DIRECTORS' REPORT TO, THE MEMBERS, Raj Oil Mills Limited Your Directors have pleasure in presenting their 13th Annual Report on the business and operations of the Company and the audited financial statements for the financial year ended March 31, 2015 2. Dividend In view of current year loss, your Directors regret their inability to recommend any dividend for the financial year under review. 3. Reserves In view of current year loss, your Directors regret their inability to carry forward any amount as reserves for the financial year under review. 4. Brief description of the Company's working during the year/State of Company's affair The net income of the company decreased by 9.27% i.e. from Rs. 69,06,11,946/- in the Financial year 2013-14 to Rs.62,65,63,745/- in the Financial year 2014-15. The net loss before tax decreased by 70.08% from Rs. 25,35,64,876/- in Financial Year 2013-14 to Rs. 7,58,59,930/- in 2014-15 As a result of the above stated financial performance, the EPS has increased from Rs. (40.91) in the financial year 2013-14 to Rs. (1.13) in 2014-15. 5. Change in the nature of business, if any There is no change in the nature of business as compared to immediately preceding years. 6. Material changes and commitments occurred between the end of the financial year of the company to which the financial statements relate and the date of the report There was no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report. 7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future 1. The Board of Directors of the Company at their meeting held on May 29, 2014 had approved the audited financial accounts for the year March 31, 2014. The Company had incurred major losses and the net-worth of the Company has been totally eroded. Further, looking at the financial position of the Company the Board of Directors of the Company at their meeting held on June 6, 2014 has decided to refer the Company to the Board of BIFR and the application to the BIFR Board was submitted on June 9, 2014. The Board of BIFR has accepted the application of the Company and the case has been registered u/s.15 (1) of the Sick Companies (Special Provisions) Act,1985 with Board as case no. 8/2015 vide order dated 12th January 2015. 2. Further, during the year, Company has received Notices from Company Law Board (CLB) and Registrar of Companies (ROC), Mumbai, Maharashtra, in relation to default made by the Company in repayment of principal amount and interest accrued to the deposit holders on public deposit taken by the Company in terms of Section 58A of the Companies Act, 1956. In this regards, prosecution has been launched against the Company, for which suitable representations and replies have been given by the Company. 8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements. The Company has an Internal Control Systems in place which ensures that all assets are protected against loss from unauthorized use and all transactions are recorded and reported correctly. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 9. Details of Subsidiary/Joint Ventures/Associate Companies The Company has no Subsidiaries, Joint Ventures during the year under review. However, the Company have associate concerns namely M/s. Raj Oil Mills and M/s. Raj Builders. 10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement: There is no transaction made with these concerns during the year hence no consolidation has made. 11. Fixed Deposits: The details relating to deposits, covered under Chapter V of the Act are stated below: (a) During the financial year under review the Company has not accepted any fresh deposits. (b) During the year under review, the unpaid / unclaimed amount (including interest and principal) as at the end of the year stands at Rs.6.84 Crores. (c) During the year under review, the Company has made default in payment of principal amount and interest accrued to the deposit holders from the Public Deposit taken by the Company. In this regard, the Company has received notice from the Company law Board and the Registrar of Companies for which suitable representations and replies have been made by the Company. 12. Statutory Auditors You are requested to appoint Auditors for the current year and to authorize the Board to fix their remuneration. The retiring auditors, M/s. B. M. Gattani & Co, Chartered Accountants, are eligible for reappointment. A certificate from the Auditors has been received to the effect that their reappointment, if made, would be within the limits prescribed under Section 139 of the Companies Act, 2013. M/s. B. M. Gattani & Co. are proposed to be re-appointed as Auditors, to hold office up-to the conclusion of the 15th Annual General Meeting. Pursuant to the provisions of Companies (Audit and Auditors) Rules, 2014, M/s. B. M. Gattani & Co., Chartered Accountants have certified that: a. They are eligible for appointment and are not disqualified for appointment under the Companies Act, 2013, the Chartered Accountants Act, 1949 and rules/regulations made there under; b. The proposed appointment is as per the term provided under the Companies Act, 2013; c. The proposed appointment is within the limits laid down by or under the authority of the Companies Act, 2013; d. There are no proceedings against the audit firm or proprietor of the audit firm pending with respect to professional matters of conduct. The Board of Directors recommends to the shareholders the appointment of M/s. B. M. Gattani & Co., Chartered Accountants, as Statutory Auditors of the Company. 13. Auditors' Report Observations and explanations made in the annexure to the Auditors' Report are self explanatory and therefore do not call for any further comments under the provisions of the Companies Act, 2013 and hence do not call for any further information and explanation under Section 134 of the Companies Act, 2013 14. Share Capital At present, the Company has only one class of shares, viz. Equity Shares of Rs.10 each. During the year the Company has allotted shares upon conversion of warrants as detailed below: Conversion Of Warrants a) The Board of Directors at their meeting held on May 5, 2014 have converted 39,33,330 warrants out of 2,00,00,000 warrants allotted to Non-Promoters (Person Acting in Concert) into equity shares of Rs. 10/- each. The relevant Form PAS - 3 for allotment of 39,33,330 Equity Shares has been filed to the Registrar of Companies, Maharashtra, Mumbai. b) Forfeiture Of Warrants The Board of Directors at their meeting held on May 5, 2014 have forfeited 1,60,66,670 warrants due to non-payment of pending warrant call money. There are no pending warrants due for conversion into equity shares of the company. 15. Extract of the annual return The extract of the Annual Return in Form No. MGT - 9 forms part of the Board's Report and the same is provided as "Annexure I". 16. Conservation of energy, technology absorption and foreign exchange earnings and outgos are as follows: The relevant particulars regarding the above are given in "Annexure III" and forms part of this report. 17. Corporate Social Responsibility (CSR) Social Welfare Activities has been an integral part of the Company since inception. The Company is committed to fulfill its social responsibility as a good corporate citizen. The Companies Act, 2013, pursuant to the provision of Section 135, has laid down the requirement for constitution of Corporate Social Responsibility Committee, which shall be responsible for laying down the CSR Policy, to a certain class or classes of Companies. However, our Company does not fall under the requisite criteria and thus the compliance with the relevant provisions of the Companies Act, 2013 are not applicable. 18. Directors: (A) Changes in Directors and Key Managerial Personnel There are no changes in the Directors & KMP of the Company during the year under review. However, during the year company has appointed Ms. Saryu Chimanlal Vora w.e.f. 31st March, 2015 as Non-Executive Independent Women Director. (B) Declaration by an Independent Director(s) and re- appointment, if any Declaration by an Independent Director(s) that she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is enclosed. An independent director shall hold office for a term up to five consecutive years on the Board of a Company and shall not be eligible for reappointment for next five years on passing of a special resolution by the Company Formal Annual Evaluation The Board is having a policy of formal annual evaluation and the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors. 19. Number of meetings of the Board of Directors The board shall meet at least four times in a year, with a maximum time gap of four months between any two meetings. The Company holds regular Board Meetings. During the year under review 10(Ten) Meetings of the Board of Directors of Raj Oil Mills Limited were held during the Financial Year 2014-2015 on the following dates: May 5,2014, May 29, 2014, 6th June,2014, August 14, 2014, November 14, 2014, December 12, 2014, January 22, 2015, February 1, 2015, February 13,2015 and 31st March,2015. 20. Audit Committee The Board of Directors has constituted and reconstituted from time to time Audit Committee commensurate with the requirements of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Details of Composition of Audit Committee and dates and attendance at the Audit Committee Meeting are provided in detail in the "Corporate Governance Report" section of the Annual Report. 21. Details of establishment of vigil mechanism for directors and employees The Board of Directors of the Raj Oil Mills Limited is committed to maintain the highest standard of honesty, openness and accountability and recognize that employees have important role to play in achieving the goal. The Company's Vigil Mechanism Policy encourages Directors and employees to bring to the Company's attention, instances of unethical behavior and actual or suspected incidents of fraud or violation of the conduct that could adversely impact the Company's operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Company's Policy to ensure that no employee is victimized or harassed for bringing such incidents to the attention of the Company. The practice of the Vigil Mechanism Policy is overseen by the Board of Directors and no employee has been denied access to the Committee. The Vigil Mechanism Policy is available on the Company's website www.rajoilmillsltd.com 22. Nomination and Remuneration Committee The Board of Directors of the Company have constituted the Remuneration Committee to determine Company's Remuneration Policy, appoint Executive Directors and Senior Employees, having regard to performance standards and existing industry practice, to approve grant of Employees Stock Option, if any, and to administer and superintend the same, recommending remuneration package, if any to all Directors as per the requirements of the Clause 49 of the Listing Agreement for Corporate Governance. Details of Composition of Nomination and Remuneration Committee and dates and attendance at the Nomination and Remuneration Committee Meeting are provided in detail in the "Corporate Governance Report" section of the Annual Report. 23. Remuneration Policy: The remuneration policy is directed towards rewarding performance, based on review of achievements. It is aimed at attracting and retaining high calibre talent. The remuneration policy is in consonance with the existing practice in the Industry Remuneration to Executive Directors: The Whole Time Directors of the Company are not being paid any remuneration for the year under review. There is no separate service contract entered into by the Company with the Whole Time Directors, the appointment and terms of employment are governed by the Articles of Association of the Company and Resolution passed by the Shareholder of the Company. Remuneration to Non-Executive Directors: The Non-Executive Directors of the Company do not draw any remuneration from the Company. 25. Particulars of contracts or arrangements with related parties: There are no materially significant related party transactions during the year. The details of transactions with related parties have been mentioned in notes to accounts point no. 24 the Accounts in the Annual Report. The details of contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form No. AOC -2 and the same is marked as "Annexure IV" 26. Secretarial Audit Report Mr. Amit R. Dadheech, Company Secretaries, was appointed as Secretarial Auditors of the Company for the financial year 2014-15 Pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed Form MR-3 is attached as "Annexure II" and forms part of this report. The explanations or comments on every qualification, reservation or adverse remark or disclaimer made by the company secretary in practice in the secretarial audit report are self explanatory and not required any further explanations. 27. Risk management policy The Company, like any other enterprise, is exposed to business risk which can be an internal risks as well as external risks. Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issue can affect our operations and profitability. However the Company is well aware of the above risks and as part of business strategy has formulated a Risk Management Policy. The Risk Policy approved by the Board, clearly lays down the roles and responsibilities of the various functions in relation to risk management covering a range of responsibilities, from the strategic to the operational. These role definitions, inter alia, provide the foundation for your Company's Risk Management Policy and Framework that is endorsed by the Board and is aimed at ensuring formulation of appropriate risk management procedures, their effective implementation across the Company and independent monitoring and reporting by Internal Audit. Backed by strong internal control systems, the Company is in the process of implementing the current Risk Management Framework that consists of the following key elements: • The Corporate Risk Management policy facilitates the identification and prioritization of strategic and operational risks, development of appropriate mitigation strategies and conducts periodic reviews of the progress on the management of identified risks • A combination of risk policy and unit wise evolved procedures brings robustness to the process of ensuring that business risks are effectively addressed. • Appropriate structures are in place to proactively monitor and manage the inherent risks in businesses with unique / relatively high risk profiles. • The periodical planning exercise requires all units to clearly identify their top risks and set out a mitigation plan with agreed timelines and accountability. Top Management and Unit heads confirm periodically that all relevant risks have been identified assessed, evaluated and that appropriate mitigation systems have been implemented. The combination of policies and processes as outlined above is expected to adequately address the various risks associated with your Company's businesses. 28. Directors' Responsibility Statement The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state 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 appropriated accounting policies has been selected 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 for the year ended 31st March,2015 and of the Loss of the company for that period; (c) the proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis; (e) the proper internal financial controls have been laid down to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (e) the proper systems has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 29. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013"the Company has in place a formal policy for prevention of sexual harassment of its women employees. The following is the summary of sexual harassment complaints received and disposed off during the current financial year. Number of Complaints received : NIL Number of Complaints disposed off : NIL 30. Acknowledgements An acknowledgement to all with whose help, cooperation and hard work the Company is able to survive during this hardship By Order of the Board of Directors For Raj Oil Mills Limited Sd/- Shaukat S. Tharadra Chairman & Managing Director DIN: 01598234 Place: Mumbai Date: September 4, 2015 |