BOARDS' REPORT TO THE SHAREHOLDERS, Your Directors have pleasure in presenting the Thirty Sixth Annual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015 OPERATIONS AND RESULTS The Company continues to be engaged in the activities pertaining to manufacturing of wide range of Aluminum Extrusions for its various end user industries. The year under review has been a challenging one for your Company and the Metal Industry as a whole, with several macro headwinds at play. Though the seeds for much needed sustainable economic stability were swon, with a Government enjoying clear majority coming to power at the center, taking various steps for economic revival and the future to be seen with a certain degree of optimism, the Financial Year 2014-15 proved to be a tumultuous one, particularly in the background of; a) Subdued manufacturing growth leading to overall depressed demand; b) High input cost; c) Frequent changes in the prices at London Metal Exchange affecting the local price charging system of primary producers in the country; d) Regulatory uncertainties in captive mining operations. For the first time since the Financial Year 2003-04 your Company incurred a loss of X 838.19 Lakhs in the current Financial Year (2014-15) as compared to a profit of Rs. 41.09 lakhs in the previous Financial Year (2013-14). EBIDT fell to Rs. 331.36 Lakhs as compared to Rs. 775.20 in the previous Financial Year. However the Company recorded an increase in revenue from operations of Rs. 8075.54 Lakhs in the current Financial Year (2014-15) from Rs. 7638.32 Lakhs in the previous Financial Year (2013-14). The Financial Year 2014 -15 got off to a jittery start with the first half of the year witnessing a muted consumer demand and production cuts, given the backdrop of slow economic growth. Further high indirect input and finance cost made the operating environment a challenging one. In the second half of the year under review, the third quarter faced a financial crunch which nearly doubled the working capital requirement of your company. Further lower margin and lower EBIDT impacted interest coverage, thereby increasing the finance cost. The last quarter of the financial year saw business sentiments improving in the energy sector (which constitutes almost 40% of the user segment in India) and automobile sector, which improved the demand and production margins, thereby the Company witnessed an overall increase in volume as compared to the previous Financial Year. However considering the above factors, the profitability of the company got severely affected. II DIVIDEND Considering the loss in the current financial year, your Directors have not recommended any dividend. III TRANSFER TO RESERVES In view of loss incurred during the year, the Board of Directors has not recommended transfer of any amount to reserves. IV REVISION OF FINANCIAL STATEMENT There was no revision of the financial statements during the year. V REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES During the year, your Company did not have any subsidiary, associate and joint venture company. VI DEPOSITS The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, details of deposits which are not in compliance with the Chapter V of the Act is not required to be furnished. VII DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013 Except as disclosed elsewhere in this report, no material changes and commitments have occurred between the end of the financial year of the Company and date of this report which could affect the Company's financial position. VIII INTERNAL FINANCIAL CONTROLS The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. IX SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. X RELATED PARTY TRANSACTIONS The details of transactions/contracts/arrangements entered by the Company with related party / parties as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the year, are furnished in Annexure I and forms part of this Report. XI PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES Full particulars of loans, guarantees, investments and securities provided during the year along with the purposes for which such loans, guarantees and securities are proposed to be utilized by the recipients thereof, has been furnished in Annexure II which forms part of this report XII DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT, 2013 The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. XIII DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT, 2013 The Company has not issued any sweat equity shares during the year and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. XIV DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT, 2013 The Company has not issued any equity shares under Employees Stock Option Scheme during the year and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. XV DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013 During the year there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014. XVI MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT Since as per the Audited Accounts of your Company as at 31st March, 2014, the paid-up Equity Capital and Net worth of your Company, does not exceed the prescribed limits as stipulated under the Listing Agreement, the Company is not required to furnish Management Discussion and Analysis Report and Corporate Governance Report. XVII MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL During the year the following appointments were made : Mr. Jal Thanawal (DIN 06912221) and Mrs. Kamlini Maniar (DIN 06926167) were appointed as Additional Directors categorized as Independent Directors w.e.f 22nd July, 2014. Thereafter at the Thirty Fifth Annual General Meeting of the Company held on 27th September, 2014, the members of the Company approved the appointment of the said directors as Independent Directors under the Companies Act, 2013, for a period of five years w.e.f. 27th September, 2014. At the said Annual General Meeting held on 27th September, 2014, the members also approved appointment of Mr. Manoj Shah (DIN 00453634) as Independent Director, for a period of 5 years w.e.f. 27th September, 2014. Mr. Shyantanu Chokhani, (DIN 02444142) resigned from the office of Joint Managing Director of the Company w.e.f 27th September, 2014, and continued as a Non - Executive Director. As per the recommendation of the Nomination and Remuneration Committee, appointed Mr. Mukesh Ashar, Chief Financial Officer (CFO) of the Company as an additional director of the Company w.e.f 8th December, 2014, and also as Whole -Time Director of the Company with effect from said date The Board of Directors appointed Mr. Ketan Shirwadkar, an Associate Member of the Institute of Company Secretaries of India (ACS No A37829), as Company Secretary of the Company w.e.f 1st January, 2015, designated as Key Managerial Personnel under section 203 of the Companies Act, 2013 and Rule 8 of the Companies (Management and Administration) Rules, 2014. As per the provisions of Section 149 of the Companies Act and Clause 49 of the Listing Agreement, the Company needs to have atleast one women director on the Board. In order to comply with these requirements, the Board of Directors appointed Miss. Dimple Nayak (DIN 07140233) as an additional director and women director of the Company, categorized as Independent Director w.e.f. 31st March, 2015 and the who shall hold the office till the date of this Annual General Meeting. The Company has received a notice from a member proposing the candidature of Miss. Dimple Nayak as the Director of the Company. Necessary resolution for appointment of Miss. Dimple Nayak as Director of the Company is included in the Notice of Annual General Meeting. Your Board recommends her appointment During the year the following Directors vacated / resigned from their office : Mr. Chaitan Maniar, (DIN 00034121) Chairman and Non Executive Director, passed away and left for heavenly abode on 29th June, 2014. The Board places on record its sincere condolences to Mr. Chaitan Maniar and appreciate the contributions received during his association with the Company. Mr. Deokinandan Ajitsaria (DIN 00244412) resigned from the office of Non - Executive Director w.e.f. 10th July, 2014, due to his poor health. The Board places on record its appreciation for the contributions made by Mr. Deokinandan Ajitsaria. Mrs. Kamlini Maniar, Independent Director, resigned from the office w.e.f. 6th November, 2014 due to her personal reasons. DECLARATIONS BY INDEPENDENT DIRECTORS The Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company. DIRECTOR'S RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2015, the Board of Directors hereby confirms that : 0 in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; 0 such accounting policies have been selected and applied consistently and the Directors 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 as at 31st March, 2015 and of the loss of the Company for that year; 0 proper and sufficient care was taken 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; 0 the annual accounts of the Company have been prepared on a going concern basis; 0 internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively; 0 proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; NOMINATION AND REMUNERATION COMMITTEE The Remuneration Committee constituted under the provisions of Clause 49 of the Listing Agreement was renamed as Nomination and Remuneration Committee of Directors reconstituted in accordance with the provisions of Section 178 of the Act. The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. Major criteria defined in the policy framed for appointment of and payment of remuneration to the Directors of the Company, are as under : • Minimum Qualification • Positive Attributes • Independence • Experience AUDIT COMMITTEE The Audit Committee of Directors constituted under the provisions of Companies Act, 1956 and Listing Agreement confirms the compliance of the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee comprises of : The scope and terms of reference of the Audit Committee have been amended in accordance with the Act. During the year under review, the Board of Directors of the Company had accepted all the recommendations of the Audit Committee. STAKEHOLDERS RELATIONSHIP COMMITTEE During the year under review, pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of the Company constituted the Stakeholder's Relationship Committee, comprising of : XIX VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES The Board of Directors of the Company has, pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy " for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc. The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. XX BUSINESS RISK MANAGEMENT The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual / strategic business plans and in periodic management reviews. XXI ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance, the directors individually, as well as the evaluation of all Committees. The manner in which evaluation has been carried out is detailed in Annexure III, which forms part of this Report. XXII INTERNAL CONTROL SYSTEMS Adequate internal control systems commensurate with the nature of the Company's business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected. XXIII DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014 The ratio of the remuneration of each Director to the median remuneration of the employees of the Company during the year has been furnished and marked as Annexure IV. XXIV AUDITORS AND REPORTS The matters related to Auditors and their Reports are as under : OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2015 The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2015 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2015 As per the provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, the Company has obtained Secretarial Audit Report from M/s Rathi and Associates, Company Secretaries for the financial year 2014-15 which forms part of this Report (Annexure V). The explanation of the Board under Section 134 (3) of the Companies Act, 2013 for the Comments mentioned in the Secretarial Audit Report are as under : 1) Secretarial Auditors' Comment The Company has filed certain intimations, to the Stock Exchanges under the Listing Agreement, related to appointment / cessation / change in designation of directors after the stipulated time period. Management Response Due to inadvertent errors there have been delays in submitting necessary compliance to the Stock Exchanges under the Listing Agreement. Now proper system is in place to ensure timely compliances. 2) Secretarial Auditors' Comment Certificate under Clause 47(c) of the Listing Agreement for the six months period ended 31st March 2014, was submitted to stock exchange after the stipulated time period. Management Response Due to inadvertent errors there have been delay in submitting necessary compliance to the Stock Exchanges under the Listing Agreement. Now proper system is in place to ensure timely compliances. 3. Secretarial Auditors' Comment The Audit Committee Chairman did not remain present in the Annual General Meeting of the Company held on 27th September, 2014. Management Response Due to sad demise of father of the Chairman of the Company he could not attend the said Annual General Meeting. However, Audit Committee considering the said fact, authorized a person to reply to the queries on the Accounts, if any. 4. Secretarial Auditors' Comment The Company is in process of updation of its website with the documents required to be uploaded thereon as per the provisions of the Companies Act, 2013 and Listing Agreement. Management Response Due to technical errors the website of the Company was not operational for some time. However the said problem was since resolved and efforts are being made to make the website fully functional and keep it up to date with the documents required to be uploaded thereon as per the provisions of the Companies Act, 2013 and Listing Agreement. RATIFICATION OF APPOINTMENT OF AUDITORS Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Lodha & Co, Chartered Accountants, (Firm Registration No. 301051E) the Statutory Auditors of the Company have been appointed for a term of 3 Years. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of AGM for seeking approval of members. COST AUDITORS Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, (including any amendments thereof), as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 31st July, 2015 appointed M/s Hemant Shah & Associates, Cost Accountants (Firm Reg No. 000394), as the Cost Auditors of the Company for the Financial Year Ending 31st March, 2016 on a remuneration of Rs. 60,000 (Rupees Sixty Thousand Only) for the applicable Product Groups. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members ratification for remuneration payable to M/s Hemant Shah & Associates, Cost Auditors is included in the Notice convening the Annual General Meeting. XXV OTHER DISCLOSURES Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under : EXTRACT OF ANNUAL RETURN Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended 31st March 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure VI which forms part of this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure VII which forms part of this Report. XXIX ACKNOWLEDGMENTS AND APPRECIATION Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. By Order of the Board of Directors For Sudal Industries Limited Sudarshan Chokhani Managing Director Mukesh V. Ashar CFO and Director Place: Mumbai Date: 31st July, 2015 Registered Office : A - 5, MIDC, Ambad Industrial Area, Mumbai Nashik Highway, Nashik-422 010 |