DIRECTORS' REPORT TO THE SHAREHOLDERS Your Directors have pleasure in presenting their 58th Annual Report together with the Audited Annual Accounts of the Company for the Financial Year ended March 3I, 20I6. DIVIDEND The Board, in its meeting held on I4th March, 20I6, declared an Interim Dividend @ 20% i.e. Re. 0.20 on Equity Shares of face value of Re. I/each. Further, your Board has recommended a Final Dividend for the year ended March 3I, 20I6 @ 8 % i.e. Re. 0.08 on Equity Shares of face value of Re. I/- each and seeks your approval for the same. The Dividend paid for the previous Financial Year was 22% i.e. Re. 0.22 on Equity Shares of face value of Re. I/- each. OPERATIONS During the year under review, Company recorded a 2.2I% growth in net revenues. Profit before Tax registered a I4.38% growth and the net profit of the Company improved by I7.69%. A full analysis and discussion on the business outlook is included in this Annual Report under the heading 'Management Discussion and Analysis' as Annexure 'A' to this Report. MATERIAL CHANGE One of the plants of the Company at Chembur in Mumbai producing paints, discontinued production w.e.f. May I, 20I5. Most of the workmen and staff employed in the plant retired through a voluntary retirement scheme or were shifted to other plants of the Company. SIGNIFICANT AND MATERIAL ORDERS BY REGULATORS OR COURTS There were no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. SHARE CAPITAL The paid up Equity Share Capital as at March 3I, 20I6, stood at Rs. 226.7I Million. During the year under review, the Company has not issued shares with differential voting rights nor has it granted any Stock Options or Sweat Equity Shares. A on March 3I, 20I6, none of the Directors of the Company held instruments convertible into Equity Shares of the Company. CORPORATE GOVERNANCE The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms an integral part of this Report. (Annexure 'B') The requisite certificate from Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance. (Annexure 'C') CORPORATE SOCIAL RESPONSIBILITY As part of its initiatives under 'Corporate Social Responsibility (CSR)', the Company has undertaken or contributed funds for various activities in the areas of Education, Healthcare, preventive Healthcare, Sanitation, Environmental Sustainabilities etc. These activities are largely in accordance with Schedule VII of the Companies Act, 20I3 and Company's CSR Policy which is available on the website of Company (www.growel.com/ Policies.html) The report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 20I4 is set out in Annexure 'D' forming part of this Report. Company is in the process of identifying specific projects which can contribute to the overall social and economic growth, development and prosperity of the communities residing in the vicinity of the operations of the Company. During the year under review, Company has spent Rs. I.6I Million towards CSR activities against Rs. 7.I4 Million to be spent as per Section I35 of the Companies Act, 20I3 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has strong Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual, which is reviewed each year in consultation with the Statutory Auditor of the Company and the Audit Committee. To maintain its objectivity and effectiveness, the Internal Audit function reports directly to the Chairman / CEO of the Company. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. 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. VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section I77 of the Companies Act, 20I3 and the Regulation 22 of SEBI Listing Regulations, the Company has established a Whistle Blower Mechanism / Vigil Mechanism for Directors and Employees to report genuine concerns about any instance of any irregularity, fraud, unethical behavior and / or misconduct. This policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meeted out to any person for a genuinely raised concern. A high level Committee has been constituted which looks into the complaints raised. BUSINESS RISK MANAGEMENT Pursuant to Section I34(3)(n) of the Companies Act, 20I3 & Clause 49 of the Listing Agreement, the Company has framed a Risk Management Policy. The Company had also constituted a Risk Management Committee. The details of the committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board Report. With the resignation of Shri Neeraj Garg as a Director and Member of the Risk Management Committee, the Committee is now reduced to only one Member viz. Shri Nirajkumar More. Considering the size of operations and nature of business of the Company, it is no longer felt necessary to continue the Committee. Further under the newly introduced SEBI Listing Regulations, it is also not mandatory for the Company to constitute a Risk Management Committee. At present the Company has not identified any risk, which may threaten the existence of the Company. Audit Committee is now monitoring, reviewing and evaluating the Risk Management plans / policies and systems. EXTRACT OF ANNUAL RETURN The Extract of Annual Return in Form No. MGT-9 as per Section I34(3)(a) of the Companies Act, 20I3 read with Rule 8 of Companies (Accounts) Rules, 20I4 and Rule I2 of Companies (Management & Administration) Rules, 20I4 duly certified by the Practicing Company Secretary is annexed hereto as Annexure 'E' and forms part of this Report. FIXED DEPOSITS The Company's balance of Fixed Deposits as on March 3I, 20I6 was Rs. 4.27 Million (Previous Year: Rs. 7.34 Million). The Company did not accept any deposits from the public falling within the ambit of Section 73 of the Companies Act, 20I3 and The Companies (Acceptance of Deposits) Rules, 20I4, during the year nor defaulted in any repayment or interest payments due thereon. LOANS, GUARANTEES AND INVESTMENTS The details of Loans, Guarantees and Investments covered under the provisions of Section I86 of the Companies Act, 20I3 forms part of the notes to the Financial Statements provided in this Annual Report. RELATED PARTY TRANSACTIONS All Related Party Transactions that were entered into during the Financial Year were on an arm's 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 the Company at large. Prior omnibus approval of the Audit Committee is obtained for the transactions. A statement giving details of all Related Party Transactions were placed before the Audit Committee and the Board of Directors for their approval. The policy on Related Party Transactions and arms length basis Transactions are available on www.growel.com/Policies.html Since all Related Party Transactions entered into by the Company were in the ordinary course of business and on an arm's length basis, Form AOC-2 is not applicable to the Company. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL As per the provisions of the Companies Act, 20I3 and in terms of the Articles of Association of the Company, Shri Rohitkumar More, Whole Time Director of the Company, retires by rotation in the forthcoming Annual General Meeting and being eligible, offered himself for reappointment. The Board recommends his reappointment. During the year under review, Shri Neeraj Garg, COO & Whole Time Director of the Company resigned w.e.f. February 27, 20I6. The Board places on record its appreciation for the services rendered by Shri Neeraj Garg during the tenure of his Directorship. In compliance with Regulations 36(3) of SEBI Listing Regulations, brief resume of all the Directors proposed to be appointed / re-appointed are attached along with the Notice to the ensuing Annual General Meeting. Pursuant to sub Section (7) of Section I49 of the Companies Act, 20I3 and Regulation I6(I)(b) of the SEBI Listing Regulations, all the Independent Directors of the Company has given declaration to the Company that they qualify the criteria of independence as required under the Act and the Regulations. Pursuant to the provisions of the Companies Act, 20I3 and SEBI Listing Regulation, 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 various committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. The Company has also carried out various training and familiarization programme for Independent Directors, details of which are set out in the Corporate Governance Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is available on website of the Company (www. growel.com/Policies.html). A calendar of Board Meetings is prepared and circulated in advance to the Directors. During the year five 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, 20I3. BOARD COMMITTEES Currently Board has four Committees viz. Audit Committee, Nomination and Remuneration Committee, CSR Committee, Stakeholders Relationship Committee. Detailed note on the Composition of Board and its Committees, Numbers of Meetings held during the year and other related details are provided in the Corporate Governance Report. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has been employing about I00 women employees in various cadres. The Company has in place an Anti Sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 20I3. Complaint Redressal Committee has been constituted to redress the complaint of Sexual Harassment. All employees (permanent, contractual, temporary, trainees) are covered under the policy. Compliant received from an employee during the Financial Year 20I5-I6 was effectively redressed. No complaint is outstanding as on 3I-03-20I6 for redressal. DIRECTORS' 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 I34(3)(c) of the Companies Act, 20I3: a. that in the preparation of the annual financial statements for the year ended March 3I, 20I6, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies as mentioned in Note No. I of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 3I, 20I6 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 20I3 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. SUBSIDIARY & ASSOCIATES COMPANIES A on date, Company has 3 Overseas Subsidiaries viz. Grauer & Weil (Shanghai) Ltd. at China, Grauer & Weil (UK) Ltd. at United Kingdom and Growel Chemicals Co. Ltd. at Thailand. During the year, the Board of Directors reviewed the affairs of the Subsidiaries. Details of the Subsidiaries form the part of Financial Statements. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements have been prepared by your Company in accordance with the requirements of Accounting Standard 2I on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements together with Auditor's Report thereon forms part of the Annual Report. Further, a statement containing the salient features of the Financial Statements of the Subsidiaries in the prescribed format AOC-I is attached as a part of Financial Statements. STATUTORY AUDITORS At the 57th Annual General Meeting held on August 20, 20I5, M/s M. M. Nissim & Co., Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the 59th Annual General Meeting of the Company to be held in the calendar year 20I7. In terms of the first proviso to Section I39 of the Companies Act, 20I3, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s M. M. Nissim & Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the Shareholders. The Company has obtained a consent letter from M/s M. M. Nissim & Co. under Section I39(I) of the Companies Act, 20I3 along with certificate that appointment, if made will be in accordance with the provisions of Section I4I of the Companies Act, 20I3 and they are not disqualified to be appointed as Auditors of the Company under Section I4I(3) of the Companies Act, 20I3. Members are requested to consider their appointment at a remuneration to be decided by the Board of Directors for the Financial Year ending March 3I, 20I7, as set out in the Notice convening the Meeting. COST AUDITORS The Board has appointed the M/s V J. Talati & Co. as Cost Auditors for conducting the audit of cost records of the Company for Chemicals and Engineering segments of the Company for the Financial Year 20I5-I6. SECRETARIAL AUDITOR The Board has appointed M/s GMJ & Associates, Firm of Practicing Company Secretaries, to conduct the Secretarial Audit for the Financial Year 20I5-I6. The Secretarial Audit Report for the Financial Year ended March 3I, 20I6 is annexed herewith marked as Annexure 'F' to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has reappointed M/s GMJ & Associates, Firm of Practicing Company Secretaries, as Secretarial Auditor of the Company for the Financial Year 20I6-I7. AUDITORS' OBSERVATIONS The observations of the Auditors contained in their Report have been adequately dealt with in Note No. '27' to the Accounts which are self explanatory and therefore, do not call for any further comments. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO The information pursuant to Section I34(3)(m) of the Companies Act, 20I3, read with the Rule 8(3) of the Companies (Accounts) Rules, 20I4 are given in Annexure 'G' to this Report. PARTICULARS OF EMPLOYEES The requisite details as stipulated under Section I97 and Rule 5(I) and 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4 will be provided upon request and same is available for inspection to the Members at the Registered Office of the Company on any working days between I0.00 am to I2.00 noon upto the date of the Meeting i.e. August II, 20I6. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION The Company has taken all the necessary steps for safety, environmental control and protection at all its plants. All plants of the Company fully comply with the laws, regulations and requirements stipulated by the concerned Pollution Control Board. LISTING AGREEMENT The Securities and Exchange Board of India (SEBI), on September 2, 20I5, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 20I5 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December I, 20I5. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the date of notification i.e. September 2, 20I5. The Company entered into Listing Agreement with BSE Limited during February, 20I6. LISTING The Equity Shares of the Company are at present listed with BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 00I. The Company is regular in payment of listing fees. APPRECIATION The Directors wish to put on record their appreciation for the support of all our Bankers and the dedication and support of all our Members and Associates. Their efforts continue to be integral to our Company's ongoing success. Registered Office: Growel Corporate, Akurli Road, Kandivli [East], Mumbai - 400 I0I For & on behalf of the Board of Grauer & Weil (India) Limited Nirajkumar More Managing Director Vinod Haritwal CEO & Whole Time Director Date : May 30, 20I6 |