DIRECTORS' REPORT TO THE MEMBERS OF PEE CEE COSMA SOPE LTD The Directors hereby present their 28th 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. 80,61,37,914.22 as against Rs. 75,74,94,774.85 in the previous year. The Company was able to earn a marginal profit for the year of Rs. 1,34,61,208.95 against a profit of Rs. 1,87,65,130.54. Your Directors are putting in their best efforts to improve the performance of the Company. Statement of Company's Affair Our financial performance continues to be encouraging and we believe that we will continue registering sustained growth going forward. The company developed some new products in Laundry soap, detergent and bathing soap and we see huge potential to tap the market there by generating handsome margins and turnover for the coming year. 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 had declared a dividend of Rs1.50/- per share (15%) on the Equity Shares of the Company, for the financial year ended March 31,2015 amounting to Rs. 39.69 lac. The aforesaid amount of dividend is exclusive of Dividend Tax amounting to Rs. 8.08 lac. The dividend on equity shares will be paid to members whose names appear in the Register of Members as on 22nd September, 2015; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. Share Capital The paid up Equity Share Capital as on 31st March, 2015 was 2.64 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 The Company neither granted any loans, guarantees nor made any investments under Section 186of the Act as at end of the Financial Year 2014-15. 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 Vof 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 The Company has complied with the provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A Certificate from Company Secretary in Practice on compliance of Clause 49 of the Listing Agreement. 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. Anil Gupta had resigned as Director w.e.f. August14, 2014, owing to personal reason to which he was finding it difficult to effectively discharge his duties as Director. Further, Mr Anil Gupta has been appointed by the Board of Directors as Additional Director of the Company w.e.f November 14,2014. He shall hold office upto the date of the ensuing AGM of the Company and, being eligible, offer himself for re-appointment. The Company has also received a notice in writing from a member proposing his candidature for the office of Director along with a deposit of Rupees one lakh. 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. Pramod Kumar Jain, Director will retire by rotation at the ensuing AGM, and being eligible, offer himself for re-appointment in accordance with the provisions of the CompaniesAct, 2013. Pursuant to Section 149(1) of the Companies Act, 2013 the Board of Directors of the Company had on 25th March, 2015 appointed a Women Director Ms. Babita Agarwal as Additional Director in the category of Non-Executiveln dependent Director. Ms. Babita Agarwal 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. 25thMarch, 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 share holding etc., are provided in the report on Corporate Governance forming part of the Annual Report. In terms of Section 149(5) of the Companies Act, 2013 Shri Nemi Chandra Jain and Shri Amar Singh Rajput were appointed as Non-Executive Independent Directors of the Company within the meaning of Section 149 and 152 [including Section 149(10)] of the new Companies Act, 2013 read with Schedule IV attached thereto and Rules made there under, not subject to retirement by rotation, for a term of 5 (five) consecutive years in the Annual General Meeting held on 26th September, 2014. 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). Key Managerial Personnel The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows Ceased to be Company Secretary due to sudden demise on May 15, 2015 and Ms. Nidhi Agarwal was appointed as Company Secretary w.e.f May 30,2015. During the year, Mr. Mahendra Kumar Jain was reappointed as Whole time Director of the Company w.e.f April 1, 2014. Mr. Brij Mohan Verma 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 'Annexure2' 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 Rule 5 (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, 5 (five) number of Board meetings were held. For details thereof 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: 1. Mr. Nemi Chandra Jain-Chairman (Independent Director) 2. Mr. AmarSingh Rajput-Member (Independent Director) 3. Mr. Pramod Kumar Jain-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/sDoogar& Associates, Chartered Accountants, were appointed with your approval at the 27th AGM to hold such office till the conclusion of the 30th AGM. The Board, in terms of Section 139of the Act, on the recommendation of the Audit Committee, has recommended for the ratification of the Members the appointment of M/s Doogar & Associates from the conclusion of the ensuing AGM till the conclusion of the 30th 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. Doogar & Associates for the financial year2015-16. 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 CompaniesAct, 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 CompaniesAct, 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 underSection 188(1) of the CompaniesAct, 2013 With reference to Section 134(3)(h) of the Companies Act, 2013,all contracts and arrangements with related parties underSection 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on 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. 32 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 all around operational performance. By order of the board For Pee Cee Cosma Sope Ltd Ashok Kumar Jain DIN:00113133 Place : Agra Dated: 30th May, 2015 |