DIRECTORS' REPORT TO, THE MEMBERS Your Directors are pleased to present the Eighty Sixth Annual Report on the business and operations of the Company and the audited accounts for the year ended on March 31, 2015 RESERVES: The Company does not have any Reserves. YEAR IN REVIEW: The Company continued to be under liquidation throughout the year. Nevertheless Directors have been allowed to take steps to ensure implementation of the Scheme of Compromise/Arrangement sanctioned by the Hon. Bombay High Court in September 2009 and subsequently modified from time to time. The Company incurred loss of Rs 290.14 lakhs during the year. This is essentially on account of interest paid on Secured Debentures of Rs 30 crores, the proceeds,of which were used to discharge statutory and other liabilities as per the Scheme of Compromise/Arrangement. FUTURE PROSPECTS: The Company is ready with its plans for developing an ultra-modern township on 60% of the land at Bilimora and an integrated textile unit on the balance 40% land. However, we cannot move ahead until the workmen's litigation pending before the Courts (described below) is finally disposed off and the liquidation proceedings set aside. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: As mentioned in the Chairman's Statement of 2014 some erstwhile workmen had filed three Special Leave Applications (Civil) before the Supreme Court of India challenging various orders of the Gujarat and Bombay High Courts in favour of the Company. These SLP's were disposed of by an order of the Hon Supreme Court on 13-01-2015. In the said order of the Supreme Court, 4 weeks were granted to the workmen association to remove office objections in their earlier appeal filed before the Bombay High Court, and further request to Bombay High Court to hear appeal of workmen within the framework of law. The appeal is listed for hearing on 29th June 2015. Other than the above matter, no significant or material orders have been passed by any regulators or courts or tribunals against the Company during the year 2014-15. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: No material changes and commitments have occurred subsequent to the close of FY 201415 till date of this report. DIVIDEND: The Directors do not recommend any dividend for the financial year 2014-15, in view of the accumulated loss. DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. SHARE CAPITAL: Presently, the Share Capital of the Company is Rs. 2,00,00,000/- divided in to 2,00,000 Equity Shares of Rs. 100/- each. CORPORATE GOVERNANCE: In terms of SEBI Circular dated 14th September 2014, compliance with the provisions of Clause 49 of the Listing Agreement relating to Corporate Governance, is not mandatory for the Company. Moreover, as mentioned at the beginning of this report, the Company continues to be under liquidation, and under the supervision of the Official Liquidator and Bombay High Court, as the Scheme is under implementation, with only limited powers with the Board of Directors. Nevertheless, the Company has voluntarily adopted most of the norms for Corporate Governance as laid down in Clause 49. and a report thereon forms part of this Annual Report. Declaration regarding compliance of Code of Conduct by Board Members is also included. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES: During this period under the review not applicable to the Company. Hence, your Directors have not constituted the Corporate Social Responsibility (CSR) Committee. SUBSIDIARY COMPANIES: The Company does not have any subsidiary company. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS The Company has given Inter Corporate Deposit to its associate company M/s Platinum Square Pvt Ltd. The details of Loans to Associate Company are provided in Note 20 of the notes to accounts. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION: A. Conservation of Energy, Technology Absorption The particulars as required under the provisions of Section 134(3)(m) of the Companies Act ,2013 in respect of conservation of energy and technology absorption have not been furnished as the Company did not conduct any activities during the year under review. B. (a) Conservation of energy measures taken: - N.A. (b) Technology absorption measures: - N.A. C. Foreign Exchange Earnings And Outgo There were no foreign exchange earnings and outgo during the year under review. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES: The Company does not have any employees. Further, as the Company has not employed any female employees, the declaration required under Sexual Harassment of Women at Work (Prevention, Prohibition and Redressal) Act does not apply. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES: There were no contracts or arrangements entered into by the company in accordance with provisions of section 188 of the Companies Act, 2013. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in the Note 20 to the financial statements. RISK POLICY: The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal and Risk Management Policy will be developed as and when Company starts operations. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an adequate system of internal controls commensurate with the size and the limited nature of its business activities. DIRECTOR'S RESPONSIBILITY STATEMENT: To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: i. In the preparation of the annual accounts, the applicable accounting standards have been followed ii. 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 a 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. iii. The directors 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. iv. The directors have prepared the annual accounts on a going concern basis. 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 system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. DIRECTORS Changes in Board constitution- The Board of Directors had appointed Ms. Shweta Bakul Parekh (DIN: 03287393) as an Additional Woman Director in the category of Non-Executive Director with effect from 31st March, 2015. In accordance with the provisions of the Companies Act, 2013, Mr. Homi Framroze Mehta (DIN: 00105524) retire by rotation at the ensuing AGM and being eligible offers himself for reappointment. Mr. Homi Framroze Mehta is not disqualified from being appointed as a Director as specified in terms of Section 164 of the Companies Act, 2013. Brief profile of Mr. Homi Framroze Mehta and Ms.' Shweta Bakul Parekh who are proposed for appointment, as stipulated under Clause 49 of the Listing Agreement is furnished in the Notice of the ensuing AGM. The Board of Directors of your Company recommends their reappointment at the ensuing AGM. MEETINGS- Minimum four pre-scheduled Board meetings are held annually. Additional Board meetings are convened by giving appropriate notice to address the Company's specific needs. In case of business exigencies or urgency of matters, resolutions are passed by circulation. During the year Seven Board Meetings and Five Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement. DECLARATION BY AN INDEPENDENT DlRECTORS- The Company has received declaration by all Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD EVALUATION- The Board of Directors has made the formal annual evaluation of its own performance and that of its committees and individual directors and found it to be satisfactory. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS AND KMP AND REMUNERATION POLICY- Policy will be developed as and when Company starts operations. NOMINATION AND REMUNERATION COMMITTEE- During the year, no such committee meeting took place. TERMS OF APPOINTMENT & REMUNERATION CFO &MANAGING DIRECTOR During the year the company has not paid any remuneration to any of the non-executive directors. KEY MANAGERIAL PERSONNEL The current Board of Directors comprises of Non-Executive and Independent Directors. As the Company has not commenced any activity and has very limited resources, it has not been possible to employ Managing Director, Chief Financial Officer and Company Secretary. The Board will take steps to recruit these personnel at the time of commencement of commercial activity. For the time being, decision making is in the hands of Chairman, Mr. Homi F Mehta, assisted by other directors. VIGIL MECHANISM: The Company has not set up Vigil Mechanism/ Whistle Blower policy as it has not commenced any activity and does not have any employees on its rolls. AUDITORS: Statutory Auditors- M/s M. D. Pandya & Associates, (Reg. No. 107325 W) Chartered Accountants, Mumbai who are the statutory auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting (AGM) and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed there under, it is proposed to appoint M. D. Pandya & Associates, Chartered Accountants as the statutory auditors of the Company from the conclusion of forthcoming AGM till the conclusion of the AGM to be held in the year 2019. The Company has received letter from the statutory auditors to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. STATUTORY AUDITORS' OBSERVATIONS: There are no qualifications, reservations or adverse remarks or disclaimers made by M/s M D Pandya & Associates, Statutory Auditors, in their report SECRETARIAL AUDITORS: In terms of the provisions of 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. Anish Gupta& Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting Secretarial Audit of your Company for the financial year 31.3.2015. The report of the Secretarial Auditor is annexed herewith as "Annexure [A]" SECRETARIAL AUDITORS' OBSERVATIONS& COMMENTS FROM BOARD: REMARKS OF THE SECRETARIAL AUDITOR 1. The company has delayed in filing of certain forms with the Registrar of Companies. 2. The Company has not appointed Key Managerial Personnel including the Company Secretary as required under section 203 of the Companies Act, 2013. 3. The Company is yet to approve and adopt the Policies and posting the same on the website of the Company as per the various provisions of the Companies Act and Listing Guidelines. 4. Ms. Shweta B. Parekh has been appointed as an additional director in the category of independent woman director in the Board Meeting held on 31.3.2015. However, she does not qualify as an Independent Director under section 149(6)(b)(ii) as her father has pecuniary interest in an associate company. 5. Omdutt Purohit is an Independent Director and is also appointed as Compliance Officer under listing guidelines and as required under the listing guideline, being an Independent director, he should not be appointed as a compliance officer. 6. The company has not taken the connectivity from the CDSUNSDL to provide demat facilities to its shareholders as required under the SEBI Guidelines and that 100 % shares of promoters in demat form is also required to be complied with. COMMENTS FROM THE MANAGEMENT 1. As elaborated in earlier paragraphs, the Company does not have any staff and very limited resources. As a consequence, there were deficiencies in certain secretarial compliances. The Directors have taken note of the same and will ensure they do not recur in future. 2. In the absence of any staff, the Company had no choice but to assign duties of Compliance Officer to a Director. Upon appointment of qualified staff the Director will be relieved of duty as Compliance Officer. 3. The Company had earlier applied for dematerialization of its shares, but depositories had declined, on the ground that share capital is below their threshold limit. Directors will pursue this matter once again with the depositories. EXTRACT OF ANNUAL RETURN: In terms of the provisions of Section 92 (3) of the Act read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31st March, 2015 is given in Annexure [B] OTHER DICLOSURES • There were no material changes and commitments affecting the financial position of your Company between end of the financial year and the date of this report. • Your Company has not issued any shares with differential voting. • There was no revision in the financial statements. • Your Company has not issued any sweat equity shares. • During the year your Company has not received any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. PREVENTION OF INSIDER TRADING: The Company has ensured the compliance of Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Company is in process to adopt the Code of Conduct for prevention of Insider Trading. APPRECIATION: Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company and other interested parties at all levels for their continuous co-operation and assistance. By Order of the Board of Directors for, Gaekwar Mills Limited Omdutt Purohit Director (DIN No: 00041597) Ratan Karanjia Director (DIN No: 00033108) Place: Mumbai Date:29.5.2015 |