| Dear Members,
The Directors have pleasure in presenting the Twenty Fifth Annual
Report together with the Financial Statements for the year ended on
March 31, 2015
FINANCIAL RESULTS:
2014-2015 2013-2014
(Rs. in lakhs) (Rs. in lakhs)
Sales 2368.00 2481.59
PROFIT 20.69 75.72
Less:
Depreciation 52.08 49.88
Interest 13.18 20.38
PROFIT BEFORE TAX (2.39) 25.84
Less: Provision for Taxation
Current Tax 0.55 0.60
Deferred Tax (10.62) 3.67
PROFIT AFTER TAX 7.67 21.57
Surplus brought forward from
Previous Year 111.37 89.79
Balance Carried to Balance Sheet 193.51 190.10
DIVIDEND
To conserve the resources your directors do not recommend dividend on
the equity shares of the Company for the financial year 2014-2015.
TRANSFER TO GENERAL RESERVES
Rs. 193.51 crores is proposed to be retained in the Profit & Loss A/c
of the company.
OUTLOOK
Although the first half of FY14-15 was progressing well, due to the
unprecedented fall in the value of the Euro and the British Pound
versus the Indian Rupee it significantly impacted your company both in
terms of Sales and Profits even though the Company achieved volume
growth. Due to extreme cost control done the Company was able to remain
profitable. Going forward with better price realizations achieved from
the EU markets and with the general strengthening of the Euro the
company is are very positive with regards to FY 15-16.
BUSINESS
Your company continues to export Printed Circuit Boards (PCBs) to the
G20 nations and has added New Products (Rigid Flex PCBs) and New
Markets (exports to a total of 13 countries) and New Volumes (orders
from many new customers of many new part numbers) which augurs well for
the coming years. There has been no material change in the nature of
the business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:
There have been no material changes and commitments, if any, affecting
the financial position of the Company, which have occurred between the
end of the financial year and the date of the report.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
5 (Five) meetings of the Board of Directors were held during the year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri. Abhay B. Doshi (DIN 00040644) and Shri. Rajiv B. Doshi (DIN
00651098), Directors of the Company, retires at the ensuing Annual
General Meeting and being eligible offers themselves for
re-appointment.
Pursuant to the provisions of Section 149 of the Act, which came into
effect from April 01, 2014, Shri. Juzer Vasi (DIN 00040682), Shri.
Ramunni Premkumar (DIN 00328942), Shri. Apurva Shah (DIN 00004781) and
Shri. Rajendra Gandhi (DIN 00189197) were appointed as Independent
Directors at the Annual General Meeting of the Company held on August
09, 2014.
With a view to strengthen the Board and in compliance of the regulatory
requirements, Smt. Kumudini Mehta (DIN 03191065) was appointed as
Additional Independent Director of the Company with effect from March
28, 2015.
The resolution seeking approval of the Members for the appointment of
Smt. Kumudini Mehta as an Independent director with effect from March
28, 2015 have been incorporated in the notice of the forthcoming annual
general meeting of the Company. The Company has received notice under
Section 160 of the Act along with the requisite deposit proposing her
appointment.
Pursuant to the provisions of Section 203 of the Act, which came into
effect from April 01, 2014, the appointments of Shri. Abhay
Doshi,Managing Director, Shri. Bhagwandas Doshi (DIN 00040596) and
Shri. Rajiv Doshi, Wholetime Directors and Ms. Prema Radhakrishnan,
Chief Financial Officer as key managerial personnel of the Company was
formalised.
DECLARATION FROM INDEPENDENT DIRECTORS
Shri. Juzer Vasi, Shri. Ramunni Premkumar, Shri. Apurva Shah, Shri.
Rajendra Gandhi and Smt. Kumudini Mehta, who are independent directors,
have submitted a declaration that each of them meets the criteria of
independence as provided in sub Section (6) of Section 149 of the Act
and there has been no change in the circumstances which may affect
their status as independent director during the year. In the opinion of
the Board, the independent directors possess appropriate balance of
skills, experience and knowledge, as required.
AUDIT COMMITTEE OF BOARD OF DIRECTORS
The Audit committee of the Board of directors of the Company consists
of the following members
1. Shri. Apurva Shah
2. Shri R.M.Premkumar
3. Shri. Rajendra Gandhi
4. Prof. Juzer Vasi
VIGIL MECHANISM
The Company has formulated and published a Whistle Blower Policy to
provide a mechanism ("Vigil Mechanism") for employees including
directors of the Company to report genuine concerns. The provisions of
this policy are in line with the provisions of the Section 177 (9) of
the Act and the revised Clause 49 of the listing agreement with the
Stock Exchange. (URL : www.finelineindia.com)
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR
INDEPENDENT DIRECTORS
The Nomination and Remuneration Committee (NRC) has laid down the
criteria for selection of candidates eligible to be appointed on the
Board of Directors of the Company. The committee has also recommeneded
the remuneration policy to the Board. The following attributes/criteria
for selection and remuneration policy have been laid by the Board on
the recommendation of the Committee:
Criteria for Selection of Directors:
The Committee shall, before making any recommendation to the Board for
appointment of any director, consider the following;
* the candidate should posses the positive attributes such as
Leadership, Industrialist, Business Advisor or such other attributes
which in the opinion of the Committee the candidate possess and are in
the interest of the Company;
* the candidate should be free from any disqualifications as provided
under Sections 164 and 167 of the Companies Act, 2013;
* the candidate should meet the conditions of being independent as
stipulated under the Companies Act, 2013 and Listing Agreement entered
into with Stock Exchanges in case of appointment of an independent
director;
* the candidate should posses appropriate skills, experience and
knowledge in one or more fields of finance, law, management, sales,
marketing, administration, research, corporate governance, technical
operations, infrastructure, or such other areas or disciplines which
are relevant for the Company's business.
Remuneration Policy:
(1) SMPs & KMPS (other than Managing Director/Wholetime Director):
(i) Remuneration packages shall be designed in such manner that:
(a) motivates delivery of key business strategies, creates a strong
performance-orientated environment and rewards achievement of the
Company's objectives & goals over the short and long-term.
(b) attracts high-flier executives in a competitive global market and
remunerate executives fairly and responsibly.
(ii) Remuneration shall be competitive and shall include salary
comprising of both fixed and variable components, performance
incentives and other benefits such as retiral benefits, health care
insurance and hospitalisation benefits, telephone reimbursement etc.
(iii) Remuneration shall be evaluated annually and annual increase
shall be decided considering the performance of the individual and also
of the Company. Industry practices/ trends shall also be given due
consideration.
(iv) Remuneration can be reset at any time considering the benchmark of
international and domestic companies, which are similar in size and
complexity to the Company. Benchmark information shall be obtained from
internationally recognized compensation service consultancies.
(v) The remuneration to be paid to the KMPs viz. CEO, CFO, CS or SMPs,
shall be recommended by the NRC considering relevant qualification and
experience of the individual as well as the prevailing market
condition.
(vi) The NRC may consider to grant Stock Options to KMPs & SMPs
pursuant to any Stock Option Plan adopted by the Company, if any.
(2) Managing Director/Wholetime Director(MD/WTD):
(i) Remuneration to the MD and WTD shall be proposed by the NRC and
subsequently approved by the Board of Directors and the shareholders of
the Company, whenever required.
(ii) Remuneration shall be evaluated annually against performance and a
benchmark of international and domestic companies, which are similar in
size and complexity. Benchmark information shall be obtained from
internationally recognized compensation service consultancies.
(iii) Total remuneration for the MD and WTD shall be comprised of the
following:
(a) Salary (both fixed & variable).
(b) Perquisites like house rent allowance, domiciliary medical expenses
and club memberships etc.
(c) Retirals, made in accordance with applicable laws and policies of
the Company.
(d) In addition, they shall also be entitled to a Performance Bonus
linked to their individual performance and also the performance of the
Company and the individual.
(e) It shall be ensured that total remuneration payable to MD and WTD's
shall not increase 10% of the net profit of the Company (not exceeding
5% for MD), computed in accordance with Section 198 of the Companies
Act, 2013.
(3) Non-Executive Directors (NEDs):
(i) NEDs shall be entitled to such sitting fees as may be decided by
the Board of Directors from time to time for attending the meeting of
the Board and of the Committee thereof.
(ii) NEDs shall also be entitled for payment of commission, if any, as
upto the limits permitted in Section 197 of the Companies Act, 2013 and
approved by the shareholders from time to time.
(iii) IDs shall not be eligible for any Stock Options, pursuant to any
Stock Option Plan adopted by the Company.
(iv) The NEDs shall be eligible for remuneration of such professional
services rendered if in the opinion of the NRC, the NED possesses the
requisite qualification for rendering such professional services.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures;
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and
operating effectively;
(vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has proper and adequate system of internal financial
controls commensurate with its nature and size of business and meets
the following objectives:
* Providing assurance regarding the effectiveness and efficiency of
operations
* Efficient use and safeguarding of resources
* Compliance with policies, procedures and applicable laws and
regulations and
* Transactions being accurately reported and recorded timely
* The Company has budgetary control system to monitor expenditures and
operations against budgets on an ongoing basis. The internal auditor
also regularly reviews the adequacy of internal financial control
system.
DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES
The Company does not have any subsidiary/ joint ventures/ associates.
EXTRACT OF ANNUAL RETURN
As provided under sub Section (3) of Section 92 of the Act, the extract
of annual return is enclosed, which forms part of the directors' report
as Annexure I.
AUDITORS
M/s. DKP & Associates, Chartered Accountants, the Auditors of the
company who would retire at the ensuing Annual General Meeting offer
themselves for reappointment. M/s. DKP & Associates, Chartered
Accountants, the existing auditors have furnished a certificate,
confirming that if reappointed for the financial year 2015-2016 their
reappointment will be in accordance with Section 139 read with section
141 of the Companies Act, 2013.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 and other applicable
provisions, if any, of the Companies Act, 2013, M/s. Parikh &
Associates, Practicing Company Secretaries were appointed as the
Secretarial Auditor for auditing the secretarial records of the Company
for the financial year 2014-2015.
The Secretarial Auditors' Report is annexed as Annexure II.
AUDITOR'S REPORT AND SECRETARIAL AUDITOR'S REPORT
The auditors' report does not contain any qualifications, reservations
or adverse remarks.
As regards observations of Secretarial Auditor in their report , your
directors have to state that the company is making efforts to find a
suitable candidate for the position of Company Secretary.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information in accordance with Clause (m) of Sub-section (3) of Section
134 of the Act read with Companies (Accounts) Rules, 2014 is annexed to
this report as Annexure III.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are annexed as Annexure IV.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such, no
amount on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORY / JUDICIAL
AUTHORITY
There are no significant or material orders passed by any regulator or
court that would impact the going concern status of the Company and its
future operations.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not given any loans or guarantees or made investments
in contravention of the provisions of the Section 186 of the Companies
Act, 2013.
RISK MANAGEMENT POLICY
The Board of Directors of the Company has framed a risk management
policy and is responsible for reviewing the risk management plan and
ensuring its effectiveness. The audit committee has additional
oversight in the area of financial risks and controls. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis.
RELATED PARTY TRANSACTIONS
Particulars of transactions with related parties pursuant to Section
134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)
Rules, 2014 are given in Form AOC-2 and the same forms part of this
report as Annexure V.
BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act.
The annual evaluation was carried out in following manner:
Sr. Performance evaluation of Performance
No. evaluation
performed by
1 Board and individual directors Board seeking inputs
from all the
Directors.
2 Individual directors Nomination and
Remuneration
Committee
3 Non-independent directors; the Board as Separate meeting of
a whole and of the Chairman Independent
Directors, taking
into account the
views of executive
directors and
non-executive
directors
4 Board, its committees and individual Board meeting held
directors after the meeting of
the Independent
Directors, based on
evaluation exercise
carried out above.
Criteria for performance evaluation was as follows:
Sr. No. Performance Criteria
evaluation of
1 Board Board composition and structure;
effectiveness of Board processes, information
and functioning etc
2 Directors Contribution to the Board and committee
meetings like preparedness on the issues to
be discussed, meaningful and constructive
contribution and inputs in meetings etc. In
addition the Chairperson was also evaluated
on the key aspects of his/her role.
DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has zero tolerance for sexual harassment at workplace and
has adopted a policy on prevention, prohibition and Redressal of sexual
harassment at workplace in line with the provisions of Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the rules framed there under. During the
financial year 2014-15, the Company has received nil complaints on
sexual harassment.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS
During the year, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company.
DISCLOSURE REQUIREMENTS
As per Clause 49 of the listing agreements entered into with the stock
exchanges, corporate governance report with auditors' certificate
thereon and a management discussion and analysis are attached, which
form part of this report.
Details of the familiarization programme of the independent directors
are disclosed on the website of the Company (URL:
www.finelineindia.com)
Policy on dealing with related party transactions is disclosed on the
website of the Company (URL : www.finelineindia.com)
ACKNOWLEDGEMENT
We acknowledge our appreciation to our clientele and vendors for their
invaluable support during the year.
We also place on record our deep appreciation for the contribution made
by the staff and the contract workmen at all levels. Their
contribution has in no small measure enabled the Company to remain
competitive.
Grateful thanks are also due to SEEPZ-SEZ Authorities, for their
continued support extended to the Company from time to time.
Shareholders' appreciation for the management's efforts in such
competitive times, at the General Meeting of the Company will be of
great fillip to strive for better performance in spite of severe
competitive factors faced by the Company.
On behalf of the board of directors,
Mumbai
May 30, 2015 Bhagwandas T. Doshi
Chairman
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