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Everlon Synthetics Ltd.

BSE: 514358 Sector: Industrials
NSE: N.A. ISIN Code: INE339D01026
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VOLUME 179
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P/E 30.80
Mkt Cap.(Rs cr) 9
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OPEN 1.55
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VOLUME 179
52-Week high 2.64
52-Week low 1.36
P/E 30.80
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Everlon Synthetics Ltd. (EVERLONSYNTH) - Director Report

Company director report

To

The Members

The Board of Directors present their 27th Annual Report together with Audited Statementof Accounts for the year ended 31st March 2016.

1. OPERATIONS AND FINANCIAL RESULTS

Year Ended 31/03/2016 Year Ended 31/03/2015
(Rs. in Lacs) (Rs. in Lacs)
Sales 3096.77 4102.60
Other Income 7.28 4.95
Profit for the year before Depreciation Exceptional Items &Tax (21.18) 39.58
Less : Depreciation 23..37 30.72
Add : Exceptional items 53.96
Profit before Tax 9.41 8.86
Less : Provision for Tax 1.80 1.70
Profit after tax 7.61 7.16
Add/Less: IT Provisions for earlier years 0.32 (1.09)
Add: Additional Depreciation written back 23.92 -
Profit for the year 31.85 6.07
Profit (Loss) Brought forward from Previous Year (100.21) (106.28)
Profit/ (Loss) carried to Balance Sheet (68.36) (100.21)

2. PERFORMANCE

Your Company has managed to achieve reasonable good performance during the year inspite of difficult market conditions. Sales have declined mainly due to reduction infinished goods prices.

The company has produced 3292.73 tons against 3795.44 tons during the previous yearresulting in sales turnover of ` 3096.77 lacs as against ` 4102.60 lacs during theprevious year.

3. DIVIDEND

Directors do not recommend any dividend due to the accumulated losses suffered by thecompany.

4. DIRECTORS & KEY MANAGERIAL PERSONNEL

A) Changes in Directors and Key Managerial Personnel

Mr. Kamlesh C Sanghavi Independent Director of the Company expired on 3rdMarch 2016. He was associated with the company since 2006. Board put on record valuablecontribution made by him to the affairs of the company. Mrs. Varsha Jitendra Vakharia(DIN: 00052361) is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible seek reappointment pursuant to Section 152 of the Companies Act 2013 Thepresent term of appointment of Shri Jitendra K. Vakharia as Managing Director is validupto 30th September 2016 subject to approval of members at the ensuing AnnualGeneral Meeting. The Board has reappointed him as Managing Director for a period of 3years from 1st October 2016.

Mr. Nitin Ishwarlal Parekh (DIN 00087248) Additional Director appointed in the BoardMeeting held on 29th March 2016 is proposed to be appointed as an IndependentDirector of the Company who shall not be liable to retire by rotation and in respect ofwhom the Company has received notice proposing his candidature under Section 160 of theCompanies Act 2013 along with requisite deposit for a tenure of 5 years. The Boardrecommends his appointment as an Independent Director to the members.

Shri Subodh L More Secretary of the Company resigned on 23rd May 2015 andShri Sandeep S.Gupta was appointed on 6th August 2015 as Secretary of theCompany.

B) Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and the ListingAgreement/Regulations the Board has carried out an annual performance evaluation of itsown performance of individual Directors as well as the evaluation of the working of itsall Committees.

C) Declaration by an Independent Director(s)

All the Independent Directors have provided the declaration of Independence asrequired pursuant to Section 149(7) of the Companies Act 2013 stating that they meet thecriteria of independence as provided in sub-section (6).

5. AUDITORS

M/s. Poladia & Company Chartered Accountants Mumbai retiring Auditors haveexpressed their unwillingness for reappointment. Further the audit committee and Boardhave recommended appointment of M/s. K.S. Maheshwari & Co. Chartered Accountants asStatutory Auditors of the Company. They have given their consent to act as StatutoryAuditors and are eligible for appointment . Members are requested to appoint the auditorsand to fix their remuneration.

6. FIXED DEPOSITS :

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

7. 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.

The details of the investments made by the company is given in the notes to thefinancial statements.

8. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that :a) in the preparation of the annual accounts for the year endedMarch 31 2016 the applicable accounting standards have been followed and there are nomaterial departures from the same. b) the Directors have selected such accounting policiesand applied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state affairs of the Company as at

March 31 2016 and of the profit of the company for the year ended on that date. c) theDirectors have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d) the Directorshave prepared the annual accounts on a going concern basis; e) the Directors have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; and f) the Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.

9. AUDITORS REPORT

Auditors notes are self-explanatory and do not call for any further comments. There areno qualifications in Auditors Report.

There are no frauds reported by Auditors u/s.143(12) of the Companies Act 2013.

10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureA to this report.

11. DETAILS OF COMMITTEE OF THE BOARD

Currently the Board has 3 Committees: the Audit Committee Nomination and RemunerationCommittee and Stakeholders’ Relationship Committee. The Composition of variouscommittees and compliances as per the applicable provisions of the Companies Act 2013and the Rules there under and Listing Agreement/ Regulations are as follows:

A. Audit Committee:

Mr. Kamlesh Sanghvi member of the Audit Committee expired on 3rd March2016.

On 29th March 2016 Board appointed Mr. Nitin I. Parekh as a member of thecommittee. The Audit Committee comprising of Mr. Dinesh Turakhia Independent Director asthe Chairman of the Committee and Mr. Nitin Parekh Independent Director and Mr. JitendraVakharia Director as the members of the Committee. The recommendations of the AuditCommittee is always welcomed and accepted by the Board and all the major steps impactingthe financials of the Company are undertaken only after the consultation of the AuditCommittee.

Details of establishment of vigil mechanism for directors and employees:

The Company has established vigil mechanism pursuant to Section 177(9) of the CompaniesAct 2013 for Directors and Employees to report their concerns and has also taken steps tosafeguard any person using this mechanism from victimization and in appropriate andexceptional cases there is direct access to approach Mr. Dinesh P. Turakhia Chairpersonof the Audit Committee.

B. Nomination and remuneration committee:

Shri Kamlesh C. Sanghvi member of the committee expired on 3rd March 2016.Board has appointed Mr. Nitin I. Parekh as member w.e.f. 29th March 2016.

The Board has constituted Nomination and Remuneration Committee under Section 178 ofthe Companies Act 2013. Mr. Dinesh P.Turakhia Independent Director is the Chairman ofthe said Committee and Mr. Nitin I. Parekh Independent Director and Mrs. VarshaJ.Vakharia Director are the members of the Committee. The Committee has framed a policyto determine the qualification and attributes for appointment and basis of determinationof remuneration of all the Directors Key Managerial Personnel and other employees.

C. Stakeholder’s Relationship Committee:

The Stakeholder’s Relationship Committee comprises of Mr. Dinesh P. Turakhiandependent Director as the Chairman of the Committee and Mr. Jitendra K. VakhariaDirector and Mrs. Varsha J. Vakharia Director as the members of the Committee. The roleof the Committee is to consider and resolve securities holders’ complaints. Thecomplaints are responded resolved within the time frame provided.

12. SECRETARIAL AUDITOR

The Board has appointed A. M. Sheth & Associates Practising Company Secretary toconduct Secretarial Audit for the financial year 2015-16 as required u/s.204 of theCompanies Act.2013 and the rules framed thereunder. The Secretarial Audit Report for thefinancial year ended March 31 2016 is annexed herewith marked asAnnexure B to thisReport

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

13. MEETING OF THE BOARD OF DIRECTORS

The Board of Directors duly met 8 times during the financial year from 1 stApril 2015 to 31st March 2016. The dates on which the meetings were held areas follows:- 30th May 2015 29th July 2015 11th August2015 15th September 2015 3rd November 2015 6th November 2015 3rdFebruary 2016 and 29th March 2016.

14. EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure C tothis Report.

15. RISK MANAGEMENT PLAN

There is a continuous process for identifying evaluating and managing significantrisks faced through a risk management process designed to identify the key risks facingbusiness. There are no risks which threaten the existence of the company.

16. CORPORATE SOCIAL RESPONSIBILITY

Provisions of section 135 of the Companies Act 2013 are not applicable to the company.

17. CORPORATE GOVERNANCE

The Company is adhering to good corporate governance practices in every sphere of itsoperations. The corporate governance provisions as specified in regulations 17 to 27 andclauses (b) to (i) of sub-regulation (2) of regulation 46 and para C D and E of ScheduleV are not applicable to the Company as company’s paid up capital is less than ` 10crores and net worth is less than ` 25 crores. Management Discussions and Analysis Reportis attached herewith as Annexure D

18. DEPOSITS

The Company has not accepted any Deposits from the Public.

19. CONTRACTS U/S. 188

All contract/arrangements / transactions entered by the company during the financialyear with related parties were in ordinary course of business and on an arm’s lengthbasis. Form AOC2 giving details of contract is attached herewith as Annexure E .

20. INTERNAL FINANCIAL CONTROL

Adequate internal controls systems and checks are in place commensurate with thesize of the Company and the nature of its business.

21 . DIRECTORS REMUNERATION

Remuneration policy for Directors Key Managerial Persons and other employees isattached herewith as Annexure F. Particulars of Directors Remuneration as requiredu/s. 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel)Rules 2014 are attached herewith as Annexure G.

22. RIGHTS ISSUE

In term of letter of offer company issued and allotted 25948800 equity shares ofRe.1/- each a premium of Rs.0.30 per equity share on 6th November 2015. Thefunds were fully utlised for the purpose of repayment of unsecured loan and to meet theissue expenses.

23. CODE OF CONDUCT

Declaration by Managing Director under Para D of Schedule V of Listing Regulations2015.

"I hereby declare that all the Board members and Senior Management Personnel ofthe Company have affirmedcompliance with the code of conduct of Board of Directors andSenior Management."

24. UNCLAIMED SHARES SUSPENSE ACCOUNT

The company has dematerialized 733800 equity shares of ` 1/- each and transferred toUnclaimed Suspense Account on 16/04/ 2016 .

25. GENERAL DISCLOSURE

No disclosure is required in respect of following matters:-

a) Subsidiary Associate or Joint Venture Company.

b) Material orders passed by the Regulators or Courts or Tribunals.

c) Equity shares with differential rights.

d) Sweat equity shares.

e) Employee Stock Options Scheme.

f) Particulars of Employees. (no employee is in receipt of remuneration of Rs. 60 lacsp.a. or Rs. 5.00 lac p.m.)

g) Sexual Harassment of Women at work place (Prevention Prohibition and Redressal)Act 2013. (No cases filed).

26. ACKNOWLEDGEMENT

The Directors wish to place on record appreciation for the efforts put in by all theemployees of the Company. They are thankful to Company’s Bankers for the supportextended to the company.

For and on behalf of the Board of Director
-- Sd -- -- Sd --
J. K. Vakharia V. J. Vakharia
Place :- Mumbai Managing Director Director
Date :- 30th May 2016 (DIN 00047777) (DIN 00052361)

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO ETC :

Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are provided.

(A) CONSERVATION OF ENERGY

(i) the steps taken or impact on conservation of energy : Energy conservation continues to receive priority attention at all levels.
(ii) the steps taken by the company for utilising alternate sources of energy : All efforts are made to conserve and optimise use of energy with continuous monitoring improvement in maintenance and distribution systems and through improved operational techniques.
(iii) the capital investment on energy conservation equipment : No Capital has been earmarked separately for Energy Conservation equipment.

(B) TECHNOLOGY ABSORPTION

NIL

(C) FOREIGN EXCHANGE EARNINGS AND OUT GO:

Foreign Exchange earned : NIL

Foreign Exchange outgo : NIL

Annexure E FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014. Form for Disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to in subsection (1) of section 188 of the Companies Act 2013 including certain arms lengthtransaction under third proviso thereto.

1. Details of contracts or arrangements or transactions not at Arm’s length basis.

Not Applicable as all transactions are on Arm’s Length basis

Particulars Details
a) Name (s) of the related party & nature of relationship N.A.
b) Nature of contracts/arrangements/transaction N.A.
c) Duration of the contracts/arrangements/transaction N.A.
d) Salient terms of the contracts or arrangements or transaction including the value if any N.A.
e) Justification for entering into such contracts or arrangements or transactions’ N.A.
f) Date of approval by the Board N.A.
g) Amount paid as advances if any N.A.
h) Date on which the special resolution was passed in General meeting as required under first proviso to section 188 N.A.

2. Details of contracts or arrangements or transactions at Arm’s length basis.

Particulars Details
a) Name (s) of the related party & nature of relationship Teekay International & Director Interested
b) Nature of contracts/arrangements/transaction Lease Rent
c) Duration of the contracts/arrangements/transaction 11 months
d) Salient terms of the contracts or arrangements or transaction including the value if any Rs.25000/- p.m.
e) Date of approval by the Board 30th May 2015
f) Amount paid if any Rs.300000/-

 

For and on Behalf of the Board of Directors
--Sd-- --Sd--
JITENDRA K. VAKHARIA VARSHA J. VAKHARIA
Place : Mumbai DIRECTOR DIRECTOR
Date : 30th May 2016 (DIN 00047777) (DIN 00052361)

ANNEXURE - F REMUNERATION POLICY

A. REMUNERATION POLICY FOR EXECUTIVE DIRECTORS

a) The remuneration paid to the Executive Directors of the Company is approved by theBoard of Directors on the recommendations of the HR & Remuneration Committee.

b) Remuneration of the Chairman and Managing Director and Executive Directors consistof a fixedcomponent and commission based on the net profits of each financial year. Thecommission amount year. The increase in fixed salary I s recommended by the HR Committeebased on the general industry practice .

B. REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS

Non-Executive Directors of a Company’s Board of Directors add substantial value tothe Company through their contribution to the Management of the Company. In addition theyalso play an appropriate control role. For best utilizing the Non - Executive Directorsthe Company has constituted certain Committees of the Board.

Remuneration payable:

Particulars Remuneration Remarks
1 Sitting Fees: Rs.500/- per meeting a) As per the limits prescribed by the Companies Act.
For Board Meetings b) Approval – Board
For Committee Meetings At present company does not pay any sitting fees for attending committee meetings. a. As per the limits prescribed by the Companies Act.
2 b. Approval – Board
(An Independent Director shall not be entitled to any stock option.)

C. Remuneration Policy for Senior Managers

1. The Company while deciding the remuneration package of the senior management memberstakes into consideration the employment scenario remuneration package prevailing in theindustry and remuneration package of the managerial talent of other comparable industries.

2. The remuneration to senior management employees comprises of two broad terms –Fixed Remuneration and Variable remuneration in the form of performance incentive.

3. Annual increase in fixed remuneration is reviewed and then approved by the HR andRemuneration Committee.

Annexure – G

(A) REMUNERATION OF DIRECTORS / KEY MANAGERIAL PERSON (KMP)

The information required pursuant to Section 197 read with Rule 5 The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of theCompany and Directors is furnished hereunder:-

Name Designation Remuneration Paid Rs. F.Y.2015-16 Director Sittings Fees Paid Rs F.Y.2015-16
1 Shri Jitendra K.Vakharia Managing Director - -
2 Smt Varsha J.Vakharia Director - 5500/-
3 Shri Dinesh P.Turakhia Independent Director - 3500/-
4 Shri Kamlesh C.Sanghvi Independent Director - 2000/-
5 Shri Sandeep S. Gupta (w.e.f. 06/08/2015) Company Secretary 147581/- -
6 Shri Pradeep K.Pareek Chief Financial Officer 222995/- -
7 Shri Subodh L. More (Upto 23/05/2015) Company Secretary 30000/- -

(B) PARTICULARS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL REMUNERATION

(i ) The information required pursuant to Section 197 read with Rule 5(1) TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnishedhereunder:-

Name Designation Ratio of Remuneration of each Director or KMP to median remuneration of employees % increase in remuneration during F.Y. 2015-16 Comparison of the remuneration of each KMPS against the performance of the company
Jitendra K. Vakharia Managing Director - Nil Compared to F.Y 2014-15
Pradeep K. Pareek Chief Financial Officer 1.51 times 2.5% Revenue decreased by 24.51% and EBIDTA
Sandeep S. Gupta Company Secretary 1 time Nil decreased by 16.68%

(ii) The median remuneration of employees increased by 5.82% in F.Y. 2015-16.

(iii) The number of permanent employees on the rolls of the Company as on 31stMarch 2016 is 36 nos.

(iv) The average increase in remuneration paid to employees is 4.49% for F.Y. 2015-16as compared to F.Y. 2014-15 the revenue in F.Y. 2015-16 decreased by 24.51% & EBITDAdecreased by 16.68%.

(v) The total remuneration of KMPs decreased by 50% while the revenue in FY 2015-16decreased by 24.51% and EBITDA decreased by 16.68%.

vi)
PARTICULARS 31st MARCH 2016 31st MARCH 2015
a) Market Capitalization 57909072 51465120
b) Price Earnings Ration 0.01 0.02

Comparison of rate at which company came out with public offer in 1994 at par andcurrent market price (after adjustment for sub division) market value increased by 3.1%.

(vii) Average percentage increase in the salaries of employees other than KMP forFY.2015-16 was 21.80% as compared to FY 2014-15. There was an decrease by 50% in the totalremuneration of KMPs for the same period.

(viii) There is no direct relationship between average increase in the remuneration ofemployees and Key Managerial Personnel with year to year financial performance of theCompany.

(ix) None of the employees (who are not Directors) receive remuneration in excess ofthe highest paid director.

(x) It is hereby affirmed that the remuneration paid during FY2015-16 is as per theremuneration policy of the Company.

Information under Rule 5 (2) and 5 (3) of the companies (Appointment and remunerationsof managerial personnel) Rule 2014. There are no employees drawings remunerations asstated in the aforesaid Rules 5 (2) and 5 (3)