DIRECTORS' REPORT To the Members, MADHUSUDAN SECURITIES LIMITED 1. Your Directors have pleasure in presenting the 32nd Annual Report on the business and operations of the company along with the Audited Financial Statement of Accounts for the year ended March 31, 2015. 2. Dividend Due to losses incurred during the year by the Company, the Board regrets its inability to recommend any dividend to strengthen the financial resources of the Company. 3. Operations and Future Prospects During the year under review, the Company has made meagre surplus by trading in Securities. However, it has suffered losses due to high fixed administrative expenses related to the Company. The net loss suffered by the Company is of Rs. 10,78,236/-. The Company has paid Rs. 12 Crores to Primus Retail P. L. pursuant to the BTA agreement dated 04/02/2011 which stands cancelled due to non-performance of the obligation by the party, hence, the said amount is due and recoverable, treated as doubtful advances. 61,42,847 equity Shares of Rs. 10/- each were issued without any cash consideration to Primus Retail (P) Ltd.pursuant to BTA for transfer of its Brand & Business. High Court has declined Primus Retail (P) Ltd. to transfer the Brand & Business. Therefore, equity shares issued in lieu of BTA has not materialized, consequently the said shares stands as cancelled & subsequently forfeited by the Company. The securities premium account is adjusted to give effect of cancellation and forfeiture of own shares. The face value of such shares are accounted as Forfeited Shares (to be reissued), pending statutory approval / consideration. 4. Number of meetings of the board The Board of Directors have conducted quarterly Board Meetings during the Financial Year 2014-15 on various dates namely, I. August 09, 2014; II. October 17, 2014; III. February 13, 2015: IV. May 25, 2015 5. Equity Share Capital The Equity Share Capital as on March 31, 2015 was Rs.8,69,54,870/-, of which the Company has forfeited shares of Rs.6,14,28,470/- during the year. 10. Other Matters - The Management of the Company has been taken over by Mr. Salim P Govani and others after completing the Takeover formalities under the SEBI (SAST) Regulations 2011on 21st April 2015. The existing promoter Mr. Madhusudan Reddy ceased to be promoter on account of transfer of shareholding to the acquirer. 11. Directors Responsibility Statement As per section 134 (3) (c) of the Companies Act 2013 1. That in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed, along with proper explanation relating to material departures; 2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to maintain the matching revenue concept, 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 for that period; 3. That the Directors have taken proper and sufficient care 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; and 4. That the annual accounts for the financial year ended March 31, 2015 are prepared on a ‘going concern’ basis; 5. That proper internal financial controls were in place and the financial controls were adequate and operating effectively; 6. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 12. Directors And Key Management Personnel In accordance with the provisions of the Act and the Articles of Association of the Company, Director Mr. Madhusudan Reddy retire by rotation and, has expressed his unwillingness vide letter dated 21/04/2015 for reappointment. On request of the Board of Directors, Mr. Madhusudan Reddy shall continue to be the Director till the ensuing Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. 13. Particulars of loans, guarantees or investment The Company has not made any investment either by loans/ guarantees/ any other form through more than two layers of investment companies. 14. Related Parties Transaction All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. The Related Party Transactions are duly recorded as part of Notes to Accounts which is self-explanatory and the terms and conditions of which are not prejudicial to interests of the Company. 15. Material changes and commitments The Company has received order from SEBI dated 17th April 2015 imposing a penalty of Rs. 3,00,000/- for the violation of the SEBI Regulations which has been duly paid before the date of the report. No other material changes have occurred after the Balance Sheet date. 16. Particulars Regarding Conversion of Energy and Technology Absorption Additional information required regarding Conservation of Energy and Technology Absorption are NOT APPLICABLE as the Company is not carrying out any manufacturing operation. 17. Foreign Exchange Earnings And Outgo During the year under review, the Company has not earned or incurred any amount in foreign exchange. 18. Internal Financial Controls The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. 19. Corporate Social Responsibility The Company is not liable to constitute a Corporate Social Responsibility Committee since the Company has not attained the prescribed limit as mentioned hereunder: ? Net Worth of Rs.500 crore or more or ? Turnover of Rs. 1000 crore or more or ? Net Profit of Rs.5 crore or more during the financial year 20. Corporate Governance The company generally maintains good standards of corporate governance and adheres to the corporate governance requirements set out by SEBI. The company has also implemented several best corporate governance practices as prevalent globally. The report on corporate governance as stipulated under Clause 49 of the listing agreement forms part of the annual Report. The requisites of the certificate from the auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid clause 49 is, attached to the report in corporate governance. 21. Risk Management The Company has a Fraud and Risk Management Policy to deal with the instances of fraud and mismanagement, if any. During the year, the Company has not identified any element of risk which may threaten the existence of the Company. 22. Particulars of Employee There are no employees in receipt of remuneration exceeding the limit as prescribed under the provisions of Section 197 of the Companies Act, 2013. 23. Details of Policy Development and Implementation The change of management shall draw up the Business Plan and Corporate Social Responsibility in due course. 24. Auditors Report & Auditors The company’s statutory auditors M/s. Vora & Associates, Chartered Accountants ICAI FRN.- 111612W, Mumbai, retire at the ensuing AGM. The members are requested to appoint Statutory auditors of the Company. The observations made by the Statutory Auditors in their Report read together with Significant Accounting Policies and the relevant Notes forming part of the accounts for the financial year ended 31st March, 2015 are self-explanatory and therefore do not call for any further comments. 25. Explanation by the Board on Qualifications Or Adverse Remark by the Auditor in its Audit Report The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. Refer Note no. 16(b), (c) and (d) for detailed explanation. 26. Secretarial Audit Report Pursuant to the provision of the Section 204 of the Companies Act 2013 and the Companies Rule 2014, the company shall appoint a Practising Company Secretary, to conduct secretarial audit in due course to comply the provisions of the Act. 27. Acknowledgement Your Directors wish to place on record their deep sense of appreciation to the Outgoing Promoters and employees, Associates, Bankers for the continued help and co-operation extended by them to the Company. For AND ON BEHALF OF THE BOARD OF DIRECTORS MR. SALIM P. GOVANI CHAIRMAN Place: Mumbai Dated: 25th May, 2015 |