DIRECTORS' REPORT TO THE MEMBERS VAMSHI RUBBER LIMITED Your Directors have pleasure in presenting their 21st Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the Financial Year ended March 31, 2015. v2. Brief description of the Company's working during the year/State of Company's affair During the year, many times, raw-material prices crashed where we had to pass on the benefits to the customers. However, this resulted in uncertainty for the customers in buying regular purchases. This affected slightly sales and resulted in inventory losses. As the prices have rock bottomed, we expect better sales and improved margins in the coming year. 3. Change in the nature of business, if any There is no change in the nature of business during the year. 4. Material Changes and Commitments, if any, affecting 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 There are no other Material Changes and Commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report. 5. Future Outlook As the prices are stabilized and transportation is likely to be picked up, we expect a better performance and hope for a growth between 8 to 10%. 6. Dividend The Board of Directors recommended a dividend of Re. 1.00 per Equity Share for the financial year ended 31st March, 2015, which if approved at the forthcoming Annual General Meeting on 30th September 2015, will be paid to those shareholders whose names appear in the Register of Members as at the closing hours of business on Wednesday, the 30th day of September, 2015. In respect of shares held in electronic form, the dividend will be paid on the basis of beneficial ownership furnished by Depositories viz., NSDL and CDSL for this purpose. The Register of Members and Share Transfer Books will remain closed from 24th September, 2015 to 30th September, 2015 (both days inclusive). 7. Reserves Rs. 97,20,494 has been transferred to the Reserves during the financial year 2014-15, being the surplus for the year end 31st March, 2015. 8. Share Capital During the year under review, there has been no change in the Share Capital of the Company. The Authorised Share Capital of the company is Rs. 4,50,00,000 divided into 45,00,000 equity shares of Rs. 10 (Rupees Ten) each. The Issued, Subscribed and Paid up Capital of the Company as on March 31, 2015 is Rs.4,20,68,000 divided into 42,06,800 equity shares of Rs. 10 (Rupees Ten) each. 9. Directors and Key Managerial Personnel In accordance with the Companies Act, 2013 read with Articles of Association of the Company, Mr. Venkateswara Sarma Kuchibhotla, Director, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. Mrs. Akhila Pushpa Sundari was appointed as an Additional Director with effect from 31/03/2015, who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160(1) of the Act, from Mrs. Akhila Pushpa Sundari herself proposing her candidature for the office of Director. Mr. P. Varun Kumar was appointed as CFO of the Company w.e.f. 31st March, 2015 who subsequently resigned as CFO on 29/05/2015. Mr. M.Ramesh Reddy was then appointed as CFO of the Company w.e.f. 29/05/2015 and Ms. Titiksha Jain was appointed as Company Secretary w.e.f. 28/04/2015. 10. Particulars of Employees Details in respect of remuneration paid to employees as required under Section 197 (12) of the Companies Act, 2013, read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company. The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure -II and forms part of this Report 11. Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year six (6) Board 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 of 120 days as prescribed under the Companies Act, 2013. 12. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 13. Declaration by an Independent Director(s) and re- appointment, if any A declaration has been received by all the Independent Directors of the Company that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. The independent directors of the Company holds office for a term up to five consecutive years on the Board of a Company, but are also eligible for re-appointment for next five years on passing of a special resolution by the Company. During the year, Ms. Akhila Sundari Pushpa was appointed as Independent Additional Director of the Company. The Company has also received declaration from her confirming that she meets with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49. In accordance with the provisions of Section 149(4) and proviso to Section 152(5) of the Companies Act, 2013, Mrs. Akhila Pushpa Sundari is being proposed to be appointed as Independent Director to hold office as per her tenure of appointment mentioned in the Notice of the forthcoming AGM of the Company. 14. 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. 15. Statutory Auditors M/s. Ramana Reddy & Associates, Chartered Accountants, Hyderabad, were appointed as Statutory Auditors of the Company for a period of three (3) years from the conclusion of the 20th AGM to the conclusion of 23rd aGm, subject to ratification by the members at every AGM. The statutory auditors have also confirmed their eligibility under section 139(1) of the Companies Act, 2013. Members are requested to ratify their appointment as Statutory Auditors and to authorize the Board to fix their remuneration. Replies to Auditors' Report The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 16. Secretarial Audit Report In terms of Section 204 of the Act and Rules made there under, Mr. Manoj Kumar Koyalkar, M/s. AGR Reddy & Co, Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure-II to this report. The report is self-explanatory and do not call for any further comments. 17. Cost Auditors The provisions of Section 148 of the Companies Act, 2013 relating to mandatory Cost Audit does not apply to the Company and hence, no Cost Audit is conducted. However, the Company is required to maintain Cost records which the Company is maintaining. 18. Internal Audit & Controls The Company continues to engage M/s. CSVR Associates, Chartered Accountants, as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. 19. Vigil Mechanism : In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. 20. Risk management policy The Risk Management Policy in place in the company enables the company to proactively take care of the internal and external risks of the company and ensures smooth business operations. The company's risk management policy ensures that all its material risk exposures are properly covered, all compliance risks are covered and the company's business growth and financial stability are assured. Board of Directors decide the policies and ensure their implementation to ensure protection of company from any type of risks. 21. Extract of Annual Return As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form MGT 9 is given as Annexure-IV to this report. 22. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future. 23. Deposits The Company has not accepted any deposit from the public under Chapter V of the Act or under the corresponding provisions of Section 73 and 74 of the Companies Act, 2013, and no amount of principal or interest was outstanding as on the Balance Sheet date. 24. Particulars of loans, guarantees or investments under section 186 Details of loans and guarantees given and investments made under Section 186 of the Act are given in the Notes to the Financial Statements. 25. Particulars of contracts or arrangements with related parties: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto shall be disclosed in Form No. AOC-2 as Annexure to this report. There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management which may have a potential conflict with the interest of the Company at large. None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration, sitting fee and commission. 26. Corporate Governance Certificate In pursuance of Clause 49 of the Listing Agreement with the Stock Exchange, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate from the Auditors of the Company regarding the compliance of the conditions of Corporate Governance as stipulated under the said Clause 49 also forms a part of this Annual Report. 27. Management Discussion and Analysis Report Management Discussion and Analysis Report, pursuant to Clause 49 of the Listing Agreement, forms part of this report and the same is annexed. 28. Obligation Of Company Under The Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15: • No. of complaints received: - NIL - • No. of complaints disposed off: - NIL - 29. Conservation of energy, technology absorption and foreign exchange earnings and outgo Information on conservation of Energy, Tec hnology absorption, Foreign Exchange earnings and outgo required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are as follows (C) Foreign exchange earnings and Outgo The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is as follows: Foreign Exchange Inflows: NIL Foreign Exchange Outflows: Rs. 84,07,012 30. Corporate Social Responsibility (CSR) The provisions w.r.t. CSR is not applicable to the Company. Therefore, the Company had not constituted CSR committee during the year 2014-15. 31. Human Resources Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. 32. Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of your Company make the following statements, with the best of their knowledge and belief and according to the information and explanations obtained by them: i. that in the preparation of the annual accounts for the financial year ended 31st March 2015, the applicable accounting standards have been followed and there have been no material departures from them; ii. that the accounting policies mentioned in notes to Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the company for the year ended on that date; iii. that 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; iv. that the annual financial statements have been prepared on a 'going concern' basis; v. that proper internal financial controls have been laid down to be followed by the Company and such internal financial controls are adequate and operating effectively; and vi. that proper systems are in place to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively 33. Constitution of Audit Committee The Audit Committee of the Company is duly constituted as per Section 177 of the Companies Act, 2013. Composition and scope of Audit Committee is provided under the Corporate Governance report annexed herewith. 34. Listing with Stock Exchanges: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to BSE where the Company's Shares are listed. 35. Transfer of Amounts to Investor Education and Protection Fund Your Company has Rs. 1,81,768.00 lying unpaid or unclaimed for a period of seven years which the Company is required to transfer to Investor Education and Protection Fund (IEPF) on or after 25/10/2015. Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 27th September, 2014), with the Ministry of Corporate Affairs. 36. Acknowledgements Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation to business associates, banks and other financial institutions and shareholders, of the Company for their continued support. By order of the Board for Vamshi Rubber Limited Sd/- R.Surendra Reddy Managing Director DIN: 000294240 Sd/- M.Ramesh Reddy Chairman DIN: 00025101 Date: 10/08/2015 Place: Hyderabad |