REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2015 The Directors of your Company are pleased to present the 27th Annual Report and Audited Statement of Accounts for the financial year ended 31st March, 2015. DIVIDEND Board of Directors did not recommend dividend for the current year, due to inadequate profits. REVIEW OF OPERATIONS 2014-15 As you are aware your Company is primarily engaged in designing, manufacturing and commissioning customized equipment/ systems for diverse applications. The company registered marginal growth in revenue by 3% during the year under review, due to difficult economic environment. ORDER BOOK An improved macro economic environment led to better inflow of Process Equipment related customized orders which normally involve 8 to 18 months execution period. During 2014-15, following good critically customized equipments orders have been executed and/ or currently under execution. Export Orders • For Paddle Dryers and Coolers from a reputed overseas manufacturer of lime and dolime Domestic Orders • For Rotary Calciner having 480 TPD capacity for Reputed Soda Ash manufacturer. • For Nuclear Reactor's Ventilation project from a reputed infrastructure Company. • For Rotary Dryers, Coolers, Granulators and Lump Crushers from a reputed fertilizer company FUTURE OUTLOOK Your company operates primarily in two divisions viz. Process Equipment and Food Processing Equipment. The future outlook based on the expected order inflow appears to be encouraging. A detailed review of the operations of each division is incorporated in the Management Discussion and Analysis Report in Annexure A which forms part of this Report. AUDIT REPORT In respect of the qualification in the Auditors' Report regarding partial provision for diminution in the value of investment in equity shares of Mcnally Bharat Engineering Company Limited, the Company is of the opinion that the diminution in market value of these shares is temporary and is a result of general slowdown in the economy. The Directors of your Company have on a conservative basis made a provision during the year under review to cover the diminution in the value of the investments. The Company is also filing Form B with the stock exchanges as required by the SEBI Circular No. CIR. CFD/ DIL/7/2012 Dated August 13, 2012. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provision of Section 134 (5) of the Companies Act, 2013, the Board of Directors of your Company hereby confirms : 1) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure; 2) that the Directors have 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 affairs of the Company as at the end of the financial year and of the Profit and Loss of the Company for the period; 3) that the Directors have 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; 4) that the Directors have prepared the annual accounts on a going concern basis. 5) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. 6) 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. MANAGEMENT DISCUSSION & ANALYSIS A separate report on Management Discussion & Analysis is appended to this Annual Report as Annexure "I" and forms part of this Director's Report; MATERIAL CHANGES & COMMITMENTS There are no material changes and commitments, affecting the financial position of the Company, between the end of the financial year of the Company i.e. March 31, 2015 and the date of this Report. EMPLOYEE RELATIONS Your Company believes employees are its key strengths. Your Board would like to place on record its appreciation of employees for their contribution to the business. During 2014 - 15, Saravali factory witnessed labour unrest in the second half as workmen raised some demands outside the purview of settlement in October 2013 entered into between workmen and your Company for four years period upto October 2017. In May 2015, settlement of the issues of workmen has been made and industrial relations continue to be cordial and amicable. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, as amended, is appended to this Annual Report as Annexure "II" and forms part of this Directors' Report. ADEQUACY OF INTERNAL CONTROL SYSTEM WITH RESPECT TO THE FINANCIAL STATEMENTS The Company has a comprehensive system of internal control to safeguard the Company's assets against any loss from unauthorized use and ensure proper authorization of financial transactions. The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of inter control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director. The Company has been further strengthening the internal control system by implementation robust ERP systems based on FACT platform. This ensures high degree of systems based checks and controls. CORPORATE GOVERNANCE In compliance with revised Clause 49 of the Listing Agreement, a detailed Report on Corporate Governance is enclosed as a part of this Annual Report. The report has details of formal evaluation by the Board of its own performance, its committees and individual directors. A certificate from a Practicing Company Secretary regarding compliance of the condition of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, is appended as Annexure - III and forms part of this Directors' Report DIRECTORS Mr. Supriya Mukherjee has been appointed as Managing Director for a period of three years effective April 1, 2014 at the 26th Annual General Meeting of the Company. Mr. S. R. Dasgupta, Mr. Padam Kumar Khaitan, Mr. Manmohan Singh and Mr. Gobind Saraf, who have been Directors of the Company and also been Independent Directors of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, were appointed as Independent Directors for a period of five consecutive years at the 26th Annual General Meeting of the Company, held on September 30, 2014 in terms of Section 149 and other applicable provisions of the Companies Act, 2013. With profound grief, we inform the sad demise of our beloved chairman, Mr. Deepak Khaitan, Chairman on 9th March, 2015 after prolonged illness. The Board places on record its profound sorrow on the loss of Mr. Deepak Khaitan and also its deep appreciation of the valuable contributions made by him during his long association with the Company. Board of directors appointed Mrs. Priya Saran Chaudhri as additional director effective 14th November, 2014 and Mr. Aditya Khaitan as additional director (Chairman of the Board) effective 31st March, 2015. Both the directors hold office upto the ensuing Annual General Meeting and their appointment is proposed as regular director of the company. Mr. Amritanshu Khaitan, director retires by rotation pursuant to Section 152 of The Companies Act, 2013 and Article 86 of Articles of Association of the Company at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-appointment. DECLARATIONS BY INDEPENDENT DIRECTORS Necessary declarations from all the Independent Directors of the Company, confirming that they meet the criteria of independence as prescribed, have been received. KEY MANAGERIAL PERSONNEL During the year 2014 - 15, following officials continued as Key Managerial Personnel, pursuant to section 203 of The Companies Act, 2013 : i. Mr. Supriya Mukherjee, Managing Director ii. Mr. Anjaneyan Suresh, Chief Financial Officer iii. Mr. Arvind Bajoria, Company Secretary HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES Your Company has no holding or subsidiary company. Williamson Magor & Company Limited is holding 4319043 equity shares constituting 32.58% of total shareholding of the Company, so it is an associate company within the meaning of section 2 (6) of The Companies Act, 2013. RELATED PARTY TRANSACTIONS Your Board has developed and approved a Related Party Transactions Policy for purposes of identification and monitoring of related party transactions and the same is uploaded on the Company's website. Your Company has not entered into any contracts/arrangements with related parties as required under Section 188(1) of the Companies Act, 2013, during the year under review. However there are contracts/arrangements with related parties as defined by the said Act, executed prior to April 1, 2014 and the Statement in Form AOC -2 containing the details of the Related Party Transactions pertaining to such ongoing contracts forms a part of this Report as Annexure . MANAGERIAL REMUNERATION Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as per annexure V. Mr. Supriya Mukherjee, Managing Director is the only executive director in receipt of remuneration, and its details are in the corporate governance report and annexure VII attached to this directors' report. STATUTORY AUDITORS M/s Deloitte Haskins & Sells (Firm's Registration No. : 117364W ), Statutory Auditors of the Company hold the appointment for a term of three years upto 2017 and their appointment is subject to ratification by members at the ensuing Annual General Meeting. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for continuation as Stautory Auditors. VIGIL MECHANISM The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors and employees of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. The VIGIL MECHANISM is available on the website of Company. REMUNERATION POLICY The Company has formulated a Remuneration Policy for Directors, Key Managerial Personnel and employees of the Company to ensure that adequate remuneration paid to attract, retain and motivate the senior management employees to run the company successfully. The Policy is available on the website of the Company and also annexed herewith (Annexure IV). RISK MANAGEMENT Directors have adopted risk management policy to identify the risks involved in all activities of the Company, set up adequate controls to timely mitigate the risks. SOCIAL CONTRIBUTION The Company continues to support social causes and has, like in the previous years, made contributions for underprivileged people. The Company will continue to support social projects that are consistent with the policy. COST AUDITOR Pursuant to section 148 of The Companies Act, 2013, Board of Directors in their meeting held on 28th May, 2015 reappointed M/s. Sabyasachi & Co., Cost Accountants as Cost Auditor for conducting the audit of the cost accounting records of the company for the financial year 2015-16. The remuneration payable to the Cost Auditors for the said year is being placed for ratification by the Members at the forthcoming Annual General Meeting. SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Secretarial Audit Report by M/s. Dhrumil M. Shah & Co., Practicing Company Secretaries is annexed to the report. EXTRACT OF THE ANNUAL RETURN The extract of the annual return in Form No. MGT - 9, as per annexure - forms part of the Board's report. OTHER DISCLOSURES During the year under review: a. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. b. Your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. c. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. COLLABORATORS The Directors place on record its sincere appreciation to all its Collaborators for extending their valuable support and co-operation. ACKNOWLEDGEMENT The Directors wish to convey their appreciation to their Customers, Bankers, Dealers, Suppliers, Stock Exchanges, Government and all other Stakeholders for the excellent assistance and cooperation. The Directors' also thank all the employees of the Company for their valuable service and support during the year. For and on behalf of the Board Aditya Khaitan Chairman Date: May 28, 2015 Place : Kolkata |