Directors' Report (For the Financial Year ended 31st March, 2015) To The Members, Your Directors have pleasure in presenting the Thirty-Eighth Annual Report along with Audited Financial Statements of the Company for the year ended 31st March, 2015. • 2014-2015 THE YEAR UNDER REVIEW: Your Company earned revenue of Rs. 786.60 crores for the year ended 31st March, 2015, as against Rs. 688.79 crores of previous year. Domestic Sales amounted to Rs. 401.06 crores, and the Export Sales amounted to Rs. 385.54 crores for the year ended 31st March, 2015. The Indian economy started FY 2014-15, on a positive note with significant improvement in market and business sentiment, following the 'General Elections in May 2014'. Softening of international crude and commodity rates has eased the mounting cost pressures on the industry to some extent as well as curtailed inflationary pressures on the Government. Given the increased government focus and policy initiatives to boost the infrastructure and agri segments, the growth rate is expected to pick up, moving forward. However, the micro economic environment continued to be challenging to the country during the year. During the year, your Company has successfully navigated from depressed period with remarkable growth. Your Company earned the Net Profit After Tax of Rs. 43.05 crores, in the year under review, which is a significant improvement of 61.50%, compared to previous year. Your Company has improved its performance through innovative products and exploration of new product segments. Innovation is deeply rooted at the heart of our consumer-aligned business focus. Your Company is continuously working on pioneering initiatives to offer premium, international quality products to customers around the world. Innovative solutions launched in aquaculture industry are well accepted by your Company's customers. • OPERATIONS: The operations of the Company are elaborated in the annexed "Management Discussion and Analysis Report". • RESERVE: Your Company proposes to carry Rs. 430.55 lacs (Previous year Rs. 267.00 lacs) to General Reserve and retain Rs. 18,180.27 lacs in the Statement of Profit and Loss. • DIVIDEND: Your Directors have recommended a Dividend of 30% (Rs. 3/- per share) for the year 2014-2015 for your consideration. The proposed Dividend will absorb an amount of Rs. 787.74 lacs (including Dividend Tax). The Dividend, if approved by the Shareholders of the Company, will be paid to the eligible members within the stipulated time. • CHANGE IN THE NATURE OF BUSINESS, IF ANY: Therewas no change inthe nature ofbusiness ofyourCompany during the Financial Year 2014-15. • MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION: No material changes and commitments, affecting the financial position of the Company occurred between the end of the Financial Year of the Company i.e. 31st March, 2015 and the date of this Directors' Report i.e. 26th May, 2015. • DIRECTORS: Ms. Diya Garware Ibanez (DIN 00415841) ceased to be a Director with effect from 25th September, 20 l4.YourDirectors place on record its sincere appreciation for the services rendered by her. Having regard to the present composition of the Board of Directors of the Company, Mr.VR. Garware (DIN 00092201), although a non-retiring director as per the provisions of Article 94 of the Articles of Association of the Company, is required to retire at this Annual General Meeting as per the provisions of Section 152of theCompaniesAct,20l 3. Being eligible, he offers himself for reappointment as a director not liable to retire by rotation at the ensuing Annual General Meeting. Mr. Ashish Goel (DIN 00147449), was appointed as an Independent Director for a term of one year, with effect from 25th September, 2014 or till the date of next Annual General Meeting (i.e. 2nd September, 2015), whichever is earlier. Resolution proposing appointment of Mr. Ashish Goel, Independent Directors, for a further term of five consecutive years, forms part of the Notice of the Annual General Meeting. As per the provisions of the Companies Act, 2013, Independent Director will not be liable to retire by rotation. The Company has received notice in writing from a member under Section 160 of the Companies Act, 201 3, proposing his candidature for the Office of Director. Mr. M. V Subbarao (DIN 02099059), was appointed as an Additional Director by the Board of Directors at its meeting held on 26th May, 2015 and who holds office upto the date ofthis Annual General Meeting (i.e. 2nd September, 2015). The Company has received notice in writing from a member under Section 160 of the Companies Act, 2013, proposing his candidature for the Office of Director. Resolution proposing appointment of Mr. M. V Subbarao, as a Non-Executive and Non-Independent Director of the Company, whose period of office shall be liable to be determined by provisions for retirement of Directors by rotation, forms part of the Notice of 38th Annual General Meeting of the Company. • KEY MANAGERIAL PERSONNEL: Mr. S. H. Bamne, is discharging the functions and responsibilities of a whole-time key managerial personnel as Chief Financial Officer of the Company. Mr. Ashish Boradkar, resigned as Company Secretary and Compliance Officer of the Company, with effect from 2nd May, 2014. Mr. Ravindra Yadav was appointed as Company Secretary and Compliance Officer of the Company, with effect from 7th August, 2014. He resigned with effect from 15th October, 2014. Mr. Sunil Agarwal has been appointed as Company Secretary and Compliance Officer of the Company, with effect from 14th April, 2015. • DIRECTORS' RESPONSIBILITY STATEMENT: Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and pursuant to the provisions of Section l 34(3)(c) read along with Section l 34(5) of the Companies Act, 2013, hereby state and confirm that: 1) In the preparation of the Annual Financial Statements for the year ended 3 lst March, 2015, the applicable Accounting Standards have been followed; 2) For the Financial Year ended 31st March, 2015, such Accounting Policies as mentioned in the Notes to the Financial Statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended 3 l st March, 2015; 3) That proper and sufficient care has been taken for the maintenance of adequate accounting records, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities in accordance with the provisions of the Companies Act, 201 3; 4) The Annual Financial Statements have been prepared on a "Going Concern" basis; 5) That proper Internal Financial Controls were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and 6) That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. • BOARD EVALUATION: The Nomination & Remuneration Committee of the Board had lai d down - a. Criteria for determining qualifications, positive attributes and independence of director at the time of consideration for appointment; b. Criteria to identify persons, who are qualified to become Director; c. Criteria for evaluation of performance of directors including Independent Directors and the Board as a whole; and d. Criteria to identify persons, who may be appointed in Senior Management. The Nomination & Remuneration Committee of the Board has recommended to the Board a Policy relating to the Remuneration for the Directors, Key Managerial Personnel and Senior Management. The said Policy has been approved and adopted by the Board of Directors of the Company. Based on the criteria of evaluation formulated by the Nomination & Remuneration Committee of the Board, the Board of Directors of the Company has carried out Annual Evaluation of its own performance, the Directors individually and also the working of its Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Stakeholder Relationship Committee. A separate meeting of Independent Directors was held or 6th February, 2015, inter alia, to: i. Review the performance of Non-independent Directors and the Board as a whole; ii. Review the performance of the Chairperson of the Company, taking into account the views of Executive Director and Non-Executive Directors; iii. Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that was necessary for the Board to effectively and reasonably perform their duties. • DECLARATION BY INDEPENDENT DIRECTORS1; Declarations under subjection (7) of Section 149 of the Companies Act, ZD 13, received from all Independent Directors, meeting the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013, have been taken on record by the Board of Directors of the Company. • NUMBER OF MEETINGS OF THE BOARD: There were five (5) meetings of the Board of Directors held during the year, details of which are given in the annexed "Corporate Governance Report". COMPOSITION OF THE COMMITTEES OF THE BOARD; The details relating to the composition of Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders Relationship Committee of the Board are given in the annexed "Corporate Governance Report". • STATUTORY AUDITORS: Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, M/s Patki & Soman, Chartered Accountants (E R. No. I07830W), the Statutory Auditors of the Company, were appointed for a period commencing from the conclusion of the 37th Annual General Meeting til the conclusion of the 40th Annual General Meeting subject to the ratification of their appointment at every Annual General Meeting of the Company. The members are requested to ratify the appointment of M/s Patki & Soman, Chartered Accountants (F. R. No, I07830W), as Statutory Auditors of the Company till the conclusion of the 39th Annual General Meeting of the Company. STATUTORY AUDITORS' REPORT; There are no audit qualifications, reservations or adverse remarks or disclaimers, in the Auditors' Report, as annexed elsewhere in this Annual Report. • COST AUDIT AND COST COMPLIANCE: In accordance with the Companies (Cost Records and Audit) Rules, 2014, the Cost Audit for the Financial Year 2014-15 was not applicable to the Company. Ministry of Corporate Affairs, Government of India on 31st December, 2014, has notified the Companies (Cost Records and Audit) Amendment Rules, 2014 and has redefined the scope of Cost Audit, which require Cost Audit in respect of certain products of your Company. M/s Joshi Apte & Associates, Cost Accountant, were appointed as Cost Auditors for conducting an audit of Cost Accounting Records maintained by the Company, for the Financial Year 2015-16. • SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. SVD & Associates, Company Secretaries (CP No. 965) as Secretarial Auditor, for the year ending 31st March, 2015. The Secretarial Auditor has submitted its Report in Form No. MR-3 for the Financial Year ended 31st March, 2D 15 and the same is set out in Annexure I, forming part of this Report. The same does not contain any qualifications, reservations or adverse remarks or disclaimers, PARTICULARS OF LOANS, GURANTEES AND INVESTMENTS: The Company, has not given any Loans and not provided any Guarantees during the Financial Year 2014-15, attracting the provisions of Section 186 of the Companies Act, 2013 read along with the Companies (Meetings of Board and its Powers) Rules, 2014. The details of Investments are provided under Note 14 of the Notes to Financial Statements for the year ended 31st March, 2015. • RELATED PARTY TRANSACTIONS; All the transactions with Related Parties entered during the Financial Year 2014-15 by the Company, were in its ordinary course of business and on arm's length basis. There were no Material Related Party Transactions) made with the Company's Promoters, Directors, Key Managerial Personnel or their relatives as specified under Clause 49 of the Listing Agreement. All Related Party Transactions are placed before the Audit Committee for their prior approval. The Policy on Related Party Transactions as approved by the Board is uploaded on the Compan/s website: <http://www.garwareropes.com/party->transactions-policy.html, Pursuant to the provision of the Section I34(3)(h) of the Companies Act, 2013, Form AOC-2 is not applicable to the Company. • INTERNAL FINANCIAL CONTROL: Internal Financial Controls laid down by your Company with reference to the Financial Statements are adequate and Operating effectively. • RISK MANAGEMENT POLICY: The Company recognizes the importance of Risk Management and hence the Board of Directors of the Company has adopted Risk Assessment and Minimization Policy Statement. This Policy Framework has been adopted as a fundamental part of the business policy to counter and combat the adverse consequential effects of various risks. Risk Assessment and Minimization Policy involves the following: • Identification of risks. • Evaluation of the risks as to likelihood and consequences. • Assessment of options for minimising / covering the risks. • Action Plan for the implementation of the risk management plans. • Review of the risk management efforts. The Board of Directors of the Company regularly review the initiatives taken within framework of Risk Assessment and Minimization Policy Statement and accordingly, take necessary corrective actions, if required, for managing / mitigating the same. I CORPORATE SOCIAL RESPONSIBILITY (CSR): The concept of Corporate Social Responsibility (CSR) was recognised and practiced by the Founder / Promoter of the Company, Late Shri Abbasaheb Garware and this was (slowed all through after him by ex-chairman Late Shri R, B. Garware. Your Company has been direcdyand also indirectly, carrying out various socially beneficial activities aiming to be a part of the process of progress and development of Society as a whole. Pursuant to the provisions of Section 135 of the Companies Act, 2013, read along with the Companies (Corporate Social Responsibility Policy), Rules, 2014, the Company has established Corporate Social Responsibility (CSR) Committee and an Annual Report on CSR Activities, forming part of the Directors' Report is given at 'Annexure 2'. PERSONNEL: The relations with employees at all levels continued to be cordial throughout the year. • PARTICULARS OF EMPLOYEES; The information required pursuant to the provisions of Section 197 read along with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of the Directors' Report. However, as perthe provisions of Section 136 of the Companies Act, 2013, the Financial Statements along with reports thereon to be annexed or attached to the Financial Statements are being sent to all the Shareholders of the Company excluding the above said information in respect of employees. Any Shareholder interested in obtaining a copy may write to the Company Secretary at the Registered Office of the Company. DETAILS OF EMPLOYEE WELFARE TRUST SET UP FOR THE BENEFIT OF ITS MANAGERIAL EMPLOYEES Your Company on 16th October, 2D06, constituted a Trust named as "GWRL Managerial Staff Welfare Trust" ("GWRLTrust") to implement the Welfare Scheme for the benefit of its Managerial Employees. In accordance with the provisions of the Companies Act, 1956 and SEBI (Disclosure and Investment Protection) Guidelines, 2000, 9,98,000 convertible warrants were allotted to the GWRL Trust, which were later on converted into Equity Shares and the Company gave advance required to acquire the said Warrants / Equity Shares. The GWRL Trust presently holds 9,46,500 Equity Shares of Rs. 10/-each of the Company. The GWRL Trust did not have any dealings in the secondary market during the last Financial Year. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read along with Rule 8(3) of the Companies (Accounts) Rules, 2014, pertaining t© the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is set out in 'Annexure 3' forming part Of this report- • EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Sections 134(B)(a) and 92(3) of the Companies Act, 2013 read along with Rule 12 of the Companies (Management & Administration) Rules, 2014, an extract of Annual Return as of 31st March, 2015, in Form No. MGT-9, is set out in 'Annexure 4' forming part of this report. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013; Your Company has Zero tolerance towards any action on the part of any employee, which may fall under the ambit of 'Sexual Harassment1 at workplace, and is fully committed to uphold and maintain the dignity of every woman employee working in the Company. There was no complaint reported during the Financial Year under the said Act. SUBSIDIARY; Garware Environmental Services Private Ltd. is the wholly-owned subsidiary of your Company- This Subsidiary Company is yet to start its commercial operations. • CONSOLIDATED FINANCIAL STATEMENTS: Pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Company has prepared a Consolidated Financial Statement of the Company and also of its Subsidiary i.e. Garware Environmental Services Private Limited, in the same form and manner as that of the Company, which shal be laid before the ensuing Annual General Meeting of the Company along with the laying of the Company's Standalone Financial Statement. The Annual Report of the Company inter alia containing the Standalone Audited Financial Statement of the Company and Consolidated Audited Financial Statement of the Company and separate Audited Financial Statement of the Company in respect of its subsidiary is also placed on the Company's website: www.Yarwareropes.com. The Annual Accounts of the Subsidiary Company and the related detailed information will be made available to any member of the Company / its Subsidiaries who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Company wil also be kept for inspection by any member at the Company's Registered Office and that of the Subsidiary Company. CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Management Discussion and Analysis, Corporate Governance as well as the Auditor's Certificate regarding compliance of conditions of Corporate Governance is set out in Annexure forming part of this report. The Report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. • ACKNOWLEDGMENT: Your Directors gratefully acknowledge the support given by the Customers, Dealers, Distributors, Suppliers, Bankers, various departments of the Central and State Governments, Local Authorities and also the Shareholders of the Company. Your Directors would further like to record their appreciation for the unstinted efforts put in by all Employees of the Company during the year. On behalf of the Board of Directors, V. R. GARWARE Chairman & Managing Director DIN 0009220! Pune 26th May, 2015 |