DIRECTORS' REPORT TO, THE MEMBERS OF, Kabra Extrusiontechnik Limited, Mumbai Your Directors are pleased to present the THIRTY-THIRD ANNUAL REPORT together with the AUDITED STATEMENT OF ACCOUNTS for the year ended 31st March, 2016. 2. DIVIDEND: Your Directors at their meeting held on 9,h March, 2016 had declared an interim dividend of Rs. 2.25 per share of Rs. 5/- each for the financial year 2015-16 (Rs. 21- per share for the previous year). The Directors have recommended that in terim dividend paid by the Company be treated as a final dividend for the financial year ended 31st March, 2016. 3. TRANSFER TO RESERVES: The Company proposes to transfer X 225 lacs to the General Reserves out of the amount available for appropriation. 4. OPERATIONS AND OUTLOOK: The Company has achieved Operational and Other Income for the year under review at ^ 29,907.74 lacs as against the previous years' Operational and Other income of Rs. 27,127.54 lacs (increased by 10.25%). The profit before tax and exceptional item was Rs. 5,004.69 lacs against the previous years' profit of Rs. 2,705.05 lacs The Company has recognised a diminution other than temporary of Rs. 1,850 lacs in the investement held in BW PTI Holdings Inc (Formerly known as Gloucester Engineering Inc. USA) (GEC) upon sale of certain assets and Habilites of its manufacturing division by said GEC. Net profit of the Company after exceptional item and tax was Rs. 2,247.45 lacs against Rs. 2,239.89 lacs of the previous year. 5. EXPORTS: Exports during the year is Rs. 8,244.90 lacs as against previous years' export of Rs. 9,093.86 lacs and is about 27.57% of total sales turnover. 6. DIRECTORS: Shri Anand S. Kabra and Shri Shreevallabh G. Kabra Directors of the Company are liable to retire by rotation in accordance with the provisions of Section 152 of the Companies Act, 2013 (Act) at the ensuing Annual General Meeting, being eligible, offers themselves for re-appointment. Shri Varun S. Kabra, Director is proposed to be appointed as a Director - Business Development subject to approval of the Members. 7. INDEPENDENT DIRECTORS: A separate meeting of Independent Directors was held in compliance of Regulation 25 of SEBI (Listing, Obligations and Disclosure Requirements) Regulations, 2015, without the presence of Executive Directors. Performance of non-independent directors, performance of the board as a whole and of Chairman was evaluated, taking into account the views of executive directors and non-executive directors and on the basis of evaluation criteria. Ail independent directors have given declaration that they meet the criteria of independence as provided in section 149 (6) of the Act, and Regulation 16 and 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances, which has affected their status as independent director. The non-executive directors of the company had no pecuniary relationship or transactions with the company. In the opinion of the Board, they fulfill the conditions of independence as specified and are independent of the management. 8. DIRECTORS' RESPONSIBILITY STATEMENT AND INTERNAL FINANCE CONTROL: The Board is of opinion that the Company's Internal Financial Controls were adequate and effective during the financial year 2015-16. The Audit Committee of the Board of Directors reviews the adequacy and effectiveness of internal control Systems and suggests improvements to strengthen the same. The Audit committee of the Board of Directors, Statutory Auditors and Departmental Heads are appraised of the internal audit findings and corrective actions taken. Statutory Auditors of the Company have reported on adequacy of internal control in their Report. Pursuant to Section 134(3) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge confirm that: i. in the preparation of annual accounts for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii. they have selected such appropriate accounting policies and applied them consistently, and made judgements and estimates that were reasonable and prudent so as to give the true and fair view of the state of affairs of the Company as at 31st March, 2016, and of the profits of the Company for the said financial year; iii. they 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; iv. they have prepared the said accounts on a "going concern basis"; v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and vi. they have devised proper Systems to ensure compliance with the provisions of ail applicable laws and that such Systems are adequate and operating effectively. 9. SUBSIDIARY/ASSOCIATE COMPANIES: The Company has adopted a policy for determining material subsidiaries in terms of erstwhile Clause 49 of the Listing Agreement, which is uploaded on <http://www.kolsite.com/Upload/FinancialResult/MATERIAL%20> SUBSIDIARY%20POLICY.pdf. The company has no subsidiary company, nor has any company become or ceased to be a subsidiary of the company. The Company does have an associate or joint venture company M/s. Penta Auto Feeding India Ltd. within the meaning of Section 2(6) of the Companies Act, 2013. A statement Containing the salient features of the financial statement of associate company/joint venture in the prescribed format AOC-1 is annexed herewith as Annexure -1 to this Report. 10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The Company has not given any loans or guarantees or provided any security during the year. Details of Investments made during the year under review are given in the notes to financial statements. 11. PUBLIC DEPOSITS: Your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposit from public was outstanding as on the date of the balance sheet. 12. RELATED PARTY TRANSACTIONS: AH Related Party Transactions that were entered into during the financial year were on an arm's length basis, in the ordinary course of business. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of ail Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying nature, value, terms and conditions of the transactions. Disclosure in Form AOC-2 is annexed as Annexure-2 in respect of material transaction that were carried out with the approval of the Shareholders at Annual General Meeting held on 27th August, 2015 and Extra-ordinary General Meeting held on 15,h October, 2015. The Company has adopted a policy on materiality of Related Party Transactions and dealing with the same, as approved by the Board and is uploaded on the Company's website: <http://www.kolsite.com/Upload/FinancialResult/RELArED%20PARTY%20TRANSACTION%20POLICY.pdf>/RELArED <http://www.kolsite.com/Upload/FinancialResult/RELArED%20PARTY%20TRANSACTION%20POLICY.pdf>%20PARTY%20TRANSACTION%20POLICY.pdf <http://www.kolsite.com/Upload/FinancialResult/RELArED%20PARTY%20TRANSACTION%20POLICY.pdf> Details of the transactions with Related Parties are provided in the accompanying financial statements. 13. RISK MANAGEMENT: The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. 14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS: No Significant Material Orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. 15. NUMBER OF MEETINGS OF THE BOARD: The details of the number of Meetings of the Board held during the financial year 2015-16 form part of the Corporate Governance report. 16. AUDIT COMMITTEE COMPOSITION: Audit Committee composition is presented in Corporate Governance Report. There have not been any instances during the year, when recommendations of the said committee were not accepted by the Board. 17. CORPORATE GOVERNANCE: A separate section on Corporate Governance is included in this Annual Report as required under Listing Agreement. 18. MEASURES FOR PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE: The Company pursuant to the Section 4 of the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressai) Act, 2013 and rules made thereunder, had constituted the Internal Complaints Committee. During the year no complaint was lodged with the Committee. 19. STATUTORY AUDITORS AND THEIR REPORT: M/s. Kirtane & Pandit LLP, a firm of Chartered Accountants were appointed as a Statutory Auditors of the Company for a one term of 5 (five) consecutive years to hold office from the conclusion of the 31st Annual General Meeting until the conclusion of the 36m Annual General Meeting (AGM). The company has received their eligibility certificate subject to Section 139 and 141 of the Act and rules made there under. Their appointment has to be ratified in terms of Section 139 (1) of the Companies Act, 2013. Members are requested to consider their re-appointment at the forthcoming AGM and authorize the Board of Directors to fix their remuneration. There is no audit qualification in the financial statements by the Statutory Auditors for the year under review. During the year, the statutory Auditors had not reported any matter under Section 143(12) of the Act, therefore no details is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013. 20. COST AUDITORS: As per Section 148 read with Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors of your Company has appointed M/s. Dhara Shah & Associates, a firm of qualified Cost Accountants as the Cost Auditor of your Company to conduct audit of Cost Accounting records for financial year 2016-17 on the recommendation made by the Audit Committee. The remuneration proposed to be paid to the Cost Auditors, subject to the ratification by the Members at the ensuing Annual General Meeting, would be Rs. 1,20,000/- (Rupees One Lac Twenty Thousand Only) excluding Service Tax, Conveyance and out of pocket expenses, if any. They have conducted audit of Cost Accounting Records maintained in respect of financial year 2015-16 and report therein shall be finalized and filed as statutorily provided. Members are requested to consider the ratification of their remuneration. 21. SECRETARIAL AUDITORS AND THEIR REPORT: Pursuant to the provisions of Section 204 of the Act and The Companies (Appdintment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Bhandari & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit for the financial year ended 31st March, 2016. Their Report is annexed as Annexure-3 to this report. In respect of comment of Secretarial and Statutory Auditors, regarding Board composition, the Company is in process of complying with applicable requirements. 22. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Board has constituted a Corporate Social Responsibility Committee headed by Shri S. V. Kabra as Chairman. CSR policy was also adopted in compliance with the provisions of section 135 of the Companies Act, 2013 (Act). As a Part of its CSR initiatives, the Company has undertaken activity of "Promoting Education" in accordance with Schedule - VII of the said Act and amount of Rs. 40 lacs was spent during the financial year 2015-16 against obligation of Rs. 37 lacs. Report on CSR activities is annexed as Annexure-4 to this report. 23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed as Annexure-5 to this report. 24. REMUNERATION POLICY: Brief outline of Company's Policy on Director's appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 has been disclosed in Annexure-6 to this report. 25. CHANGE IN REGISTRAR AND SHARE TRANSFER AGENT: In compliance of SEBI order dated 22nd March, 2016, advising companies who are clients of M/s. Sharepro Services (India) Pvt. Ltd., to switchover their share transfer activities either in-house or to another SEBI Registered Registrar and Transfer Agent (RTA). The Company has considered appointment of M/s. Sharex Dynamic (India) Pvt. Ltd., a reputed RTA. 26. PARTICULARS OF EMPLOYEES AND REMUNERATION: The information required under Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in annexed as Annexure-7. The information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure-8. 27. EXTRACT OF ANNUAL RETURN: Pursuant to Section 92 (3) of the Act and Rule 12(1 ) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form No. MGT-9 is annexed as Annexure-9. 28. EMPLOYEE RELATIONS: Employee relations continued to be cordial. The Company takes pride in the commitment and dedication shown by its employees in ail areas of business. 29. ACKNOWLEDGEMENT: Your Directors would like to express their appreciation for the support received from the Shareholders, Bankers, Government Authorities, Stock Exchanges, Customers, Suppliers and Business Associates at ail levels during the year under review. For and on behalf of the Board S. V. Kabra Chairman & Managing Director Place : Mumbai Date : 25th May, 2016 |