SV TRADING DIRECTORS' REPORT AND MANAGEMENT DISCUSSION &ANALYSIS Dear Members, SV Trading and Agencies Limited The Directors are pleased to present the 35thAnnual Report together with the Audited Financial Statements for the financial year ended March 31, 2015. The Management Discussion and Analysis is also included in this Report. 2. OPERATION AND STATE OF THE AFFAIRS OF THE COMPANY During the financial year ended on March 31 2015, your Company reported top-line growth of 107.35% over the previous year. The Gross revenue from operations stood at Rs. 225.35 lacs as compared with Rs. 108.69 lacs in the previous year. The Profit before tax stood at Rs. 60.84 lacs as against loss of Rs. 51.31 lacs in the previous year. The Net Profit for the year stood at Rs. 49.19 lacs against loss of Rs. 51.31 lacs reported in the Previous Year. 3. CORPORATE OVERVIEW During the year the company is in the business of general trading and investment in shares and securities. There is no change in nature of the business of the Company. The Company has its registered office at Mumbai. 4. OVERVIEW OF THE ECONOMY AND ANALYSIS As per the latest GDP growth estimates, Indian economy grew by 7.4% inFY15 compared to 6.9% in FY14, mostly driven by improved economicfundamentals and revision of GDP methodology calculation. Eveninflation showed signs of moderation, a welcome sign -wholesale priceand consumer price inflation declined. Reduced inflation, falling crude oil prices, stable Rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policyreforms have already put India on an accelerating growth track an improved the business outlook. Reforms like e-auctions of coalmines and telecom, FDI hike in insurance, speedier regulatory approvals etc. will be critical growth enablers to de-bottleneck stalledprojects, improve the investment outlook and the ease of doing business in the country. Reformscurrently underway such as GST implementation, Amendment on Land Acquisition Bill, Labour Reforms, etc.are expected to provide the requisite thrust for growth in the medium-term. Opportunities and Challenges Being a major employer in India coupled with strong industry linkages with the rural economy augurs trading activities as oneof the most significant sectors with an incremental growth potential.Rural economy has seen a spurt in income levels the last few years and this is the right time to promote trade and investment. Being one of the key focus sectors under theGovernment's ''Make in India'' campaign is a testimony to the huge growthpotential the trading and investment activities. Globally, favourable trade policy reforms would also allow the trade and investment to expand its trade partners,improve its export competitiveness and contribute substantially to thenation's income. However, the trading and investment are constrained with many challenges including rising costs (wages, inventory and interest costs),intensified competition from other low costcountries and political risk to implement the reforms like GST etc. Such issues need to be addressed to result in unlocking maximum growth potential. 5. DIVIDEND AND RESERVES In view of the insufficient profit your directors do not recommend any dividend.During the year under review, no amount was transferred to GeneralReserve. 6. SHARE CAPITAL The paid up Equity Share Capital as at March 31, 2015 stood at Rs. 171,000,000 (Rupees Seventeen crores ten lacs). During the year under review the Company has issued and allotted 17,000,000 equity shares of Rs. 10/- each at par on preferential basis. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. 7. SUBSIDAIRY AND ASSOCIATES COMPANIES As on March 31, 2015, the Company has no Subsidiary and Associates Company. 8. CONSOLIDATED FINANCIAL STATEMENT The Company is not required to consolidate its financial statements in terms of the provision of Section 129(3) of the Companies Act, 2013 and Rules made there-under during the financial year. 9. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, aseparate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditor confirming compliance forms an integral part of this Report. 10. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure - A and forms an integral part of this Report. 11. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Manoharbhai P. Joshi Director retires by rotation at the forthcoming Annual General Meeting and, being eligible offers himself for re-appointment. During the year Mr. Rajeev Sharma, Mr.Kulbir Singh Pasricha, Mr. Sunil Upadhayay were appointed as additional Director (Non-Executive and Independent) by the Board at its meeting held on May 05, 2014and their appointment as Independent Director for a period of 5 years was confirmed by the members of the Company at the Annual General Meeting held on September 12, 2014. Ms. Jyotsana Joshi, was appointed as Non-Executive Women Director at the Annual General Meeting held on September 12, 2014. All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. During the year under review, the Company has appointed Mr. Prakash Chandra as Chief Financial Officer (CFO)in terms of the provision of Section of 203 of the Act. 12. BOARD EVALUATION, INDUCTION AND TRAINING OF BOARD MEMBERS Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. The process followed by the Company for induction and training to Board members has been explained in the Corporate Governance Report. 13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. 14. 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.svtrading.co.in ). 15. REMUNERATION AND NOMINATION POLICY The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. . The remuneration and nomination policy has been posted on the website of the Company (www.svtrading.co.in ). 16. RELATED PARTY TRANSACTIONS AND POLICY The Company has developed a related party transactions framework through standard operating procedures for the purpose of identification and monitoring of transactions with the related parties. The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-d-vis the Company. The details of transactions entered into with the related parties are given here-in-below in form AOC-2 in terms of the provision of section 188(1) including certain arm's length transactions: A. Details of contract or arrangement or transactions not at arms' length basis ; Nil 17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations. 18. DIRECTORS' RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013: i. that in the preparation of the Annual Accounts for the year endedMarch 31, 2015, the applicable accounting standards have been followedalong with proper explanation relating to material departures, if any; ii. 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date; iii. 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; iv. the annual accounts have been prepared on a going concern basis; v. that 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; and vi. that 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. 19. STATUTORY AUDIT M/s S. G. Kabra& Co., Chartered Accountants, (Firm Registration No: 104507W) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re- appointment to audit the accounts of the Company for the financial year 2015-16. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s.S.G.Kabra& Co.,that their appointment, if made, would be in conformity with the limits specified in the said Section. 20. COST AUDIT Provision of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company during the year under review. 21. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s R M Mimani& Associates LLP, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report is included as Annexure - B and forms an integral part of this Report. The Management comments/observation on the qualifications in the Secretarial Audit Report as under: The Company has not appointed Managing Director and Company Secretary during the financial year as required under section 203 of the Act. The Company has appointed and designated Mr. Gopal LalPaliwal as Managing Director of the Company with effect from August 1, 2015 and is in process of the appointing Company Secretary and would be complied the requirement as soon as it find the suitable candidate. The Company is in process of formulating the certain policies as required under the Companies Act, 2013 and listing agreement. The Board of Directors of the Company had adopted and implemented most of the policies as required under the various laws and listing agreement and will continue to do the same as required in term of the various laws and listing agreement from time to time to ensure compliance of the laws as suggested during the course of audit. The Company has partial disclose the information/data on its website e as required under the Companies Act, 2013 and listing agreement. The Board of Directors of the Company noted the same and updated all the disclosure required on the website as suggested during the course of Audit and will ensure that all the disclosure as required under the Companies Act, 2013 and listing agreement made available from time to time in future. The Company has delayed the filing of certain returns/ forms with the Registrar of Companies. However these forms/returns have been filed by making the payment of the additional fee as prescribed by the law. The Board of Directors of the Company noted the same and will take necessary steps to have systems to avoid such delays in future. 22. INTERNAL FINANCIAL CONROL AND THEIR ADEQUACY Your Company has policies, procedures and effective internal controls for ensuring orderly and efficient conduct of the business, safeguard of its assets, prevention and detection of fraud and errors, accuracy and completeness of the accounting record, timely preparation of financial statements and proper disclosure. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. The internal and operational audit is conducted on regular basis The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. 23. RISK MANAGEMENT During the year under review, the Company has identified and evaluates elements of business risk. Consequently a Business Risk Management framework is in place. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business. Some of the risks that the Company is exposed to are: Financial Risks The Company's policy is to actively manage its foreign exchange risk within the framework laid down. Given the interest rate fluctuations, the Company has adopted a prudent and conservative risk mitigation strategy to minimize interest costs. Commodity Price Risks The Company is exposed to the risk of price fluctuation of goods in which it trades. The Company proactively managesthese risks through forward booking, inventory management and proactive vendor development practices. Regulatory Risks The Company is exposed to risks attached to various statutes andregulations. The Company is mitigating these risks through regular review of legal compliances carried outthrough internal as well as external compliance audits. 24. CORPORATE SOCIAL RESPONSIBILITY (CSR) Provision of Schedule VII of the Companies Act, 2013 read with Companies Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company during the year under review. 25. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. As required by the Sexual Harassment of Women at Workplace (Prevention,Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. Its redressal is placed on the intranet for the benefit of its employees. During the year under review, no complaints were reported to the Board. 26. STATUTORY INFORMATION The information on conservation of energy, technology absorption andforeign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company during the period under review. The information required under Section 197of the Companies Act,2013 read with rule 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014 are not applicable to the Company during the financial year. The Company has not accepted any deposits, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. The Business Responsibility Reporting as required by Clause 55 of theListing Agreement with the Stock Exchanges is not applicable to your Company for the financial year ending March 31, 2015. 27. CAUTIONARY STATEMENT Statements in this Directors' Report & Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. 28. APPRECIATION Your Directors wish to thank all the stakeholders who have contributed to the success of your Company. Your Directors wish to place on record their appreciation, for thecontribution made by the employees at all levels. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company. For and on behalf of the Board of Directors of SV Trading and Agencies Limited Gopal LalPaliwal Managing Director DIN: 06522898 Mr. Manoharbhai P. Joshi Director DIN:02208711 Place: Mumbai Dated: August 17, 2015 |