hiran orgochem ltd Directors report

To,

The Members,

Hiran Orgochem Limited

Your Directors have pleasure in submitting Thirty first Annual Report of the Company together with the Audited Statements of Accounts of your company for the financial for the year ended 31st March, 2015.

1. Financial Highlights:

The Companys financial performance for the year under review along with previous years figures are given hereunder:

		(Rs. in Lacs)
Particulars	Current Period	Previous Year
	(1st April, 2014 to 31st March, 2015)	(1st July, 2013 to 31st March, 2014)
Net Sales and Other Income	130.48	356.58
Less: Expenditure except Finance Cost & Depreciation	2900.35	908.89
Profit/(Loss) before Finance Cost, Depreciation & Taxation	(2769.87)	(552.31)
Less: Finance Cost & Depreciation	5.77	169.26
Less: Extraordinary Item Profit / (Loss) before Taxation	(2775.64)	(721.57)
(Add)/Less: Provision for Taxation & deferred Tax	-	-
Profit/(Loss) after Taxation	(2775.64)	(721.57)

2. Performance:

The financials of the Company for the period ended 31st March, 2015 during the year Company registered sales including other income of Rs. 1,30,48,140/- The Company suffered net Loss after tax of Rs. (27,75,64,088.54). Company currently does not have manufacturing as factory is in possession of SBI bank as mentioned in last year annual report, currently SBI has assigned all the rights, title and interest in financial assistances granted to Company in favour of Edelweiss Asset reconstruction company as informed to Company by Edelweiss via letter no: EdelARC/4392-2014 dated 13th June, 2014. The Sales shown in Annual Accounts is due to trading activities.

3. Dividend

Considering the financial position of the Company your Directors express their inability to recommend any dividend for the financial year ended 31st March, 2015.

4. Transfer Of Unclaimed Dividend To Investor Education And Protection Fund

In terms of Section 125 of the Companies Act, 2013, the unclaimed or unpaid Dividend relating to past 7 financial years and more cumulating to Rs. 4.22 Lacs is due for remittance on and shall be transferred to the Investor Education and Protection Fund established by the Central Government as per applicable laws.

5. Reserves And Surplus

Company has not transferred any amount to reserves due to losses.

6. Share Capital

The authorised share capital of the Cpmpany as on March 31, 2015 is Rs. 1,050,000,000/-.

The total paid up capital of the Company as on March 31, 2015 is Rs. 98,65,68,600/- comprising of 98,65,68,60 Equity Shares of Rs. 10/-.

7. Directors And Key Managerial Personnel

In accordance with the provisions of Companies Act, 2013 the Board of Directors of the Company appointed Mrs. Dariyadevi Hiran as an Additional Director of the Company in the Board Meeting held on 31st January, 2015 under Section 161 of the Companies Act, 2013 who holds office up to the date of this Annual General Meeting. Subject to approval of members the Company has received a notice along with requisite deposit from a member of the Company under Section 160 of the Companies Act, 2013, proposing her candidature for the office of Director The Board recommends her appointment.

8. Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the financial year ended 31 March 2015, 7 (seven) Board meetings (excluding adjourned meeting) were held i.e. on 30 May, 2014, 6 August, 2014, 14 August, 2014, 1 September, 2014, 14 November, 2014, 31 January, 2015 and 13 February, 2015. The Audit Committee meetings were held i.e. on 30 May, 2014, 14 August, 2014, 1 September,2014, 14 November, 2014 and 13 February 2015.

The maximum interval between any two meetings was well within the maximum allowed gap of four months.

9. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.

10. Report On Corporate Governance

Pursuant to clause 49 of the listing agreement entered into with stock exchanges, the following have been made a part of the Annual Report and are attached to this Report:

• Management Discussion and Analysis Report

• Report on Corporate Governance

• Auditors Certificate regarding compliance of conditions of Corporate Governance

11. Committees Of The Board

During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently three Committees of the Board, as follows:

• Audit Committee

• Stakeholders Relationship Committee

• Nomination and Remuneration Committee

• Risk Management Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, a part of this Report.

12. Remuneration Policy

The Board has, on recommendation of the Nomination & Remuneration Committee framed for selection and appointment of Directors, Senior Management and their remuneration.

13. 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 ends of the financial year to which these financial statements relate on the date of this report.

14. Statement Concerning Development And Implementation Of Risk Management Policy Of The Company

The Board has constituted the Risk Management Committee as per the requirements of the Companies Act, 2013 along with applicable Rules and requirements of the Listing Agreement.

The Risk Management Committee lays down procedures:

a) To inform Board members about the risk assessment and minimization procedures.

b) Framing, implementing and monitoring the risk management plan for the company.

c) Any other matter that may be entrusted to the Committee by the Board.

The frequency, agenda, duration, etc., for meetings of Risk Management Committee shall be as set by the Chairman of the Committee.

15. Details Of Policy Developed And Implemented By The Company On Its Corporate Social Responsibility Initiatives

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

16. Particulars Of Loans, Guarantees Or Investments Made Under Section 186 Of The Companies Act, 2013

The particulars of loans, guarantees and investments made & given by the Company in the year 2014-2015 as per Section 186 of Companies Act, 2013 is stated in the Notes to Account which forms part of this Annual Report.

17. Particulars Of Contracts Or Arrangements Made With Related Parties:

All the Related Party Transactions are entered on arms length basis and in ordinary course of business. All the transactions are in compliance with the applicable provisions of the relevant Acts. There are no related party transactions entered by the Company which may have potential conflict with the interest of the Company at large.

18. Explanation Or Comments On Qualifications, Reservations Or Adverse Remarks Or Disclaimers Made By The Auditors And The Practicing Company Secretary In Their Reports And Managements Reply For The Same

A) Ankita Gandhi & Associates

(Internal Auditors)

Sr. No.	Auditors Observation	Managements Reply
1.	There were some short TDS deduction for the payments made to vendors and contractors during the year ended 31st March, 2015. .	Immediate necessary rectification actions has been taken by board and shall deduct the short (difference) amount in their future payments.

B) MVK Associates

(Statutory Auditors)

Sr. No.	Auditors Observation	Managements Reply
1.	Company has exceeded the limit specified in Section 186 of Companies Act, 2013 as regards to lending money.	The Company at the time of borrowing under Section 293 and while investing funds under Section 372A of the Companies Act, 1956 has passed the necessary special/ordinary resolution and further, The company has initiated Posatl ballot for approval of Shareholder for regularizing current borrowing Limites under the Companies Act, 2013, notice postal ballot which be dispatched on 5th September, 2015 and result of which shall be declared on 4th October, 2014.
2.	Sales recognized by the company were not in conformity with the sales tax returns filed by the company. Sales as per books of accounts were 42.22 lakhs however sales as per returns filed by the company was Nil	The management has to inform that same has been noted and Immediate necessary rectification actions will be initiated.
3.	Company has not appointed Chief Financial Officer and a whole time Company Secretary as on 31st March, 2015 as required by Section 203 of Companies Act, 2013.	Company is seeking for appropriate candidate who shall understand current company position of company and join as chief financial officer.
		Company has appointed Ms. Ratika Gandhi as whole-time company Secretary w.e.f. 01/08/2015.
4.	During the year Management has provided for doubtful loans and advances for Rs. 96.50 lacs. Company has also written off Short term loans and advances aggregating to Rs. 202.07 lakhs (net of loans and advances written back). We were not provided with any documentary evidence or basis on which management has relied and classified these loans as doubtful or writing it off.	Board informs that company have sent constant reminders to the debtors personally and also via post.
		Company will furnish the documentary evidences along with acknowledged copies to our auditors immediately as same were not available during auditing due as same was not available due to office shifting.
5.	We have been informed that there are huge outstanding demands, disputed as well as undisputed, against the company with regards to Sales Tax, Income Tax, Excise Duty, Wealth Tax, etc. However, the necessary documentary evidences / information were not made available by the management. Hence we are unable to quantify the same. Loss of the Company is understated to that extent.	The assessments and demands are on stay and currently there is no movement in case as confirmed by company consultants.
		Any updates received shall be immediately informed to statutory auditors.

C) Mr. Sanjog V. Naravankar Company Secretary

Sr. No.	Auditors Observation	Managements Reply
1.	The Company does not have Whole time Company Secretary as Compliance Officer as required under Clause 47(a) of the Listing Agreement as entered between the Company and the Bombay Stock Exchange.	Same as mentioned in point no. 03 above.
2.	During the Period Under Review, Trading in equity Shares of the Company was suspended with effect from September 9, 2014 due to Non Compliance of Listing agreement.	Company has already moved application for revocation of suspension and suspension will revoked with due approval statutory authorities.

*Note: The Secretarial audit report is attached as annexure to Directors report is furnished in Annexure IV and is attached to this Report.

19. Companys policy relating to directors appointment, payment of remuneration and discharge of their duties

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company and have constituted proper composition of independent directors for various committees.

Company has two independent directors on board and company have taken declaration of independent directors from them. There are no material pecuniary benefits to independent directors.

20. Annual Return:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure I and is attached to this Report.

21. Vigil Mechanism

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.hiranorgochem.com.

22. Listing With Stock Exchanges

The shares of the Company are currently suspended from trading in BSE Limited due to penal reasons. However the Company has made application for revocation of suspension with BSE Limited in near future.

23. Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:—

(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 this Act 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; and

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.- Not applicable to Private Limited Company.

Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

(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.

24. Subsidiaries, Joint Ventures And Associate Companies

Company does not have any subsidiary company or any joint ventures.

M/s. Actgen pharma private limited is associate company to Hiran Orgochem limited. Company has entered into transactions under arms length basis and hence there is no requirement for approvals under Section 188 of Companies act, 2013.

25. Public Deposits

The Company has not accepted any deposits within the meaning of Section 73(1) read with rule 1(3) of Companies (Acceptance of Deposits) Rules 2014 as amended.

26. Declaration Of Independent Directors And Familiarisation Programme For Independent Directors

The Independent Directors have submitted their disclosures 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.

All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Director (ED) and Senior Management giving an overview of our operations, to familiarise the new IDs with the Companys business operations. The new IDs are given an orientation on our products, group structure and subsidiaries, Board constitution and procedures, matters reserved for the Board, and our major risks and risk management strategy.

The Policy on the Companys Familiarisation Programme and Code of Conduct for Independent Directors can be accessed at http://www.hiranorgochem.com/financials/financ ials.html.

27. Statutory Auditors

M/s. MVK Associates, Chartered Accountants, were appointed as Statutory Auditors for a period in the Annual General Meeting held on 30 September, 2014. 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.

28. Management Discussion And Analysis Report

Management Discussion and Analysis report for the financial period under review as stipulated in Clause 49 of Listing Agreement entered into with the Stock Exchange is set out in a separate section forming part of Annual report.

29. Internal Control System

The Company has an internal control system and conducts Internal audit. The scope and authority of the Internal Audit function is defined by audit committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

Audit committee evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies.

30. Particulars Of Employees

During the period none of the employees of the Company, whether employed for the whole year or part thereof, was in receipt of remuneration aggregating to or in excess of limits specified under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and hence no particulars are required to be furnished in connection with the same.

31. Corporate Governance Report

A report on Corporate Governance and a certificate from Mr. Sanjay V. Naravankar- Company Secretary in Whole-time practice, regarding compliance of the requirement of Corporate Governance along with management Discussion & Analysis Report pursuant to Clause 49 of Listing Agreement entered into with stock exchange are annexed hereto.

32. Disclosure As Per The Sexual Harassment Of

Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has adopted policy on prevention, prohibition and redressal of sexual harassment at workplace under provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the Financial Year 2014-15, the Company has not received any complaints on sexual harassment.

33. Insider Trading Regulations

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the code of conduct for prevention of insider trading and the code for corporate disclosures ("Code"), as approved by the Board from time to time, are in force by the Company. The objective of this Code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, designated employees and other employees.

The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Officers, designated employees and other employees from trading in the securities of Hiran Orgochem Limited at the time when there is unpublished price sensitive information.

34. Conservation Of Energy, Technology Absorption And Foreign Exchange And Outgo:

The Company is engaged in trading activity and it did not carry out any Research & Development activities nor introduced any new technology during the year. Hence, Rule 8 (3) of the Companies (Accounts) Rules, 2014 are not applicable with respect to those details.

There are no foreign exchange earnings and outgo during the period ended March 31, 2015

35. Acknowledgements

The Board wishes to place on record their sincere appreciation for the continuous support received from Shareholders, Customers, Suppliers, Bankers, Statutory Authorities and all other business associates. The Board also takes this opportunity to appreciate and value the contribution made by the Companys employees at all levels during the period under review.

	By Order of the Board
	Sd/-
Place: Mumbai	Kantilal M. Hiran
th
Date: 13 August, 2015	Chairman & Managing
	Director
	DIN: 00186885
Address:	103/104, C-wing, Vastu park,
	Evershine Nagar, Malad (w),
	Mumbai, 400064.

Registered Office:

Unit 908,9th flr, IJMIMA-Immitation Jewellery Mkt

CSL, Raheja Metroplex, Link Road,

Malad (West) Link Road,

Malad (West), Mumbai – 400 064

CIN: L51900MH1983PLC029596