DIRECTORS' REPORT Ladies and Gentlemen, Your Directors have pleasure in presenting 40th ANNUAL REPORT of your Company together with the Audited Statement of Accounts and the Auditors' Report for the Financial Year ended 31st March, 2015. The summarized financial results for the Financial Year are as under: PERFORMANCE AND STATE OF COMPANY'S AFFAIRS OF THE COMPANY During the year under review, the Company has incurred net loss Rs.1083,00,000 as against loss of Rs5,25,65,000 in the previous year. Even though the total revenue of the Company has increased while comparing the previous year, the rise in loss was mainly due to increase in cost of Power & Fuel etc comparing to the previous year. No material changes have occurred or commitments made affecting the financial position of the company, between the end of the financial year of the company to which the financial statements relate and the date of the report BUSINESS OPERATIONS: Industrial Gases The order book position is comfortable since the Company was able to tie up long term contracts with the customers. The plant at Pondicherry and Perundurai is also performing at its rated capacity. Your Company is working at its market front since the supply of oxygen and nitrogen has increased compared to previous year. Windmill The power generation is normal and we expect the generation of power will improve in the coming months DIVIDEND Considering the current and accumulated losses of your Company , the Board of Directors is not recommending any dividend for the year 2014-2015. TRANSFER OF PROFITS TO RESERVES During the year your company has met net loss of Rs . 10,83,00,783/- which has been transferred to reserve account as ' Debit balance in statement of profit and loss' MATERIAL CHANGES AND COMMITMENTS OF THE COMPANY There were no material changes and commitments affecting the financial position of the Company between the end of financial year ( March 31, 2015 and the date of the Report 06.08.2015 ) SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES The Company doesn't have any subsidiaries, associates and joint venture companies THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134 (3) (m) of the Companies Act 2013 are attached as Annexure -1: Retirement by Rotation In terms of Section 152 of the Companies Act 2013 Smt. Veena Devi Saraf Who retire by rotation at the forthcoming AGM and is eligible for re-appointment. DECLARATION OF INDEPENDENT DIRECTORS As per the Companies Act 2013, your company had appointed three independent directors and they have declared that they meet the criteria of independence in terms of Section 149(6) of the Companies Act 2013 and that there is no change in their status of Independence INFORMATION U/s 197 (12) OF THECOMPANIES ACT 2013 The information required under section 197 (12) of the Act and read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as Annexure-5. STATUTORY AUDITORS: As per the provisions of the Companies Act 2013, M/s Sing & Co, Chartered Accountants, had been appointed as the statutory auditors of the Company to hold office from the conclusion of the 39 Annual General Meeting held on 12.09.2014 till the conclusion of Annual General Meeting to be held in 2017 subject to the ratification of share holders in every Annual General Meeting . The company has received confirmation from the audit firm regarding their consent and eligibility under sections 139 and 141 of the Companies Act 2013 read with the Companies ( Accounts ) Rules, 2014 for appointment as the Auditors of the Company. As required under clause 41 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India The Audit committee and the Board of Directors have recommended to ratify the appointment of auditors for the financial year 2015-16. The necessary resolution is being placed before the shareholder for their approval. SECRETARIAL AUDITOR Pursuant to the requirements of Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies ( Appointment and Remuneration of Managerial Personnel ) Rule 2014, the company has appointed, Mrs Lakshmmi Subramanain & Associates , Practicing Company Secretaries to conduct the secretarial audit for the financial year 2014-15. The Secretarial Audit report as received from the secretarial auditor is annexed to this report as Annexure-2 COMMENT ON SECRETARIAL AUDIRTOR REPORT With reference to the remarks made by the secretarial auditor, Mrs. Lakshmmi Subramanian, Practicing Company Secretary, in her secretarial audit report , the company has taken the corrective measures during the current financial year. INTERNAL CONTROL AND ITS ADEQUACY M/s Sivasubramanian & co, Cost Accountants was appointed as internal auditors of the Company. They regularly conduct audit and submit their quarterly reports, which are reviewed by the Audit Committee. The Company has an adequate Internal Control system, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. RELATED PARTY TRANSACTIONS U/S 188 (1) There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in Note No.37 of the Notes to the financial statements. Details of the transactions are provided in Form AOC-2 which is attached as Annexure - 3 The Board had approved the Related Party Transactions. EXTRACT OF THE ANNUAL RETURN: The details forming part of the extracts of Annual Return in form MGT-9 as provided under subsection (3) of section 92 of the Companies Act is annexed herewith as Annexure 4 to this report. RISK MANAGEMENT POLICY Your Company has an estabilished Enterprise Risk Management function that engages with all the business verticals for risk assessment , ensures that the risk mitigation plans are in place and validates the risk mitigation status regularly . Action plans are incorporated into the corporate plans of your company. The steering committee consisting of core Business vertical Heads overseas the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting, The Committee, Chaired by the Managing Director, reviews on a quarterly basis the enterprise risks to the achievement of the business objectives. The steering Committee updates the Risk Management committee comprising of independent directors and non-executive director on the enterprise risks and the action taken thereon DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of undesired behavior. The Board of Directors are responsible for redressal of complaints related to sexual harassment During the year ended 31 March 2015, the Board did not receive any complaints pertaining to sexual harassment. DEPOSIT FROM PUBLIC The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on date of the balance sheet. CORPORATE GOVERNANCE REPORT Since your company's paid up capital and Net worth is less than Rs.10 Crores and Rs.25 Corers respectively, the provisions of revised clause 49 relating to Corporate Governance, vide SEBI circular dated CIR/CFD/POLICY CELL/7 is not applicable to the Company. ANNUAL BOARD EVALUATION The Nomination and Remuneration Committee of the Board laid down the criteria for performance evaluation of all Directors. The performance evaluation has been done by the entire Board of Directors, except the Director concerned being evaluated. The criteria for performance evaluation are as follows: Role & Accountability - Understanding the nature and role of Independent Directors' position - Understanding of risks associated with the business - Application of knowledge for rendering advice to management for resolution of business issues - Offer constructive challenge to management strategies and proposals - Active engagement with the management and attentiveness to progress of decisions taken Objectivity - Non-partisan appraisal of issues - Own recommendations given professionally without tending to majority or popular views Leadership & Initiative - Heading Board Sub-committees - Driving any function or identified initiative based on domain knowledge and experience Personal Attributes - Commitment to role & fiduciary responsibilities as Board member - Attendance and active participation - Proactive, strategic and lateral thinking CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT The Board of Directors had adopted a Code of Conduct for the Board Members and employees of the company. This code helps the Company to maintain the standard of business ethics and ensure compliance with the legal requirements of the company The code is aimed at preventing any wrongdoing and promoting ethical conduct at the Board and employees. The Compliance officer is responsible to ensure adherence to the Code by all concerned The code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders All the Board Members and the Senior Management personnel have confirmed compliance with the Code WHISTLE BLOWER POLICY/VIGIL MECHANISM Pursuant to section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies ( Meetings of Board and its Powers ) Rules,2014 and clause 49 of the Listing Agreement, the Board of Directors had approved the policy on vigil mechanism / whistle blower and the same was hosted on the website of the Company. The policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director / employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year BOARD COMMITTEES The Board had constituted the following committees Viz Audit Committee, Nomination and Remuneration Committee and Stakeholders' Relationship Committee AUDIT COMMITTEE: The Audit Committee which acts as a link between the management, external and internal auditors and the Board of Directors of the Company is responsible for overseeing the Company's financial reporting process by providing direction to audit function and monitoring the scope and quality of internal and statutory audits. The Audit Committee comprises of Mr. P.Siva, Independent Director as Chairman, Mr.Anil Kumar Seth and Mr. D.M.Mohunta, Independent Directors as members. All members of the Audit Committee are financially literate and have expertise in accounting / financial management. Thteh Chairman of the Audit Committee was present at the last Annual General Meeting held on 12th September, 2014 Terms of reference in brief Financials • Review of the quarterly / half-yearly / annual financial statements with reference to changes, if any in accounting policies and reasons for the same • Major accounting entries involving estimates based on exercise of judgment by management, adjustments, if any arising out of audit findings. • Compliance with listing and legal requirements relating to financial statements, qualifications, if any in the draft audit report. Internal controls and risk management • Review of internal audit function and discussion on internal audit reports • Review of vigil mechanism and above all adequacy of internal control systems • Review of risk management policies especially enterprise level risk management Compliance and other related aspects • Disclosure of related party transactions and subsequent modifications, if any. • Scrutiny of inter-corporate loans and investments • valuation of undertakings or assets of the company • uses/application of funds raised through an issue • Review and recommendation of appointment, remuneration and terms of appointment of statutory auditors • Review of other services rendered by the statutory auditors • Review of the management discussion and analysis of the financial conditions and results of operations, significant related party transactions, management letters issued by statutory auditors, internal audit reports The audit Committee also looks into the matters as are specifically referred to it by the Board of Directors besides looking into the mandatory requirements of the Listing Agreement and provisions of Section 177 of the Companies Act 2013. NOMINATION AND REMUNERATION COMMITTEE: Constitution The Nomination and Remuneration committee comprises of Mr. P.Siva, Independent Director as Chairman, Mr.Anil Kumar Seth and Mr. D.M.Mohunta, Independent Directors as members. Terms of Reference • The Committee shall formulate the criteria for determining the qualification, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees. • The Committee shall identify persons who are qualified to become directors and who may be appointed in senior management positions in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance. • The Committee shall ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets performance benchmarks, and involves a balance between fixed and incentive pay. • Review the policy from time to time for selection and appointment of Directors and senior management employees and their remuneration; • Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and Senior Management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and that the remuneration involves a balance between fixed and incentive pay reflecting short term and long term objectives of the Company. • Filling up of vacancies in the Board that might occur from time to time and appointment of additional Non-Executive Directors. In making these recommendations, the Committee shall take into account the special professional skills required for efficient discharge of the Board's functions. • Recommendation to the board with regard to retirement of Directors, liable to retire by rotation and appointment of Executive Directors. • To determine and recommend to the Board from time to time (a) The amount of commission and fees payable to the Directors within the applicable provisions of the Companies Act, 2013 (b) The amount of remuneration, including performance or achievement bonus and perquisites payable to the Executive Directors (c) To frame guidelines for Reward Management and recommend suitable schemes for the Executive Directors and Senior Management. • To determine the need for key man insurance for any of the company's personnel • To carry out the evaluation of every director's performance • To carry out any function as is mandated by the Board from time to time and /or enforced by any statutory notification, amendment or modifications as may be applicable. • Stakeholders' Relationship Committee (C) Meetings and attendance during the year: There is no meeting held during the year. (D) Remuneration policy The Board has, on the recommendation of the Nomination & Remuneration Committee approved a policy for selection and appointment of Directors, Senior Management and for determining their remuneration. STAKE HOLDERS RELATIONSHIP COMMITEE The Stakeholders Relationship Committee specifically looks into issues such as redressing of shareholders' and investors' complaints such as transfer of shares, non-receipt of shares, non-receipt of declared dividends and ensuring expeditious share transfers and also redresses the grievances of deposit holders, debenture holders and other security holders. (A) Composition, Members, its meetings and attendance This Committee comprises of Mrs. Veena Devi Saraf as Chairman with Mr.Gajanand Saraf and Mr. P.Siva as members of the Committee. CORPORATE SOCIAL RESPONSIBILITY ( CSR ) Your company is not mandatorily required to constitute CSR committee since it has not come within the purview of threshold limit specified in section 135 of the Companies Act 2013. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: During the year, there were no such instances of significant and material orders passed by the regulators, courts or tribunals. DIRECTORS' RESPONSIBILITY STATEMENT: As required under Section 134 (5) of the Companies Act, 2013, the Board of Directors hereby confirm:- (i) That in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) That 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 fair view of the state of the affairs of the Company at the end of the Financial Year and of the profit of the Company for that period; (iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) That the Directors had prepared the Annual Accounts on a going-concern basis; (v) That proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively. (vi) That the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. GENERAL INFORMATION AGM Date, Time and Venue : 26th September 2015 at 9.30 a.m Hotel Kanchi, No.28, Ethiraj Salai, Egmore Chennai-600 008 Financial Calendar: 1st Quarter : 1st April to 30th June 2nd Quarter: 1st July to 30th September 3rd Quarter : 1st October to 31st December 4th Quarter : 1st January to 31st March Date of Book Closure: 19.9.2015 to 26.9.2015 Record Dates 19.9.2015 Dividend Payment date : Not applicable Listing with Stock Exchanges : Bombay Stock Exchange Address of the Registered office No.80 ( Old No.141 ) Greams Road Opp. to Greams Road Post Office Chennai Tamilnadu 600006 E-mail id contact@nolgroup.com Web Site www,nolgroup.com ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation of the co-operation and assistance received from the business constituents during the year under review. By Order of the Board, Sd/- Rajesh Kumar Saraf Joint Managing Director DIN:-00007353 Sd/- G.N.Saraf Managing Director DIN:-00007320 Place : Chennai Date : 06.08.2015 |