DIRECTORS' REPORT TO THE MEMBERS OF RUBFILA INTERNATIONAL LIMITED The Directors have pleasure to present their 22nd Annual Report and the audited Annual Accounts for the year ended 31st March 2015. Performance Review Your company has continued to grow this year also and has ,achieved an all time high performance in its history as far as turnover and profits are concerned. . The gross revenues touched Rs.l6905.93 Lacs, 28.73 % more than last year whereas profit before depreciation and taxes touched Rs.2274.61 Lacs , 33.70 % higher compared to previous year. The earnings per equity share (face value Re. 5) for the year increased to Rs. 3.05 from Rs.2.14 in the previous year. It is to be noted that the company had at achieved better performance for the year irrespective of the challenges which existed in the market. The company has been following prudent financial management and has operated this year also with no debt support from any institutions. Dividend Your Directors have recommended a dividend of 15% (Re.0.75 per Share of face value Rs. 5/-) for the year, (as against 12% for the previous year ended 31st March, 2014), subject to the approval of the shareholders at the ensuing Annual General Meeting. This will result in total payout for the year 2014-15 (including Dividend Distribution Tax) of Rs. 390.13 Lacs. (Rs. 303.38 Lacs in 2013-14). An amount of Rs. 68.00 Lacs has been transferred to General Reserve as per the provisions of Companies Act, 2013. Capital Expenditure As on 31st March 2015, the gross fixed assets of the company stand at Rs.72 70.04 Lacs and net fixed assets Rs 2874.37 Lacs. Capital additions during the year amounted to Rs.360.23 Lacs, which include addition to Building for Rs.l23.44 Lacs, Plant & Machinery and other assets amounting to Rs.236.79 Lacs. Future Prospects The rubber thread industry witnessed highly volatile situations in the past year due to a variety of factors like over capacity in the Indian and international market, latex price fluctuations etc. The challenges continue to remain in the medium term in view of the highly volatile latex prices in India compared to very low prices existing in Malaysia and Thai land. The steps taken by the government to safeguard the interests of rubber growers has aggravated the situation with the Indian latex prices reaching almost the double that of international prices. This has led to large volume of imports of threads into the country putting pressure on the pricing. Rubfila continues to enjoy a dominant position in the Indian market even as its presence in the international market is also growing. The installed production capacity of the Company has grown from 6350MT to 11500 MT per annum by 2014. In addition to this, the company has also entered into exclusive manufacturing arrangement with M/s. Abhisar Buildwell P Ltd., the second largest manufacturer of Rubber threads in India and thus has got a total capacity of 15500MT per annum at its disposal. The year 2015-16 will be the first year when all the above mentioned capacity would be available on a full year basis and the company expects to achieve a better turnover this year. Directors' Responsibility Statement The Directors report that i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. ii. 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 the company at the end of the financial year and of the profit of the company for that period. iii. The Directors have taken proper and sufficient care 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. iv. The Directors have prepared the annual accounts on a going concern basis. v. The Directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively. vi. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Listing on Stock Exchanges Your Company's shares are listed on the Bombay stock exchange. During the year under review, your company's share price had touched Rs.52.80 per equity share. The Share price quoted at BSE at the closing on 31.03.2015 which was Rs.38.40 against the closing price of Rs. 17.40 on 31.03.2014. Corporate Governance As required by Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis, and the Auditor's Certificate regarding compliance of conditions of Corporate Governance, form pad ol the Annual Report. Declaration on Independent Directors The Independent Directors Mr.Samir K. Shah (DIN 0171471 7), Mr.S.N.Rajan {DIN 00105864), Mr. Patrick M Davenport (DIN 00962475) and Ms.R.Chitra (DIN 01560585): (a) in the opinion of the Board, are persons of integrity and possess relevant expertise and experience; (b) (i) who were not promoters of the company or its holding, subsidiary or associate company (ii) who are not related to Promoters or Directors in the company, its holding, subsidiary or associate Company; (c) who have or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their Promoters or Directors, during the two immediately preceding financial years or during the current financial year; (d) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company or their Promoters, or Directors, amounting to two percent or more of its gross turnover of total income or fifty lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; (e) Who, Neither himself nor any of his relatives- i) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial year immediately preceding the financial year in which he is proposed to be appointed; ii) is or has been an employee or propriety or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of- (A) a firm of auditors or company secretaries in practice or cost auditors or the company or its hold ing, subsidiary or associate company; or (B) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of the gross turnover of such firm; (iii) holds together with his relative two per cent, or more of the total voting power of the company; or (iv) is a Chief Executive or Director, by whatever name called, of any non profit organization that receives twenty-five percent or more of its receipts from the company, any of its Promoters, Directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or (f) who possesses such other qualification as may be prescribed. Particulars of Loans, guarantees or investments Your company has not directly or indirectly a) given any loan to any person or other body corporate other than usual advances envisaged in a contract of supply of materials if any, b) given any guarantee or provide security in connection with a a loan to any other body corporate or person and c) acquired by way of subscription purchase or otherwise, the securities of any other body corporate d) exceeding sixty percent, of its paid-up share capital, free reserve and securities premium account or one hundred percent of its free reserves and securities premium account whichever is more. Deposits Your company has not accepted any deposits from public as envisaged under Sections 73 to 76 of Companies Act,2013 read with Companies (acceptance of Deposit)Rules,2014 and no amount remain unpaid or unclaimed as at the end of the period under review. Related Party Transactions A detailed report on contracts and arrangements made during the year 2014-15, being arm's length transactions have been reported and annexed hereto in Form AOC 2. Conservation of Energy, technology absorption, foreign exchange earnings and outgo Information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure forming part of this report. Corporate Social Responsibility: Board of Directors, the Management and all of the employees subscribe to the philosophy of compassionate care. We believe and act on an ethos of generosity and compassion, characterized by a willingness to build a society that works for everyone. This is the cornerstone of our CSR policy. The CSR activities were overseen by a committee of Directors comprising of Mr. Bharat ). Dattani, Mr. S.N. Rajan and Mr. G Krishna Kumar on a regular basis. During the year Company has spent Rs.21.02 Lacs towards CSR expenditures. The areas in which amounts spent are palliative care, infrastructure development for charitable societies , financial assistance to the needy in the society, contribution to the dialysis centre and other public health sector for treatment. A report on the Corporate Social Responsibility activities is annexed to this report. Directors The Board is comprised of Non-Executive Chairman, Managing Director (Executive), four Non-Executive Promoter Directors and four Non-executive Independent Directors. Detailed composition of the Board and its subcommittees are enumerated in the Corporate Governance Report forming part of this Annual Report, In accordance with the Companies Act, 2013. Mr. Dhiren S. Shah (DIN 01149436), and Mr HarHhik R Parel (DIN 00590663) retire by rotation and being eligible offer themselves for reappointment. Mr.Samir K.Shah (DIN 01714717) Mr.S.N.Rajan (DIN 00105864) and Mr. Patrick M Davenport (DIN 00962475) were appointed as Independent Directors as per provisions of Companies Act, 2013, though they were already Independent Directors under listing agreement. In order to comply with the provisions of the Companies Act, 2013, your company also appointed Mrs. R.Chitra (DIN 01560585) as an Independent Director to comply with the condition of having a Woman Director. Your Directors recommend the appointment of these four Independent Di rectors for a period of Five years years from the date of appointment. During the year 2014 - 15 four Meetings of the Board of Directors were held. Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors, has carried out an annual performance evaluation of its own, Sub-Committees of Board and individual directors, based on the criteria laid down in the Nomination Remuneration and Evaluation Policy of the Company. As per the provisions of Section 2 (51) and Section 203 of the Companies Act, 2013 Company has named Mr.G.Krishna Kumar (Managing Director), Mr.N.N. Parameswaran (Chief Finance Officer & Company Secretary) as the Key Managerial Personnel (KMP) of the Company. Auditors M/S Mohan & Mohan Associates., Chartered Accountants, Thiruvananthapuram Statutory Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013. it is proposed to re-appoint them as Statutory Auditors for the financial year 2015-16 from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders. M/S Mohan & Mohan Associates have given necessary Certificate as per Section 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules,2014. Secretarial Audit Secretarial Audit Report as per Section 201 of Companies Act 2 013 i s placed as annexure to this report. Management Reply to the observations of the Secretarial Auditor in their report. 1. Even though there was one day delay in transferring the dividend amount to the Bank Account, the dividend was paid to the shareholders in time. 2. Advertisement in the newspaper about the book-closure was an inadvertent omission and company has taken note of this. 3. Non-filing of Form 5 INV is an inadvertent comission and steps are taken to file the Form. 4. The Board of Directors in its meeting held on 28/10/2013 noted the expiry of the term of Managing Director. As it would take some more time to finalise the terms and conditions of appointment of Managing Director he was requested to continue his office. Subsequently, the terms and conditions of the appointment of Managing Director were finalized and the Board Meeting held on 26th May, 2014 appointed him as the Managing Director of the Company with retrospective effect. Cost Audit Compliance M/s. Ajith Sivadas &Co, Cost Accountants was appointed as Cost Auditors for the year 2014-15 and a resolution for ratification of the appointment and remuneration payable is included in the Notice of Annual General Meeting. Disclosures: Information Pursuant to Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014. In terms of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has no employee drawing salary exceeding Rs. 60.00 lacs per annum or Rs. 5.00 takhs per month during the year under review. Company is not paying any commission to the Directors. Vigil Mechanism / Whist le Blower Policy The company has established vigil mechanism and adopted whistle blower policy which protects persons who uses the mechanism from victimization. The Pol icy is posted in the website of the company. Risk Management Policy: The Company has set up a robust risk management framework to identify, monitor and minimize risk and also to identify business opportunities. The Audit Committee a Iso fu nctions as the Risk Management Committee. Disclosure under the Sexual Harassment ot Women at Workplace {Prevention, Prohibition and Redressal) Act, 2013 Company has not received any complaint under the Sexual Harassment of Women at work place (Prevention and Redressal Act, 2013. Status of Employees Stock Option Scheme (ESOS) : Employees Stock Option Scheme (ESOS) was approved by the members in the last Annual General Meeting held on 12-08-2014. No options have been granted or vested during the year 2014 -15. Change in the Nature of Business, if any There was no change in the nature of business of the Company du ring the Financial Year 2014-15. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report. No material changes and commitments affecting the financial position of the Company occurred between the end of the Financial Year to which this financial statements relate and the date of report. Significant or Material Orders passed by Regulators / Courts,' Tribunals During the year under review, there were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. Subsidiaries, Joint Ventures and Associate Companies The Company do not have any Subsidiaries, joint Ventures and Associate Companies Internal Financial Controls The Company has established adequate internal control system which is commensurate with its natu re and volume of operations. Extract of Annual Return The Extract of Annual Return in Form No.MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 is annexed hereto and forms part of this report. Appreciation Your Directors acknowledge with gratitude the cooperation and assistance given by M/s. Rubpro Sdn. Bhd., Malaysia, Kerala State Industrial Development Corporation Ltd, M/s. Integrated Enterprises India Ltd, Banks, and other agencies of the Central and State government. Your Directors also wish to place on record the sincere appreciation of services rendered by the employees at all the levels towards your company's success during the year under review and shareholders for their active support and co-operation. Bharat J. Patel DIN 01100361 Chairman Kanjikode 07/08/2015 |