DIRECTORS' REPORT TO THE MEMBERS OF ARCHIDPLY INDUSTRIES LIMITED Your Directors are pleased to present the Twentieth Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2015 OPERATIONAL REVIEW: The Net Sales during the year under review increased by 14.83% from 22652.02 lakhs in the previous year to Rs.26012.39 lakhs. Export turnover of the Company increased by 27.63% from Rs. 1414.63 lakhs in the previous year to 1805.60 lakhs. The Profit Before Tax (PBT) increased by 23.89 %from Rs.508.86 lakhs in the previous year to Rs.630.45 lakhs. The Profit After Tax (PAT) increased by 38.52 % from Rs.401.10 lakhs in the previous year to Rs.555.61 lakhs. During the year under review , our concerted effort in growing the revenues and contributions from the decorative laminates and veneers, which are the value added products in the overall product mix of the Company, coupled with the increase in the exports of the Company have resulted in the improved topline and bottom line performance. DIVIDEND: The Board is happy to report an encouraging financial performance but regret its inability to recommend any dividend as it is considered prudent to conserve the resources for investments in the business. TRANSFER To RESERVE The Board proposes to transfer Profit After Tax of Rs.555.62 lakhs to the General Reserve. SHARE CAPITAL: The paid up equity capital as on March 31, 2015 was Rs. 2206.50 Lakhs. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity during the year. FINANCE: Cash and cash equivalents as at March 31, 2015 was Rs.954.13 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. Brickwork Ratings India Pvt Limited has upgraded Company's rating to BBB (outlook stable) for long term Bank loan facilities. MATERIAL CHANGES AND CQMMITMENTS There is no material changes and commitments affecting our financial position between the end of the financial year to which this financial statement relate and date of this report. Significant and material orders passed by the regulators / courts / tribunals impacting the going concern status and the Company's operations in future: As such there is no significant and material order by the regulator/ court/tribunals impacting the going concern status and the Company's operation in future. FIXED DEPoSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS PF LPANS, GUARANTEES PR INVESTMENTS: The Company has not given any loans or guarantees or investments covered under the provisions of section 186 of the Companies Act, 2013. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has in house Internal Auditor. To maintain its objectivity and independence, the Internal Auditor function reports to the Chairman of the Audit Committee of the Board & Managing Director. The Internal Auditor 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 recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. corporate social responsibility(csr) initiatives We have constituted a CSR committee for the purposes of recommending and monitoring the CSR. The Board on the recommendation of CSR committee adopted a CSR Policy . The same is available on our website, <http://www.archidply.com>. The details of the CSR Committee and its composition is given in the Corporate Governance Report. As part of its initiatives under "corporate social responsibility" (CSR), the company has contributed funds for the schemes of promotion of education by way of supporting the school infrastructure development . The annual report on our CSR activities is appended as Annexure A to the Board's report. conservation of energy, technology absorption, foreign exchange earnings and outgo The statement containing the necessary information as required under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed hereto and forms an integral part of this report. (Annexure 'C') INDUSTRIAL RELATIONS: During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. DIRECTORS: Shri. Kamal Kishore Taparia, an independent director submitted his resignation to the Board on Feb 13, 2015. The same was accepted by the Board in its meeting held on Feb 13, 2015. The Board placed on record its sincerest thanks and gratitude for the invaluable contribution made by Shri. Kamal Kishore Taparia towards the growth and development of the company during his tenure as a director. Mr. Deen Dayal Daga as eligible to re-appoint as Executive Chairman of the Company for a period of five years are recommended by Board. Mr. Shyam Daga as eligible to re-appoint as Managing Director & CFO of the Company for a period of five years are recommended by Board. Mr. Rajiv Daga as eligible to re-appoint as Joint Managing Director & CEO of the Company for a period of five years are recommended by Board.. Mrs. Shanthi Varadaraj Mallar was appointed as additional directors retires at the ensuing Annual General Meeting as a women director in the Board on 11/03/2015. The Board now recommends the appointment of Mrs. Shanthi Varadaraj Mallar as independent Women director under section 149 (1) of the Companies Act, 2013 and clause 49 of the listing agreement in the ensuing A.G.M. to hold office for 5 (Five) consecutive years i.e. for a term up to the conclusion of 25th Annual General Meeting of the company in the calendar year 2020. A brief resume of the Directors being appointed / re-appointed are attached to the Notice for the ensuing Annual General meeting. None of the Directors of your Company is disqualified as per provisions of Section 164 of the Companies Act, 2013. The Directors of the Company have made necessary disclosures as required under various provisions of the Companies Act and clause 49 of the Listing Agreement. All independent directors have given declarations that they meet the criteria of independence as laid down under section149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. board evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The independent Directors meeting to review the performance of the non-independent Directors and Board as a whole was held on 13.02.2015. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 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 their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. board 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. We have circulated the calendar of meetings for the year 2015-16 to the Directors. DIRECTOR'S RESPONSIBILITY STATEMENT: In terms of Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability confirm that: i) In the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures. ii) The directors 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 profit or loss of the Company for the year under review. iii) 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. iv) The directors have prepared the annual accounts on a going concern basis. v) 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. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. SUBSIDIARY COMPANIES: The Company does not have any subsidiary company. CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company The Code has been posted on the Company's website www.archidply.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. WHISTLE BLOWER POLICY: The Company has established a"Vigil Mechanism" for its employees and Directors, enabling them to report any concerns of unethical behavior, suspected fraud or violation of the Company's Code of Conduct. The Whistle Blower Policy has been adopted by the Board which an Audit Committee overlooks into the implementation of the policy.. The Committee reports to the Board. The employees and other stakeholders have direct access to the Chairperson of the Audit Committee for concerns, if any, for review. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website<http://www.archidply.com>. PREVENTION OF SEXUAL HARASSMENT: We have zero tolerance for sexual harassment at workplace and have adopted a policy on prevention , prohibition and redressal of sexual harassment at Work place in line with the provisions of the Sexual Harassment of Women at Workplace ( Prevention, Prohibition and Redressal) ACT, 2013 and the Rules thereunder for prevention and Redressal of Complaints of sexual harassment at workplace. There was no complaint related to sexual harassment during the year 2015. AUDITOR'S REPORT: The observation made in the Auditors' Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a Secretarial Audit Report AUDITORS: The Auditors M/s GRV & PK, Chartered Accountants, Bengaluru, appointment to be ratified at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. SECRETARIAL AUDIT: Pursuant to 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. J V Shivaprakash Practicing Company Secretary, Bengaluru to undertake the Secretarial Audit of the Company. The Secretarial Audit report for the year ended 31st March, 2015 is annexed herewith as " Annexure D" EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure E" RISK MANAGEMENT POLICY: Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, during the year, the role of Audit Committee is enhanced to take care of Risk Management which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, raw material, foreign exchange fluctuation, quality , cost and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Risk Management Policy was reviewed and approved by the Committee during the year is available on our website, <http://> www.archidply.com PARTICULARS ON REMUNERATION OF EMPLOYEES: The information required pursuant to Section 197(2) read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, are provided in Annexure 'B' CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. committee The Board of Directors has constituted four Committees i.e., audit committee, stakeholder relationship committee, nomination and remuneration committee, corporate social responsibility committee as per requirement of Corporate Governance under listing Agreement. The majority of the members of these committees are Independent and non-executives. The more details are given under the Corporate Governance Report The Equity shares of the Company are listed with Bombay Stock Exchange Ltd. (BSE) & National Stock exchange of India Limited (NSE). The annual listing fee for the year 2015-16 was paid within the scheduled time to BSE & NSE. ACKNOWLEDGEMENT: Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous co- operation and assistance. For and on behalf of the Board of Directors Deen Dayal Daga Chairman Date : 23rd May, 2015 Place : Bengaluru |