BOARD'S REPORT Dear Members, Your Directors have pleasure in presenting the 21st Annual Report together with the audited financial statements for the financial year ended March 31, 2015. COMPANY'S FINANCIAL PERFORMANCE Net revenue from operations increased to Rs. 27565.59 lacs as against Rs. 25567.23 lacs in the previous year showing a growth of 7.82%. The Profit Before Extra-Ordinary Items & Tax for the current year is Rs. 942.55 lacs as against Rs. 652.96 lacs in the previous year showing a growth of 44.35%. However, Profit before tax for the current year is Rs. 340.64 lacs which was Rs. 652.96 lacs in the previous year. Profit before tax in the current year compared to previous year is gone down by Rs. 312.32 lacs. The reason for going down the Profit before tax is because of the company sold sizable fixed assets of its Navalgadh Unit in current year resulted in loss of Rs. 601.91 lacs. The said loss is reflected under the extraordinary item in the statement of Profit & Loss. After deduction of Tax, there is a loss in the current year of Rs. 64.54 lacs as against Rs. 301.65 lacs profit in the previous year. The PAT of current year was affected mainly due to the loss in sale of fixed assets of its Navalgadh Unit as mentioned above There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2014-15 and the date of this Report. SALE OF FIXED ASSETS OF THE NAVALGADH UNIT The Particle Board manufacturing unit ("The Navalgadh Unit") located at Survey No. 270, Village Navalgadh, Taluka Dhrangadhra, Dist. Surendranagar, Gujarat, was started in the year 2009 for manufacture of Plain Particle Board. Initially, it was contributing well but laterly it started the negative contribution, which was ultimately impacting negatively in the overall profits of the Company. To come out of this impact and to increase the profitability of the Company, the management of the Company disposed off the selective assets of the Navalgadh Unit and the amount realized has been utilized to pay off the existing liabilities of the Company. In compliance with provision of Section 180(1)(a) of the Companies Act, 2013, Section 192A of the Companies Act, 1956 read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011 and other applicable provisions, your company had taken the approval of the shareholders by a Special Resolution through Postal Ballot for said matter. During the year under review, your company has sold sizable fixed assets of the Particle Board manufacturing unit ("The Navalgadh Unit") which resulted in loss of Rs. 601.91 lacs and said loss is reflected under the extraordinary items in the statement of Profit & Loss. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis forms an integral part of this Director's Report. It gives detail of the overall industry structure, developments, performance and state of affairs of the Company's all the businesses, internal controls and their adequacy, risk management systems and other material developments, if any, during the Financial Year. DIVIDEND Your directors have not recommended any dividend on equity shares for the Financial Year 2014-15. PUBLIC DEPOSITS During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Further, Company has not any deposit which is in violation of Chapter V of the Companies Act, 2013. CORPORATE GOVERNANCE REPORT In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Practicing Company Secretary on its compliance forms an integral part of this Report. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES In accordance with Section 178 and other applicable provisions if any, of the Companies Act, 2013 read with the Rules issued thereunder and Clause 49 of the Listing Agreement executed with Stock Exchanges, the Board of Directors at their meeting held on 14th July, 2014 formulated the Remuneration Policy of your Company on the recommendations of the Nomination and Remuneration Committee. The salient aspects covered in the Remuneration Policy, covering the policy on appointment and remuneration of Directors, key managerial personnel, employees and other matters have been outlined in the Corporate Governance Report which forms part of this Report. The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in "Annexure [A]". DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review, Shri Harshadbhai N. Doshi, an Independent Director ceased from the directorship as he shown his unwillingness for reappointment at the 20th Annual General Meeting held on 29.09.2014. The Company is very thankful to him for the valuable contributions made by him to the Board and the Company during his tenure as Director. Shri Ghanshyambhai A. Thakkar, Director, liable to retire by rotation at the ensuing Annual General Meeting, and being eligible offers himself for re-appointment. The brief resume of him and other related information has been detailed in the Notice convening the 21st AGM of your Company. Your Directors recommend his re-appointment as Director of your Company. Pursuant to Section 149, 152, Schedule IV and other applicable provisions of the Companies Act, 2013 read with the rule framed thereunder and Clause 49 of Listing Agreement executed with Stock Exchanges, Shri Shankar Prasad Bhagat, Shri Rohitbhai B. Thakkar and Miss Jingle P. Thakkar appointed as Independent Directors by Shareholders at the 20th Annual General Meeting held on 29th September, 2014. At the Board Meeting held on August 07, 2014, Mr. Keyur M. Gajjar, Chief Executive Officer and Mr. Vipul S. Vora, Chief Financial Officer 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. The other Key Managerial Personnel are Shri Ghanshyambhai A. Thakkar, Wholetime Director, Mr. Krupesh G. Thakkar, Managing Director and Mr. Hasmukh K. Modi, Company Secretary of the Company. EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS Pursuant to the provisions of the Companies Act, 2013 read with the rules framed thereunder and clause 49 of the Listing Agreement executed with Stock Exchanges, the annual performance evaluation was done by the Board of its own performance and that of its committees and individual directors, including the Chairman of the Board based on the criteria and framework adopted by the Board. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. AUDIT COMMITTEE COMPOSITION The Audit Committee comprises of Mr. Shankar Prasad Bhagat, Independent Director as Chairman, Miss Jingle P. Thakkar, Independent Director and Mr. Kaushikbhai J. Thakkar, Executive Director as Members. During the year under review, Mr. Harshadbhai N. Doshi, Independent director who was the member of Audit Committee ceased from the directorship w.e.f. September 29, 2014 and consequently his membership in the Committee also ceased. Miss Jingle P. Thakkar was inducted as a Member of the Committee w.e.f. November 8, 2014. All members of the Audit Committee are financially literate and more than one-half of the members have expertise in accounting/ financial management. Further, as per section 177(8) of the Companies Act, 2013 there was not any case in the financial year that any recommendation is made by the Audit Committee and the Board has not accepted it. NUMBER OF THE BOARD AND COMMITTEE MEETINGS The details about the number of Board and Committee meetings are given in the Corporate Governance Report which forms part of this Report. DECLARATION OF INDEPENDENCE All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement which has been relied on by the Company. Every Independent Director, at the first meeting of the Board in which he/she participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he/she meets the criteria of independence as required under Section 149(7) of the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(3)(c) of the Companies Act, 2013, Your Directors state that: (a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures from the same; (b) such accounting policies have been selected 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 your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015; (c) 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) the annual accounts have been prepared on a going concern basis; (e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. STATUTORY AUDITORS M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad (Firm Registration No. 107525W), Statutory Auditors of the Company, will hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment, subject to the ratification by the shareholders of the Company. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. As recommended by the Audit Committee of the Board of Director, the Board of Directors has proposed the ratification of re-appointment of M/ s. Parikh & Majmudar, Chartered Accountants as Statutory Auditors of the Company for the financial year 2015-16 by the shareholders of the Company at the ensuing Annual General Meeting. The shareholders are requested to ratify their re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed CS Chirag G. Shah Proprietor of Chirag G. Shah & Co., Practicing Company Secretary (FCS Membership No: 6572 & CP No.: 11827), to conduct the Secretarial Audit of your Company. The Secretarial Audit Report for the FY 2014-15 is annexed herewith as "Annexure [B]" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as "Annexure [C]" to this Report. RELATED PARTY TRANSACTIONS During the FY 2014-15, Company has entered into some transactions with related parties as defined under Section 2(76) of the Companies Act, 2013, which were in the 'ordinary course of business' and 'at arm's length basis'. Further, the transactions were in accordance with the provisions of the Companies Act, 2013, Rules issued thereunder and Clause 49 of the Listing Agreement. In view of this, disclosure in form AOC-2 has not been provided as the same is not applicable to the Company. During the FY 2014-15, there were no transactions with related parties which can be considered as material transactions as defined under the Listing Agreement. The details of the related party transactions as required under Accounting Standard - 18 are set out in Notes to the financial statements. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RISK MANAGEMENT Your Company has a robust Risk Management policy which is approved by the board of directors. The Company through a Steering Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. As per the requirements of Clause 49 of the Listing Agreement, your Company has constituted a Risk Management Committee to oversee the risk management efforts in the Company under the Chairmanship of Shri Ghanshyambhai A. Thakkar, a Whole Time Director. The details of the Committee along with its charter are set out in the Corporate Governance Report forming part of this Report. There are no risks which in the opinion of the Board threaten the existence of your Company. VIGIL MECHANISM / WHISTLE BLOWER POLICY Your Company has established a Vigil Mechanism/ Whistle Blower Policy which is in compliance with the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its directors and employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. The Policy provides adequate safeguards against victimization of Director(s)/ employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any, reported under this Policy will be appropriately and expeditiously investigated by the Chairman Your Company hereby affirms that no Director/ employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The Whistle Blower Policy has been disclosed on the Company's website under the web link <http://virlaminate.com/wp-content/> uploads/2015/03/Whistle-Blowing-Policy.18.pdf and circulated to all the Directors / employees. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES Your Company at the Board Meeting held on 14th July, 2014 approved a Policy on CSR Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and the Policy was hosted on the website of the Company. As part of CSR initiatives, your Company during the financial year 2014-15 has undertaken activities in areas of promoting education, Eradicating hunger, poverty, malnutrition (food supply) etc. These activities are in accordance with Schedule VII of the Companies Act, 2013. The initiatives undertaken by the Company during the financial year 2014-15 in CSR have been detailed in this Annual Report. The Report on CSR activities is attached as "Annexure [D]" to this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure [E]" to this Report. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, there was not observed any reportable material weakness in the design or operation. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN MARCH 31, 2015 AND AUGUST 08, 2015 (DATE OF THE BOARD'S REPORT) There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2015) and the date of the Report (August 08, 2015). SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 An Internal Complaints Committee has been set up by the Company to redress complaints regarding sexual harassment as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the financial year 2014-15, the company has not received any complaints on sexual harassment and hence no complaints remain pending as of 31 March, 2015. OTHER INFORMATION • Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and • Company does not have any ESOP scheme for its employees/Directors. APPRECIATION Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, honesty, trust, unity, cooperation and dedication during the year. Your Directors also sincerely convey their appreciation to customers, distributors, consignment agents, shareholders, vendors, bankers, other business associates, regulatory and government authorities for their continued support. For and on behalf of the Board of Directors, Ghanshyambhai A. Thakkar Chairman Place : Ahmedabad Date : 8th August, 2015 |