DIRECTORS' REPORT Dear Members, 1.Your Directors are pleased to present the fifty fourth Annual Report and the Company's Audited Accounts for the financial year ended March 31, 2015, 2. Dividend To strengthen the financial position of the Company, your Directors have not recommended any dividend on equity shares for the year under review. 3. Transfer to Reserve The Company has not transferred any amount to the Reserves during the year 4. Management Discussion & Analysis Reports The Management Discussion and Analysis Report has been separately furnished as an annexure to this Report as "Annexure A." 5. 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. 6. Particulars of Loans, Guarantees or Investments The particulars of loans, guarantees and investments have been disclosed in the financial statement. The details of the investments made by company is given in the notes to the financial statements. 7. Internal Control Systems and their Adequacy The Company has an Internal Control System, commensurate with the size, scale and nature of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Managing Director. The Internal Audit Department 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 suggestions of internal audit function, Management undertakes corrective action in their respective areas and thereby strengthens the controls. 8. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Since your Company does not own manufacturing facility, the particulars relating to conservation of energy and technology absorption stipulated as per Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are not applicable. There were no foreign exchange earnings / outgo during the year. 9, Industrial Relations During the year under review, your Company enjoyed cordial relationship with employees at ail levels. 10. Directors and Key Managerial Personnel In accordance with the provisions of Section' 152 of the Companies Act, 2013 and the Articles of Association of the Company Mr. Pradyumna Jajodia, retires by rotation at the ensuing Annual General Meeting and offers himself for reappointment. 11. Declaration by an Independent Director(s) All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. 12. Board Evaluation Pursuant to the provisions of the Schedule IV, clause VIII of the Companies Act, 2013, the Board has carried out an evaluation of its own performance as well as performance of Independent Directors. 13. Nomination and Remuneration Policy The Nomination and Remuneration Policy is under preparation and will be posted on the website of the Company in due course, 14. Meetings of the Board Nine (9) meetings of the Board of Directors were held during the year, the details of which are incorporated in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. A separate meeting of Independent Directors, pursuant to Section 149 (7) read with Schedule VI of the Companies Act, 20 J 3 was not held during the year due to unavailability of quorum of Independent Directors. The details the Board meetings are furnished as an annexure to this Report as "Annexure D." 15. Directors' Responsibility Statement As Required Under Section 134(3)(C) of the Companies Act, 2013 The Directors state that: - a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation by way of notes to accounts relating to material departures; b. The selected accounting policies were applied consistently and the judgments and estimates made by them are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March 2015 and of the profit for the year ended on that date; c. The proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The annual accounts have been prepared on a going concern basis. e. The Directors had laid down internal financial controls to be followed by the Company and that such internal controls are adequate and were operating effectively. f. The Directors had devised proper systems to ensure compliance with the provisions of ail applicable laws and that such systems were adequate and operating effectively. 16- Related Party Transactions All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. 17. Subsidiary Companies The Company does not have any subsidiary Company. 18. Code of Conduct The Code is under preparation and will be posted on the website of the Company in due course as the Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. 19. Vigil Mechanism / Whistle Blower Policy The WBP is under preparation and will be posted on the website of the Company in due course as the Company wants to deal with instance of fraud and mismanagement, if any. 20. Prevention of Insider Trading The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Compliance Officer is responsible for implementation of the Code. The code of prevention of Insider Trading and fair disclosures is there on the website of the Company. All Board Directors and the designated employees have confirmed compliance with the Code. 21. Auditors and Auditors Report (a) Statutory Auditor Pursuant to Section 139(1) M/s. K L. Singhee& Co., Chartered Accountants, (FRN No.303121B), were appointed as statutory auditor of the Company in 53rd Annual General Meeting (AGM) for three consecutive A GM of the Company and they hold office until the conclusion of Annual General Meeting of the Company to be held in calendar year 2017. Necessary resolution for ratification of their appointment has been included in the Notice convening the ensuing Annual General Meeting. The Qualification made by the Auditors in their Report dated 2nd June, 2015, in the "Qualified opinion" are explained as under: a. Regarding non-provision for Doubtful Debtors- I. Sundry Debtors, amounting to Rs. 2,134,761/- are in litigation at the Hon'ble High Court, Mumbai and the management is hopeful of arriving at a out of Court settlement with the debtor. Hence, the same is not provided in the accounts. II. An amount Rs. 310,408/- is recoverable towards statutory dues from a government organization which is disputed by them and is in litigation and the management is hopeful of recovering the dues. b. In respect of Investments in quoted shares which are not actively traded on stock exchange the management is confident that the realizable value of these investments is atleast equivalent or more than the value at which they are stated in the balance sheet. (b) Secretarial Audit and Secretarial Audit Report 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, ND ^Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure E" to this Report, The Secretarial Audit Report does contained one qualification, i.e. no separate meeting of Independent Directors happened during the year under review, however there are no reservations or adverse remarks. For the qualification Board has replied above in point no. 14. (c) Cost Auditor and Cost Audit Report Cost Audit is not applicable to your Company. 22. Statement Pursuant to Listing Agreement The Company's Equity shares are listed at Bombay Stock Exchange Limited. The Annual listing fee for the year 2014-15 has been paid. 23. Corporate Governance Pursuant to Listing Agreement, Corporate Governance is not applicable to Company; however, the Company is committed to maintain the highest standards of Corporate Governance as set out by SEBI as good corporate governance. The Report on composition of Committees and meeting of committees as stipulated under Clause 49 and Section 177 of the Companies Act, 2013, forms part of the Directors Report as an "Annexure B". 24. Particulars of Employees The information required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (appointment and Remuneration of Managerial Personnel) rules, 2014, in respect of employees of the Company are not applicable as no employee was in receipt of remuneration exceeding the limits specified in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, weather employed for the full year or part of the year. 25. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure C". 26. Cash flow statement The Cash flow statement for the year 2014-15 Is part of Balance sheet. 27, Acknowledgements The Board of Directors wish to place on record their appreciation for the support extended by the bankers, business associates, clients, consultants, auditors, shareholders of the Company for their continued co-operation and support. The Board of Directors would also like to place on record their sincere appreciation for the co-operation received from the Local Authorities, BSE and all other statutory and/or regulatory bodies. By Order of the Board of Directors For Lynx Machinery And Commercials Limited EL K Jajodia Director (DIN: 04075508) Place : Mumbai, Dated : 21st August 2015 |