DIRECTORS REPORT TO THE MEMBERS Your Directors take pleasure in presenting the Twenty Third Annual Report and that of the Auditor's together with the audited Balance Sheet as at 31st March 2015 and the Profit/ Loss Account for the year ended on that date. PERFORMANCE: The Company has earned a total income of Rs.5139.46 Lakhs during the 2014-15 and earned a profit before tax of Rs.48.54 Lakhs. The total profit after tax in 2014-15 is Rs.27.93 Lakhs compared to Rs.353.81 Lakhs in 2013-14 During the year the Company has received insurance claim settlement amounting to Rs.42,29,575/- for Nagelkeni Unit and Rs.7,08,013/- for Uthiramerur Unit for damages caused by strong winds and rainfall. DIVIDEND: Your Directors of the Company, decided to plough back the profit for the year and hence do not recommend any dividend for the year. The company has not transferred any amount to the general reserve. SHARE CAPITAL: The Company during the year under review has not issued any Sweat Equity Shares or Shares with Differential Rights or under Employee Stock Option Scheme nor did it Buy Back any shares. The Authorised Capital remained the same as previous year and the company has received an amount of Rs. 23,80,167/- towards the calls in arrears and the Paid Up capital as on 31st March, 2015 is Rs. 3,63,70,500/-. DEPOSITS: The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013 LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: The Company has not provided loans and guarantees and nor made investments pursuant to Section 186 of the Companies Act, 2013. DIRECTORS & KEY MANAGERIAL PERSONNEL: The Board of the Company comprises of Five Directors out of which Four are Independent Directors and One is Whole Time Director. As per Section 149 of the Companies Act, 2013 the Company needs to have atleast two Independent Directors and One Woman Director. Accordingly Shri. N Meenakshi Sundaram, Shri. S. Jambunath and Shri. P S Nathan were appointed as Independent Directors of the Company in the 22nd Annual General Meeting of the Company held on 18th September, 2014 for a period of 2 years. Appointment / Re-Appointment: In order to comply with provisions of Section 149 and Clause 49 of the Listing Agreement, the Board of Directors at their meeting held on 27th April, 2015 and based on the recommendation of the Nomination and Remuneration Committee, appointed Smt. Jayamalini as Independent Woman Director of the Company with effect from 27th April, 2015. In terms of recommendation, by Nomination and Remuneration Committee and approval of the Board of Directors on 31st July, 2015, Shri. RM. Lakshmanan, Whole-Time Director of the Company is to be re-appointed as Whole Time Director for a period of five years from 01st April, 2015 to 31st March, 2020. We seek your approval for appointment & re-appointment of Smt. Jayamalini as Independent Director and Shri. RM Lakshmanan as Whole-Time Director of the Company. Resignation: Shri. AR. Ramanathan, Managing Director of the Company, resigned from the Board with effect from 01st September, 2014. The board expresses its sincere appreciation for the contribution made by him during his tenure as Managing Director of the Company. Key Managerial Personnel: In order to comply with the provisions of Section 203 of Companies Act, Shri. RM Lakshmanan, Whole Time Director of the Company was designated as Key Managerial Personnel and Shri. M Nagendra was appointed as Chief Financial Officer (CFO) with effect from 10th November, 2014. BOARD MEETINGS: Five Board Meetings were held during the year under review and the gap between two Board meetings were not more than 120 days. DECLARATION RECEIVED FROM INDEPENDENT DIRECTOR ON ANNUAL BASIS: As required under Section 149(7) all the Independent Directors of the Company have submitted their annual declaration stating that they meet the criteria of independence as stated Section 149(6) of the Companies Act, 2013. COMMITTEES OF THE BOARD: a) Audit Committee Pursuant to provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the terms of reference of Audit Committee of the Board was revised in accordance with terms of reference prescribed therein. Detailed disclosure on compositions, terms of reference and meetings of the Audit Committee are furnished in the Corporate Governance Report. b) Nomination and Remuneration Committee The Nomination and Remuneration Committee has been empowered and authorized to exercise powers as entrusted under the provisions of Section 178 of the Companies Act, 2013. In compliance with Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration and including criteria for determining qualifications, positive attributes, independence of Directors and other matters. The terms of reference of the Committee inter alia, include the following: • Succession planning of the Board of Directors and Senior Management Employees; • Identifying and selecting candidates for appointment as Directors / Independent Directors based on certain laid down criteria; • Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions; • Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their remuneration; • Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and Senior Management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and that the remuneration involves a balance between fixed and incentive pay reflecting short term and long term objectives of the Company. DIRECTOR'S RESPONSIBILITY STATEMENT: To the best of their knowledge, belief and according to the informations and explanations obtained by them, the Directors pursuant to Section 134 of the Companies Act, 2013 hereby state that: 1) in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made for the same. 2) the directors had selected appropriate 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 as at 31st March 2015 and of the Profit of the Company for the year ended 31st March 2015 3) the directors had taken proper and sufficient care for 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, 4) the annual accounts have been prepared the annual accounts on a going concern basis 5) the directors, had laid down proper and sufficient internal financial controls and policies and procedures of such internal financial controls are adequate and operating effectively. 6) 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. AUDITORS: M/s N Venkatesan Associates, Chartered Accountants, Chennai (FRN: 004632S), were appointed as Statutory Auditors of the company in the 22nd Annual General Meeting of the Company held on 18.09.2014 until the conclusion of third consecutive Annual General Meeting, subject to ratification by shareholders in every consecutive Annual General Meeting. The Directors recommend ratification of appointment of Statutory Auditors, to carry out the audit for the financial year 2015-2016. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and rules framed there under for their re-appointment as Statutory Auditors of the Company. The necessary resolution is being placed before the shareholders for approval. COMMENTS ON AUDITORS' REPORT: There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. N Venkatesan Associates, Statutory Auditors, in their report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review. SECRETARIAL AUDIT Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company has appointed Shri. S. Ananthanarayan, Practicing Company Secretary as secretarial auditor to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Secretarial Audit Report attached with this report as Annexure - A. Reply to point 4 of the Secretarial Auditor's report: i) The Company is in the process of identifying suitable candidate for the designation of Company Secretary and has taken necessary steps for the same. ii) The Board of Directors in their meeting held on 27th April, 2015 has appointed Smt. Jayamalini as Independent Woman Director of the Company. EXTRACTS OF THE ANNUAL RETURN: The extracts of Annual Return of the Company in prescribed Form MGT - 9 for the financial year ended 31st March, 2015 is attached to the report by way of Annexure - B. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS: The Company has not received any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operation in future. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: No material changes and commitments were made, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. PARTICULARS OF EMPLOYEES: None of the employees draws remuneration of Rs. 500,000/- or above per month and Rs. 6,000,000/ - or above per year. Hence, details of the employees of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not furnished. Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the 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, forming part of the Annual Report, is available for inspection at the registered office of the company during working hours. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee and free of cost. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EARNINGS AND OUTGO: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - C. RELATED PARTY TRANSACTIONS: All the transaction with the related parties entered into during the period under review have been in the ordinary course of business and at arm's length basis. The details of related party transaction pursuant to clause (h) of sub -section 134 of the Act, is enclosed in Form AOC-2 as Annexure - D. MANAGEMENT DISCUSSION AND ANALYSIS: Management Discussion and Analysis Report, emphasizing the business details, is attached and forms part of the report. CORPORATE GOVERNANCE The Report on Corporate Governance and Auditors certificate on Compliance with the Code of Corporate Governance are provided and forms part of this report. LISTING WITH STOCK EXCHANGE The Company's equity shares are listed in Bombay Stock Exchange. The annual listing fee has been paid for the year 2015 - 2016. CORPORATE SOCIAL RESPONSIBILITY (CSR): The provisions of Section 135 of the Companies Act 2013 pertaining to Corporate Social Responsibility are not applicable to the Company. VIGIL MECHANISM: In Compliance of Section 177 of Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Company has set up a Whistle Blower policy. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report genuine concerns or grievances. Adequate safeguards are in place against victimization of employees who availed the mechanism. RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL: The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Audit Committee has also revisited the Risk Management Policy and has taken steps to strengthen the Risk Management process in keeping with the changes in the external environment and business needs. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. In addition to the Internal Control Systems, the Board has laid emphasis on adequate Internal Financial Controls to ensure that the financial affairs of the Company are carried out with due diligence. These are routinely tested and certified by the Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee. ANNUAL EVALUATION BY THE BOARD Pursuant to Section 134 of Companies Act, 2013 and in compliance with the Listing Agreement the Board of Directors has carried out an annual performance evaluation of the Board, its Committees, and Directors individually, is carried out as per the criteria laid down by the Nomination and Remuneration Committee. Accordingly, as per Schedule V of Companies Act, 2013 and Clause 49 of the Listing Agreement the Independent Directors of the Company at their separate meeting evaluated the performance of non independent directors and the Board as a whole. They also evaluated the performance of Chairman of the Company and flow of information from the Management to the Board. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROBHITION AND REDRESSAL), ACT, 2013: The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013. During the year under review no complaints have been received. ACKNOWLEDGEMENT: Your Directors take this opportunity to express their thanks to the Shareholders, Customers, Suppliers Banks and Government for their valuable assistance and support. Your Directors wish to place on record their appreciation of the sincere efforts put in by the employees of the Company at all levels. On Behalf of the Board. RM.Lakshmanan Whole Time Director S.Jambunath Director Place: Chennai Date: 31.07.2015 |