DIRECTOR'S REPORT Dear Shareholders, It is indeed and honor for Board of Directors to present the 32nd Annual Report together with Audited statement on the business and operations of the company for the year ended on 31st March, 2015. RESULTS OF OPERATIONS AND STATE OF AFFAIRS The highlights of the performance during the year under review are as under: •Total Revenue increased by 19.83% to 10808529 (Previous year 9020251). •Profit before interest & dep. increased by 25.61% to 8153002 (Previous year 5843336). •PAT increased by 39.82% to 5141822 (Previous year 3677368). The increase in the Total Revenue, Profit before interest & dep. and PAT during the year is attributable to larger deployment of funds and recovery of dues during the year. ASSET GROWTH Total Assets of the Company stood at Rs. 221733302/- as compared toRs.215718274/-during the last year, showing an increase of 2.79%. DIVIDEND Directors are of the view that the area of operation the company should be increased. For that Company needs to conserve the financial resources for meeting financial requirements of those future business projects. Hence it was decided by your director not to declare any dividend this year. TRANSFER TO RESERVES The Company transferred an amount of 10, 28, 364 to the Special Reserves under section 45IC of RBI Act, during the year. CONSOLIDATED FINANCIAL STATEMENTS The audited consolidated financial statement of the Company prepared in accordance with applicable Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 is provided in the Annual Report. SUBSIDIARY COMPANIES As on March 31, 2015, the Company has the following subsidiaries: 1. Rodic Coffee Estates Private Limited. The audited financial statements, the Auditors Report thereon and the Board's Report for the Company's subsidiaries for the year ended March 31, 2015 are available on the website of the Company. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. MATERIAL SUBSIDIARIES There are no material subsidiaries of the Company. The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at www.sulabh.org.in DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134(5) of the Companies Act, 2013, your Board of Directors states that: a)in preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures from the same; b)the Directors have 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date; c)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; d)the Directors have prepared the annual accounts on a 'going concern basis'; e)the Directors have laid down proper internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively; f ) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that the systems are adequate and are operating effectively. CORPORATE GOVERNANCE The Company has been observing best governance practices and is committed to adhere to the Corporate Governance requirements on an ongoing basis. A separate section on Corporate Governance and a certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance, as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. RELATED PARTY TRANSACTIONS Company has not entered into any related parties transactions. CORPORATE SOCIAL RESPONSIBILITY The Company does not meet the requirement of Section 135 of Companies Act 2013 for applicability of Corporate Social Responsibility. RISK MANAGEMENT The Board of Directors of the Company has constituted Risk Management Committee which is entrusted with the responsibility to assist the Board in identification and mitigation of risks associated with the business of the Company. The details of the Risk Management Committee is provided in the Report on Corporate Governance forming part of this Annual Report. FIXED 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. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has in place adequate internal controls commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditors report to the Chairman of the Audit Committee of the Board. Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of the company is duly constituted. In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company Mrs. Seema Mittal, retires by rotation at the ensuing Annual General Meeting and offers herself for reappointment. During the year under review, the members approved the appointment of Mr. Rakesh Chand Agarwal, Mr. Rajiv Agarwal, and Mr. Umesh Khandelwal as Independent Directors who are not liable to retire by rotation. Shri Santosh Kumar Agarwal, a non executive director submitted his resignation to the Board on May 30, 2015 due to other preoccupations. The same was accepted by the Board in its meeting held on May 30, 2015. The Board hereby places on record its sincerest thanks and gratitude for the invaluable contribution made by Shri Santosh Kumar Agarwal towards the growth and development of the company during his tenure as a director. Shri Vivek Khanna, an Independent director submitted his resignation to the Board on May 30, 2015 due to other preoccupations. The same was accepted by the Board in its meeting held on May 30, 2015. The Board hereby places on record its sincerest thanks and gratitude for the invaluable contribution made by Shri Vivek Khanna towards the growth and development of the company during his tenure as a director. 7DECLARATION BY INDEPENDENT DIRECTOR(S) The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement. FORMAL ANNUAL PERFORMANCE EVALUATION The Board has carried out an annual performance evaluation of Independent Directors, Board, and other individual Directors as per the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Process of evaluation was followed as per the Policy laid down in this regard. NOMINATION AND REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection of Directors, determining Directors independence and payment of remuneration to Directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Policy is stated in the Report on Corporate Governance. FAMILIARIZATION PROGRAM On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. The details of program for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company and related matters are put up on the website of the Company at www.sulabh.org.in AUDITORS AND AUDITORS' REPORT Statutory Auditors M/s. Satish Soni & Co., Chartered Accountants, Statutory Auditors of the Company, holds office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. The Notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditor 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 CS Gopesh Sahu, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith to this Report. The Secretarial Audit Report does not contain any qualification, reservations or adverse remark. DISCLOSURES Audit Committee The Audit Committee comprises Independent Directors namely Mr. Rajiv Agarwal (Chairman), Mr.Rakesh Chand Agarwal and Mr. Manoj Kumar Agarwal as other members. The Audit Committee played an important role during the year. It coordinated with the Statutory Auditors, Internal Auditors and other key personnel of the Company and has rendered guidance in the areas of internal audit and control, finance and accounts. All the recommendations made by the Audit Committee were accepted by the Board. Five meetings of the Audit Committee were held during the year. Stakeholders' Relationship Committee The Committee met two times during the year. There is no unresolved pending investor grievance. Nomination & Remuneration Committee The Nomination and Remuneration Committee recommends to the Board the suitability of candidates for appointment as Key Managerial Personnel, Directors and the remuneration payable to them and other employees. The Nomination and Remuneration Committee met twice during the year. Vigil Mechanism / Whistle Blower Policy The Company has a vigil mechanism named Whistle Blower Policy (WBP) to deal with instance of fraud and mismanagement, if any. The WBP may be accessed on the Company's website at the link www.sulabh.org.in Meetings of Board Six meetings of the Board of Directors were held during the year, the details of which are provided in Report on Corporate Governance. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013. Particulars of Loans, Investments, Guarantees Not applicable being a Non-Banking Finance Company. However the details of the investments made by company are given in the notes to the financial statements. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The provisions of Section 134(3)(m) of the Companies Act, 2013, relating to conservation of energy and technology absorption are not applicable to the Company. However, there is a system of proper check and control in order to avoid unnecessary wastage of power and energy. Foreign Exchange earnings and outgo is NIL. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT 9 is annexed to this Report. Particulars of Employees Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Reserve Bank of India Directions Your Company is non-banking finance company (NBFC). Accordingly, during the year, Company has not accepted any deposits from the public and there were no deposits which become due for repayment or renewal. Company has complied with the directives issued by the Reserve Bank of India under the Non Banking Financial Companies (Reserve Bank of India) Directions, 2007, as amended from time to time. Increase in Share Capital The paid up equity capital as on March 31, 2015 was Rs.100475000/-. During the year under review, the Company has not issued shares with differential voting rights nor has issued any sweat equity. As on March 31, 2015, none of the Directors of the Company hold any convertible instruments of the Company. Disclosure under Sexual Harassment of Women Company has Sexual Harassment Policy in place and available on Company's website. During the year under review, there were no complaints from any of the employee. Suspension of Trading BSE has suspended trading in the securities of the Company w.e.f. 07 January 2015 pursuant to directions received from SEBI as a surveillance measure until further notice. ACKNOWLEDGMENTS The Board of Directors Yours Directors acknowledge with thanks for the support extended by the bankers, business associates, clients, consultants, advisors, shareholders, investors and the employees of the Company and subsidiaries for their continued co-operation and support. The Board of Directors would also like to appreciate for the co-operation received from the Reserve Bank of India, SEBI, NSE & BSE and all other statutory and/or regulatory bodies. For and on behalf of the Board Sd/-Manoj Kumar Agarwal CEO and Whole Time Director DIN:01767926 Rakesh Chand Agarwal Director DIN: 3539915 Place: Kanpur Date: May 30, 2015 |