DIRECTORS' REPORT, MANAGEMENT'S DISCUSSION & ANALYSIS To Dear Members, Your Directors have the pleasure of presenting the 55th Annual Report and the audited financial statement of the Company for financial year ended March 31, 2016 DIVIDEND: The interim dividend of Rs. 3.50/- per share of the nominal value of Rs.2/-each for the financial year ended March 31, 2016 was declared on 12th March, 2016 and paid to all the eligible shareholders on 29th March, 2016. The interim dividend paid is the final dividend on equity shares for the financial year ended 31st March, 2016. SHARE CAPITAL: The paid up equity share capital as on 31st March, 2016 was Rs. 5.84 crores. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. DIRECTORS: • As per the provisions of Companies Act, 2013, Mr. S. Santhanam, retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. • Mr. S. Sridhar ceased to be Joint Managing Director with efect from 31.10.2015 and is continuing as Non-Executive Director. • Mr. R. Sampath ceased to be Managing Director with efect from 14.03.2016 and is coninuing as Non-executive Director. • The Nomination and Remuneration Committee and the Board have recommended appointment of Mr. R. Senthil kumar, General Manager - Operaions of the Company as Whole-ime Director for a period of 3 years with effect from 01.08.2016, subject to the approval of the shareholders. The details regarding the appointment of Mr. R. Senthil Kumar are given in the explanatory statement to the Notice of AGM. Declaration by Independent Directors All the Independent Directors had furnished to the Company a declaration under section 149 (7) of the Companies Act, 2013 sating that they meet criteria of independence as provided under section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations. MEETINGS During the year, six Board meetings and four Audit Committee meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under Companies Act, 2013. BOARD EVALUATION Pursuant to the provisions of Companies Act, 2013, the performance evaluation of Chairman and Non Independent Directors was carried out by the Independent Directors. The Independent Directors evaluated the parameters viz., level of engagement, duties, responsibilities, performance, obligations and governance. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION The policy of the Company on director's appointment and remuneration, including criteria for determining qualification, positive attributes, independence of a director and other matters provided under sub - section (3) of Section 178 of the Companies Act, 2013 was framed on the recommendation of the Nomination and Remuneration Committee and approved by the Board. The key objective of this policy is selection, appointment and remuneration of Key Managerial Personnel, Directors and Senior Management Personnel. The said policy is given as Annexure - 1 to the Director's Report. RISK MANAGEMENT POLICY A Risk Management Policy was framed and approved by the Board. The objective of this policy is to minimize the adverse impact of various risks to business goals and objectives and to enhance the value of stakeholders. VIGIL MECHANISM (Whistle Blower Policy) The vigil mechanism of the Company incorporates a Whistle Blower Policy in terms of Listing Agreement (now SEBI Listing Regulations) with Stock Exchange. It aims to provide an avenue for employees through this policy to raise their concerns on any violation of legal or regulatory requirements, suspicious fraud, misfeasance, misrepresentation of any financial statements and reports. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place an Ani-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16. No. of complaints received: Nil No. of complaints disposed off: NA Listing Agreement The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Lasing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective 1st December, 2015. All listed envies were required to enter into a fresh Lasing Agreement within six months from the effective date. The Company entered into a fresh Listing Agreement with BSE Limited during February, 2016. Policies SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. In compliance with the same, the Company has formulated the policies. The corporate governance policies viz. Policy on Related Party Transactions, Corporate Social Responsibility Policy, Policy on Board Diversity, Policy on Disclosure of Material Event / Information, Code of fair disclosure under SEBI (Prohibition of Insider Trading) Regulations, 2015, Whistle Blower Policy etc. are available on our Company's website: www.ultramarinepigments.net DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the provisions of Sec. 134 (5) of the Companies Act, 2013, the Directors confirm that. i] in the preparation of the annual accounts for the year ended March 31, 2016 the applicable accounting standards have been followed along with proper explanation relating to material departures. ii] appropriate accounting policies have been selected and applied and such judgment and estimates have been made that are reasonable and prudent so as to give true and fair view of the state of affairs of the company as at March 31, 2016 and of the profit of the company for the year ended that date. iii] proper and sufficient care has been 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. iv] the annual accounts have been prepared on a "going concern "basis. v] that proper internal financial controls are laid down and are adequate and operating effectively. vi] that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and operating effectively. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS Particulars of loans and investments are provided in the financial statements (Please refer Note 3.9, 3.10 and 3.15 to the financial statement). 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 were no materially significant related party transactions entered in to 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 was obtained for the transactions which are foreseen and repetitive in nature. The transactions for which omnibus approval granted are placed before the Audit Committee and Board for their review and approval. A policy on the Related Party Transactions was framed, approved by the Board and posted on the Company's website, www.ultramarinepigments.net The disclosure of Related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable. FINANCE: All taxes and statutory dues are being paid on time. The Company has been regular in making timely repayment of the loans and interest to Banks. The surpluses in business are deployed in a prudent manner, considering the risk, reward and safety. STATEMENT PURSUANT TO LISTING AGREEMENT The Company's shares are listed with Bombay Stock Exchange Ltd. Your Company has paid the respective annual lasing fees up-to-date and there are no arrears. REPORT ON CORPORATE GOVERNANCE A report on Corporate Governance is annexed herewith. As required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditor's Certificate on Corporate Governance is enclosed to the Board's Report. AUDITORS Pursuant to the provision of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rule, 2014, the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Brahmayya & Co., Chartered Accountants, Chennai as statutory auditors is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the Auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of section 141 of the Companies Act, 2013. COST AUDIT The company is covered under the audit of cost accounting records relating to the products of the company. Mr. G. Sundaresan, Cost Accountant has been appointed as Cost auditor for the financial year 2015-16. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel ) Rule, 2014, the Company has appointed M/s. R.M. Mimani & Associates LLP, a firm of Company Secretaries in practice as Secretarial Auditor to undertake the secretarial audit of the Company. The Secretarial audit report in Form MR- 3 is given in Annexure -2 to this report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of Annual Return in Form MGT- 9 is given in Annexure - 3 to this report. PARTICULARS OF EMPLOYEES The information required under section 197 of the Companies Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are given in Annexure - 4 & 5 to this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars required to be included in terms of section 134(3)(m) of the Companies Act, 2013 with regard to Conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo are given in Annexure - 6 to this report. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES OF THE COMPANY: A report on CSR initiatives of the Company, CSR policy is given in Annexure - 7 to this report. ACKNOWLEDGEMENT The Board acknowledges the support given by the employees for their collecive contribuion, Bankers and the shareholders for their continued support. On Behalf of the Board For Ultramarine & Pigments Limited., Indira Sundararajan Managing Director [DIN: 00092203] Tara Parthasarathy Joint Managing Director [DIN: 07121058] Place : Mumbai Date : 27th May, 2016 |