DIRECTORS' REPORT Your Directors have great pleasure in presenting Annual Report of your Company comprising the Audited Financial Statements for the year ended 31st March, 2015. RESULTS OF OPERATIONS: During the year under review, the Company has registered a sale of Rs.5,236.68 Lacs (previous year Rs.4,415.72 Lacs) and Net Profit after Tax of Rs.79.01 Lacs (previous year Rs.64.37 Lacs). SHARE CAPITAL: There was no change in the share capital of the Company during the year 2014-15. DIVIDEND: The Company's overall performance during the year under review was satisfactory. Your Directors have pleasure in recommending payment of dividend of Rs.0.80/- (8%) per share (of Rs.10/- each) on the Company's Share Capital (previous year Re. 0.80/- (8%) per share). This will absorb total cash outflow of Rs. 51.76 Lacs (previous year Rs.51.22 Lacs) including Corporate Dividend Distribution Tax of Rs.7.96 Lacs (previous year T1.42 Lacs). DIRECTORS AND KEY MANAGERIAL PERSONNEL: In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Dr. S N Sahai, Whole time Director & CFO of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. Further, the Board of Directors of the Company re-appointed Dr. S. N. Sahai as Whole time Director of the Company (designated as Whole time Director & CFO) of the Company for a further period of one year w.e.f. 1st April, 2015 to 31st March, 2016. The Company has received a notice along with requisite deposit from a member of the Company under Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director of the Company. Your Board recommends his re-appointment. The office of Mr. Arvind Patel becomes vacant as per the provisions of Section 167(1)(b) of the Companies Act, 2013 since he did not attend any meeting during the financial year 2014-15. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement entered into with the Stock Exchanges. As stipulated under the Clause 49 of the Listing Agreement with BSE Limited and Ahmedabad Stock Exchange, brief resume of the Directors proposed to be appointed/re-appointed are given in the Notice convening Annual General Meeting. The Board of Directors in its meeting, re-designated Mr. Vipul P Shah as Chairman & Managing Director of the Company and Mr. Pravinchandra B Shah shall act as Non Executive Non Independent Director of the Company. PUBLIC DEPOSITS: During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. EXTRACT OF ANNUAL RETURN: An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure I. MEETINGS OF THE BOARD: The Board meets at regular intervals to discuss and decide on Company's/ business policy and strategies apart from other business. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board's approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. The notice of Board meeting is given well in advance to all the Directors of the Company. Usually, meetings of the Board are held in Mumbai, Maharashtra. The agenda of the Board / Committee meetings is circulated 7 day prior to the date of the meeting. The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. The Board met six times during year as per details given in the Report on Corporate Governance. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013. AUDIT COMMITTEE AND ITS COMPOSITION: The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process. As on 31st March, 2015, the Audit Committee comprised of Mr. Prasannakumar Gawde, Mr. Jagdeep Mehta, Independent Directors and Mr. Vipul P. Shah, Managing Director of the Company. Mr. Prasannakumar Gawde is the Chairman of Audit Committee of the Company. DIRECTORS' RESPONSIBILITY STATEMENT: Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3)(c) of the Companies Act, 2013 state that: a.in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; 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 the Company at the end of the financial year and of the profit of the Company for that period; c.the directors 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.the directors have prepared the annual accounts on a going concern basis; e.the directors have 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.the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 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 determination of salary of Directors, Senior Management Personnel and any other employees of the Company. The Remuneration Policy is stated in the Report on Corporate Governance. RISKS AND AREAS OF CONCERN: The Company has laid down a well defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT 2013: All Related Party Transactions entered during the year were in Ordinary Course of the Business and on Arm's Length basis. No Material Related Party Transactions were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: The details of loans, guarantee or investment made by your Company under Section 186 of the Companies Act, 2013 during the financial year 2014-15 are given under Notes to Accounts of financial statements. ANNUAL PERFORMANCE EVALUATION BY THE BOARD: Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has adopted a Policy for evaluation of the performance of the Directors, Key Managerial Personnel and Senior Management Personnel. Based on the consideration of various parameters, gathered from all Directors, the performance of the Board and individual Directors is evaluated. Besides, the Board has also developed a system to evaluate the performances of each of executive and non-executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the Directors and the value addition provided by them. The Policy, inter alia, provides the criteria for performance evaluation of Directors consisting of ; i.Attendance of the directors at the Meetings and the quality of contribution at Board and it's Committee/s meetings; ii.Participation of such director in the Company's business and attribution to the strategic plans of the Management; iii.Relationship with other Board members and other officials of the Senior Management; iv.Sharing of knowledge and experience for the benefit of the Company. During the year under review, a separate meeting of the Independent Directors was held for evaluation of performance of non-independent directors, performance of the Board as a whole and performance of the Chairman. 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: There was no order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on Company's operations in future. WHISTLE BLOWER POLICY: The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases. The details of the Vigil Mechanism Policy is explained in the Report on Corporate Governance and also posted on the website of the Company. We affirm that during the financial year 2014-15, no employee or director was denied access to the Audit Committee. SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Secretarial Audit Report received from M/s. Manish Ghia & Associates, Practising Company Secretaries, Mumbai is appended as Annexure - II and forms part of this report. SECRETARIAL AUDITORS' REPORT: In respect to the Secretarial Auditors' remarks in their report, the Company would like to state as under: (a)as required under Section 203 of the Act, the Company is yet to appoint a Company Secretary; The Company is in precess of appointing Whole-Time Company Secretary. (b)in respect of dividend declared on equity shares in the Annual General Meeting of the Company held on 30th September, 2014 the amount of dividend to be paid to members was transferred to a separate dividend account on 7th October, 2014; The transfer of dividend amount to separate dividend account was delayed inadvertently. (c)one of the director of the Company, Mr. Arvind Patel is yet to obtain Director Identification Number; however due to non-attendance of all meetings of the Board of Directors held during the audit period, the director has vacated his office in terms of section 167(1)(b) of the Act; the mandatory declaration/disclosure have also not been received from the said director;and The above remark is self explanatory INTERNAL AUDIT: The Company has appointed M/s. Amit Desai & Associates. Chartered Accountants, Mumbai, as its Internal Auditor. Internal Auditor has given his report on quarterly basis to the Audit Committee. Based on the report of internal audit function the Board takes corrective action in the specific areas observed and thereby to strengthen the controls on significant audit observations, corrective actions thereon are presented to the Audit Committee of the Board. COST AUDITORS: Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company has appointed M/s. Y S Gokhale & Associates, Cost Accountants, Mumbai as Cost Auditors of the Company to conduct audit of cost records for the financial year 2014-15, at a remuneration of Rs.50,000/- p.a., subject to approval for remuneration of the shareholders of the Company. As per the provisions of Companies (Cost Records and Audit) Rules, 2014 notified on 30th June, 2014, the Company is not required to appoint Cost Auditors for the financial year 2014-15 onwards. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance for sexual harassment at workplace and 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 there under. There was no complaint on sexual harassment during the year under review. DELISTING OF EQUITY SHARES OF THE Company: The Equity shares of the Company have been delisted from Delhi Stock Exchange Limited since the exchange has been derecognized by SEBI vide its order dated 19th November, 2014. SUBSIDIARY Company: Shree Ambika Naturals Private Limited is a subsidiary of the Company. The Company does not have any Associate Company. Pursuant to the provisions of Section 129(3) of the Companies Acts, 2013 a statement containing the salient features of the financial statements of the subsidiary in Form AOC-1 is attached as Annexure III. REPORT ON CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement entered into with the stock exchange, the following have been made a part of the Annual Report and are attached to this report: •Management Discussion and Analysis •Report on Corporate Governance •Auditors' Certificate regarding compliance with conditions of Corporate Governance COMMITTEES OF THE BOARD: During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently three Committees of the Board, as follows: 1.Audit Committee 2.Stakeholders' Relationship Committee 3.Nomination and Remuneration Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", as part of this Annual Report. PARTICULARS OF REMUNERATION: Pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details of the ratio of remuneration of each Director to the median employee's remuneration are appended to this report as Annexure IV. During the year under review, no employee was in receipt of remuneration exceeding the limits as prescribed under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. AUDITORS: M/s. J. A. Rajani & Co., Chartered Accountants, Mumbai, the Statutory Auditors of your Company hold office as such upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that they are willing to continue as Statutory Auditors and if re-appointed, their re-appointment would be within the limits prescribed under Section 139 of the Companies Act, 2013 and they are not disqualified from being appointed as Auditor. Your Directors recommend the re-appointment of M/s. J. A. Rajani & Co., Chartered Accountants, Mumbai, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting up to the conclusion of next Annual General Meeting of the Company and to audit financial statements for the financial year 2015-16. AUDITOR'S REPORT: With regard to observation made by the Auditors' in their Standalone and Consolidated Report, your Directors would like to state that: 1.Regarding the non-payment of Professional Tax of Subsidiary Company amounting to Rs.0.27 Lacs, we state that the Company is in process of making payment of the same. 2.The Company has disputed the demand of Rs.0.55 Lacs raised by the Income Tax Department in respect of Assessment Year 2002-03 and for Rs.3.16 Lacs in respect of Assessment Year 2011-12 for which appeal is filed with the Income Tax Appellate Tribunal, Mumbai and Commissioner of Income Tax, Mumbai respectively. The Company is hopeful of winning the appeal. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Details regarding Conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure V. ACKNOWLEDGEMENT: Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Financial Institution, Banks, Government Authorities, Vendors and Shareholders and all organizations connected with its business during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of executives, staff and workers of the Company. For and on Behalf of the Board of Directors Vipul P Shah Chairman & Managing Director Date: 11th August, 2015 Place: Mumbai |