DIRECTORS' REPORT The Directors present their 45th Annual Report on the business and operations of the Company and the financial accounts for the year ended on 31st March, 2015. DIVIDEND Your Directors do not recommend any dividend on equity shares in view of the brought forward loss of earlier years incurred by the Company. REFERENCE TO BIFR The Company had made Reference to the Board for Industrial & Financial Reconstructions (BIFR) under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 and has been registered as case No. 14/2008 on 10.03.2008 as the entire net worth of the Company has been eroded. As per the draft Rehabilitation Scheme submitted consultation with the consortium Banks to the BIFR, the Company has been declared as Sick Company by an Order issued by the BIFR on 24th February 2010 and has appointed Bank of Baroda as the Operating Agency with directions to prepare a revival scheme for the Company and to submit before BIFR. The Operating Agency i.e. Bank of Baroda has submitted draft rehabilitation scheme to BIFR. The Company is awaiting hearing on the draft rehabilitation scheme. OPERATION AND FUTURE OUTLOOK During the year under review, the turnover stood at Rs. 19.18 crores against Rs.27.34crores in the previous year. Due to paucity of working capital, the sales have affected during the year. The Company has taken various steps to boost better working results and operating profit, which will result in the coming years. As per the One Time Settlement approved by the Consortium Banks for restructuring of its existing Long Term Working Capital Facilities, the Company is making payments on installments to the Banks. This will enable the Company to reduce the cost of finance and will improve working of Company's manufacturing plants. During the year the Company has credited a sum of Rs.344.08 lac to Profit & Loss Account on account of unpaid interest saved on One Time Settlement with the Banks. DIRECTORATE : Mrs. Shahnaz A. Dawoodani, a Director of the Company shall retire by rotation at the forthcoming Annual General Meeting and offer herself for re-appointment. Mr. SadruddinJiwani and Dr. Akbar Virani have been appointed as additional Directors on 31st March 2015. EXPORTS During the year under review, the Company exported its products to various countries. Total exports during the year on FOB basis was Rs. Nil lac against Rs. 35.05 lac in the previous year. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report There were no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report like settlement of tax liabilities, depression in market value of investments, institution of cases by or against the company, sale or purchase of capital assets or destruction of any assets etc. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future Internal control systems and their adequacy The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board and to the Chairman. The Company has obtained ISO 9001 certification and adheres to the Standard Operating Practices its manufacturing and operating activities. The management of the Company evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the assessment, the management undertakes corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations with corrective actions thereon are presented to the Audit Committee of the Board. Subsidiaries/ Joint Ventures The Company does not have Subsidiary or Joint Ventures. Fixed deposit The Company has fully repaid the outstanding deposits held by it and there were no outstanding deposits payable by the Company. Auditors & auditor's report The Company's Auditors M/s. A.N. Damania & Co., Chartered Accountants will retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that their appointment, if made, would be within the provision prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. The Notes on Financial Statements referred to in the Auditor's Report are self-explanatory and do not call for any further comments. Extract of Annual Return The details forming part of the extract of Annual Return in form MGT-9 is annexed herewith as Annexure -A. Conservation of energy, technology absorbtion etc. The particulars of conservation of Energy, Technology, Absorption, foreign Exchange Earnings and outgo have not been given since the same are not applicable to the Company. Corporate Social Responsibility Initiatives The Company does not come under the parameters specified under Section 135 of the Companies Act, 2013, hence no Committee has been constituted for Corporate Social Responsibility Initiatives. Directorate : Mrs. Shahnaz A. Dawoodani, a Director of the Company shall retire by rotation at the forthcoming Annual General Meeting and offer herself for re-appointment. Mr. SadruddinJiwani and Dr. Akbar Virani have been appointed as additional Directors on 31st March 2015. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. As required under Clause 49 of the Listing Agreement with the Stock Exchange, the information on the particulars of the Directors proposed for appointment/ re-appointment has been given in the Notice of the Annual General Meeting. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration and Stakeholder's Grievance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Nomination and Remuneration Committee The Board has on the recommendation of the Appointment and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Board and Audit Committee Meetings 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, 2013. Vigil Mechanism / Whistle Blower Policy The Company has established a vigil mechanism to be known as the "Whistle Blower Policy" for its Directors and employees to report instances of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about serious irregularities within the Company. Prevention of Insider Trading The Company has adopted a Code of Conduct for Prevention of Insider Trading under Securities and Exchange Board of India (Insider Trading) Regulation 2015 with a view to regulate trading in securities by the Directors, designated employees and their immediate relatives and other connected persons. The Code requires pre-clearance for dealing in the Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. All the members of the Board and designated employees have confirmed compliance with the Code. Particulars of loans, guarantees or investments 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 by the Company are given in the notes to the financial statements. Related Party Transactions All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. Secretarial Audit Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr. P.V. Ramaswamy, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure-B, which is self-explanatory. Risk Management Policy Pursuant to Section 134(3) (n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has constituted a business 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. At present the Company has not identified any element of risk which may threaten the existence of the Company. Corporate Governance The Report on Corporate Governance along with a certificate of compliance from the Auditors and Management Discussion and Analysis Report forms part of this Report. Director's responsibility statement The Board of Directors of your Company confirms that: i) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; ii) the Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fiar view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period; iii) the directors had taken proper and sufficient care 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 Directors have prepared the Annual Accounts on a going concern basis; and v) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operative effectively. Particulars of employees The Company did not have any employee falling within the purview of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Persons Rule 2014). INDUSTRIAL RELATIONS The Industrial Relations continued to be cordial during the year under review. ACKNOWLEDGEMENT The Directors wish to place on record their sincere appreciation for the continued co-operation by the Company's Bankers and the support given by the Company's valued customers. The Board also express its sincere appreciation to the commitment and dedicated employees at all levels. Last but not least the Board places on record their gratitude to the Investors, Clients and Shareholders of the Company. On behalf of the Board of Directors M. M. Gadgil Chairman PLACE: MUMBAI DATE :30th August 2015 |