DIRECTORS REPORT DEAR MEMBERS, Your Directors have pleasure in presenting the 21st Annual Report of the Company together with the audited statement of accounts for the year ended 31st March, 2015. (B) Operations: Your Company has been able to strengthen its financial position during the current year. The gross amount of loans provided by the Company stood at Rs.2728.56 Lakhs as on 31st March, 2015 as compared to Rs.1922.93 Lakhs as on 31st March, 2014. 2. EXTRACT OF ANNUAL RETURN (FORM MGT-9): The extract of Annual Return pursuant to the provisions of sub-section (3) of section 92 read with sub-rule (1) of rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-1 and is attached to this report 4. DIRECTORS RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement: (a) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) The Directors had 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 at the end of the financial year and of the profit and loss of the Company for that period; (c) The Directors had 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; (d) The Directors had prepared the annual accounts on a going concern basis; (e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively. 5. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE STATUTORY AUDITORS: The observations made by the auditors in their report and notes to the account referred to in the Auditors Report are self-explanatory. There were no qualifications, reservations or adverse remarks made by the Auditors in their respective reports. 6. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE SECRETARIAL AUDITORS: The Secretarial Auditors have made the following observations in their report for the year ended 31st March, 2015: 1. Except for general delays up to 102 days, the Company has, prima facie, been regular in filing its returns with the Registrar of Companies. 2. The Company has not filed the following resolutions in terms of provisions of sub-section (3) of section 117 read with sub-section (3) of section 179 and other applicable rules made under the Companies Act, 2013: (i) Resolution for appointment of internal auditor; (ii) Resolution for considering and adopting its unaudited quarterly financial results; (iii) Resolution for borrowing funds from banks and others during the financial year; (iv) Resolution for investing funds of the Company. 3. The Company has not filed the prescribed returns under section 93 of the Companies Act, 2013 in relation to changes in holdings of promoters and top ten shareholders by 2% or more. 4. The Company having shareholders, exceeding 1000 in number, has not provided e-voting facility to its shareholders in terms of rule 20 of the Companies (Management and Administration) Rules, 2014. 5. The Company has not updated its website with regard to various matters which are statutorily required to be placed on the website of the Company. 6. The Company has not issued a postal ballot notice and nor complied with the provisions of section 110 of the Companies Act, 2013 read with rule 22 of the Companies (Management and Administration) Rules, 2014 for the purpose of passing a resolution under clause (a) of sub-section (1) of section 180 of the Companies Act, 2013. However, the said resolution was passed in a duly convened Extraordinary General Meeting. 7. The Company has not filed the report of Annual General Meeting as required under section 121 of the Companies Act, 2013 with the Registrar of Companies. 8. The Company, its promoters, directors and other insiders including employees have not made and submitted any disclosures or provided any information as contemplated under the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. 9. In accordance with the provisions of clause 47A of the listing agreement entered into with the Bombay Stock Exchange Limited, the Company is yet to appoint a Company Secretary as its Compliance Officer. 10. The Company has delayed in submitting the papers, documents, records, statements and information as required in terms of the listing agreement entered into with the Bombay Stock Exchange Limited. The Company has also paid a fine of Rs.19101/- in this regard. 11. With regard to transfer of shares by Non-Resident Indians, we were unable to verify whether the approval of Reserve Bank of India was obtained for such transfers as the documents relating to transfer of shares were not in the possession of the Company and the same were kept with the Registrar & Share Transfer Agents. Board's Reply to the above observations: As the members are aware that the Companies Act, 2013 along with various rules and regulations made under the said Act, were made effective from 1st April, 2014. The Board of Directors were busy in both business and also updating and updgrading its records as per Companies Act, 2013. Also the various reporting and procedural formalities under the New Act have been made detailed and the Directors were unable to comply with respect to the above observations. Your Directors would also like to state that there were no updates from the Ministry of Corporate Affairs regarding the manner in which the various compliances were to be made and periodical returns which were required to be submitted to them under the Act. Your Board of Directors have now taken note of the above qualifications and are making provisions for complying with the same. Your Directors further assure that they will take all necessary and appropriate steps to make good the above qualifications. 7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: The Company has continued the investments made in other bodies corporate during the financial year. Your Directors would like to draw your attention to the notes to the financial statements which sets out the details of investments made. 8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES: All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. The Company presents a statement of all related party transactions before the Audit Committee of the Company for their approval. During the year, the Company had not entered into any contract/arrangement/ transaction which could be considered as material in nature. Your Directors would like to draw your attention to the notes to the financial statements which sets out related party disclosures. 9. DETAILS OF AMOUNTS TRANSFERRED TO RESERVES: The Company has transferred a sum of Rs.3090852/- to statutory reserves maintained under the provisions of Reserve Bank of India Act, 1934. The closing balance of such reserve fund as on 31st March, 2015 was Rs.22409613/- 10. DIVIDEND: In view of requirement of working capital, your directors do not recommend any dividend for the financial year ended 31st March, 2015. 11. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND: The Company was not required to transfer any amounts in unpaid dividend account, application money due for refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund. 12. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT (01/04/ 2015 to 29/05/2015): There were no material changes and commitments affecting the financial ^ position of the Company between the period 1st April, 2015 to 29th May, 2015. ^ 13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014: In terms of clause (m) of sub-section (3) of section 134 of the Companies Act, 2013 and the rules framed there under, the particulars relating to conservation of energy, technology absorption and foreign earnings and outgo is given below: 1) CONSERVATION OF ENERGY: Your Company is not engaged in any manufacturing activity and thus its operations are not energy intensive. However, adequate measures are always taken to ensure optimum utilization and maximum possible saving of energy. 2) TECHNOLOGY ABSORPTION: The Company has no activity relating to technology absorption. 14. DETAILS OF CHANGE IN NATURE OF BUSINESS, IF ANY: There was no change in the nature of business of the Company, during the year 2014-15. 15. DIRECTORS: In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Company's Articles of Association, Shri. SURESH BAFNA (DIN: 00056152), is due to retire by rotation and is eligible for re-appointment. Shri. BHUPAT L THAKKAR (DIN: 02526454) and Shri. MAHESH TATED (DIN: 00488121), Directors of your Company, retire by rotation and being eligible, offers themselves for re-appointment. As per the Companies Act, 2013, an Independent Director shall be appointed for a period of five years on a non- rotational basis. Accordingly, Shri. BHUPAT L THAKKAR (DIN: 02526454) and Shri. MAHESH TATED (DIN: 00488121) being Independent Directors, are proposed to be appointed for a period of five years. Smt. SAJJAN KANWAR BAFNA (DIN: 00007725) was appointed as an Additional director of the Company during the financial year with effect from 27th March, 2015. 16. EVALUATION OF THE BOARD'S PERFORMANCE: In compliance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, the performance evaluation of the Board, its Committees and individual Directors was carried out during the year under review. Questionnaire approach was adopted for said evaluations. The Nomination and Remuneration Committee (NRC) at its meeting carried out a separate exercise for evaluating every Directors performance. The evaluation of Independent Directors was carried out without the presence of that Director. A separate meeting of the Independent Directors was convened which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman Some of the key criteria's for performance evaluation were as follows: Performance evaluation of Board and Committees: 1. Degree of fulfillment of key responsibilities; 2. Board structure and composition; 3. Effectiveness of Board processes, information and functioning; 4. Board Culture and Dynamics; 5. Quality of relationship between the Board and the Management; 6. Establishment and delineation of responsibilities to committees. Performance evaluation of Directors: 1. provide meaningful and constructive contribution and inputs in meetings; 2. display a good degree of understanding of the company, industry, sector, geography; 3. display independence of judgment. 17. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS: The Independent Directors of the Company are persons of integrity, possessing rich experience and expertise in the field of corporate management, finance, capital market, economic and business information. The company has issued appointment letter to the Independent Directors setting out in detail, the terms of appointment, duties, roles & responsibilities and expectations from the appointed Director. The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors / Audit Committee / Nomination & Remuneration Committee / Stakeholders Relationship Committee on various related matters, where Directors have interactive sessions with the Management. 18. SUBSIDIARY: The Company does not have any subsidiary companies or associate companies or joint ventures. 19. INTERNAL FINANCIAL CONTROLS: The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 20. DEPOSITS: The Company has neither accepted nor renewed any deposits during the year. 21. MATERIAL ORDERS PASSED BY REGULATORY AUTHORITIES: There are no significant and material orders passed by the regulators or courts or tribunals during the year, impacting the going concern status and company's operations in future. 22. RISK MANAGEMENT POLICY: Risks are events, situations or circumstances which may lead to negative consequences on the Company's businesses. Risk Management is a structured approach to manage uncertainty. Although the Company does not have a formal risk management policy but a formal enterprise-wide approach to Risk Management is being adopted by the Company and key risks will now be managed within a unitary framework. Key business risks and their mitigation are also considered in the annual / strategic business plans and in periodic management reviews. 23. DETAILS OF REVISION OF FINANCIAL STATEMENTS: There was no revision of the financial statements of the Company, during the year 2014-15. 24. SHARES AND SHARE CAPITAL: a. CAPITAL STRUCTURE: The Authorised Share Capital of your Company is Rs.55000000/-comprising of 5500000 Equity Shares of Rs.10/- each and the Paid-up Share Capital is Rs.35349000/- comprising of 3534900 Equity Shares of Rs.10/- each. b. BUY-BACK OF SHARES: The Company has not bought back any of its securities during the year. c. SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during the year. d. BONUS SHARES: No Bonus Shares were issued during the year. e. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees, during the year. 25. STATUTORY AUDITORS: M/s. SIROHIA & CO (FRN: 003875S), Chartered Accountants, Chennai retire as Auditors of the Company at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of the Auditors, if re-appointed. The Company has received confirmation from the firm that their appointment will be within the limits prescribed under section 141(3)(g) of the Companies Act, 2013. 26. SECRETARIAL AUDITORS: In accordance with the provisions of Section 204 of the Companies Act, 2013, the Board has appointed M/s. MUNDHARA & CO, Company Secretaries in Whole-time Practice, Chennai as the Secretarial Auditor for the financial year 2014-15. The report of the Secretarial Auditor is annexed to this report. 27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company's premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company does not have a formal Anti Sexual Harassment policy in place but has adequate measures including checks and corrections in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under the policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15: - No. of Complaints received : NIL - No. of Complaints disposed off : NIL 28. RESERVE BANK OF INDIA REGULATIONS: Your Company is generally complying with the directions of the Reserve Bank of India regarding prudential norms of accounting, capital adequacy ratio, provisions for bad and doubtful debts and other requirements as per the directions issued from time to time. 29. CORPORATE GOVERNANCE: Report of Corporate Governance for the year 2014-2015 and Management Discussion and Analysis are forming part of this Annual report. 30. COMPOSITION OF AUDIT COMMITTEE: The Board has constituted the Audit Committee, which comprises of Shri. MAHESH TATED as Chairman and Shri. YUVARAJ A JAIN and Shri. BHUPAT L THAKKAR as the members. More details on the committee are given in the Corporate Governance Report. 31. CERTIFICATE FROM MANAGING DIRECTOR: A certificate has been obtained from Shri. SURESH BAFNA (DIN: 00056152), Chairman & Managing Director as required under the provision VIII - CEO / CFO Certification of the revised clause 49 of Corporate Governance, which is enclosed and is forming part of this Report. 32. LISTING AT STOCK EXCHANGE: The Equity Shares of the Company continue to be listed on Bombay Stock Exchange Limited. The annual listing fee for the year 2015-2016 has been paid to the Exchange. 33. CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT: A certificate from the Statutory Auditors of the Company regarding compliance with the Code of Corporate Governance is forming part of this annual report. 34. MANAGEMENT'S DISCUSSION AND ANALYSIS: In terms of the provisions of clause 49 of the Listing Agreement, the Management's Discussion and Analysis is set out in this Annual Report. 35. DECLARATION BY INDEPENDENT DIRECTORS: The Company has received necessary declaration from each independent director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. 36. EMPLOYEE REMUNERATION: The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub-section 12 of section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are forming part of this report and are annexed as Annexure-2 to this report. 37. ACKNOWLEDGEMENTS: Your Directors wish to place on record their appreciation of the dedicated and untiring hard work put by the employees at all levels. Your Directors would like to thank the Banks, Consultants, auditors and above all the shareholders and valued Customers for their continued support and patronage. For and on behalf of the Board (SURESH BAFNA) Chairman & Managing Director DIN: 00056152 Old No. 22, New No.45, Mulla Sahib Street, Sowcarpet, Chennai-600 079. (MAHESH TATED) Director DIN: 00488121 No.10/33, Arumugam Street, Chennai-600 001. Place: CHENNAI Date : 29.05.2015 |