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Ellenbarrie Industrial Gases Ltd

BSE: 590087 | NSE: ISIN: INE236E01014
Market Cap: [Rs.Cr.] 370.08 Face Value: [Rs.] 10
Industry: Chemicals

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Director's Report
DIRECTORS

To

THE MEMBERS

Your Directors take pleasure in presenting the Fortieth Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2014

FINANCIAL RESULTS

The highlights of the financial results of the Company for the year ended 31 st March, 2014 are as under:

(Rs. in lacs)
Particulars Year Ended 31st March, 2014 Year Ended 31st March, 2013
Revenue from operations 6785.61 7937.99
Other Income 237.45 138.63
Profit before Taxation (2781.30) 56.27
Tax Expense 10.72
Profit for the year after tax (2717.24) 45.55
Earnings per Share of Rs. 10/- each (41.51) 0.70

DIVIDEND

In view of the loss incurred for the Financial Year 2013-14, the Board does not declare any dividend for the given financial year.

OPERATIONS

"During the financial year 2013-14 sales of manufactured goods (net of excise) registered a decline of 13% over that of 2012-13, sale of traded goods registered a decline of 27%. During the same period Earnings Before Interest, Tax & Depreciation Allowance (EBITDA) registered a decline of 50% from Rs. 1813 Lacs to Rs. 906 Lacs owing to cost increases, adverse economy of scale and other macro economic factors. Total Finance cost increased by a massive 193% mainly due to recognition of loss on repayment of foreign currency borrowings during the year, eventually your company reporting a net loss for the year.

Following the business restructuring carried out during the year by way of acquisition of 51% of shareholding of the company by Air Water Inc. of Japan, the company recognized the need for revaluation of assets, especially its landed assets, to represent a fair assessment of the current worth. Accordingly, the Board appointed registered Valuers to evaluate the fair value of the Freehold and Leasehold interests in lands of the company and thus an amount of Rs 2320 lacs were credited to the Revaluation Reserves".

SUBSIDIARY COMPANIES

Your Company does not have any subsidiary company as on date.

CHANGE IN COMPANIES ACT

The Companies Act, 2013 ('the Act') and the rules made thereunder has come into being replacing the existing Companies Act, 1956 and a large portion of the Act has already become effective. The Company has already formed / renamed various Committees of the Board in accordance with the requirements of the Act. The Terms of reference for various Committees of the Board have also been modified and adopted as per the provisions prescribed in the Act. Your Company is taking necessary steps to ensure compliance with the requirements of the new Act.

The Ministry of Corporate Affairs has vide General Circular 08/2014 No. 1/19/2013-CL-V dated 04.04.2014 notified that the Financial Statements and documents required to be attached thereto, Directors Report and Auditors Report in respect of the Financial years that commenced earlier than 01.04.2014 shall be governed by the relevant provisions of the Companies Act, 1956 and the rules made thereunder. Consequently the Financial Statements, Directors Reports Auditor's Report for the Financial year 2013-14 have been prepared in accordance with the provisions of the Companies Act, 1956 and appropriate references have been made in respect of the Act wherever required.

CORPORATE GOVERNANCE

The Company has been practicing the principles of good corporate governance over the years and lays strong emphasis on transparency, accountability and integrity. As required under Clause 49 of the Listing Agreement of Stock Exchanges, a report on Corporate Governance confirming compliance with the requirements of the Corporate Governance are annexed as part of this Report.

DEPOSITORY SYSTEM

As the members are aware, your Company's shares are tradeablecompulsorily in electronic form. In view of the numerous advantages offered by the Depository system, members are requested to avail of the facility of dematerialization of the Company's shares either in National Securities Depository Ltd. or Central Depository Services (India) Ltd.

DIRECTORS

The Companies Act, 2013 ('the Act') contains provisions for certain class of companies with regard to composition of the Board of Directors and their appointment / reappointment. Accordingly your Company being listed company is required to have at least one third of the total number of Directors as Independent Directors in accordance with section 149(4) of the act and not less than two-thirds of the total number of Directors of a public company shall be persons whose period of office is liable to determination by retirement of directors by rotation. At every Annual General Meeting one-third of the directors as are liable to retire by rotation shall retire from office. The Independent Directors shall not be liable to retire by rotation.

Accordingly the Board have proposed the names of Mr. Manas Kumar Dutta, Mr. Swapan Kumar Bhowmik and Dr. Prabir Kumar Dutt who has confirmed to the Company that they meet the criteria of Independence as specified in section 149(69) of the Act, to be appointed as Independent Directors within the meaning of the act. The necessary resolutions for appointment of Independent Directors would be proposed in the ensuing Annual General Meeting. After such appointment the Independent Directors would no longer be liable to retire by rotation during their tenure.

Shri Ranesh Bhowmick, Director of the Company resigned from the Board due to his advanced age and ill health. The resignation of Shri Bhowmick was noted in the Board Meeting held on 09.05.2014. Shri Ajit Khandelwal, also resigned from the Board due to his pre-occupation and the resignation was noted in the Board Meeting held on 13.08.2014. The Board of Directors wish to place on record their deep sense of appreciation for the invaluable contributions of Shri Ranesh Bhowmick and Shri Ajit Khandelwal towards growth and prosperity of the Company.

The Board recommends the appointment of above directors with a view to avail their valuable advices and wise counsel. A brief profile of the above Directors seeking appointment/re-appointment required under Clause 49 of the Listing Agreement, is given in the Notice of AGM.

AUDITORS

M/s. A. K. Kumar & Co., Chartered Accountants, Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the financial year 2013-14. The Company has received a letter from them to the effect that their reappointment, if made, would be within the limits prescribed under the Companies Act, 2013 and that they are not disqualified for re-appointment.

As per the requirement of Central Government your Company carries out an Audit of cost records every year. The Cost Audit Report for the financial year 2013-2014 has been filed within due date.

In accordance with section 148 of the Companies Act, 2013 read with rule 14 of the Companies (Audit and Auditors) rules, 2014, the remuneration payable to the Cost Auditors for the financial year 2014-15 would be placed at the ensuing the Annual General Meeting for ratification.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Additional information as required by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in the prescribed form in Annexure "A" to the Report.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, there is no employee being paid the amount as mentioned in this rule.

KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company has approved continuance of office of Shri Padam Kumar Agarwala as the Managing Director, Shri Shanti Prasad Agarwala as the Whole Time Director, Shri Varun Agarwal, Executive Director & Ms. Priyanka Jaiswal as the Company Secretary and act as 'Key Managerial Personnel' in terms of the requirements of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm as under:

i) that in the preparation of Annual Accounts, the applicable Standards have been followed along with proper explanations for material departures.

ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii) that the Directors have 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.

iv) that the annual accounts have been prepared on a going concern basis.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

APPRECIATION

Your Directors wish to place on record their appreciation for the contribution made by the employees at all levels but for whose hard work, solidarity, and support, your Company's achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, joint venture partners, investors and bankers for their continued support and faith reposed in the Company.

The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry despite increased competition from several existing and new players.

TRADE RELATIONS

The Board desires to place on record its appreciation for the support and co-operation that the Company has received from suppliers, brokers, customers and others associated with the Company as its enterprise partners. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Company's endeavour to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other.

ACKNOWLEDGMENT

Your Directors take this opportunity to thank all investors, customers, vendors, bankers, regulatory and government authorities and stock exchanges, for their continued support and faith reposed in the Company.

3A, Ripon Street For and on behalf of the Board
Kolkata-700 016 PADAM KUMAR AGARWALA
Dated: 13th day of August, 2014 Managing Director

ANNEXURE - 'A' TO THE DIRECTORS' REPORT

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 :

A. Conservation of Energy

a. Energy Conservation measures taken :

i. Electricity being the major cost factor, focus on continuous improvement of the plant so as to attain optimum energy consumption.

ii. Steps taken towards improvement of power factor and load factor with a view to achieve optimum power efficiency.

b. Additional investments and proposal for reduction of consumption of energy :

New investment in the upcoming air separation plant in Hyderabad is designed to produce air gases with lowest possible power consumption.

c. Impact of the above Measures :

The above measures will have a positive impact on the electrical power usage and will lead to significant reduction in specific power usage per unit of output.

B. Technology Absorption

Company has plans to explore new applications of gases to address customer needs in different industrial sectors. Being a member of Air Water Inc. Group, the Company has opportunity to access various Research & Development carried out by the group in Japan and other parts of the world.

C. Foreign Exchange Earnings & Outgo

Company continues to leverage its past experience in the gas industry to explore possible export opportunities to neighboring countries.

Total Foreign Exchange used during the year towards import of goods and services were Rs. 935 lakhs and total foreign exchange earned stood at Rs. 200 lakhs.

ANNEXURE - 'A' TO THE DIRECTORS' REPORT

The Board of Directors

ELLENBARRIE INDUSTRIAL GASES LTD.

3A, Ripon Street

Kolkata-700 016

MD / CFO Certification

(a) We have reviewed financial statements and the Cash Flow Statement for the year and that to the best of our knowledge and belief:

(i) These statements do not contain any materially unfair statement or any material fact or statements that might be misleading.

(ii) These statements together present a true and fair view of the Company's affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company's code of conduct.

(c) We accept responsibility for establishing and maintaining internal control and that we have evaluated the effectiveness of the Internal Control Systems of the Company and have disclosed to the Auditors and the Audit Committee deficiencies in the design or operation of Internal Controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the Auditors and the Audit Committee :

(i) Significant changes in internal control during the year.

(ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements and

(iii) There are no instances of significant fraud of which we have become aware and the involvement therein if any of the management or an employee having a significant role in the Company's internal control system, if any.

3A, Ripon Street
Kolkata-700 016 PAD AM KUMAR AGARWALA T.GHOSH
Dated : 13th day of August, 2014 Managing Director Manager Accounts
   
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Key Information

Key Executives:

Shanti Prasad Agarwala , Whole-time Director

Varun Agarwal , Executive Director

Manaskumar Dutta , Director

Priyanka Jaiswal , Company Secretary


Company Head Office / Quarters:

3A Ripon Street,
,
Kolkata,
West Bengal-700016
Phone : West Bengal-91-033-22491922/22291923/22292441 / West Bengal-
Fax : West Bengal-91-033-22493396 / West Bengal-
E-mail : ellenbarrie@vsnl.com
Web : http://www.ellanbarrie.com

Registrars:

ABS Consultant Pvt Ltd
99 Stephen House ,6th Floor ,4 B B D Bag(E) ,Kolkata-700002

 
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