DIRECTORS REPORT To, The Members, The directors take pleasure in presenting the Twenty Second Annual Report on the business operations of the Company and the accounts along with audited financials for the year ended as on 31st March 2015. The Management Discussion and Analysis has also been incorporated into this report. Dividend In view of the future expansion programme, your Direcotrs do not recommed any dividend. Reserves The Company proposes to transfer an amount of Rs.2,90,64,351/- to the Reserves. Share capital The paid up Equity Share Capital as on 31st March 2015 was Rs.5,12,42,000/-. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. Finance Cash and cash equivalent as at 31st March 2015 was Rs.40,04 Lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. Change in the nature of business, if any No change in the nature of the business of the Company done during the year. 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 is no significant and material changes and commitments 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 Details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government No such frauds are reported during the year under review. 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 is no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. Details in respect of adequacy of internal financial controls with reference to the Financial Statements The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Board. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Board. Details of Subsidiary/Joint Ventures/Associate Companies The Company does not have any Subsidiary / Associate Companies. Particulars of Loans, Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement Not applicable as the Company does not have any Subsidiary / Associate Companies or joint venture Companies. Vigil Mechanism / Whistle Blower Policy The Company has a vigil mechanism named Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company. Related Party Transactions All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large. All related party transactions were placed before the Audit Committee and also for the Board approval, wherever required. Prior omnibus approval of the Audit Committee is generally obtained for the transactions which are of a foreseen and repetitive nature and these transactions are reviewed by the Audit Committee on quarterly basis. The policy on related party transactions as approved by the Board is uploaded on the Company's website: www.keshavcement.com Sexual Harassment Policy The Company has a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013". Up till date, the Company has not received any complaint under the Policy. Risk Management Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has developed and implemented the Risk Management Policy. The details of policy are set out in the Corporate Governance Report forming part of the Directors' Report. 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 and the performance of the individual Directors as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report. Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year six Board Meetings and four 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. The details of Board Meetings and Committee of Board Meetings are given in the Corporate Governance Report. The details of deposits which are not in compliance with the requirements of Chapter V of the Act: NIL Extract of the Annual Return as provided under Section 92(3) The extract of the annual return as provided under Section 92(3) forms part of Directors Report and is attached as "Annexure I". Green Initiatives With the aim of going green and minimising our impact on the environment, we are sending electronic copies of the Annual Report 2015 and Notice of the 22nd AGM to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015 and Notice of the 22nd AGM are being sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary. The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all the resolutions set forth in the notice. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting are provided in the Notice. Directors' Responsibility Statement In pursuance of Section 134(5) of the Companies Act, 2013, the directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (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 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 ) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Explanation: For the purposes of this clause, the term "internal financial controls" means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to 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 information; (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. Statement on Declaration Given by Independent Directors under Section 149 The Company has received declarations from the Independent Directors of the Company stating that they meets the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 1956. Remuneration Policy As per the recommendation of the Nomination & Remuneration Committee of the Company and after considering data regarding remuneration paid in the market by companies of a similar size and activity the Board has formulated the Policy on Appointment & Remuneration of the Directors, Key Managerial Personnel and Other Employees, which has been enumerated in the Corporate Governance Report. Statutory Auditors At the Annual General Meeting held in the year 2014, CA. Prabhakar K. Latkan, Chartered Accountant, bearing ICAI Membership No.21730, Statutory Auditors of the Company were re-appointed by the shareholders to hold office as Statutory Auditors from the conclusion of Annual General Meeting held in the year 2014 till the conclusion of Twenty Fourth Annual General Meeting of the Company to be held in the year 2017, subject to ratification of their appointment at every Annual General Meeting. Under Section 139 of the Companies Act, 2013, the Company is required to place the matter relating to Statutory Auditor's appointment for ratification by members at every Annual General Meeting. The Company has received a letter from the Statutory Auditors confirming that they are eligible for appointment as Auditors of the Company under Section 139 of the Companies Act, 2013 and meet the criteria for appointment specified in Section 141 of the Companies Act, 2013. Based on the recommendations by the Audit Committee, the Board of Directors of the Company recommend the ratification of appointment of CA. Prabhakar K. Latkan, Chartered Accountant, bearing ICAI Membership No.21730 as Statutory Auditors of the Company by the shareholders at the ensuing Annual General Meeting. The observations of the Auditors in their report, read together with the notes on Accounts, are self-explanatory and therefore, in the opinion of the Directors, do not call for any further explanation. Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made in the Audit Report There are no qualifications, reservations or adverse remarks or disclaimer made in the Audit Report by the Auditors in their report for the financial year ended as on 31st March 2015. 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 Board of Directors have appointed M/s. S. Kedarnatah & Associates a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure II". Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made in the Secretarial Audit Report The secretarial audit report is qualified stating that the Report on Annual General Meeting as required under Section 121 (2) of the Companies Act, 2013 required to be filed with the Registrar of Companies, Karnataka and has not complied with Rule 10(1) and 20(v) of the Companies (Management and Administration) Rules, 2014 and the Company has not complied with Clause 41(III) with respect to publication of board meeting notice as per listing agreement. Cost Auditors Pursuant to Section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not required to audit the cost records but only required to maintain the cost records. With the object of ensuring that the cost records maintained by the Company are adequate and proper your Directors had voluntarily appointed M/s. Santosh Kalburgi & Co. Cost Accountant, as Cost Auditor for auditing the cost accounts of the Company for the financial year 2015-16 on a remuneration of 25,000/-. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in the general meeting for ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to Mr. Santosh Kalburgi & Co., Cost Auditors is included in the notice convening the Annual General Meeting. Board of Directors During the year under report, the Board was duly constituted in so far as the number of independent Directors was 50% and the Mr. Vilas H. Katwa as the Executive Chairman. The Board would like to mention here that Mr. Ashok M. Tarale, member of the Audit Committee resigned w.e.f. 12th August 2014. Mr. Ramesh M. Shah has agreed to act as a Director and member of the Audit Committee and accordingly, the notice convening forthcoming annual general meeting throws more light on these points. Further the Board of Directors has appointed Mr. Prajakta K. Kulkarni & Mrs. Narmada H. Katwa as an Additional Directors of the Company with effect from 10th November 2014. 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. The Board of Directors had on the recommendation of the Nomination and Remuneration Committee of the Board appointed Mr. Deepak H. Katwa as Chief Financial Officer (CFO) of the Company for a period of 5 years with effect from 10th November 2014. The brief resume and other details relating to the Directors, who are to be appointed/ re-appointed as stipulated under Clause 49 of the Listing Agreement, are furnished in the Annual Report. None of the Directors are disqualified under Section 164(2) of the Companies Act, 2013. Key Managerial Personnel The following employees were designated as whole-time Key Managerial Personnel by the Board of Directors during the year under review: 1. Mr. Vilas H. Katwa, Managing Director 2. Mr. Rajesh Lakkar, Company Secretary 3 . Mr. Deepak H. Katwa, Chief Financial Officer. BOARD OMMITTEES Audit Committee After reconstitution of the Board during the year under review the audit committee consisted of following Directors: 1. Shri. Ramesh M. Shah, Chairman 2. Shri. Satish Kalpavriksha 3. Smt. Nisha Maganur Nomination and Remuneration Committee As per the provisions of Section 178 of the Companies Act, 2013 the Board has constituted a Nomination and Remuneration Committee in place of earlier Remuneration Committee. The said Committee consisted of following Directors: 1. Smt. Nisha Maganur, Chairman 2. Shri. Venkatesh H. Katwa 3. Shri. Satish Kalpavriksha Stakeholders Relationship Committee As per the provisions of Section 178 of the Companies Act, 2013 the Board has constituted a Stakeholders Relationship Committee which consists of following Directors 1. Shri. Satish Kalpavriksha, Chairman 2. Smt. Prajakta K. Kulkarni 3. Smt. Nisha Maganur Risk Management Committee As per the provisions of the Companies Act, 2013 the Board has constituted a Risk Management Committee which consists of following Directors: 1. Shri. Satish Kalpavriksha, Chairman 2. Smt. Nisha Maganur 3 . Shri. Venkatesh H. Katwa Management Discussion & Analysis and Corporate Governance Report The Company is committed to uphold the highest standards of Corporate Governance and adhere to the requirements set out by the Securities and Exchange Board of India. Pursuant to clause No 49 of Listing Agreement with the stock exchange, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of corporate governance are annexed as "Annexure II" forming part of this report. Listing of Shares [Disclosure Requirement as per SEBI Circular No.14/98 Dated 24.4.1998] During the year under report, the equity shares of the Company were traded on the Bombay Stock Exchange. The Company has paid annual listing fee to the Bombay Stock Exchange up to the financial year 2014-15. During the financial year 2014-15 or up to the date of this report, the trading in the equity shares of the Company was not suspended. 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 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report 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 the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. ACKNOWLEDGEMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. CAUTIONARY STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. For and on behalf of the Board of directors For SHRI KESHAV CEMENTS AND INFRA LIMITED (Vilas H. Katwa) Chairman Place: Belagavi Date: 26/05/2015 |