DIRECTORS' REPORT Dear Members, The Directors hereby present their 24th Annual Report on the business and operations of the Company and the financial accounts for the year ended 31st March, 2015. Company Performance During the year under review total income of the Company was Rs.55,456.93 Lac as against Rs. 47,475.49 Lac in the previous year. The Company was able to earn profit for the year of Rs. 254.62 Lacs against a profit of Rs. 139.88 Lacs. Your Directors are putting in their best efforts to improve the performance of the Company. Statement of Company's Affair The Company is engaged in the business of manufacturing of VanasPati and Refined Oil with shortening products (bakery & biscuit). During the year company has produced 89472.406 MT of Vanaspati/Refined Oil as against 75441.978 MT in the previous year. The most popular brands of Vanaspati/refined oil are "Dhruv" and "Anchal", both of which enjoy a considerable market share. Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report attached to this report. Change in nature of Business of the Company There has been no change in the nature of business of the Company. Material Changes etc. Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company-31st March, 2015 and the date of this Report. Dividend The Board of Directors of your Company has decided to retain and plough back the profits into the business of the Company, thus no dividend is being recommended for this year. Share Capital The paid up Equity Share Capital as on 31st March, 2015 was 15.50 crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company. Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 Pursuant to Section 134(3)(g) of the Companies Act, 2013 details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in Notes 13, 15 and 37 to the Financial Statements. Disclosure on Deposit under Chapter V The Company has neither accepted nor renewed any deposits during the Financial Year 2014-15 in terms of Chapter V of the Companies Act, 2013. Report on Subsidiaries, Associates and Joint Venture companies The Company has no subsidiaries, associates and joint ventures companies. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Pursuant to provisions of Section 134 of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are attached as Annexure 1 which forms part of this report. Listing At present, the equity shares of the Company are listed at Bombay Stock Exchange Ltd. (BSE). The annual listing fees for the financial year 2015-16 to BSE has been paid. Corporate Governance Corporate Governance is the system by which corporate entities are directed and controlled. It provides the structure through which the company's objectives are set and provides the means of attaining those objectives and monitoring performance. It is the application of best management practices, compliance of law, adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for the sustainable development of all stakeholders. Ajanta Soya Limited be holds Corporate Governance measures as an integral part of business strategy which adds considerable internal and external values and contributes to the business growth in ethical perspective. Besides complying with the prescribed Corporate Governance practices as per Clause 49 of the Listing Agreement in terms of revised dispensation, the Company has voluntarily adopted various practices of governance confirming to highest ethical and responsible standard of business, globally benchmarked. Strong governance practices of the Company have been rewarded in terms of improved share valuations, stakeholder's confidence, improved market capitalization, high credit ratings and bagging of various awards for brands, stocks, environmental protection, etc. A certificate from Auditors of the Company regarding compliance of the conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report. Certificate of the CEO/CFO, inter-alia, confirming the correctness of the financial statements, compliance with Company's Code of Conduct, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of Clause 49 of the Listing Agreement with the Stock Exchanges, is attached in the Corporate Governance Report and forms part of this Report. Directors During the year Mr Babu Lal Jain and Mr Bishan Goyal resigned w.e.f 14th August, 2014 from the board due to their pre-occupation. The Board takes this opportunity to place its gratitude for services rendered by them. In Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every AGM. Consequently, Mr Sushil Goyal, Managing Director will retire by rotation at the ensuing AGM, and being eligible, offer himself for re-appointment in accordance with the provisions of the Companies Act, 2013. Pursuant to Section 149(1) of the Companies Act, 2013 the Board of Directors of the Company had on 28th March, 2015 appointed a Women Director Ms. Sushila Jain as Additional Director in the category of Non-Executive Independent Director. Ms. Sushila Jain shall hold office upto the date of the ensuing AGM of the Company and, being eligible, offer herself for re-appointment. The Company has also received a notice in writing from a member proposing her candidature for the office of Director along with a deposit of Rupees one lakh. She will not be subject to retirement by rotation, for a term of 5 (five) consecutive years commencing from the date of her appointment as an Additional Director in the Company i.e. 28th March, 2015. The brief resume of the Directors being appointed/reappointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorships, Committee Memberships/ Chairmanships, their shareholding etc., are provided in the report on Corporate Governance forming part of the Annual Report. Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Act, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6). *Resigned as Company Secretary w.e.f. May 19, 2015 and Mr Kapil was appointed as Company Secretary w.e.f. May 30, 2015. During the year, Mr Sushil Goyal was re-appointed as Managing Director of the Company w.e.f. July 26, 2014. Mr Jai Gopal Sharma was appointed as Chief Financial Officer of the Company w.e.f. May 30, 2014. Policy on Directors appointment and Policy on remuneration Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached as Annexure 2 respectively, which forms part of this report. Particulars of remuneration of Directors/ KMP/Employees There are no employees who are in receipt of remuneration in excess of the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 3 which forms part of this report. Number of Meetings of the Board During the Financial Year 2014-15, 12 (Twelve) number of Board meetings were held. For details there of kindly refer to the section Board of Directors in the Corporate Governance Report. Performance Evaluation of the Board, its Committees and Individual Directors Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent Directors. A structured questionnaire has been prepared, covering various aspects of the functioning of the Board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board's focus, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of Individual Director's performance, the questionnaire covers various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc. Board members had submitted their response on a scale of 5(excellent) - 1 (poor) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board. The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non-Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors. The Nomination and Remuneration Committee has also carried out evaluation of every Director's performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The Directors expressed their satisfaction with the evaluation process. Composition of Audit Committee As on 31st March, 2015, the Audit Committee of the Company comprises the following directors: Mr Harsh Chander Kansal-Chairman (Independent Director) Mr Hemant Kumar Bansal-Member (Independent Director) Mr Abhey Goyal- Member (Executive and Promoter Director) Further, all recommendations of Audit Committee were accepted by the Board of Directors. Statutory Auditors and their Report The Auditors, M/s Tas Associates, Chartered Accountants, were appointed with your approval at the 23rd AGM to hold such office till the conclusion of the 26th AGM. The Board, in terms of Section 139 of the Act, on the recommendation of the Audit Committee, has recommended for the ratification of the Members the appointment of M/s Tas Associates from the conclusion of the ensuing AGM till the conclusion of the 26th AGM. The Board, in terms of Section 142 of the Act, on the recommendation of the Audit Committee, has also recommended for the approval of the Members the remuneration of M/s Tas Associates for the financial year 2015-16. There are no observations (including any qualification, reservation, adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further, the notes to accounts referred to in the Auditor's Report are self-explanatory. Secretarial Auditors Your Board, during the year, appointed M/s R & D Company Secretaries, to conduct secretarial audit of the Company for the financial year ended 31st March, 2015. The Report of M/s R & D Company Secretaries in terms of Section 204 of the Act is provided in the Annexure 4 forming part of this Report. Directors' Responsibility Statement Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors confirm: a) That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; b) That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are 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 and loss of the Company for that period; c) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That they had prepared the annual accounts on a going concern basis; e) That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Corporate Social Responsibility (CSR) The Company does not come under the preview of Section 135 of the Companies Act, 2013 in relation to Corporate Social Responsibility. Internal Financial Controls with reference to the financial statements Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report. Risk Management Policy The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this programme, each Function and Unit addresses opportunities and risks through a comprehensive approach aligned to the Company's objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status. Sustainability is embedded in the Corporate Enterprise Risk Management programme, which gives an opportunity to Increase the effectiveness of risk management practices and for improving business efficiency. The Company's social and environmental policies correlate strongly with the risk management strategy and ultimately the financial performance. This risk management process, which is facilitated by internal audit, covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies. The current risk slate and the comprehensive risk policy have been further redefined during the year. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are covered as part of the annual risk based audit plan. Vigil Mechanism Policy The Company has adopted a Vigil Mechanism Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. Prevention of Sexual Harassment As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. Its redressal is placed on the intranet for the benefit of its employees. During the year under review, no complaints were reported to the Board. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure 5 to this Report. Contracts or arrangements with Related Parties under Section 188(1) of the Companies Act, 2013 With reference to Section 134(3)(h) of the Companies Act, 2013,all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract or arrangement with related parties which could be considered 'material' according to the policy of the Company on Materiality of Related Party Transactions. Your attention is drawn to the Related Party disclosures set out in Note no. 37 of the Financial Statements. Acknowledgements Your Directors place on record their gratitude to the Central Government, State Governments and Company's Bankers for the assistance, co-operation and encouragement they extended to the Company. Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of investors, vendors, dealers, business associates and employees in ensuring an excellent allaround operational performance. By order of the Board For AJANTA SOYA LTD SUSHIL GOYAL Managing Director DIN: 00125275 ABHEY GOYAL Whole-time Director DIN: 02321262 Address:House No. 42-A, Road No. 78, ABHEY GOYALWhole-time Director DIN: 02321262 Address: Regd.Office: SP-916, Phase III, Industrial Area, Bhiwadi, 301019, Distt. Alwar, Rajasthan Date : 13th August, 2015 Place : New Delhi |