To the Members of the Company
Your Directors have pleasure in presenting the 27th Annual Report on thebusiness and operations of your Company with Audited Accounts for the year ended 31stMarch 2016. The financial results of the Company are summarized below:
|FINANCIAL HIGHLIGHTS AND OPERATIONS: || || |
|(in INR) || || |
|Particulars ||31st March 2016 ||31 st March 2015 |
|Profit /Loss (before interest depreciation and tax) ||12272133 ||4418659.00 |
|Less: Interest ||1046817 ||591632.00 |
|Depreciation ||5105361 ||2323151.00 |
|Profit /Loss before Tax ||6119955 ||1503876.00 |
|Less: Loss on obsolence/damage to Plant/assets ||41735 ||2057218.00 |
|Less: Current Tax ||960617 ||Nil |
|Add: Deferred Tax ||85438 ||Nil |
|Profit /Loss After Tax ||5203041 ||(553342.00) |
The financial performance of the Company was satisfactory and operation remainedconfined mainly to job work. The Company continues to focus on its initiatives to improveprofitability through productivity improvement and cost optimization.
Your Directors do not recommend payment of any dividend during financial the year.
CORPORATE GOVENRANCE REPORT:
The compliance with the Corporate Governance provisions as specified in regulations 17to 27 and Clause (b) to (i) of Sub-regulation (2) of regulation 46 and para C D and E ofSchedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 isnot applicable to your Company as the paid up equity share capital not exceeding rupeesten crore and net worth not exceeding rupees twenty five crore as on the last day of theprevious financial year. Accordingly the information required under said clauses are notfurnished hereafter. However the Board of Directors at Company level has enforcedcomplete adherence to the Corporate Governance norms. Provided that where the provisionsof the regulations specified in above said regulation becomes applicable to the Company ata later date the Company shall comply with the requirements of those regulations withinsix months from the date on which the provisions became applicable to the Company.
During the financial year under review there is no change in the Board of Directors ofthe Company. The Company has received declaration from all the Independent Directors ofthe Company confirming that they meet with the criteria of Independence as prescribed bothunder sub-section (6) of Section 149 of the Companies Act 2013 and Regulations 16 (b) ofSEBI (Listing Obligation and Disclosure Requirements) Regulations 2015. As per provisionsof Section 152 of the Companies Act 2013 one third of the total strength of directors isrequired to retire by rotation at every Annual General Meeting and they can offerthemselves for reappointment if eligible. At present the total strength of Board ofDirectors of the Company is five directors out of which three are Independent Director andtwo are executive director.
Since the Independent directors are not required to be calculated for the purpose ofdetermining the directors liable to retire by rotation and the executive directors areappointed for a particular period as per the terms of employment no directors areretiring by rotation at the forth coming Annual General Meeting.
COMMITTEES OF THE BOARD:
The Board has constituted the following committees of Directors: I) Audit Committee II)Nomination and Remuneration Committee III) Shareholderss Grievance Committee
I. AUDIT COMMITTEE: a. Composition:
The Audit Committee comprises of three Directors namely
|Names of Directors ||Category |
|Mr. Vikram P. Adagale ||Chairman |
|Mr. Vasant L. Mange ||Member |
|Mr. Rajesh P. Mange ||Member |
b. Terms of reference:
In terms of Section 177 of the Companies Act 2013 the Audit committee also
(a) Review of the Companys financial reporting process and financial statements.
(b) Review of accounting and financial policies and practices.
(c) Review of Internal control systems.
(d) Discussion with Statutory/Internal Auditors on any significant findings andfollow-up thereon.
(e) Reviewing the Companys financial and risk management policies.
c. Audit committee Meetings and Attendance:
The Committee has met 4 times during the financial year ended 31st March2016 i.e. on 30th April 2015 14th August 2015 13thNovember 2015 and 12th February 2016. Details of attendance of each Directorat the Audit Committee Meetings are given below:-
|Name of the Director ||Position ||Meeting attendance |
|Mr. Vikram P. Adagale ||Chairman ||4 |
|Mr. Vasant L. Mange ||Member ||4 |
|Mr. Rajesh P. Mange ||Member ||4 |
II. NOMINATION AND REMUNERATION COMMITTEE:
a. Composition and attendance :
The Nomination and Remuneration Committee comprised of three Non-Executive Directorsnamely Mr. Rajesh P. Mange (Chairman of the Committee) Mr. Vikram P. Adagale andMr. Vasant L. Mange as members of the Committee.
b. Terms of Reference:
The broad terms of reference of the committee are to appraise the performance ofManaging Director and whole time directors determine and recommend to the Boardcompensation payable to Managing Director and whole time directors. The remunerationpolicy of the Company is based on review of achievements. The remuneration policy is inconsonance with the existing industry practice.
c. Remuneration Policy:
Subject to the approval of the Board of Directors and subsequent approval by themembers at the General Meeting and such authorities as the case may be remuneration ofManaging Director and Whole time
Directors is fixed by the Remuneration Committee. The remuneration is decided by theNomination and Remuneration Committee taking into consideration various factors such asqualifications experience expertise prevailing remuneration in the competitiveindustries financial position of the company etc.
d. Remuneration to Directors:
The details of remuneration for the year ended March 31 2016 to the Executive /Non-Executive Directors are as follows:
|Name ||Designation ||Remuneration |
|Mrs. Zaver S. Bhanushali ||Chairman & Managing Director ||INR 660000.00 |
|Mr. Siddharth S. Bhanushali ||Whole-time Director ||INR 588000.00 |
The Company has paid sitting fees of Rs.2000/- per meeting to Non-Executive Directorsduring the financial year 2015-16.
III. SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE: a) Composition and attendance:
The present Shareholders Grievance Committee comprised of Two Executive and Two NonExecutive Directors namely Mrs. Zaver S. Bhanushali Mr. Vikram P. Adagale Mr. Rajesh PMange and Mr. Siddharth S. Bhanushali as a members of the Committee. The Committeehas been empowered to look into all share holders grievances periodically and takenecessary actions. Further there were no complaints pending for redressel during the yearunder review. b) Terms of Reference:
The Company has a Shareholders/Investors Grievance Committee to look into redress ofInvestors Complaints and requests such as delay in transfer of shares non receipt ofDividend Annual Report revalidation of Dividend warrants etc.
The committee deals with various matters relating to:
Transfer / transmission of shares
Issue of Share certificate in lieu of lost sub-divided consolidatedrematerialized or defaced certificates.
Consolidation / splitting of folios
Review of shares dematerialized and all other related matters.
Investors grievance and redressal mechanism and recommend measures to improvethe level of investors services.
Meeting of Independent Directors
During the year meeting of Independent Directors was held on 12th February2016 to review the performance of the Board as a whole and Chairman on parameters ofeffectiveness and to assess the quality quantity and timeliness of flow of informationbetween the management and the Board.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors Responsibilities Statement it is hereby confirmed: (i) that inthe preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures; (ii) that the Directors have selected such accountingpolicies and applied them consistently and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the financial year and of the profit or loss of the Company for thatperiod;
(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; and
(iv) that the Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a going concern basis.
(v) that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(i) that the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operating effectively.
The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
NUMBER OF MEETINGS OF THE BOARD:
The Board met 4 (Four) times during the financial year and the intervening gap betweenany two meetings was within the period prescribed by the Companies Act 2013. The dates onwhich the meetings were held are 30th April 2015 14th August2015 13th November 2015 and 12th February 2016
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.caprolactam.in
RISK MANAGEMENT POLICY:
Your Company is aware of the risks associated with the business. It regularly analysesand takes corrective actions for managing/ mitigating the same. Your Company hasinstitutionalized the policy/process for identifying minimizing and mitigating risk whichis reviewed. The key risks and mitigation actions are placed before the Audit Committee.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration the various aspects of the Boards functioningcomposition of the Board and its Committees culture execution and performance of thespecific duties obligations and governance. The performance evaluation of the IndependentDirectors was completed. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. The Board of Directorsexpressed their satisfaction with the evaluation process.
The Board has on the recommendation of the Nomination & Remuneration committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure A".
SIGNIFICANT AND MATERIAL ORDERS:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company does not have any obligation to fulfil under corporate socialresponsibility as none of the criteria are applicable to the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT:
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of the report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review there is no change in the nature of Business of theCompany.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board and tothe Chairman & Managing Director.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large.
The Company does not have any subsidiary / associate company.
AUDITORS REPORT/ SECRETARIAL AUDIT REPORT:
The observation/comment made in the Auditors' Report read together with relevant notesthereon are self explanatory and hence do not call for any further comments under Section134 of the Companies Act 2013. As required under section 204 (1) of the Companies Act2013 the Company has obtained a secretarial audit report. Certain observations made in thereport which are self explanatory. However the company would ensure in future that allthe provisions are complied to the fullest extent. Further the Company is in process ofappointing suitable candidate for the key position of Whole time Company Secretary interms of Section 203 of the Companies Act 2013 and rules made thereunder.
In accordance with provisions of Section 139 and other applicable provisions of theCompanies Act 2013 and the Companies (Audit and Auditors) Rules 2014 M/s. L J Kothari& Co. Chartered Accountants Mumbai (FRN 105313W) have been appointed as statutoryauditors of the Company at the Annual General Meeting held on 28.09.2015 for a period of 5years subject to ratification by members at every consequent Annual General Meeting.Therefore ratification of appointment of Statutory Auditors is being sought from themembers of the Company at the ensuing AGM.
Pursuant to provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Nitesh Jain & Co. Company Secretaries to undertake the SecretarialAudit of the Company. The Secretarial Audit report is annexed herewith as "AnnexureB"
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
PREVENTION OF INSIDER TRADING:
In January 2015 SEBI notified the SEBI (Prohibition of insider trading) Regulations2015 which came into effect from May 15 2015. Pursant thereto the Company has formulatedand adopted a new Code for Prevention of Insider Trading. The Company has adopted a Codeof Conduct for Prevention of Insider Trading with a view to regulate trading insecuritiesby the Directors and designated employees of the Company. The Code requires pre-clearancefor dealing in the Companys shares and prohibits the purchase or sale of Companyshares by the Directors and the designated employees while in possession of unpublishedprice sensitive information in relation to the Company and during theperiod when theTrading Window is closed. The Board is responsible for implementation of the Code. AllDirectors and the designated employees have confirmed compliance with the Code.
INFORMATION PURSUANT TO RULE 5 (2) OF COMPANIES (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
The Company has not appointed any employee(s) in receipt of remuneration exceeding thelimits specified under Rule 5 (2) of Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The related information is provided in "Annexure C" which is attached tothis report.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Reporting under the sexual harassment of women at workplace (Prevention Prohibitionand Redressal) Act 2013 is not required as the Company has not employed any women atwork place.
An acknowledgement to all with whose help cooperation and hard work the Company isable to achieve the results.
|Place: Mahad ||For and behalf of the Board of ||Directors |
|Dated: 30th May 2016 || || |
| ||Sd/- ||Sd/- |
| ||Zaver Bhanushali ||Siddharth Bhanushali |
| ||Managing Director ||Whole-time Director |
| ||DIN 00663374 ||DIN - 01721586 |