DIRECTORS' REPORT TO THE MEMBERS, Your Directors have pleasure in presenting the 29th Annual Report together with the Audited Accounts of the Company for the financial year ended 31st March 2016. Performance Review Your Directors are pleased to inform you that during the year under review, there has been substantial improvement in the overall performance of the company. The revenue from operation increased from Rs.228.67 crores to Rs.255.66 crores, profit before tax from Rs.55.76 crores to Rs.77.92 crores and profit after tax from Rs.41.74 crores to Rs.58.71 crores. Increase in overall performance of the company can be attributed to increased production, expansion at Sitarganj Unit, reduction in power and fuel cost , economy of scale and aggressive in marketing strategy . Some new players are expected to enter into the market and the competition and other challenges in the Domestic as well as in the International market is likely to pore challenges hitherto unknown. In order to combat competition, various steps are to be initiated by the management for further improvement in quality, expansion in marketing network and introduction of new designs. Barring unforeseen circumstances, the future of the company appears to be encouraging The summarized results of the current year's performance are given hereunder : Dividend Your Directors are pleased to recommend, for consideration of shareholders at the 29th Annual General Meeting, payment of dividend of 90% i.e. Rs.1.80 per share on equity shares of the face value of Rs. 2 each (Previous year 65% i.e. Rs. 1.30 per share on equity shares of the face value of Rs. 2 each) for the year ended 31st March 2016. Transfer to Reserves Your Directors are proposing to transfer Rs. 1000 lacs to General Reserves. Brief Description of the Company's Working During the Year The capacity of the Sitargunj plant has been substantially increased during the period under review . New Product development, better utilization of exiting capacity, cost reduction efforts, expansion of Distribution Network , Introduction of New Designs and Improved Packaging contributed to overall better performance of the company 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 appointed a firm of Chartered Accountant as Internal Auditor to ensure compliance and effectiveness of the Internal Control Systems in place. The Audit Committee is regularly reviewing the Internal Audit Reports for the audits carried out in all the key areas of the operations. Deposits The Company has neither accepted nor renewed any deposits during the year under review. Auditors The Company's Auditors M/s Doshi, Chatterjee, Bagri & Co., retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The observations of the Auditors, if any, are explained wherever necessary, in the appropriate Note to the Accounts. Explanation or Comments on Qualifications, Reservations or Adverse Remarks or Disclaimers Made by the Auditor There were no qualifications, reservations or adverse remarks made by the Statutory Auditors. Extract of Annual Return The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration ) Rules, 2014 in From No MGT 9 is furnished in "Annexure A' and is attached to this Report. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in 'Annexure B' and is attached to this report. Details of Policy Developed and Implemented by the Company on Its Corporate Social Responsibility Initiatives The Company has developed and implemented the Corporate Social Responsibility initiatives during the year under review. The Annual Report on Company's CSR activities of the Company is furnished in 'Annexure C' and attached to this report. Appointment and Reappointment of Directors Mr. Sushil Jhunjhunwala and Mr. Arun Kumar Churiwal retire by rotation and being eligible offer themselves for re appointment. The details in respect to this are being covered under the Corporate Governance report under the heading Disclosures. Declaration of Independent Directors The provisions of Section 149 pertaining to the appointment of Independent Directors apply to our Company. The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. Formal Evaluation In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 , the Board has carried out an annual performance evaluation of its own performance, executive and non-executive Directors individually. The detail on the same is given in the Corporate Governance Report. Number of Board Meeting During the financial year under review Six Board meetings and One independent directors meeting were convened. Audit Committee Pursuant to section 134(3) and section 177(8) of The Companies Act, 2013 the Audit Committee comprises of total 4 members. The names are as follows:- 1) Mr. G Narayana, Chairman 2) Mr. A.C. Chakrabortti 3) Mr Arun Churiwal 4) Mr. Rajiv Gujral During the reporting period under review four committee meetings have been convened. The Board of Directors accepted all recommendations of the Audit Committee in the reporting period. Vigil Mechanism In pursuant to section 177(9) and (10) of The Companies Act, 2013, a vigil mechanism for directors and employees to report genuine concerns has been formulated under the name "Whistle Blower Policy". The details of the policy have been posted on the website of the Company. Remuneration Policy The Board has, on recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of Directors and other matters as per section 178 of Companies Act 2013 and Regulation 19 of SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 . The Nomination & Remuneration Policy is stated in the Corporate Governance Report. Particulars of Loans, Guarantees or Investments Made Under Section 186 of the Companies Act, 2013 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. Particulars of Contracts or Arrangements Made with Related Parties The particular of Contracts or Arrangement made with the related parties pursuant to section 188 are furnished in Annexure D (Form No AOC-2) and is attached to this report. The same have also been disclosed under Note No 33 of the Notes to the Financial Statements. Managerial Remuneration Pursuant to section 178(1) of The Companies Act, 2013 the Nomination and Remuneration Committee comprises of total 3 Non-Executive Directors out of which two are Independent Directors. The names are as follows:- 1) Mr. G Narayana, Chairman 2) Mr. A C Chakrabortti 3) Mr. Arun Churiwal Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure E and is attached to this Report. Details of every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in Annexure F and is attached to this Report. 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 M/S Drolia and Company, Company Secretaries, Kolkata, to undertake the Secretarial Audit of the Company. The details forming part of Secretarial Audit report in FORM MR-3 is enclosed herewith as Annexure G for financial year 2015-16. There are no reservations, qualification, adverse remark or disclaimer contained in the Secretarial Audit Report. Corporate Governance Report on Corporate Governance along with the Certificate of Auditors M/S Doshi, Chatterjee, Bagri & Co. Chartered Accountants, Kolkata confirming the compliances to conditions of Corporate Governance as stipulated in SEBI (Listing Obligations & Disclosure Requirements), Regulations,2015, form part of the Annual Report. Business Risk Management Like all businesses, we are affected by a number of risks and uncertainties. These may be impacted by internal and external factors. The Company has framed a policy and process to help identify, assess and manage risks, pursuant to section 134(3) (n) of The Companies Act, 2013 and Regulation 21 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 . The policy and process has been in place throughout the reporting period. The Risk Management Process passed through a rigorous discussion to assess the relative profile of each risk. The suggestions of the Internal Auditors are taken into consideration while evaluating the risk and its mitigation process. Directors Responsibility Statement In accordance with the provisions of Section 134(5) 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, 2016, 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, 2016 at the end of the financial year 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 this Act 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; and (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. (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 Acknowledgement The Directors express their grateful appreciation of the assistance and cooperation extended by Banks, various Governments and other agencies, shareholders and the suppliers and solicits their continued support. Your Directors also wish to place on record their deep sense of appreciation of the devoted services of the Executives, staff and workers of the Company for another year of successful operation. By Order of the Board A.C. Chakrabortti Chairman Place Kolkata Date: 13th May 2016 |