| The Directors have pleasure in presenting herewith the 40th Annual
Report on the business of Your Company together with the Audited
Accounts for the financial year ended 31st March, 2015.
FINANCIAL RESULTS (Rs. In Lakhs)
PARTICULARS 2014-2015 2013-2014
Gross Income 26,153 24,136
Gross Income (Net of Excise Duty) 23,828 23,056
Less: Expenditure 21,870 21,218
Gross Profit 1,958 1,838
Less: Interest & Finance Charges 1,510 1,407
Less: Depreciation 211 210
Profit before Tax 237 221
Less: Current Tax 49 39
Less: Deferred Tax 10 14
Profit available for appropriations 178 169
Profit brought forward 2,199 2,030
Revised Depreciation of earlier years (27)
Balance carried forward 2,350 2,199
BUSINESS REVIEW:
During the year under review your Company has achieved gross revenues
amounting to Rs. 23,828 Lakhs as against Rs.23,056 Lakhs in the previous
year. Though the numbers are truly incomparable yet it could be
inferred that trend of these parameters to continue to be on the right
path.
Increased interest costs, and arrears of payments towards increase in
employees' benefits have affected the bottom line.
OPERATIONS:
For the year under review, production of PVC Leather Cloth was 66.72
Ln. Mtrs. as against the previous year's production of 60.49 Ln. Mtrs.
Production of PVC Film was 11,310.56 MT as against the previous year's
production of 11,181.30 MT
DIVIDEND:
Your Directors did not recommend any dividend for the year 2014-15.
TRANSFER TO RESERVES:
Your Company has not transferred any amount to the general reserve.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:
Mr. Haridas Narsaiah, Director of the Company, retire by rotation at
the ensuing Annual General Meeting and being eligible, offer himself
for re-appointment.
During the year under review Mr.Krishna Kumar Haridas, (Whole time
Director) was appointed as Chief Financial Officer of the Company and
Mrs.Amulya Dasari was appointed as Company Secretary of the Company
w.e.f 13th February, 2015.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Act and Clause 49 of the
Listing Agreement with the Stock Exchanges.
The Company has devised a Policy for performance evaluation of
Independent Directors, Board, Committees and other individual Directors
which include criteria for performance evaluation of the non-executive
directors and executive directors.
AUDITORS
Statutory Auditors:
At the Annual General Meeting (AGM) held on September 29, 2014, M/s.
M.Anandam & Co., Chartered Accountants (Registration No.000125S), were
appointed as Statutory Auditor of the Company to hold office till the
conclusion of the Annual General Meeting to be held in the calendar
year 2017. In terms of the first proviso to Section 139 of the
Companies Act, 2013, the appointment of the auditor shall be placed for
ratification at every Annual General Meeting. Accordingly, the
appointment of M/s. M.Anandam & Co., Chartered Accountants, as
statutory auditors of the Company, is placed for ratification by the
shareholders. In this regard, the Company has received a certificate
from the auditors to the effect that if they are reappointed, it would
be in accordance with the provisions of Section 141 of the Companies
Act, 2013.
Cost Auditors:
The Board has appointed Mr. Sanisetty Venkata Ramarao of M/s SVRR &
Associates, Cost Accountants for conducting the audit of cost records
of the Company for various segments for the financial year 2015-16 as
recommended by the Audit Committee. As required under section 148 and
Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a resolution
is being placed at the ensuing AGM for ratification of remuneration
payable to said Cost Auditors.
Secretarial Auditors:
M/s.RS. Rao & Associates, Practicing Company Secretaries, was appointed
to conduct the Secretarial Audit of the Company for the financial year
2014-15, as required under Section 204 of the Companies Act, 2013 and
Rule 9 there-under. The secretarial audit report for FY 2014-15 forms
part of this Report as Annexurel. The Board has appointed M/s.P.S.Rao &
Associates, Practicing Company Secretaries, as Secretarial Auditors of
the Company for the financial year 2015-16.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act, 2013
read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed
herewith as Annexure2
RISK MANAGEMENT POLICY:
Pursuant to the requirement of Clause 49 of the Listing Agreement, the
Company has formulated a policy on the Risk Management. The Risk
Management Policy of the Company is posted on the website of the
Company's website: www.fenoplast.com. Major risk to the Company apart
from the general business risks related to the industry, is competition
from small/ unorganized players.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL
STATEMENTS:
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations.
Through Internal Audits the Company monitors and evaluates the efficacy
and adequacy of internal control system in the Company, its compliance
with operating systems, accounting procedures and policies at all
locations of the Company. Based on the audit reports the units
undertake corrective action in their respective areas and strengthen
the controls. Significant audit observations and corrective actions
thereon are presented to the Audit Committee of the Board periodically.
The Board of Directors of the Company have adopted various policies
like Related Party Transactions policy, Whistle Blower Policy such
other procedures for ensuring the orderly and efficient conduct of its
business for safeguarding its assets, the prevention and detection of
frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information.
NOMINATION AND REMUNERATION POLICY:
A committee of the Board named as "Nomination and Remuneration
Committee" has been constituted to comply with the provisions of
section 178, Schedule IV of the Companies Act and Clause 49 of the
Listing Agreement and to recommend a policy of the Company on
directors' appointment and remuneration, including criteria for
determining qualifications, positive attributes, independence of a
director and other matters and to frame proper systems for
identification, appointment of Directors & KMPs, Payment of
Remuneration to them and Evaluation of their performance and to
recommend the same to the Board from time to time. Nomination and
Remuneration Policy of the Company is enclosed herewith as Annexure 3.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND
OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
As required under the provisions of Schedule IV of the Companies Act,
2013 the performance evaluation of independent directors has been done
by the entire Board of Directors, excluding the director being
evaluated. The evaluation of all the directors and the Board as a
whole was conducted based on the criteria and framework adopted by the
Board. The Board approved the evaluation results as collated by the
nomination and remuneration committee. None of the independent
directors are due for re-appointment
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors'
confirm that:
i. In preparation of annual accounts for the financial year ended 31st
March, 2015 the applicable Accounting Standards have been followed
along with proper explanation relating to material departures;
ii. The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of the financial year ended 31s1 March, 2015 and
of the profit and loss of the Company for the year;
iii. The Directors have taken proper and sufficient care for their
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
iv. The Directors had prepared the annual accounts on a 'going
concern' basis;
v. The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
vi. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
EXTRACT OF ANNUAL RETURN :
The details forming part of the extract of the Annual Return in Form
MGT-9 is annexed herewith as Annexure 4.
OTHER DISCLOSURES: Board Meetings:
During the year under review Four Board Meetings were held during the
year under review. For further details, please refer report on
Corporate Governance Report enclosed herewith.
Committees of Board:
Your company has the following committees namely:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
The constitution of all the committees are as per the Companies Act,
2013 and Listing Agreement with Stock Exchanges. The details of the
Constitution are mentioned in Corporate Governance Report, which forms
part of thisAnnual Report.
Corporate Governance Report:
Your Company has complied with the requirements of Clause 49 of the
Listing Agreement entered with the Stock Exchanges, Report on Corporate
Governance including Auditor's Certificate on compliance with the code
of Corporate Governance specified under the said Clause is enclosed as
Annexure 5 to this report
Management Discussion and Analysis:
A brief note on the Management discussion and analysis for the year is
enclosed as Annexure 6 to this report
Vigil Mechanism:
In pursuant to the provisions of section 117(9)( & (10) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement a Vigil
Mechanism for directors and employees to report genuine concerns has
been established. Protected disclosures can be made by a whistle
blower to the Chairman of the Audit Committee. The Policy on vigil
mechanism and whistle blower policy may be accessed on the Company's
website: www.fenoplast.com.
Remuneration ratio of the directors/ Key Managerial Personnel/
Employees:
Statement showing disclosures pertaining to remuneration and other
details as required under Section 197(12) of the Companies Act read
with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure 7.
PARTICULARS OF EMPLOYEES:
The table containing the names and other particulars of employees in
accordance with the provisions of Section 197(12) of the Companies Act,
2013, read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is appended as
Annexure 8.
No employee of the Company was in receipt of remuneration, during the
financial year 2013-14, in excess of the sum prescribed under section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules 1975 as amended.
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS:
Details of the Loans, guarantees and investments covered under Section
186 of the Companies Act, 2013 are given in the notes to the financial
statements pertaining to the year under review.
DEPOSITS:
Your Company has not accepted any fixed deposits and as such no
principal or interest was outstanding as on the date of the Balance
sheet.
RELATED PARTY TRANSACTIONS:
Related. party transactions entered during the financial year under
review are disclosed in Note No. 30C of the Financial Statements of the
Company for the financial year ended 31st March, 2015. These
transactions entered were at an arm's length basis and in the ordinary
course of business. There were no materially significant related party
transactions with the Company's Promoters, Directors, Management or
their relatives, which could have had a potential conflict with the
interests of the Company. Form AOC-2, containing the note on the
aforesaid related party transactions is enclosed herewith as Annexure
9.
The policy on materiality of Related Party Transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website.
Auditors' qualifications and replies from the Board of Directors
Qualification Reply
Ref: Auditors report @ Page No 67: The Company has passed a Special
Note 23.1 to the financial
statements, regarding excess managerial remuneration
amounting to Rs. 57.43 Lakhs paid to and the approval from the
Managing Director and the Whole Central Government is
time Director in excess of the to be obtained in due
prescribed under Schedule XIII course. However the enhanced
of the Companies Act,1956 in the remuneration is well within
financial year 2073-74 for wft/ch the prescribed limits suffice
approval from the Cenfra/ Government with the special resolution
fe pern/fog. The ultimate outcome of as per the new Companies act 2013
this matter cannot presently be
determined; accordingly no as Sir
œNew adjustments have been made in
the financial statements.
Ref: Secretarial Audit report @
page No 39 a):
Key Managerial Persons i.e, Company
Secretary and Chief The delay was due to the
identification
Financial Officer were appointed
w.e.f. 13th February2015 of the suitable candidates for the
positions. Hence the appointment
was delayed.
GENERAL:
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
3. Neither the Managing Director nor the Whole-time Director & Chief
Financial Officer of the Company receive any remuneration or commission
from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
5. No material changes and commitments affecting the financial
position of the Company have occurred between the end of the Financial
year and date of report.
Your Directors further state that during the year under review, there
were no cases filed/registered pursuant to the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013.
ACKNOWLEDGMENT:
Your Directors place on record their appreciation of the continued
patronage extended to the Company by dealers, customers, suppliers,
employees and shareholders. The trust reposed in your Company by its
esteemed customers helped stabilized growth during the year in review.
Your Company also acknowledges the support and guidance received from
Canara Bank, State Bank of India and Syndicate Bank, other government
agencies and look forward to continuing support.
For and on behalf of the Board of Directors
Place: Secunderabad
Date : 13-08-2015 B. KAMALAKER RAO
CHAIRMAN |