Dear Shareholders
Your Directors are pleased to present herewith the 25 Annual Report on the business andoperations of the Company and the Audited Accounts for the year ended 31 March 2017.
1. Financial Results and Operations
The summarized financial results for the year ended 31 March 2017 as compared with theprevious year are as under:
| | | Rs. in Lakhs |
| S.No | Particulars | For the Year 2016-17 | For the Year 2015-16 |
| a. | Sales | 569.48 | 787.83 |
| b. | Profit before Interest Depreciation & Tax | 182.42 | 42.66 |
| c. | Less: Interest | 40.42 | 94.75 |
| d. | Less: Depreciation | 44.54 | 42.40 |
| e. | Profit before Tax | 97.46 | (94.49) |
| f. | Less: Provision for Income Tax | 19.27 | 0 |
| g. | Add: Deferred Tax | 2.61 | 8.41 |
| h. | Less: MAT Credit Entitlement | 19.27 | 0 |
| i. | Net Profit | 94.84 | (102.90) |
The Net sales for the year ended 31 March 2017 are 569.48 lakhs as against 787.83lakhs for the previous corresponding year. The Profit before Tax is 97.46 lakhs as againstloss of (94.49) lakhs for the previous year showing a rise in the profit of the Company.
2. Dividend
Your Directors consider it's prudent to conserve the resources of the Company tosustain its future growth and as such not recommended any dividend for this year.
3. Deposits from public
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
4. Transfer to the Reserves
No amount was transferred to the Reserves for the year ending 31.03.2017.
5. Board of Directors and Key Managerial Personnel
Relevant information on composition of the Board and number of meetings is provided in'Board of Directors' section of Corporate Governance Report which forms part of thisAnnual Report.
In accordance with the requirements of the Companies Act 2013 and the Articles ofAssociation of the Company Shri. Pankaj Goel and Shri. Paras Goel Directors retires byrotation and offers themselves for re-appointment. Your Board of Directors recommendstheir re-appointment. Their brief profile has been provided elsewhere in this AnnualReport.
Pursuant to the provisions of Companies Act 2013 Mr. Aman Goel has been inducted tothe Board on 11-02-2017 as Executive Director of the Company. Shri. Baburam Goel NonExecutive Non Independent Director of the Company resigned from the directorship of theBoard as on 11.02.2017 and Shri. Ishoo Narang Independent Director of the Companyresigned from the directorship of the Board as on 24.03.2017. Shri. Suresh Kumar Gupta wasappointed as 'Director in Casual Vacancy' raised consequent to resignation of Shri. IshooNarang..
Pursuant to the provisions of section 203 of Companies Act 2013 the key managerialpersonnel of the Company are Shri. Pankaj Goel Managing Director Mr. T.Brahmaiah ChiefFinancial Officer and Ms. Rekha Singh Company Secretary (appointed on 29.05.2017consequent to the resignation of earlier CS).
Remuneration and other matters provided in section 178(3) of the Act have beendisclosed in the corporate governance report which forms part of this report.
Statement on Declaration given by Independent Directors under sub-Section (6) ofSection 149
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149(7) of the Companies Act 2013 stating that they meet the criteriaof Independence as provided in sub-section (6).
6. Evaluation of the Board's Performance
In compliance with the Companies Act 2013 and SEBI (LODR) Regulations 2015 theperformance evaluation of the Board and of its Committees was carried out during the yearunder review. More details on the same are given in the Corporate Governance Report.
7. Familiarization Program for Independent Directors
The Company has formulated a familiarization program for the Independent Directors toprovide insights into the Company to enable the Independent Directors to understand itsbusiness in depth and contribute significantly to the Company.
8. Nomination and Remuneration Policy
The Company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination and Remuneration Committee and theBoard. More details on the same are given in the Corporate Governance Report.
9. Director's Responsibility Statement
In accordance with clause (c) of sub-section 3 of section 134 of the Companies Act2013 the Directors of the Company state:
a. That in the preparation of the accounts for the financial year ended 31 March 2017;the applicable accounting standards have been followed along with proper explanationrelating to material departures.
b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review.
c. That the Directors have taken proper and sufficient care for the maintenance ofadequateaccounting records in accordance with the provisions of the Companies Act 2013for safe guarding the assets of the Company and for preventing and detecting fraud andotherirregularities.
d. That the Directors have prepared the accounts for the financial year ended 31 March2017 on a 'going concern basis'.
e. That the Directors have laid down internal financial controls to be followed by theCompanyand that such financial controls are adequate and operating effectively.
f. The Directors had devised proper systems to ensure Compliance with the provisions ofall applicable Laws and that such systems were adequate and operating efficiently.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutoryauditors and external consultants and the reviews performed by management and the relevantboard committees including the audit committee the board is of the opinion that theCompany's internal financial controls were adequate and effective during the financialyear 2016-17.
10. Auditors
a) Statutory Auditors
As the term of existing Statutory Auditors of the Company i.e. M/s. Luharuka &Associates was expired as per the provisions of the Companies Act 2013 the Board basedon the recommendation of the Audit Committee recommends the appointment of M/s. Sekhar& Co. Chartered Accountants as Statutory Auditors of the Company for a period 5 yearsfrom the conclusion of this AGM subject to ratification at every AGM.
Your Company has received intimation to the effect that proposed re-appointment ifmade would be within the prescribed limit under Section 141 of the Companies Act 2013 andalso in compliance with the requirements of the SEBI (LODR) Regulations 2015 regardingPeer Review. They have confirmed their willingness to accept office if appointed.
The Auditors' Report to the Shareholders for the year under review does not contain anyQualifications.
b) Internal Auditors
The Board of Directors based on the recommendation of the Audit Committee hasreappointed M/s. Suresh Prakash & Co. Chartered Accountants as the Internal Auditorsof your Company. The Internal Auditors are submitting their reports on quarterly basis.
c) Secretarial Auditors
The Board has appointed M/s. A.S. Ramkumar and Associates Company Secretaries inPractice to carry out the Secretarial Audit under the provisions of section 204 of theCompanies Act 2013 for the financial year 2016-17. The Report of the Secretarial Auditoris annexed to this report as Annexure - A.
11. Particulars of Employees
No employee in the organization was in receipt of remuneration which requiresdisclosure under section 197 of the Companies Act 2013 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
12. Corporate Governance
As per SEBI (LODR) Regulations 2015 and Companies Act 2013 on Corporate Governancethe Company has complied with the Corporate Governance requirements. A separate section onCorporate Governance along with a certificate from the auditors confirming the complianceforms part of this Report.
13. Risk Management Policy
The Company has instituted a proper mechanism for identifying and establishing controlsto effectively manage different kinds of risks. At present the threats risks and concernsbeing felt are stiff competition in the market consolidation of manufacturers who havebranded products and fluctuations in prices as well as availability of raw materials.
14. Management Discussion & Analysis Report
Pursuant to the provisions of SEBI (LODR) Regulations 2015 a report on ManagementDiscussion & Analysis is herewith annexed as Annexure B to this report.
15. Whistle Blower Policy
The Company has in place a Whistle Blower Policy for Vigil Mechanism for Directors andEmployees to report to the Management about unethical behavior fraud and violation ofCompany's Code of Conduct. None of the personnel has been denied access to the AuditCommittee.
16. Declaration about Compliance with Code of Conduct by Members of the Board andSenior Management Personnel
The Company has complied with the requirements about the Code of Conduct for Boardmembers and Senior Management Personnel. A compliance certificate by the Managing Directorforms part of this Report.
17. Disclosure under the Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal)Act 2013. All employees (permanent contractual temporary and trainee) are covered underthe Policy. The following is a summary of sexual harassment complaints received anddisposed off during each year:
a) No. of Complaints Received : NIL
b) No. of Complaints Disposed off : NIL
18. Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo
Particulars pursuant to the provisions of Section 134 of Companies Act 2013 read withRule 8 of Companies (Accounts) Rules 2014 are given in the Annexure C to thisreport.
19. Disclosures Under The Companies Act 2013
i. Extract of Annual Return
An extract of Annual Return prepared in accordance with section 92(3) of the CompaniesAct 2013 in Form MGT-9 is annexed as Annexure - D to this Report.
ii. Number of Board Meetings
The Board of Directors met Six (6) times during the year 2016-17. The details of BoardMeeting and attendance of Directors is provided in the Corporate Governance Report whichforms a part of this Report.
iii. Change in Share Capital
There was no change in Share Capital during the year 2016-17.
iv. Composition of Audit Committee.
The Board has re-constituted the Audit Committee comprising of Shri. T. Prasad Reddyas the Chairman Shri. Pankaj Goel and Shri. Manohar Ramavat as the members of thecommittee. More details on the Committee are given in the Corporate Governance Reportwhich forms a part of this Report.
v. Related Party Transactions
All Related Party Transactions are entered on Arm's Length basis and are in complianceof the Companies Act 2013 and the SEBI (LODR) Regulations 2015.
There are no materially significant related party transactions made by the Company withPromoters Directors or Key Managerial Personnel etc. which may have potential conflictwith the interest of the Company at large.
All Related Party Transactions are presented to the Audit Committee and the Board.Omnibus approval is obtained for transactions which are foreseeable and repetitive innature. A statement of all Related Party Transactions is presented before the AuditCommittee on quarterly basis specifying the nature value and terms and conditions of thetransactions. Complete details mentioned in the Notes to accounts.
Information on transactions with related parties pursuant to section 134(3) (h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure -E in Form AOC-2 to this report.
vi. Loans/ Guarantees/ Investments under section 186 of Companies Act 2013
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
20. Significant and material orders passed by Regulators or Courts
There are no significant material orders passed by the Regulators or Courts which wouldimpact the going concern status of the Company and its future operations.
21. Adequacy of Internal Financial Control Systems with reference to FinancialStatements
The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures designed to ensure reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedure applicable laws and regulations and that all assets andresources as acquired are used economically.
22. Corporate Social Responsibility
The provisions of Corporate Social Responsibility are not applicable to the Company forthe year.
23. Subsidiary / Joint Venture / Associate Companies
The Company does not have subsidiary/joint venture companies. Details of AssociateCompanies are mentioned in MGT 9 i.e. Extract of Annual Return and financial statements.
24. Indian Accounting Standards
The Ministry of Corporate affairs vide its notification dated 16.02.2015 has notifiedthe Companies (Indian Accounting standards) Rules 2015. In pursuance of the saidnotification the Company will adopt Indian Accounting Standards with effect from01.04.2017. The implementation of Indian accounting standards is a major change processfor which the company has set up a dedicated team and is providing desired resources forits completion within the time frame. The impact of the change on adoption of said IAS isbeing assessed.
25. Human Resource
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of employees is thedriving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
26. Acknowledgements
Your Directors wish to express their appreciation for the cooperation and continuedsupport received from the Industrial Development Bank of India the Company's Bankers.Your Director's also take this opportunity to place on record their appreciation for thededicated services rendered and sense of commitment shown by the employees at all levelsand their contribution towards the performance of the Company.
| for and on behalf of the Board of Directors |
| Place: Secunderabad | Sd/- | Sd/- |
| Date: 22.08.2017 | Pankaj Goel | Paras Goel |
| Managing Director | Jt.Managing Director |
| (DIN 00010059) | (DIN 00010086) |
ANNEXURE-C
Information under section 134 of the Companies Act 2013 read with rule 8 of Companies(Accounts) Rules 2014 and forming a part of Directors' Report.
Conservation of Energy
The Company is striving to conserve energy by adopting innovative measures to reducewastage and optimize consumption. The adoption of the above helps to control theproportionate increase in total energy usage consequent to overall increase in production.The total energy consumption is given as per Form-A below:
Form A: for Disclosure of Particulars with respect to Conservation of Energy
| PARTICULARS | 2016-17 | 2015-16 |
| POWER & FUEL CONSUMPTION | | |
| 1. Electricity | | |
| a) Purchased | | |
| Units | 439088 | 648648 |
| Total Amount (Rs.) | 3510894 | 5106459 |
| Rate Per Unit (Rs.) | 8.00 | 7.87 |
| b) Own Generation | | |
| Through diesel generator | | |
| Units (Litres) | -- | -- |
| Total Cost (Rs.) | -- | -- |
| 2. Coal (specify quality and where used) | | |
| Quantity | -- | -- |
| Total Cost (Rs.) | -- | -- |
| Average Rate (Rs.) | -- | -- |
| 3. Furnace Oil | | |
| Quantity (Litres) | -- | -- |
| Total Amount (Rs.) | -- | -- |
| Average rate (Rs.) | -- | -- |
| 4. Natural gas | | |
| Quantity | -- | -- |
| Total Amount (Rs.) | -- | -- |
| Average rate (Rs.) | -- | -- |
| CONSUMPTION PER UNIT OF PRODUCTION: | -- | -- |
| The consumption of raw material per Kg. | | |
FORM B (See Rule 2)
Form for Disclosure of Particulars with respect to Technology Absorption (R&D)
| A. Research and Developed (R&D) | Not Applicable |
| B. Technology absorption adoption and innovation | Not Applicable |
| C. Foreign Exchange Earnings and Outgo: | | |
| Amount in Rs. | Amount in Rs. |
| Earnings | NIL | NIL |
| Outgo | NIL | NIL |
| for and on behalf of the Board of Directors |
| Sd/- | Sd/- |
| Place: Secunderabad | Pankaj Goel | Paras Goel |
| Date : 22.08.2017 | Managing Director | Jt. Managing Director |
| (DIN 00010059) | (DIN 00010086) |
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 of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
| S. No. | Particulars | |
| 1. | Details of contracts or arrangements or transactions not at arm's length basis: | |
| (a) Name(s) of the related party and nature of relationship: | |
| (b) Nature of contracts/arrangements/transactions: | |
| (c) Duration of the contracts / arrangements/transactions: | |
| (d) Salient terms of the contracts or arrangements or transactions including the value if any: | NIL |
| (e) Justification for entering into such contracts or arrangements or transactions | |
| (f) Date(s) of approval by the Board: | |
| (g) Amount paid as advances if any: | |
| (h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188: | |
| 2. | Details of material contracts or arrangement or transactions at arm's length basis: | |
| (a) Name(s) of the related party and nature of relationship: | |
| (b) Nature of contracts/arrangements/transactions: | |
| (c) Duration of the contracts / arrangements/transactions: | NIL |
| (d) Salient terms of the contracts or arrangements or transactions including the value if any: | |
| (e) Date(s) of approval by the Board if any: | |
| (f) Amount paid as advances if any: | |
| For and on behalf of the Board of Directors |
| Place: Secunderabad | Sd/- | Sd/- |
| Date: 22.08.2017 | Pankaj Goel | Paras Goel |
| Managing Director | Managing Director |
| (DIN 00010059) | (DIN 00010086) |
