DIRECTORS' REPORT Dear Shareholders, 1. Your Directors have pleasure in presenting 59th Annual Report together with the Audited Financial Statement for the financial year ended 31st March, 2015. 1. 2. STATE OF COMPANY'S AFFAIRS AND FINANCIAL PERFORMANCE: As you are aware the Company has exited from its core business of solvent extraction since past two years and now is looking for diversification in new business areas. The management is considering diversification into chemical business however, due to dull economic scenario, weak international demand, high capital requirements and cost of funding etc. factors are discouraging the management to conceive and enter into chemical business. Further unhealthy competition, growth uncertainties due to weak international market, sluggish demand has not provided appropriate opportunity to the management of the Company to start new business during the financial year ended 31st March, 2015. The performance of the Company was reasonable considering the fact that there was no business and standing expenses remained during the year, however, the management has minimized such expenses to the best practical extent. The loss before interest and depreciation amounted to Rs. 195.48 Lacs as against Rs. 60.68 Lacs in the previous year. The net loss for the year ended amounted to Rs. 213.09 lacs as against Rs. 66.51 Lacs for the previous year. 3. PROSPECTS: Your directors are still confident that with new government policies, Make in India campaign and international fall in crude and commodity prices will improve business sentiment and climates within India as well as internationally. The management is desirous to enter into chemical and trading business once growth certainty is established to the satisfaction of the management. On the right available opportunities, the Board and the Management of the Company are confident of getting diversified into new business areas in due course with a view to create sustainable business model for enhancing stakeholder's value and growth of the Company. 4. CHANGE IN NATURE OF BUSINESS, IF ANY: During the Financial Year 2014-15, the company has not changed its nature of business. However, the Company has exited from its core business of solvent oil extraction since past two years and now is considering diversification into new business areas for which chemicals, trading and distribution network are focus areas for the management of the Company. 5. DIVIDEND: In view of losses, your Directors express their inability to recommend declaration of any dividend for the year ended 31st March, 2015. 6. TRANSFER TO RESERVES: In view of losses, there is no requirement to transfer any surplus to general reserve account. 7. SHARE CAPITAL: During the year under review, the Company has not issued any Shares with or without differential rights or Debentures or any other securities by way of Public offer, Private Placement, Preferential allotment, Rights issue, Bonus Issue, Sweat Equity Shares, and Employee Stock Option Scheme or in any such other manners. 8. SEGMENT WISE PERFORMANCE: Segment reporting is not applicable to the Company in accordance with the Accounting Standard 17 issued by the Institute of Chartered Accountants of India. 9. SUBSIDIARIES, JOINT VENTURES & ASSOCIATES: During the year under review, your Company doesn't have any Subsidiaries, Joint Ventures and Associates. 10. MANAGEMENT DISCUSSION AND ANALYSIS: The Management Discussion and Analysis as set out in this report forms an integral part of this Report and provides overview of the business and operations of the Company. 11. PUBLIC DEPOSITS: There were no public deposits accepted during the financial year or any amount of principal or interest thereof was outstanding in terms of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, for the financial year ended. 12. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT: There were no material changes and commitments, which has affected the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. 13. CORPORATE GOVERNANCE: In compliance with the Clause 49 of the Listing Agreement with the Stock Exchange, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance as set out in this report is forming part of this report. Revised Clause 49 of the Listing Agreement is not mandatory to the Company hence Auditors Certification has not been obtained. However, as good governance the Company has voluntary disclosed the Compliance to the best extent possible and accordingly the Management Discussion and Analysis and the Corporate Governance Report on compliance with the conditions of Corporate Governance are attached along with the Annual Report. 14. INDUSTRIAL RELATIONS: The relationship with employees at all level remained cordial and harmonious during the year. We appreciate for committed contribution made by employees of the Company at all the levels to sustain during the challenging business scenario. 15. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT OF THE COMPANY: The Board of Directors at their meeting held on 8th August, 2014 formulated the Nomination and Remuneration Policy of your Company on the basis of recommendations made by the Nomination and Remuneration Committee. The salient aspects covered in the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a director and other matters have been outlined in the Corporate Governance Report which forms part of this Report. The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company in advance. 16. PARTICULARS OF EMPLOYEES: No employee of the Company was in receipt of remuneration more than the limits specified under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the financial year ended 31st March 2015. 17. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointments: During the financial year 2014-15, Smt. Gayatri Priyam Jhaveri was appointed as Additional/Non-Executive Director of your Company at the meeting of the Board of Directors held on 8th August, 2014 and subsequently she was appointed as a Non-Executive Director by the shareholders at the AGM held on 16th September, 2014. Further, in compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Shri Amit B. Shah, Shri Asit D. Javeri and Shri Anand R. Dalal were appointed as Independent Directors of your Company at the 58th AGM of your Company held on 16th September, 2014 to hold office up to 5 (five) consecutive years up to the AGM to be held in the year 2019. Re-appointments: Pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company, Smt. Gayatri Priyam Jhaveri, Non-Executive Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible offered herself for reappointment. Appropriate resolution for her re-appointment is being placed for your approval at the ensuing AGM. The brief resume of Smt. Gayatri Priyam Jhaveri and other related information has been detailed in the Corporate Governance Report. Your Directors recommend her re-appointment as Non-Executive Director of your Company. None of the independent directors are due for re-appointment. Resignations along with facts of resignation: During the year Shri Shantilal B. Jhaveri has been resigned as a Chairman & Managing Director of the Company with effect from 8th August, 2014 on account of his advanced age. The board appreciated and taken on records his significant contribution to the Company's growth and challenges during his term for more than five decades. Considering his visionary approach and contribution made for the Company's growth the Board has decided to designate him as a Chairman Emeritus who shall be non executive and non board member and has requested him to provide his valuable guidance, advice, expertise and long standing experience from time to time for the benefits of the Company. Key Managerial Personnel: During the year under review, the Company has appointed Shri Priyam Shantilal Jhaveri, Chairman & Managing Director and Shri Anil Ravindrakumar Kapoor, Chief Financial Officer as the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Annual Evaluation of Board's Performance: The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the corporate governance report section in this Annual Report. Declaration of Independence: Your Company has received declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed under Section 149(6) of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement. 18. COMMITTEES OF THE BOARD As on 31st March, 2015, the Board has following committees: a. Audit committee, b. Nomination and Remuneration committee, c. Stakeholder's relationship committee A detailed note on the Board and its committees is provided under the corporate governance report section in this Annual Report. 19. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE MEETINGS: The details of the number of Board meetings and Audit Committee Meeting of your Company are set out in the Corporate Governance Report which forms part of this Report. The time gap between the two meetings was in accordance with the requirements. All the information required to be furnished to the Board was made available along with detailed Agenda. 20. DIRECTORS' RESPONSIBILITY STATEMENT: As required under Section 134(3) (c) of the Companies Act, 2013, the Directors hereby confirm that: (a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same; (b) 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 your Company as at 31st March, 2015 and of the profit and loss statement of the Company for the financial year ended 31st March, 2015; (c) proper and sufficient care has been taken 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 annual accounts have been prepared on a 'going concern' basis; (e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. 21. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure [A]" and form an integral part to this Report. 22. RELATED PARTY TRANSACTIONS During the financial year 2014-15, all transactions entered into with the Related Parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 and Clause 49 of the Listing Agreement were in the ordinary course of business and on arm's length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. During the financial year 2014-15, there were no transactions with related parties which can be qualified as material transactions under the Listing Agreement. The Form AOC- 2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as "Annexure [B]" to this Report. 23. LOANS AND INVESTMENTS: Loans, guarantees/securities and investments as covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements. 24. RISK MANAGEMENT: At present the company has not identified any element of risk which may threaten the existence of the company. All the properties and insurable interest of the Company are adequately insured. 25. VIGIL MECHANISM AND WHISTLE BLOWER POLICY: The Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. 26. CORPORATE SOCIAL RESPONSIBILITY: At present your Company does not fall under the purview of the criteria specified under Section 135(1) of the Companies Act, 2013, therefore constitution of CSR Committee and spending on CSR activities shall not applicable to the Company. 27. AUDITORS AND AUDITORS' REPORT: Statutory Auditors: At the 58th Annual General Meeting held on 16th September, 2014, M/s Walker Chandiok & Co. LLP Chartered Accountants, were appointed as statutory auditors of the Company to hold office till the conclusion of the 63rd Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Walker Chandiok & Co. LLP Chartered Accountants, 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 reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Cost Auditor: The appointment of Cost Auditor for the Company is not applicable to the Company. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. Kunal Sharma, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as "Annexure - [C]" to this Report. 28. EXPLANATION ON AUDITORS REPORT: The notes to the accounts referred to in the Auditors Report are self explanatory and therefore do not call for any separate or further comments or explanations. 29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: In view of no business operations and manufacturing activities, the information required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 with respect to the information on conservation of energy, technology absorption and foreign exchange earnings and outgo are not provided. 30. INTERNAL FINANCIAL CONTROLS: The Company has adequate internal controls and checks in commensurate with its activities. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 31. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS: There are no significant/material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations. 32. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation for the continued support received from stakeholders, employees at all levels, consultants and associates of the Company. By order of the Board of Directors For INDIAN EXTRACTIONS LIMITED Priyam S. Jhaveri Chairman & Managing Director Mumbai 12th August, 2015 |