Ambica Agarbathies Aroma & Industries Ltd.
|BSE: 532335||Sector: Others|
|NSE: AMBICAAGAR||ISIN Code: INE792B01012|
|BSE LIVE 15:55 | 14 Sep||Stock Is Not Traded.|
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 532335||Sector: Others|
|NSE: AMBICAAGAR||ISIN Code: INE792B01012|
|BSE LIVE 15:55 | 14 Sep||Stock Is Not Traded.|
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
Your Directors have pleasure in presenting herewith the 20th Annual Report of Companytogether with the Audited Accounts for the financial year ended 31st March 2015
1. FINANCIAL RESULTS:
2. STATE OF COMPANY'S AFFAIR:
During the financial year under review the overall performance of the Company was goodand the overall turnover of the Company was Rs 11567.77 Lakhs as compare to Rs 11203.78Lakhs and the Net profit Rs 143.51 Lakhs as compare to Rs 105.84 Lakhs.
Your Directors do not recommend any Dividend for the Financial Year 2014-2015 as theprofits are planned to be ploughed back into the business operations.
4. FIXED DEPOSITS:
The Company has neither accepted nor renewed any deposits falling within the provisionsof Section 73 and 76 of the Companies Act 2013 read with the
Companies (Acceptance of Deposits) Rules 2014 from the its member and public duringthe Financial Year.
During the year under review Six board meetings were held on 30.05.2014 14.08.201413.11.2014 05.02.2015 17.02.2015 and 31.03.2015.The maximum time-gap between any twoconsecutive meetings was within the period prescribed under the Companies Act 2013.
6. BOARD EVALUATION
The Board of Directors evaluated the annual performance of the Board as a whole itscommittee's and the directors individually in accordance with the provisions of theCompanies Act 2013 and Clause 49 of the Listing Agreement in the following manner:
i. Structured evaluation forms as recommended by the Nomination and RemunerationCommittee after taking into consideration inputs received from the Directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance for evaluation of the performance of the Board itsCommittees and each director were circulated to all the members of the Board alongwith the Agenda Papers.
ii. The members of the Board were requested to evaluate by filling the evaluation formsand the duly filled in evaluation forms were required to be sent to the Company Secretaryin a sealed envelope or personally submitted to the Chairman at the concerned meeting.
iii. Based on the individual evaluation of the Directors the Board initiated adetailed discussion at the concerned meeting on the performance of the Board /Committee/Individual Director and formulated a final collective evaluation of the Board.The Board also provided an individual feedback to the concerned director on areas ofimprovement if any.
A separate meeting of Independent Directors was held on 05 February 2015 to evaluatethe performance of the Company the Non Independent Directors the Board and flow ofinformation from management.
7. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy framed to deal with instance of fraud andmismanagement if any in the Group. The details of the Policy are explained in theCorporate Governance Report and also posted on the website of the Company
8. RISK MANAGEMENT
Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee and formulated a policy on the Risk Management.The details of Committee and its terms of reference are set out in the CorporateGovernance Report forming part of the Boards Report. The Risk Management Policy ofthe Company is posted on the website of the Company
9. REMUNERATION POLICY
The Board of Directors on recommendation of the Nomination and Remuneration Committeeframed a Nomination and Remuneration policy for selection appointment and remuneration ofDirectors KMP and Senior Management and matters covered u/s 178(3) of the Companies Act2013. The details of the same are provided in the Corporate Governance Report and websiteof the company
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Sri Ambica Krishna (DIN 00391898) retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment
For Directors seeking appointment/re-appointment in the forthcoming Annual GeneralMeeting of the Company; the particulars as required to be disclosed in accordance withClause 49 (Corporate Governance) of Listing Agreement forms part of Corporate GovernanceReport.
11. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134(3) (c) of the Companies Act 2013 andsubject to disclosures in the Annual Accounts as also on the basis of the discussion withthe Statutory Auditors of the Company from time to time and to the best of theirknowledge and information furnished the Board of Directors states:
(i) That in preparation of the Annual Accounts for the year ended 31st March 2015 allthe applicable Accounting Standards Prescribed by the Institute of Chartered Accountantsof India have been followed along with proper explanation relating to material departuresif any.
(ii) That the Directors have adopted such accounting policies as selected inconsultation with Statutory Auditors and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit of theCompany for the financial year ended 31st March 2015.
(iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) That the Annual Accounts for the year ended 31st March 2015 has been prepared ona going concern basis.
(v) Those proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
(vi) That systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively
12. DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessarydeclarations from all the Independent Directors under Section 149 (7) of the CompaniesAct 2013 that they meet the criteria of independence laid down in Section 149 (6) andClause 49 of the Listing Agreement.
13. STATUTORY AUDITORS
The Statutory Auditors of the Company M/s. Sri T S AJAI Chartered AccountantHyderabad [Registration Number: 025524] were re-appointed by the members at the 19thAnnual General Meeting held on 29th September 2014 at 11.00 AM for a term of 3(Three)years till the conclusion of 22nd Annual General Meeting to be held in 2017. Members arerequested to ratify the same at the ensuing Annual General Meeting of the company inaccordance with section 139 of the Companies Act 2013.
The Audit Report issued by the Statutory Auditors for the financial year ended 31stMarch 2015 forms part of this Report.
14. REPLY TO THE AUDITORS OBSERVATIONS
1. With regard to the improvement of the Internal Control system the Company is in theprocess of improving the Internal control Systems
2. With regard to the statutory payments the Company is in the process of reconcile ofthe data with the relevant authorities and will ensure the compliance
3. With regard to transferring of unpaid dividend to Investor Education Fund Yourboard would like bring to your kind notice that the company is under the process ofreconciliation of claims from the shareholders and transfer the unclaimed or unpaiddividend if any
15. INTERNAL AUDITORS:
The Board of Directors based on the recommendation of the Audit Committee hasreappointed T.V.V. Satyanarayana Chartered Accountants and Hyderabad as the InternalAuditors o your Company. The Internal Auditors are submitting their Reports on quarterlybasis pursuant to the provisions of section 138 and rule 13 of companies (Accounts) rules2014.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not provided any loan to any person or body corporate or given anyguarantee or provided security in connection with such loan or made any investment in thesecurities of anybody corporate pursuant to Section 186 of the Companies Act 2013. TheCompany has given advance against salary to some employees in terms of the applicablepolicies of the Company
17. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements related and the date of the report
18. CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of section 135 (1) and read with all other applicableprovisions of the Companies Act 2013 and the Companies (Corporate social responsibilitypolicy) Rules 2014 (including any statutory modification(s) or re-enactment thereof forthe time being in force) Corporate Social Responsibility is Not Applicable to theCompany.
19. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and Outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014
A. Conservation of Energy :
The present operation of the Company does not involve high energy consumption. Howeversteps being taken to minimize energy consumption where ever possible
B. Research & Development :
The Research and Development division of Agarbathies department continues to focus onintroducing of new brands.
C. Technology Absorption : Not Applicable D. Foreign Exchange Earnings &Outgo :
20. MANAGEMENT DISCUSSION AND ANALYSIS:
Aspects of Management Discussion and Analysis are enclosed as "Annexure I "to this report
21. CORPORATE GOVERNANCE:
Report on Corporate Governance including Auditors Certificate on Compliance withthe code of Corporate Governance under Clause 49 of the listing agreement is enclosed as"Annexure II" to this report
22. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules framedthere under the Board of Directors on recommendation of the Audit Committee appointedM/s P S Rao and Associates Practicing Company Secretaries to undertake the secretarialaudit of the Company. The secretarial audit report issued by M/s P S Rao and AssociatesPracticing Company Secretaries for the financial year ending 31st March 2015 is given inthe FORM NO: MR - 3 is herewith annexed as "Annexure (III)" attachedhereto and forms part of this Report. There are no qualifications reservations or adverseremarks made by the secretarial auditor and the observation made is self explanatory andrequires no further explanation from the Board.
23. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. All related party transactions areplaced before the Audit Committee as also the Board for approval. Prior omnibus approvalof the Audit Committee is obtained as per Clause 49 of the Listing Agreement for thetransactions which are of a foreseen and repetitive nature. The Company has developed aPolicy on Related Party Transactions for the purpose of identification and monitoring ofsuch transactions.
The particulars of contracts or arrangements with related parties referred to insub-section (1) of Section188 of the Companies Act 2013 is reffered in notes to Accounts.
24. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure IV" to this report.
25. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 (1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is herewith annexed as Annexure V to this report and Rule 5 (2)Of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Noemployee of your company is in receipt of remuneration exceeding Rs.5 00000 per month orRs. 60 00000 per annum during the Financial Year
Your Directors place on record their appreciation for the co-operation and supportfrom the Bankers Financial Institutions the stockiest and distributors Supplier andCustomers.
Your Directors would also like to place on record their sincere appreciation andgratitude to the Shareholders Central and State Government agencies etc for their supportand co-operation. Your Directors express their heartfelt gratitude to the employees fortheir exceptional commitment and loyalty to the Company.
ANNEXURE - I
MANAGEMENT DISCUSSION AND ANALYSIS
1. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Ambica Agarbathies Aroma & Industries Limited manufactures and sells incense sticksin India. The company owns a farm land with resort club house and health center. It alsoinvolves in the film production and distribution activities engages in wind powergeneration and operates hotels. The Business was founded in 1946 and is based in EluruIndia.
The company is consistently involved in innovating its products through upgrading thetechnology customizing production process and creatively designing its products. With itsrich experience and wide network of dynamic dealers it is able to compete with others andmeet market standards. The Company has well knit distributor/ dealer network comprising ofaround 600 distributors/dealers spread over the India developed over a period of yearsfor marketing its products.
2. OPPORTUNITIES AND THREATS:
AS PER SEGMENT WISE
Agarbathies are used by all communities in India Sri Lanka Burma and by Indiansresiding abroad. As on today about 90 foreign countries are using our Agarbathies.Agarbathies industry is one of the labour intensive cottage types of traditionalindustries in India Karnataka state leads in this industry. The main centers ofmanufacture are Mysore and Bangalore. As on today about 150 units exist in Andhra Pradesh.In fact this is one of the items considered for boosting exports. Owing to the low levelof technology involved in this industry this can be taken to rural areas without muchdifficulty thus implementing the rural industrialization policy of the government ofIndia to a greater extent
Hotel and hospitality industries are the biggest employment generators in the country.Towards helping its growth the government should confer infrastructure status to thehotel industries several taxation issues also need to be rationalized the demand fortravel and tourism in India is expected to grow by 8.2% between 2010 and 2019 according tothe tourism satellite accounting (TSA) research. The tourism sector is expected to be thesecond largest employer in the world where India is expected to be place third position inthe world. Capital investment in India's travel and tourism sector is expected to grow at8.8 % between 2010 and 2019 the report forecasts India to get more capital investment inthe travel and tourism sector and is projected to become the fifth fastest growingbusiness travel destination from 2010 through 2020
The Indian economy has witnessed considerable progress in the past few decades. Most ofthe infrastructure development sectors moved forward but not to the required extent ofincreasing growth rate up to the tune of 8 to 10 per cent. The Union Government hasunderlined the requirements of the construction industry. With the present emphasis oncreating physical infrastructure massive investment is planned in this sector. ThePlanning Commission has estimated that investment requirement in infrastructure to thetune of about 14500 billion or US$320 billion during the 11th Five Year Plan period. Thisis a requirement of an immense magnitude. Budgetary sources cannot raise this muchresources. Public Private Partnerships (PPP) approach is best suited for finding theresources. Better construction management is required for optimizing resources andmaximizing productivity and efficiency.
3. SEGMENT WISE /PRODUCT WISE:
We have three segments which are continuingly operating through this industry which areas follows
1. AGARBATHIES DIVISION 2. HOTEL DIVISION
3. CONSTRUCTION DIVISION
Detailed info regarding those segments which are stated above are given below
1. AGARBATHIES DIVISION
The Company is manufacturing varieties of incense sticks which counts more than 80% ofthe revenue in overall turnover of the Company some of the majors products are
We offer Durbar Bathi in various fragrances to suit the different demands of theclients. We are well reckoned as one of the prominent Incense Sticks Manufacturers andSuppliers based in India. Our Durbar Bathi is comprised of natural base materials keepingin mind the national and international quality standards.
3.1.2 Fruit (NaturalBathies)
We offer Fruit (Natural Bathies) in various fragrances to suit the different demands ofthe clients. We are well reckoned as one of the prominent Incense Sticks Manufacturers andSuppliers based in India. Our Fruit (Natural Bathies) are comprised of natural basematerials keeping in mind the national and international quality standards.
3.1.3 SunMoon (Incense Sticks) :
We offer Sun Moon (Incense Sticks) in various fragrances to suit the different demandsof the clients. We are well reckoned as one of the prominent Incense Sticks Manufacturersand Suppliers based in India. Our Sun Moon (Incense Sticks) is comprised of natural basematerials keeping in mind the national and international quality standards.
3.1.4 Amrutham (Herbal Bathies)
We offer Amrutham (Herbal Bathies) in various fragrances to suit the different demandsof the clients. We are well reckoned as one of the prominent Incense Sticks Manufacturersand Suppliers based in India. Our Amrutham (Herbal Bathies) are comprised of natural basematerials keeping in mind the national and international quality standards.
3.1.5 Athjisaya Dhoop
We offer Athjisaya Dhoop in various fragrances to suit the different demands of theclients. We are well reckoned as one of the prominent Incense Sticks Manufacturers andSuppliers based in India. Our Athjisaya Dhoop is comprised of natural base materialskeeping in mind the national and international quality standards.
2. HOTEL DIVISION:
The performance of the Hotel division of the Company is satisfactory in this fiscal ascompared to the last fiscal the economy of the country is witnessing uptrend and moretourist and visitors are expected in this fiscal wherein we are expecting good business incoming years
3. CONSTRUCTION DIVISION
As the economy of the Country is witnessing uptrend lots of new projects are sanctionedand expected more new projects in coming time where as we in the process of bidding fornew projects and focusing on the ongoing projects in the hand.
4. INDUSTRY OUT LOOK AGARBATHIES DIVISION
The burning of incense in religious and social functions has been practiced in Indiasince early times. Dhup an aromatic powder or paste is burnt in Indian homes as a fragrantfumigant and is reputed to possess insecticidal and antiseptic properties. Agarbathiesalso known as Udubattis similar to joss sticks are a development of Dhup. Agarbathies areobtainable in different colors and with different perfumes. The burning time; of anagarbatti varies from 15 minutes to 3 hours according to quality and size. Agarbatti isalso obtainable in other forms such as dashang (stickly paste or powder) deep (cones andDhup tablets etc.).
The hotel industry in India is going through an interesting phase. One of the majorreasons for the increase in demand for hotel rooms in the country is the boom in theoverall economy and high growth in sectors like information technology telecom retailand real estate. Rising stock market and new business opportunities are also attractinghordes of foreign investors and international corporate travelers to look for businessopportunities in the country the hospitality industry of India is expected to grow at arate of 8.8% from 2007-16 placing India the second-fastest growing tourism market in theworld. Progress like massive investment in hotel infrastructure and open sky policieswhich are made by the government are all aimed at propelling growth in the hospitalitysector.
The development in Indian construction industry feature is almost equal to theconstruction industry development in other countries. It is founded by the government andgradually it was taken over by the enterprises. After self-government requirement forindustrial and infrastructural developments in India they established the stone ofconstruction architectural and engineering services.
5. RISKS AND CONCERNS:
Indians have well understood the importance of staying one step ahead of developmentsin the world economic environment. The industry is now preparing itself to take share ofopportunities expected to arise out of the market freed from quota restrictions and othertrade barriers. Industry operators are increasingly moving towards modernization andexpansion as encouraged by the so-designated film production and distribution activitieswind power generation; hotels construction activities by Government.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The companys internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. These systems are designed toensure that all the assets of the Company are safeguarded and protected against any lossand that all transactions are properly authorized recorded and reported and the Company isin the process of improving internal control system
7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
When it comes to Segment wise performance of the Company the Turnover of theAgarbathies Division was Rs 9326.76 Lakhs as Compare to Rs 8963.17 Lakhs the Turnover ofhotel division was Rs 2241.01 Lakhs as compared to Rs 2240.61 Lakhs and the Turnover ofWindmill was 52.96 Lakhs as compared to 53.99 Lakhs and in Construction Division manyprojects are in finishing stages and it has good future in coming years.
8. HUMAN RESOURCES/ INDUSTRIAL RELATIONS:
The Company recognizes that people play a critical role in achieving its goals. As on31st March 2015 Company had a team of talented and experienced employees providing awide range of Financial Services. The focus for the year was to build platforms and to putin place scalable processes that would meet the needs of our Companys growth agenda.As a growing Company there are many opportunities available to employees to contribute andgrow ensuring that motivation is high. Our Company prides itself on its ability toattract and retain talents at all levels.
REPORT ON CORPORATE GOVERNANCE
The following are the details furnished in the form as required under the ListingAgreement.
1. COMPANYS PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE:
Your company believes in providing highest transparency and ethical value in CorporateGovernance. Your company also believes in taking into confidence all the stakeholders vizShareholders Employees Creditors Customers etc. Your company is committed to take thetorch of Corporate Governance forward so that every stakeholder of the companysynchronizes and synergies their efforts in their growth along with the growth of theircompany.
2. BOARD OF DIRECTORS:
The Board of Directors presently comprises of six Directors having rich experience andspecialized skills in their respective fields out of which 2 Executive Directors 1Non-Executive Director and 3 Independent Directors which is more than 50% of the totalstrength of the Board.
All the Directors on the Board of the Company have made necessarydeclarations/disclosures regarding their other Directorships along with Committeepositions held by them in other Companies.
During the financial year 2014-2015 6 (Six) Board Meetings were held on the followingdates: 30.05.2014 14.08.2014 13.11.2014 05.02.2015 17.02.2015 and 31.03.2015. Themaximum time-gap between any two consecutive meetings did not exceed four months. Thecomposition of the Board of Directors their directorship details and the attendance ofeach Member at the meetings were as follows:
*Narayanam Kameswara Rao was appointed as non executive &independent director inthe Board meeting held on 17th April 2015
The Directorships held by Directors in other Companies as mentioned above do notinclude Directorships in Foreign Companies Companies Registered under Section 8 of theCompanies Act 2013 and Private Limited Companies.
In accordance with Clause 49 of the Listing Agreement memberships/chairmanships ofAudit Committees and Stakeholders Relationship Committees in all public Limited companies(excluding Ambica Agarbathies Aroma & Industries Limited have been considered.
None of the Directors on the Board is a member on more than 10 Committees and Chairmanof more than 5 Committees across all the companies in which they are Directors.
None of the Directors serve as an Independent Director in more than 7 listed companies.
Currently there are four Board Committees Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee and Risk management committee.The terms of reference of the Board Committees are determined by the Board from time totime. Meetings of each Board Committee are convened by the Chairman of the respectiveCommittees.
The role and composition of these Committees including the number of meetings heldduring the financial year and the related attendance are provided below
The Company constituted a Qualified and Independent Audit Committee comprising of threeNon-Executive Independent Directors in accordance with the provisions of Clause 49 of theListing Agreement read with Section 177of the Companies Act 2013.
The Committee is empowered with the powers as prescribed under Clause 49 of ListingAgreement and Section 177 of the Companies Act 2013. The Committee also acts in terms ofreference and directions of the Board from time to time. Audit Committee of your companyconsists of following Directors:
*Narayanam Kameswara Rao was appointed as member of Audit Committee on 17th April 2015
During the year under review five Audit Committee Meetings were held on 30.05.201414.08.2014 13.11.2014 05.02.2015 and 31.03.2015.
The composition of the Audit Committee and the attendance of each Member of theCommittee at the meetings were as follows:
The terms of reference are:
The terms of reference are:
i. The recommendation for appointment remuneration and terms of appointment ofauditors of the company;
ii. Review and monitor the auditors independence and performance andeffectiveness of audit process;
iii. Examination of the financial statement and the auditors report thereon;
iv. Reviewing with the management the annual financial statements before submissionto the Board for approval with particular reference to:
- matters required to be included in the Directors Responsibility Statement to beincluded in the Boards report in terms of clause (c) of sub-section 3 of Section 134of the Companies Act 2013
- changes if any in accounting policies and practices and reasons for the same
- major accounting entries involving estimates based on the exercise of judgment bymanagement
- Significant adjustments made in the financial statements arising out of auditfindings.
- compliance with listing and other legal requirements relating to financial statements
- disclosure of any related party transactions
- review of draft Auditors Report in particular qualifications / remarks /observations made by the Management Discussion and Analysis of financial conditions andresults of operations v. Approval or any subsequent modification of transactions of thecompany with related parties; vi. Scrutiny of inter-corporate loans and investments; vii.Valuation of undertakings or assets of the company wherever it is necessary; viii.Evaluation of internal financial controls and risk management systems; ix. Monitoring theend use of funds raised through public offers and related matters.
x. The Committee is authorized to investigate into matters referred /delegated to it bythe Board of Directors and for this purpose has full access to information / records ofthe Company including seeking external professional support if necessary.
xi. Reviewing the Compliance of the Listing Agreement and Various other legalrequirement concerning financial statements and related party transactions.
NOMINATION AND REMUNERATION COMMITTEE
In compliance with the provisions of section 178 of the Companies Act 2013 read alongwith clause 49 of the listing agreement the Board has considered and approved the changein the nomenclature of the existing Remuneration Committees the "Nomination andRemuneration Committee".
4.1 Composition-name of members and Chairperson
The Nomination and Remuneration Committee constitutes the following three Non-Executive& Independent Directors.
*Narayanam Kameswara Rao was appointed as Member of Remuneration Committee on 17thApril 2015 and he should be effective from the respective date.
Remuneration Committee meetings were held on 14-08-2014 and 31-03-2015 attendance ofeach Member of Committee is as follows.
Brief Description Of Terms Of Reference
The Remuneration Committee is vested with the power to decide and pay to the executiveand non-executive directors of the Company. This power is exercisable on behalf of theBoard of Directors and the Shareholders.
The terms of reference of the Remuneration Committee are as follows:
a) The Remuneration Committee recommends to the board the compensation terms of theexecutive directors / non-executive directors
b) Framing and implementing on behalf of the Board and on behalf of the shareholders acredible and transparent policy on remuneration of executive directors including ESOPPension Rights and any compensation payment
c) Considering approving and recommending to the Board the changes in designation andincrease in salary of the executive directors
d) Ensuring the remuneration policy is good enough to attract retain and motivatedirectors
e) Bringing about objectivity in deeming the remuneration package while striking abalance between the interest of our Company and the shareholders.
The objectives of the remuneration policy are to motivate employees to excel in theirperformance recognize their contribution retain talent and reward merit. Remuneration ofemployees largely consists of base remuneration perquisites and performance incentives.
Details of the Directors Remuneration:
No sitting fees is paid to the Independent Directors of the Company
STAKEHOLDER RELATION SHIP COMMITTEE:
The terms of reference of the Investor Grievance & Share Transfer Committee are asfollows: To supervise and ensure: (i) Redressal of shareholder and investor complaintslike transfer of shares non-receipt of balance sheet non-receipt of declared dividendsetc;
(ii) Issue of duplicate / split / consolidated share certificates; (iii) Allotment andlisting of shares;
(iv) Review of cases for refusal of transfer / transmission of shares and debentures;(v) Reference to statutory and regulatory authorities regarding investor grievances; (vi)And to otherwise ensure proper and timely attendance and Redressal of investor queries andgrievances.
Composition of Shareholder and Investor Grievance Committee is as follows :
The committee specifically looks after the services of the Registrars and sharetransfer agents and recommends measures for providing efficient services to investors. Itresolves within the reasonable time various complaints received from the investors.
(b) Details of Investor complaints received and readressed during the year:
During the year under review the Independent Directors met on 05 February. 2015inter alia to discuss:
1. Evaluation of the performance of Non-Independent Directors and the Board ofDirectors as a whole;
2. Evaluation of the performance of the Chairman of the Company taking into accountthe views of the Executive and Non-Executive Directors.
3. Evaluation of the quality content and timelines of flow of information between theManagement and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
All the Independent Directors were present at the Meeting
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsAudit Nomination and Remuneration and Compliance Committees.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Boards functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department. The Directors expressed theirsatisfaction with the evaluation process.
VIGIL MECHANISM POLICY
Section 177 of the Companies Act 2013 requires every listed company and such class orclasses of companies as may be prescribed to establish a vigil mechanism called WhistleBlower Policy (as per Clause 49 of the Listing Agreement) for the Directors and employeesto report genuine concerns in such manner as may be prescribed. The Company has adopted aCode of Conduct for Directors and Senior Management Executives ("the Code")which lays down the principles and standards that should govern the actions of the Companyand its employees. Any actual or potential violation of the Code howsoever insignificantor perceived as such would be a matter of serious concern for the Company. Such a vigilmechanism shall provide for adequate safeguards against victimization of persons who usesuch mechanism and also make provision for direct access to the Chairman of the AuditCommittee in appropriate or exceptional cases.
Under these circumstances AMBICA AGARBATHIES AROMA & INDUSTRIES LIMITED being aListed Company has established a Vigil Mechanism and formulated a Policy for the samepursuant to the review and recommendation by the Audit Committee.
RISK MANAGEMENT COMMITTEE
The Committees prime responsibility is to implement and monitor the riskmanagement plan and policy of the Company. The Risk Management Committee (RM Committee)constitution meets with the requirements of Clause 49 of the Listing Agreement andrequirements of the Companies Act 2013
Role and Responsibilities of the Committee includes the following:
i. Framing of Risk Management Plan and Policy ii. Overseeing implementation of RiskManagement Plan and Policy iii. Monitoring of Risk Management Plan and Policy iv.Validating the process of risk management v. Validating the procedure for RiskMinimisation vi. Periodically reviewing and evaluating the Risk Management Policy andpractices with respect to risk assessment and risk management processes Continuallyobtaining reasonable assurance from management that all known and emerging risks have beenidentified and mitigated or managed vii. Performing such other functions as may benecessary or appropriate for the performance of its oversight function
Composition of Risk Management Committee is as follows.
6. General Body Meetings:
Location day date and time where the last three AGMs held and special resolutionpassed thereat as follows:
No Special Resolution is passed in the Previous three Annual General Meeting.
The Company has conducted the postal ballot for the item specified as below Dated18.05.2015 and results were declared on 20th June 2015 by the Chairman on the basis ofthe report submitted by the scrutinizer.
ITEM OF POSTAL BALLOT :
Items of postal ballot:
Appointment of Sri Narayanam Kameswara Rao as Independent Director
Appointment of Smt satyavathi perla as Women Director
Appointment of sri Ambica Krishna as Chairman & Managing Director
Appointment of sri Ambica Ramachandra Rao as Whole time Director
Amendment of main objects to the Memorandum of Association
Approval of Related Party Transaction
SPECIAL RESOLUTION(S) PASSED THROUGH POSTAL BALLOT
During the year the members of the Company have approved the following items throughpostal ballot i. Re-appointment of sri ambica krishna as chairmna & managing directorii. Re-appointment of sri ambica ramachandra rao as wholetime director iii. Amendment ofmain objects to the memorandum of association iv. Approval of related party transaction
The particulars of the Voting Pattern in the Postal Ballot is as follows:
Sri Ambica Krishna Chairman & Managing Director of the Company was authorized toconduct the postal ballot process andMr.YELLAREDDY VOOTKURI Practicing CharteredAccountant was appointed as Scrutinizer for Postal Ballot process of the Company.
No Special Resolution is proposed to be conducted through postal ballot at theensuing 20th
Annual General Meeting.
Disclosures on Materially Significant Related Party Transactions:
Besides the transactions mentioned elsewhere in the Annual Report there were nomaterially significant related party transactions during the year conflicting with theinterest of the Company.
Details of Non-Compliance and Penalties:
There was no non-compliance during the last three years by the Company on any matterrelated to Capital Market. There were no penalties imposed nor strictures passed on theCompany by any Stock Exchanges Securities and Exchange Board of India or any StatutoryAuthority relating to the capital markets.
The company has belatedly complied some of the provision of Clause 41 of listingAgreement
MEANS OF COMMUNICATION:
Quarterly Results and Annual Results of the Company are normally published in Englishdaily and Regional daily.
As required by Clause 49 of the Listing Agreement Management Discussion and Analysisreport is a part of the Annual Report.
9. General Shareholder Information:
The Listing fee for the year 2014-2015 has been paid to both the above said StockExchanges.
Market Price Data: During the last Financial Year 2014-2015
High and Low of the each month of the Companys Equity Shares during the lastFinancial Year 2014-15at BSE Limited
The script of the company in NSE & BSE was suspended for belated compliance underclause 41 of listing agreement and in BSE platform the shares of the company is traded onevery Monday of the week
SHARE TRANSFER SYSTEM:
The Board of Director has delegated the power of share transfer to Registrar and ShareTransfer Agents for processing of Share transfers to M/s Venture Capital and CorporateInvestments Private Limited
Shareholding pattern as on 31st March 2015:
Distribution of Shareholding as on 31st March 2015
Dematerialization of shares and liquidity:
The Shares of the Company are under compulsory demat trading. The Company has alreadyentered into necessary agreements with NSDL and CDSL for demat facility.
77.42% of total equity share capital of the Company is held in dematerialization formwith NSDL and CDSL as on 31st March 2015.
CEO & CFO Certifications
The CFO of the Company gave annual certificates on financial reporting and internalcontrols to the Board in terms of Clause 49. Report annexed
Outstanding GDRs / ADRs / Warrants or any Convertible instruments conversion date andlikely impact on equity: Nil
Plant Location : SATRAMPADU ELURU. DUGGIRALA ELURU West Govdavari Dist AndhraPradesh
Address for correspondence:
Sri Ambica Krishna
Ambica Agarbathies Aroma & Industries Limited Shankar Towers Power petELURU-534002
Both physical and demat:
M/s. Venture Capital and Corporate Investments Private Limited 12-10-167 Bharat NagarHyderabad-500018
DECLARATION OF THE MANANGING DIRECTOR ON COMPLIANCE WITH CODE OF CONDUCT AND ETHICS:
Ambica Agarbathies Aroma & Industries Limited has adopted a Code of BusinessConduct and Ethics ("the Code") which applied to all employees and Director ofthe Company. Under code it is responsibility of all employees and Directors tofamiliarize themselves with the Code and Comply with its standards.
I hereby certify that the Board Members and Senior Management Personnel of AmbicaAgarbathies Aroma & Industries Limited have affirmed compliance with the Code for theFinancial Year 2014-15.
Chairman & Managing Director
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificates:
I Sri Ambica Hanuma Chief Finanancial officer of Ambica Agarbathies Aroma &Industries Ltd to the best of our knowledge and belief certify that:
1. I have reviewed the Balance Sheet and Profit and Loss Account and all its schedulesand notes on accounts as well as the Cash Flow Statement for the year ended 31.03.2015.
2. To the best of our knowledge and belief:
a) These statements do not contain any untrue statement or omit any material fact orcontain statements that might be misleading.
b) The financial statements and other financial information included in this reportpresent true and fair view of the Companys affairs and are in compliance withexisting accounting standards and applicable laws and regulations.
3. To the best of our knowledge and belief there are no transactions entered into bythe Company during the year which are fraudulent illegal or volatile of theCompanys code of conduct.
4. We accept responsibility for establishing and maintaining internal controls forfinancial reporting. We have evaluated the effectiveness of internal control systems ofthe Company pertaining to financial reporting and have disclosed to the Auditors and theAudit Committee deficiencies in the design or operation of such internal controls ifany of which we are aware and steps taken or proposed to be taken for rectifying thesedeficiencies.
5. a) There has not been any significant change in internal control over financialreporting during the year under reference;
b) There has not been any significant changes in accounting policies during the yearunder reference; and
c) We are not aware of any instances during the year of significant fraud withinvolvement there in of the management or any employee having a significant role in theCompanys internal control system over financial reporting.
SECRETARIAL AUDIT REPORT
For the financial year ended 31st march 2015
[Pursuant to section 204(1) of the Companies Act 2013 and ruleNo.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
M/s Ambica Agarbathies Aroma &industries Limited
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s Ambica Agarbathies Aroma& Industries Limited (hereinafter called the company) having its registered office atShankar towers power pet Eluru-534002. Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on our verification of the Company books papers minute books forms and returnsfiled and other records maintained by the company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit We hereby report that in our opinion the company has during the auditperiod covering the financial year ended on 31st March 2015 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board-processes andcompliance-mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2015according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade there under;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992; (not applicable during the audit period)
c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; (not applicable during the audit period)
d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; (not applicable during the audit period)
e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; (not applicable during the audit period)
f) The Securities and Exchange Board of India (Registrars to an 12 Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; (not applicable during the audit period) and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; (not applicable during the audit period) We have also examined compliance with theapplicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India. (Notnotified hence not applicable to the Company)
(ii) The Listing Agreements entered into by the Company with Stock Exchange(s) Duringthe period under review the Company has complied with the provisions of the Act RulesRegulations Guidelines Standards etc. mentioned above subject to the followingobservations:
1. Belated compliance of Clause 41of the Listing agreement
We further report that The Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act. Adequatenotice is given to all Directors to schedule the Board Meetings agenda and detailed noteson agenda were sent at least seven days in advance and a system exists for seeking andobtaining further information and clarifications on the agenda items before the meetingand for meaningful participation at the meeting. All decisions at Board Meetings andCommittee Meetings are carried out unanimously as recorded in the minutes of the meetingsof the Board of Directors or Committee of the Board as the case may be.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period and information received from themanagement of the Company there were no specific events / actions having a major bearingon the companys affairs in pursuance of the above referred laws rules regulationsguidelines standards etc.
Information pursuant to Section 197 of the Act
Read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
A. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary during the financial year 2014-15 and Ratio ofthe remuneration of each director to the median remuneration of the employees of thecompany for the financial year 2014-15:
Note: The median remuneration of employees of the Company during the financial year wasRs.129000
B. The percentage increase in the median remuneration of employees in the financialyear:4.37% C. The number of permanent employees on the rolls of company: 435 D. Theexplanation on the relationship between average increase in remuneration and companyperformance:
The average increase in the employee remuneration effected during the year 2014-15 isbased on the individual performance and Companys performance during the previousfinancial year 2013-14. The other factors considered for revision in remuneration is basedon market survey functional expertise industry standards etc.
E. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:
F. Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies
G. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average increase in the salaries of employees other than the managerial personnelin 2014-15 was 79.83%. The Percentage increase in the managerial remuneration for the samefinancial year was Nil
H. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the company:
I. The key parameters for any variable component of remuneration availed by thedirectors:
Not Applicable as the directors does not avail any variable component of remuneration
J. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:
Not Applicable as No employee is receiving remuneration in excess of the highest paidDirector
K. Affirmation that the remuneration is as per the remuneration policy of the company.
It is hereby affirmed that the remuneration paid to the Directors and Key ManagerialPersonnel are as per the Nomination and Remuneration Policy of the Company.