DIRECTORS' REPORT To The Members of VELJAN DENISON LIMITED Your Directors take pleasure in presenting the 41st Annual Report on the affairs of the Company along with the Audited Accounts for the year ended 31st March, 2015. 2.COMPANY'S PERFORMANCE: During the year under review the sales are 8.31 % higher at Rs.7885.14 Lacs as against Rs.7279.99 Lacs in the previous year. The Profit before tax for the year is 57.71% higher at Rs.1976.20 Lacs against Rs.1253.02 Lacs for the previous year. There has been increase in profits due to Comparatively better sales realization, and some incidental receipts non repetitive in nature. 3.FUTURE OUTLOOK: Growth in the hydraulic equipment industry depends on overall economic expansion and, in particular, growth in industrial production. Similar to other industrial segments, the hydraulic industry experienced a significant downturn during the 2008 - 2009 economic recession but has gradually recovered. With fears of another recession subsiding completely , growth prospects for 2015 and beyond , corroborated by recent GDP growth, industrial production and consumer confidence data etc looks slightly encouraging. Experts believe the positive outlook in certain end user markets such as material handling equipment and construction machinery is a sign that indicates the industry may achieve a steady growth rate. 4.MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT Management Discussions and Analysis Report, as required under the Listing Agreement with the Stock Exchange is annexure to the report. 5.DIVIDEND: Your Company had a consistent Dividend policy that balances the dual objectives of appropriately rewarding Shareholders and retaining adequate funds, in order to maintain a healthy Capital adequacy ratio to support future growth. Consisting with this policy and based on the Company's performance, the Directors are pleased to recommend a dividend of Rs 10 /- per equity share for the financial year 2014-15 which, if approved at the ensuing Annual General Meeting will be paid to those members whose names appear as shareholders of the Company as at the end of business hours on 22nd September 2015 as per particulars to be furnished for this purpose. The Dividend payout as proposed is in accordance with the Company's policy to pay sustainable Dividend linked to long term performance, keeping in view the Capital needs for the Company's growth plans and the intent to achieve optimal financing of such plans through internal accruals. The dividend distributed would be tax free in the hands of the Shareholders. 6.RESERVES: The Company has transferred Rs.1.50 Crore, i.e. 11.50 % of the current profits to reserves of the Company. 7.PARTICULARS OF EMPLOYEES: The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is annexed to this report. 8.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Account) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is given in the Annexure I which is annexed to this Report. 9.DEPOSITS: Your Company has not accepted any deposits from the public during the year under review and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 10.DIRECTORS: None of the directors of the company is disqualified under the provisions of the Companies Act 2013 or under the Listing Agreement with the BSE. As per the provisions of the Companies Act, 2013 read with Articles of Association of the Company, Smt.U.Uma Devi, retire by rotation and being eligible offer, herself for re-appointment at this Annual General Meeting. Board recommends her re-appointment at the AGM. During the year under review the Board appointed Shri. V. C. Janardan Rao as Chairman & Managing Director effective from 1st January 2015 for a period of five years. Board recommends his appointment at the AGM. 11.INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal audit Department monitors and evaluates the efficacy and adequacy of internal control systems, accounting procedures and policies. 12.AUDITORS: Pursuant to the provisions of Section 139 of the Companies Act and the rules framed there under, M/s.Brahamayya & Co., Chartered Accountants, (FRN: 000513S) Hyderabad were appointed as Statutory Auditors of the Company from the conclusion of the 40th Annual General meeting of the Company held on 30th September, 2014 till the conclusion of the 43rd Annual General Meeting to be held in the year 2017, subject to ratification of their appointment at every Annual General Meeting. Directors recommend the ratification of Auditors Appointment from the conclusion of 41st AGM to the conclusion of the 42nd AGM. The Auditor's Report for the financial year 2014-2015 does not contain any qualification, reservation or adverse remarks. 13.SECRETARIAL AUDITORS The Board had appointed M/s VBM Rao & Associates, Company Secretaries, Hyderabad to carry out Secretarial Audit under the provisions of Section 204 of the Companies Act, 2013 for the financial year 2014-15. The report of the Secretarial Auditor is annexed to this report. The Secretarial Auditor's Report for the financial year does not contain any qualification, reservation or adverse remarks. 14.NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES Eleven meetings of the board were held during the year. For details of the meetings of the board and committee meeting, please refer to the Corporate Governance report, which forms part of this report. 15.TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO IEPF. Pursuant to the provisions of Section 125 of the Companies Act, 2013 the Unclaimed Dividend which remained unpaid/unclaimed for a period of 7 years have been transferred by the company to the Investor Education and protection Fund( IEPF) established by the Central Government pursuant to Section 125 of the Companies Act, 2013. 16.PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Particulars of loans, guarantees and investments have been disclosed in the financial statements. 17.TRANSACTIONS WITH RELATED PARTIES All related party transactions done by the company during the financial year were at arm's length and in the ordinary course of business. All related party transactions were placed in the meetings of Audit committee and the Board of directors for their necessary review and approval. During the financial year your Company has not entered into any material transaction (as per Clause 49 of the Listing Agreement) with any of its related parties which may have potential conflict with the interest of the Company at large. Disclosures pursuant to Accounting Standards on related party transaction have been made in the notes to the Financial Statements. 18.MANAGERIAL REMUNERATION: Details of the ratio of the remuneration of each director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of managerial Personnel) Rules, 2014 has been annexed separately and forms part of this report. 19.CORPORATE SOCIAL RESPONSIBILITY Through sustainable measures, actively contribute to the Social, Economic and Environmental Development of the community in which we operate ensuring participation from the community and thereby create value for the nation. In accordance with the provisions of the Companies Act, 2013 the Company have constituted a corporate Social Responsibility committee which comprises of the following members: 1.Shri. V C Janardan Rao: Chairman 2.Shri. M L Motwani: Member 3.Shri. B.S. Srinivasan: Member The contents of the CSR activities undertaken by the Company have been annexed separately and forms part of this report. 20.EXTRACT OF ANNUAL RETURN Pursuant to the Section 92(3) of the Companies Act, 2013 Extract of the Annual Return is annexed to this report in the prescribed Form MGT - 9 (which forms part ofthis report). 21.CORPORATE GOVERNANCE CERTIFICATE The Compliance certificate from the Statutory Auditors regarding compliance of conditions of Corporate Governance as stipulated in Clause 49 of the Listing agreement form part of this Report. 22.LISTING: The Company is listed in The Bombay Stock Exchange Limited and there have been no arrears of the listing fees payable to the Stock Exchange. 23.DIRECTORS' RESPONSIBILITY STATEMENT: In terms of Section 134 (3)(c) and 134(5)of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that (based on the representations received from the Management): i)In the preparation of Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any. ii)they have selected such accounting policies and applied them consistently and made judgments and estimates that were 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)they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv)they have prepared the Annual Accounts on a going concern basis v)they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively. "Internal Financial Control" means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including the adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information; vi)they have devised proper systems to ensure Compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 24.COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub section (3) of section 178 relating to the remuneration for the Directors, Key Managerial Personnel, and other employees. 25.REPORT ON RISK MANAGEMENT POLICY The Company has formed the Risk Management Committee with its members as Shri. V. Pattabhi, Shri.B.S.Srinivasan, Shri. Srinivas VG and Shri. M.L. Motwani, the committee will perform its activities according to the Risk Policy finalized by the Board indicating the development and implementation of Risk Management. 26.DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL ) ACT, 2013. The Company has put in place a Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in accordance with the requirement of the 'Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees of the Company are covered under the afore mentioned Policy. The summary of complaints received and disposed off upto 31st March 2015 were as under: Number of complaints received: Nil Number of complaints disposed off: Not Applicable 27.DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. 28.EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS There were no material changes/commitments affecting the financial position of the Company between March 31, 2015 and the date of Board's Report 29.ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE Pursuant to the provisions of the Companies Act, 2013 and clause 49 of the Listing Agreement, 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 its Audit, Nomination & Remuneration and Compliance Committees. 30.STATEMENT ON DECLARATION GIVEN BY INDEPENDENT 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 Clause 49 of the Listing Agreement. 31.VIGIL MECHANISM/ WHISTLE BLOWER POLICY Your Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct. The Code of Conduct applies to all the employees, including Directors of the Company. The Code of Conduct Hotline is available on the Company website to report any genuine concerns about unethical behavior, any actual or suspected fraud or violation of Company's Code of Conduct. 32.REPORT ON CORPORATE GOVERNANCE: In accordance with the Clause 49 of the Listing Agreement, the Company has complied with all mandatory recommendations. A Report on corporate Governance is provided elsewhere in this report. 33.ACKNOWLEDGMENTS: Your Directors acknowledge with a deep sense of gratitude the continued support extended by Investors, Customers, Business Associates, Bankers and Vendors. Your Directors take this opportunity to thank the regulatory Authorities and Governmental Authorities for continued support and assistance. Your Directors also place on record their appreciation for the contribution of all the employees of the Company in achieving the performance. By order of the Board FOR VELJAN DENISON LIMITED V. C. Janardan Rao Chairman & Managing Director Date: 31/07/2015 Place: Hyderabad |