DIRECTORS' REPORT TO THE MEMBERS, Your Directors have pleasure in presenting their Thirty-First Annual Report together with the Audited Financial Statement of the Company for the financial year ended 31st March, 2015 GENERAL DESCRIPTION Your Company is in the highly creative Decorated Tile and Decal manufacturing. The concept has a tough competition with digital technology and copy from un-organised sector. But with our strong creative team base and expertise we expect to retain the growth. OPERATION Sale of Transfer Division during the year was near to flat with a slight growth of 0.70% i.e. Rs. 1006.72 Lac (net of excise) from Rs. 999.71 Lac (net of excise) in the previous year. Sale of Decorated Tiles Division during the year increased to Rs. 3525.60 Lac from Rs. 3158.79 Lac in the previous year reflecting a growth of 11.61%. MARKET AND FUTURE PROSPECTS Ceramic Transfer Sheets (Decals) Captive plant by buyers kept affecting our business prospects but simultaneously with the entry of few buyers in high end segment the requirement of Quality Decals is remain in the market where our Design Supremacy is established. Your Company is responding to these challenges by adding new customer and increasing share of Decal consumption of each buyer and also increasing our reach to small buyers. Decorated Tiles The proliferation of Digital Printing on Tiles competed against our Designers Tiles and other medium like Glass, Resin, Steel, Aluminium and Sand Blasting also affected the business. The prevalent copying of our product by local suppliers affected our business badly. Trading With the launch of big Wall Tile range a growth in Trading Vertical was achieved and the same is expected to continue in coming financial year also. Because of KERASPANA brand tiles the addition of new Independent dealers is taking place and our network is growing which will help in improving the sales of our manufacturing verticals also. The allied activity in Trading Vertical also continued successfully. DIVIDEND In view of losses for the year, your Directors do not recommend any dividend on equity shares for the year under review. INVESTOR EDUCATION & PROTECTION FUND (IEPF) The Company is required to transfer dividends which have remained unpaid/ unclaimed for a period of seven years to the IEPF established by the Central Government. Accordingly, the amount of unpaid/ unclaimed dividend for the financial year ended 31st March, 2008 is due for transfer to IEPF on or after 26th September, 2015. PUBLIC DEPOSIT Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. AUDITORS Statutory Auditor M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company, having Firm Registration No. 500106N, were appointed as Statutory Auditors for a term of 4 (four) consecutive years at the 30th Annual General Meeting (AGM) held on 16th September, 2014, to hold office till the conclusion of the 34th AGM of the Company, subject to ratification of their appointment at every AGM, in terms of the first proviso to Section 139 of the Companies Act, 2013, read with Rule 3(7) of Companies (Audit and Auditors) Rules, 2014. In this regard the Company has received a letter from the Auditors conforming that they are eligible for appointment as Auditors of the Company under Section 139 of the Companies Act, 2013 and meet the criteria for appointment specified under Section 141 of the said Act. Based on the recommendations by the Audit Committee, the Board of Directors recommend the ratification of appointment of M/s. A. K. Maheshwari & Associates, Chartered Accountants, Statutory Auditors of the Company by the Shareholders at the ensuing AGM. All the items on which, comments have been made by the Auditors in their report to the Members are self-explanatory, as explained by way of notes to the accounts and does not contain any qualification, reservation or adverse remark, therefore needs no further explanation by the Board in terms of Section 134(3)(f)(i) of the Companies Act, 2013. Secretarial Auditor Your Board, during the year, appointed M/s. Drolia & Company, Practicing Company Secretaries, having Certificate of Practice No. 1362 as Secretarial Auditors on such remuneration as may be determined by the Board, for the financial year ended 31st March, 2015, to undertake the Secretarial Audit of the Company, pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report for the financial year 2014-15, in terms of Section 204(1) of the Companies Act, 2013, submitted by the said Auditors, forming part of this Report, is marked as 'Annexure A'. The said Report does not contain any qualification, reservation or adverse remark, therefore no need for any explanation/s by the Board in terms of Section 134(3)(f)(ii) of the Companies Act, 2013. NUMBER OF BOARD MEETINGS During the year 5 (five) Board Meetings were convened and held. Details of which are given in the Corporate Governance Report, forming part of this Report. RISK MANAGEMENT The Company has adopted the measures concerning the development and implementation of a Risk Management Policy in terms of Section 134(3)(n) of the Companies Act, 2013, after identifying the elements of risks which in the opinion of the Board may threaten the very existence of the Company itself. The Company has an elaborate Risk Management process of identification, assessment and prioritisation of risk followed by coordinated efforts to minimise, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximise the realisation of opportunities. The Risk Management procedure is reviewed by the Audit Committee from time to time, to ensure that the executive management controls risks through means of a properly defined framework. Major risks identified are systematically addressed through mitigating actions on a continuing basis. Some of the identified risks relate to competitive intensity and cost volatility. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal control systems which commensurate with the size, scale and complexity of the operations of the Company. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties during the financial year 2014-15 were on arm's length basis and were in the ordinary course of business. Further, there were no materially significant related party transactions during the year under review made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2, is not required. Related Party Transactions Policy as approved by the Board has been uploaded on the Company's website www.schablona.in at the web link: BOARD EVALUATION Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. Clause (p) of sub-clause 3 of Section 134 of the Companies Act, 2013, states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and the Directors individually. Schedule IV to the Companies Act, 2013, states that the performance evaluation of Independent Directors shall be done by the entire Board excluding the Directors being evaluated. Performance evaluation was made by the Board on the various parameters and criteria's governing performance of the Board and that of its committees and Directors and the same was taken on record. The criteria's for evaluation of the performance has been mentioned in the Corporate Governance Report forming part of this Report, under the Nomination & Remuneration Policy of the Company. EXTRACT OF ANNUAL RETURN The extract of Annual Return as provided under sub-section (3) of Section 92 of the Companies Act, 2013, in Form MGT-9, in terms of Section 134(3)(a) of the Companies Act, 2013 forms part of this Report and is marked as 'Annexure B'. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO 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 annexed hereto and forms part of this report and marked as 'Annexure C'. DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as stipulated under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments Mr. Satish C. Vishwakarma, was appointed as an Additional Director on the Board by the Board of Directors of the Company and was thereafter appointed as Regular Director and also as Key Managerial Personnel i.e. Whole-time Director, designated as Executive Director on Board w.e.f. 27th May, 2014 at the 30th Annual General Meeting of the Shareholders of the Company held on 16th September, 2014. Mr. Satish C. Vishwakarma, Executive Director of the Company retire by rotation at the ensuing Annual General Meeting of the Company and, being eligible, offers himself for re-appointment. Ms. Ritika Mansata, a Commerce Graduate and an Associate Member of the Institute of Company Secretaries of India, was appointed as Key Managerial Personnel, designated as Company Secretary, w.e.f. 11th June, 2014. She was also appointed as the Compliance Officer of the Company w.e.f. 30th July, 2014. Further, she was appointed as the Chief Financial Officer (CFO) of the Company and re-designated as Company Secretary and Chief Financial Officer of the Company w.e.f 31st March, 2015. Ms. Abha Kabra, was appointed as an Additional Director under Section 161 of the Companies Act, 2013. A notice in writing was received from a Member along with requisite deposit under Section 160 of the Companies Act, 2013, proposing candidature of Ms. Abha Kabra for the office of Regular Director and also as an Independent Director of the Company, for a term of 5 (five) consecutive years i.e. from the 31st Annual General Meeting till the conclusion of the 36th Annual General Meeting of the Company in terms of Section 149(10) of the Companies Act, 2013, not liable to retire by rotation. Necessary resolution for obtaining Members approval has been incorporated in the Notice of the 31st Annual General Meeting of the Company. Resignations Mr. Anirudh Kabra, Independent Director of the Company, resigned from the Directorship of the Company, w.e.f. 21st March, 2015. The Board placed on record its appreciation for the valued contribution made by him in the various deliberations, discussions and guidance during his association with the Company. NOMINATION AND REMUNERATION POLICY The Company's Policy on Director's appointment and remuneration including criteria's for determining qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 and Clause 49 of the Listing Agreement is stated in the Corporate Governance Report, forming part of this Report. DIRECTORS RESPONSIBILITY STATEMENT As required by Section 134(3)(c) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (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 and loss 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; (e) 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; and (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. AUDIT COMMITTEE AND VIGIL MECHANISM In compliance with the requirements of Section 177(8) of the Companies Act, 2013, the Audit Committee comprises of Mr. R.K. Borar as the Chairman of the Committee with Mr. N. Goenka and Ms. Abha Kabra as other Members of the Committee. More details on the Committee have been provided in the Corporate Governance Report, forming part of this Report. All recommendations made by the Audit Committee were accepted by the Board. The Company has established a vigil mechanism and overseas through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns and in certain cases have also provided direct access to the Chairman of the Audit Committee for reporting issues. The Whistle Blower Policy (Vigil Mechanism) is put on the website of the Company. More details about the Whistle Blower Policy have been provided in the Corporate Governance Report, forming part of this Report. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT A report on Corporate Governance along with Management Discussion and Analysis Report in terms of Clause 49 of the Listing Agreement is annexed hereto and forms an integral part of this Report. PARTICULARS OF EMPLOYEES Information required as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto as 'Annexure D', forming part of this Report. During the year under review, there were no managerial personnel/employee whose information required to be provided under Rule 5, sub-rule 2 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. OTHER DISCLOSURES I. No loans, guarantees and investments under Section 186 of the Companies Act, 2013 were made by the Company during the year under review, hence disclosure in terms of Section 134(3)(g) of the Companies Act, 2013 does not arise. II. No issue of equity shares were made during the year under review with respect to differential rights, Employee Stock Options, Sweat Equity shares, Buy-back of shares and Bonus Issue under Companies (Share Capital and Debentures) Rules, 2014. III. No Corporate Social Responsibility (CSR) initiatives have been undertaken by the Company, as Section 135 of the Companies Act, 2013 on CSR is not applicable. IV. Business Responsibility Report as per Clause 55 of the Listing Agreement with the Stock Exchange, describing the initiatives taken by Company from an environmental, social and governance perspective is not applicable to the Company, as per SEBI Circular CIR/CFD/DIL/8/2012 dated 13 August, 2012. V. There were no significant material orders passed by the Regulators / Courts during the financial year 2014-15 which would impact the going concern status of the Company and its future operations. VI. There were no significant material changes and commitments in terms of Section 134(3)(l) of the Companies Act, 2013, affecting the financial position of the Company. ACKNOWLEDGEMENT Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Central and State Governments, Financial Institutions, Banks, Customers, Dealers, Vendors and Employees of the Company. For and on behalf of the Board N. Goenka Chairman Place : New Delhi Date : 18th May, 2015 |