DIRECTOR'S REPORT 1. Your Directors have the pleasure of presenting the Fifty Fifth Annual Report to the shareholders together with the audited statement of accounts for the year ended March 31, 2016. The 2. Dividend Your Directors do not consider it prudent to recommend a dividend this year owing to the absence of profit. 3. Performance Your company has registered total revenue of Rs. 6,400.39 Lac with a loss for the year Rs. 692.92 Lacs. The overall market continued to be subdued, and various restructuring and cost reduction initiatives have been undertaken at both business units. With majority of the restructuring initiatives completed, your company is now on a stronger platform to leverage market opportunities for stable growth and performance in the coming years. 4. Operations The turnover of Fluid Power and Automation business unit in the current year saw an increase by Rs. 403.43 Lacs (14%) compared to previous year. This was achieved in a very difficult market and slowing demand in the industrial and capital goods sector. The turnover of Automotive Business Unit in the current years is Rs. 3,045.55 Lacs. Taking into account the increased operating cost, stagnant demand and uncertain future, your directors at their meeting dated April 16, 2016 decided to close down the Tube Valve Product line in April 2016. The Company will continue to focus on the Tubeless Tyre Valves and Off Highway tyre products going forward. 5. Change in the Nature of Business There was no change in the nature of the Business of the Company during the year. There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Company's operations in future. There is impairment of assets with the closure of the tube valve product line. The estimated loss in the books on written down the value of asset in books. 6. Research and Development Research & Development is fundamental to the Company's efforts to maintain the technical and quality edge. New products are also being developed to meet customers varied requirements. Research in the areas of reducing utilities cost and process parameters improvement is also being done. 7. Pollution Control Your Company's Plant has all the requisite Pollution Control Equipments and meets all the desired and statutory norms in this regard. 8. Statement in respect of adequacy of internal financial controls with reference to the Financial Statements: The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Scope and authority of the Internal Audit (IA) is as per the works assigned to them by the management. To maintain its objectivity and independence, Internal Audit function reports to the chairman of the Audit Committee of the Board. M/s Pipalia Singhal & Associates is the Internal Auditor of the Company. The Internal Audit monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures, procurement, sales, Stores and Statutory Compliances. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. 9. Particulars of loans/advances/investments outstanding during the financial year. The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made and loan taken by company is given in the notes to the financial statements. 10. Public Deposits The Company has not accepted any fixed deposits from the public or shareholders falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. 11. Statutory Auditors At the AGM held on August 4th, 2014, the Members approved the appointment of M/s Singhi & Co. Chartered Accountants, Mumbai as a statutory auditor for a period of three consecutive years for a term up to the conclusion of Annual General Meeting in the calendar year 2017 subject to the ratification by the members every year. As recommended by the Audit Committee, your Directors propose to ratify the appointment of M/s Singhi & Co, Chartered Accountants, as Statutory Auditors of the Company as per the terms and conditions of the Companies Act, 2013. The appointment is accordingly proposed in the Notice of the Current AGM vide item No. 3 for ratification by Members. 12. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Vaishnav Associates, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure A". There are no qualifications, reservation or adverse remark or disclaimer made by the auditor in the report save and except disclaimer made by them in discharge for their professional obligation. 13. Auditor's Report The observation made in the Auditors Report, read together with the relevant notes thereon, are self explanatory and hence does not call for any comments under. 14. Extract of the Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure B" 15. Particular of Employees and Key Managerial Personnel (KMP) The following three persons were formally appointed as Key Managerial Personnel of the Company as per the provisions of Section 203 of the Companies Act, 2013. a) Mr. Shantanu Parvati, Whole-time Director b) Mr. V S Patil, Chief Financial Officer c) Mr. Rajib Kumar Gope, Company Secretary The information required pursuant to Section 134(3)(q) and 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Remuneration and other details of Key Managerial Personnel and other Employees for the year ended March 2015 are given in extract of the Annual Return. 16. Directors All Independent Directors have given declarations that they meet the criteria of Independence as laid down under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr Arvind Goenka (holding DIN 00135653) is liable to retire by rotation and are being eligible for re-appointment. Your Directors propose his re-appointment as set out in the notice. i) Annual Performance Evaluation As per Section 134(3)(p) of the Companies Act, 2013 read with sub-rule (4) of Rule 8 of the Companies (Accounts) Rules 2014 and SEBI(LODR) Regulation 2015 (w.e.f.1st December 2015) the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of the other Committees. Board focused on criteria like strategy effectiveness, Board Structure and Committees, Board Meetings and Procedures while evaluating its own performance and that its committees. The manner in which the evaluation has been carried out is explained in the "Policy on Performance Evaluation" which is available on the website of the Company. ii) Remuneration Policy The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The approved remuneration policy of the Company is also available on the website of the Company which is www.schraderduncan.com iii) Meetings The Company has hold Meetings as per the Listing Agreement signed with the Stock Exchange and as per the Companies Act, 2013. During the year four Board Meetings and four Audit Committee meetings were convened and held. The details of which are given in the Corporate Governance Report, the intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015. 17. Corporate Governance As per Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (clause 49 of the Listing Agreement), a section on Corporate Governance and Management Discussion and Analysis is annexed to this report. A certificate from M/s Vaishnav Associates, Pune confirming compliance of Corporate Governance is also annexed. 18. Conservation of Energy, Technology Absorption, Exports and Foreign Exchange Earnings and Outgo. A statement giving details of conservation of energy, technology absorption, exports and foreign exchange earnings and outgo pursuant to Section 134(3) (m) read with Companies (Accounts) Rules, 2014. 19. Risk Management Policy The Board of the Company look into the element of risk associated with the Company. At present the company has not identified any element of risk which may threaten the existence of the Company. 20. Related Party Transactions All related party transactions that were entered into during the financial year were on arms' length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All related party transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company. The approved policy on related party transactions is also available on the website of the company www.schraderduncan.com under investor dropdown. 21. Subsidiaries Your Company does not have any subsidiary / subsidiaries within the meaning of the Companies Act, 2013. 22. Vigil Mechanism/Whistle Blower Policy The Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the Company's website. 23. Director's Responsibility Statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of section 134 (3) (c) of the Companies act, 2013: i) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any; ii) the directors had selected such accounting policies and applied them consistently and made judgements 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 the profit and loss of the Company for that period. iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing the detecting fraud and other irregularities; iv) that the annual financial statements have been prepared on a going concern basis; v) that proper financial controls were in place and that the financial controls were adequate and were operating effectively. vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 24. Disclosures a) Materially Significant Related Party Transactions: All related party transactions form part to the notes to the Balance Sheet. Saving those, there were no materially significant related party transactions with Company's promoters, directors or its management their relatives, etc. that had a potential conflict with the interest of the Company. b) Accounting Treatment No treatment different from that prescribed in an Accounting Standards has been followed by the Company. c) Statutory Compliance, Strictures and Penalties: The Company has complied with rules and regulations prescribed by the Stock Exchange, Securities Exchange Board of India and any other statutory authority relating to capital market. No penalties and/or strictures have been imposed on the Company by Stock Exchange or SEBI or any statutory authority during the last three years. d) Disclosure with respect to Demat/Unclaimed Suspense Account: There were no shares lying in the Demat Suspence account. 25. Audit Committee The Audit Committee comprises Non-executive Director and Independent Directors namely, Mr. O P Dubey (Chairman), Mr. Arvind Goenka (Member) and Mr. B B Tandon (Member). All the recommendation made by the Audit Committee accepted by the Board. Chief Financial Officer and Auditors are permanent invitees to the committee meetings. The detail of terms of reference of Audit Committee, number and dates of meetings held, attendance of the directors and remunerations paid to them are given separately in the attached Corporate Governance Report. 26. The Stakeholder's Relationship Committee The Company has a stakeholder's Relationship Committee for reviewing shareholder/investors complaints. The present members of this committee are Mr. J P Goenka (Chairman), Mr. O P Dubey (Member), and Mr. Shantanu Parvati (Member). The details reference of the committee has been given in the Corporate Governance Report. 27. Nomination and Remuneration Committee The Nomination and Remuneration Committee has Mr. O P Dubey as Chairman, Mr. B B Tandon, Mr. Arvind Goenka and Mr. Nitin Kaul as Members. The details terms of reference of this committee has been given in the Corporate Governance Report. 28. Acknowledgements Your Directors would like to thank to the Bankers, Central and State Government, Stock Exchange, other Regulatory Agencies, Investors, Shareholder and Employees of the Company and wish to acknowledge and place on record their sincere appreciation for the continuous excellent support given by them to the Company and their confidence in its management. Industrial relations continued to be cordial and peaceful. On behalf of the Board of Directors Shantanu Parvati Whole Time Director O P Dubey Director Place : Mumbai, date : May 25, 2016 |