DIRECTORS' REPORT TO THE MEMBERS The Directors submit the TWELFTH ANNUAL REPORT on the business and operations of the Company and the Audited Statements of Accounts for the year ended 31st March, 2015. OVERALL PERFORMANCE As mentioned in the last year's Annual Report, a lock out was declared in the plant w.e.f. 04th February, 2014 due to labour unrest. As per directions of the State Government though the lock out was uplifted w.e.f. 26th December, 2014 but the production activities are yet to be resumed. As a result of this during the financial year 2014-15 there was no production/no sale except some minor depot sales. Due to fixed overheads company has incurred a loss of Rs. 807.36 net of write back of deferred tax and income on sale of fixed assets including interest income of Rs. 1198.66 Lacs and Rs. 1518.02 Lacs respectively. DIVIDEND In view of the losses during the year, the Directors regret their inability to recommend any dividend for the financial year ended 31st March 2015 on Equity Shares of the company. STATE OF COMPANY'S AFFAIRS As mentioned above the production activities are yet to be resumed. Due to non operation of the plant the fund flow position of the company is in very bad shape. EXTRACT OF THE ANNUAL RETURN An extract of annual return for the financial year ended on 31st March, 2015 in Form MGT-9 pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is attached as Annexure-1. NUMBER OF MEETINGS OF THE BOARD The Board met five times in FY 2014-15 viz. on 29th May, 2014, 26th July, 2014, 10th November, 2014, 29th December, 2014 and 13th February, 2015. The maximum interval between any two meetings did not exceed 120 days. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates, the audited Consolidated Financial Statements are provided in the Annual Report. SUBSIDIARIES Pursuant to Section 129 (3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company's Subsidiaries and Associates' (in Form AOC-1) is attached to the financial statements as Annexure-2. The company will make available the Annual Accounts of the subsidiary companies and related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the Company and that of the respective subsidiary companies as well will also be kept open for inspection at the Registered Office of the Company. Further, the Consolidated Financial Statements presented by the Company include the financial results of the subsidiary companies. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to provisions under Section 134 (5) of the Companies Act, 2013, your Directors hereby confirm: (i) that in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards read with requirements set out under schedule III of the Companies Act, 2013 have been followed and there are no material departures from the same; (ii) that they have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss for the year under consideration; (iii) that they have taken proper and sufficient care 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 frauds and other irregularities; (iv) that they have prepared the annual accounts of the Company for the financial year ended 31st March, 2015 on a going concern basis; (v) they 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 (vi) that they had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DECLARATION GIVEN BY INDEPENDENT DIRECTORS The Independent Directors have given declaration that they meet the criteria specified under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-Section (3) of Section 178, is attached as Annexure-3 to this Report. AUDITORS AND AUDITORS' REPORT Statutory Auditors The Auditors' Report to the Shareholders for the year under review does not contain any qualification. Secretarial Auditor There are no qualifications, reservations or adverse remarks or disclaimers made in the Secretarial Audit Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There are no contracts/arrangements/transactions which are not at arm's length basis and there are no material contracts/arrangements/ transactions which are at arm's length basis. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER CLOSE OF THE FINANCIAL YEAR A SBLC for USD 10 Million issued by Bank of India, Visakhapatnam in favour of Bank of India, Jersey for sanctioning a loan of USD 10 Million to Facor Minerals (Netherlands) B.V., an overseas subsidiary of the Company has been invoked. Company is approaching the BOI with a request to arrange to provide the time to the Company to pay back the guarantee invoked amount to the bank in instalments. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information required under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are set out in Annexure-4 hereto forming part of this report. RISK MANAGEMENT POLICY The Company’s Risk Management framework is designed to identify, assess and monitor various risks related to key business and strategic objectives and lead to the formulation of a mitigation plan. Major risks in particular are monitored regularly at Executive meetings and the Board of Directors of the Company is kept abreast of such issues. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has formed a Committee 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 thereunder. CORPORATE SOCIAL RESPONSIBILITY Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company at the Board Meeting held on 29th May, 2014 approved a Policy on CSR and the Policy was hosted on the website of the Company. Company is not having average net profits in the immediately preceding three years. ANNUAL BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, considered/evaluated the Boards’ performance, Performance of the Chairman and other Non-independent Directors. The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director). VIGIL MECHANISM/WHISTLE BLOWER POLICY Pursuant to Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower and the same was hosted on the website of the Company. This Policy interalia provides a direct access to the Chairman of the Audit Committee. Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. FINANCE The Company has not invited any deposit from public during the year. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197 (12) of the Companies Act, 2013 read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the year under review there were no employees receiving remuneration of or in excess of Rs. 60,00,000/- per annum or Rs. 5,00,000/- per month requiring disclosure. Disclosures pertaining to remuneration and other details as required under 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 provided in the Annexure forming part of the Annual Report. Having regard to the provisions of Section 136 (1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review, Mr. M. D. Saraf, Vice Chairman & Managing Director, Mr. Gautam Khaitan, Independent Director stepped down from the Board w.e.f. 26-07-2014 and 31-01-2015 respectively. Mr. Arye Berest ceased as a director of the company w.e.f. 22-04- 2015 due to his sudden demise. The Board wishes to place on record its deep sense of appreciation for the valuable contributions made by them to the Board and the Company during their tenure as Directors. Mr. Anurag Saraf, Joint Managing Director, retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himself for re-appointment. Mrs. Urmila Gupta was appointed as Additional Director (Independent) on the Board with effect from 13th February, 2015. We seek your confirmation for appointment of Mrs. Urmila Gupta as Independent Director for a term upto five consecutive years i.e. from, 13th February, 2015 to 12th February, 2020 on non-rotational basis. Members are requested to refer to the Notice of the Annual General Meeting and the Explanatory Statement for details of the qualifications and experience of the Director and the period of her appointment. The Company has formulated a code of conduct for all members of the Board and Senior Management Personnel. All concerned members/ executives have affirmed compliance with the said code. At the Board Meeting held on 29th May, 2014 Mr. Ashim Saraf, Joint Managing Director, Mr. O. P. Saraswat, Dy. Chief Financial Officer and Mr. S. S. Sharma, Company Secretary were designated as “Key Managerial Personnel” of the Company pursuant to Sections 2 (51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. SECRETARIAL AUDIT REPORT The Company has appointed Mr. Nilesh Jain of N.V. Jain & Associates, Company Secretaries to conduct secretarial audit and his Report on Company’s Secretarial Audit is appended to this Report as Annexure-5. CORPORATE GOVERNANCE Management Discussion and Analysis, Corporate Governance Report and Auditors’ Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. AUDIT COMMITTEE The Audit Committee formed by the Board of Directors of the Company consists of Mr. K. Jayabharath Reddy, Mr. P.V.R.K. Prasad & Mr. A.S. Kapre who are Non-Executive Independent Directors of the Company and Mr. R.K. Saraf. Mr. K. Jayabharath Reddy is its Chairman. The Committee’s role, terms of reference and the authority and powers are in conformity with the requirement of the Companies Act, 2013 and the Listing Agreement. AUDITORS M/s Salve & Co., Chartered Accountants, the existing Auditors, will retire at the ensuing Annual General Meeting and are eligible for reappointment. Based on the recommendation of the Audit Committee, the Board of Directors of the Company have proposed the appointment of M/s Salve & Co., Chartered Accountants, as the Auditors of the Company from the conclusion of the forthcoming 12th Annual General Meeting till the conclusion of the 14th Annual General Meeting. M/s Salve & Co., have expressed their willingness to act as Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of Section 141 of the Companies Act, 2013. COST AUDITOR Mr. Prakash Uppalapati, Cost Accountant has been appointed by the Board as Cost Auditor of the Company to conduct audit of cost records of the Company for the year ended 31st March, 2016. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under, Members are requested to consider the ratification of the remuneration payable to Mr. Prakash Uppalapati. The due date for filing of the Cost Audit Report for the financial year 2013-14 was 30th September, 2014. The Company has filed the Report with the Ministry of Corporate Affairs on 25-09-2014. ACKNOWLEDGEMENT AND APPRECIATION Your Directors place on record their gratitude for the support and cooperation received from Central and State Governments, Financial Institutions & Banks, Customers, Suppliers and Shareholders and for their continued support. The Board also expresses its sincere appreciation to the dedicated and committed team of employees and workmen. On behalf of Board of Directors, (U.P.) R.K. SARAF Chairman & Managing Director Place : Noida Dated : 08th August, 2015 |