DIRECTORS’ REPORT FOR THE FINANCIAL YEAR 2015-2016 To, The Members, Your Directors are pleased to present the Company’s 68th Annual Report on the business and operation of the Company together with the Audited Statements of Accounts of the Company for the year ended on 31st March, 2016. 2. DIVIDEND: In view of the losses, your Directors do not recommend dividend for the period under review. 3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND: The Company has transferred unclaimed dividend of the Financial year 2007-08 amounting to Rs. 2,29,561/ - in to Investor Education and Protection Fund during the period under review. 4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS: In spite of best efforts, the performance of the Company in terms of revenue and profit had de-accelerated, both in personal care products and trading division. While in the short period, it may be difficult to have a quick turnaround; nonetheless efforts shall be made to realign work systems to ensure sustenance, with thrust to strive ahead in the current financial years. Your Company’s initiatives in the area of sustainability, vision and its growth path into the future, leveraging its corporate strategy of creating multiple drivers of growth is slowly bearing fruit. The order booking for the current year is encouraging when viewed against the backdrop of the extremely challenging business context in which it was achieved, namely, the continued economic slowdown, steep increase in taxes/duties, gestation costs relating to the new FMCG businesses and other investments. One of the sectors that have been affected in the past years is FMCG, which is the fourth largest sector in the Indian economy. Overall, the FMCG sector is witnessing a slowdown, depreciating rupee has escalated raw material prices and this, in turn, has led the FMCG companies to make their endeavor to balance both. Company acquired an alcohol license at its plant in Pondicherry as well and has invested in doubling capacity of alcohol based products in the financial year 2014-15. Further the Company has significant increased the licensed capacity of Alcohol utilization from 1,20,000 litre per year to 4,20,000 litre per year spread across both Bangalore and Pondicherry Plants of the Company during the current financial year. This is to meet the growing demand of hand sanitizers, perfumes and other alcohol based products. 5. MATERIAL CHANGES AND COMMITMENT IF ANY 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 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 on the date of this report. 6. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION:- The Company has not carried any activities relating to the conservation of energy. The Company has not acquired any technologies during the year under review. 7. FOREIGN EXCHANGE EARNINGS / OUTGO:- Your Company has carried out following activities relating to the export and import during the financial year. There are following foreign exchange expenses and foreign income during the 8. REPORT ON CORPORATE GOVERNANCE : Your company is under exemption of compliance of Regulation 17, 18, 19, 20, 21,22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. Pursuant to regulation 34(3) read with Schedule V (C) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, therefore Report on Corporate Governance is not applicable. 9. REPORT ON MANAGEMENT DISCUSSION & ANALYSIS: A detailed Management Discussion and Analysis as required under regulation 34(3) read with Schedule V (B) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 is given in Annexure A, which forms part of this Board Report 10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES: Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company’s subsidiaries/associate company/joint venture in Form AOC-1 to be attached with this Report. Since your Company has one associate company within the meaning of the Companies Act, 2013 (“Act”).Form AOC – 1, is appended as Annexure B to the Board’s Report 11. PUBLIC DEPOSITS: The Company has not accepted any deposits from the public and accordingly no amount was outstanding as on the date of the Balance Sheet. 12. EXTRACT OF THE ANNUAL RETURN: As required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in Form No. MGT 9, as at the financial year ended 31st March, 2016, is given in Annexure C, which forms part of this Board Report. 13. NUMBER OF MEETINGS OF THE BOARD: The Board of Directors met four times during the financial year 2015-2016 in compliance with the provisions of the Companies Act, 2013. The intervening gap between any two meetings was within the period of 120 days as prescribed by the Companies Act, 2013. 14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review except investment of Rs. 40,00,000/- made in M/s. 1908 e-ventures Pvt. Ltd. which represents 38% of the total shareholding of investee company as on 31st March, 2016. 15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES: Particulars of contracts or arrangements with related parties referred to Section 188 of the Companies Act, 2013, in the prescribed form AOC – 2, is appended as Annexure D to the Board’s Report. 16. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: There are no qualifications, reservations or adverse remarks made by the Auditors in their report. 17. COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES: The policy of the Company on Directors’ Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided in Section 178(3) of the Companies Act, 2013, adopted by the Board has been posted on its website. 18. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement: (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. 19. DIRECTORS AND KEY MANAGERIAL PERSONNEL: In accordance with the provisions of Article 49 of the Articles of Association of the Company, Mrs.Ninotchka Malkani Nagpal, Director of the Company, retire by rotation at the forth coming Annual General Meeting and being eligible seeks re- appointment. The Board of Directors at its Meeting held on 9th February, 2016 has re-appointed Mr. Deep A Lalvani as the Whole Time Director and Chief Financial Officer of the Company for a further period of five years effective from 1st February, 2016. The Board recommends his re-appointment to the Members of the Company. A Resolution in this regard is contained in the Notice of the Annual General Meeting. The following persons were designated as Key Managerial Personnel during the financial year 2015-2016: 1. Deep A Lalvani, Whole Time Director and Chief Financial Officer 2. Gaurav Kumar Jain, Company Secretary and Compliance Officer. 20. DECLARATION OF INDEPENDENT DIRECTORS: The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulation, 2015. 21. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENT: The Company has an Internal Control Sysytem, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. During the year under review, such controls were tested and no reportable material weakness in the design or operation was observed. 22. AUDITORS AND AUDITORS’ REPORT: Statutory Auditors: At the Annual General Meeting held on 26th August, 2015, M/s. Amarnath Kamath and Associates, Chartered Accountants [Firm registration No.000099S], were re-appointed as the Statutory Auditors of the Company to hold office until the conclusion of the 70th Annual General Meeting to be held in the year 2018. In terms of the provision of Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly the re-appointment of Amarnath Kamath and Associates, as Statutory Auditors of the Company, is placed for ratification by the Shareholders’. Your Company has received a written confirmation from the Statutory Auditors to the effect that their reappointment as the Auditors of the Company, if made, will be as per the requirements laid down under Section 139 and 141 of the Companies Act, 2013 read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for re-appointment. The observations of the Auditors and the relevant notes to the financial statement are self-explanatory and therefore do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark. Further, during the year, in the course of the performance of their duties as Auditor, no fraud was reported by them for which they have reason to believe that an offence involving fraud has been committed against the Company by officers or employees of the Company. Report on Frauds, if any: During the year under review, no incidence of any fraud has occurred in the Company. Neither the Audit Committee of the Board, nor the Board of the Company had received any report involving any fraud, from the Statutory Auditors of the Company. As such, there is nothing to report by the Board, as required under Section 134 (3) (ca) of the Companies Act, 2013. Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, Ms. Snehal Amol Phirange, Practicing Company Secretary (FCS 8103; C P No. 8064), Pune, was appointed to conduct a secretarial audit of the Company’s Secretarial and related records for the financial year ended 31 March, 2016. The Practicing Company Secretary has submitted her Report on the secretarial audit conducted by her which is given in Annexure E and forms part of this Board Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Auditors’ certificate on Corporate Governance: Your company is under exemption of compliance of Regulation 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. Pursuant to regulation 34(3) read with Schedule V (E) of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, therefore Auditors’ certificate on corporate governance is not applicable. CEO and CFO certification: As required by regulation 17(8) SEBI (Listing Obligations And Disclosure Requirements) Regulations 2015, the CEO and CFO certification as specified in Part B of Schedule II is not applicable. 23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE: The Audit Committee comprises Mr. Gaurav Lalwani, Mr. Navroze S.Marshall all of whom are Independent Directors and Deep A Lalvani as an Executive, Non- Independent Member. 24. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has established a vigil mechanism (which incorporates a whistle blower policy in terms of listing agreement) for directors and employees to report their genuine concerns. The Policy is also available on the Company’s website 25. POLICIES OF THE COMPANY Your Company has posted the following documents on its website 1. Materiality of event & information 2. Preservation of documents 3. Whistle Blower cum Vigil Mechanism. 4. Prevention of Sexual Harassment 5. Remuneration Committee 6. Nomination & Remuneration Policy 7. Archive Management Policy 8. Independent Director Appointment -T&C 9. Audit Committee Charter 10. Code of Conduct for Prevention of Insider Trading 11. Code of Practices and Procedures for fair disclosure 12. Stakeholders’ Relationship Committee 26. RISK MANAGEMENT POLICY: The Board regularly reviews the risk management strategy of the Company to ensure the effectiveness of implementation of the risk management policies and procedures. Your Directors do not foresee any elements of risk, which in its opinion, may threaten the existence of the Company. 27. 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. 28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.Your Directors have to report that, during the year under review, neither any complaints of sexual harassment were received by it from the ICC, nor were there any complaints relating thereto which required any disposal thereof. 29. CHANGES IN SHARE CAPITAL: Your company has converted 125500 Preferential warrants into 125500 Equity Shares during the period under review, consequently the Paid up Share Capital has increased from Rs. 2,73,86,780 to Rs. 2,86,41,780. 30. PERFORMANCE EVALUATION OF THE DIRECTORS ETC: The Nomination and Remuneration Committee has laid down the criteria for performance evaluation by the Board of its own performance and that of the various Committees of the Board and the individual Directors. The framework of performance evaluation of the Directors captures the following points: Key attributes of the Independent Directors that ustify his / her extension / continuation on the Board of the Company; Participation of the Directors in the Board proceedings and his / her effectiveness; The evaluation was carried out by means of the replies given / observations made by all the Directors on the set of questions developed by them which brought out the key attributes of the Directors, quality of interactions among them, adequacy and effectiveness of the various Committees of the Board and the performance of the Board. 31. INFORMATION FORMING PART OF THE DIRECTOR’S REPORT PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014: Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and also the Statement containing particulars of employees as required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 is provided in Annexure F forming part of this Report. 32. EMPLOYEE RELATIONS: Employee relations throughout the Company were harmonious. The Board wishes to place on record its sincere appreciation of the devoted efforts of all employees in advancing the Company’s vision and strategy to deliver good performance. 33. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS: No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future. 34. LISTING AGREEMENT: The company has entered into Listing Agreement with BSE Ltd. in compliance with SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. 35. ACKNOWLEDGEMENTS: Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. For and on behalf of the Board DEEP A LALVANI Chairman Mumbai 10th May, 2016 |