DIRECTORS REPORT Dear Members, Your directors have pleasure in presenting the TWENTY SEVENTH ANNUAL REPORT on the affairs of the Company for the year ended 31st March, 2015. OPERATIONAL REVIEW We would like to inform you that Company operates in a single segment i.e., "BOPP Films" as such disclosure requirements under Accounting Standard AS 17 issued by the Institute of Chartered Accountants of India, New Delhi are not applicable. During the year under review, the Company performed reasonably well. The Company achieved an operating revenue of Rs.343.13 crores showing an increase of 3.90% over the previous year. The Company achieved an export turnover of 43.45 crores. Presently the company is exporting its products to Nigeria, United Kingdom, United Arab Emirates, Bangladesh, Turkey, Oman Tanzania, Nepal, Slovakia Republic etc. On financial front, the company improved it's performance and earned a Profit before Interest and Depreciation of Rs. 42.43 crores showing an impressive increase of 48.10% over the previous year. After providing Rs. 13.12 crores towards finance cost and Rs. 21.72 crores towards depreciation, it earned a profit before tax of Rs.7.59 crores. After providing for Income Tax and Deferred Tax of Rs 3.05 crores, the company earned a net profit of Rs.4.54 crores as against Rs 0.29 crores earned in the previous year. In the current year the Company is performing well. The Company is also making continuous efforts to develop new export markets which will definitely enable the company to improve its performance in the coming periods. TRANSFER TO RESERVE After appropriation of profit, Company's Reserves stand increase to Rs.136.22 Crores as on 31st March, 2015 DIVIDEND Even though your Company earned a profit after tax of Rs. 4.54 crores but having regard to the future requirement of funds and to conserve resources, your Directors do not recommend any dividend for the year ended 31st March, 2015. INVESTOR EDUCATION AND PROTECTION FUND Pursuant to Section 205C of the Companies Act, 1956 the company has transferred an amount of Rs. 7,24,128.00 (Rs. Seven Lacs Twenty Four Thousand One Hundred Twenty Eight only) being the amount of unclaimed dividend for the year 2006-07 to the Investor Education and Protection Fund. Further unpaid dividend for the year 2007-2008 is to be transferred to Investor Education and Protection Fund pursuant to Section 205C of the Companies Act, 1956 in November, 2015. DECLARATION UNDER SECTION 149(6) The Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the rules made thereunder. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to section 152(6) of the Companies Act, 2013 and Article 117 of Article of Association of the Company, Sh. Jawahar Lal Oswal (DIN 00463866) and Sh. Kamal Oswal (DIN 00493213), will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board has recommended their appointment to the members of the Company at the ensuing Annual General Meeting. During the year, the members approved the appointment of Prof. K.S. Maini, Dr. A.S. Sohi, Dr. (Mrs.) H.K. Bal, Dr. S.K. Singla, Dr. Y.P. Sachdeva and Dr. Vijay Asdhir as Independent Directors not liable to retire by rotation. Further the Board appointed Mr. Rakesh Kumar Jain, who is a qualified Chartered Accountant, having Membership No. 403903 of the Institute of Chartered Accountants of India, as Chief Financial Officer of the Company under the category of Key Managerial Personnel. The Board also approved the inclusion of Sh. Satish Kumar Sharma, Executive Director and Sh. Atul Sud, Company Secretary of the Company under the category of Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carried out a formal Annual performance evaluation of its own, Board Committees and individual Directors as per the criteria laid down by the Nomination and Remuneration Committee of the Company. The Board evaluation was carried out through a structured evaluation process by all the Directors based on the criteria such as composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board. They were evaluated on parameters such as their education, knowledge, experience, expertise, skills, behaviour, leadership qualities, level of engagement and contribution, independence of judgement, decision making ability for safeguarding the interest of the Company, stakeholders and its shareholders. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Board was satisfied with the evaluation process and the results thereof. APPOINTMENT AND REMUNERATION POLICY The Board, on the recommendation of the Nomination & Remuneration Committee framed a policy for Appointment and Remuneration of Directors, Senior Management and other employees as provided under Section 178(3) of the Companies Act, 2013. The Appointment and Remuneration Policy of the Company is annexed hereto as Annexure- I and form part of this report. SEPARATE MEETING OF INDEPENDENT DIRECTORS The Company's Independent Directors met on 15th December, 2014, without the attendance of Non Independent Directors and members of the management. All Independent Directors were present at the meeting. At the meeting, they:- i. Reviewed the performance of non-independent directors and the Board as a whole; ii. Reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors; iii. Assessed the quality and timeliness of flow of information between the Company management and the Board which is necessary for the Board to effectively and reasonably perform their duties. FAMILIARISATION PROGRAMME FOR BOARD MEMBERS The Company at the time of appointing a Director, issues a formal letter of appointment which, inter alia, explains the role, functions duties and responsibilities expected from him/her as a Director of the Company. All Directors are provided with all policies/Guidelines as framed by the Company under various statutes and Listing Agreement to familiarize with the Company's procedure and practices. Further, to update them on the regular basis, the Company provides copies of all amendments in Corporate Laws, Corporate Governance Rules and Listing Agreement. The details of the Company's policy on Familiarisation Programme for Independent Directors are posted on the website of the Company and can be accessed at <http://www.owmnahar.com/npfl/> BOARD MEETINGS During the year under review, the Board of Directors met four times i.e. 29th May, 2014, 11th August, 2014, 12th November, 2014 and 3rd February, 2015 with a predefined agenda circulated well in advance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES Your company is engaged in the Manufacture of Bi-Axially Oriented Polypropylene Films (BOPP) for which sometimes the company purchases DEPP Licenses from group company(s) which are in the ordinary course of business at Arm's length basis. The Company has not entered into any contract or arrangement with related parties as referred in Section 188(1) of the Companies Act, 2013. Thus the requirement for disclosure of particulars of contracts or arrangement with related parties referred to in Section 188(1) is not applicable. However, as per Company's policy, all the transactions with the Group Companies are placed before the Audit Committee as well as the Board, for their information and approval. We also wish to inform you that there are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict of interest with the Company at large. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT: There are no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report SHARE CAPITAL The Paid up equity share capital of the Company as on 31st March, 2015 is Rs. 1229.40 Lacs. During the year under review Company has neither issued shares with differential voting rights nor granted stock options or sweat equity. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 3, 6, 11, 12, 16, to the Financial Statements. CORPORATE SOCIAL RESPONSIBILITY Pursuant to provisions of Section 135 of the Companies Act, 2013, the Board in their meeting held on 29th May 2015 constituted the Corporate Social Responsibility Committee(herein after referred to as CSR Committee) comprising of three members namely Sh. Dinesh Oswal, as Chairman, Dr. S.K. Singla and Sh. Dinesh Gogna, as members. The term of reference of CSR Committee are:- 1. To formulate and recommend to the Board CSR Policy specifying therein the activities to be undertaken by the Company as laid down in Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. 2. To Recommend the amount of expenditure to be incurred on the CSR activities. 3. To Monitor the Company's CSR Policy and implementation of CSR projects from time to time. The CSR Committee formulated CSR Policy and recommended to the Board to undertake CSR activities in collaboration with Group Companies under one umbrella i.e. through Oswal Foundation, which is a Registered Society formed in 2006, having its charitable objects in various fields. The Company has started contributing the sum for the expenditure to be incurred by Oswal Foundation for CSR activities. The Oswal Foundation is undertaking the project to 'maintain the quality of soil and water' on Sidhwan Canal, Ludhiana. Besides, the said foundation has also adopted two Government Schools situated in Ludhiana district. for 'promoting education'. The Company's CSR Policy is available on its website i.e. www.owmnahar.com . The disclosure relating to the CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of the Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto as "Annexure II" and form part of this Report. AUDIT COMMITTEE As required under Section 177 of the Companies Act, 2013, the Board of Directors have already constituted Audit committee, consisting of Sh. Suresh Kumar Singla as Chairman, Prof K.S. Maini and Sh. Dinesh Gogna, Directors as members. Mr. Atul Sud is the Secretary of the Committee. The committee held four meetings during the year under review. VIGIL MECHANISM Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the Company established a Vigil Mechanism process as an extension of Company's Code of Conduct whereby any employee, directors, customers, vendors etc., can report the genuine concerns or grievances to the members of the Committee about unethical behavior, actual or suspected, fraud or violation of Company's Code of Conduct so that appropriate action can be taken to safeguard the interest of the Company. The Mechanism also provides for adequate safeguards against victimization of persons who uses such mechanism. The mechanism provide direct access to the chairperson/chairman of the Audit Committee in appropriate or exceptional cases. The Whistle Blower Policy/Vigil Mechanism is also posted on Company's Website. The Company has a dedicated e-mail address i.e. whistleblowernpfl@owmnahar.com for reporting the genuine concerns. The Audit Committee regularly review the working of the Mechanism. No complaint was received during the year under review. GREEN INITIATIVE The Ministry of Corporate Affairs(MCA) vide Circular No. 17/2011 dated 21.04.2011 and Circular No. 18/2011 dated 29.04.2011 has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the Companies. Your Company has decided to join the MCA in its environmental friendly initiative. Accordingly, Company propose to send documents such as Notice of the General Meetings, Annual Report and other communication to its shareholders via electronic mode to the registered e- mail addresses of shareholders. To support this green initiative of the Government in full measure, shareholders are requested to register/update their latest e-mail addresses with their Depository Participant (D.P.) with whom they are having Demat A/c. or send the same to the Company via e-mail at:-secnel@owmnahar.com or gredressalnpfl@owmnahar.com . We solicit your valuable co-operation and support in our endeavour to contribute our bit to the environment. LISTING OF SECURITIES The securities of the company are listed on the following Stock Exchanges: 1. The Bombay Stock Exchange Ltd., 25th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001 2. The National Stock Exchange of India Ltd., Exchange Plaza, 5th Floor, Plot No.C/1, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai- 400051 The company has paid listing fee to both the Stock Exchanges for the financial year 2015-2016. DEMATERIALISATION OF SHARES. As the members must be aware that Company's securities are tradable compulsorily in electronic form w.e.f. 8th May 2000. Your company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Ltd (CDSL) to facilitate the holding and trading of securities in electronic form. As on date 92.73% of the Share Capital has been de-materialized by the members of the Company. Annual custodian fee for the financial year 2015-2016 has also been paid to the National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Further as per SEBI circular No. D & CC/FITTC/CIR-15/2002 DATED 27TH December, 2002, Company has appointed M/s Alankit Assignments Ltd., as Registrar for Share Transfer and Electronic connectivity. Accordingly all the shareholders, Investors, Members of the Stock Exchanges, Depository Participants and all other concerned are requested to send all communication in respect of share transfer, demat/remat, change of address etc. to our registrar at below mentioned address: M/s Alankit Assignments Limited (Unit: Nahar Poly Films Limited) Alankit House, 2E/21, Jhandewalan Extension New Delhi - 110 055 Telephone No. : (011) 23541234 Fax No. (011) 41540064 E-mail address rta@alankit.com In case any query/complaint remains unresolved with our Registrar please write to Company Secretary at the Registered Office of the Company. The shareholder(s) who have not gone in for dematerialization of shares till date, are requested to opt for dematerialization of the shares at the earliest. DIRECTORS RESPONSIBILITY STATEMENT The Directors would like to assure the Members that the financial statements for the year under review, confirm in their entirety to the requirements of the Section 134(3)(c) of the Companies Act, 2013. The Directors Confirm: i) that in preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures. ii) that they 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 and loss of the Company for that period; iii) that they had taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting any fraud and other irregularities. iv) that they had prepared the Annual Accounts on a going concern basis. v) that they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and vi) that they have devised proper systems to ensure compliances with the provisions of all applicable laws and that such systems are adequate and operating effectively. AUDITORS & AUDITOR'S INDEPENDENT REPORT STATUTORY AUDITORS The members at the Annual General Meeting held on 30th September, 2014, appointed M/s Gupta Vigg and Co., Chartered Accountants (Registration No. 001393N) as Statutory Auditors of the Company to hold the office till the conclusion of 27th Annual General Meeting of the Company. Their period of office will expire at the ensuing Annual General Meeting. They have expressed their willingness for re-appointment as Auditors of the Company and has given a written consent/certificate regarding eligibility for their reappointment as Statutory Auditors in accordance with the Rule 4 of the Companies(Audit and Auditors) Rule, 2014 read with the provisions of section 139(2) of the Companies Act, 2013. The Board of Directors based on the recommendation of the Audit Committee has proposed the appointment of M/s. Gupta Vigg & Co., as the Statutory Auditors of the Company for a period of one year to hold the office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting. AUDIT REPORT The Statutory Auditors have submitted Audit Report on the Accounts of the Company for the Accounting year ended on 31st March, 2015. The observations and comments given by Auditors in their Report read together with the Notes to the Accounts are self explanatory and require no comment. COST AUDITORS We would like to inform you that the Ministry of Corporate Affairs vide Notification dated 31st December, 2014 amended Companies (Cost Records and Audit) Rules, 2014, pursuant to which, the Company's business activities has been included with in the purview of Cost Audit requirement. Accordingly The Board of Directors on the recommendation of Audit Committee has appointed M/S. Khushwinder Kumar & Associates, Cost Accountant, as Cost Auditors of the Company for financial year 2015-16 and has fixed the remuneration of Rs. 45000/- for the audit of Cost Accounting records for the said financial year. The Board, pursuant to the provision of Section 148(3) of the Companies Act, 2013 and Rules 14 of the Companies (Audit and Auditors) Rules, 2014, has recommended a resolution for the ratification of the remuneration of the Cost Auditor by the shareholders at the ensuing Annual General Meeting of the Company. SECRETARIAL AUDITOR The Board, pursuant to the provision of Section 204 of the Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed M/s. P.S. Bathla & Associates, Practising Company Secretaries, having Membership No. 2585 to conduct Secretarial Audit for the financial year 2014-15. M/s. P.S. Bathla & Associates, Practising Company Secretaries have carried out the secretarial Audit for the financial year ended March 31, 2015 and their Secretarial Audit Report in Form No. MR-3 is annexed herewith this report as Annexure III and forms part of this report. The Report is self explanatory and require no comments. BUSINESS RISK MANAGEMENT The Company has laid down Risk Management Policy to identify, evaluate manage and monitor all types of risks which are associated with the business of the Company. The Board as well as Audit Committee regularly overseas the risk management process in the Company, as required under 134(3)(n) of the Companies Act, 2013 and Clause 49 of the Listing Agreement and suggests steps to be taken to control and mitigate the risks associated with Company's business. The Company is engaged in the manufacture of BOPP Films and has identified certain risks which may affects the performance of the Company. These includes operational risks such as fluctuation in the prices of the raw materials, fluctuation in foreign exchange rates, Labour problems, Regulatory risks, Government Policy etc. We are of the opinion that none of identified risk is such that which may threaten the existence of the Company. INTERNAL FINANCIAL CONTROL AND SYSTEMS The Company has an adequate system and Internal Financial Control to ensure that all the assets of the company are safeguarded and protected. The Company's Internal Financial Control System commensurate with the nature of its business and size of its operations. In order to further strength the Internal Control System and to automate the various process of the business, company is making use of Enterprise Resource Planning(ERP). Pursuant to the provisions of section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Company has also appointed an Internal Auditor. The Company is also having an Internal Audit Department to test the adequacy and effectiveness of Internal Control Systems laid down by the management and to suggest improvement in the systems. Apart from this, an Audit Committee consisting of three non executive directors has been constituted. All the significant audit observation and follow up action thereon are taken care of by the Audit Committee. The Committee oversee the adequacy of Internal Control. The Audit Committee met four times during the financial year under review. The Company has also established a Vigil Mechanism as per Section 177(9) of Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014. PUBLIC DEPOSITS During the year the company has not accepted any Public Deposit within the meaning of section 73,of the Companies Act,2013 and the rules made there under. There is no outstanding/unclaimed deposit from the public. However, the information as required under Rule 8 of the Companies (Accounts) Rules, 2014 is given hereunder:- (i) Deposits accepted during the year : Nil (ii) Deposits remained unpaid or unclaimed as at the end of the year : Nil (iii) Default in repayment of deposits and deposits which are not in ompliance with the requirements of Chapter V of the Companies Act, 2013 : Notapplicable c DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment for women at workplace and has adopted a policy against sexual harassment in line with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2014-15, the Company has not received any complaints on sexual harassment and hence no compliant remains pending as of 31 March, 2015. EXTRACT OF ANNUAL RETURN Extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the Financial year 2014-15 in the Form MGT-9 of the Company is annexed herewith as Annexure IV and form part of this report. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as Annexure V and form part of this report . Further During the year under review, No employee of the Company was in receipt of remuneration exceeding the limits as provided under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO The detailed information as required under section 134(3) of the companies Act, 2013 read with Subrule 3 of the Rule 8 Companies (Accounts) Rules, 2014, is enclosed as per Annexure-VI and forms part of this report. REPORT ON THE CORPORATE GOVERNANCE Your Company continues to follow the principles of good Corporate Governance. The company has already constituted several committees of directors to assist the Board in good Corporate Governance. The Corporate Governance Report alongwith the Auditors Certificate regarding compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange, is attached herewith as Annexure-VII and form part of this report . MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review as stipulated under the clause 49 of the listing agreement with the Stock Exchanges in India is enclosed as per annexure-VIII and forms the part of this Report. INDUSTRIAL RELATIONS The industrial relations remained cordial throughout the year and the excellent results were achieved with the whole hearted co-operation of employees at all levels. ACKNOWLEDGMENT The Board of Directors of the company wish to place on record their thanks and appreciation to all workers, staff members and executives for their contribution to the operations of the company. The Directors are thankful to the Bankers, Financial Institutions for their continued support to the company. The Directors also place on record their sincere thanks to the shareholders for their continued support, co-operation and confidence in the Management of the Company. FOR AND ON BEHALF OF THE BOARD JAWAHAR LAL OSWAL (CHAIRMAN) DIN:00463866 PLACE : LUDHIANA DATED : 5th August, 2015 |