DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the Twenty Sixth Annual Report together with Audited Financial Statements for the year ended March 31, 2015. DIVIDEND Enthused with the working of the Company, your Directors have pleasure to recommend a higher dividend of Rs.2.50/- on equity share of face value of Rs. 10/- each (25%) for the fiscal year ended 31st March, 2015 as against Rs.1.50 per Share (15%) for the previous financial year. The dividend, if approved by the Members in the ensuing Annual General Meeting, would absorb Rs.133.06 Lacs including dividend distribution tax of Rs. 23 Lacs out of the distributable profits available. PERFORMANCE The Company has achieved total revenue of Rs. 6921 Lacs as compared to last year's revenue of Rs.5747 Lacs. Profit before tax is Rs.887 Lacs and profit after tax stands at Rs. 591 Lacs during the year under review as against Rs. 516 Lacs and Rs. 339 Lacs respectively in the previous year. PLANT OPERATIONS Company's Plant situated at Block 458, Village Post Tundav, Taluka Savli, Gujarat is running well and continues to operate satisfactorily. SHARE CAPITAL The paid up equity capital as on March 31, 2015 was Rs. 442.23 Lacs consisting of 44,22,346 Equity Shares of Rs.10/- each. During the year under review, the Company has not issued any bonus shares, equity shares nor any Right Shares with differential voting rights etc., neither granted any stock options or sweat equity. APPOINTMENT/REAPPOINTMENT/CESSATION OF DIRECTORS/ KMP The following directors are appointed /reappointed /ceased during the year It is indeed with a deep sense of sorrow we note the passing away of Mr. Ajay Kumar Rungta, founder Chairman of the Company and has thus ceased from the directorship of the Company w.e.f. February 24, 2015. The Board takes on record the invaluable guidance provided by the late Chairman since inception of the Company. His guiding principles and good governance in the Management of the Company will continue to be the guiding principles for future and he leaves behind a legacy that will be probably difficult to match. Nonetheless, the entire team of the Company shall endeavour to do its best. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Independent Directors have carried out an evaluation of Board as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is spelt out in the Corporate Governance Report. FINANCE / ACCOUNTS Your Company continued to focus on improved cash generation without any compromise in the quality of its product. The focus on managing optimal levels of inventory, sound capacity utilization of each line in operation and cost saving/cutting across the organisation helped generate healthy cash flow. Your Company kept surplus funds prudently without any undue risk so as to ensure safety and liquidity of the funds. Your Company was able to raise the short-term/long-term funds, if and as and when required at reasonable rates and repaid strictly on due date as per terms. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility (CSR Committee) has been formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board and shall be hosted on the Company's website. The Annual Report on CSR activities is annexed herewith marked as "Annexure A". FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS The company has not given any guarantees or securities covered under the provisions of Section 186 of the Companies Act, 2013 ("the Act"). However, the aggregate of loans and advances granted as also investments are within the limits of Section 186 of the Act. A STATEMENT ON THE DECLARATION GIVEN BY INDEPENDENT DIRECTORS PURSUANT TO SECTION 149(6) OF THE ACT The Company has received declaration from allIndependent Directors of the Company to the effect that they meet the criteria of independence as stipulated u/s 149(6) of the Act. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review; c) the directors have 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; d) the directors have prepared the annual accounts on a going concern basis; and e) 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; f) the directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 OF THE COMPANIES ACT, 2013 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. The details are mentioned as per "Annexure B". AUDIT COMMITTEE RECOMMENDATIONS During the year, the Board has accepted all recommendations of Audit Committee and accordingly no disclosure is required to be made in respect of non acceptance of the recommendation of the Audit Committee by the Board. AUDITORS The auditors, M/s. JAIN & HINDOCHA, Chartered Accountants, retire at the ensuing Annual General Meeting. They have furnished their consent and requisite certificate pursuant to the Companies Act, 2013 in respect of their proposed appointment for the year 2015-16. EXTRACT OF ANNUAL RETURN The extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure C". EXPLANATION/ COMMENTS ON QUALIFICATION/ RESERVATION/ ADVERSE REMARK/ DISCLAIMER BY THE AUDITORS, IF ANY Since there was no qualification/ reservation/ adverse remark/ disclaimer either by the Auditors or Secretarial Auditors in their respective report, no explanation/ comment is offered. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The code laid down by the Board is known as "Code of Business Conduct" which forms an Appendix to the Code. The Code lays down the standard procedure of business 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. All Key Managerial Personnel have been given appropriate briefing in this regard. WHISTLE BLOWER POLICY/ VIGIL MECHANISM The Company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant to new SEBI (Prohibition & Insider Trading) Regulation 2015 in place of SEBI (Prohibition & Insider Trading) Regulation 1992 with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company 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. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code. MEETINGS OF THE BOARD Four meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report. SECRETARIAL AUDITOR 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. Upendra C. Shukla, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as "Annexure D" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. RISK MANAGEMENT POLICY The Company has identified elements of any possible risk threatening the existence of the Company and has put in place adequate measures to control it. DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERN STATUS/ COMPANY'S OPERATIONS IN FUTURE No significant/ material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company or company's operations in future. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 company has proper system to receive the complaint and constituted Internal Complaints Committees. During the year no complaint was received from any employee. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as per "Annexure E" to this Report. INDUSTRIAL RELATIONS Industrial relations at all levels have remained cordial throughout the year in the Company. CONSERVATION OF ENERGY/ TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has not imported any foreign technology and hence, the Company does not have any information to offer in respect of Technology absorption. However, information in respect of Conservation of Energy & Foreign Exchange earnings and outgo are as per "Annexure- F". MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, IF ANY, DURING THE PERIOD FROM 31ST MARCH, 2015 TO THE DATE OF THE REPORT There has been no material change/ commitment affecting the financial position of the Company during the period from the end of the financial year on 31st March, 2015 to the date of the Report. ACKNOWLEDGEMENTS The Company would like to thank all the Stakeholders, including inter alia Suppliers, Vendors, Investors and Bankers and appreciation to all its customers for their consistent unstinted support throughout the year. By Order of the Board of Directors SANJEEV RUNGTA (DIN: 00053602) CHAIRMAN Date : 08.08.2015 Place : Mumbai |