DIRECTORS' REPORT The Members, Your Directors have pleasure in presenting the 32ND Annual Report on the operations of the Company together with the Audited Accounts for the year ended 31st March, 2015. 2. DIVIDEND: Your Directors do not recommend any dividend for the year ended on 31st March 2015 with a view to conserve the resources for future. 3. STATE OF AFFAIRS OF THE COMPANY: During the year ended 31st March, 2015, your Company achieved a total income aggregating to ^ 9957.37 lakhs. After providing for Depreciation and Finance Charges, the Company has registered a profit before tax of Rs. 828.07 Lakhs. After making provision for tax in respect of current year, the profit after tax is of Rs. 675.90 lakhs has been carried to the Balance sheet. The Company maintains adequate internal control systems covering all its operational areas. Your Directors are putting in their efforts and are hopeful of improved working during the years to come. 4. TRANSFER TO RESERVE: Company has transferred Rs. 135.18 Lakhs to Reserves u/s 45IC of RBI Act. 5. SUBSIDIARIES, JOINT VENTURES ANDASSOCIATES: Sareshwar Trading and Finance Pvt. Ltd. and Arcies Laboratories Limited are the associates of the company. During the year under review, Mahotsav Trading and Finance Private Limited ceased to be associate of the company and none of the Companies have become or ceased to be Company's subsidiary and joint ventures. Pursuant to Section 129 (3) of the Companies Act, 2013 read with the Rules (5) of the Companies Act, 2014 the salient feature of Financial Statement of Associates in Form AOC 1 is attached as "Annexure 4" which forms part of this report. 6.DIRECTORS & KEY MANAGERIAL PERSONNEL: Independent Director In terms of the definition of 'Independence' of Directors as prescribed under Clause 49 of Listing Agreement entered with the Stock Exchanges and Section 149 (6) of Companies Act, 2013 and based on the confirmation received from the Directors, the following Non - Executive Directors are Independent Directors :- 1. Smt. Babita Thakar 2. Shri. Ketan Desai Women Director In terms of the provision of Section 149 of the Companies Act, 2013 a company shall have at least one women director on the board of the company. Your Company has appointed Smt. Babita Thakar on Appointment / Resignation of Directors Shri. Harisingh Shyamsukha, Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. Shri. Ketan Desai was appointed as an Additional Director of the Company w.e.f. 13th February, 2015 pursuant to Section 161 of the Companies Act, 2013 read with the Articles of Association of the Company. Shri. Umaidmal Kala resigned from Board of Directors of the company with effect from 13th February, 2015. The Board placed on record its appreciation of the enormous contribution made by him during his tenure as Director of the Company. Appointment / Resignation of Key Managerial Personnel Shri. Nalin Kothari, CEO, Smt. Vaishali Dhuri, CFO and Smt. Ekta Kumari, Company Secretary are the Key Managerial Personnel as per the provision of the Companies Act, 2013. Shri. Nalin Kothari is being appointed as CEO of the Company with effect from 13th February, 2015, Smt. Vaishali Dhuri is being appointed as CFO of the Company with effect from 13th February, 2015 (Shri. Nalin Kothari was CFO of the Company before his appointment as the CEO of the company) Smt. Ekta Kumari is appointed as Company Secretary with effect from 24th March, 2015. The Company has devised a policy on directors' appointment and remuneration including criteria for deeming qualifications, independence of director and other matter provided under sub-section (3) of section 178 which is enclosed to this report.("Annexure 1") DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirements of Section 134 (3) (c) of the Companies Act, 2013, your Directors confirm the following: • that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; • that 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 31st March, 2015 and of the profit and loss of the Company for the year ended on that date; • 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; • that the directors had prepared the annual accounts on a going concern basis. • that the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and; • that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. STATUTORY AUDITORS: M/s Ajmera Ajmera & Associates, Chartered Accountants, the Statutory Auditors of the Company, retires at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received intimation to the effect that the proposed re-appointment, if made, would be within the prescribed limit under section 141 of the Companies Act, 2013 and Rules made there under. The said Auditors have confirmed their willingness to accept office, if re-appointed. The Board on the recommendation of the Audit Committee have proposed the re-appointment of M/s. Ajmera Ajmera and Associates as Statutory Auditors of the Company to hold office from the conclusion of this AGM till the conclusion of 34th AGM (subject to the ratification of their appointment in the next Annual General Meeting) at such remuneration to be decided by the Board of Directors in consultation with the said Auditors. Members are requested to appoint auditors for the current year and to authorize the Board to fix their remuneration. The Notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. 9. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2014-15, the Company has not received any complaints on sexual harassment and no complaint is remain pending as on 31 March, 2015. The policy on prevention, prohibition and redressal of sexual harassment at workplace can be accessed on the website of the company- www.saraswaticommercial. com or through the following link - http://www. saraswaticommercial.com/Policy%20On%20 Prevention%20of%20Sexual%20Harassment.pdf 10. SECRETARIAL AUDITOR: The Board has appointed M/s Nishant Jawasa and Associates, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-2015. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed to this Report ("Annexure 2"). Secretarial Audit's Report are self-explanatory and do not call for any further comments except that intimation required under Clause 20b of listing agreement was not intimated to the Stock Exchanges. Management was of the view that the details as required under Clause 20b is similar as given in the Audited Result under Clause 41 and was not intimated separately, however we assure the compliance of the same henceforth. 11. PUBLIC DEPOSITS: During the year the Company has not accepted any deposits from public. 12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: A] Conservation of Energy and Technology Absorption: i) The step taken or impacts on conversation of energy – The operation of your Company are not energy intensive. However, adequate measures have been initiated for conservation of energy. ii) The steps taken by the Company for utilizing alternative sources of energy – though the operations of the Company are not energy intensive, the Company shall explore alternative sources of energy, as and when necessity arises. iii) The capital investment on energy conservation equipments - NIL 13. PARTICULARS OF EMPLOYEES: The Company does not have any employee in receipt of remuneration equal to or exceeding the limits prescribed under 197 (12) of the Companies Act, 2013, read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 14. EXTRACT OF ANNUAL RETURN The details forming part of extract of the Annual Return in form MGT-9 a required under section 92 of the Companies Act, 2013, is included in this report as Annexure 3 and forms an integral part of this Report. 15. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GURANTEES GIVEN AND SECURITIES PROVIDED: Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statements. The details of Loans, Guarantees and Investments made are given in the Notes to the Financial Statements. However, provisions of Section 186 of Companies Act, 2013 except Sub section (1), is not applicable to the company. 16. INDEPENDENT DIRECTORS' DECLARATION: Smt. Babita Thakar and Shri. Ketan Desai who are independent Directors, have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Companies Act, 2013. Further, there has been no change in the circumstances which may affect their Company are not energy intensive. However, adequate measures have been initiated for conservation of energy. ii) The steps taken by the Company for utilizing alternative sources of energy -though the operations of the Company are not energy intensive, the Company shall explore alternative sources of energy, as and when necessity arises. iii) The capital investment on energy conservation equipments - NIL Saraswati Commercial (India) Limited status as independent director during the year. 17. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS: As provided in Sub-Section (6) of Section 149 of the Companies Act, 2013 ,the company shall familiarize the independent directors with the company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company, etc., through various programmes. Two such programmes were conducted for the familiarization of Independent directors. The details of the same can found on the 19. website of the company - www.saraswaticommercial. com or through the following links - http:// www.saraswaticommercial.com/Details of Familiarisation Programme SARASWATI-1-12-14. pdf and http://www.saraswaticommercial.com/ final%20Details of Familiarisation Programme SARASWATI-23-3-15.pdf 18. CORPORATE GOVERNANCE : The paid up capital of Saraswati Commercial (India) Limited was less than Rs. 10 Crores (Paid up capital as on 31.03.2015- Rs. 64,00,000) and net worth was below Rs. 25 Crores (net worth as on 31.03.2014- Rs. 14.61 Cr). Hence the company falls under the criteria 1.a of the SEBI circular CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014 and hence, the Report on corporate Governance is not applicable to the company. The company has been intimating the Stock Exchange (BSE Ltd) every quarter about the same. NUMBER OF MEETINGS OF THE BOARD Board Meetings and Attendance of Directors The Board meets at least once in a quarter to consider amongst other business the performance of the Company and quarterly financial results. When necessary, additional meetings are held. The Board meetings are held at the Registered Office of the Company at Mumbai. Agenda for each meeting along with explanatory notes are drafted and distributed well in advance to the Directors. Every Board Member is free to suggest the inclusion of items on the agenda. Committees of the Board The Company has several committees which are in compliance with the requirements of the relevant provisions of applicable laws. Company has following Committees of the Board: 32nd Annual Report 2014 - 2015 Audit Committee Composition of Audit committee: Smt. Babita Thakar - Independent Director Shri. Harisingh Shyamsukha- Director Shri. Ketan Desai - Independent Director Nomination & Remuneration Committee • Stakeholder Relationship Committee 20. 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 was observed. 21. BOARD EVALUATION The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non- Independent Director was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. The Nomination and Remuneration Committee and the Board of Directors has laid down criteria for performance evaluation of Directors, Chairperson, Board Level Committees and Board as a whole and also the evaluation process for the same. The performances of the members of the Board, the Board level Committees and the Board as a whole were evaluated at the meeting of the Independent Directors and the Board of the Directors held on December 24, 2014. The Board of Directors expressed their satisfaction with the evaluation process. 22. VIGIL MECHANISM POLICY The Company has a Vigil Mechanism policy which lays down the principles and standards governing the management of grievances and concerns of employees and directors of the Company. The Vigil Mechanism policy has been posted on the website of the Company (www.saraswaticommercial.com) or can be accessed through the following link - http:// www.saraswaticommercial.com/Vigil-Mechanism-policy-SCIL.pdf 23. PARTICULARS OF REMUNERATION The information required under Section 197 of the Act and the Rules made there-under, in respect of the employees of the company a) The ratio of the remuneration of each director to the median remuneration of the employee of the company for the financial year: No remuneration is been paid to the Directors of the company. b) The percentage of increase in remuneration of each Director, Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Company Secretary (CS) if any, in the financial year- d) The number of permanent employees on the rolls of company as on 31.03.2015 - 7(Seven) e) The explanation on the relationship between average increase in remuneration and company performance On an average, employees received an increase of 15.51% The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects company performance, the performance pay is linked to organization performance. g) Variations in the market capitalization of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the share s of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the h) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration The average increase in salaries of employees other than managerial personnel in 2014-15 was 18.35% Percentage increase in the managerial remuneration for the year was 12.68% j) The key parameters for any variable component of remuneration availed by the directors No variable component of remuneration has been availed by the directors k) The ratio of the remuneration to the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: N.A. l) Affirmation that the remuneration is as per the remuneration policy of the Company The Company's remuneration policy is driven by the success and performance of the individual employees and the Company. Through the compensation package, the Company endeavor to attract, retain develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process, The company affirms remuneration is as per the remuneration policy of the company. 24. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. All Related Party transactions were placed before the Audit Committee for approval. The Audit Committee has granted omnibus approval for Related Party transactions. The details of Related Party Transactions are provided in the Financial Statements of the Company. A resolution for approval of this Related Party transactions has been included in the Notice convening the AGM of the Company. 25. MATERIAL CHANGES AND COMMITMENTS: During the year under review, the Net Profit of the company was more than Rs. 5 crores (Five crores), i.e. Rs. 6,75,90,852. Therefore pursuant to Section 135 of the Companies Act, 2013, the Board, in its meeting held on 12th August, 2015 has constituted Corporate Social Responsibility (CSR) Committee consisting of three Directors out of which one is Independent Director. The Board also considered, approved and adopted a policy on Corporate Social Responsibility on the recommendations of the CSR Committee. The company will take initiatives for the CSR activities in the year 2015-2016. Apart from these, there have been no other material changes and commitments affecting the financial position of the company between the end of the financial year and the date of the report. 26. GENERAL: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under the review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of share (including sweat equity shares) to employees of the Company under any scheme. 4. Company does not have any subsidiary and hence none of the Directors of the company receives any remuneration or commission from any of its subsidiaries 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going 27. ACKNOWLEDGEMENTS: Your Directors take this opportunity to express their gratitude for the support and co-operation from the Investors, Banks and Statutory Authorities. Your Directors express their deep appreciation to the Company's employees at all levels for their unstinted efforts and valuable contributions during the year. concern status and Company's operations in future. For and on behalf of the Board of Directors Sd/-HARISINGH SHYAMSUKHA CHAIRMAN Place: Mumbai Dated:12.08.2015 |