DIRECTORS REPORT Your Directors have pleasure in presenting the Annual Report together with Audited Accounts for the year ended 31 st March, 2015. DIVIDEND The Company has not declared dividend for the financial year 2014-15. RESERVES No amount is carried to any reserves during the period under review. OPERATIONS During the year under review the Company has achieved a higher turnover of Rs. 24,91,73,023/- as against Rs. 24,82,28,591 /- in the previous year. The net profit of the company is Rs. 64,22,479/-as against net profit of Rs. 51 ,66,304/- in the previous year. There was an increase in net profit by 24.31 % which was mainly due to increase in other income. FUTURE PROSPECTS The year 2014-15 has seen downfall in some of the areas of the Indian economy. One of the major features of the fiscal year was the unfavorable market condition. However, the company expects good performance even after stiff competition with big players. The Company is still hopeful to expect better performance in new products recently launched by company. DEPOSITS The Company has not accepted any deposits during the year under review or in earlier years. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BYTHE COMPANY: Details of loans, guarantees and investments, if any, covered under the provisions of section 186 of the Companies act, 2013 are given in the notes to the financial statements. SIGNIFICANT AND MATERIAL ORDERS No significant or material order has been passed by the Regulators /Courts or Tribunals which can impact the going concern status and Company's operation in future. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There were no material changes occurred subsequent to the close of financial year of the company to which the balance sheet relates and the date of the report which can affect the financial position of the Company. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134 (3) (c) of the Companies Act, 2013, your Directors state that: 1.In preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; 2.They 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 31st march ,2105 and of the profit or loss of the Company for that period; 3.They have taken proper and sufficient care for the maintenance of proper accounting records in accordance with the provisions of the companies Act, 2013 and rules made thereunder for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4.They have prepared the annual accounts for the financial year ended 31st March, 2015 on a going concern basis. 5.They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. 6.The directors had devised proper and systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT The Board has appointed M/s Mahendra Khandelwal & Company, Company Secretaries in Whole-time Practice, to carry out Secretarial Audit of the Company under the provisions of Section 204 of the Companies Act 2013. The Report of Secretarial Auditor is annexed with this report as Annexure-lll. RELATED PARTY TRANSACTIONS: ALL the related party transactions that were entered in to during the financial year were on an arm's length basis and were in the ordinary course of business. There are no material / significant related party transaction made by the Company which has a potential conflict with the interest of the Company at large and disclosure in form AOC-2 is given as required. The Board has framed a policy on related party transaction. HUMAN RESOURCES Company values its Human Resources the most. To keep their morale high, company extends several welfare benefits to the employees and their families by way of comprehensive medical care, education, housing and social security. EXTRACTS OF AN N UAL RETU RN: Extracts of annual return is annexed to this report as Annexure-I CORPORATE SOCIAL RESPONSIBILITY The Provisions of Companies Act, 2013 relating to corporate social responsibility does not apply to the company. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The company has zero tolerance for sexual harassment at work places and has in place a policy on prevention , prohibition and redressal of sexual harassment at work place in the line of provisions of Sexual Harassment of women at work place (Prevention , prohibition and redressal), Act, 2013and the rules framed there under. At present company has no women worker in service. DOCUMENTS PLACED ON THE WEBSITE (www.conpetco.com) The following documents have been placed on the website in compliance with theAct: Financial statements of the Company.Code of conduct for insidertrading and corporate disclosure practices. Shareholding patterns. Annual Reports. DIRECTORS Smt. Radhika Khandelwal, Director of the Company, is retiring by rotation at ensuing Annual General meeting and being eligible, offers herself for reappointment. The company has independent Directors on the Board and also one women Director as per requirement of Companies Act, 2013. APPOINTMENT, REMUNERATION AND EVALUATION OF DIRECTORS The Board has based on recommendations of the Nomination and Remuneration committee laid down following policies: (i) Appointment and removal of Directors, KMP and Senior Management; •The NRC will have the responsibility and authority to decide the essential and desirable skills/competencies/Experience/criteria of independence required from the individuals for the office of director, KMP and senior management Personnel. The experience required from Directors, KMP and Senior Management personnel. •The NRC will review the criteria for the role and define the role specifications for the appointment. •The NRC shall review the criteria for the role and define the role specifications for appointment. •In case of directors and KMP, in addition to above specifications the NRC shall ensure that the candidate possesses the requisite qualifications and attributes as per Applicable laws. 8- CONTINENTAL PETROLEUMS LIMITED- (i)Identifying candidates who are qualified to become Directors , KMP and senior Management personnel: The NRC may assign the responsibility of identifying the candidates for the final interview by the NRC to the following; a)To the Managing Director / whole time Director and Chairman of NRC in case of selection of directors and b)To the Managing Director/ whole time Director in case of selection of KMP and Senior Managerial Personnel. c)The NRC shall identify members of the Board who will interview the candidate recommended to the NRC as above. d)Upon selection of the candidate, the NRC shall make a recommendation to the Board for appointment of Director/KMP/Senior Management Personnel. e)The appointment of directors and KMP shall be subject to the compliance of the Act, Clause 49 of listing agreement and Articles of Association. (ii)Selection of independent Directors: Considering the requirement of skill sets on the Board, eminent people having an independent standing in their respective field and who can effectively contribute to the Company's business and policy decisions are considered by NRC for appointment, as an independent Directors on the Board. The committee inter alia, considers qualification, positive attributes, area of experience and number of directorship held in other Companies by such person in accordance with the Company's policy for selection of Directors and determining Director1 independence. The Board considers the committee's recommendation, and takes appropriate decision. Every Independent Director at the first meeting of the Board in which he participates as Director and thereafter at the first meeting Board in every financial year, gives a declaration that he meets the criteria of independence as provided in the law. (iii)Term of appointment: •The term of appointment of Directors shall be governed by provisions of the Act and clause 49 of listing agreement. •The term of KMP (other than the MD) and Senior management personnel shall be governed by the prevailing policy of the company. (iv)Removal of Director, KMP and Senior Management Personnel: •Removal of Director, KMP and Senior Management personnel may be warranted due to reasons such as disqualification prescribed under applicable laws and /or disciplinary reasons. (v)Remuneration of Director, KMP and Senior Managerial Personnel: •The remuneration payable to managing Director shall be determined by the NRC and recommended to the Board for approval. Such remuneration is further subject to approval of shareholders as per applicable provisions of the Act. •Remuneration payable to non Executive Directors: Only the sitting fee will be paid to Non Executive Directors which shall be determined by NRC. •Remuneration to KMP and Senior Managerial personnel: The NRC will approve policy for remuneration payable to KMP and senior Managerial personnel. The NRC will approve remuneration payable to KMP and Senior Managerial Personnel Which will finally be approved by Board. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS (i)Board is committed to assessing its own performance as Board is to identify its strength and areas in which it may improve its functioning. (ii)NRC is responsible for carrying out evaluation of every Director's performance and the NRC will frame criteria for the same. (iii)The evaluation of Board and Chairman will be reviewed by Independent Directors at their meeting. (iv)The directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Grievance Committee. (v)The Performance of the Board is evaluated by each individual Director as well as collectively by the Board on the Annual Basis towards the end of the Financial Year. (vi)The Board performance is evaluated on the basis of number of Board and Committee meetings attended by individual director, participation of director in the affairs of the company, duties performed by each director and targets achieved by company during the year. (vii)Performance of Independent Directors is evaluated based on objectivity and constructiveness while exercising duties, providing independent Judgment and risk management etc. DIVERSITY OF BOARD OF DIRECTORS NRC will ensure the diversity of Board of Directors is in order with the requirement of size of the Company. Further, NRC will ensure scope of work of Directors in the Company and portfolios which are going to be allocated to them shall be based on diverse experience of Directors. MEETINGS OF BOARD OF DIRECTORS: During the year under review four Board meetings were held ON 29.05.2014, 14.08.2014,15.11.2014 and 14.02.2015. The Company held four Board Meetings in the year as required under the Act and the gap between two Board meetings was in compliance with the provisions contained in the Companies Act 2013 and the Listing Agreement. COMMITTEES AT BOARD LEVEL In compliance with the Companies Act 2013 as on 31st March, 2015 the Board has three Committee viz. Audit Committee, Nomination and Remuneration Committee, Shareholders and Stake holders relationship Committee. The Committees have optimum combination of Executive, Non -Executive and/or Independent Directors. The Committees are constituted with specific terms of reference and scope to deal with specific matters expediently. The details of the committees constituted by the Board are given below: AUDIT COMMITTEE The Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013 at the Board level of Company acts as a link between the Independent Auditors, Internal Auditors, the Management and the Board of Directors and overseas the financial reporting process. The Audit committee interacts with the Internal Auditors, Independent Auditors, Secretarial Auditors and reviews and recommends their appointment and remuneration. The Audit Committee is provided with all necessary assistance and information for enabling them to carry out its function effectively. The terms of references of the Audit Committee are broadly as under: 1)Overseeing of the Company's financial reporting process and the disclosures of its financial information to ensure that the financial statements are correct, sufficient and credible. 2)Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. 3)Approval of payment to statutory auditors for any other services rendered by them. 4)Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: Changes, in accounting policies, significant adjustment made in the financial statements arising out of audit findings. •Disclosure of any related party transactions and qualifications in the draft audit report. •Compliance of listing agreement relating to financial statement. 5) Reviewing with the management the quarterly financial statements before submission to the board for approval. 6)Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control systems. 7)Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading department, reporting structure coverage and frequency of internal audit. 8)Discussion with internal auditors or any significant findings and follow up there on. 9)Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post- audit discussion to ascertain any area of concern. Composition and Attendance The Audit Committee pursuant to the provisions of Section 177 of the Companies Act, 2013 the Board comprises of three qualified Directors viz. Ram Nath Karol, Goverdhan Das Sethi and Radhika Khandelwal, with majority being independent. Ram Nath Karol is the Chairman .Two of the members are having experience in finance, law and business. During the year under review the Audit Committee met 4 times on 29.05.2014, 14.08.2014, 15.11.2014 and 14.02.2015, to deliberate on various matters. The Present Composition and Attendance of the Audit Committee is as follows: NOMINATION AND REMUNERATION COMMITTEE: In compliance of Section 178 of Companies Act, 2013 the Board renamed the Remuneration committee as "Nomination and Remuneration Committee. Your Board has re-constituted the Nomination and Remuneration Committee which now comprises of Goverdhan Das Sethi as Independent Director and Chairman, Ram Nath Karol and Radhika Khandelwal as Members. The terms of reference of the committee inter alia include Succession planning for Board of Directors and Senior Management Employees, identifying and selection of candidates for appointment of Directors/Independent Directors based on certain laid down criteria's, identifying potential individuals for appointment of Key Managerial personnel and other senior managerial position and review the performance of the Board of Directors and Senior Management personnel including Key managerial personnel based on certain criteria approved by the Board. While reviewing the performance, the committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents, remuneration commensurate with the performance of individual and group and also maintains a balance between fixed and incentive pay reflecting both short and long term objectives of the company. The Committee met on 29/05/2014 and reviewed the performance of the Directors both Non-Executive and Executive Directors and also the senior managerial personnel including Key Managerial personnel during the year. STAKE HOLDERS RELATIONSHIP COMMITTEE: Stakeholders Relationship Committee performs various functions provided under the Section 178 of the Companies Act, 2013. The Committee comprises of three members namely Ram Nath Karol (Chairman of the Committee), Goverdhan Das Sethi the independent Directors and Radhika Khandelwal. The Committee administers transfer and transmission of shares, Issue of duplicate certificates, change of status of members, change of name, transposition, sub-division of share certificates, consolidation of shares, dematerialization/ rematerialization of shares. Committee meets from time to time as per requirements of listing agreement. The committee facilitates prompt and effective redressal of investor complaints. Number of complaints received -Nil • Number of complaints not solved to the satisfaction of shareholders-NIL Number of pending share transfers-NIL As at 31st March, 2015 no shares were pending for transfer. DETAILS PERTAINING TO REMUNERATION 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) 2014: (i)The ratio of remuneration of each Director to the median remuneration of the employees of the company for the financial year2014-15 and (ii)The percentage increase in remuneration of each Director, Chief Financial Officer, CEO, Company Secretary or Manager, if any in the financial Year. REMUNERATION OF NON-EXECUTIVE/EXECUTIVE DIRECTORS (i)Details pertaining to remuneration 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) 2014: (ii)The ratio of remuneration of each Director to the median remuneration of the employees of the company for the financial year2014-15 and (iii)The percentage increase in remuneration of each Director, Chief Financial Officer, CEO, Company Secretary or Manager, if any in the financial Year. (i)The number of employees on the roll of the company are 16. (ii)The median remuneration of employees (MRE) of the Company is Rs.2.29 Lacs. The MRE forthe year is increased by 3.32 % compared to previous year. (iii)There is no variable component in remuneration of Directors of the Company. (iv)The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid directorduring the year- None. (v)It is hereby affirmed that the remuneration paid is as per the remuneration policy of the company. INDEPENDENT DIRECTORS MEETING During the year under reference one meeting of Independent directors was held on 28th January, 2015 in compliance with the requirement of Schedule IV of the Companies Act, 2013. At the said meeting performance of non-independent Directors, Board as a whole and Chairman of the Company was reviewed. PREVENTION OF INSIDERTRADING The Company has adopted a code of conduct for fair disclosure and prevention of insider trading in order to regulate and control trading in Petroleums by Directors and designated employees of the Company. The code requires pre-clearance for dealing in the Company shares and prohibits the purchase and sales of Company shares by Directors and designated employees while in possession or unpublished price sensitive information in relation to Company and during the period of closure of trading window, (i) Demat/Remat of shares (i) Disclosures a)There were no transactions of material nature with its related parties that may have the potential conflict with the interest of the company at large. Transactions with related parties are disclosed in Note No. 35 of the financial statements. b)There were no instances of non compliance nor have any penalties imposed by Stock Exchanges or SEBI or any other statutory authority on any matter related to capital market during the last here financial years. c)Managing Director of the company has certified to the Board with regard to the compliance made by them in terms of Clause 49 of the listing agreement and the certificate form part of this report. INTERNAL AUDITORS M/s Ajay Khandelwal & Associates were appointed internal Auditors of the Company for the year ended 31s' March, 2015 underthe provisions of Companies Act, 2013 .The Company proposes to continue their services for the year 2015-16. VIGIL MECHANISM In Accordance of Section 177 of the Companies Act, 2013 the Company has constituted a Whistle Blower policy/ Vigil Mechanism to establish a vigil mechanism for the Directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behavior, actual or suspected fraud or violation or violation of company's code of conduct. RISK MANAGEMENT Company has implemented an integrated risk management approach through which it reviews and assesses significant risk on a regular basis to ensure the there is a robust system of risk controls and mitigation in place. Senior management periodically reviews the risk management. The management however, of the view that no risk element is identified which in opinion of the board may threaten the existence of the company. INTERNAL CONTROL SYSTEM The Company has an internal control system commensurate with the size and complexity of operations. The Company has appointed M/S Ajay Khandelwal & Associates, Chartered accountants Jaipur as internal auditors of the Company. The Audit committee has also taken effective steps to review internal control system from time to time. AUDITORS M/s R.R Khandelwal & Associates, Jaipur, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re- appointment. DECLARATION BY INDEPENDENT DIRECTORS: The Company has obtained a declaration from independent Directors that the said independent Director meets the criteria of independence as mentioned in Section 149 (6), of the Companies Act,2013. REPRESENTATION ON OBSERVATION OF SECRETARIAL AUDITOR There were four observations found by the Secretarial Auditor during his audit for the financial year 2014-15, which areas under:- 1.315000 shares are pending for listing under BSE. 2.No Company Secretary and Chief Financial Officerappointed. 3.Website not showing result of current period. 4.MGT-14 relating to Unaudited Results in F.Y. 2014-15for Quarter ending 30.06.2014,30.09.2014 was notfiled. The Board of Directors would like to express their incapability to meet the above compliance as under: - 1.The Company has already made application and reminder mails for listing of 315000 shares on BSE but does not take any initiative action by it. 2.The Board of Directors have already started recruitment process for appointment of Company Secretary and Chief Financial Officer but still not able to find any suitable candidates for these posts. But assure that it will not create adverse impact on the company as well as shareholders and company will appoint them shortly. 3.The Board of Directors have already appointed IT Technician and updated the website but due to some problem website had not been updated on that time but now information are updated and available on website. 4.The Board of Directors had lack of knowledge in First and Second Quarter of Financial Year of New Companies Act, 2013 and its Rules, Regulations, Notification, Circulars and compliances relating to Registrar of Companies, due to that the forms was not filed for that period but now everything is lined up and is up to date. The Board of Directors would also like to assure its shareholders that the above non-compliances by the company would not have any adverse effects on the shareholders and their shareholding and the company will take care that such above non-compliances should not happen in future. TECHNOLOGY ABSORPTION The Research and Development Department of the Company is dedicated to develop environment- friendly processes and introduces new formulations for lubricants from time to time. FORIGN EXCHANGE During the year under review the income in foreign exchange was Rs.5,24,104.00 and the out go on purchase of lubricants was Rs.3,34,46,295.00 ACKNOWLEDGMENT The Board would like to place on record its sincere appreciation to all the employees fortheir continued efforts towards the growth of the company. The Board also wishes to place on record the support extended by its Bankers and the trust reposed in it by its shareholders. For and on behalf of the Board of Directors, M. L .KHANDELWAL Chairman DATE: 30th May, 2015 PLACE: JAIPUR |