DIRECTORS'REPORT Dear Shareholders, Your Directors have pleasure in presenting their 25th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31st 2015. COMPANY PERFORMANCE The year has been an adverse year for liquor companies particularly in Kerala. The Government had announced step by step prohibition and as first step closed all bars other than of 'Five Star Hotels'. However, your company having diversified into job work business, could wither this adverse market contraction. In fact, the company could achieve 146% increase in net profit this year, thanks to cost cutting and efficiency drive. The Directors are happy that the company is progressing from a heavy loss making company to a profit making one. This year the company has made a net profit of Rs. 158.65 lakhs against Rs. 64.46 lakhs during the last year. The liquor industry is susceptible to heavy government involvement, both in production and sales. Hence, a cautious approach is required on future forecast. RESERVES Due to accumulated losses, the company is unable to transfer any amount to its Reserves. DIVIDEND The company has been a loss making one from inception and being a BIFR referred unit, is prohibited to declare dividend while under reference and without the permission of Hon. BIFR. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND There is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under. SHARE CAPITAL The paid up Equity Share Capital as on 31 st March, 2015 wasRs. 11,68,73,000. During the year under review, the Company has not issued any shares. EXTRACT OF ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure No.1 and is attached to this Report. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS During the year under review, 5 Meetings of the Board of Directors, 4 Meetings of the Audit Committee, 1 Meeting of the Nomination and Remuneration Committee and 13 Meetings of the Stakeholders Relationship Committee were held. Further details of the same have been remunerated in the Corporate Governance Report annexed herewith. DIRECTORS'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 that: (a) In the preparation of the annual accounts, the applicable accounting standards had been followed; (b) 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 the end of the financial year and of the profit of the company for that period; (c) The directors had 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; (d) The directors had prepared the annual accounts on a going concern basis; and (e) The internal financial controls to be followed by the company were laid down and such internal financial controls were adequate and were operating effectively. (f) 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. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT. There have been no frauds reported by the Auditors pursuant to Section 143(12)of the Companies Act, 2013. DECLARATION BY INDEPENDENT DIRECTORS All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to quaiify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES In adherence of section 178(1) of the Companies Act, 2013, the Board of Directors of the Company approved a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3), based on the recommendations of the Nomination and Remuneration Committee. The Company's Policy relating to appointment of Directors, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure No.2- and forms part of this Report. AUDITORS STATUTORY AUDITORS M/s. Varma & Varma (Firm Registration No. FRN:004532S), Chartered Accountants have been appointed as statutory auditors of the company at the last Annual General Meeting held on 29 September, 2014 for a period of three years subject to ratification by members at every subsequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. SECRETARIALAUDITORS Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Mr. VS. Subhash, M.Com, LLB, FCS, M/s. JMACS Associates to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure 3. With reference to the observations made by the Secretarial Auditor in his report the Directors wish to state that the company has appointed a Woman Director on 29.05.2015. The company being a sick company has not appointed a whole time Company Secretary and due to tight financial position the company has not been paid the listing fees due to the Stock Exchanges. Once the position improves necessary steps would be taken for appointment of whole time Company Secretary and listing fees due to the Stock Exchanges will be paid. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: There were no loans, guarantees cr investments made by the Company under section 186 of the Companies Act, 2013 during the period under review and hence the said provision is not applicable. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All transactions entered into during the financial year 31st March 2015 with Related Parties as defined under the Companies Act and Clause 49 of the Listing Agreement were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Compank s Act, with related parties which could be considered material under the Listing Agreement. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act in Form AOC-2 is not applicable. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to Accounts - Note 24 forming part of the financial statements. However it is to be noted that this venture is advantageous to your company as it contributes profitability. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: There have been no 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. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO 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 furnished in Annexure - 4 and is attached to this report. RISK MANAGEMENT POLICY The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. ANNUAL PERFORMANCE EVALUATION In accordance with the criteria suggested by The Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory. The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily. CHANGE IN THE NATURE OF BUSINESS, IF ANY There was no change in the nature of business of the Company during the financial year ended 31st March, 2015. DIRECTORS At the Annual General Meeting of the Company held on 29th September, 2014, the Members had approved the appointment of Mr. M.P. Gopalakrishnan & Mr. N. Muralidhar Nair as Independent Directors for a term of five years. Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. K. Viswamohan Menon (holding DIN:00666339) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board of Directors has appointed Ms. Ramakanth Pai Smitha (holding DIN: 07183913) as an Additional Director with effect from 29th May, 2015. She will holds office up to the ensuing Annual General Meeting, of the Company and being eligible, offers herself for reappointment. Notice under Section 160 of the Act, has been received by the Company from a Member, signifying his intention to propose the candidature of Ms. Ramakanth Pai Smitha as an Independent Director of the Company for a period of five years. Accordingly necessary resolution proposing the appointment of Ms. Ramakanth Pai Smitha as an Independent Director of the Company has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the members. SUBSIDIARIES ANDASSOCIATE COMPANIES The Company does not have any Subsidiary or Associate Company. FIXED DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. There was no deposit remaining unpaid or unclaimed as at the end of the year. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future. INTERNAL CONTROL SYSTEMS ANDTHEIRADEQUACY In the opinion of the Board, the existing internal control framework is adequate and commensurate to the size and nature of the business of the Company. PARTICULARS OF EMPLOYEES AND REMUNERATION The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - 5 to this Report. The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs.60,00,000/- if employed throughout the year or Rs.5,00,000/- per month if employed for part of the year. AUDIT COMMITTEE The Audit Committee of the Board of Directors of the Company, comprises five Members, namely Mr. K.V. Mohan Menon, Mr. M.P. Gopalakrishnan, Mr. K. Rajkumar, Mr. N. Muralidhar Nair & Ms. R. Smitha out of which three of them are Independent Directors. Mr. M.P. Gopalakrishnan, an Independent Director, is the Chairperson of the Audit Committee. VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013. The Company has been employing women employees in various cadres within the factory premises. The Company has in place an Anti -harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been setup to redress complaints received regularly. There was no complaint received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Clause 49 of the Listing Agreement, forms part of the Annual Report. ACKNOWLEDGMENTS: The Board of Directors express their appreciation for the contribution made by the employees, customers and bankers for the support extended by them during the year under review. We also would like to thank our bottling partners for their faith in us with continued patronage. For and on behalf of the Board K. V. Viswamohan Menon Chairman & Whole time Director (DIN: 00666339) Date : 14.08.2015 Place : Palakkad |