DIRECTORS' REPORT To, The Members CIL Nova Petrochemicals Limited Your Directors are pleased to present their 11th Annual Report together with the Audited Financial Statements for the period ended 31st March, 2015. PERFORMANCE HIGHLIGHTS During the year under review, net turnover decreased from Rs. 316.97 crore to Rs. 243.01 crore . The profit before tax was at Rs. 5.08 crore as against previous year profit before tax of Rs. 3.87 crore . The profit after tax was at Rs 4.02 crore as against a profit of Rs. 2.90 crore over the previous year. The increase in profit is due to reduction in international crude price and reduction in financial charges and depreciation. TRANSFER TO RESERVES The Company proposes to transfer Rs.4 crores to the Preference Share Redemption Reserve, out of the amount available for appropriation. DIVIDEND Your Directors do not recommend any dividend on equity share for the period ended 31st March,15 considering the current position of the Company. FIXED DEPOSITS During the year under review your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act,2013 read with rules made thereunder. TRANSFER OF UNCLAIMED AND UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND During the year the Company has fulfill its obligation that had been arise due to demerger of Nova Petrochemicals Limited by transferring its portion of Unclaimed and Unpaid Dividend of Rs. 3,38,715 which was originally declared by GSL Nova Petrochemicals Limited (Formerly known as Nova Petrochemicals Limited) into Investor Education and Protection Fund. REDEMPTION OF PREFERENCE SHARES The Board of Directors at their meeting held on 14th August,2015 approved the redemption of preference shares. Pursuant to the terms of issue such shares are redeemable after the expiry of 5 years at the option of the Company from the date of issue and maximum tenure of preference shares were of 10 years from the date of the issue and period of 5 years has completed and therefore the board has decided to redeemed such shares. Directors retiring by rotation In accordance with the provisions of the section 152 Companies Act,2013 and Companies Articles of Association, Mr. Vedprakash Chiripal (DIN 00290454 ) , retires by rotation and being eligible, offer himself for re-appointment at the ensuing Annual General Meeting of the Company. Necessary resolution for their re-appointment is placed before the shareholders for approval. Brief details of Directors proposed to be appointed/ re-appointed as required under Clause 49 of the Listing Agreement are provided in the notice of the Annual General Meeting of the Company. Declaration from Independent Directors Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Section 149(6) of Companies Act, 2013 read with Rules made thereunder as well as Clause 49 of the Listing Agreement. Company's Policy on appointment and remuneration of Directors Appointment of Independent Directors Pursuant to the provisions of section 149 of the Act, which came into effect from 1st April,2014 Mr. Ambalal Patel, Mr. Rajendraprasad Shah, Mr. Murli Goyal and Ms. Renu Siddhu, were appointed as Independent Directors at the annual general Meeting of the company held on 20th September,2014. Criteria for appointment of Independent Directors The Independent Directors shall be of high integrity with relevant expertise and experience in the fields of manufacturing, marketing, finance, taxation, law, governance and general management, so as to have a diverse Board. Criteria for appointment of Managing Directors/ Whole Time Directors The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise and experience, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board. Remuneration Policy The Company follows a policy on remuneration of Directors and Senior Management Employees, details of the same are given in the Corporate Governance Report. Board Evaluation The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise of performance evaluation was carried out covering various aspects of Board functioning such as Composition of the Board and its Committees, Board Culture , performance of special duties, governance & compliance issues, attendance , contribution at meetings. The performance evaluation of the Independent Directors was also carried out. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. Key Managerial Personnel During the year under review, Mr. Pradip Khandelwal - Chief Executive Officer, Mr. Satish Bhatt - Chief Financial Officer and Mr. Romin Shah -Company Secretary were designated as Key Managerial Personnel pursuant to the requirements of the applicable provisions of Companies Act, 2013 read with rules made there under. VIGIL MECHANISM The Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the Company's code of conduct as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. The purpose of this mechanism is to provide platform to all directors, employees, business associates, stakeholders to come forward and express their concerns about unethical behavior, suspected fraud, violation of Code of Conduct without any fear of unfair treatment with them. RISK MANAGEMENT The Board of the Company has formed Risk Management Committee which have been entrusted with the responsibility to assist the Board in following matters such as Overseeing and approving the Company's enterprise wide risk management framework . Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified , assessed and necessary measures being taken to mitigate such risks RELATED PARTY TRANSACTIONS All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. Thus disclosure in form AOC-2 is attached as Annexure-C. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All Related Party Transaction are placed before the Audit Committee and also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are in repetitive nature. CORPORATE GOVERNANCE A separate report on Corporate Governance and Management Discussion and Analysis Report together with a certificate from Company's Auditors confirming compliance of the condition of Corporate Governance as stipulated in Clause 49 of the Listing Agreement forms part of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY During the year under review Company has not constituted Corporate Social Responsibility Committee as the said provisions were not applicable to the Company for the year ended 31st March,2015. LOANS, GUARANTEES, SECURITIES OR INVESTMENTS There were no loans , guarantees given, investments made or security provided by the Company to any other entity falling within the purview of section 186 of the Companies Act, 2013. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint Venture or Associate Company. NUMBER OF MEETINGS OF THE BOARD The details of the number of Board Meetings of your Company are set out in the Corporate Governance Report which forms part of this Report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL There are no significant and material orders passed by the Regulators / Courts/Tribunal which would impact the going concern status of the Company and its future operations. EXTRACT OF ANNUAL RETURN Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014, the extract of annual return is annexed to this report as Annexure - A. INTERNAL CONTROL SYSTEM The details in respect of internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of this report. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that : (a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures from the same. (b) the Directors 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 your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015. (c) the Directors 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) the annual accounts have been prepared on a 'going concern' basis. (e) the Directors have laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. (f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS AND AUDITORS' REPORT M/s. J.T Shah & Co, Chartered Accountants, Ahmedabad who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the financial year 2015-16. As required under the provision of the Companies Act,2013, the Company has obtained written confirmation from M/s. J.T Shah & Co, that their appointment, if made, will be in conformity with the limits specified in the said section. There are no qualifications, reservations, or adverse remarks or disclaimers made by the M/s. J.T Shah & Co, Statutory Auditors, in their report. Observations made in the Auditor's Report are self-explanatory and therefore do not call for any further comments under Section 134(1)(f) of the Companies Act, 2013. COST AUDITORS As per the requirement of section 148 of the Companies Act,2013 read with the Companies (Cost Records and Audit) Rules,2014 as amended from time to time the Board of Directors on recommendation of the Audit Committee has appointed M/s. Kiran J. Mehta & Co, Cost Accountants, as Cost auditor to audit the cost accounts of the Company for the financial year 2015-16. SECRETARIAL AUDITOR AND HIS REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. Jatin Kapadia, Practicing Company Secretary to conduct the Secretarial Audit for the year ended 31st March,2015. The Secretarial Audit Report is annexed herewith and forms part of this Report as Annexure - B. The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks. PARTICULARS OF EMPLOYEES Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement showing names and other particulars of employees who is in receipt of the remuneration prescribed under the said rules is required to be attached to board report. However during the year under review there were no employees who is in receipt of the remuneration prescribed under the said rules. Your Directors therefore do not attach any statement regarding this. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed to this report as Annexure - ACKNOWLEDGEMENT Your Directors would like to express their appreciation for the support and co-operation received from its shareowners, bankers, regulatory authorities, customers and business associates. Your Directors recognize and appreciate the sincere hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained performance in a challenging business environment. By order of Board of Directors Jyotiprasad Chiripal Chairman Date : 14th August, 2015 Place: Ahmedabad |