DIRECTORS' REPORT To, The Members, 1. Your Directors have pleasure in presenting their Twenty Eighth Annual Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended March 31, 2015. 2. Performance Review • Standalone Once again, sales are the highest ever. During the current financial year, your Company took various growth initiatives to improve its volumes which helped the Company in posting an impressive performance for the year. Sales turnover for the year was Rs.11640.56 Lacs against Rs.10370.96 Lacs in the previous year. The net profit for the year was Rs.947.83 Lacs compares to Rs.798.11 in the previous year. • Consolidated On the consolidated basis, Sales turnover of your Company for the year was Rs.12710.40 Lacs as against Rs.10646.07 Lacs in the previous year. The Consolidated Profit before Taxation and Minority was Rs.1316.49 Lacs against Rs.1035.99 Lacs in the previous year. The Consolidated Profit after Tax and Minority Interest was Rs.873.10 Lacs against Rs.772.27 Lacs in the previous year. 3. Dividend Your company has a consistent dividend policy of balancing the dual objective of appropriately rewarding shareholders through dividends and retaining capital to maintain a healthy capital adequacy ratio to support future growth. It has a consistent track record of moderate but steady increases and expansions in dividend declarations over its history. Considering the achievement of targets for the year and growth of the business, Directors are pleased to recommend dividend of 40% (Rs.4.00 per Equity Share of Rs.10/- each) on Equity Shares of Rs.10/- for the financial year ended March 31, 2015 subject to approval of shareholders at the ensuing Annual General Meeting. 4. Material Changes, Transaction and Commitment/Change in the nature of business, if any There is no change in the nature of the business of the Company for the year under review. During the year under review, no significant or material order was passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 5. Management Discussion and Analysis (MDA) MDA, for the year under review, is presented in a separate section, which forms part of the Annual Report 6. Share Capital During the year under review, 1,50,000 equity shares of the face value of Rs.10/- each were issued and allotted on conversion of preferential warrants allotted to Promoter Group company. Consequent thereto, total paid up equity share capital of the Company as on 31st March 2015 stands at Rs.4,65,80,000 divided into 46,58,000 equity shares of Rs.10/- each. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options or sweat equity. 7. Transfer to Reserves The Company proposes to transfer Rs.314.35 Lacs to the General Reserves. An amount of Rs.721.65 Lacs is proposed to be retained in the Statement of Profit and Loss of standalone financials. 8. Subsidiary companies As on 31st March, 2015, the Company has eight subsidiaries, including three subsidiaries overseas, two step down subsidiaries overseas. All the said subsidiaries of the Company remained operational during the year under review. There has been no material change in the nature of the business of the subsidiaries. Financials of subsidiaries are disclosed in the consolidated financial statements, which forms part of this Annual Report. Pursuant to sub-section (3) of section 129 of the Act and Rule 8(1) of the Companies (Accounts) Rules, 2014, the statement containing the salient feature of the financial statements of a Company's subsidiaries in Form AOC-1 is attached to the Accounts. Pursuant to the provisions of section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company. Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary. There were no companies which have ceased to be Company's subsidiaries, joint ventures or associate companies. 9. Directors and Key Managerial Personnel The Board of Directors of the Company is led by the Executive Chairman and comprises six other Directors as on 31st March 2015, including one Chairman and Managing Director, five Independent Directors and one Non-Executive Director (other than Independent Directors). During the year under review, the members, in their Annual General Meeting held on 24th September, 2014, approved the appointments of Mrs. Shetal Chirag Parekh as a non-executive Non-Independent Director who is liable to retire by rotation and of Mr. Shyam H. Mariwala, Mr. Pradeep H. Gohil, Mr. Jagdish R. Naik and Mr. Ajit Sanghvi as Independent Directors who are not liable to retire by rotation. During the year under review, Mr. Arjun S. Handa was appointed as Additional Director (Independent) on the Board with effect from February 10, 2015. We seek your confirmation for appointment of Mr. Arjun S. Handa as Independent Director for a term upto five consecutive years i.e. from September 25, 2015 to March 31, 2020, on non-rotational basis. Based on disclosures provided by him, he is not disqualified from being appointed as Directors as per section 164 of the Companies Act, 2013. All the Independent Directors of the Company have furnished declarations that they meet the criteria of independence as prescribed under the Companies Act, 2013 and Listing Agreement with Stock Exchanges. Mrs. Shetal Chirag Parekh, Non Executive Director, retires by rotation at the forthcoming Annual General Meeting, and being eligible offers herself for re-appointment. At the Board Meeting held on August 12,2014, Mr. Chirag A. Parekh, Chairman and Managing Director and Mr. Damodar Sejpal, Company Secretary were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Apart from this, there were no changes in the Directors or Key Managerial Personnel during the year under review. The brief resumes and other relevant documents of the Directors being appointed / re-appointed are given in the Explanatory Statement to the Notice convening the Annual General Meeting, for your perusal. a. Board meetings During the year, eight Board meetings were held, with gap between Meetings not exceeding the period prescribed under the Companies Act, 2013. Details of Board and Board committee meetings held during the year are given in the Corporate Governance Report which forms part of the Annual Report. Board meeting dates are finalised in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions. A detailed presentation is also made to apprise the Board of important developments in industry, segments, business operations, marketing, products etc. b. Independent Director's familiarization Programme As per requirements under the Listing Agreement, the Company undertook directors' familiarization programme for Independent Directors in order to familiarise them with business model, management structure, product portfolio, Industry overview, manufacturing operations, internal control system and processes, FOREX management, risk management framework, functioning of various divisions, HR Management, CSR activities etc. Details of such familiarization programme is placed on the Company's website at www.acrysilcorporateinfo.com (http://www.acrysilcorporateinfo.com/public/upload/pdf/9390 Familiarisation Programme for Independent directors.pdf). c. Evaluation of Board, Committees and Directors Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board. The manner in which the evaluation has been carried out has been detailed in the Corporate Governance Report which forms part of the Annual Report. d. Policy on appointment and remuneration of Directors The Board, on the recommendation of the Nomination & Remuneration Committee, formulated criteria for determining Qualifications, Positive Attributes and Independence of a Director as also a Policy for remuneration of Directors, Key managerial Personnel and senior management. The Board has formulated Nomination and Remuneration Policy and the same is uploaded on the Company's website at www.acrysilcorporateinfo.com (http://www.acrysilcorporateinfo.com/ public/ upload/ pdf/2328 Nomination %20&%20Remuneration %20Policy.pdf) 10. Auditors a. Statutory Auditors Your Company's statutory auditors, M/s. Sanghavi & Co., Chartered Accountants, Bhavnagar, retire at the conclusion of ensuing Annual General Meeting. Your Company has received a letter from them to the effect that their reappointment, if made, will be in accordance with the provisions of section 139 & 141 of the Act, and are eligible for re-appointment, holding peer review certificate. Audit Committee and the Board recommend their reappointment. The remarks as contained in the Auditor's Report read with Notes forming part of the accounts are self-explanatory. b. Cost Auditors Pursuant to Section 148 of the Act, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Kitchen Sinks under other manufacturing activity are required to be audited by cost auditors. The Board has on the recommendation of the Audit Committee, appointed M/s. S. K. Rajani & Co., Cost Accountants to audit the cost accounts of the Company for the financial year 2015-16 on a remuneration of Rs.60,000/-, subject to ratification by members. Accordingly, a resolution seeking Member's ratification for the remuneration payable to M/s. S. K. Rajani & Co., Cost Accountants is included at Item No. 6 of the Notice convening the Annual General Meeting. Your Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period. c. Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P.P.Shah & Company, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure VI". The Secretarial Audit Report is self explanatory in nature and do not require any further comments and explanations. 11. Internal Control System And Compliance Framework The Company has an Internal Control System, 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. The Company has appointed M/s. Pramod Shah & Associates as Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such system are adequate and operating effectively. 12. Audit committee The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 13. The Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 There has been no complaint related to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, during the year. 14. Risk Management and Policy on Risk Management Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. Major risks identified for the Company by the management are Currency fluctuation, Compliance, Regulatory changes, Manufacturing & Supply, Litigation, Information Technology and new capital investments return. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialise. The Board has formulated Policy on Risk Management and the same is uploaded on the Company's website at www.acrysilcorporateinfo.com (http://www.acrysilcorporateinfo.com/public/upload/pdf/1902risk-management-policy.pdf) 15. Vigil Mechanism The Company has set up vigil mechanism viz. Whistle Blower Policy to enable the employees and Directors to report genuine concerns and irregularities, if any in the Company, noticed by them. It is posted on the intranet of the Company. The same is reviewed by the Audit Committee from time to time. 16. Related party transactions and Policy on Related Party Transactions All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Details on Related Party Transactions in Form AOC - 2 has been enclosed as Annexure III. The Board has formulated Policy on Related Party Transactions and the same is uploaded on the Company's website at www.acrysilcorporateinfo.com (http://www.acrysilcorporateinfo.com/public/upload/pdf/5203related-party-transcation-policy.pdf). None of the Non-Executive Directors has any pecuniary relationship or transactions with the Company other than sitting fees and commission payable to them. 17. Managerial Remuneration and Particulars of Employees The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and statement of particulars of employees is annexed as Annexure IV. 18. Insurance The assets of the Company are adequately insured against the loss of fire, riot, earthquake, terrorism, loss of profits, etc. and other risks which are considered necessary by the management. In addition to this coverage, a statutory Public Liability Insurance Policy has been taken to cover the company for providing against the Public liability arising out of Industrial accidents for employees working in plants. 19. Loans, Guarantees Or Investments Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements. 20. Corporate Social Responsibility (CSR) Pursuant to the provisions of Section 135 of the Act, read with CSR Rules, the Company has constituted CSR committee and formulated CSR policy. During the year, the Company undertook several initiatives under the CSR program. The details of CSR policy and CSR activities undertaken during the year are annexed herewith as Annexure II. 21. Deposits Your Company has not accepted any deposits from the public falling within the purview of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014. 22. Extract of the Annual Return The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure I. 23. Directors' Responsibility Statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm: a. that in the preparation of the annual accounts for the year ended 31st March 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any; b . that the directors had selected 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 ended 31st March 2015 and of the profit of the Company for that period; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d . that the annual accounts/financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f. that 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. 24. Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo The information relating to Conservation of energy, technology absorption, foreign exchange earnings and outgo, pursuant to Section 134 of the Act, read with the Companies (Accounts) Rules, 2014 is given as Annexure VII and forms part of this report. 25. Corporate Governance As required by Clause 49 of the Listing Agreement, a separate Report on Corporate Governance forms part of the Annual Report. The report on Corporate Governance also contains certain disclosures required under the Companies Act, 2013. A certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement, forms part of this report 26. Human Resource Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building programs are conducted to enhance employee skills, motivation as also to foster team spirit. Company also conducts in-house training programs to develop leadership as well as technical/ functional capabilities in order to meet future talent requirements. Industrial relations were cordial throughout the year. 27. Disclosures under Section 134(3)(l) of the Companies Act, 2013 Except as disclosed elsewhere in this report, there have been no material changes and commitments which can affect the financial position of the Company occurred between the end of the financial year of the Company and date of this report. 28. Gratitude & Acknowledgments Your Directors place on record their earnest appreciation for the unstinted commitment, dedication, hard work and significant contribution made by employees across the globe in ensuring sustained growth of the Company. Your Directors also sincerely thanks all the stakeholders, business partners, government, other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, co-operation and support. For and on behalf of the Board of Directors Chirag A. Parekh (DIN: 00298807) Chairman & Managing Director Mumbai August 14, 2015 Registered Office:704, Centre Point, J. B. Nagar, Andheri-Kurla Road, Andheri (East), Mumbai - 400 059 (India) Phone: (022) 66711101, 66711105 • Fax: (022) 66711109 CIN: L26914MH1987PLC042283 www.acrysilcorporateinfo.com www.acrysil.com |