DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting the 21st Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2015. OPERATIONS: Your Board would like to bring to your notice that the Company has witnessed significant fall in production due to reduction in orders from Tupperware and profitability during the financial year under review when compared to the last year. In spite of recessionary conditions of market and increasing competition, during the financial year under review, your Company has achieved total net of sales of Rs. 1099.27 lakh when compared to last year sales of Rs. 1173.82 lakh and recorded net loss of Rs. 277.35 lakh for the financial year 2014-15 when compared to net profit of Rs. 5.61 lakh during the previous year. The company made a provision for bad & doubtful debts relating to erstwhile cable & projects division receivables to the extent of Rs.251.96 lakh and goodwill of Rs.10.50 Lakh written off and debited to profit & loss account. This causes a current year loss of Rs.277.35 Lakh when compared to Net profit of Rs.5.61 lakh during the previous year. DIVIDEND: During the Financial Year 2014-15, Your Company has incurred loss; hence your Directors do not recommend any dividend for the Financial Year 2014-15. DIRECTORS In accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Smt K Saraswati, Director of the Company will retire by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they continue to meet with the criteria of independence as prescribed under sub- section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. For Directors seeking appointment/re-appointment in the forthcoming Annual General Meeting of the Company; the particulars as required to be disclosed in accordance with Clause 49 (Corporate Governance) of Listing Agreement, forms part of Corporate Governance Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Your Company has not given any Loans or Guarantees nor has it made any Investments covered under the provisions of Section 186 of the Companies Act, 2013. FIXED DEPOSITS The Company has neither accepted nor renewed any deposits falling within the provisions of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 from the its member and public during the Financial Year. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134 (5) of the Companies Act, 2013, your Directors confirm that to the best of their knowledge and belief and according to the information and explanation obtained by them, i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. Such accounting policies as mentioned in the notes to the financial statements have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit or loss of the Company for that period; iii. 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. The annual accounts for the year 2014-15 have been prepared on a going concern basis. v. Those proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. vi. That system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively. VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to the provisions of section 177 (9) and read with all other applicable provisions of the Companies Act, 2013 and the Companies (meetings of board and its powers) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Group. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company. AUDITORS: Pursuant to the provisions of Section 139(2) of the Companies Act, 2013, the Statutory Auditor M/s. Ramsamy Koteswara Rao & Co, Chartered Accountants, Hyderabad, as the Statutory Auditors of the Company to hold office from conclusion of this Annual General Meeting till the next Annual General Meeting subject to the ratification of shareholders at every Annual General Meeting. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. There are no qualifications in the report of the statutory auditors for the year 2014-15. INTERNAL AUDITOR: The Board of Directors based on the recommendation of the Audit Committee has re-appointed M/s. SVP& Co Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis. BOARD MEETINGS During the year under review, six board meetings were held on 01.05.2014, 30.05.2014, 1308.2014, 30.09.2014, 13.11.2014, and 12.02.2015. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: A Statement of particulars of the conservation of energy, technology absorption and foreign exchange earnings and outgoings is given as required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is enclosed as ANNEXURE A. MANAGEMENT DISCUSSION & ANALYSIS Pursuant to the provision of clause 49 of the listing agreement a report on Management Discussion & Analysis is set out as an ANNEXURE B 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 K Malleswari a practicing Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as ANNEXURE C to this report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT - 9 is annexed herewith as ANNEXURE D to this report. CORPORATE GOVERNANCE: The Company has been making every endeavor to bring more transparency in the conduct of business. As per the requirements of Listing Agreement with the Stock Exchanges, a compliance report on corporate Governance for the year 2014-15 and a certificate from the Auditors of the Company are furnished as a part of this Annual Report ANNEXURE E. PARTICULARS OF EMPLOYEES: The information required pursuant to Section 197 read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is herewith annexed as Annexure F to this report and Rule 5 (2) Of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, No employee of your company is in receipt of remuneration exceeding Rs.5, 00,000/- per month or Rs. 60, 00,000/- per annum during the Financial Year. 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 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 are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained as per Clause 49 of the Listing Agreement for the transactions which are of a foreseen and repetitive nature. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 is referred in Notes to Accounts. HUMAN RESOURCES Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. ACKNOWLEDGEMENTS: Your Directors place on record their appreciation and gratitude for the continuous support and assistance extended by all the Statutory Authorities. The Board also extends its heartfelt gratitude to the Creditors and Shareholders for the confidence reposed by them in the Company. Your Directors also place on record their sincere appreciation for the continued contributions made by the employees at all levels. By order of the Board For INNOCORP LIMITED Sd/- Mr. Prasad V S S Garapati Chairman and Managing Director Date: 12th August 2015 Place: Hyderabad |