Directors' Report To the Members, Your Directors have great pleasure in presenting the Thirteenth Annual Report together with the Audited Statement of Accounts for the year ended March 31,2015. During the year under review, the Company achieved a Turnover of Rs.8466.26 Lakhs as against the previous year figure of Rs.2452.12 Lakhs showing an improvement of 245% increase. However, Earnings from other Income amounted to Rs. 5.31 Lakhs as compared to Rs. 350.11 Lakhs in the Previous Year. As a result, the Company reported a Profit of Rs. 304.55 Lakhs as against Rs.117.94 Lakhs in the previous year. Consequently the Net Worth of the Company increased by the amount of Profit made during the year and stands at Rs. 441.68 Lakhs. DIVIDEND In order to conserve resources of the company your Board has not recommended any dividend for the year under review and has transferred the entire amount of Rs.304.55 Lakhs to the reserves. EVENTS SUBSEQUENTTO THE DATEOF FINANCIAL STATEMENTS: There are no material changes and commitments affecting the financial position of the company between 31st March 2015 and the date of Board's Report (29- May, 2015). CHANGE IN THE NATURE OF BUSINESS, IF ANY: Your Company has realigned the production capacity to match the current market scenario. On account of the downward revision in the production capacity from 3000 MT to 900 MT, along with Anti Dumping duty on R134a, the current prices are not sustainable in the market, since the domestic prices have become more competitive. Your Company is working on launching other types of Refrigerants, which are globally being used in newer systems. Apart from this, Company is also looking at various other business opportunities in the Solar Sector and also Real Estate. As and when the business plans are frozen, the Company will report and announce the same in suitable platforms. Your Company is planning to enter into Solar Power Development business. It is constantly studing various Government policies in order findout any suitable opportunity exists in the Solar Power Sector. It has also traded in Solar Modules to gain firsthand experience in the business. With Government pushing so much in this Sector, your Company with past experience looks forward to getting more business in this sector. For this reason, a SPV by name Vituza Solar Energy Limited has been formed. There are no changes in the nature of business of the company during the financial year under review BOARD MEETINGS: The Board of Directors met Eight (8) times i.e. on 30.05.2014, 30.06.2014, 14.08.2014, 13.11.2014, 20.11.2014, 10.12.2014, 14.02.2015 and 20.03.2015 during the FinancialYear2014 - 2015. DIRECTORS AND KEY MANANGERIAL PERSONNEL: As perArticle 35 of the Articles of Association of the Company, Shri.T. Anil Jain, Director retires by rotation in the forth coming Annual General Meeting and being eligible offers himself for re-appointment. The Board has recommended his re-election. A resolution is proposed for his re-appointment in the notice. Smt. U. Lalitha was appointed as a Chief Financial Officer of the Company w.e.f. 14.02.2015 Smt. Maheswari Ramamoorthy was appointed as a Woman Independent Director on 20.03.2015 pursuant to Section 149 of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2015 as well as the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges. Appropriate resolution seeking your approval of the aforesaid appointment is appearing in the accompanying Notice. Formal Annual Evaluation of Directors was done as per the requirements of the Companies Act, 2013. Shri. T. Jagdish Jain, Director resigned his seat from the Board on 20.03.2015 due to personal reasons and the Board wishes to place on record its sincere appreciation for the services rendered by Shri T Jagdish Jain during his tenure in the Board. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS: The Company has received necessary declaration from all the Independent Directors i.e. Sri. N. D. Trivedi, Sri. D. Hem Senthil Raj and Smt. Maheswari Ramamoorthy under Section 149(7) of the Companies Act, 2013. The said Independent Directors of the Company meet the criteria of their Independence as laid down underSection 149(6) of the Companies Act, 2013. BOARD COMMITTEES: Details pertaining to the Composition, Terms of Reference and the frequency of the meetings of all the committees are given under Report of Corporate Governance. VIGILMECHANISM: The Board of Directors of the Company has formulated an effective Vigil Mechanism in its meeting held on 13- November 2014, in accordance with the provisions of Section 177 of the Companies Act 2013 and as per the Revised Clause 49 of the Listing Agreement, enabling stakeholders, including individual employees and their representative bodies, to freely communicate their concerns about illegal or unethical practices, if any, reporting of concerns by directors and employees and other stakeholders of the Company about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy or any other genuine concerns or grievances, to provide for adequate safeguards against victimization of employees and directors who avail of the Vigil Mechanism and also provide for direct access to the Chairman of the Audit Committee. DIRECTORS' RESPONSIBILITY STATEMENT: In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby 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 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 (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (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. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES There is only one Subsidiary, Vituza Solar Energy Limited, which is formed to enter into Solar Power Development space. The Company is yet to commence business and the necessary details of subsidiary as required under the Companies (Accounts) Rules, 2014 in format AOC1 is given asAnnexure4) EXTRACTOF ANNUAL RETURN: 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 MGT 9 is annexed to this Report. (Annexure 1) AUDITORS The members of the Company, in terms of Section 139(1) and (2) of the Act 2013 , had already appointed M/S Bhandari & Keswani (Membership no. FCA 17411), Chartered Accountants, Chennai as statutory auditors of the company in the AGM held on 29th September 2014 to hold office up till the conclusion of 15th AGM of the company to be held in the year 2017. However the same is subject to ratification by the shareholders in every Annual General Meeting and necessary resolution is placed before the members in this regard. The Company has obtained necessary certificate under Section 141 of the Act 2013 conveying their eligibility for the above appointment. The Audit Committee and the board reviewed their eligibility criteria, as laid down under Section 141 of the Act 2013 and recommended the ratification of the re-appointment for the second year from the conclusion of the ensuing AGM till the conclusion of the next annual general meeting as auditors of the Company. The Notes on Financial Statements referred to in the Auditors' Report are self explanatory and do not call for any further comments. The reply to qualification in Auditors' Report is given below. SECRETARIAL AUDIT: In accordance with 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 Mr. R. Muthukrishnan,(FCS 6775) Practicing Company Secretary, Chennai, to undertake the Secretarial Audit of the company. The Secretarial Audit report is annexed herewith as'Annexure 2'. The reply to qualification in SecretarialAuditors' Report is given below. As regards late filing / non filing of certain forms with ROC during 2014-15, there was certain dislocation in the administrative work due to reduction of employees. However the company shall ensure that such delays are avoided in future. As regards non reporting of changes in share holding of promoters under SEBI (Prohibition of InsiderTrading) Regulations, 1992, the Company's reporting to stock exchanges under regulation 13(6) is subject to receipt of intimation from the promoters under regulation 13(5) and not otherwise. As regards non compliance of certain conditions contained regarding disposal of investments of the company in a company incorporated outside India as contained under FEMA guidelines, the said joint venture company was an inactive company and the accounts of such company was not audited as per local laws. Hence your company was not in a position to submit the necessary annual performance report of such joint venture company to RBI for non availability of audited accounts of such joint venture company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEOUTGO: (A) Conservation of energy & Technology absorption: The company does not engage in manufacturing activity involving energy intensive processes. However, the company has taken sufficient steps towards general energy saving techniques and conservation. Given the Nature of Process employed by the company, there is no technology absorption involved. (B) Foreign Exchange Earnings and Outgo: Foreign Exchange Earnings = Nil Foreign Exchange Outgo = Rs. 68.36 Lacs PUBLIC DEPOSITS: The Company did not invite or accept any deposits from the Public under Sec 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules, 2014. SIGNIFICANT a MATERIAL ORDERS PASSED BY THE REGULATORS: During the year 2014-2015, no significant and material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future. INTERNAL FINANCIAL CONTROLS The Company has appointed an Internal Auditor, a Chartered Accountant, to ensure the effective functioning of internal financial controls and check whether the financial transaction flow in the organization is being done based on the approved policies of the Company. The Management based on the internal audit observations gives their comments. Further, the Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Vigil Mechanism , Material Subsidiary Policy for ensuring the orderly and efficient conduct of its business, for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statement (Please refer to Note 12, 13 & 17 under Note to the Standalone Financial Statement). RISK MANAGEMENT POLICY: The Company has a Risk Management Committee in place although it is not applicable to it both under the Listing Agreement and the Companies Act, 2013. However, the Company has an adequate Risk Management Policy commensurate with its size and operation. Risk Management includes identifying types of risk and its assessment, risk handling, monitoring and reporting. CORPORATE SOCIAL RESPONSIBILTY POLICY: As the Company is not meeting the requirements as set out in Section 135 of the Companies Act 2013, there is no need for the Board to constitute the said committee. However, as and when the provision of the said section is made applicable to the Company, the Board will form the Committee. At the same time, the company has made donations to an Educational Institution for RS. 1.29 Lakhs during the year as a measure towards CSR. RELATED PARTY TRANSACTIONS: All arrangements / transactions entered by the Company with its related parties during the year were in ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any arrangement / transaction with related parties which could be considered material in accordance with the Company's Policy on Related Party Transactions and accordingly, the disclosure of Related Party Transactions in Form AOC 2 is not applicable. However, names of Related Parties and details of transactions with them have been included in Note no. 25.1.b to the financial statements provided in the Annual Report DISCLOSURE ABOUT COST AUDIT: As per Companies (Cost Records and Audit) Amendments Rules, 2014 dated 31-December, 2014 issued by the Ministry of Corporate Affairs, the Company is not subjected to Cost Audit RATIO OF REMUNERATION TO EACH DIRECTOR: There are no employees drawing remuneration in excess of Rs. 5 Lakhs per month or Rs.60 Lakhs per annum in terms of Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The other details as required under Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014is given in Annexure - 3 LISTING WITH STOCK EXCHANGES: The Equity Shares of the Company are listed on the following Stock Exchanges: i. BSE Limited (BSE) No. 25- Floor, P.J. Towers, Dalai Street, Fort, Mumbai- 400 001. ii. National Stock Exchange of India Limited (NSE) Exchange Plaza, Bandra Kurla Complex, Bandra East, Mumbai- 400 051. The Stock Codes allotted by these Stock Exchanges are as under Name –Code BSE Limited -532884 National Stock Exchange of India Limited -REFEX Demat ISIN Numbers in NSDLand CDSL -INE056101017 CORPORATE GOVERNANCE A detailed report on Corporate Governance pursuant to Clause 49 of the Listing Agreement with the BSE and NSE along with the Auditors' certificate on Compliance with the mandatory provisions on Corporate Governance is given as a separate statement in the Annual Report. The Managing Director has issued necessary certificate to the Board in terms of Clause 49 (V) of Listing Agreement with Stock Exchanges for the Financial Yearended 31 March 2015. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report pursuant to Clause 49 of the Listing Agreement with the BSE and NSE for the year under review are given as a separate statement in the Annual Report. |