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Refnol Resin Ltd.

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Annual Report

For Year :
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Director’s Report

Dear Members, The Directors present their 34th Annual Report together with the Audited Financial Statements of Company for the year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report. 01. FINANCIAL RESULTS: (STANDALONE) The financial results of the Company for the year under review are as under: - (Rs. In Lacs) Particulars 2014-15 2013-14 Profit/(Loss) before Financial Costs and Depreciation 59.51 (3.47) Less:- Interest & Financial 95.08 109.71 Charges Less:- Depreciation 7.74 15.86 Loss before tax (43.31) (129.04) Tax Expenses - - Short Provision of Tax in respect of earlier years - - Exceptional item -charge - 55.73 Loss after tax (43.31) (184.77) Loss available for Appropriation (43.31) (184.77) 02. DIVIDEND In view of the accumulated losses, your Directors have not recommended any dividend for the year under review. Board of Directors sincerely hopes that members would appreciate and understand the situation for non-payment of Dividend. 03. TRANSFER TO RESERVES: Pursuant to provisions of Section 134(1) (j) of the Companies Act, 2013, the company has not proposed to transfer any amount to general reserves account of the company during the year under review. 04. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTUS Your Directors wish to present the details of Business operations done during the year under review: The period under review was a very challenging year; still your Company has performed quite well as compared to previous financial performance. a. Consolidated Financial Performance: * Consolidated income for the year increased by 21.33% to Rs. 3752.96 Lacs as compared to Rs. 3093.25 Lacs in 2014. * Consolidated net sales for the year were Rs. 3728.11 Lacs as compared to Rs. 3078.42 Lacs in 2014, growth of 21.10%. * Consolidated profit before tax and after tax for the year was Rs. 32.05 Lacs as compared to (Rs. 146.16) Lacs loss in 2014. b. Standalone Financial Performance: * Standalone income for the year increased by 29.43% to Rs. 2040.51 Lacs as compared to Rs. 1576.55 Lacs in 2014. * Standalone net sales for the year were Rs. 2028.45 Lacs as compared to Rs. 1570.88 Lacs in 2014, growth of 29.13%. 05. INFORMATION ON STATE OF THE COMPANY''S AFFAIRS The Company is in the business of manufacture and marketing of textile chemicals, polyster resins and chemicals for laundry and garments wet process. It covers both domestic and international markets. All the products, services, different segments, including performance and business environment thereof have been covered in detail in the Management Discussion and Analysis Report separately which is the part of this Board Report and enclosed as Annexure - A. 06. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate on the date of this report. 07. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND 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. Your Company understands and appreciates the responsibility and importance of conservation of energy and continuous to put efforts in reducing or optimizing energy consumption for its operations. 08. SAFETY, HEALTH AND ENVIRONMENT: a) Safety: The Company encourages a high level of awareness of safety issues among its employees and strives for continuous improvement. All incidents are analysed in the safety committee meetings and corrective actions are taken immediately. Employees are trained in safe practices to be followed at work place. b) Health: Your Company attaches utmost importance to the health of its employees. Periodic checkup of employees is done to monitor their health. Health related issues if any are discussed with visiting Medical Officer. c) Environment: Company always strives hard to give importance to environmental issues in normal course of operations. Adherence to Environmental and pollution control Norms as per Gujarat Pollution Control guidelines is of high concern to the Company. 09. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES AND POLICY The Company has not implemented any Corporate Social Responsibility initiatives as the provisions of Section 135 of the Act and Rules made thereunder governing Corporate Social Responsibility are not applicable. 10. FINANCE Cash and Cash equivalent as at 31st March, 2015 was Rs. 55.70 Lacs. Interest and Fixed charges has decreased from Rs. 109.71 Lacs to Rs. 95.08 Lacs. The company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. 10.1 PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS 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. 10.2 DEPOSITS The Company has neither accepted nor renewed any deposits falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time, during the year under review and therefore details mentioned in Rule 8(5) (v) & (vi) of Companies (Accounts) Rules, 2014 relating to deposits, covered under Chapter V of the Act is not required to be given. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There were no significant and material orders passed by any regulators and/or courts and tribunals which may have the impact on the going concern status and company''s operations in future. 11. INTERNAL FINANCIAL CONTROLS: The Board of Directors of the Company has laid down adequate internal financial controls which are operating effectively. During the year, policies and procedures are adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, the prevention and detection of its frauds and errors, the accuracy and completeness of the accounting records and the timely preparations of reliable financial information. 12. RELATED PARTY TRANSACTIONS All transactions entered into with the Related Parties as defined under the Companies Act, 2013 read with Clause 49 of the Listing Agreement were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior approval of the Audit Committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the approval so granted are audited and a statement giving details of all rrelated party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. The Details of the Nomination and Remuneration Committee and the said Policy have been provided under Corporate Governance Report, which forms part of this Annual Report. 13. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS There was no qualifications, reservations or adverse remarks made by the either by the Auditors or by the Practicing Company Secretary in their respective reports. There are no qualifications in the Statutory Auditor''s Report. However, * Company''s Net Worth has been fully eroded, due to accumulated losses. * The Company has incurred cash losses in the current financial year as well as in the preceding financial years. * Company''s Loss has decreased substantially from Rs. 184.77 Lacs in 2013-14 to Rs. 43.31 Lacs in 2014-15, showing growth of 76.56% in profitability. * Company''s accounts were prepared on going concern basis. 14. EXTRACT OF ANNUAL RETURN In compliance with Section 92(3), Section 134 (3) (a) and rule 11 of the Companies (Management and Administration) Rules, 2014 the Extract of the Annual Return has been annexed with this board''s report in form MGT-9 as Annexure - C. 15. MEETINGS During the year Four Board Meetings and Four Audit Committee Meetings were convened and held. The Details of which are given in the corporate Governance Report which forms part of Annual Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 16. DIRECTORS'' RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement that: 1. That in the preparation of the Accounts for the financial year ended 31st March, 2015; the applicable accounting standards have been followed along with proper explanation relating to material departures. 2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 and of the Profit or loss of the Company for the year under review. 3. That the Directors have 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. 4. Inspite of company''s net worth being fully eroded, the Directors have prepared the annual accounts on a going concern basis. 5. That proper internal financial control was in place and that the financial controls were adequate and were operating efficiently. 6. That system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively. 17. SUBSIDIARY COMPANIES As on 31st March, 2015 following companies are the subsidiaries/step down Subsidiaries of the Company: 17.1 REFNOL OVERSEAS LIMITED (ROL) RENOL OVERSEAS LIMITED was incorporated on 10th August 1994 and is limited by shares. The company holds a category 2 Global Business License issued under the Financial Services Act. The principal activity of the Company is that of investment holding. REFNOL OVERSEAS LIMITED (ROL) is subsidiary of Refnol Resins and Chemicals Limited (RRCL). 17.2 TEXCARE MIDDLE EAST LLC (TCME) M/s TEX CARE MIDDLE EAST L.L.C. is a limited liability company, licensed by Economic Development Department, Government of Sharjah, in accordance to the Federal Company Law of 1984. The main activity of the company is processing and trading in cleansing detergents. TEXCARE MIDDLE EAST L.L.C. is represented by Mr. Shaikh Faisal Bin Khalid Bin Sultan AL Qasemi (51% of share holding) & M/s REFNOL OVERSEAS LTD., MAURITIUS (49% of share holding) 17.3 TEX CARE BAHRAIN W.L.L. (TCB) TEX CARE BAHRAIN W.L.L. was incorporated in the kingdom of Bahrain as a limited liability company with the Ministry of Industry & Commerce under the commercial registration number - 45414-01 dated 15 July 2000. The company is engaged in the business of import, export and sale of detergents, disinfectants, plastic manufacturing materials fiber optical reinforced. TEX CARE BAHRAIN W.L.L. (TCB) is subsidiary of Texcare Middle East LLC (TCME). TEX CARE BAHRAIN W.L.L (TCB), represented by Texcare Middle East LLC (49% of share holding) & Karan Anne Farangi Hinkly (51% of share holding). Operations of Texcare Bahrain W.L.L. (TCB) have been discontinued during fourth quarter of the year due to lack of viable business. The Company has prepared Consolidated Financial Statement in strict compliance with the applicable accounting standards and listing agreement(s) executed with the stock exchanges where the shares of the Company are currently listed. In compliance with Clause 32 of the Listing Agreement, audited consolidated financial statements form part of this annual report. The accounts of the Subsidiary Companies and the related detailed information will be made available to any shareholder of the holding as well as Subsidiary Companies seeking such information at any point of time and are also available for inspection by the members of the Company as well as Subsidiary Companies at the registered office of the Company and subsidiaries concerned. A separate statement containing the salient features of the financial statement of aforesaid subsidiaries is part of this Annual Report and given in Form AOC-1 and enclosed as Annexure - D. 18. DECLARATION OF INDEPENDENT DIRECTORS All the Independent Directors have submitted their declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. 19. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Directors of your company has various executive and non-executive directors including independent directors who have wide and varied experience in different disciplines of corporate functioning. The Board of Directors had on the recommendation of the Nomination & Remuneration Committee designated Mr. Vikas Agarwal as Chief Financial Officer (CFO), of the Company and also approved the terms of remuneration, with effect from May 29, 2014. The Board has also approved appointment of Ms. Anu Rajput as Company Secretary (CS), of the Company along with the terms of remuneration with effect from August 8, 2014 during the period under review. Mr. Rajagopalan Sesha, a Non Executive Director of the Company had resigned from the Chairmanship of the Audit committee, however he continued to be a member of the committee. Mr. Bhalchandra Sontakke, an Independent Director, has been appointed as chairman of the Audit committee in place of Mr. Rajagopalan Sesha. In accordance with the provisions of the Companies Act 2013 and in terms of the Memorandum and Articles of Association of the Company, Mrs. Asha Khatau, (DIN:00063944) Director of the Company, who retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. Mrs. Asha Khatau holds Directorship in the following companies: a. Asha Marine Products Private Limited b. Emerald Capital Services Private Limited c. Prism Plantations Private Limited d. Indokem Limited None of the Directors is disqualified for appointment/re-appointment under Section 164 of the Companies Act, 2013. As required by law, this position is also reflected in the Auditors'' Report. The composition of the Board, meetings of the Board held during the year and the attendance of the Directors there at have been mentioned in the Report on Corporate Governance in the Annual Report. 20. PERFORMANCE EVALUATION Pursuant to the provisions of Section 134(3)(p) of the Companies Act, 2013, Rules made thereof and Clause 49 of the Listing Agreement, the Board has Carried out an evaluation of its own performance, the directors individually as well as the evaluation of its Committees as per the criteria laid down in the Nomination, Remuneration and Evaluation policy. Further the Independent directors have also reviewed the performance of Non -Independent directors and Board as a whole including reviewing the performance of the Chairperson of the company taken into account the views of Executive Directors and Non-Executive Directors vide their separate meeting which was held on February 13, 2015 at registered office of the Company. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down in the Corporate Governance Report, which forms part of this Annual Report. 21. DISCLOSURE ON THE NOMINATION AND REMUNERATION POLICY OF THE COMPANY PURSUANT TO SECTION 134(3)(e) AND SECTION 178(3): The Board of Directors of the Company in its meeting held on May 29, 2014 constituted/renamed the Nomination and Remuneration Committee with the requisite terms of reference as required under Section 178 of the Companies Act, 2013 and other applicable provisions thereof in place of existing Remuneration Committee. The said Committee framed adopted and recommended the Nomination, Remuneration & Evaluation Policy vide its committee meeting dated November 14, 2014 and the said policy has been approved by the Board in its Board meetings which was scheduled on the same date i.e. November 14, 2014. The Details of the Nomination and Remuneration Committee and the said Policy have been provided under Corporate Governance Report, which forms part of this Annual Report. The Nomination and Remuneration policy as provided herewith pursuant to provisions of Section 178(4) of the Companies Act, 2013 and Clause 49(IV)(B)(4) of the Listing Agreement, the same is enclosed herewith as Annexure - E. The policy is also available on our website at following link http://www.refnol.com/pdf/policy/policy-on-nomination-remuneration- and-evaluation.pdf 22. PARTICULARS REGARDING EMPLOYEES REMUNERATION The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as under: a. The ratio of remuneration of each director to the median employees remuneration of the Company for the FY 2014-2015 Sr. Name Designation CTC No. 1 Mr. Arup Basu Managing Director 17.58 Sr. Name Median Employee Salary Ratio No. 1 Mr. Arup Basu 1.84 9.54 : 1 b. The percentage increase in remuneration of each director, chief financial officer, chief executive officer, company secretary or manager, in the FY 2014-2015 Sr. Name Designation Remuneration No. Paid in FY 2013-14 (Rs. In Lacs) 1 Mr. Arup Basu Managing Director 17.50 2 Mr. Vikas Agarwal Chief Financial Officer 7.60 (CFO) 3 Ms. Anu Rajput Company Secretary NA (CS) Sr. Name Remuneration Change % of No. Paid in FY (Rs.In Lacs) changes 2014-15 (Rs. In Lacs) 1 Mr. Arup Basu 17.58 0.06 0.34% 2 Mr. Vikas Agarwal 7.89 0.29 3.82% 3 Ms. Anu Rajput 1.50 NA NA * Mr. Vikas Agarwal designated as a CFO from May 29, 2014. * Ms. Anu Rajput appointed as a CS from August 12, 2014. c. The percentage increase in the median remuneration of employees in the FY Remuneration of Remuneration of Increase Percentage 2013-14(Rs.In Lacs) 2014-15(Rs.In lacs) 1.71 1.84 0.13 7.64% d. The number of permanent employees on the rolls of Company Name of the company No. of Employees No. of Employees as on March as on March 31,2014 31, 2015 REFNOL RESINS AND 93 93 CHEMICALS LIMITED Name of the company % of change during the year REFNOL RESINS AND 0 CHEMICALS LIMITED e. The explanation on the relationship between average increases in remuneration and Company performances Particulars Financial Financial year 2013-14 Year 2014-15 Total Revenue 1576.55 2040.51 Profit/(Loss) Before Tax (184.77) (43.31) Profit/(Loss) After Tax (184.77) (43.31) Total Remuneration paid 206.84 215.5 Particulars % Change Total Revenue 29.43% Profit/(Loss) Before Tax 76.56% Profit/(Loss) After Tax 76.56% Total Remuneration paid 4.19% f. Comparison of the remuneration of the key managerial personnel against the performance of the Company (Rs. In Lacs) Particulars 14-15 13-14 Remuneration of Key Managerial Personnel (KMP) during 26.97 17.50 financial year 2014-15 (aggregated) Turnover 2028.45 1570.88 Remuneration (as % of Turnover) 1.33% 1.11% * Mr. Vikas Agarwal designated as CFO from May 29, 2014. * Ms. Anu Rajput appointed as CS from August 12, 2014. g. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Remuneration paid Remuneration % of Change in in to employee paid to employee remuneration paid excluding managerial excluding to employees personnel for the managerial excluding F Y 2013-14 personnel for the managerial F Y 2014-15 personnel 181.74 188.55 3.75% Remuneration Remuneration % of Change paid to managerial paid to managerial remuneration paid personnel for the personnel for the to managerial F Y 2013-14 F Y 2014-15 personnel 25.10 26.97 7.37% * Mr. Vikas Agarwal designated as CFO from May 29, 2014. * Ms. Anu Rajput appointed as CS from August 12, 2014. h. The key parameters for any variable component of remuneration availed by the Directors There is no variable component in the remuneration availed by the Directors. i. The ratio of remuneration of the highest paid directors to that of the employees who are not directors but receive remuneration in excess of the highest paid directors during the year There is no employee in the Company who receive remuneration in excess of the highest paid Director during the Year. The Company has not paid any remuneration attracting the provisions of Companies (Particulars of Employees) Rules, 1975 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence, no information is required to be appended to this report in this regard. 23. AUDITORS 23.1 Statutory Auditors The Company''s Auditors, Messrs G.P. Kapadia & Co., Chartered Accountants, (Firm Registration No.104768w) who were appointed at the 33rd (Thirty Third) Annual General Meeting of the Company, their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above 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. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The proposal for their re-appointment is included in the notice of the Annual General Meeting. 23.2 Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Sandip Sheth & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2014-2015. The Report of the Secretarial Audit Report is annexed herewith as Annexure - F. 24. INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013. 25. RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Business Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level. Risk management forms an integral part of the Company''s Mid-Term Planning cycle. The key business risks identified by the Company and its mitigation plans are as under: 25.1 Competition Risks: The Chemical Industry is becoming intensely competitive with the foray of new entrants and some of the existing players adopting inorganic growth strategies. To mitigate this risk, the Company is leveraging on its expertise, experience and it''s created capacities to increase market share, enhance brand equity / visibility and enlarge product portfolio and service offerings. It would also leverage on its Infrastructure, Commercial and Institutional Sales team to offer value to large customers. 25.2 Occupational Health & Safety Risks: Safety of employees and workers is of utmost importance to the Company. To reinforce the safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas. Various training programmes have been conducted at the plants and sales units such as behavior based safety training program, Visible Safety Leadership program, Logistics Safety program etc. The accountability structure has also been strengthened with the introduction of OH&S competencies into the job descriptions of all Top Management, Line Management and Safety Professionals. 25.3 Interest Rate Risk Refnol Resins and Chemicals Limited borrow funds from domestic markets to meet its short-term funding requirements. It is subject to risks arising from fluctuations in interest rates. 25.4 Foreign Exchange Risk Refnol Resins and Chemicals Limited prepare its financial statements in Indian Rupee (INR), but most of the payables and receivables of Polyester resin and Textile Chemical are in US Dollars, GBP maximizing the cash flow risk on account of fluctuations in foreign exchange rates. 25.5 Regulatory Compliance Risk The evolution of the global regulatory environment has resulted into increased regulatory scrutiny that has raised the minimum standards to be maintained by Refnol Resins and Chemicals Limited. This signifies the alignment of corporate performance objectives, while ensuring compliance with regulatory requirements. 25.6 Risk Management Policy: The Company has a risk management policy which from time to time is reviewed by the Risk Management Committee of the Board of Directors. The policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The policy is designed to provide the categorization of this into threats and its cause, impact, treatment and control measures. As part of the risk management policy, the relevant parameters for manufacturing sites are analysed to minimize risk associate with protection of environment, safety of operations and health of people at work and monitor regularly with reference to statutory regulations and guidelines define by the company. The company fulfills its legal requirement concerning ambition, waste water and waste disposal. Improving work place safety continued top priority at manufacturing site. The policy has been posted on the Company''s website www.refnol.com and also made available on the following link: http://refnol.com/ pdf/policy/risk-management-policy.pdf 26. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM/WHISTLE BLOWER The Audit Committee consists of the following members: a. Mr. Bhalchandra Sontakke - Chairman b. Mr. Rajagopalan Sesha - Director c. Ms. Hutoxy Dara Miller - Director d. Mr. Arup Basu* - Director The above composition of the Audit Committee consists of majority of independent Directors. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co employees and the Company. The Company has a vigil mechanism named whistle blower policy and vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company www.refnol.com *Mr. Arup Basu became a member of Audit Committee w.e.f. 12th August 2014 V a. Buy Back of Securities The Company has not bought back any of its securities during the year under review. b. Sweat Equity The Company has not issued any Sweat Equity Shares during the year under review. c. Bonus Shares No Bonus Shares were issued during the year under review. d. Employees Stock Option Plan The Company has not provided any Stock Option Scheme to the employees. 28. INSURANCE All the properties and assets of the Company are adequately insured. 29. CODE OF CONDUCT The Company has laid down a Code of Conduct applicable to the Board of Directors and Senior management which is available on Company''s website. All Board members and senior management personnel have affirmed compliance with the Code of Conduct. 30. INSIDER TRADING POLICY As required under the new Insider Trading Policy Regulations of SEBI, your Directors have framed new Insider Trading Regulations and Code of Internal Procedures and Conducts for Regulating, Monitoring and Reporting of Trading by Insider. For details please refer to the company''s website on following link http://www.refnol.com/pdf/policy/code-of- insider-trading.pdf 31. CORPORATE GOVERNANCE Pursuant to the clause 49 of the Listing Agreement, a separate section forming part of this report and titled as Corporate Governance is attached herewith as Annexure - G. 32. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has set up Internal Complaints Committees at its workplaces to redress complaints received regarding sexual harassment. No complaints have been reported during the financial year 2014-15. All employees (permanent, contractual, temporary, trainees) are covered under this policy. 33. CHANGE IN THE NATURE OF BUSINESS There is no change in the nature of the business of the Company during the financial year 2014-15. 34. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. 35. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS UNDER SECTION 149(6) OF COMPANIES ACT, 2013 Presently the Company has Three Independent and Non- Executive Directors namely Mr. Bhalchandra Sontakke, Mr. Rajagopalan Sesha and Mrs. Hutoxy Dara Miller who have given declaration that they meet the eligibility criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. 36 DISCLOSURE OF RELATIONSHIPS BETWEEN DIRECTORS INTER-SE Directors of the Company viz. Mr. Mahendra Kishore Khatau and Mrs. Asha Khatau are related to each other in accordance with Section 2 (77) of the Companies Act, 2013 and Rule 4 of the Companies (Specification of Definitions Details) Rules, 2014. They are husband and wife. 38. DETAILS AND INFORMATION AS REQUIRED UNDER SECTION 134 (3) (1) OF THE COMPANIES ACT, 2013 No material changes and commitments, have taken place between the end of the financial year of the company to which the balance sheet relates and the date of report, which affects the financial position of the Company. 39. ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company''s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 40. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company prepared in accordance with relevant Accounting Standards (AS) issued by the Institute of Chartered Accountants of India form part of this Annual Report. 41. CAUTIONARY STATEMENT Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. 42. LISTING Your company''s shares are listed with The Bombay Stock Exchange, Mumbai, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai. (Stock Code: - 530815). The Company has already paid Annual Listing fees of The Stock Exchange, Mumbai for the ensuing financial year. 43. ACKNOWLEDGEMENT Your Directors record their appreciation of the Co-operation and assistance extended by Financial Institutions, Banks and Government Authorities as well as valued customers from time to time. They also record their appreciation of the devoted services rendered by the Executives, Staff Members and Workers of the Company. For and on behalf of the Board of Directors, Mahendra. K. Khatau Place: Mumbai (Chairman) Date : 10th August, 2015 DIN: 00062794

Director’s Report