director
Directors' Remuneration Remarks
FY 14-15 FY 13-14
1 Managing Director 5,239,726 7,500,000 12-Dec-14 to 31-Mar-15 no MD on
rolls.
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER/WTD
Remuneration to other directors: NA
In case any item is not applicable, write "NA"
Sl No. Position
Remuneration (Rs. in Lac) %
Increase
YoY
Remarks
FY 14-15 FY 13-14
1 MD 5,239,726 7,500,000 -30% 12-Dec-14 to 31-Mar-15 no MD on rolls.
2 CFO 5,467,161 1,991,153 174%
After separation of CFO (Mr. DS Chakrabarti) on 10-Sept-13, Company Secretary (Mr. Aloke K Chattopadhyay) had taken additional responsibility of CFO till the new CFO (Mr. Bhaswar Mukherjee) joined on 02-Jun-14.
3 Company Secretary
2,412,431 4,811,680 -49% Company Secretary (Mr. Aloke K Chattopadhyay) separated on 30-Sept-14. New CFO & Company Secretary (Mr. Ashutosh Bose) joined on 02-Feb-15.
45
Annexure III
Statement containing salient features of the financial statement of subsidiaries
Rs in million
Name of the subsidiary Haldia
Cracker
Complex
Limited
Haldia
Riverside
Estates
Limited
Bengal
Cracker
Complex
Limited
1. Reporting period for the subsidiary concerned,
if different from the holding Company’s reporting
period
2. Reporting currency and Exchange rate as on the last
date of the relevant Financial year in the case of
foreign subsidiaries.
3. Share capital
4. Reserves & surplus
5. Total assets
6. Total Liabilities
7. Investments
8. Turnover
9. Profit before taxation
10. Provision for taxation
11. Profit after taxation
12. Proposed Dividend
13. % of shareholding:
HPL
HCCL
N.A.
INR
6,175.60
(20.20)
6,155.75
6,155.75
6,155.10
0.04
(0.12)
0.02
(0.14)
-
100%
-
N.A.
INR
175.00
145.87
806.20
806.20
-
73.79
21.96
4.39
17.56
-
0.01%
99.99%
N.A.
INR
20,300.50
(25.18)
29,050.51
29,050.51
-
-
(25.18)
-
(25.18)
-
100%
-
46
Annexure IV
ANNEXURE - A
Statement of Particulars of employees pursuant to the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014
Sl.
No.
N a m e Designation/
Nature of Duties
Remuneration
Received [Rs.]
Qualificatio
n
Experienc
e in years
Age in
years
Date of
commenceme
nt of
employment
Last
employment
held
2230 Rabin
Mukhopadhyay
EVP-
Proc,Tech,HR&IT,
HSEF&New Proj
TCC
71,28,417
BE , PG Dip 37 59 01.07.2003 The
Chatterjee
Group
3467 Ashutosh Bose EVP, CFO & CS TCC
65,00,045
M.Com ,
LLB,ACS,
AICWA,
FCMA,
J. Dip.M.A.
50 72 02.02.2015 HPL
47
ANNEXURE – V
CONSERVATION OF ENERGY ENERGY CONSERVATION MEASURES TAKEN
FORM A Form for disclosure of particulars with respect to conservation of energy
A. POWER AND FUEL CONSUMPTION
1. ELECTRICITY
(A) PURCHSED (FROM WBSEB) 2013-14 2014-15
Total Units (Million kwh)
Total Units (Rs. Million)
Rate per unit (Rs.)
44.97 51.90
(B) OWN GENERATED
(I) THROUGH DIESEL GENERATOR
Total Units
Units per litre of diesel oil
Cost/Unit
(II) THROUGH GAS TURBINE/ STEAM
TURBINE/GENERATOR HPL
COGENERATION LIMITED
Total Units (Million kwh)
Units per kg of fuel (kwh) Cost/units
(Rs.)
NIL
501.12
NIL
219.53
2. COAL (SPECIFY QUALITY AND WHERE USED)
Quantity (Tonnes)
Total Cost
Average rate
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
3. LPG to fuel gas header
Quantity (metric tons)
Total amount (Rs. Million)
Average rate (Rs./MT)
11139 2679
(Fuel in NCU: 649
Fuel in CPP:2030)
4. FUEL CONSUMPTION IN CPP (naphtha total)
48
Naphtha (MT)
PCN (MT)
FGN (MT)
NRS / Py Gas (MT)
Fuel Gas (MT)
CLS (MT)
CBFS (MT)
HSD (MT)
Note – Naphtha (PCN,FGN,Pygas), CBFS data is
transfer figures from IOP to CPP
124026
55221
68804
347
24542
NIL
36173
78.5
59554
4102
55452
Nil
9784.4
NIL
16226
10.0
5. OTHERS/ INTERNAL GENERATION
FUEL GAS GENERATED DURING NAPHTHA
CRACKING
Quantity as FG consumed in NCU Heaters (MT)
Total Cost (Rs. Million)
Rate/ Unit (Rs./MT)
201798
199169
84352
81312
49
CONSERVATION OF ENERGY
ENERGY CONSERVATION MEASURES TAKEN
Energy conservation activities in FY 2014-15 were carried out in line with complex operation philosophy to have
optimum energy usage, primarily concentrated towards reduction in losses during low capacity utilization,
optimum use of energy during plant start-up and complex shut down periods. Taking the opportunity of long
shut down, a few energy saving schemes were implemented, like ‘dry ice cleaning’ of HRSGs (Heat Recovery
Steam Generators) which started giving results with the start-up of the plants. Energy Management Groups were
also restructured, roles and responsibilities of each group were reviewed and discussions held at various levels
to address issues to achieve better energy efficiency.
Major Energy Conservation Schemes Implemented in 2014–15
Performance improvement of HRSGs in Captive Power Plant (CPP) by application of ‘dry ice cleaning’ technologyReduction in LP steam consumption in deaerators in Naphtha Cracker Unit (NCU) & CPP by reducing the operating pressure of deaerators
Reduction in SHP steam consumption in Charge Gas Compressor (CGC) by reducing it’s surge margin in NCU
Optimum use of lights in plant and non-plant areas during complex shut down period
Reduction in excess air in Auxiliary Boilers at CPP by continuous monitoring
Reduction in steam loss by attending leakages & steam trap management across the complex
Like previous years, continuous efforts are also being exercised in the following areas: Reduction in grid import in view of operating philosophy of Gas Turbines & Condensing Steam Turbine
(CST) in CPP
Maximum utilization of process generated waste gas (RFG-residual fuel gas) to have minimum liquid fuel consumption in CPP
Efficient operation of furnaces & boilers
Maximum power generation from Back Pressure Steam Turbine (BPST) and optimization of steam let down through PRDSs
Steam trap management
Composite water treatment philosophy to optimize boiler blow down
Continuous exercise towards leak free system
Major energy saving schemes / survey / training programme being planned and under various stages of development, are as follows:
1. Thermography survey by external agency to access insulation health of entire steam network, furnaces, boilers etc.
2. Training on Energy Conservation by external agency at plant 3. Recovery of boiler blow down water to cooling tower basin in CPP 4. Recovery of condensate from CST ejector system 5. On-line compressor wash for Gas Turbines to improve efficiency
(a) Conservation of energy
50
(i) the steps taken or impact on conservation of energy
Mentioned as above
(ii) the steps taken by the Company for utilizing alternative sources of energy
NIL
(iii) the capital investment on energy conservation equipments
NIL
51
ANNEXURE – VI (b) Technology Absorption, Adaptation and Innovation
1. Efforts, in brief, made towards technology absorption, adaptation and innovation. 2. Benefits derived as a result of the above efforts, e.g. products improvement, cost reduction, product development, import substitution, etc.
CPP CPP DCS old generation GUS system has been phased out with
the most up-to-date EST system.
IOP Utilities like Instrument air, Plant air and Nitrogen fugitive losses
arrested, usage has been optimized through repetitive reviews
and monitoring at the user level. This has resulted power saving
as well.
Fuel grade naphtha receipt logistics through pipeline transfer
capability augmented and it gave additional flexibility in absence
of FGN availability from nearby IOC refinery.
NCU Installing parallel exchanger for RPG: Parallel RPG cooler installed last year, performance demonstrated in March’2015 when the standby cooler was taken out for maintenance. This has prevented plant downtime.
Depropanizer-1 pressure fluctuation problem: Installed butterfly valves at the outlet pipe of condenser, thermocouples at each condenser outlet HC & CW service and provided level indicators for condenser during July-Dec’2014 turnaround. This has aided smooth control of DP-1 pressure, demonstrated plant operation at design throughput in FY 2014-15.
Additive dosing - Quench & Process water system: Quench, process water PH control with conventional chemicals like ammonia and caustic becomes erratic and has the potential to contaminate monomer stream if exceeds its threshold limit. An amine based scheme developed and once implemented intended to control PH smoothly both in vapor and liquid phase.
ID fan tripping interlock from shaft shearing Engineered low cost solution in-house to alert plant operation and generate high priority alarms in Phase-1 while retaining the original hardware installed since original project against shearing of ID fan motor shaft in consultation with Technology Licensor & LSTK contractor (TEC). Based on the plant operational feedback, ESD logic will be implemented in phase-2 to trip the heater.
52
NCAU TBC unloading : TBC unloading system revamped to eliminate safety hazards and relocated to a safer place aimed to reduce cost of handling.
LLDPE/PP/HDPE Trial taken with Finastat163 in plant to develop an alternative to Atmer-163, further trial at higher throughput planned to establish compatibility. Polymer catalyst from two vendors, which are already running successfully in other Mitsui HDPE plants, has been evaluated and shortlisted for plant trial. Market trials of their product and operating data from respective plants indicate comparable product quality and advantages in plant operation.
The expenditure incurred on
Research and Development
a. Capital b. Recurring c. Total d. Total R&D expenditure as a
percentage of total turnover
NIL
Rs 1,55,504.69
Rs 1,55,504.69
0.0005%
(c) Foreign exchange earnings and Outgo During the year, the total foreign exchange used was Rs 420.08 million and the total foreign exchange
earned was Rs 4,892.04 million.
53
Annexure VII
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31.03.2015
[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment
and Remuneration Personnel) Rules, 2014]
To, The Members, Haldia Petro Chemicals Limited 1, Auck Land Place
INDIA – 700017
54
We have conducted the Secretarial Audit in compliance with the applicable statutory provisions and adherence to good corporate practices by Haldia Petro Chemicals Limited.(hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Haldia Petro Chemicals Limited books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31.03.2015 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31/03/2015 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made there under( As per Annexure-1 );
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under; ( Not
Applicable )
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; -( As per Annexure- 2)
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; ( Not applicable )
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- ( Not Applicable)
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
55
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (vi) Factories Act 1948 ( Details are as per annexure-3 ) ( vii) Provident Fund Act ( Details are as per annexure-4 ) ( viii ) Payment of Gratuity Act 1972 ( Details are as per annexure-5 ) ( ix ) Sexual Harassment ( Prevention and Redressal ) Act 2013 ( Details are as per annexure-6 ) ( x ) Petroleum Rules( As per Annexure-7 ) ( xi ) West Bengal Fire Services Act 1950( As per Annexure-8 ) ( xii ) The Environment Protection Act 1986 ( As per Annexure-9 ) ( xiii ) The Hazardous Waste Rules 2008( As Per Annexure-10 ) ( XIV) The Static and Moblile pressure Rules 1981 ( As per Annexure- 11 ) ( XV) The Radiation and Protection Rules ( As per Annexure-12 ) ( XVI) The Explosive Act 1884 ( As per Annexure-13 ) ( XVII) Industrial Disputes Act 1947( As per Annexure-14 ) ( XVIII ) The payment of wages Act 1936 ( As per Annexure-15 ) ( XIX ) The Employees State Insurance Act 1948 ( As per Annexure-16 )
We have also examined compliance with the applicable clauses of the following: During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations: We further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors and Non-Executive Directors. However The Company did not appoint any Independent Director and Women Director in the Board within the reporting period( details are as per Annexure-1). The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice was given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance. A system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through and recorded as part of the minutes. We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
56
We further report that during the audit period the Company had formed a wholly owned subsidiary namely Bengal Cracker Complex Limited and has transferred it’s one undertaking worth Rs2030 crore under slump sale basis and the Company has taken the required approval from it’s share holders in the general meeting.
Date : 22.12.2015
Place: Kolkata S.SARKAR & ASSOCIATES
Company Secretaries
SANDIP SARKAR
( Proprietor )
Membership No-FCS 7524
CP No-9483
57
Annexure-1
Companies Act 2013
The shares and any other securities of the Company are not listed with any stock exchange and therefore none
of the provision of listed companies are applicable to the Company.
On the basis of our verification and examination we hereby report the details of the compliance under the
Companies Act as follows:
The Board of Directors duly during the year and as per information and explanations given by the management,
in respect of which, proper notices were sent to all the Directors and the gap between two Board meetings was
within one hundred and twenty days. The proceedings were properly recorded and the Minutes Book
maintained for the purpose was signed. Further the Company holds other committee meeting after giving
proper notice. However the Company did not hold the meeting of the Independent Directors in compliance of
schedule IV of the Companies Act 2013.
1. The Directors of the Company has failed to disclosed their interest in terms of the Section 184( 1) of the Companies Act 2013 in the First Board meeting of the Year.
2. The Company has complied the Provision of Section 152(6 ) of the Companies Act 2013 in relation to retirement of Directors by rotation.
3. The annual general meeting for the financial year ended on 31st March, 2014 was held on 26.09.2014 as per the information and explanation given by the management. The Company had given adequate notice to the members of the Company and the Resolutions passed thereat were duly recorded in Minutes Book maintained for the purpose.
4. The Board of Directors duly constituted Committee of Directors like Audit Committee, Nomination and Remuneration Committee. According to the explanation given by the management of the Company in view of the Management change and the Share Purchase Agreement executed between the promoters of Company it were not being able to dilute the Director composition of the Board and for that reason the Company has not appointed any Independent Director and Women Director during the period, so the Nomination and Remuneration Committee and the Audit Committee could not be constituted according to the provisions of the Companies Act 2013.
5. The Company has failed to appoint Key managerial personnel in relation to Chief Financial officer and designate the Managing Directors as a Key Managerial person within a period of six months from the commencement of Section 203 of the Companies Act 2013. Although Company has subsequently appointed Chief Financial officer at the Board meeting and has filed the required forms and returns with the Registrar of Companies, West Bengal within the specified time limit. Although the position of Key managerial personnel is a whole time position, Inspite of that an individual is holding two position of key managerial person in the Company.
6. The Company has made investment in terms of Section 186 of the Companies Act 2013 and has complied the provisions of the said section.
58
7. The Company has not advanced any loans to its directors or persons or firms or companies referred to under section 185 of the Companies Act 2013.
8. The Company was not required to comply with the provisions of section 188 of the Companies Act 2013 in respect of contracts specified in that section.
9. The Company has made necessary entries in the register maintained under section 184 of the Act.
10. The Board of Directors duly constituted Committee of Directors like Audit Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee. However the above committees were formed without appointing the Independent Director.
11. The remuneration paid to Managing Director is within the limit as specified in Section 197 read with Schedule V of the Companies Act 2013.
12. On 4th November, 2014, the Company hold a Board meeting and in which a decision of borrowing of an amount Rs2500 crore has been taken but failed to report the same to the Registrar of Companies, West Bengal in terms of section 117(3)(g) of the Companies Act 2013.
13. The Company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar and/or such authorities prescribed under the various provisions of the Act during the financial year in relation to any matter.
14. The Company has not issued any shares or other securities during the financial year.
15. The Company has not bought back any shares during the financial year.
16. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares.
17. The Company has not invited/accepted any deposits including any unsecured loans falling within the purview of Section 74 of the Companies Act 2013 during the financial year.
18. The Company has not altered the provisions of Memorandum with respect to situation of the Company's registered office from one State to another during the year under scrutiny
19. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the year under scrutiny.
20. The Company has not altered the provisions of the Memorandum with respect to the name of the Company during the year under scrutiny.
21. The Company has not altered the provisions of the Memorandum with respect to share capital of the Company during the year under scrutiny.
22. The Company has not altered its Articles of Association during the financial year.
23. The Company has adequate internal control system in relation to it’s size and operational activiies.
59
Annexure- 2
The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
The Company has entered into an agreement with National Securities Depositories Limited (
NSDL ) and Central Depository Services Limited( CDSL ) to dematerialize it’s equity shares.
Annexure -3
Factories Act 1948
The Company holds valid factory license to operate it’s Factory units situated at Haldia. The
Company has appointed an occupier as per provision of the Factories Act 1948.The Company
has provided the sufficient number of canteen and urinal facilities to it’s workers in terms of
health and welfare measures. The Company has not engaged any child labour in it’s factory.
Annexure-4
Provident Fund Act 1952
The Company is regular to deposit the provident fund and regularly submit the returns with the
Authority.
Annexure-5
Payment of Gratuity Act 1972
The Company has constituted the gratuity trust and appointed trustees over there. We have found that
the all payments made during the period were according to the provisions of the Act. However
there are two death cases found during the year where the payment has been made
beyond Thirty days of time.
Annexure-6
THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION &
REDRESSAL) ACT, 2013
60
The Company has constituted a committee to prevent the sexual harassment at the work place as per
Vishakha guidelines during the reporting period. However it did not appoint any lady representative
from an independent agency as per provision of the Act.
Annexure-7
Petroleum Rules
The Company has valid licence to import a transport the petroleum products and it has also complied
the other provisions of the said rules.
Annexure-8
West Bengal Fire Services Act 1950
The Company is holding a valid licence issued by West Bengal Fire Services Act 1980 during the
reporting period. Further as per information provided by the management of the Company during the
reporting period there was no penalty has been imposed under the said act.
Annexure-9
The Environment Protection Act 1986
As per information and explanation given by the management the Company has complied all terms and
conditions in relation to the Environment Protection Act 1986.
Annexure-10
The Hazardous Waste Rules 2008
The Company is authorised to handle the hazardous waste under the Hazardous Waste Rules 2008 and
has maintained the details record in Form 3. Further it has submitted the Return with State Pollution
Control Board in Form 4.
Annexure-11
The Static and Moblile pressure Rules 1981
The Company has obtained the authorisation issued by Chief Controller under the Static and Mobile
Pressure Rules 1981. The Company has conducted a safety audit during the reporting period and as per
that audit report the proper safety measures has been taken by the Company including other provision
as per the Static and Mobile pressure Rules 1981.
Annexure-12
The Radiation and Protection Rules
The Company has licence to establish a radiation installation for siting, design, construction,
commissioning etc. As per information given by the management that the Company has not appointed
any person who has not attained the age of 18 years to deal in this matter.The Company has
61
mantained the copy of the list of worker as per prescribed format.Further as per the safety Audit
Report the Company has complied the all requirements of safety measures
Annexure-13
The Explosive Act 1884
The Company has obtained a licence From the controller of explosives East Circle, Kolkata to deal in
explosive matters and the said licence is valid upto 30th September, 2017.
Further as per explanation given by the management it has not engaged any person who has not
attained the age of 18 years to deal in the matter.
Annexure-14
Industrial Disputes Act 1947
The Company maintain the details of master roll as per section 25D under ERP system. Details of the
works committee as per section 3 of the act. exist in the form of Canteen Committee, Departmental
Quality Teams ( DQT ) and Central Safety Committee ( CSC ) etc. The Company maintained the
grievance Redressal committee as per section 9C of the Act under online system for addressing
grievances related to general administration. As per information provided by the management there is
no employee has been retrenched during the reporting period.
Annexure-15
The payment of wages Act 1936
The Company pays it’s monthly wages payment to its worker by 10th of subsequent month. Further as
per explanation given by the management there is no deduction from wages of any worker has been
made on account of damage or loss.
Annexure-16
The Employees State Insurance Act 1948
The Company has maintained online Register of its employees during the reporting period and filed
the Annual Return with the Authority. Further as per information given by the management there is no
fatal accident occurred to any worker during the reporting period.
62
Annexure VIII
Addendum I to the Directors Report 2014-15
Directors’ explanation to Auditors’ observation in terms of Sec 134(3)(f)of the Companies Act, 2013.
Management response to the Auditors’ Report/observation on the Standalone Balance Sheet as on 31stMarch,
2015and related Profit and Loss Account and Cash Flow Statement for the year ended 31st March, 2015.
Sl. No.
Audit Report Reference
Audit Observation Management Response
1 Para 2 of the Basis for Qualified Opinion of main Audit Report
Stock of stores and spares (Note No. 15 to Standalone financial statements) includes stock of Rs. 456.74 million lying non-moving for a considerable period of more than 5 years. In the absence of any laid down policy of the Company for ascertainment of value of such stock and providing for loss arising there from, we are unable to comment on the impact in this respect on the financial statements.
The company has a system of perpetual physical verification of stock and determination of obsolete items. Based on such system obsolete items have been determined from time to time and necessary provision has been made in the books for the same.
2 Para 3 of the Basis for Qualified Opinion of main Audit Report
Attention is drawn to Note No. 36.1 to the Standalone financial statements regarding remuneration of Rs. 31.95 million paid to the Managing Director of the Company in 2005-2011, which is subject to necessary approvals from the shareholders and Central Government’s assent to that effect.
Mr. S K Bhowmik has filed a civil suit and therefore the matter is sub-judice.
3 Para 4 of the Basis for Qualified Opinion of main Audit Report
Attention is drawn to Note No. 32 to the Standalone financial statements of the Company regarding sale of Naphtha Cracker Business to its wholly own subsidiary, Bengal Cracker Complex Limited (BCCL) on a slump sale basis for a consideration of Rs. 20,300 million (net) based on the valuation report submitted by a firm of chartered valuers. The appropriateness of the value so considered and the resultant impact thereof as such cannot be commented upon by us.
Based on the decision taken by the Board of Directors of the Company and approved by the shareholders through a special resolution at an extra ordinary general meeting held on 20th January 2015, a business transfer agreement was signed on 28th March 2015 for transfer of the Naphtha Cracker Business of the Company to its wholly owned subsidiary Bengal Cracker Complex Limited (BCCL) on a slump sale basis for a consideration of Rs. 29,050 million along with a loan liability of Rs 8,750 million, as a part of restructuring. The consideration for transfer of the business has been determined based on valuation report of an independent firm of Chartered Valuers.
4 Para 1 of Emphasis of Matter of the main Audit Report
We draw attention to the financial statements which indicates that the company has accumulated losses and its net worth has been substantially eroded, the company has incurred operating loss during the current and previous year(s), the company’s current
The management feels that the company has an inherent strength to sustain and grow because of its modern plant & technology, skilled manpower and wide demand of its high quality products. During the year under
63
liabilities exceeds its current assets and the company is having a very high debt-equity ratio as at the balance sheet date. These conditions indicate the existence of material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern. However, the financial statements of the company have been prepared on a going concern basis for the reasons stated in the note no. 44 to the Standalone Financial Statements. Our opinion is not modified in respect of this matter.
consideration the Company continued its operations at sub-optimal level including closure of plant operations for about seven months (July 2014 to January 2015). due to inadequate working capital. However, with interim refinancing support from the lenders and promoters contribution, the Company restarted its operations in February 2015. Post restart of plant operations, the Company is operating at almost full capacity and earning positive contribution. Accordingly the Company does not foresee any difficulty in continuing its operations as a going concern.
5 Para 8 of the Annexures of the Annexure to the Auditors’ Report
The Company’s accumulated losses are more than 50% of the net worth as at the end of the financial year. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.
The para represents factual position and does not require any specific explanation.
6 Para 9 of the Annexures of the Annexure to the Auditors’ Report
Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions, and banks during the year and the period end amount of defaults are as hereunder. The Company has neither any outstanding debenture at the beginning of the year nor has it issued any debentures during the year.
This is due to stringent financial condition and continuing cash losses. During the year under consideration the Company continued its operations at sub-optimal level due to critical working capital condition, including closure of plant operations for about seven months (July 2014 to January 2015). Later, with interim refinancing support from the lenders and promoters contribution, the Company restarted its operations in February 2015. Post restart of plant operations, the company is operating at almost full capacity and earning positive contribution. Further, it may be noted that subsequent to 31st March 2015, all overdue interests (other than interest on unsecured loan from a Promoter - WBIDC) have been paid off.
64
Addendum I to the Directors Report 2014-15
Directors’ explanation to Auditors’ observation in terms of sec 134(3)(f) of the Companies Act, 2013.
Management response to the Auditors’ Report/observation on the Consolidated Balance Sheet as on 31stMarch,
2015and related Profit and Loss Account and Cash Flow Statement for the year ended 31st March, 2015.
Sl. No.
Audit Report Reference
Audit Observation Management Response
1 Para 2 of the Basis for Qualified Opinion of main Audit Report
Stock of stores and spares (Refer Note No. 15.3 to consolidated financial statements) includes stock of Rs. 456.74 million lying non-moving for a considerable period of more than 5 years. In the absence of any laid down policy of the Holding Company for ascertainment of value of such stock and providing for loss arising there from, we are unable to comment on the impact in this respect on the consolidated financial statements.
The company has a system of perpetual physical verification of stock and determination of obsolete items. Based on such system obsolete items have been determined from time to time and necessary provision has been made in the books for the same.
2 Para 3 of the Basis for Qualified Opinion of main Audit Report
Attention is drawn to Note No. 34.1 to the consolidated financial statements regarding remuneration of Rs. 31.95 million paid to the Managing Director of the Holding Company in 2005-2011, which is subject to necessary approvals from the shareholders and Central Government’s assent to that effect.
Mr. S K Bhowmik has filed a civil suit and therefore the matter is sub-judice.
3 Para 1 of Emphasis of Matter of the main Audit Report
We draw attention to the consolidated financial statements which indicates that the Group has accumulated losses and its net worth has been substantially eroded, the Group has incurred operating loss during the current year, the Group’s current liabilities exceeds its current assets and the Group is having a very high debt-equity ratio as at the balance sheet date. These conditions indicate the existence of material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. However, the consolidated financial statements of the Group have been prepared on a going concern basis for the reasons stated in the Note No. 42 to the consolidated financial statements. Our opinion is not modified in respect of this matter.
The management feels that the company has an inherent strength to sustain and grow because of its modern plant & technology, skilled manpower and wide demand of its high quality products. During the year under consideration the Company continued its operations at sub-optimal level including closure of plant operations for about seven months (July 2014 to January 2015). due to inadequate working capital. However, with interim refinancing support from the lenders and promoters contribution, the Company restarted its operations in February 2015. Post restart of plant operations, the Company is operating at almost full capacity and earning positive contribution. Accordingly the Company does not foresee any difficulty in continuing its operations as a going concern.
65
4 Para 8 of the Annexures of the Annexure to the Auditors’ Report
In our opinion and the opinion of the other auditors and according to the information and explanations given to us and to the other auditors, the covered entities have consolidated accumulated losses more than 50% of the consolidated net worth as at the end of the financial year. The covered entities have incurred consolidated cash losses during the financial year covered by the audit. This being the first year of preparation of consolidated financial statements we cannot comment whether there was a cash loss in the immediately preceding financial year.
The para represents factual position and does not require any specific explanation.
5 Para 9 of the Annexures of the Annexure to the Auditors’ Report
In our opinion and the opinion of the other auditors and based on our audit procedures and according to the information and explanation given to us, the holding company has defaulted in repayment of dues to financial institutions, and banks during the year and the period and amount of defaults are as hereunder. The covered entities have neither any outstanding debenture at the beginning of the year nor have they issued any debentures during the year.
This is due to stringent financial condition and continuing cash losses. During the year under consideration the Company continued its operations at sub-optimal level due to critical working capital condition, including closure of plant operations for about seven months (July 2014 to January 2015). Later, with interim refinancing support from the lenders and promoters contribution, the Company restarted its operations in February 2015. Post restart of plant operations, the company is operating at almost full capacity and earning positive contribution. Further, it may be noted that subsequent to 31st March 2015, all overdue interests (other than interest on unsecured loan from a Promoter - WBIDC) have been paid off.
66
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF HALDIA PETROCHEMICALS LIMITED Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of HALDIA PETROCHEMICALS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss,the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevanttothepreparationand presentationofthefinancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under section 143 (10) of the Act. Those Standardsrequire thatwecomplywithethicalrequirementsandplanand perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
67
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
Basis for Qualified Opinion 1. Stock of stores and spares (Note No. 15toStandalone financial statements) includes stock of Rs. 456.74
million lying non-moving for a considerable period of more than 5 years. In the absence of any laid down policy of the Company for ascertainment of value of such stock and providing for loss arising there from, we are unable to comment on the impact in this respect on the financial statements.
2. Attention is drawn to Note No. 36.1to the Standalone financial statements regarding remuneration of Rs. 31.95 million paid to the Managing Director of the Company in 2005-2011, which is subject to necessary approvals from the shareholders and Central Government’s assent to that effect.
3. Attention is drawn to Note No. 32to the Standalone financial statements of the Company regarding sale of Naphtha Cracker Business to its wholly own subsidiary, Bengal Cracker Complex Limited (BCCL) on a slump sale basis for a consideration of Rs. 20,300 million (net) based on the valuation report submitted by a firm of chartered valuers. The appropriateness of the value so considered and the resultant impact thereof as such cannot be commented upon by us.
Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its profit and its cash flows for the year ended on that date. Emphasis of Matter We draw attention to the financial statements which indicates that the company has accumulated losses and its net worth has been substantially eroded, the company has incurred operating loss during the current and previous year(s), the company’s current liabilities exceeds its current assets and the company is having a very high debt-equity ratio as at the balance sheet date. These conditions indicate the existence of material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern. However, the financial statements of the company have been prepared on a going concern basis for the reasons stated in the note no. 44to the Standalone Financial Statements.Our opinion is not modified in respect of this matter. Other Matter Subsequent to adoption of accounts by the Board of Directors on 22nd December 2015, the Government of India vide their letter dated 29th December 2015 has advised the licensing authority i.e. the DGFT / Dept. of Commerce to extend the period of fulfilling the export obligation against the advance authorizations with the conditions as specified in the note no. 30 to the financial statements. By virtue of such extension of the time period, the said export obligation has been disclosed under the contingent liability under note no. 29 to the financial statements. Our procedures on subsequent event are restricted solely to the amendment of the financial statement as described in the aforesaid notes. In view of the subsequent development, we are issuing this supplementary audit report in supersession of our earlier audit report dated 22nd December, 2015 by removing the qualification given on the aforesaid issue.Our opinion is not modified in respect of this matter.
68
Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”)issued by the Central
Government of India in terms of sub-section 11 of section 143 of the Act, we give in the Annexure– 1, a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. We are enclosing our report in terms of sub-section 5 of section 143 of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure – 2on the directions and sub-directions issued by Comptroller and Auditor General of India.
3. As required under provisions of section 143 (3) of the Act, we report that:
69
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d. Except for the matter described in the “Basis for Qualified Opinion” paragraph, in our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014.
e. The going concern matter described under the “Emphasis of Matters” paragraphin our opinion, may have an adverse effect on the functioning of the Company.
f. On the basis of written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as directors in terms of section 164(2) of the Act.
g. With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 29 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For N. C. Banerjee & Co. For Singhi& Co. Chartered Accountants Chartered Accountants (FR No: 302081E) (FR No:302049E) (CA B. K. Biswas) (CA Pradeep Kumar Singhi) Partner Partner M. No. 055623 M. No. 050773
Place: Kolkata Date:30thday of December, 2015
70
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
ANNEXURES TO THE INDEPENDENT AUDITORS’ REPORT
Annexure 1 referred to in paragraph 1 with the heading “Report on Other Legal and Regulatory Requirements” of our report of even date issued to the members of HALDIA PETROCHEMCIALS LIMITED on standalone financial statements of the Company for the year ended 31st March, 2015.
1. a) On the basis of information and explanation made available to us, the company has maintained proper records
showing full particulars including quantitative details and situation of fixed assets.
b) The fixed assets are physically verified in a phased manner by the management to cover all the fixed assets in a time period of four years. In our opinion, the frequency of verification is reasonable having regard to the size of the company and nature of the assets. As per the information and explanationsgiven to us by the management, no material discrepancies as compared to book records were noticed in respect of fixed assets physically verified during the year.
2. a) As per the information and explanations provided to us the inventories of the company (excluding stock with third party and stock in transit) have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations given to us, the procedures of verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.
c) On the basis of our examination of the inventory records, in our opinion, and according to the information and explanations given to us, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventories as compared to book records were not material.
3. The company has not granted any loans, secured or unsecured, to companies, firms or other parties during the year covered in the register maintained under section 189 of the Act. Consequently, the provisions of sub-clauses (a) and (b) of clause (iii) of paragraph 3 of the Order are not applicable.
4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of the inventory, fixed assets and sale of goods & services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
5. The company has not accepted any deposit and thus, directives issued by the Reserve Bank of India and provisions of Section 73 to 76 or any other provisions of the Companies Act, 2013 and rules framed thereunder will not be applicable on Company.
6. The Central Government has prescribed maintenance of cost records under section 148(1) of the Act, for the Company. We have broadly reviewed such accounts and records and are of the opinion that prima facie, the prescribed accounts & records have been made & maintained but no detailed examination of such records and accounts have been carried out by us.
7. a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess & other statutory dues, as applicable, with the appropriate authorities. We are informed that the Employee’s State Insurance Scheme is not applicable to the Company.
According to the information and explanations given to us, no undisputed payable in respect of the aforesaid statutory dues were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us and the records of the Company examined by us, the
dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess as
71
at 31st March, 2015 which have not been deposited on account of dispute and the forum where the disputes are pending are as under:
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
(Rs. in Million)
Sl. No.
Name of the Statute Nature of the Dues
Amount
Year to which it pertains
Forum
1. The Research & Development Cess Act, 1986
Cess 5.71 1996-97 Secretary, Technology Development Board, Government of India
2. Central Excise & Salt Act, 1944 Excise Duty
20.64 2002-12 Commissioner (Appeals), Kolkata
4.40 2002-03 Commissioner (Tribunal), Kolkata
4,087.91 2000-01 to 2011-12
Central Excise and Service Tax Appellate Tribunal, Kolkata
Total 4,112.95
3. Income Tax Act, 1961 Income Tax
101.78 2003-04 to 2010-11
Commissioner of Income Tax (Appeals)
70.89 2007-08 Tribunal, Kolkata
0.23 2004-05 Calcutta High Court
Total 172.90
4. Finance Act,1994 with regards to Service Tax
Service Tax
134.14 2002 to 2011 Tribunal - Kolkata
7.66 2004-05 to 2011-12
Commissioner (Appeals) – Kolkata
Total 141.80
5. West Bengal Value Added Tax Act, 2003
Value Added Tax
0.96 2005-06 & 2010-11
Revisional Board
Total 0.96
6. The Central Sales Tax Act, 1956
Central Sales Tax
5.02 2005-06 & 2010-11
Revisional Board
31.95 2011-12 to 2013-14
Additional Commissioner, Commercial Tax
Total 36.97
Grand Total
4,471.29
c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
8. The Company’s accumulated losses are more than 50% of the net worth as at the end of the financial year. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.
9. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions, and banks during the year and the period and amount of defaults are as hereunder. The Company has neither any outstanding debenture at the beginning of the year nor has it issued any debentures during the year.
72
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
(Rs. in Millions)
Sl. No. Nature of Loan Principal Default Interest Default
Amount From Amount From
i. Unsecured Loan from Promoter
(WBIDC) – Financial Institutions
165 28.02.2014 7.65 31.12.2013
165 31.05.2014 7.65 31.01.2014
165 31.08.2014 6.90 28.02.2014
165 30.11.2014 7.65 31.03.2014
165 28.02.2015 7.40 30.04.2014
8.53 31.05.2014
13.69 30.06.2014
16.01 31.07.2014
16.09 31.08.2014
15.66 30.09.2014
16.09 31.10.2014
15.45 30.11.2014
15.97 31.12.2014
16.21 31.01.2015
14.64 28.02.2015
8.17 31.03.2015
ii. Rupee Term Loan – Banks 4.64 31.01.2015
41.09 28.02.2015
90.79 31.03.2015
iii. Rupee Term Loan – Financial
Institution
1.99 31.01.2015
14.43 28.02.2015
19.87 31.03.2015
iv. Project Loan from Banks 8.25 28.02.2015
8.21 31.03.2015
73
Sl. No. Nature of Loan Principal Default Interest Default
Amount From Amount From
v. Working Capital Term Loan 2.62 31.12.2014
18.56 31.01.2015
36.31 28.02.2015
56.96 31.03.2015
vi. Foreign Currency Term Loans –
Financial Institutions
0.29 31.08.2014
0.13 30.09.2014
0.07 30.11.2014
6.60 28.02.2015
vii. Cash Credit 0.10 31.03.2015
viii. Short Term Working Capital Loan 40.99 31.03.2015
77.45 28.02.2015
215.02 31.03.2015
ix. Working Capital Demand Loan 19.40 28.02.2015
26.80 31.03.2015
x. Devolved Letters of Credit 8.66 31.10.2014
10. The company has given guarantee for loan taken by one of its subsidiaries from a financial institution. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.
11. On the basis of review of utilization of funds pertaining to term loans and related information and explanation given to us by the management, we are of the opinion that the term loans taken by the company have been applied for the purpose for which they were obtained.
74
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
12. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the companyand according to the information and explanations given to us, no fraud was noticed or reported during the year by the management.
For N. C. Banerjee & Co. For Singhi& Co. Chartered Accountants Chartered Accountants (FR No: 302081E) (FR No:302049E) (CA B. K. Biswas) (CA Pradeep Kumar Singhi) Partner Partner M. No. 055623 M. No. 050773 Place: Kolkata Date:30thday of December, 2015
75
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001 Annexure 2 referred to in paragraph 2 with the heading “Report on Other Legal and Regulatory Requirements” of our report of even date issued to the members of HALDIA PETROCHEMCIALS LIMITED on accounts of the Company for the year ended 31st March, 2015.
SL. NO.
Directions / Sub-Directions Auditors’ Comment
A. Directions
(I) Valuation of assets and liabilities:
If the Company has been selected for disinvestment, a complete status report in terms of valuation of Assets (including intangible assets and land) and Liabilities (including Committed and General Reserves) may be examined, including the mode and present stage of disinvestment process.
State Government vide a share purchase agreement dated 11th September, 2014 entered between West Bengal Industrial Development Corporation Limited (WBIDC), Government of West Bengal (GoWB), Chatterjee Petrochem (Mauritius) Company (CPMC), Essex Development Investments (Mauritius) Limited (Essex) and the Companyhas decided to disinvest its holding in the company. As per this agreement WBIDC has agreed to transfer 520 million shares of Rs. 10 each to CPMC & its affiliates upon fulfillment of conditions precedent. The government has gone for bidding process of disinvestment and the valuation of the company as a whole has been done through this bidding process itself. As the conditions precedent defined in the share purchase agreement are yet to be complied with, the disinvestment process is ongoing.
(II) Waiver / write-off of debts / loan / interest
To report whether there are any cases of waiver / write-off of debts / loans / interests etc. If yes, the reasons thereof and amounts involved.
As per the information and explanations provided to us by the company, no waiver/ write off of debts/ loan and interest has been granted by the company.
(III) Inventories
Whether proper records are maintained for inventories lying with third parties and assets received as gift from Government or other Authorities?
Proper records are maintained for inventories lying with third parties. We have been informed that the Company has not received any asset as gift from the Government or other authorities.
(IV) Legal / Arbitration cases
A report on age-wise analysis of pending legal / arbitration cases, including the reasons of pendency and existence / effectiveness of a monitoring mechanism for expenditure on all legal cases (foreign and local) may be given.
There are 106 pending legal/arbitration cases against the company. The age-wise classification obtained from the management is as under.
More than 15 years : 3Nos 10 to 15 years: 37 Nos 5 to 10 years : 42 Nos Less than 5 years: 24 Nos These cases are pending for hearing/ disposal at the respective forums. The company has a system for monitoring expenditure on legal cases (foreign and local) which in our view is effective.
B. Sub- Directions
1. Whether the Company’s pricing policy absorbs all fixed and variable cost of production as well as allocation of overheads?
Company fixes prices of its finished products based on the ruling international prices. For Domestic sales, prices are fixed based on import parity and competition. During the year under audit, due to adverse international market scenario and due to lack of utilization of the capacity of the plant, all fixed and variable cost of production as well as allocation of overheads could not be absorbed and the company has thus incurred operating losses during the year.
M/s N. C. BANERJEE & CO. M/s SINGHI & CO.
76
SL. NO.
Directions / Sub-Directions Auditors’ Comment
CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
2. Whether the Company has utilized the Government assistance for technology up-gradation/ modernization of its manufacturing process and timely submitted utilization certificates.
No Government assistance for technology up-gradation/modernization of its manufacturing process was taken during the year under review.
3. Whether the Company has fixed norms for normal losses and a system for evaluation of abnormal losses for remedial action is in existence.
The Company has fixed norms for normal losses which are built into the standard bill of material for each intermediary and finished product. Such norms are reviewed from time to time and revised, if necessary, depending on changes in manufacturing conditions.
The Company has a system to identify and evaluate the abnormal losses and as explained in such cases, the Company takes remedial measures, if required and this monitoring process is a continuous process.
4. What is the system of valuation of by-products and finished products? List out cases of deviation from its declared policy.
By-products are valued at net realizable value and their value is deducted from the cost of production of the main products.
Finished products are valued at lower of cost of production and net realizable value.
Cost of production is determined based on cost of raw material, costs that are directly related to production and a systematic allocation of fixed and variable production overheads.
During the period under review, there has been no deviation from the aforesaid policy of valuation of by-products and finished goods.
5. Whether the effect of deteriorated stores and spares of closed mills been properly accounted for in the books?
As the plant of the company is in operation, the clause is not applicable.
6. Whether the company has effective system for physical verification, valuation of stock, treatment of non-moving items and accounting the effect of shortage / excess noticed during physical verification?
The Company has an effective system for physical verification, valuation of stock, and accounting the effect of shortage/ excess noticed during the physical verification. For non-moving items of more than 5 years, no provision has been made in the accounts as referred in Para 1 under “Basis for Qualified Opinion” paragraph of our report of even date.
7. State the extent of utilization of plant and machinery during the year vis-à-vis installed capacity.
Installed capacity : 257 TPH (approx.) Utilized capacity: 01.04.2014 to 05.07.2014 - Approximately 50% 06.07.2014 to 29.01.2015 - Shutdown 30.01.2015 to 29.02.2015 - Approximately 64% 01.03.2015 to 31.03.2015 - Approximately 88%. All downstream plants operated matching Naphtha Cracker Business capacity.
8. Report the cases of discounts / commission in regard to debtors and creditors where the company has deviated from its laid down policy.
During the period under review, the company has issued various discounts as per the price lists on the basis of laid down discount policies. However, there have been cases wherein special discounts have been allowed which have been approved by the authorized personnel as defined in the delegation of authority. All the commission provided by the company is as per the individual agreements entered
77
by the company with the party.
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
For N. C. Banerjee & Co. For Singhi& Co. Chartered Accountants Chartered Accountants (FR No: 302081E) (FR No:302049E) Sd/- Sd/- (CA B. K. Biswas) (CA Pradeep Kumar Singhi) Partner Partner M. No. 055623 M. No. 050773 Place: Kolkata Date:30thday of December, 2015
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF HALDIA PETROCHEMICALS LIMITED Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of HALDIA PETROCHEMICALS LIMITED (“the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”). Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidatedfinancial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our qualified audit opinion on the consolidated financial statements.
109
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001 Basis for Qualified Opinion
4. Stock of stores and spares (Refer Note No. 15.3toconsolidatedfinancial statements) includes stock of Rs. 456.74 million lying non-moving for a considerable period of more than 5 years. In the absence of any laid down policy of the Holding Company for ascertainment of value of such stock and providing for loss arising there from, we are unable to comment on the impact in this respect on the consolidated financial statements.
5. Attention is drawn to Note No. 34.1to the consolidatedfinancial statements regarding remuneration of Rs. 31.95 million paid to the Managing Director of the Holding Company in 2005-2011, which is subject to necessary approvals from the shareholders and Central Government’s assent to that effect.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid consolidated financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2015 and their consolidated loss and their consolidated cash flows for the year ended on that date. Emphasis of Matter
We draw attention to the consolidated financial statements which indicates that the Group has accumulated losses and its net worth has been substantially eroded, the Group has incurred operating loss during the current year, the Group’s current liabilities exceeds its current assets and the Group is having a very high debt-equity ratio as at the balance sheet date. These conditions indicate the existence of material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. However, the consolidated financial statements of the Group have been prepared on a going concern basis for the reasons stated in the Note No. 42 to the consolidated financial statements. Our opinion is not modified in respect of this matter. Other Matters
a. We did not audit the financial statements of 3 subsidiaries whose financial statements reflect total assets ofRs. 36,012.46 million as at 31st March, 2015, total revenues of Rs. 73.83 million and net cash flows amounting to Rs. 0.83 million for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose report has been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiaries, is based solely on the report of the other auditors.
b. Subsequent to adoption of accounts by the Board Of Directors on 22nd December 2015, the Government of India vide their letter dated 29th December 2015 has advised the licensing authority i.e. the DGFT / Dept. of Commerce to extend the period of fulfilling the export obligation against the advance authorizations with the conditions as specified in the note no. 29 to the financial statements. By virtue of such extension of the time period, the said export obligation has been disclosed under the contingent liability under note no. 28 to the financial statements. Our procedures on subsequent event are restricted solely to the amendment of the financial statement as described in the aforesaid notes. In view of the subsequent development, we are issuing this supplementary audit report in supersession of our earlier audit report dated 22nd December, 2015 by removing the qualification given on the aforesaid issue.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the report of the other auditors and the financial statements.
110
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001 Report on Other Legal and Regulatory Requirements
4. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on the comments in the auditors’ reports of the Holding company and its subsidiary companies, incorporated in India, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
5. As required under provisions of section 143 (3) of the Act, we report that:
h. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements.
i. In our opinion proper books of account as required by law relating to the preparation of the consolidated financial statements have been kept so far as it appears from our examination of those books and the report of the other auditors.
j. The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
k. Except for the matter described in the “Basis for Qualified Opinion” paragraph, in our opinion the Consolidated Balance Sheet, Consolidated Statement of Profit and Loss and Consolidated Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of Companies (Accounts) Rules, 2014.
l. The going concern matter described under the “Emphasis of Matters” paragraph above, in our opinion, may have an adverse effect on the functioning of the Group.
m. On the basis of written representations received from the directors of the Holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the report of the other statutory auditors of its subsidiary companies, incorporated in India, none of the directors of the Group companies, incorporated in India, is disqualified as on 31st March, 2015 from being appointed as directors in terms of section 164(2) of the Act.
n. With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Group has disclosed the impact of pending litigations on the consolidated financial position of the Group in its consolidated financial statements – Refer Note 28to the consolidated financial statements;
ii. The Group did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies, incorporated in India.
For N. C. Banerjee & Co. For Singhi& Co. Chartered Accountants Chartered Accountants (FR No: 302081E) (FR No:302049E) (CA B. K. Biswas) (CA Pradeep Kumar Singhi) Partner Partner M. No. 055623 M. No. 050773
Place: Kolkata Date: 30thday of December, 2015
111
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
ANNEXURES TO THE INDEPENDENT AUDITORS’ REPORT
Annexure referred to in paragraph 1 with the heading “Report on Other Legal and Regulatory Requirements” of our report of even date Re: Haldia Petrochemicals Limited & its Subsidiaries (Covered Entities)
Our reporting on the CARO 2015 is on Holding Company and the subsidiary companies incorporated in India. The subsidiary companies financial statements have been audited by other auditors and our report in respect of these subsidiaries is based solely on the report of the other auditors, to the extent considered applicable for reporting under CARO 2015 in the case of the consolidated financial statements.
13. a) The covered entities, wherever applicable, have maintained proper records showing particulars, including quantitative details and situation of fixed assets;
c) Physical verification of fixed assets has been carried out to cover all items as per the practice of the respective covered entities, except for in case of Bengal Cracker Complex Limited wherein the fixed assets were acquired at the close of the business on 31st March, 2015 and thus no physical verification has been conducted, which in our opinion and in the opinion of the other auditor is reasonable to the having regard to the size of the respective covered entities and the nature of their business. As reported to us, no material discrepancies were noticed on such verification.
14. a) As per the information and explanations provided to us the inventories of the covered entities (excluding stock with third party and stock in transit) have been physically verified during the year by the management of the respective covered entities except for in case of Bengal Cracker Complex Limited wherein the stores and spares were acquired at the close of the business on 31st March, 2015 and thus no physical verification has been conducted. In our opinion and in the opinion of the other auditors, the frequency of verification is reasonable.
d) In our opinion and in the opinion of other auditors and according to the information and explanations given to us, the procedures of verification of inventories followed by the management of the respective covered entities are reasonable and adequate in relation to the size of the respective covered entities and the nature of their business.
e) On the basis of our examination of the inventory records, in our opinion and in the opinion of the other auditors, and according to the information and explanations given to us, the respective entities have maintained proper records of inventory. The discrepancies noticed on physical verification of inventories as compared to book records were not material.
15. The covered entities have not granted any loans, secured or unsecured, to companies, firms or other parties during the year covered in the register maintained under section 189 of the Act. Consequently, the provisions of sub-clauses (a) and (b) of clause (iii) of paragraph 3 of the Order are not applicable.
16. In our opinion and the opinion of the other auditor according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the covered entities and the nature of their business with regard to the purchase of the inventory, fixed assets and sale of goods & services. Further, on the basis of our examination of the books and records of the covered entities, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
17. In our opinion and the opinion of the other auditor and according to the information and explanations given to us, the covered entities has not accepted any deposit from Public under the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed there under.
18. In our opinion and the opinion of the other auditors and according to the information and explanations given to us and other auditors, the covered entities, wherever applicable, have maintained the books of account in respect of products, pursuant to the rule made by the Central Government of India regarding the maintenance of cost records as prescribed under section 148(1) of the Act. However, neither we nor the other auditors have made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
112
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
19. a) In our opinion and the opinion of the other auditors and according to the information and explanations given to us and the other auditors, the covered entities have generally been regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues during the year with the appropriate authorities.
According to the information and explanations given to us and the other auditors, no undisputed payable in respect of the aforesaid statutory dues were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.
d) According to the information and explanations given to us and the other auditors, the dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess as at 31st March, 2015 which have not been deposited with the appropriate authorities on account of any dispute by the respective covered entities and the forum where the disputes are pending as on 31st March, 2015 are as under:
(Rs. in Million)
Sl. No.
Name of the Statute Nature of the Dues
Amount
Year to which it pertains
Forum
1. The Research & Development Cess Act, 1986
Cess 5.71 1996-97 Secretary, Technology Development Board, Government of India
2. Central Excise & Salt Act, 1944
Excise Duty
20.64 2002-12 Commissioner (Appeals), Kolkata
4.40 2002-03 Commissioner (Tribunal), Kolkata
4,087.91 2000-01 to 2011-12
Central Excise and Service Tax Appellate Tribunal, Kolkata
Total 4,112.95
3. Income Tax Act, 1961 Income Tax
101.78 2003-04 to 2010-11
Commissioner of Income Tax (Appeals)
70.89 2007-08 Tribunal, Kolkata
0.23 2004-05 Calcutta High Court
Total 172.90
4. Finance Act, 1994 with regards to Service Tax
Service Tax
134.14 2002 to 2011 Tribunal - Kolkata
7.66 2004-05 to 2011-12
Commissioner (Appeals) – Kolkata
Total 141.80
5. West Bengal Value Added Tax Act, 2003
Value Added Tax
0.96 2005-06 & 2010-11
Revisional Board
Total 0.96
6. The Central Sales Tax Act, 1956
Central Sales Tax
5.02 2005-06 & 2010-11
Revisional Board
31.95 2011-12 to 2013-14
Additional Commissioner, Commercial Tax
Total 36.97
Grand Total
4,471.29
e) According to the information and explanations given to us and based on our examination of books of accounts of the Holding Company and based on reports of covered entities, no amount is required to be transferred to Investor Education and Protection Fund as required by the relevant provisions of the Companies Act, 1956 and rules made there under as on 31st March, 2015.
20. In our opinion and the opinion of the other auditors and according to the information and explanations given to us and to the other auditors, the covered entities have consolidated accumulated losses more than 50% of the consolidated net worth as at the end of the financial year. The covered entities have incurred consolidated cash losses during the
113
financial year covered by the audit. This being the first year of preparation of consolidated financial statements we cannot comment whether there was a cash loss in the immediately preceding financial year.
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
21. In our opinion and the opinion of the other auditors and based on our audit procedures and according to the information and explanation given to us, the holding companyhas defaulted in repayment of dues to financial institutions, and banks during the year and the period and amount of defaults are as hereunder. The covered entities have neither any outstanding debenture at the beginning of the year nor havethey issued any debentures during the year.
(Rs. in Millions)
Sl. No. Nature of Loan Principal Default Interest Default
Amount From Amount From
i. Unsecured Loan from Promoter
(WBIDC) – Financial Institutions
165.00 28.02.2014 7.65 31.12.2013
165.00 31.05.2014 7.65 31.01.2014
165.00 31.08.2014 6.90 28.02.2014
165.00 30.11.2014 7.65 31.03.2014
165.00 28.02.2015 7.40 30.04.2014
8.53 31.05.2014
13.69 30.06.2014
16.01 31.07.2014
16.09 31.08.2014
15.66 30.09.2014
16.09 31.10.2014
15.45 30.11.2014
15.97 31.12.2014
16.21 31.01.2015
14.64 28.02.2015
8.17 31.03.2015
ii. Rupee Term Loan – Banks 4.64 31.01.2015
41.09 28.02.2015
90.79 31.03.2015
iii. Rupee Term Loan – Financial 1.99 31.01.2015
114
Sl. No. Nature of Loan Principal Default Interest Default
Amount From Amount From
Institution 14.43 28.02.2015
19.87 31.03.2015
iv. Project Loan from Banks 8.25 28.02.2015
8.21 31.03.2015
v. Working Capital Term Loan 2.62 31.12.2014
18.56 31.01.2015
36.31 28.02.2015
56.96 31.03.2015
vi. Foreign Currency Term Loans –
Financial Institutions
0.29 31.08.2014
0.13 30.09.2014
0.07 30.11.2014
6.60 28.02.2015
vii. Cash Credit 0.10 31.03.2015
viii. Short Term Working Capital Loan 40.99 31.03.2015
77.45 28.02.2015
215.02 31.03.2015
ix. Working Capital Demand Loan 19.40 28.02.2015
26.80 31.03.2015
x. Devolved Letters of Credit 8.66 31.10.2014
22. In our opinion and the opinion of the other auditors and based on our audit procedures and according to the
information and explanations given by the management to us and to the other auditors, the covered entities have not given any guarantee for loans taken by others from banks or financial institutions.
23. In our opinion and the opinion of the other auditors and based on our audit procedures and according to the information and explanations given by the management to us and to the other auditors, the covered entities, wherever applicable, have applied term loans for the purpose for which they were obtained during the year.
24. During the course of our examination of the books and records of the covered entities carried out in accordance with the generally accepted auditing practices in India, in the our opinion and the opinion of the other auditors and according to the information and explanations given to us and to the other auditors, no instance of fraud on or by the covered entities, were noticed or reported during the year, nor have we been informed of any such case by the management.
115
M/s N. C. BANERJEE & CO. M/s SINGHI & CO. CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS COMMERCE HOUSE, 1ST FLOOR EMERALD HOUSE, 4TH FLOOR 2, GANESH CHANDRA AVENUE 1B, OLD POST OFFICE STREET KOLKATA – 700 013 KOLKATA – 700 001
For N. C. Banerjee & Co. For Singhi& Co. Chartered Accountants Chartered Accountants (FR No: 302081E) (FR No:302049E) Sd/- Sd/- (CA B. K. Biswas) (CA Pradeep Kumar Singhi) Partner Partner M. No. 055623 M. No. 050773 Place: Kolkata Date:30thday of December, 2015
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
HALDIA PETROCHEMICALS LIMITED
MGT 9 (IV) (i) Category - Wise Share Holding Between 31/03/2014 AND 31/03/2015
CATEGORY CODE CATEGORY OF SHAREHOLDER
NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR 31/03/2014
NO. OF SHARES HELD AT THE END OF THE YEAR 31/03/2015 %
CHANGE DURING THE YEAR
DEMAT PHYSICAL TOTAL
% OF TOTAL SHARES DEMAT PHYSICAL TOTAL
% OF TOTAL SHARES
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI)
(A) PROMOTER AND PROMOTER GROUP
(1) INDIAN
(a) Individual /HUF 0 13520172 13520172 0.80 0 13520172 13520172 0.80 0.00
(b) Central Government/State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00
(c) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00
(d) Financial Institutions / Banks 0 0 0 0.00 0 0 0 0.00 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total A(1) : 0 13520172 13520172 0.80 0 13520172 13520172 0.80 0.00
(2) FOREIGN
(a) Individuals (NRIs/Foreign Individuals) 0 0 0 0.00 0 0 0 0.00 0.00
(b) Bodies Corporate 0 0 0 0.00 0 0 0 0.00 0.00
(c) Institutions 0 0 0 0.00 0 0 0 0.00 0.00
(d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total A(2) : 0 0 0 0.00 0 0 0 0.00 0.00
Total A=A(1)+A(2) 0 13520172 13520172 0.80 0 13520172 13520172 0.80 0.00
(B) PUBLIC SHAREHOLDING
147
(1) INSTITUTIONS
(a) Mutual Funds /UTI 0 0 0 0.00 0 0 0 0.00 0.00
(b) Financial Institutions /Banks 127805755 0 127805755 7.57 127805755 0 127805755 7.57 0.00
(c) Central Government / State Government(s) 0 0 0 0.00 0 0 0 0.00 0.00
(d) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00
(e) Insurance Companies 0 0 0 0.00 0 0 0 0.00 0.00
(f) Foreign Institutional Investors 127400000 39507747 166907747 9.89 127400000 39507747 166907747 9.89 0.00
(g) Foreign Venture Capital Investors 0 0 0 0.00 0 0 0 0.00 0.00
(h) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
(i) Others 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total B(1) : 255205755 39507747 294713502 17.46 255205755 39507747 294713502 17.46 0.00
(2) NON-INSTITUTIONS
(a) Bodies Corporate 1350941944 25323911 1376265855 81.54 1350941944 25323911 1376265855 81.54 0.00
(b) Individuals
(i) Individuals holding nominal share capital upto Rs.1 lakh 10000 5003 15003 0.00 10000 5003 15003 0.00 0.00
(ii) Individuals holding nominal share capital in excess of Rs.1 lakh 3424000 0 3424000 0.20 3424000 0 3424000 0.20 0.00
(c) Others
(d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00
Sub-Total B(2) : 1354375944 25328914 1379704858 81.74 1354375944 25328914 1379704858 81.74 0.00
Total B=B(1)+B(2) : 1609581699 64836661 1674418360 99.20 1609581699 64836661 1674418360 99.20 0.00
Total (A+B) : 1609581699 78356833 1687938532 100.00 1609581699 78356833 1687938532 100.00 0.00
(C) Shares held by custodians, against which
148
Depository Receipts have been issued
(1) Promoter and Promoter Group
(2) Public 0 0 0 0.00 0 0 0 0.00 0.00
GRAND TOTAL (A+B+C) : 1609581699 78356833 1687938532 100.00 1609581699 78356833 1687938532 100.00
149
HALDIA PETROCHEMICALS LIMITED
TOP 100 SHAREHOLDERS COMPARISION REPORT BETWEEN 31/03/2014 AND 31/03/2015
Slno Dpid Folio/Client-Id Name of the Share Holder Category
No of Shares held as on31/03/2014
Change in Shareholding
No of Shares Held As on 31/03/2015
% Change in Shareholding
Reason for change
PLEDGE SHARES AS ON 31/03/2014
PLEDGE SHARES AS ON 31/03/2015
1 12400 1301240000081941
WEST BENGAL INDUSTRIAL DEVELOPMENT CORPORATION LTD
BODIES CORPORATES 674999996 0 674999996 0.00 0 0
2 29500 1302950000004264 CHATTERJEE PETROCHEM (MAURITIUS) COMPANY
BODIES CORPORATES 394082148 0 394082148 0.00 0 0
3 10100 1601010000011684 INDIAN OIL CORPORATION LIMITED
BODIES CORPORATES 150000000 0 150000000 0.00 0 0
4 13900 1601390000003443
WINSTAR INDIA INVESTMENT COMPANY LIMITED, PCC-WINS
FOREIGN INSTITUTIONAL INVESTORS 127400000 0 127400000 0.00 0 0
5 29500 1302950000005384
INDIA TRADE (MAURITIUS) LTD.
BODIES CORPORATES 107142852 0 107142852 0.00 0 0
6 C 000004 CHATTERJEE PETROCHEM (MAURITIUS) COMPANY
FOREIGN INSTITUTIONAL INVESTORS 38775000 0 38775000 0.00 0 0
7 IN300450 13813608 IDBI BANK LIMITED BANKS 27128521 0 27128521 0.00 0 0
8 T 000009 TATA MOTORS LIMITED BODIES CORPORATES 22499999 0 22499999 0.00 0 0
9 IN301524 30005534 THE TATA POWER COMPANY LIMITED
BODIES CORPORATES 22499999 0 22499999 0.00 0 0
10 IN303786 10000023 STATE BANK OF INDIA BANKS 12146800 0 12146800 0.00 0 0
11 IN301364 10000012 IFCI LIMITED INDIAN FINANCIAL INSTITUTIONS 10320951 0 10320951 0.00 0 0
150
12 IN301348 20002990 ICICI BANK LTD BANKS 10194085 0 10194085 0.00 0 0
13 IN300812 10000012 LIFE INSURANCE CORPORATION OF INDIA
INDIAN FINANCIAL INSTITUTIONS 9898305 0 9898305 0.00 0 0
14 IN300812 10491084 UNITED BANK OF INDIA BANKS 6508474 0 6508474 0.00 0 0 15 IN300812 10488056 BANK OF INDIA BANKS 6440678 0 6440678 0.00 0 0 16 IN300095 10719922 UNION BANK OF INDIA BANKS 5667144 0 5667144 0.00 0 0 17 IN301356 10001195 CANARA BANK-MUMBAI BANKS 5423729 0 5423729 0.00 0 0 18 C 000005 VIJAY K. CHAUDHRY PROMOTERS 4500000 0 4500000 0.00 0 0 19 IN302437 20005246 INDIAN OVERSEAS BANK BANKS 4390834 0 4390834 0.00 0 0 20 IN300812 10490813 ALLAHABAD BANK BANKS 3986440 0 3986440 0.00 0 0 21 IN302847 10000006 UCO BANK BANKS 2711864 0 2711864 0.00 0 0 22 IN300812 10006118 BANK OF BARODA BANKS 2711864 0 2711864 0.00 0 0 23 IN300812 10491156 INDIAN BANK BANKS 2711864 0 2711864 0.00 0 0 24 IN300386 10000004 DENA BANK BANKS 2169491 0 2169491 0.00 0 0
25 IN300564 10010120 AKM SYSTEMS PVT LTD BODIES CORPORATES 2000000 0 2000000 0.00 0 0
26 IN300079 10000949 CENTRAL BANK OF INDIA BANKS 1898305 0 1898305 0.00 0 0 27 IN301397 10024768 STATE BANK OF HYDERABAD BANKS 1898305 0 1898305 0.00 0 0
28 V 000002 VIJAY DIAMOND PTE LTD BODIES CORPORATES 1836000 0 1836000 0.00 0 0
29 IN300812 10001728 THE NEW INDIA ASSURANCE COMPANY LIMITED
INDIAN FINANCIAL INSTITUTIONS 1538983 0 1538983 0.00 0 0
30 IN300812 10000029 GENERAL INSURANCE CORPORATION OF INDIA
INDIAN FINANCIAL INSTITUTIONS 1538983 0 1538983 0.00 0 0
31 IN300812 10000543 UNITED INDIA INSURANCE COMPANY LIMITED
INDIAN FINANCIAL INSTITUTIONS 1448136 0 1448136 0.00 0 0
32 M 000008 RUPA SAMIR MEHTA PROMOTERS 1400000 0 1400000 0.00 0 0 33 IN300079 10001066 THE KARUR VYSYA BANK LTD BANKS 1355932 0 1355932 0.00 0 0 34 IN300812 10501028 PUNJAB NATIONAL BANK BANKS 1243661 0 1243661 0.00 0 0
35 IN300812 10000502 NATIONAL INSURANCE COMPANY LTD
INDIAN FINANCIAL INSTITUTIONS 1031864 0 1031864 0.00 0 0
36 M 000011 ANKIT DILIP KUMAR MEHTA PROMOTERS 1000000 0 1000000 0.00 0 0
37 M 000010 KOKILA NAVIN CHANDRA MEHTA PROMOTERS 1000000 0 1000000 0.00 0 0
38 K 000005 AMI RITESH KOTHARI PROMOTERS 1000000 0 1000000 0.00 0 0
151
39 C 000010 SIMONI H CHOKSI PROMOTERS 1000000 0 1000000 0.00 0 0 40 C 000009 AYESHA CHAUDHRY GANDHI PROMOTERS 1000000 0 1000000 0.00 0 0
41 IN300966 10178783 SHAGUN CHAUDHRY RESIDENT INDIVIDUALS 1000000 0 1000000 0.00 0 0
42 IN300966 10113799 V.K. CHAUDHRY RESIDENT INDIVIDUALS 1000000 0 1000000 0.00 0 0
43 IN300142 10571483 VISHAL CHAUDHRY RESIDENT INDIVIDUALS 1000000 0 1000000 0.00 0 0
44 T 000012 TARADIAM PTE LTD BODIES CORPORATES 987910 0 987910 0.00 0 0
45 IN300812 10000560 THE ORIENTAL INSURANCE COMPANY LIMITED
INDIAN FINANCIAL INSTITUTIONS 977627 0 977627 0.00 0 0
46 IN300812 10491164 STATE BANK OF MYSORE BANKS 813559 0 813559 0.00 0 0
47 HDL000007 HSBC GLOBAL CUSTODY NOMINEE (UK) LTD
FOREIGN INSTITUTIONAL INVESTORS 732747 0 732747 0.00 0 0
48 IN303786 10000334 STATE BANK OF BIKANER AND JAIPUR BANKS 705085 0 705085 0.00 0 0
49 IN303786 10000279 STATE BANK OF PATIALA BANKS 705085 0 705085 0.00 0 0 50 P 000003 SAROJ RAMESH PATEL (MS) PROMOTERS 413640 0 413640 0.00 0 0 51 C 000011 BHARTI SHRENIK CHOKSI PROMOTERS 400000 0 400000 0.00 0 0
52 M 000012 KALPANA DILIP KUMAR MEHTA PROMOTERS 400000 0 400000 0.00 0 0
53 K 000006 SANDHYA RUPEN KOTHARI PROMOTERS 400000 0 400000 0.00 0 0 54 M 000009 PURVI AJESH MEHTA PROMOTERS 400000 0 400000 0.00 0 0
55 IN300484 14205509 RADHIKA RAJAN RESIDENT INDIVIDUALS 350000 0 350000 0.00 0 0
56 R 000002 RADHIKA GOVIND RAJAN PROMOTERS 350000 0 350000 0.00 0 0
57 IN300159 10124658 MERLIN RESOURCES PRIVATE LIMITED
BODIES CORPORATES 216949 0 216949 0.00 0 0
58 C 000012 SWADESH CHATTERJEE PROMOTERS 200000 0 200000 0.00 0 0
59 27500 1302750000000013 AXIS BANK LIMITED BANKS 184949 0 184949 0.00 0 0
60 IN302806 10002018 VIJAYA BANK BANKS 54237 0 54237 0.00 0 0
61 IN301151 28782967 RANGARAJAN VASUDEVAN RESIDENT INDIVIDUALS 54000 0 54000 0.00 0 0
62 M 000007 VIRESH MATHUR PROMOTERS 49532 0 49532 0.00 0 0
152
63 IN300142 10027402 PRITHVI RAJ KHANNA RESIDENT INDIVIDUALS 20000 0 20000 0.00 0 0
64 HDL0000013 MERLIN ENCLAVES PVT LTD RESIDENT INDIVIDUALS 5000 0 5000 0.00 0 0
65 IN300476 42443768 DEBASISH BHATTACHARYYA RESIDENT INDIVIDUALS 5000 0 5000 0.00 0 0
66 IN300394 10066930 DEBASISH BHATTACHARYYA RESIDENT INDIVIDUALS 5000 0 5000 0.00 0 0
67 K 000004 DEEPAK KUMAR PROMOTERS 4999 0 4999 0.00 0 0 68 B 000009 JYOTI BHANOT PROMOTERS 2000 0 2000 0.00 0 0
69 HDL0000041 DEBASIS KONAR RESIDENT INDIVIDUALS 1 0 1 0.00 0 0
70 HDL0000040 ASHIS CHAKRABORTY RESIDENT INDIVIDUALS 1 0 1 0.00 0 0
71 HDL0000014 JAYANTA CHAKRABORTY RESIDENT INDIVIDUALS 1 0 1 0.00 0 0
72 P 000002 MR. A PANDEY PROMOTERS 1 0 1 0.00 0 0
73 T 000011 TATA MOTORS LIMITED BODIES CORPORATES 1 0 1 0.00 0 0
74 T 000010 TATA MOTORS LIMITED BODIES CORPORATES 1 0 1 0.00 0 0
Total: 1687938532 0 1687938532 0 0
