DIRECTORS' REPORT To, The Members, Your Directors present the Twenty Second Annual Report and Audited Accounts of the Company for the financial year ended March 31,2015. OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS A) Sales and Profit: The sales and other income of the Company during 2014-15 were flat at Rs. 2104.14 Lacs compared to Rs. 2926.42 Lacs of the previous year. The loss incurred Rs. 34.17 Lacs during the FY2014-15 compared to Rs. 25.92 Lacs of the previous year. B) Raw Material: Required quantities of the Raw materials were available from within India. C) Export: Company was able to procure the required orders for its export products. Company made export of Rs. 7.82 lacs during the year. No material changes and commitments, affecting the financial position of the Company, have occurred between March 31,2015 and the date of this Report. DIVIDEND: In view of loss incurred during the year under review, your Board of Directors does not recommend any dividend for the financial year 2014-15. MEETINGS OF THE BOARD : During the Financial Year 2014-15, 5 (five) meetings of the Board of Directors took place. For further details, please refer Report on Corporate Governance. PARTICULARS OF LOANS GUARANTEESAND INVESTMENTS : The Company has not given any loan, made investment, given any guarantee or provided any security - covered u/s. 186 of The Companies Act, 2013 - to any one. CORPORATEGOVERNANCE/MANAGEMENTDISCUSSIONANDANALYSIS REPORT: A Report on the Corporate Governance Code along with a certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreements as also the Management Discussion and Analysis Report are annexed to this Report. FIXED DEPOSITS: During the year Company has not accepted any Fixed Deposits. INSURANCE: All fixed assets and movable assets of the Company are adequately insured. TECHNICALACHIEVEMENT: The Company keeps on exploring the possibility of technical improvement and process optimization for better yields / product mix/energy efficiency. DIRECTORS: The Board of Directors had on the recommendation of Nomination and Remuneration Committee, subject to the approval of shareholders, appointed Shri Bharat J. Shah and Shri Subhash J. Shah as the Whole-Time Directors of the Company for a period effective from February 13, 2015 to March31,2018. Pursuant to the recommendation of Nomination and Remuneration Committee, Shri Shailesh J. Shah was re-appointed by the Board of Directors, subject to the approval of the shareholders, as the Managing Director of the Company for a further period of three years with effect from April 1, 2015toMarch31,2018. During the year under review, Shri Ajay R. Gandhi, Shri Umesh P. Mehta and Shri Virendra B. Shah were appointed as Additional Independent Directors u/s 161(1) of the Companies Act, 2013. They will hold the office of Director up to the date of forthcoming Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company, inter alia, confirming that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange. In accordance with the provisions of Section 152 of the Companies Act,2013 and the Company's Article of Association , Shri Shailesh J. Shah and Shri Bhupendra J. Shah retire by rotation at the forthcomingAnnual General Meeting and, being eligible offer themselves for re-appointment. During the year under review, Shri Mahesh S. Shah, Shri Kaushik R. Patel and Shri Rohit K. Choksi resigned as the Independent Directors of the Company with effect from October 01,2014, September 30, 2014 and November 15, 2014 respectively. Shri Daxesh B. Shah, Shri Vivek S. Shah and Shri Rumit B. Shah resigned as Executive Directors of the Company with effect from February 13, 2015. The Board has placed on its record its appreciation for the services rendered by all the resigned Directors during their tenure as the Directors. COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCEOFADIRECTORETC.: Pursuant to the provisions of Section 178 and other applicable provisions, if any, of the Companies Act, 2013 read with the Rules made there under and Clause 49 of the Listing Agreement, the Board of Directors at their Meeting held on 06.08.2014 approved the Remuneration and Nomination Policy as recommended by the Nomination and Remuneration Committee. The salient features of the said policy covering the policy on appointment and remuneration and other matters have been explained in the Corporate Governance Report. BOARD EVALUATION: Based on the criteria for evaluation of Independent Directors and the Board as recommended by the Nomination and Remuneration Committee and as adopted by the Board. Board carried out evaluation of its own performance and that of the individual Directors. DIRECTORS'RESPONSIBILITY STATEMENT: Pursuant to the requirement of Section 134 of the Companies Act, 2013 with respect to Directors' Responsibility Statement, the Directors hereby confirm: (i) that in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III of the Companies Act have been followed and there are no material departures from the same; (ii) that 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 a true and fair view of the state of affairs of the Company at the end of the financial year viz. March 31, 2015 and of the profit of the Company for that period; (iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions ofthisAct for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts on a 'Going Concern' basis; (v) that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and (vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. PERSONNEL: All the employees have worked with zeal and enthusiasm and your Directors wish to express their sincere appreciation to all the employees for their support, co-operation and dedicated services. PARTICULARS OF EMPLOYEES: There was no employee drawing an annual salary of Rs. 60.00 lacs or more where employed for full year or monthly salary of Rs. 5,00,000/- or more where employed for part of the year. The information pursuant to the provisions of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as AnnexureA. LISTING: Company's Securities are listed with the Bombay Stock Exchange at Mumbai. The Company has already paid the listing fees to this Stock Exchange for FY2014-15. CORPORATE GOVERNANCE: The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the StatutoryAuditors of the Company confirming the compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance. BUSINESS RESPONSIBILITY REPORT: The Business Responsibility Reporting, as required under clause 55 of the Listing Agreement is not applicable to the Company. CONTRACTSANDARRANGEMENTSWITH RELATED PARTIES: All contracts / arrangements / transactions with related parties entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with related party transactions. WHISTLE BLOWER POLICY: The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company (www.hipolin.com). RISK MANAGEMENT POLICY: The Company follows well-established and detailed risk assessment and minimization procedures, which periodically reviewed by the Board. The Company has in place a business risk management framework for identifying risks and opportunities that may have a bearing on the organization's objectives, assessing them in terms of likelihood and magnitude of impact and determining a response strategy. The Senior Management assists the Board in its oversight of the Company's management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall business risk management framework. AUDITORS: The auditors M/s Harish S. Patel & Co., Chartered Accountants, Ahmedabad retire at the conclusion of the ensuing Annual General Meeting and they have confirmed their eligibility pursuant to the provision of the Section 139 of The CompaniesAct, 2013 and willingness to be re-reappointed. The Board of Directors recommends their re-appointment for the year 2015-16 at the ensuing AGM. The Report of the Statutory Auditors for the financial year 2014-15 does not contain any qualification, reservation or adverse remark. SECRETARIALAUDIT REPORT: As required by Section 204 of The Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. M. P. Mehta & Co., Company Secretaries, Ahmedabad, Company Secretaries in Practice to conduct Secretarial Audit for the Financial Year 2014-15. The Report of the Secretarial Audit for the financial year ended on March 31, 2015 is annexed as Annexure B to this Report. The said report does not contain any qualification, reservation or adverse remark. COSTAUDITOR: As per the Companies (Cost Records and Audit) Rules, 2014 as amended by Companies (Cost Records and Audit)Amendment Rules, 2014, issued by the Central Government, the Company is not required to get its cost records audited by a Cost Auditor. But the Company is maintaining cost records voluntarily and obtained the Certificate of Maintenance of Cost Records from the Cost Auditor. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGSAND OUTGO: A. Conservation of Energy The Company has not incurred Significant amount on electricity, as most of the products of the company are mixing of various ingredients. The percentage of electricity expenses is very negligible to total expenses. However, the Company ensures conservation at all possible levels. B. Technology Absorption The Company has established a well-equiped Quality Control Laboratory and Research and Development Laboratory. The Research & Development Laboratory does not require any sophisticated instruments. The Company has adopted indigenously available technology for its production process. The Company has not adopted any foreign technology. C. Foreign Exchange Earnings and outgo EXTRACT OFANNUAL RETURN: The details forming part of the extract of Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 is annexed herewith as Annexure C to this Report. ACKNOWLEDGMENTS: Your Board of Directors wishes to place on record its appreciation to the contribution made by the employees of the company. The Directors also wish to thank the Government authorities, financial institutions and shareholders for their cooperation and assistance extended to the company. For and on behalf of the Board, Bhupendra J. Shah Shailesh J. Shah Chairman Managing Director Date : May 28, 2015 Place : Ahmedabad |