DIRECTORS' REPORT TO THE MEMBERS Your Directors are pleased to present the 41st Annual Report together with the audited accounts for the financial year ended March 31, 2015. OPERATIONS During the year 2014-15, the production of Synthetic Blended Yarn was marginally lower i.e. 184 lac kg as compared to 185 lac kg in 2013-14 and the gross revenue increased by 3% from Rs.307 crores to Rs.316 crores in 2014-15. Your company achieved a net profit Rs.18.85 crores in 2014-15, which is marginally lower than last year which was due to uncertainty in the market because of decreasing trend in the prices of the Petroleum Products. The earnings per share for the year 2014-15 was Rs.8.72, as compared to the previous year's Rs.9.91. EXPORTS The export turnover increased to Rs.477 lacs from Rs.266 lacs in the previous year. EXPANSION AND MODERNIZATION The company continues to modernize its Plant and Machinery and add balancing equipment. This would enable the company to improve productivity and widen its product range and improve the quality of its products. PROSPECTS The company's performance in the current year is expected to be satisfactory. PUBLIC DEPOSIT Our company has not accepted any public deposits during the Financial Year and as such, no amount of principal or interest was outstanding as on March 31, 2015. DIVIDEND Your Directors in its meetings held on November 7, 2014 and April 8, 2015 had paid interim dividends @ 50% i.e. Re.1.00 per equity share and @ 85% i.e. Rs.1.70 per equity share respectively. The total dividend for financial year 2014-15 is 135% i.e. Rs.2.70 per equity share. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(3) (c) of the Companies Act, 2013 the Board hereby submits its responsibility Statement: (a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards had been followed and there are no material departures from the same; (b) 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 affairs of the company as at March 31, 2015 and of the profit and loss of the company for that period; (c) the Directors 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) the Directors had prepared the annual accounts on a going concern basis; (e) 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; and (f) 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. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link <http://www.apmindustries.co.in/Annual%20Reports/csr.pdf>. The Annual Report on CSR activities is annexed herewith marked as ANNEXURE - I to this Report. The Company aims to achieve through CSR programmes one or more of the following - 1. Supporting rural development, promoting education, providing healthcare including preventive health care, providing sanitation and drinking water, creating livelihoods for people, especially those from disadvantaged sections of society, in rural and urban India, preserving and promoting sports. 2. To develop the required capability and self-reliance of beneficiaries at the grass roots, especially of women, in the belief that these are prerequisites for social and economic development. 3. To engage in affirmative action, interventions such as skill building and vocational training, to enhance employability and generate livelihoods for persons from disadvantaged sections of society. 4. To pursue CSR Programmes primarily in areas that falls within the economic vicinity of the Company's operations to enable close supervision and ensure maximum development impact. 5. To carry out CSR Programmes in relevant local areas to fulfill commitments arising from requests by government / regulatory authorities and to earmark amounts of monies towards "Corporate Social Responsibility (CSR)" activities and to spend such monies through CSR Cells of such administrative bodies of the government and / or directly by way of developmental works in the local areas around which the Company operates. RISK MANAGEMENT POLICY Risk Management is continuous process of analyzing and managing the opportunities and threats faced by the Company in its efforts to achieve its goals and to ensure the continuity of the business. During the year, your Directors have constituted a Risk Management Committee. The Risk Management Committee has formulated and recommended to the Board, a Risk Management Policy which has been approved by the Board. The Risk Management Policy may be accessed on the Company's website at the link <http://www.apmindustries.co.in/Annual%20Reports/rmp.pdf>. INTERNAL FINANCIAL CONTROLS Your Company has in place adequate systems of internal control commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable Financial and Operational information, complying with applicable statutes, safeguarding assets from authorized use or losses, executing transactions with proper authorization and ensuring compliance of internal policies. The Company uses ERP (Enterprise Resource Planning) system to record data for accounting and connects to different locations for efficient exchange of information. The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. DIRECTORS AND KEY MANAGERIAL PERSONNEL i. In accordance with the provisions of the Act and the Article of association of the Company, Smt Uma Hada was appointed as an Additional Director of the Company w.e.f. 08.4.2015 in order to comply with the requirement of having a woman director in the Board. She holds office as a Director up to the date of the ensuing Annual General Meeting and is eligible for appointment as an independent Non-executive Director. ii. Shri R L Toshniwal retires by rotation and has not offered himself for reappointment because of indifferent health. Your Directors place on record their sincere appreciation for the services rendered by him, during his tenure on the Board. iii. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement. iv. Pursuant to the provisions of the Companies Act,, 2013 and clause 49 of the Listing Agreement, the Nomination and Remuneration Committee has carried out evaluation of every Director's performance. The Independent Directors, in a separate meeting, has also carried out the performance evaluation of the Non-Independent Directors and the Board as a whole and of the Chairman of the company and has reviewed the performance of the Secretarial Department. The performance evaluation of all the Independent Directors has been done by the entire Board, excluding the Director being evaluated. The Directors expressed their satisfaction with the evaluation process". v. The Board has, on the recommendation of Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The policies of the Company in this regard are attached herewith marked as Annexure - II to this Report. AUDITORS STATUTORY AUDITORS At the Annual General meeting held on 25th September, 2014, M/s Chaturvedi & Co., Chartered Accountant, were appointed as Statutory Auditors of the Company to hold the office till the conclusion of the 43rd Annual General Meeting, subject to annual ratification by the members at the Annual General Meeting in accordance with the provisions of Section 139 of the Companies Act, 2013 and rules there under. Accordingly, the appointment of M/s Chaturvedi & Co., Chartered Accountant as statutory auditors of the Company is placed for ratification by the shareholders. In this regard the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri Pradip Kumar Muduli, Practicing Company Secretary, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as ANNEXURE - III to this Report. AUDITORS REPORT The Auditors' Report read with notes to the financial statements is self-explanatory and does not call for any further explanations by the Board. The Auditor's Report does not contain any qualification, reservation or adverse remark. DISCLOSURES AUDIT COMMITTEE The Audit Committee meets at due intervals to conduct the required business. The Committee comprises of Independent Directors, namely, Shri K R Gupta (Chairman), Shri R R Bagri, Shri S G Rajgarhia and Smt Uma Hada, as other members. The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the listing agreements with the Stock Exchange. CSR COMMITTEE The Corporate Social Responsibility Committee compromises of Shri R K Rajgarhia, (Chairman). The other members of the Committee are Shri R R Bagri and Shri H R Sharma. VIGIL MECHANISM The Company has a Whistle Blower Policy to deal with instances of unethical behavior, actual or suspected fraud or violation of the company's code of conduct. The Policy on Vigil Mechanism / Whistle Blower may be accessed on the Company's website at the link <http://www.apmindustries.co.in/Annual%20Reports/vbm.pdf>. BOARD MEETINGS The Board of Directors duly met 4 (Four) times in respect of which proper notices were given and the proceedings were properly recorded and signed. PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The prescribed details as required under Section 134(3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are annexed as ANNEXURE - IV to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Particulars of remuneration paid to the employees as required to be disclosed under section 197(12) of the Act read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014, are set out in ANNEXURE - V attached hereto and form part of this Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as ANNEXURE - VI. RELATED PARTY TRANSACTIONS All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. All related party transactions during the year 2014-15 are disclosed in Form No. AOC - 2 in ANNEXURE - VII. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The Board has approved a policy for related party transactions which has been uploaded on the Company's website at the link <http://www.apmindustries.co.in/Annual%20Reports/rptp.pdf>. CORPORATE GOVERNANCE The Company has implemented Corporate Governance practices. 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 as ANNEXURE - VIII to this Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year 2014-15 under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report. CREDIT RATING The Company's credit rating impute by rating agency as given below: STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. GENERAL The Company has formulated a policy on Prevention of Sexual Harassment approved by the Board. The policy may be accessed on the Company's website at the link <http://www.apmindustries.co.in/> Annual%20Reports/shp.pdf. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No significant or material orders were passed by the regulators or Courts or Tribunals which impact the going concern status and Company's operation in future. APPRECIATION Your Directors gratefully acknowledge the whole hearted support given by the customers, suppliers, shareholders, employees, governments, financial institutions, banks, and we look forward to their continued cooperation and best wishes in our Endeavour to steer your company towards greater heights. For and on behalf of the Board R K RAJGARHIA Chairman & Managing Director New Delhi August 5, 2015 |