BOARD'S REPORT DEAR MEMBERS, Your Directors have pleasure in presenting their 22nd Annual report on the affairs of the Company together with the Audited Statement of Accounts for the year ended on 31st March, 2015 Operating & Financial Performance, Internal Control Your company has generated gross income of Rs. 347.72 Lacs as compared to Rs. 4789.54 lacs for previous year. The income by way of trading during the year amounted to Rs.65.13 lacs compared to Rs. 4323.65 in the previous year. Income from services amounted to Rs. Nil compared to Rs. 73.18 Lacs in the previous year. The Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance with various internal controls and other regulatory and statutory compliances. Code of Internal controls which require that the Director review the effectiveness of internal controls and compliances controls, financial and operational risks, risk assessment and management systems and related party transactions, have been complied with. Company's Policies on Remuneration, Whistle Blower and also Code of Conduct applicable to Directors and Employees of the Company has been complied with. These Policies and Code of Conduct are available on the Company's website www.laffanspetrochemical.com There is no change in the nature of the business of the Company. There were no companies which became or ceased to be the Subsidiaries, joint ventures or associate companies during the year. There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. There were no material changes and commitment affecting the financial position between March 31, 2015 and date of this Report of Directors. Deposits: The Company has not invited/ accepted any deposits from the public during the year ended March 31, 2015. There were no unclaimed or unpaid deposits as on March 31, 2015. Transfer to Reserve: The Company has not transferred any amount to reserves. Dividend: Due to net loss of Rs. 3.59 Lacs, it would not be possible to recommend any dividend for declaration. Your Directors regret their inability to recommend any Dividend for the year under review. SIGNIFICANCE AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS. There were no significance and material orders passed by regulators or courts or tribunals impacting the going concern status and company operations in future. There were no material changes and commitments affecting the financial position of the company occurring between March 31, 2015 and the date of this Report of the Directors. SUBSIDIARIES, JOINT VENTURE OR ASSOCIATES COMPANIES DURING THE YEAR: The Company has no subsidiaries, joint ventures or associated companies therefore disclosures in this regards are not provided in this report. Number of meeting of the Board: During the year 2014-15, the Board of Directors met seven times viz. on 2nd May, 2014; 29th May, 2014; 1st July, 2014; 12th August, 2014; 14th November, 2014; 14th February, 2015 and 10th March, 2015. The details relating to Audit Committee Meetings has been set out in the Corporate Governance Report annexed with this report which forms part of this report. Directors' Responsibility Statement: To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Sections 134(3) (c) read section 134(5) of the Companies Act, 2013 of the Companies Act, 2013: (i) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) 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 as at March 31, 2015 and of the profit and loss of the company for that period; (iii) 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; (iv) the directors had prepared the annual accounts on a going concern basis; and (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. (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. D. Statement on declaration given by independent directors under sub-section (6) of section 149: All Independent Directors have given declarations that they meet the criteria of independent as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing agreement. Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178: The Policy of the Company on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure A to this Report. Particulars of loans, guarantees or investments under section 186: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RELATED PARTY TRANSACTIONS: Particulars of contracts or arrangements with related parties referred to in sub-section (7) of section 188 in the form AOC-2: All the contracts/ arrangements/ transactions that were entered into by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction. All Related Party Transactions are placed before the Audit Committee for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www. laffanspetrochemical.com Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014: 1. Details of contracts or arrangements or transactions not at arm's length basis: Nil 2. Details of material contracts or arrangement or transactions at arm's length basis: a) Name of the related party and nature of relationship: Mr. Sandeep Seth, Managing Director b) Nature of transaction: Payment for Office Rent b) Duration of transaction: Not Applicable d) Salient terms of transaction: Monthly Rent of Rs. 2,00,000/- per month e) Date of Approval by Board, if any: Not Applicable f) Amount paid as advances, if any: Nil Conservation of energy, technology absorption, foreign exchange earnings and outgo: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure B". Risk management policy and its implementation: The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Corporate Social Responsibility: The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility. Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and Individual Directors: The formal annual evaluation has been done by the board of its own performance and that of its committee and individual directors on the basis of evaluation criteria specified in the Nomination and Remuneration policy of the Company. A member of the Board/committee did not participate in the discussion of his/her evaluation. Directors or key managerial personnel who were appointed or have resigned during the financial year 2014-15: The Board of Directors had appointed Mrs. Anisha Seth (DIN: 06867960) as a woman director from 2nd May, 2014 and Whole-time Director with effect from 1st July, 2014 and the same was approved by the members in the twenty first Annual General Meeting held on September 26, 2014. She will hold Office for 5 years with effect from 1st July, 2014 as approved by the members in the 21st Annual General Meeting. The Board also appointed Mr. Naresh Chhabria (DIN: 03463187) as an Independent Director with effect from 2nd May, 2014 and the same was approved by the members in the twenty first Annual General Meeting held on September 26, 2014. Mr. Naresh Chhabria (DIN: 03463187) will hold office till 31st March, 2019. Mr. Rajesh Sharma ceased to be associated with the Company on account of vacation of office under section 167 of the Companies Act, 2013. Mr. Rajesh Thadani (DIN 00009889) was appointed as an Additional Director with effect from 14th November, 2014. Board hereby recommends appointing Mr. Rajesh Thadani as Independent Director at the ensuing Annual General Meeting of the Company. During the year Company had also appointed Mr. Mahalinga B. Kotian as a Chief Financial Officer of the Company w.e.f. 10th March, 2015. During the year Company accepted resignation of Mr. Ambalal C. Patel from the post of Independent Director w.e.f. 1st July, 2014. Re-appointments As per the provisions of the Companies Act, 2013 and the Articles of Association of the company, Mrs. Anisha Seth (DIN 06867960) will retire in the ensuing Annual General Meeting and being eligible, seek re-appointment. The Board of Directors recommends his re-appointment. AUDITORS At the Annual General Meeting held on 26th September, 2014 M/s. S. M. Kapoor & Co., Chartered Accountants, Statutory Auditors of the Company having registration number FRN No. 104809W were appointed as statutory auditors 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 first proviso of section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification by members at every annual general meeting. The Company has received a certificate from the statutory auditors to the effect that their re-appointment, if made, would be within the limits prescribed. There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. S. M. Kapoor & Co., Statutory Auditors, in their report. Internal Auditors M/s Govind Prasad & Co, Chartered Accountants were appointed as an Internal Auditor with effect from 14th February, 2015, they performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: In order to prevent sexual harassment of women at work place the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and during the year Company has not received any complaint of such harassment. The Extract of the Annual Return in form MGT-9: The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure C". PARTICULARS OF INVESTMENTS HELD BY THE COMPANY UNDER SECTION 186 WITH DETAILS: The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an evaluation of every director's performance was carried out. An evaluation sheet was given to each director wherein certain criteria were set out for which ratings are to be given. RESEARCH & DEVELOPMENT: As Company is not into manufacturing activity, there was no Research and Development activity carried out by the Company during the financial year under review. WEBSITE OF THE COMPANY: The Company maintains a website www.laffanspetrochemical.com where detailed information of the company and its products are provided CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Code has been placed on the Company's website www.laffanspetrochemical.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code Secretarial Audit As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report from M/s. Ragini Chokshi & Co., Company Secretaries in Practice which is annexed herewith as "Annexure D".. Certain observations made in the report with regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company would ensure in future that all the provisions are complied with the fullest extent. Regarding observation relating to taking on records the disclosure of interest given by all the directors in second Board Meeting instead of first Board Meeting of the financial year, the same happened because in the first Board Meeting 2 new directors were appointed and they also gave their disclosures in that Board Meeting, therefore it was decided to take on record disclosure of interest received from all the directors in next Board Meeting. With respect to the observation relating to Clause 41 of the Listing Agreement, it is hereby clarified that the intimation of Board Meetings were published in newspaper but Company has not kept Newspaper cuttings in its records which will be taken care henceforth. Vigil mechanism/whistle Blower Policy: The Company has established a vigil mechanism/Whistle Blower Policy for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to this Report. Following details are also available on the website of the Company i.e on www.laffanspetrochemical.com 1. The details of such familiarisation programmes 2. The policy on Related Party Transactions 3. Code of conduct for Board of Directors and Employees 4. Code of internal procedure and conduct under insider trading regulation. 5. Policy on Board Diversity 6. Nomination & Remuneration Policy etc. Management Discussion and Analysis Report: In terms of the provisions of Clause 49 of the Listing Agreement, the Management's discussion and analysis is set out in this Annual Report. CAUSIONARY STATEMENT The statements contained in the Board's Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations. Various factors such as economic conditions, changes in government regulations, tax, regime, other statues, market forces and other associated and individual factors mar however lead to variation in actual results. Readers are cautioned not to place undue reliance on the forward looking statements. Report on Corporate Governance A separate report on Corporate Governance is attached to this report along with Statutory Auditor's certificate on its compliance. Acknowledgments Your Directors take this opportunity to place on record their appreciation and sincere gratitude to the Government of India, Governments of Gujarat & Maharashtra, Authorities and the Bankers to the Company for their valuable support and look forward to their continued co-operation in the years to come. Your Directors acknowledge the support and co-operation received from the employees and all those who have helped in the day to day management. For and on behalf of the Board of Directors Sandeep Seth Managing Director (DIN 00316075) Jaideep Seth Director (DIN 03130620) Place: Mumbai Dated: May 29, 2015 |