DIRECTORS' REPORT Dear Shareholders, 1. Your Directors are pleasured to present the 31st ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2014-15 ended on 31st March, 2015. There are no material changes and commitment affecting the financial position of the Company which have occurred between 1st April, 2015 and date of this report. 2. DIVIDEND: With a view to conserve the resources for the working capital requirement of the Company, your Directors have not recommended any dividend for the year under review. 3. REVIEW OF OPERATIONS: The Gross revenue from operations during the year under review was Rs. 9727 lacs as compared to Rs. 9707 lacs during 2013-14. The Operating Profit (Before Interest and Depreciation) was Rs. 686.50 lacs during the year under review compared to Rs. 591.87 lacs during 2013-14 showing an increase of 16%. The Profit before Tax for the year under review was Rs.142.25 lacs against Rs. 178.44 lacs during 2013-14. The Net Profit of the Company stood at Rs.83.64 lacs compared to Rs. 116.96 lacs for the year 2013-14. The company has made export at FOB value of Rs. 3317.01 lacs during the year under review compared to Rs. 3843.71 lacs during 2013-14. The management is of the firm opinion that during the current year, the export market will improve and in turn, the exports of the Company will increase to a greater extent. 4. RECOGNITION AS EXPORT HOUSE: The Director General of Foreign Trade, on the basis of Export performance of the Company, has accorded / recognised the Company as Export House. 5. FINANCE: The Company is enjoying Financial Assistance in the form of term loans and working capital facilities from State Bank of India. 6. DIRECTORS: 6.1 Mr. Rishab Chhajer (DIN: 05184646) retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment. 6.2 Ms. Swati S. Gupta (DIN: 07144628), being Independent Director, is being appointed for a term of 5 years as per provisions of the Companies Act, 2013. 6.3 Mr. Binod Chhajer ceased to be Director w.e.f. 31st March, 2015 upon resignation. 6.4 The Board of Directors duly met 8 times during the financial year under review. 6.5 The Board has made necessary evaluation of its own performance and that of its commitments and of individual Directors. 6.6 The performance evaluation of the Chairman, Executive and Non-Executive Directors was carried out by at the meeting of the Independent Directors held on 31st March, 2015. 6.7 DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed: (i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) that the Directors 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 31st March, 2015 being end of the financial year 2014-15 and of the profit of the Company for the year; (iii) that the Directors had taken proper and sufficient care for 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; (iv) that the Directors had prepared the annual accounts on a going concern basis. (v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. (vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 7. MANAGERIAL REMUNERATION: The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. The Relationship of remuneration to performance is clear and meets appropriate performance benchmarks. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy. 8. KEY MANAGERIAL PERSONNEL: 8.2 COMPARISON BETWEEN REMUNERATION OF KMP & PERFORMANCE OF THE COMPANY: As per the Remuneration Policy and based on the Recommendation of Nomination & Remuneration Committee the Relationship of remuneration to KMP & performance of Company is clear and meets appropriate performance benchmarks. 9. personnel and h. r. d.: 9.1 INDUSTRIAL RELATIONS: The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D. The Number of permanent Employees of the Company are one hundred. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals. 9.2 PARTICULARS OF EMPLOYEES: There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014. 10. preferential allotment of equity shares: As communicated in the Directors' Report for the year 2013-14, the Company, in the month of April, 2015, has allotted 7,80,000 Equity Shares (upon conversion of 7,80,000 Equity Warrants of Rs. 10/-each) of Rs. 10/- each at a premium of Rs. 17/- per share to Promoters & Promoters' group. There are no material variations between the projections and actual utilization of the funds raised through Preferential Allotment by the Company during the year 2014-15. 11. related party transaction and details of loans, guarantees, investment & securities provided: Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors' Report. 12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure- A. 13. CORPORATE GOVERNANCE AND MDA: As per Clause 49 of the Listing Agreement and the Companies Act, 2013, Report on Corporate Governance and Management Discussion and Analysis (MDA) form part of this Annual Report. A certificate regarding compliance with the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement is also appended to the Annual Report as Annexure - B. 14. SECRETARIAL AUDIT REPORT: Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Pinakin Shah & Co., Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - C. As regards the observation of the Auditors, the Company is in the process of identifying and appointing Company Secretary. 15. EXTRACT OF ANNUAL RETURN: The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure - D. 16. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIP COMMITTEE: The details of various committees and their functions are part of Corporate Governance Report. 17. DEMATERIALISATION OF EQUITY SHARES: Shareholders have an option to dematerialise their shares with either of the depositories viz. NSDL & CDSL. ISIN for Equity Shares of the Company is: INE372D01019. 18. LISTING: The Equity Shares of the Company are listed at BSE Limited, Ahmedabad Stock Exchange Limited and Madras Stock Exchange Limited. The Company is generally regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2015-16. SEBI vide its order dated 14th May, 2015, has granted exist to Madras Stock Exchange Limited (MSE) as a Stock Exchange and in viewof the same MSE has been de-recognised as Regional Stock Exchange. 19. GENERAL: 19.1. AUDITORS: The present Auditors of the Company M/s. Kantilal Patel & Co, Chartered Accounts, Ahmedabad will retire at the ensuing 31st Annual General Meeting and are eligible for reappointment. The Company has obtained from them the written Certificate to the effect that their reappointment as Auditors of the Company for period of 2 years commencing from the Financial Year 2015-16 to 2016-17, if made, will be in accordance with in the provisions of Section 139 and 141 of the Companies Act, 2013. The remarks of auditor and notes on accounts are self explanatory. 19.2 INSURANCE: The Company's properties including Building, Plants, and Machineries, Stock, Stores etc. continued to be adequately insured against risks such as fire, riots, strikes etc. 19.3 DEPOSITS: The Company has not accepted any Deposits from general public or from Shareholders during the year under review. 19.4 RISKS MANAGEMENT POLICY: The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work and monitored regularly with reference to statutory regulations and guidelines defined by the Company. 19.5 SUBSIDIARIES/ASSOCIATES/JVS: The Company does not have any Subsidiaries/ Associates Companies / JVs. 19.6 CODE OF CONDUCT: The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct. 19.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: There has been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations. 19.8 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013: The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint. 19.9 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS: There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013. 20. ACKNOWLEDGMENT: Your Directors express their sincere gratitude for the assistance and co operation extended by Financial Institutions, Banks, Government Authorities, Shareholders, Suppliers and Customers. Your Directors also wish to place on record their appreciation of the contribution made by the employees at their levels towards achievements of the Company's goals. For and on behalf of the Board, Rishab Chhajer Joint Managing Director Ashok Chhajer Managing Director Place : Ahmedabad. Date : 29th July, 2015. |