DIRECTORS' REPORT Your directors have pleasure in presenting this 28th Annual Report together with the Audited Financial Statements of your Company for the year ended March 31, 2015. ECONOMIC SCENARIO The global economic environment in recent years has been challenging which coupled with slowing growth in some of the leading global economies has impacted currencies all over the world. However, despite unpredictable headwinds, the global economic recovery seems to be gaining momentum. Specifically, the recovery in the United States was stronger than expected, which provided momentum for the global economic recovery. After a tepid start by India's economy in FY 2014-15, there was a shift to positive sentiments led by commitments from the newly elected Government at the Centre. FY 2014-15 was indeed a year of transformation and optimism for the Indian economy. The new government has ushered in an era of hope and development, and a vision to create a robust economy for India. An initiative that has particularly galvanized the entire country is 'Make in India' led by our Hon'ble Prime Minister. This campaign is designed to transform India into a global manufacturing hub. India's economy is in the midst of recovery with lower fiscal and current account deficit and structural reforms to boost investments. The Indian economy is expected to grow @ 7.5% in 2015-16 (as per the World Bank) and is expected to reach around 8% by 2017. While the various steps are being taken to de-clog the growth, it is expected that the government's reform agenda will spur economic growth and increase business sentiment this fiscal year. Announcement is available on the website of Stock exchanges (BSE Ltd and National Stock Exchange of India Limited). Further, on May 13, 2015, the Company has received a copy of the Detailed Public Statement (DPS) dated May 13, 2015 and on May 19, 2015, the Company has received the Draft Letter of Offer dated May 19, 2015 from M/s Innovative Tech Pack Limited and Mr. Ketineni Sayaji Rao ("Acquirer"). However, the said Open Offer does not affect the financial position of your Company during the financial year under review. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary or an associate company within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 ("Act") respectively, as on March 31, 2015. DIRECTORS Your Board placed on record its appreciation for the contributions made by Mr. Arun Ram Gopal Mehra during his tenure as director of the Company, who resigned on February 15, 2015 due to some personal reasons. Ms. Rajani Shirish Ladda was appointed as an Independent Women Additional Director with effect from February 14, 2015 and holds office upto date of forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Companies Act, 2013 along with the requisite deposit from a member proposing the appointment of Ms. Rajani Shirish Ladda as a Director of the Company. Accordingly, a resolution is included in the Notice of the forthcoming 28th Annual General Meeting of the Company for seeking approval of members for his appointment as a Independent Women Director of the Company to hold office for a term upto five consecutive years commencing from September 29, 2015. The Independent Directors of the Company, that are Mr. Krishnaswamy Mohanraj Madurai, Ms. Rajani Shirish Ladda have submitted their Declaration of Independence, as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they continue to meet the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013. Ms. Ketineni Suchita Rao was appointed as an Additional Director with effect from August 14, 2015 and holds office upto date of forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Companies Act, 2013 along with the requisite deposit from a member proposing the appointment of Ms. Ketineni Suchita Rao as a Director of the Company. Accordingly, a resolution is included in the Notice of the forthcoming 28th Annual General Meeting of the Company for seeking approval of members for his appointment as a Director of the Company. Mr. Ketineni Satish Rao was appointed as an Additional Director with effect from August 14, 2015 and holds office upto date of forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Companies Act, 2013 along with the requisite deposit from a member proposing the appointment of Mr. Ketineni Satish Rao as a Director of the Company. Accordingly, a resolution is included in the Notice of the forthcoming 28th Annual General Meeting of the Company for seeking approval of members for his appointment as a Director of the Company. DIRECTORS' RESPONSIBILITY STATEMENT As required by Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, your directors state that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) 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 (f ) 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. KEY MANAGERIAL PERSONNEL The following persons are Whole-Time Key Managerial Personnel ('KMP') of the Company in terms of provisions of Section 203 of the Companies Act, 2013: a. Mr. Ketineni Sayaji Rao - Chairman and Director b. Mr. Narayan Kumar Mishra - Chief Financial Officer c. Mr. Abha Garg - Company Secretary NUMBER OF BOARD MEETINGS Ten meetings of the Board of Directors of your Company were held during the year under review. EVALUATION OF BOARD PERFORMANCE Pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"), the Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors. The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the diversity of the Board, effectiveness of the board processes, information and functioning etc. The performances of the committees were evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees and effectiveness of the committee meetings etc. The performance of the individual directors was reviewed on the basis of the criteria such as contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc. The performances of non-independent directors, Board as a whole and of the Chairman were evaluated in a separate meeting of Independent Directors after taking into account the views of executive directors and non-executive directors. INTERNAL FINANCIAL CONTROL The Company has in place an established internal control system to ensure proper recording of financial &operational information, compliance of various internal controls and other regulatory/statutory compliances. All Internal Audit findings and control systems are periodically reviewed by the Audit Committee of the Board of Directors, which provides strategic guidance on Internal Controls. STATUTORY AUDITORS M/s. BGJC & Associates, Chartered Accountants (Firm Registration No. 003304N) are proposed to be appointed as the Statutory Auditors of the Company in the insuing 28th Annual General Meeting of the Company to be held on September 29, 2014, to hold the office till the conclusion of 33rd Annual General Meeting of the Company, subject to the ratification of shareholders at every Annual General Meeting. DIRECTORS' VIEW ON AUDITORS' OBSERVATIONS Management response to the observations of the auditors is explained wherever necessary through appropriate notes to the Accounts is reproduced hereunder in compliance with the relevant legal provisions. FIXED DEPOSITS No disclosure or reporting is required in respect of deposits covered under Chapter V of the Companies Act, 2013, as there were no transactions in respect of the same during the year under review. RISK MANAGEMENT There is a continuous process of identifying / managing risks through a Risk Management Process. The measures used in managing the risks are also reviewed. The risks identified by the Company broadly fall in the category of operational risk, regulatory risk, financial & accounting risk & foreign currency related risks. The risk management process consists of risk identification, risk assessment, risk monitoring & risk mitigation. During the year, measures were taken for minimization of risks and the Board was informed from time to time. In the opinion of the Board, none of the said risks which have been identified may threaten the existence of the Company. AUDIT COMMITTEE The Audit Committee of the Company consists of Mr. Krishnaswamy Mohanraj Madurai, Chairman, Ms. Rajani Shirish Ladda, Mr. Ketineni Sayaji Rao as members. The Board of Directors of your Company has revised its terms of reference to make it in line with the requirements of Section 177 of the Companies Act, 2013 and clause 49 of the listing agreement. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - A, and forms part of this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as Annexure B1 and forms part of this report. A statement showing details pertaining to remuneration and other details as required under 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 enclosed as Annexure - B2 and forms part of this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186 The Company has not made any investments in securities of other body corporate(s) during the financial year 2014-15 CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions are in ordinary course of business and at arm's length, which are not material in nature. All related party transactions are with the approval of the Audit Committee and periodically placed before the Board for review. The prescribed Form AOC-2 is enclosed as Annexure - C, and forms part of this Report. Your directors draw attention of members to Note 41 to the standalone financial statements which sets out related party disclosures. EXTRACT OF ANNUAL RETURN The details forming part of Extract of Annual Return in prescribed form MGT-9 is enclosed as Annexure - D and forms part of this Report. SECRETARIAL AUDIT The Board has appointed M/s B.S. Goyal & Co., Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year 2014-15 is enclosed herewith as Annexure - E and forms part of this Report. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remark. CORPORATE GOVERNANCE As per Clause 49 of the listing agreements entered into with the stock exchanges, Corporate Governance Report along with Auditors' certificate thereon and Management Discussion and Analysis Report are enclosed, and form part of this report. DISCLOSURE REQUIREMENTS 1. Policy on materiality of related party transactions and dealing with related party transactions is available on the website of the Company. 2. The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns, which is avaliable on Company's website www.jausspolymers.com . The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and the revised Clause 49 of the Listing Agreements with stock exchanges. 3. The Company's Remuneration Policy is enclosed as Annexure - F and forms part of this Report. 4. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 5. During the year under review, there were no cases reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENT The Directors wish to acknowledge and thank the Central and State Governments and all regulatory bodies for their continued support and guidance. The Directors thank the shareholders, customers, business associates, Financial Institutions and Banks for the faith reposed in the Company and its management. The Directors place on record their deep appreciation of the dedication and commitment of your Company's employees at all levels and look forward to their continued support in the future as well. For on behalf of the Board Sd/- Ketineni Sayaji Rao Chairman and Director (DIN.: 01045817 Place : New Delhi Date : 03.09.2015 |