DIRECTOR'S REPORT To, The Members, SOMI CONVEYOR BELTINGS LIMITED, JODHPUR The Directors of your company have pleasure in presenting the 15th Annual Report together with the audited statement of accounts for the year ended on 31st March, 2015. OPERATIONS Your company has been able to achieve turnover of Rs. 7,46,965,788.00 in year 2014-15 as compared to previous year of Rs. 6,53,636,024.00. The Net Profit increased to Rs.42,770,642.00 for the year 2014-15 as compared to Rs. 36036264.00 in the previous financial year. The Board is confident of higher growth in the current year. The Company does not have any Subsidiary Company, Associate Company or any other Joint Venture, therefore it is not required to prepare Consolidated Financial Statements. DIVIDEND Despite modest profits posted by the company, your directors are of the opinion that, to make strong economic base for the company and in order to conserve the valued resources; your directors do not recommend any dividend for the financial year under review. TRANSFER TO RESERVE The Board of Directors does not propose to transfer any amount to Reserves. EXTRACT OF ANNUAL RETURN The extract of Annual Return pursuant to the provisions of sections 92(3) and 134(3)(a) read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached to this Board's Report in Form MGT-9 as Annexure-I. MEETINGS OF THE COMPANY During the current financial year, the Board of Directors of the Company duly met Seven times on 30.05.2014, 21.07.2014, 14.08.2014, 04.09.2014, 15.11.2014, 14.02.2015 and 28.03.2015 of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book as required by the Articles of Association of the Company and the Act. Detail information is given in the Corporate Governance Report. The Gap between two consecutive meetings did not exceed one hundred twenty days. DETAILS OF COMMITTEE OF DIRECTORS Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors, Stakeholder Relationship Committee of Directors, number of meetings held of each Committee during the financial year 2014-15 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report and forms part of the report. The recommendation(s) by the Audit Committee as and when made to the Board have been accepted by it. DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL Changes in the composition of the Board of Directors and other Key Managerial Personnel As reported previously, Mr. Sharad Gyanmal Nahata was appointed as an additional director in the category of nonexecutive, independent director of the Company, in the meeting of the Board held on 14th February, 2014. Thereafter, at the fourteenth annual general meeting of the Company held on 30th September, 2014, the members of the Company appointed, Mr. Sharad Gyanmal Nahata as an Independent Director under the Companies Act, 2013 for a period of 5 years effective from 30th September, 2014. Ms. Surbhi Rathi, was appointed as an Additional and Independent Director on the board of the Company with effect from 28th March, 2015. She is being proposed to be appointed as Independent Woman director on the Board of the Company for the period of Five years. Necessary resolution relating to her appointment is included in the notice convening the Annual General Meeting. The Board recommends the appointment of Ms. Surbhi Rathi. Pursuant to provisions of Section 149 & 152 of the Act, Mr. Mahendra Kumar Rakecha, a non -executive Director of the Company, who has submitted a declaration of Independence as provided in Section 149(6) of the Act and who is eligible for appointment He is being proposed to be appointed as Independent director on the Board of the Company for the period of Five years. Necessary resolution relating to his appointment is included in the notice convening the Annual General Meeting. The Board recommends the appointment of Mr. Mahendra Kumar Rakecha Pursuant to provisions of Section 149 & 152 of the Act, Mr. Yogesh Maheshwari, a non -executive Director of the Company, who has submitted a declaration of Independence as provided in Section 149(6) of the Act and who is eligible for appointment He is being proposed to be appointed as Independent director on the Board of the Company for the period of Five years. Necessary resolution relating to his appointment is included in the notice convening the Annual General Meeting. The Board recommends the appointment of Mr. Yogesh Maheshwari. In compliance with Clause 49 IV (G) of the listing Agreement, brief resume, expertise and other details of the Directors proposed to be reappointed is attached along with the Notice to the ensuing Annual General Meeting. Pursuant to the provisions of Section 203 of the Act, following KMP were appointed during the year: 1. Mr. Amit Baxi was appointed as Company Secretary w.e.f. 15th November, 2014. 2. Mr. Manish Bohra was appointed as Chief Financial Officer w.e.f. 14th February, 2015. DECLARATION BY INDEPENDENT DIRECTORS The Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in sub-section (6) of Section 149 of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Director under the provisions of Companies Act, 2013 and the relevant rules. DIRECTORS RESPONSIBILITY STATEMENT As required under clause (c) of sub-section (3) of section 134 of Companies Act, 2013 directors, to the best of their knowledge and belief, state that - a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same; b) that they have 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 as at 31st March, 2015 and of the profit or loss of the Company for the year ended on that date; c) 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 fraud and other irregularities; d) that they have prepared the annual accounts on a going concern basis. e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178 Information regarding Directors' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are provided in the Corporate Governance Report. RATIFICATION OF APPOINTMENT OF STAUTORY AUDITORS The Auditors, P. Singhvi & Associates, Chartered Accountants were re-appointed as the Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 to hold office for a period of three years upto the conculsion of the 17th Annual General Meeting in 2017. They are eligible for re-appiontment for the financial year 2015-16. Your Board recommends ratification of their appointment as the Statutory Auditors at the ensuing Annual General Meeting for a period upto the conclusion of the 16th Annual General Meeting of the Company. AUDITOR'S REPORT The notes on account referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further explanations or comments. There are no qualifications, reservations or adverse remarks or disclaimer made in the Auditors' Report which requires any clarification or explanation. SECRETARIAL AUDITOR 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 with the approval of its Board, appointed FCS Ira Baxi (FCS: 5456; CP: 4712), Company Secretary in Practice to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report is annexed herewith as Annexure - II. There are no qualifications, reservation or adverse remark or disclaimer made by the Secretarial auditor in the report save and except disclaimer made by them in discharge of their professional obligation. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the Financial Statements. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and as such provisions of Section 188(1) of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. All Related Party Transactions were placed before the Audit Committee and also to the Board for approval. As required under Clause 49 of the Listing Agreement, the Company has formulated a policy on dealing with Related Party Transactions. The Policy has been uploaded on to the Company website www.somiconveyor.com DEPOSIT FROM PUBLIC The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. RATIFICATION OF APPOINTMENT OF STAUTORY AUDITORS The Auditors, P. Singhvi & Associates, Chartered Accountants were re-appointed as the Statutory Auditors of the Company under Section 139 of the Companies Act, 2013 to hold office for a period of three years upto the conculsion of the 17th Annual General Meeting in 2017. They are eligible for re-appiontment for the financial year 2015-16. Your Board recommends ratification of their appointment as the Statutory Auditors at the ensuing Annual General Meeting for a period upto the conclusion of the 16th Annual General Meeting of the Company. AUDITOR'S REPORT The notes on account referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further explanations or comments. There are no qualifications, reservations or adverse remarks or disclaimer made in the Auditors' Report which requires any clarification or explanation. SECRETARIAL AUDITOR 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 with the approval of its Board, appointed FCS Ira Baxi (FCS: 5456; CP: 4712), Company Secretary in Practice to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report is annexed herewith as Annexure - II. There are no qualifications, reservation or adverse remark or disclaimer made by the Secretarial auditor in the report save and except disclaimer made by them in discharge of their professional obligation. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the Financial Statements. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and as such provisions of Section 188(1) of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. All Related Party Transactions were placed before the Audit Committee and also to the Board for approval. As required under Clause 49 of the Listing Agreement, the Company has formulated a policy on dealing with Related Party Transactions. The Policy has been uploaded on to the Company website www.somiconveyor.com DEPOSIT FROM PUBLIC The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. RISK MANAGEMENT Risks are events, situations or circumstances which may lead to negative consequences on the Company's businesses. Risk management is a structured approach to manage uncertainty. A formal enterprise wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework. As a formal roll-out, all business divisions and corporate functions will embrace Risk Management Policy and Guidelines, and make use of these in their decision making. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The risk management process over the period of time will become embedded into the Company's business systems and processes, such that our responses to risks remain current and dynamic. WHISTLE BLOWER POLICY/ VIGIL MECHANISM The Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has established a vigil mechanism to be known as the 'Whistle Blower Policy' for its Directors and employees, to report instances of unethical behaviour, actual or suspected, fraud or violation of the Company's Code of Conduct. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and also provide direct access to the Chairman of the Audit Committee, in appropriate or exceptional cases. Whistle Blower Policy has been uploaded on Company's Website www.somiconveyor.com . PREVENTION OF INSIDER TRADING The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. INTERNAL FINANCIAL CONTROL The Board has laid down Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and are in fact a fluid set of tools which evolve over time as the business, technology and fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There will therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. CORPORATE SOCIAL RESPONSIBILITY Your Company believes to achieve sustainable development. It is key to integrate Social, Economic and Environmental impact to the business and our business performance is inextricably linked to our CSR goals. During the year under review, the Board constituted a CSR Committee consisting of three Directors, of which one is Independent Director. The CSR Committee at its meeting held on March 31, 2015, recommended to the Board the CSR policy formulated by it, following which the policy document was approved by the Board. The composition, terms of reference etc. of the CSR Committee are laid out in the Corporate Governance Report which forms part of this Annual Report. Further, the CSR policy of the Company has been uploaded on to the Company website www.somiconveyor.com . The Company has during the financial year under review undertaken several social and cultural initiatives intended to deepen its ties to communities local to it in line with its practices and traditions hitherto. The coming into force of the Companies Act, 2013 relating to corporate social responsibility, however, has resulted in a re-conceptualisation of the term in question by the Company in order to align it with the new legislation, as a consequence of which no part of the expenditure earlier believed to be CSR qualifies as such. This has led to the Company not being able to meet the requirements of minimum spend of two percent of the average net profits of the Company for the three immediately preceding financial years, in pursuance of the CSR Policy of the Company, during the financial year under review. The Company has made provision of the CSR amount and shall nevertheless, channelise its CSR spends during the current financial year duly in line with its CSR Policy, formulated as it is in accordance with the provisions of the Companies Act, 2013. CORPORATE GOVERNANCE The Company recognizes its role as a corporate citizen and endeavors to adopt the best practices and the highest standards of corporate governance through transparency in business ethics, accountability to its customers, government and others. The Company's activities are carried out in accordance with good corporate practices and the Company is constantly striving to better them by adopting the best practices. A separate report on Corporate Governance Compliance as stipulated by Clause 49 of the Listing Agreement is included and forms part of the Annual Report along with the requisite Certificate regarding compliance of the conditions of Corporate Governance as stipulated by Clause 49 of the Listing Agreement. MANAGEMENT DISCUSSION AND ANALYSIS REPORT In compliance with the requirements of the Listing agreement, a report on the Management's Discussion and Analysis(MDA) which forms part of this Annual Report deals with Company's Operational performance - industry trends and other material changes with respect to company and also current and future outlook of the Company. SHARE REGISTRY ACTIVITIES All work related to share registry is handled by Universal Capital Securities Pvt Ltd. (Formerly known as Mondkar Computers Private Limited), a Registrar and Share Transfer Agent registered with SEBI. LISTING WITH STOCK EXCHANGE Equity shares of your company continue to remain listed with Bombay Stock Exchange Limited .There are no arrears in payment of listing fees and the stipulated listing fee for financial year 2015-16 has been paid. DEMATERIALIZATION OF SHARES The shares of your company are traded in dematerialized form and are available for trading either with the National Securities Depository Limited (NSDL) or the Central Depository Services (India) Limited (CDSL). INSURANCE Assets of your Company remain adequately insured against various perils. HEALTH, SAFETY AND ENVIRONMENT The Company has maintained Health and Safety policy, which has been implemented across all its locations. Health, Safety and Environment policies involve identifying the risks involved in daily activities of the company so that it causes no harm to employees, environment and the public. The Company has taken all possible steps to promote the well-being of its employees. Our core principles of 'reuse','recycle'and'replenish" are aimed at: • Pollution Control • Minimising Waste • Reduced Effluent Discharge In pursuance to this Policy Your Company's management has devoted their all efforts to protect and maintain safety environment in the Company. The Company has taken all possible measures to segregate Hazardous and non-hazardous substance. Health, Safety and Environment involves proactive approach to create safe working environment, continuous safety education and training, periodic review of programs and evaluation of incidents. POLICY ON SEXUAL HARASSMENT OF EMPLOYEES The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The policy aims at educating employees on conduct that constitutes sexual harassment, ways and means to prevent occurrence of any such incident, and the mechanism for dealing with such incident in the unlikely event of its occurrence. Internal Complaints Committee (ICC) has been constituted in accordance with the Act. The ICC is responsible for redressal of complaints related to sexual harassment of women at the workplace in accordance with procedures, regulations and guidelines provided in the Policy. During the year under review there were no complaints referred to the ICC. RESEARCH AND DEVELOPMENT Research and developments are ongoing activities which have a significant role in providing inputs for developing new products, devising energy saving measures, upgrading methods of production and quality of products. These activities have helped the company in attaining leadership in its conveyor beltings products and substantial qualitative change in other operational areas. Raw material cost is continuously rising and is critical to the sustainability of manufacturers. Therefore, our R&D department seeks to maximize utilization of raw material. ACKNOWLEDGEMENT Your Directors wish to place on record their sincere appreciation for the assistance and co-operation received from the governmental authorities, companies, bankers, customers, vendors, investors and all other stake holders during the year. Your Directors are also pleased to record their appreciation for the dedication and contribution made by employees at all levels, their competence and hard work have enabled your company achieve good performance and look forward to their support in the future as well. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF SOMI CONVEYOR BELTINGS LIMITED O P BHANSALI (Managing Director) DIN: 00351846 GAURAV BHANSALI (Whole time Director) DIN: 00351860 Place: Jodhpur DATE: 4th September, 2015 |