DIRECTORS' REPORT Dear Members Your Directors are pleased to present the 23rd Annual Report and the Audited Financial Statements for the financial year ended 31st March, 2015 Operations: Your directors wish lo inform the share holders that the Company's sales have increased from Rs 919.55 Lakhs to Rs 4820.30 Lakhs for the year ended 31st March 2015. During this financial year, the Company made profit of Rs.72.57 Lakhs as against the profit of Rs. 37.56 Lakhs for the year 2013-2014. Management discussion and analysis report: The Management Discussion and Analysis Report is annexed as Annexure-I as a part of the Annual Report. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate report on corporate governance has been included in this Animal Report in Annexure -II together with a certificate from the Practicing Company Secretary, regarding compliance of conditions of Corporate Governance. All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2014-15. A declaration to this effect signed by the Chairman &Managing Director/CEO of the Company is contained in this Annual Report. Listing The Company is listed on Bombay Stock Exchange Number of Meetings of the Board and Audit Committee A calendar of meetings is prepared and circulated in advance, to the Directors. During the year 13 Board Meetings and 7 Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. Auditors: Pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder, the current auditors of the Company, M/s S.K.Bang, Chartered Accountants were appointed by the members at the 22"dAnnual General Meeting to hold office until the conclusion of the 27th Annual General Meeting, subject ufratification by shareholders at each AGM. The members are requested to ratify the appointment of M/s S.K.Bang, Chartered Accountants as statutory auditors of the Company for the year 2015-16 under Item No.2 of the Notice of the Annual General Meeting. 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 has appointed, Mr.Y.Kotesvvar Rao, Practicing Company Secretary to undertake the Secretarial Audit of the Company. Secretarial Auditor Report for the year 20I4-I5given by Mr.Y.Kotesvvar Rao, in the prescribed 'Form MR-3' is annexed to this report in Annexure -III. The remarks made by the Secretarial Auditor are self explanatory. Further, the Company has appointed Ms.Roopali Kale as the Company Secretary and Mr.Syed Masood Ali as the Chief Financial Officer of the Company w.e.f 24th June, 2015. Deposits: The Company has not accepted any deposits from the public within the meaning of Section 73 of Companies Act, 2013 Adequacy of Internal Financial Controls The Company has established and is maintaining internal controls and procedures. The Board of Directors have evaluated the effectiveness of the Company's internal controls and procedures and confirm that they are adequate based on the size and the nature of its business. Conservation of Energy, Technical Absorption and Foreign Exchange Earning and Outgo The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Sec. 134 (3) (m) of the Companies Act 2013, read with the Companies (disclosure of particulars, in die report of Board of Directors) Rules 1988 are given in the Annexure-IV forming part of this report. Extract of Annual Return • The extract of Annual Return as provided under Sub-section (3) of Section 92 of the Companies Act. 2013. in the prescribed Form MGT- 9 is annexed to this report in Annexure - V Directors' Remuneration Policy & Criteria for matters under Section 178 Policy oil Directors' Appointment The Nomination and Remuneration Committee, and the Board shall review on annual basis , appropriate skills, knowledge and experience required of the Board as a whole and its individual members. The objective is to have a board with diverse background and experience that are relevant for the Company's operations. In evaluating the suitability of Individual Board member the Nomination and Remuneration Committee may take into account factors such as, • General understanding of the Company's business dynamics , global business and social perspective • Educational and professional background • Standing in the profession • Personal and professional ethics, integrity and values • Willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively Further, the appointee shall fulfill the below mentioned requirements- 1. Shall possess a Director Identification Number 2. Shall not be disqualified under Companies Act, 2013 3. Shall disclose his interest or concern in any Company or Companies or bodies coiporate . firms, or other association of individuals including the shareholding at the first meeting of the Board in every financial year and thereafter whenever there is a change in the disclosures already made 4. Shall endeavour to attend all Board Meeting and wherever the appointment is made as a Committee member 5. Shall abide by the code of Conduct established by the Company for Directors and senior Management Personnel 6. Such other requirement as may be prescribed from time to time under the Companies Act, 2013 An Equity Listing Agreement Criteria on determining the Independence of the Directors The Nomination and Remuneration Committee shall assess the independence of the Directors at the time of appointment / re-appointment and the Board shall assess the same annually. The Board shall re-assests determinations of independence when any new interest or relationships are disclosed by a Director. The Independent Director shall abide by the "Code for Independent Directors" as specified in the Schedule IV to the Companies Act, 2013. Further, the criteria of Independence shall be in accordance with guidelines as laid down in Companies Act.2013 and Clause 49 of Equity Listing Agreement. Policy on Remuneration Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that - • Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent. • For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules fiatned therein, circulars and guidelines issued by Central Government and other authorities from time to time. • Employees remuneration shall also be determined within the appropriate work experience, qualification, competence and also on various factors such as Job Profile Skill Sets, Seniority, Experience and prevailing remuneration le vels for equivalent jobs. Significant and material orders passed by the regulators or court: There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations Internal Audit The Company has a well established system of Internal Audit which carries out audit on Risk Management framework covering all the functions. Dividend: In view of the need for strengthening the financial base of the Company, your Directors have decided not lo declare the dividend for the year 2014-2015. Material Changes & Commitments There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this report. Whistle Blower Policy / Vigil Mechanism: The Company has a Whistle Blower Policy which enables its directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy and provides safeguards against victimization of director(s)/employee(s), who avail of the mechanism. The Policy has been appropriately communicated to the employees within the organization Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Pursuant to the legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013 introduced by the Government of India, which came into effect from 9 December 2013. the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. A Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no cases reported during FY 2014-15 under the Company's Policy on Prevention of Sexual Harassment at Workplace. Related Party Transactions All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, the disclosure in 'Form AOC-2' is not applicable. ' All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on an annual basis. Particulars of Loans. Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements annexed to this Report Risk Management Policy Information on the development and implementation of a risk management policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the report on Management Discussion and Analysis. Corporate Social Responsibility The provisions relating to Corporate Social Responsibility do not apply to the Company. Formal Annual Evaluation of the performance of the Board, its Committees and the Directors Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation taking into consideration of various aspects of the Board's functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process. Directors and Key Managerial Personnel The Total number of Directors of the Company as on 31*' March, 2015 was 4. Out of which 2 are Independent Directors and 2 are Promoter Group Directors. The Company appointed Ms.Roopali Kale as the Company Secretary and Mr.Syed Masood Ali as the Chief Financial Officer of the Company with effect from 24th June, 2015. Independent Director In accordance with Section 149, 152 and Schedule IV read with relevant Rules of the Companies Act. 2013, Mr. Suresh Partani is proposed to be re-appointed as Independent Director of the Company not liable to retire by rotation upto the conclusion of the 28 Annual General Meeting pursuant to the provisions of Section 149 of the Companies Act, 2013 and the Listing Agreement Declaration by Independent Directors All the independent directors have submitted the declaration of independence, as required under Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in subsection (6) and Clause 49 of the Listing Agreement. Directors Retiring by Rotation In accordance with Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mrs.Premlatha Partani who is liable lo retire by rotation has not offered herself for re-appointment as Director of the Company. In order to fill the vacancy. Mrs.Kavita Partani is proposed to be appointed as the Director, liable to retire by rotation. Particulars of employees The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of (he Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Particulars of remuneration Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5(1.) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as follows: (i) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year - Only the Managing Director is paid the remuneration. The ratio is 1:1.85 (ii) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any. in the financial year - None of the Directors other than Managing Director are drawing remuneration .Further, there has been no increase in the remuneration paid to the Managing Director. Hence the same is not comparable. (iii) The percentage increase in the median remuneration of employees in the financial year - There was no increase in the remuneration. (iv) The number of permanent employees on the rolls of company - 7 (v) The explanation on the relationship between average increase in remuneration and company performance; - There was no change in the remuneration. (vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company -Not Applicable (vii) variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year; and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer: (viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Percentage increase in the managerial remuneration and of the salaries of employees during the year under review is Nil. (ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company - Not Applicable (x) The key parameters for any variable component of remuneration availed by the directors - No. (xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year -1:3.7 (xii) Affirmation that the remuneration is as per the remuneration policy of the company - Yes. Industrial Relation: Industrial relations remand cordial throughout (he year and your Directors express their deep gratitude to all the employees. The Company is pursuing its policy to provide a congenial working environment at work place. Director's responsibility statement: Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 with respect to Directors Responsibility Statement, it is hereby confirmed. (i) That in the preparation of the Annual Accounts for the financial year ended March 31, 2015 the applicable accounting standards had been followed along with proper explanation relating to material departures. (ii) the Directors have selected such accounting policies and applied them consistently and made judgements 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 31 March 2015 and of the loss of the Company for the year ended on that date (iii) That the Directors had 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 delecting fraud and other irregularities. (iv) That the Directors had prepared the accounts for the financial year ended March 31, 2014 on a 'going concern" basis. (v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively , (vi) That systems to ensure compliance with the provision of all applicable laws were in place and were adequate and operating effectively. Acknowledgement: Your Directors take this opportunity to express their grateful appreciation for the co-operation and assistance by Central and State Governments, Banks, Suppliers and business associates as well as shareholders. Your Directors also place on record their appreciation for the devoted services rendered by all employees. For and on behalf of the board M/s. Matra Kaushal Enterprise Limited Sd/- Ramesh Partani Managing Director Sd/- Suresh Partani Director Place: Secunderabad Date: 21-07-2015 |