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44th Annual Report 2015-16 Nava Bharat Ventures Limited Limited Nava Bharat Ventures NAVA BHARAT VENTURES LIMITED 44th Annual Report 2015-16 www.nbventures.com ContentsContents COMPANY OVERVIEW COMPANY OVERVIEW About Us 2 About Us 2 Business Operations 3 Business Operations 3 Awards and Recognitions 4 Awards and Recognitions 4 Three Decades of Excellence 5 Four Decades of Excellence 5 COAL MINING AT MAAMBA COLLIERIES LIMITED, ZAMBIA Financial Performance 6 300 MW Power Plant nearing completion at Maamba, Zambia Financial Performance 6 Report on Corporate Social Responsibility 7 Report on Corporate Social Responsibility 7 STATUTORY REPORTS STATUTORY REPORTS Secretarial Audit Report 12 Directors’ Report 13 Directors’ Report 14 Management Discussion and Analysis 62 Management Discussion and Analysis 32 Report on Corporate Governance 69 Report on Corporate Governance 40 FINANCIAL STATEMENTS FINANCIAL STATEMENTS Standalone Standalone Independent Auditors’ Report 90 Independent Auditors’ Report 61 Balance Sheet 98 Balance Sheet 66 Statement of Profit and Loss 99 Statement of Profi t and Loss 67 Cash Flow Statement 100 Cash Flow Statement 68 Notes 102 Notes 70 Salient features of the Financial Statements of 132 StatementSubsidiaries pursuant and Associate to Section Companies 212 of the U/S Companies 129 (3) 101 Act,(Form 1956, AOC-1) relating to Subsidiary Companies ConsolidatedConsolidated IndependentIndependent Auditors’ Auditors’ Report Report 134102 BalanceBalance Sheet Sheet 138104 StatementStatement of of Profi Profit t and and Loss Loss 139105 CashCash Flow Flow Statement Statement 140106 NotesNotes 142108 Financial information of Subsidiary Companies 139 www.kalajyothi.com Directors’ Report Directors’ Report OVERVIEW COMPANY Dear Members, Your Directors are pleased to present the 44th Annual Report and the Company’s Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31st March, 2016. FINANCIAL SUMMARY REPORTS STATUTORY The financial performance of the Company (Standalone and Consolidated) for the Financial Year ended 31st March, 2016 is summarized below: (` in lakhs) Standalone Consolidated 12 months 12 months 12 months 12 months ended ended ended ended 31.03.2016 31.03.2015 31.03.2016 31.03.2015 FINANCIAL STATEMENTS Turnover/Income (Gross) 129630.25 147471.34 193335.56 219837.54 Profit before Finance charges, Depreciation and Taxation 18295.39 21723.14 45664.89 42368.94 Less:Finance charges (excluding amount capitalized) 3283.76 2824.35 9617.79 11167.74 Profit before Depreciation and Taxation 15011.63 18898.79 36047.10 31201.20 Less : Depreciation 3405.05 3627.84 7630.28 7875.60 Profit for the year after Depreciation 11606.58 15270.95 28416.82 23325.60 Less : Provision for taxation - Current tax 2700.00 3310.00 3746.65 6535.82 - Deferred tax (185.34) 198.76 (188.10) 196.33 - Tax of earlier years -- 15.27 3.23 186.67 - MAT credit entitlement (2030.00) (2500.00) (5278.97) (4496.21) Profit after Tax 11121.92 14246.92 30134.01 20902.99 Balance brought forward from last year 136691.43 133113.40 167464.64 157529.26 Minority share (Profit / Loss) -- -- (1403.76) (298.72) 147813.35 147360.32 196194.89 178133.53 Less: Carrying amount of the assets whose remaining -- 594.96 -- 594.96 useful life is nil and the deferred tax thereon Profit available for Appropriation 147813.35 146765.36 196194.89 177538.57 Appropriations Dividend on Equity Share Capital 2529.43 4215.71 2529.43 4215.71 Corporate Dividend Tax 514.93 858.22 514.93 858.22 General Reserve 1500.00 5000.00 1500.00 5000.00 Surplus carried to Balance Sheet 143268.99 136691.43 191650.53 167464.64 147813.35 146765.36 196194.89 177538.57 Nava Bharat Ventures Limited 13 ECONOMIC AND BUSINESS REVIEW The continued drift in the manganese alloy prices also impacted the sales of the carried forward inventory, India’s economic and business environment remained predominantly in the Odisha unit which had also to pare subdued during 2015-16 due to multitude of factors the sales value on account of quality mis-match during the ranging from successive monsoon failures to worldwide year under review. commodity meltdown and meager capital allocations by corporates, notwithstanding a fairly moderate oil price. POWER However, growth has picked up in the later part of the fiscal year on the back of a modest recovery in consumption and The Company’s operating power plants in Telangana and increased government spending. GDP growth is now seen Andhra Pradesh delivered reasonable performance during the at about 8 percent, and Nominal Economic growth seen year under review notwithstanding planned refurbishment between 11 and 12 percent notwithstanding a marginal fall cum maintenance outages and severe grid curtailments. in the agricultural growth owing to poor monsoon. Higher availability of domestic coal and weakened The Economy of India is the seventh largest in the world international prices of coal helped your Company maintain by nominal GDP and the third largest by purchasing power competitive cost of generation for plants of this size in parity (PPP). The country is classified as a newly industrialized FY2016. country, one of the G-20 major economies, a member of BRICS and a developing economy with an average growth The power plants in Odisha have, however, been impacted rate of approximately 7% over the last two decades. Fiscal due to limitation on captive power generation and deficit is seen at 3.9 percent of GDP in 2015-16. The rupee extremely low spot prices for power which also prevented has been relatively a better performer among emerging the operationalization of the second 60 MW Unit. market currencies because of India’s higher forex reserves and lower external debt compared with other emerging SUGAR market countries. The present market trend in sugar is favourable although there was a fall in the average realizations in the year REVIEW OF OPERATIONS under review. The initial bearish trends in sugar prices were The performance of the Company should be considered reversed towards the last few months of FY 2016, resulting satisfactory for 2015-16 given that all the three business in marginally higher realizations. Integrated operations led segments that your Company has been engaged in, have by Ethanol held the sway for the Unit to gain the ground lost been subjected to moderate to significant stress in the year on account of Sugar per se during the year under review. under review. DIVIDEND Turnover for the year 2015-16 stood at ` 12,963.02 Million compared to ` 14,747.13 Million in the previous year and The Board reviewed the business scenario for FY 2016 the profit after tax stood at ` 1,112.19 Million, declined and FY 2017 in Ferro Alloy and Power segments and felt from ` 1,424.69 Million in the previous year. it necessary to conserve the funds and be prudent to recommend a dividend on the equity shares at ` 3/- per FERRO ALLOYS Equity Share of ` 2/- each for the FY 2015-16, subject to Shareholders’ approval at the ensuing Annual General The Ferro Alloy operations attained reasonable stability Meeting. The aggregate dividend payout amounts to with the resumption of conversion arrangement for Ferro ` 25.29 crores, excluding corporate dividend tax of Chrome with Tata Steel. The arrangement, resumed initially ` 5.15 crores. up to March 2016, has since been renewed till March 2020. The Silico Manganese operations for the year BONUS SHARES 2015-16 mirrored the primary steel scenario which was The Company embarked upon the Zambian Coal Mine quite subdued for the first nine months. The manganese Rehabilitation & 300 MW Power Project with a clear view alloy market, however, witnessed a high degree of volatility on capital and resource allocations for sustaining long term in the last quarter and so, the weakness persists with low growth with minimal risks. Members will be pleased to margins in the current financial year. know that the integrated Coal & Power Project has attained fruition with the two units of 150 MW each being ready for synchronization and commercial operations soon. 14 44th Annual Report 2015-16 Directors’ Report COMPANY OVERVIEW OVERVIEW COMPANY The Board of Directors at their meeting held on 22nd July, PERFORMANCE AND FINANCIAL POSITION OF 2016 considered and approved capitalization of Reserves to SUBSIDIARY COMPANIES issue Bonus Equity Shares in the ratio of 1:1 i.e. One Bonus Equity Share of ` 2/- each for every One existing Equity The Company has Indian and Overseas direct and step Share of ` 2/- each to all equity shareholders existing on the down Subsidiaries. Register of Members on the Record Date to be announced Consolidated financial statements have been prepared REPORTS STATUTORY soon. The Board considers this bonus issue a fitting reward by the Company in accordance with the requirements of to the shareholders for their unstinted support for the Accounting Standard 21 issued by Institute of Chartered Company’s growth. Accountants of India (ICAI) and as per the provisions of the Companies Act, 2013. RESERVES As per the provisions of Section 136 of the Companies The Board proposed to carry an amount of ` 15 crores Act, 2013 the Company has placed separate audited to General Reserve out of the amount available for Financial Statements of its subsidiaries on its website appropriation and an amount of ` 1432.69 crores is www.nbventures.com and the Company shall furnish FINANCIAL STATEMENTS proposed to be retained in the statement of Profit and Loss a hard copy of Annual Reports of the subsidiaries to any account. shareholder on demand at any point of time. FIXED DEPOSITS The Annual accounts of the subsidiary companies shall also be available for inspection by any shareholder in the The Company has not accepted any deposits from Public Registered Offices of the Holding Company and of the and as such, no amount on account of principal or interest subsidiary companies concerned.

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