BOARDS' REPORT DEAR SHAREHOLDERS, Your Directors are pleased to present the 32nd Annual Report together with audited accounts for the financial year ended 31st March 2015. Operations During the year under review your Company registered total revenue of Rs.17,217.84 lac as compared to previous year's revenue of Rs.18,344.11 lac a de-growth of 6.14% over the previous year. The Net Profit is at Rs.536.54 lac as compared to Rs.614.61 lac in the previous year, a decrease of 12.70% from previous year. Packaging business The decrease in profit is mainly due to decrease in volume in Pet Preforms. Few bottlers (our customers) have initiated backward integration by starting their own Pre form manufacturing set up. This impacted decrease in Sales volume. However this was marginally set off by increase in volume in job work. Over all, sales (including Job work) in PET Performs were down by 17.76% against last year. The sales of crowns have grown by 7.51% against last year. The Closures have grown at 13.44% higher than last year. Real Estate Business The company through its related company, AMD Estates & Developers Private Limited is developing a Commercial Complex at Sector-114, Gurgaon, Haryana in collaboration with VSR Infratech Private Limited, New Delhi. Since growth in the real estate market of the country has been stagnant, the development of this project has slowed down considerably. During the year under review, the company has received revenue of Rs.41.11 lac from this project. Expansion The company is exploring opportunities to expand its business in other geographies of the country. Dividend Your Directors are pleased to recommend a dividend of Re. 0.90 (Ninety Paise Only) per equity share of face value of Rs.10/- each for the financial year 2014-15. Fixed deposits During the financial year 2014-15, your Company has not invited or accepted any deposits from the public within the meaning of provisions of Section 73 of the Companies Act, 2013. Board, Directors and Key Managerial Personnel In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Harswarup Gupta, Chairman & Whole-time Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board has recommended necessary resolutions for revision/restructuring of remuneration of Mr. Adit Gupta, Managing Director & Mr. Ashok Gupta, Whole Time Director of the Company. During the year under review, the members approved the appointments of Mr. Mahipal, Mr. Prabhat Krishna and Mrs. Shubha Singh as Independent Directors who are not liable to retire by rotation. The members have also appointed Mr. Adit Gupta as the Managing Director and Mr. Ashok Gupta as Whole-time Director. Mr. Seshadri Ratnam, Independent Director, due to health reasons resigned from the Board with effect from 13.11.2015. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as director of the company. The Board appointed Mr. Alok Kumar Das as Chief Financial Officer (CFO) of the Company with effect from 6th August, 2014. However, due to personal reasons, he resigned on 26th September 2014. The Board appointed Mr. Prabir Kumar Mukhopadhyay as Chief Financial Officer of the company with effect from 11th February 2015. The Company has received necessary declarations from each of the Independent Directors under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of the independence as laid down in section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: <http://amdindustries.com/> Familiarisation%20Programme%20for%20Independent%20Directors.pdf. Pursuant to the provisions of Section 203 of the Act, which came into effect from 1st April, 2014, the appointments of Mr. Adit Gupta, Managing Director, Mr. Prabir Mukhopadhyaya, Chief Financial Officer and Mr. Prakash Chandra Prusty, Company Secretary as key managerial personnel of the Company were formalised. Policy on directors' appointment and remuneration The Board has constituted a Nomination & Remuneration Committee for formulating the criteria for determining qualifications, positive attributes and independence of a director, identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in Nomination & Remuneration policy and to recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel. The objective of the Nomination & Remuneration Policy is also to set out the principles governing the Company's Remuneration systems in organizational guidelines. The Nomination and Remuneration Policy of the Company is attached herewith as Annexure Board Evaluation The Company has adopted a Performance Evaluation Policy for evaluation of performance of Independent Directors, Board, Committees and other individual Directors (non-executive directors and executive directors). On the basis of this Policy a process of evaluation is being followed by the Board for evaluation of its own performance and that of its Committees and individual Directors. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of a questionnaire on board governance and performance issues. Individual directors met with the Chairman of the Company to discuss their responses. The performance of the committees was evaluated by the Board after getting an evaluation report from the members of each committee which evaluates the performance of the Committee against its stated objectives and responsibilities, effectiveness of committee meetings, etc. during the year. The Board reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, committed to the Company's values, beliefs and ethics etc. In addition, the Chairman was also evaluated on the key aspects of his role. Directors' Responsibility Statement Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures from the same; b) the directors have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2015 and of the profit of the Company for the year ended on that date; c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the directors have prepared the annual accounts on a 'going concern' basis; e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Auditors and Auditors' Report Statutory Auditors The Statutory Auditors of the Company M/s. Suresh & Associates (FRN:003316N), Chartered Accountants, New Delhi will retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office of Statutory Auditors of the Company, if re-appointed. The financial statements, as referred to in the Auditor's Report, are self explanatory and therefore do not require further comments and explanations. The Auditors' Report does not contain any qualification, reservation or adverse remark. Cost Auditors Referring notification of Ministry of Corporate Affairs, Government of India dated 31st December 2014 with respect to applicability of Companies (Cost Records and Audit) Amendment Rules, 2014, your company is not required to get its cost records audited and thus did not proceed towards conducting Audit of Cost Audit for the financial year 2014-15. Secretarial Auditor The Board has appointed M/s AGG & Associates, Company Secretaries, New Delhi to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report issued by M/s AGG & Associates is annexed herewith as Annexure II to this Report. The Secretarial Audit Report has one observation with respect to error in calculating Average Net Profit for the purpose of determining prescribed amounts to be spent on CSR Activities in the financial year 2014-15. Board's Reply: The Company suo motu detected the error & informed to Auditors. It was a calculation error and the Board has already taken note of it and decided that the differential amount shall be spent towards promoting education during the Financial Year 201516. Necessary explanation is also given in Annexure III to this Report. Apart from above, the audit report does not contain any qualification, reservation or adverse remark. Subsidiary Companies The company had two subsidiaries, a. AMD Estates and Developers Private Limited and b. Prime Techno Build Private Limited (a wholly owned subsidiary of AMD Estates and Developers Private Limited). The Board in its meeting dated 10th February 2015 decided to de-subsidiarize AMD Estates and Developers Pvt Ltd. As per the Valuation Report, the share was valued at Rs.12.21 per share. However, the Board decided to sell the shares at Rs.12.50 per share. With effect from 18th February 2015, AMD Estates and Developers Pvt Ltd and Prime Techno Build Private Limited have ceased to be subsidiaries of AMD Industries Limited. The company has no joint venture and associate companies during the financial year under review. The policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at the link: http:/ /amdindustries.com/Policy%20on%20Material%20Subsidiary.pdf. Corporate Governance Your Company reaffirms its commitment to good corporate governance practices. The Reports on the Corporate Governance and Management Discussion & Analysis as required pursuant to Clause 49 of the Listing Agreement form an integral part of this report and are set out as separate sections to this annual report. A Certificate from the Auditors of the Company, certifying compliance of conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement, is attached to the Report on Corporate Governance. Corporate Social Responsibility (CSR) The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: <http://amdindustries.com/Corporate%20Social%20> Responibility%20Policy.pdf During the year, in compliance with CSR provisions, Company has spent Rs.9.50 lacs on CSR activities. The brief contents of CSR policy is given in the Annual Report on CSR activities is annexed herewith as Annexure III. Internal Financial Controls The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. Meetings of the Board Five meetings (including one adjourned meeting) of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report. Committees Audit Committee The Audit Committee comprises Independent Directors namely Mr. Prabhat Krishna (Chairman), Mr. Mahipal, Ms. Shubha Singh and Mr. Adit Gupta as other members. All the recommendations made by the Audit Committee were accepted by the Board. Apart from Audit Committee, company has Nomination & Remuneration Committee, Stakeholder's Relationship Committee, Corporate Social Responsibility Committee and Management Committee, details of which are provided in Corporate Governance Report. Particulars of Loans given, Investments made, Guarantees given and Securities provided Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statements. Contracts and Arrangements with Related Parties All contracts / arrangements / transactions entered by the Company during the financial year under review with related parties were in the ordinary course of business and at arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at : <http://amdindustries.com/> Policy%20on%20Related%20Party%20Transactions.pdf The particulars of related party transactions are attached herewith as Annexure IV to this Report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report. Vigil Mechanism/Whistle Blower policy The Vigil Mechanism/Whistle Blower Policy of the Company aims to provide an avenue for directors and employees to raise concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, unethical behavior, violation of Code of Conduct, etc. This policy also aims to create an environment where individuals feel free and secure to raise the alarm where they see a problem. It also ensures that whistleblowers are protected from retribution, whether within or outside the organization. The Policy on vigil mechanism/whistle blower policy may be accessed on the Company's website at: <http://amdindustries.com/> Whistle%20Blower%20Policy%20-%20Vigil%20Mechanism.pdf Particulars of Employees and related disclosures Particulars of Employees and related disclosures in terms of the provisions of Section 197(12) of the Act read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed herewith as Annexure VI to this Report. Risk Management Risk is an integral and unavoidable component of business and your company is committed to managing the risk in a proactive and effective manner. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, legal risk. Your Company adopts systematic approach to mitigate risks associated with accomplishment of objectives, operations, revenues and regulations. During the year, your company has adopted a Risk Management Policy. Our risk management policy focuses on three key elements, 1) Risk Assessment; (2) Risk Management; and (3) Risk Monitoring. Risk Assessment consists of a detailed study of threats and vulnerability and resultant exposure to various risks. Risk Management and Risk Monitoring are important in recognizing and controlling risks. Risk mitigation is an exercise aiming to reduce the loss or injury arising out of various risk exposures. The Audit Committee of the Company reviews the Risk Management Policy and its implementation. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure VII to this Report. Disclosures Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries (de-subsidiarised with effect from 18.02.2015). 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. The company has in place an Anti Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint 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 state that during the year under review, no cases of sexual harassment has been received by the company. Listing The shares of your Company are listed at Bombay Stock Exchange Limited, Mumbai and National Stock Exchange of India Limited, Mumbai. Acknowledgement Your Directors take this opportunity to express their sincere appreciation of the cooperation and support extended by the Shareholders, Bankers, Financial Institutions, Government Departments, Regulatory Bodies, Customers and other Business Constituents during the year under review. Your Directors wish to place on record their appreciation for the committed services of the executives, staff and workers of the Company. On behalf of the Board of Directors Adit Gupta Managing Director DIN-00238784 Ashok Gupta Vice Chairman DIN-00031630 Place: New Delhi Date: 05.08.2015 |