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DIRECTOR'S REPORT

Zenith Fibres Ltd.

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Market Cap. (₹) 18.60 Cr. P/BV 0.38 Book Value (₹) 124.95
52 Week High/Low (₹) 71/41 FV/ML 10/1 P/E(X) 8.50
Bookclosure 27/09/2019 EPS (₹) 5.54 Div Yield (%) 2.12
Year End :2018-03 

Dear Members,

The Directors are pleased to present the 29th Annual Report along with the Audited Financial Statements for the year ended March 31, 2018.

(Rs. in Lacs)

PARTICULARS

2017-18

2016-17

Revenue from Operations

3698.23

5635.14

Profit before Exceptional Item and Tax

477.69

927.40

Profit After Tax

319.39

613.34

DIVIDEND

Keeping in view the performance of the Company, the Directors recommend a dividend of 15% for the fiscal year ended 31st March, 2018. The dividend, if approved by the Members in the ensuing AGM, will absorb about Rs. 79.97 Lacs including dividend distribution tax of Rs. 13.64 Lacs out of the distributable profits available.

PERFORMANCE

The Company achieved total revenue of Rs. 3962.68 Lacs as compared to Rs. 5892.39 Lacs last year. Profit before tax is Rs. 477 Lacs and profit after tax stands at Rs. 319 Lacs during the year under review as against Rs. 927.40 Lacs and Rs. 613.34 Lacs respectively in the previous year.

The operations of the Company during the year declined substantially as compared to previous year due to reduced off take of the finished product due to various reasons.

PLANT OPERATIONS

Company has only one plant located at Savli, Baroda, Gujarat and the same is operating satisfactorily.

SHARE CAPITAL

The paid up capital as on 31st March, 2018 was Rs. 442.23 Lacs consisting of 44,22,346 numbers of Equity Shares of Rs. 10/each. During the year under review, the Company has not issued any bonus shares, equity shares neither any right shares with differential voting rights etc., nor granted any stock options or sweat equity.

APPOINTMENT/REAPPOINTMENT/CESSATION OF DIRECTORS/ KMP

The following Directors / KMP were appointed / reappointed / resigned during the year:

Name of Directors/ K.M.P.

DIN/PAN

Reappointment

Shri Abhishake Rungta

00053730

Liable to retire by rotation and reappointed in the 28th AGM

Smt. Shraddha Mookim

06948233

Resigned w.e.f. 11th November, 2017

Smt. Rashmi Desai

02281570

Appointed w.e.f. 11th November, 2017

Shri K.D Sharma

AJMPS 8854P

Resigned w.e.f. 9th September, 2017

Shri B K Mehta

ABZPM

Appointed on 9th

2594F

September, 2017 &

Resigned w.e.f. 7th

March, 2018

OARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Independent Directors have carried out an evaluation of the Board as well as evaluation of the working of its Audit and Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

Please refer Form AOC 1 at “Annexure A”.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, KMP and their remuneration. The Remuneration Policy is spelt out in the Corporate Governance Report.

FINANCE / ACCOUNTS

The Company after very many years was suddenly facing issues of reduced offtake due to various reasons both in the domestic as well as in the international market. With reduced operations, a fresh look was taken at the expenses of the Company and wherever practical, expenses were curtailed for permanent long term financial benefits. The management is continuing to evaluate further prudent optimal financial deployment of funds for better contribution towards profitability of the Company. The overall generation was reduced due to decreased sales. The Company has in the past kept surplus funds invested prudently, without any undue risk so as to ensure safety and liquidity of the funds.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to all requirements as set out by law. The report on Corporate Governance as stipulated under SEBI (LODR) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Committee has formulated and recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company, which has been approved by the Board and hosted on the Company’s website. The Annual Report on CSR activities is annexed herewith, marked as “Annexure B”.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS

The Company has not given any guarantees or securities covered under the provisions of Section 186 of the Companies Act, 2013. However, the aggregate of loans and advances granted, as also investments are within the limits of Section 186 of the Act. These have been disclosed in the Financial Statements.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The Company has received declaration from all Independent Directors of the Company to the effect that they meet the criteria of independence as stipulated u/s 149(6) of the Act.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f) they have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 OF THE COMPANIES ACT, 2013

There are no materially significant related party transactions made by the company with Promoters, KMP or other designated persons during the year, which may have potential conflict with interest of the Company at large.

AUDIT COMMITTEE RECOMMENDATIONS

During the year, the Board has accepted all recommendations of Audit Committee and accordingly no disclosure is required to be made in respect of any non-acceptance of recommendation.

AUDITORS

a) Statutory Auditor

The Statutory Auditor M/s. Surendra Modiani & Associates, Charted Accountant having F.R.N.126307W were appointed as Statutory Auditors of the Company in the 28th Annual General Meeting of the Company for a period of five consecutive years, subject to ratification by members every year in the AGM. Based upon the declaration of their eligibility, consent and terms of engagement, your Directors recommend ratification of their appointment from the 29th AGM until conclusion of the 30th AGM of the Company. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company for Financial Year 2017-18.

b) Internal Auditor

The Board of Directors has appointed M/s. Keyur Patel and Company (F.R.N.126346W) as Internal Auditors of the Company for the financial year 2018-19.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT-9 is placed on Company’s website.

EXPLANATION / COMMENTS ON QUALIFICATION RESERVATION / ADVERSE REMARK/DISCLAIMER BY THE AUDITORS, IF ANY

Since there are no qualification/reservation/ adverse remark/ disclaimer either by the Auditors or Secretarial Auditors in their respective report, no explanation/comment is offered.

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 details of the Code are available on the website of the Company. All the Board Members and the Senior Management Personnel have confirmed compliance with the Code. All KMP have been given appropriate briefing in this regard.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant to SEBI (Prohibition & Insider Trading) Regulations, 2015 with a view to regulate trading in securities by the Directors and Designated Employees of the Company. The details of the Code are available on the website of the Company. All Directors and the Designated Employees have confirmed compliance with the Code.

MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year. For details, please refer the Corporate Governance section of this Report.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Shri Upendra C. Shukla, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed herewith marked as “Annexure C” to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

RISK MANAGEMENT

The Company continuously keeps a watch regarding any possible risk threatening the existence of the Company and ensures necessary mitigation of the same.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERN STATUS/COMPANY’S OPERATIONS IN FUTURE

No significant/material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company or company’s operations in future.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Work place (Prevention, Prohibition & Redressal) Act, 2013 the company has proper system to receive the complaint and constituted Internal Complaints Committee. During the year, no complaint was received from any employee.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as per “Annexure D” to this Report.

Information required under Section 197 read with rules 5(2)(i) & 5(3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is not attached. Members interested in inspecting these particulars, may do so at the Registered Office of the Company, 14 days before the 29th AGM and upto one day before of the said AGM during normal business hours on working days.

None of the employees was in receipt of remuneration exceeding Rs. 8,50,000/- p.m. or Rs. 1,02,00,000/- p.a.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year.

CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has not imported any foreign technology and hence, the company does not have any information to offer in respect of Technology Absorption. However, information in respect of Conservation of Energy & Foreign Exchange Earnings and outgo is as per “Annexure-E”.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, IF ANY, DURING THE PERIOD FROM 31ST MARCH, 2018 TO THE DATE OF THE REPORT

There is no material change/commitment affecting the financial position of the Company during the period from the end of the financial year on 31st March, 2018 to the date of the Report. Shri Pratip Patel has been appointed as CFO of the Company w.e.f. 01st June 2018.

ACKNOWLEDGEMENTS

The Company would like to thank all the Stakeholders, Bankers, Employees, including inter alia Suppliers, Vendors and Investors and also place on record its appreciation to all the valuable customers for their consistent unstinted support throughout the year.

On behalf of the Board of Directors

Sanjeev Rungta

Date: 25/08/2018 Executive Chairman

Place: Mumbai DIN:00053602

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