BOARD'S REPORT To, The Members, Your Directors have pleasure in presenting their 26th Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31st, 2015. FINANCIAL RESULTS '(Interest payable in earlier years Rs. 1323.90 Lacs and Principal amt. Rs.24.77 Lacs written back as per sanctioned scheme vide order of BIFR dated 31-08-2015. DECLARED AS SICK COMPANY The company was declared Sick industrial company in terms of the Act vide order dated 24.05.02 of BIFR, New Delhi. The draft rehabilitation scheme has been submitted to BIFR, which has been sanctioned by BIFR for implementation by ail concerned vide order dt.31.08.2015 of BIFR, New Delhi. The Company has started implementation of the "Sanctioned Scheme" (SS). DIVIDEND In view of carried forward losses, your directors have not recommended any dividend for the period under review. TRANSFER TO RESERVES In view of carried forward losses, no amount is appropriated from Profit and Loss Account and transferred to any Reserve Account. OPERATING RESULTS AND PROFITS Your company is on continued path of improvement. During the financial year, your Company has performed with 3347.67 M.T. Production , registering a good performance with capacity utilisation of 74%.There was positive growth in sales volumes in the first two quarters of the financial year, but in the 3rd quarter, poor demand hurt our volumes, though it improved in the 4th quarter in comparison with 3rd quarter. The Company has recorded sales turnover of Rs.6387.53 Lacs (Previous year Rs.7009.04 Lacs) and EBITDA Rs.255.12 Lacs (Previous Year Rs.247.51Lacs) due to external factors like reduction in cost of raw material which due to lower oil prices and internal factors like cost efficiency in the Company. Company has achieved profit before tax Rs.94.72 Lacs (Previous Year Rs.55.22 Lacs) before previous year items and extraordinary Kerns. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY Pursuance to order of Honorable Board for Industrial and Financial Restructuring (BIFR), the Company have given partial impact of Sanctioned Scheme (SS) approved by the Board, on financial result of F.Y.2014-15 consequently, profit of the Company increased by Rs. 1348.67 Lacs for the year. Apart from the above, there are no material changes affecting the financial position of the Company subsequent to the close of Fiscal 2015 till the date of this report. SHARE CAPITAL The total paid up Share Capital as on March 31, 2015 was 664.58 Lacs. During the year under review, the Company has not issued any shares nor granted stock options or sweat equity. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS Order of Honorable Board for Industrial and Financial Restructuring (BIFR) for approval of Draft Rehabilitation Scheme (Now "Sanctioned Scheme" (SS)) for the Company is received, on partial implement of the same, Profit of the Company increased by Rs. 1348.67 Lacs. RISK MANAGEMENT The Company has in April 2014 constituted a Risk Management Committee (RMC) which has been entrusted with responsibility to assist the Board in (a) Overseeing the Company's risk management process and controls, risk tolerance and capital liquidity and funding (b) Setting strategic plans and objectives for risk management and review of risk assessment of the Company (c) Review the Company's risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks. The Company has adopted a Risk Management Policy in accordance with the provisions of the Companies Act, 2013 (hereinafter referred to as 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 Board takes responsibility for the overall process of risk management in the organisation. Through Enterprise Risk Management program, Business Units and Corporate functions address opportunities and the attendant risks through an institutionalized approach aligned to the Company's objectives. This is facilitated by internal audit. The business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment and residual risks are presented to the senior management. Prior to constituting the RMC, the Audit Committee was reviewing business risk areas covering operational, financial, strategic and regulatory risks. The Company has identified in all Market Risks, Strategic Risks, Operational Risks & Regulatory Risks. Key Strategic Risks include concentration of its manufacturing capacity, fluctuation in crude oil prices , business continuity & succession planning. Key Operating Risks include labour volatility, raw material supply risk, customers credit risk, customers concentration & fluctuation on foreign exchange rates. Regulatory Risks include Government Policies with respect to the product of the Company & Regulatory compliances. The company has documented all the risks along with risk mitigation measures which shall be reviewed by Risk Management Committee. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has retained external audit firm to review its existing internal control system with a view of tighten the same and introduce system of self certification by all the process owners to ensure that internal controls over all the key business processes are operative. The Senior Management monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies in the all departments of the Company, corrective action in their respective areas and thereby strengthen the controls. HUMAN RESOURCES Safety & Health - Performance & Initiatives Safety & Health - Performance & Initiatives As part of Company's Work Safe Mission which aims to achieve ultimate Goal of Zero Injuries to its employees and all stakeholders associated with the Company's operations, Company provides a safe and healthy workplace focusing on creating right Safety Culture across the organization. Company aims to attain Zero Injury at all Levels, Governance, Robust Safety Processes and Improving Safe Behaviors. There were no fatalities during the year. Prevention of Sexual Harassment The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office premises or women service providers are covered under this policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological. During Fiscal 2015, the Company has received Nil complaints on sexual harassments, One awareness program was carried out against sexual harassment. FIXED DEPOSITS The Company has not accepted any deposits during the year. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure-I. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act, read along with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure-lll. CORPORATE GOVERNANCE A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges is included in the Annual Report. DIRECTORS Changes in Directors and Key Managerial Personnel Pursuant to the provisions of Sections 149, 150, 152 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder, your Directors appointed Ms. Jasmin Nahidakhtar Vhora as an Additional Director as a Woman Director of the Company with effect from 13th February,2015, subject to approval by the members in the ensuing Annual General Meeting as art Independent Director to hold office for five years from the date of appointment. Details of the proposal for appointment of Ms. Jasmin Nahidakhtar Vhora are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the ensuing Annual General Meeting. Key Managerial Personnel During the year under review, besides the Managing Director, the Company has not designated any personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act. Declaration by an Independent Directors) and reappointment, if any All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Board Evaluation Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI under Clause 49 of the Equity Listing Agreement, the Board of Directors ("Board") has carried out an annual evaluation of its own performance, and that of its Committees and individual Directors. The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the Non-independent Directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual Directors. The criteria for performance evaluation of the Board included aspects like Board composition and structure; effectiveness of Board processes, information and functioning etc. The criteria for performance evaluation of Committees of the Board included aspects like composition of Committees, effectiveness of Committee meetings etc. The criteria for performance evaluation of the individual Directors included aspects on contribution to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. In addition the Chairperson was also evaluated on the key aspects of his role. Nomination and Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Number of Meetings of the Board of Directors and Audit Committee During the year 5 Board Meetings and 1 Independent Directors' meeting and 4 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. VIGIL MECHANISM The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, 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. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014 is attached as Annexure VI and form an integral part of this Report. CORPORATE SOCIAL RESPONSIBILITY The Company is presently not covered under provisions relating to Corporate Social Responsibility under Section 135 of the Companies Act., 2013. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION 186 No such Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 is made by the Company. PARTICULARS OF CONTRACTS OR ARRANGEM9ENTS WITH RELATED PARTIES All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions were entered with prior approval of the Board of Directors of the Company. There have been no materially significant related party transactions between the Company and Directors, the management, subsidiaries or relatives During the year 2014-15, there are no material transactions between the Company and the related parties as defined under Clause 49 of the Listing Agreement. Further, all transactions with related parties have been conducted at an arm's length* basis and are in ordinary course of business. Accordingly Form AOC-2 is attached herewith as per Annexure II. AUDIT M/s. A. L. Thakker & Co., Chartered Accountants have been appointed Statutory Auditors of the Company, retires at the conclusion of the forthcoming Annual General Meeting, and proposed to appoint for a period of two years, subject to ratification of appointment of Statutory Auditors will being sought from the Members of the Company every year in the AGM, Further, A.L. Thakker & Co.,have, under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility and consent for appointment. Further, the report of the Statutory Auditors alongwith notes to Schedules is enclosed to this report. The observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments. The Auditor's Report does not contain any qualification, reservation or adverse remark. COST AUDIT As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. The Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s. KVM & Co. having Firm Registration No.000458 as the Cost Auditors of the Company to conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time for the year ending March 31, 2015, at a remuneration of Rs.32,500/- M/s. KVM & Co., have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Kadambari Dave & Associates, a firm of Company Secretary in practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure-VII. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks. DIRECTORS' RESPONSIBILITY STATEMENT Basea on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the statutory, cost and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; (b) they 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 at the end of the financial year and of the profit and loss of the Company for that period; (c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) they have prepared the annual accounts on a going concern basis; (e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were generally operating effectively *; and (f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Please refer to the Section "Internal Control Systems and their Adequacy in the Management Discussion and Analysis. ACKNOWLEDGEMENTS The Directors wish to convey their appreciation to all of the Company's employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management. On behalf of the Board of Directors Shailesh R. Mehta Managing Director Date : 10th October, 2015 Place: Santej |