DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 27th Annual Report of your Company along with the Audited Accounts for the financial year ended March 31, 2015. RESULTS OF OPERATIONS Net sales and other income for the standalone entity increased to Rs.140,153 lacs from Rs. 103,609 lacs in the previous year - a increase of 35.27%. The operating profit (PBDIT) witnessed an increase of 79.06 % from Rs.8,368 lacs in 2013-14 to Rs. 14,984 lacs in 2014-15. The profit after tax (PAT) showed an increase of 502 % at Rs. 5,356 lacs from Rs. 890 lacs in the previous year. DIVIDEND For the year under review, the Directors have recommended a dividend of Rs. 1.50 (i.e. 30%) per share (Face Value Rs. 5) [T1.00 (i.e. 20%) per share for the previous year (Face Value Rs.5)j, on the Ordinary (Equity) Shares of the Company. The dividend payout is subject to approval of shareholders at the ensuing Annual General Meeting. TRANSFER TO RESERVES An amount of Rs. 536 lacs is proposed to be transferred to the General Reserve. EXTRACT OF ANNUAL RETURN An extract of Annual Return in Form MGT-9 as required under the provisions of Section 134(3)(a) read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is set out in Annexure 'A' to this report. SUBSIDIARY COMPANIES The Company is having 3 subsidiary companies falling under the purview of Section 2(87) of the Companies Act, 2013. In accordance with Rule 8(1) of the Companies (Accounts) Rules, 2014, a report on their performance and financial position is presented herein below: In accordance with proviso to Section 129(3) read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the Company and forms part of this Annual Report. Pursuant to the Scheme of Arrangement ("the Scheme") under Sections 391 to 394 of the Companies Act, 1956, the Hon'ble High Court of Bombay pronounced an Order on 20th March, 2015, the Real Estate Business, defined as Undertaking 2 in the Scheme, of the Company, shall be transferred and vested into Man Infraprojects Limited ("MIPL") and Undertaking 1 defined in the Scheme as business division of MIPL shall be transferred and vested in the Company, with effect from the Appointed Date, 1st April, 2013. As per the Scheme, the Company is required to record in its books all the assets and liabilities pertaining business division as appearing in the books of MIPL as on the Appointed Date at their respective fair values. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of the Company and its subsidiaries for the financial year ended March 31, 2015, prepared in accordance with the Companies Act, 2013 and Accounting Standards AS- 21 on consolidated financial statements form part of this Annual Report and same shall also be laid in the ensuing Annual General Meeting in accordance with the provisions of Section 129(3) of the Companies Act, 2013. In accordance with the provisions of Section 136 of the Companies Act, 2013, the standalone and consolidated financial statements of the Company along with the documents required to be attached thereto and separate audited financial statements in respect of its subsidiary companies are available on its website i.e. www.mangroup.com and are also available for inspection at its Registered Office. DIRECTORS Mr. Rameshchandra Mansukhani (DIN 00012033), Director is liable to retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. During the year under review, Ms. Heena Vinay Kalantri (DIN 00149407) was appointed as an additional Director on the Board of the Company with effect from March 30, 2015. Company has received notice under section 160 of the Companies Act, 2013 from a member for the appointment of Ms. Heena Vinay Kalantri as a Director on the Board of the Company. Appropriate resolutions for the re-appointments/ appointments of the Directors are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information has been given in the notice convening the Annual General Meeting. Your Directors recommend their re-appointment/ appointment. Mr. Kirit N Damania, Mr. Dhananjay Datar and Mr. Pramod Tandon act as Independent Directors and they have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD EVALUATION Clause 49 of the Listing Agreement mandates that board shall monitor and review board evaluation framework, The Companies Act, 2013 states formal evaluation needs to be made by the board of its own performance and that of its committees and individual directors. Further Schedule IV of the Companies Act, 2013 states that the performance evaluation of independent directors shall be done by entire Board of Directors, excluding director being evaluated. The evaluation of all the directors and the board as a whole was conducted based on the criteria adopted by the board. The evaluations for the Directors and the Board were done through circulation of questionnaires which assessed the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The evaluation criterion for the Directors was based on their participation, contribution and offering guidance to and understanding of the areas which are relevant to them in their capacity as members of the Board. NUMBER OF MEETINGS OF THE BOARD The details of the number of meetings of the Board of Directors held during the financial year 2014-15 are furnished as a part of the Corporate Governance Report. COMPOSITION OF AUDIT COMMITTEE The Audit Committee comprises of Mr. Kirit Damania, Mr. Pramod Tandon and Mr. Dhananjay Datar, Independent Directors of the Company. Mr. Kirit Damania is the Chairman of the Committee and Company Secretary is the Secretary to the Committee. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board of Directors. REMUNERATION POLICY The Board, has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, Senior Management and their remuneration pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Remuneration Policy is stated in the Corporate Governance Report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to requirements of Section 134(3)(c) of the Companies Act, 2013, the Directors state that: a. 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; 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; 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year under review were on arm's length basis and were in the ordinary course of business. In compliance with the terms of the 'Policy on Related Party Transactions', no contracts, arrangements or transactions were entered into by the Company with the Promoters, Key Managerial Personnel or other designated persons which would be considered materially significant and which may have potential conflict of interest with the company at large. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board can be accessed at the weblink: <http://www.mangroup.com/Policy%20on%20Related%20Party%20Transactions.pdf> PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments are given in the notes to the Financial Statements. VIGIL MECHANISM In accordance with the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Company has adopted a Whistle Blower Policy to provide a mechanism to its directors, employees and other stakeholders to raise concerns about any violation of legal or regulatory requirements, misrepresentation of any financial statement and to report actual or suspected fraud or violation of the Code of Conduct of the Company. The Policy allows the whistleblower to have direct access to the Chairman of the Audit Committee in exceptional circumstances and also protects them from any kind of discrimination or harassment. The Whistle Blower Policy of the Company can be accessed at the weblink: <http://www.mangroup.com/Vigil%20Mechanism.pdf> MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report containing the details as required under Clause 49 (VIII)(D)(1) of the Listing Agreement is annexed hereto and forms an integral part of this Report. CORPORATE GOVERNANCE REPORT A Separate Report on Corporate Governance along with a certificate from the Statutory Auditors of the Company confirming the compliance of the conditions of corporate governance by the Company as required under Clause 49 of the Listing Agreement is annexed hereto and forms an integral part of this Report. FIXED DEPOSITS The Company has not accepted any deposits from public and as such, no amount on account of principal or interests on deposits from public was outstanding as on the date of the balance sheet. CORPORATE SOCIAL RESPONSIBILITY As part of its initiatives under “Corporate Social Responsibility” (CSR), the company has contributed funds for the schemes of promoting preventive health care including preventive health care and sanitation. Self driven initiatives were directly undertaken by the Company to locate the areas and localities in and around Anjar, where the company has manufacturing base, to educate the local inhabitants (villagers) about preventive health care management and thereafter providing them with lavatory facilities. Further the Company is in the process getting itself connected with some registered trust which is undertaking the CSR activities, in order to ensure that the Company’s contribution is utilized optimally for the cause. The Annual Report on the CSR activities as required under Section 134(3)(o) of the Companies Act, 2013 read with Rule 8 of the Companies (CSR Policy) Rules, 2014 is set out in Annexure ‘B’ to this Report and is also accessible on Company’s website at weblink: http://www.mangroup.com/CSR%20Policy.pdf RISK MANAGEMENT The Company has been following the processes and procedures for assessment and mitigation of various business risks associated with the nature of it’s operations and such adaptation has helped the Company to a very large extent. The operational responsibility for the effective implementation and monitoring of its operating procedures vis-à-vis the associated business risks, is with Audit Committee which recommends its suggestions, if any, to the Board of Directors. The ultimate responsibility for framing, implementing and monitoring the risk management plan for the Company lies on the Board of Directors. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The Board of Directors has laid down standards, processes and procedures for implementing the internal financial controls across the organization. After considering the framework of existing internal financial controls and compliance systems; work performed by the Internal, Statutory and Secretarial Auditors and External Consultants; reviews performed by the Management and relevant Board Committees including the Audit Committee, the Board of Directors is of the opinion that the Company’s internal financial controls with reference to the financial statements were adequate and effective during the financial year 2014-15. AUDITORS Statutory Auditors and Statutory Audit Report In accordance with the provisions of Section 139 of the Companies Act, 2013 read with Rule 3 of the Companies (Audit and Auditors) Rules, 2014, M/s. Rohira Mehta and Associates, Chartered Accountants were appointed as Statutory Auditors of the Company in the 26th Annual General Meeting (said AGM) held on September 26, 2014 to hold office from the conclusion of the said AGM till the conclusion of third Annual General Meeting to be held after the said AGM of the Company, subject to ratification of their appointment by the Members at every Annual General Meeting held after the said AGM. Accordingly, a proposal seeking Members' ratification for the re-appointment of M/s. Rohira Mehta and Associates, Chartered Accountants, as the Statutory Auditors of the Company and for fixing their remuneration for the remaining tenure forms part of the Notice convening the ensuing Annual General Meeting. Pursuant to the provisions of Sections 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014, the Company has received consent from them to the effect that their re-appointment, if made, will be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. As required under Clause 41 of the Listing Agreement, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Audit Committee and Board of Directors have reviewed their eligibility criteria as laid down under Section 141 of the Companies Act, 2013 and recommended the ratification of their re-appointment as Statutory Auditors for the remaining tenure. No frauds have been reported by the Statutory Auditors during the financial year 2014-15 pursuant to the provisions of Section 143(12) of the Companies Act, 2013. The Board of Directors refer to the Auditor's qualification in the Auditor's Report and as required under Section 134(3)(f) of the Companies Act, 2013, provides its explanation as under: Interest has been provided for the period post approval of the scheme by the Hon'ble Bombay High Court. Cost Auditors and Cost Audit Report In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Rule 14(a) of the Companies (Audit and Auditors) Rules, 2014, the Board of Directors, has on the recommendation of the Audit Committee, appointed M/s. ABK & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2015-16 at a remuneration of Rs. 75,000/- (Rupees Seventy Five Thousand Only) plus service tax and reimbursement of out of pocket expenses for conducting the Cost Audit subject to ratification of such remuneration by the Members in the ensuing Annual General Meeting. Accordingly, a resolution seeking Members' ratification for the remuneration payable to the Cost Auditors forms part of the Notice convening the ensuing Annual General Meeting. The Company has filed the Cost Audit Report for the financial year ended March 31, 2014 on September 26, 2014. The Cost Audit Report for the financial year ended March 31, 2015 shall be filed in due course. Secretarial Auditors and Secretarial Audit Report In accordance with the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. Rishikesh Vyas & Associates, Practising Company Secretaries as Secretarial Auditors of the Company for the financial year 2015-16. Management's reply towards qualification in Secretarial Auditors' Report The Company has Whole-time Key Managerial Personnel (KMP) in the form of Chief Financial Officer during the financial year under the review. However, the Company has not filed the relevant e-form intimating the designation of CFO as KMP with the Registrar of Companies. * The Company has initiated the necessary steps to comply with the requirements in respect thereof. As per the disclosures made in Limited Review Report issued for quarter ended June, 2014, September 2014 and December 2014. Company has not complied AS-9 & AS-21 of the Accounting Standards issued by ICAI. Interest has been provided for the period post approval of the scheme by the Hon'ble Bombay High Court. * The Company has opted for consolidation on annual basis. The Secretarial Audit Report for the financial year ended March 31, 2015 is set out in Annexure 'C' to this Report. Internal Auditor and Internal Audit Report In Compliance with the provisions of Section 138(1) of the Companies Act, 2013, Mr. Rajesh Namboodiripad, Chartered Accountant was appointed as an Internal Auditor of the Company. The Audit Committee reviews the observations made by the Internal Auditor in his report on quarterly basis and makes necessary recommendations to the management. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Particulars of employees and related disclosures as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in Annexure 'D' and 'E' to this Report. DETAILS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Details with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are set out in Annexure 'F' to this Report. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT, 2013 The Company is committed to provide a healthy environment to all its employees and has zero tolerance for sexual harassment at workplace. In order to prohibit, prevent and redress complaints of sexual harassment at workplace, it has constituted a Complaint Committee in line with the provisions of Section 4(1) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has not received any complaint of Sexual harassment during the financial year 2014-15. RESIDUARY DISCLOSURES i. During the financial year 2014-15, the Company has not issued equity shares with differential rights as to dividend, voting or otherwise. Hence, disclosure under Rule 4(3) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable; ii. During the financial year 2014-15, the Company has not issued sweat equity shares to its employees. Hence, disclosure under Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 is not applicable; iii. During the financial year 2014-15, the Company has not issued shares under Employees Stock Option Scheme: iv. During the financial year 2014-15, no significant material orders have been passed by any regulators or courts or tribunals which may impact the going concern status of the Company and its future operations. Hence, disclosure under Rule 8(5)(vii) of the Companies (Accounts) Rules, 2014 is not applicable; v. During the financial year 2014-15, there have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report. Hence, disclosure under the provisions of Section 134(3)(I) of the Companies Act, 2013 is not applicable; vi. During the financial year 2014-15, there has been no change in the nature of business of the Company. Hence, disclosure under Rule 8(5)(ii) of the Companies (Accounts) Rules, 2014 is not applicable; vii. During the financial year 2014-15, no Whole-Time Directors of the Company has received any commission from the Company nor have they received any remuneration or commission from the subsidiary of the Company; and viii. M/s. Man Infraprojects Limited ceased to be the subsidiary of the Company pursuant to the Scheme of Arrangement (demerger) between the Company and Man Infraprojects Limited and their respective shareholders and creditors, sanctioned by the Hon’ble High Court of Bombay vide its order dated March 20, 2015. The appointed date for the said Scheme of Arrangement was 1st Day of April, 2013. Certified copy of the Court order was filed with Registrar of Companies, Maharashtra on May 16, 2015. Step-down subsidiary i.e. M/s. Merino Shelters Private Limited is now 100% wholly owned subsidiary of the Company, GENERAL Safety, Health and Environment During the year, the Company continued to focus on resource conservation and reduction in generation of hazardous wastes and enhanced its efforts to positively impact the environment in which it operates. All the manufacturing facilities and processes are subject to regular inspections and a Safety Audit is carried out meticulously at Anjar plant and preventive measures are taken to ensure high standards of safety. Your Company has taken adequate insurance cover for all its plants as well as for third party liabilities and continues to work towards the improvement of our environment, healthy and safe management system. Human Resources and Industrial Relations In your Company, employees continue to be the key driving force of the organization and remain a strong source of our competitive advantage. We believe in aligning business priorities with the aspirations of employees leading to the development of an empowered and responsive human capital. Attracting, retaining and motivating employees and creating an environment that nurtures them to deliver their best have been a constant practice followed by your Company. Your Company continues to invest in training, refining its goal setting and performance evaluation processes through which employees can share best practices and seek support to drive change and improvement. Research & Development Your Company is executing an integrated strategy for technology development and deployment. The technology function is supporting your Company's strategy around four missions: technology development, development of substantially new products, productivity improvement, and cost reductions. Listing & Demat of Shares The equity shares of the Company are listed with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). As on March 31, 2015 out of total 5,71,03,055 equity shares of the Company, 5,56,23,187 equity shares representing 97.41% were held in dematerialized form and the balance 2.59% representing 14,79,868 shares were held in physical form. Insurance All the insurable interests of your Company including inventories, buildings, plant and machinery and liabilities under legislative enactments are adequately insured. Transfer of unpaid / unclaimed amount to Investor Education and Protection Fund During the year under review, the Company had transferred Rs. 9,95,214/- to investor education and protection fund in relation to unclaimed and unpaid dividend amount for the dividend for the financial year 2006-07. ACKNOWLEDGEMENTS The Directors wish to acknowledge and place on record their sincere appreciation for the assistance and co-operation received from all the members, regulatory authorities, customers, financial institutions, bankers, lenders, vendors and other business associates. The Directors also recognize and appreciate all the employees for their commitment, commendable efforts, team work, professionalism and continued contribution to the growth of the Company. For and on behalf of the Board R. C. Mansukhani Chairman Place : Mumbai Date : August 28, 2015 |