DIRECTORS’ REPORT To, The Members, Your Directors have pleasure in presenting their Thirty-First Annual Report, together with the Audited Statement of Accounts for the financial year ended 31st March, 2016. REVIEW OF OPERATIONS Since the operations of Rishiroop Rubber (International) Limited and Rishiroop Ltd (erstwhile Puneet Resins Limited) are amalgamated, sales registered a growth of 35 % compared to previous year figures which are on standalone basis. Your Company’s turnover was Rs. 3835.77 Lacs in the year under review as compared to Rs 2846.98 Lacs in the previous year. The Profit before tax (PBT) for the period under review has increased from Rs.176.99 lacs in the previous year to Rs.309.86 lacs in current year. During the year under review, the prevailing economic conditions in the industry have not improved significantly, and there was a reduction in prices of almost all trading items due to decline in crude oil and petrochemical prices. During the current year the performance will continue to be affected by the volatility of prices of Synthetic Rubbers. However, we expect demand to pick up during the current year. STATUS OF AMALGAMATION OF RISHIROOP RUBBER (INTERNATIONAL) LTD. WITH THE COMPANY As per the terms of the Scheme of Amalgamation (“Scheme”) with Rishiroop Rubber (International) Limited sanctioned by the Hon’ble High Court of Gujarat, on 23rd June, 2015, and the Hon’ble High Court of Bombay on 8th May, 2015, 71,03,935 Optionally Convertible Preference shares (OCPS) were allotted on 8th September, 2015 to the erstwhile shareholders of Rishiroop Rubber (International) Limited. These securities were listed and admitted to dealings on BSE Limited with effect from 29th February, 2016. These OCPS holders, as per terms of the Scheme, have an option to convert their OCPS to Equity Share during the period of one year from date of receipt of trading approval from BSE Limited i.e. upto 23rd February, 2017. CHANGE IN NAME OF THE COMPANY Pursuant to the amalgamation of Rishiroop Rubber (International) Limited with the Company, the name of the Company was changed from Puneet Resins Limited to Rishiroop Limited, and the Registrar of Companies, Mumbai issued a revised Certificate of Incorporation dated 11th August, 2015. EVENTS OCCURING AFTER THE BALANCE SHEET DATE Since the date of Balance Sheet, the Company has allotted 19,22,996 equity shares to OCPS holders who have exercised their option to convert their OCPS to equity shares, and as such the equity share capital of the Company stands increased to 71,38,796 equity shares of Rs. 10/- each, aggregating to Rs. 7,13,87,960/-. DIVIDEND The Board of Directors of the Company recommend, for consideration of shareholders at the 31st Annual General Meeting, payment of dividend of 8 % (Re 0.80/- per share) on the equity shares of the face value of Rs. 10/- each for the year ended 31st March 2016. The dividend paid during the previous year was 8% (Rs 0.80/- per share). The Board of Directors also recommends for consideration and confirmation of shareholders, the payment of dividend of 1 % (Re 0.10/- per Share) on the OCPS of the face value of Rs. 10/- each for the year ended 31st March 2016, as per terms of the Scheme of Amalgamation. DIRECTORS The Board of Directors, vide their resolution dated 1st August, 2015, appointed Mr. Hemant D. Vakil as an additional director in the category of Non executive Independent Director of the Company. Mr. Vakil holds office up to the date of the ensuing Annual General Meeting of the Company and is eligible for appointment. Your directors recommend his appointment as a regular Independent Director for a term of five consecutive years. Details of the proposal for appointment of Mr. Vakil is mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 31st Annual General Meeting. The Board of Directors vide their resolution dated 8th September, 2015 appointed Mr. Atul Shah as an additional director in the category of Non executive Director of the Company. Mr. Shah holds office up to the date of the ensuing Annual General Meeting of the Company and is eligible for appointment. Your directors recommend his appointment as a regular Non executive Director liable to retire by rotation. Details of the proposal for appointment of Mr. Shah is mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 31st Annual General Meeting. The Board of Directors vide resolution dated 9th February, 2016, on the recommendation of the Nomination and Remuneration Committee, appointed Mr. Aditya A. Kapoor as the Managing Director for a further term of three (3) years w.e.f. 1st April, 2016, subject to the ratification of the appointment by the shareholders. Your Directors recommend Mr. Aditya Kapoor’s appointment in the forthcoming Annual General Meeting. Details of the proposal for appointment of Mr. Aditya Kapoor is mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 31st Annual General Meeting. In terms of the Articles of Association of the Company, Mr. Arvind Mahendra Kapoor, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting of the company and being eligible, offers himself for reappointment. The brief resume of the Mr. Kapoor has been detailed in the Corporate Governance Report. The directors recommend his reappointment as director of the Company. All the appointments of Directors of the Company are in compliance with the provisions of Section 164 of the Companies Act, 2013. All independent directors have given the declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 16(b) of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. The relevant details of the above Directors are given in the Corporate Governance Report attached herewith. CHANGES IN KEY MANAGERIAL PERSONNEL Mr. Agnelo A. Fernandes was appointed as Company Secretary of the Company w.e.f. 17th August, 2015 in place of Mr. Nilesh Jain who was relieved with effect from 14th August, 2015. ANNUAL EVALUATION OF THE BOARD The Board evaluated the effectiveness of its functioning by seeking the Director’s inputs on various aspects of Board/Committee Governance. The aspects covered in the evaluation included the Chairperson’s assessment, self- assessesment / peer review by Directors’, Managing Director’s assessment, evaluation of the Board/Board Committees and non-executive director and independent director evaluation as per the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors during their separate meeting held on 9th February 2016, reviewed the performance of Board, Chairman of the Board and of Non- Executive Directors. Thereafter, the Board considered and discussed the inputs received from the Directors in the meeting also held on 9th February 2016. The manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors is summarized below: 1. Nomination and Remuneration Committee of the Board had prepared and sent through its Chairman draft parameterized feedback forms for evaluation of the Board, Independent Directors and Chairman. 2. Independent Directors at a meeting without anyone from the non-independent directors and management, considered/evaluated the Board’s performance, performance of the Chairman and other non-independent Directors. 3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant director). NO. OF MEETINGS OF THE BOARD The details of the number of meetings of the board held during the FY 2015-16 forms part of the Corporate Governance Report. AUDIT COMMITTEE The details on the Audit Committee and its meetings during the financial year 2015-16 forms part of the Corporate Governance Report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the company and its future operations. FIXED DEPOSITS We have not accepted any fixed deposit and as such no amount of principal or interest was outstanding as on the balance sheet date. DIRECTORS’ RESPONSIBILITY STATEMENT U/S 134(5) OF THE COMPANIES ACT, 2013 Pursuant to the provisions of Section 134(5) of Companies Act, 2013, as amended, with respect to the Directors’ Responsibility Statement, it is hereby confirmed that: 1) In the preparation of the accounts for the financial year ended 31st March,2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; 2) The Directors 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 as at 31st March,2016 and of the profit and loss of the Company for the year ended 31st March,2016; 3) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4) The Directors have prepared the annual accounts for the financial year ended 31st March, 2016 on a going concern basis. 5) 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. 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. DEPOSITS During the year the Company has not accepted deposits from the Shareholders and others and that the Company has complied with the provisions of section 73 of the Companies Act, 2013 and the rules made thereunder. STATUTORY AUDITORS M/s. B. D. Jokhakar & Co., Chartered Accountants (Registration No.104345W), were appointed as Statutory Auditors at the 29th Annual General Meeting till the conclusion of 32nd Annual General Meeting of the company (subject to ratification of the appointment by the members at every AGM held after this AGM). The Company has received confirmation from M/s B.D. Jokhakar & Co. to the effect that they fulfill the eligibility criteria prescribed under Section 139 and 141 of the Companies Act, 2013. Your Board recommends ratification of their appointment as the Statutory Auditors at the ensuing Annual General Meeting. The observations and comments given in the Auditors Report read together with the notes to the accounts are self explanatory and hence do not call for any further information and explanation under section 134(3) of the Companies Act, 2013. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES During the period under review, the Company did not enter into material transactions with related parties. None of the transactions with any related parties were in conflict with the Company's interest. Attention of members is drawn to the disclosure of transactions with related parties setout in notes to the financial Statements forming part of the Annual Report. All related party transactions are negotiated on an arms-length basis and are intended to further the Company’s interest. POLICY ON RELATED PARTY TRANSACTIONS OF THE COMPANY The Company has a policy on Related Party Transaction and the same has been displayed on the Company’s website: http://www.rishiroop.in/investors/corporate-governance/policies/ RISK MANAGEMENT The Company is exposed to inherent uncertainties owing to the sectors in which it operates. The Company’s Risk Management processes focusses on ensuring that these risks are identified on a timely basis and addressed. The Company has a policy on Risk Management and has been displayed on the Company’s website: http://www. rishiroop.in/investors/corporate-governance/policies/ CORPORATE SOCIAL RESPONSIBILITY Pursuant to Section 135 of the Companies Act, 2013 and the relevant rules, the Board has constituted the CSR Committee under the Chairmanship of Mr. Arvind Mahendra Kapoor. The other members of the Committee are Mr. Aditya Arvind Kapoor and Mr. Nakul Kumar. A detailed CSR policy has also been framed which is placed on the company’s website: http://www.rishiroop.in/investors/corporate-governance/policies. Other details of the CSR activities as required under Section 135 of the Companies Act, 2013 are given in the CSR Report in Annexure B. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES The Board shall have minimum 3 and maximum 12 directors, unless otherwise approved. No person of age less than 21 years shall be appointed as a director on the Board. The Company shall have such persons on the Board who complies with the requirements of the Companies Act, 2013, Provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Memorandum of Association and Articles of Association of the Company and all other statutory provisions and guidelines as may be applicable from time to time. Composition of the Board shall be in compliance with the requirements of Companies Act/SEBI Regulations. Except for the Managing Director, no other directors are paid remuneration, but are paid only sitting fees. The Managing Director is paid remuneration as approved by the Shareholders but is not paid any sitting fees. Managing Director, Company Secretary and Chief Financial Officer shall be the Key Managerial Personnel (KMPs) of the Company. All persons who are Directors / KMPs, members of Senior Management and all other employees shall abide by the Code of Conduct. Directors/ KMPs shall not acquire any disqualification and shall be persons of sound integrity and honesty, apart from knowledge, experience, etc. in their respective fields. Disclosure as per Sec 197(12) of Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Employee in receipt of remuneration of not less than Rs. 5 Lacs per month for part of the year. Name : Mr. Arvind Kapoor Designation : Managing Director of Rishiroop Rubber (International) Limited for the period from 1st April 2015 upto the effective date of amalgamation i.e. 31st July 2015. Qualification : M.S. Polymer Engg., USA, and B.Tech (IIT-Mumbai) Age : 62 years Date of Appointment : 05/11/1990 Remuneration Received :Rs. 50,38,180/- (including amounts paid as Gratuity and Leave Encashment) Experience and particulars of last employment : 36 years of Industrial and Managerial experience, promoter/ director of Rishiroop Polymers Private Limited. Percentage of equity shares held: 106120 shares (2.03 %) Whether related to director or manager of the Company and if so, name of such director or manager : Yes, Father of Managing Director Mr. Aditya Kapoor. ESTABLISHMENT OF VIGIL MECHANISM The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policy has been in force. The policy was approved on 13th February, 2015. This Policy inter alia provides a direct access to a Whistle Blower to the Chairman of Audit Committee on his dedicated email-ID auditcommittee@rishiroop.in. The Whistle Blower Policy covering all employees and directors is hosted on the Company’s website at URL-http://www.rishiroop.in/ investors/corporate-governance/policies/ DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS Your Company has an adequate system of internal control commensurate with the size and the nature of its business, which ensures that transactions are recorded, authorized and reported correctly apart from safeguarding its assets against loss from wastage, unauthorized use, and removal. The internal control system is supplemented by documented policies, guidelines, and procedures. The Company’s internal auditors continuously monitor the effectiveness of the internal controls with a view to provide to the Audit Committee and the Board of Directors an independent, objective and reasonable assurance of the adequacy of the organization’s internal controls and risk management procedures. The Internal Auditor submits detailed reports on quarterly basis to the Audit Committee and management. The Audit Committee reviews these reports with the executive management with a view to provide oversight of the internal control system. During the year under review, in compliance with the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Board approved several policies on important matters such as Nomination and Remuneration of directors and KMP, materiality of events/information, preservation of documents/archival policy etc., which would provide robust guidance to the management in dealing with such matters to support internal control. The Company reviews its policies, guidelines, and procedures of internal control on an ongoing basis in view of the ever changing business environment. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an Anti Sexual Harassment Prevention Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. 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. The following is a summary of sexual harassment complaints received and disposed off during the year: • No. of complaints received: Nil • No. of complaints disposed off: Nil EXTRACT OF THE ANNUAL RETURN An extract of the Annual Return i.e. Form No. MGT-9, as of 31st March, 2016, pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013, forming part of the report is attached separately. THE DETAILS OF FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS HAVE BEEN DISCLOSED ON WEBSITE OF THE COMPANY AND ARE AVAILABLE AT THE FOLLOWING LINK: The Familiarization Programme for Independent Directors is hosted on the Company’s website at http://www. rishiroop.in/investors/corporate-governance/policies/ SECRETARIAL AUDIT REPORT Pursuant to the requirements of the Companies Act, 2013, the Company has appointed Mr. Dinesh Kumar Deora, Practicing Company Secretaries (COP 4119) as the Secretarial Auditor for FY 2015-2016 whose report of 17th May 2016 is attached separately to this report. 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, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in Annexure ‘A’ hereto and forms part of this report. CORPORATE GOVERNANCE REPORT A report on the Corporate Governance along with the Certificate from the Statutory Auditors is separately given in the Annual Report. ACKNOWLEDGEMENTS The Board of Directors express their appreciation for the sincere co-operation and assistance of Government Authorities, Bankers, Customers, Suppliers, Business Associates and the efforts put in by all the employees of the Company. The Board of Directors expresses their gratitude to all our valued shareholders for their confidence and continued support to the Company. For and on behalf of the Board of Directors Arvind Mahendra Kapoor Chairman DIN : 00002704 Registered Office: W-75(A) & W-76(A) MIDC Industrial Area Satpur, Nasik – 422007 Place: Mumbai Date: 27.05.2016 |