Board of Directors Report To the Members of M/s. Shree Nath Commercial & Finance Limited The Directors are pleased to present the 31st Annual Report on the business and operations of your company and the Statements of Account for the year ended 31st March, 2015. Financial Performance: During the year your company has diversified its business into textile business and manages to generate more than 50% revenue out of total revenue from textile business. During the year under review the total revenue of the company is 488.18 Lakhs including other income as compared to 737.10 Lacs in the previous year and thereby registering a decrease of 33%. This was mainly because of slack market condition during the year. The volatile market condition affected the company adversely and resulted in Net loss of (233.33) Lacs against the Net loss of Rs. (15.05) Lacs in the previous year. The main reason for incurring such huge loss as compared to previous year is devaluation of stock and high administrative and business running expenses. The management of the Company hereby very optimistic regarding performance of the Company in future and taking every steps and making every efforts to turn the Company in to profitable organization. Dividend: In view of losses during the year, your Directors have not recommended any dividend on Equity Shares for the year under review. Public Deposits: The Company has no public deposits as of date and will not accept any deposits without prior approval of the Statutory Authorities concerned. Board of Directors: During the year under review the Board of Directors has appointed Ms. Seema Sidhu as an Additional Director of the Company w.e.f 24th March, 2015. Pursuant to section 161 of the Act, she will hold the office only upto the date of the ensuring Annual General Meeting (AGM) of the company. The company has received a notice in writing from a member under section 160 of the Act proposing the candidature of Ms. Seema Sidhu for the office of Director. Suitable resolution for appointment of Ms. Seema Sidhu as a Director is being proposed for adoption by the members at this AGM. Mrs. Madhu Rajkumar Goel resigned from the Directorship of the Company due to her pre-occupation w.e.f 24th March, 2015. The Board placed on record her appreciation for the contribution made by her during her tenure. Mr. Viral Bhatt, Director and CFO of the company also resigned from the post of directorship and CFO of the company w.e.f 24th June, 2015. The Board appreciates his valuable contribution to the company during the tenure of his directorship. Mrs. Tanu Agarwal, Chairman & Whole Time Director though appointed as the Whole Time Director for a fixed term of 5 years with effect from 11th August, 2015, will retire by rotation as a Director, to enable compliance by the Company with the provisions of Section 152 of the Act, and being eligible, has offered herself for re-appointment at the thirty first Annual General Meeting. During the year under review Mr. Pankaj Trivedi, had resiged from the post of Company Secretary w.e.f 6th December, 2014 due to his pre-occupations and appointed Ms. Divya Mer as a Company Secretary of the Company on his place. The Board placed on record appreciation for Mr. Pankaj Trivedi for the contribution made by him during his employment as Company Secretary. Later on Ms. Divya Mer also resigned from the post of the Company Secretary of the Company w.e.f. 12th February, 2015 and appointed in other group Company of M/s. Shree Nath Commercial & Finance Limited. Necessary praposals for appointment/re-appointment of the aforesaid Directors have been included in the notice convening the AGM and the respective resolutions are recommended for your approval. Profiles of these Directors, as required under Clause 49 of the Listing Agreement, are given in the Notice of the 31st AGM. Directors' Responsibility Statement: In accordance with the provisions of Section 134 (3) (c) of the Companies Act, 2013, and based on the information provided by management, your Directors' state that: 1. In the preparation of the annual accounts for the financial year ended 31st March, 2015 the applicable accounting standards have been followed. 2. Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the State of affairs of the corporation as at the end of March 31, 2015 and of the profit of the Company for the year ended on that date. 3. Proper and sufficient care to the best of their knowledge and ability 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. 4. The Annual Accounts of the Company have been prepared on the ongoing concern basis. 5. That they have laid down internal financial controls commensurate with the size of the Company and that such financial controls were adequate and were operating effectively. 6. That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. Declarations given by Independent Directors: All the Non-Executive and Independent Directors have confirmed to the Board that they qualify to be considered as independent as per the definition of 'Independent Director' stipulated in Section 149(6) of the Act and Clause 49(II)(B)(1) of the Listing Agreement. These confirmations have been placed before, and noted by the Board. Board Evaluation: Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee of the Board carried out the annual evaluation of the performance of the Board as a whole, the Directors individually as well as of various Committees of the Board. The performance evaluation of the Independent Directors was carried out by the Nomination and Remuneration Committee and noted in turn by the Board. Statutory Auditors: M/s. Pravin Chandak & Associates, (Registration No. 116627W), Chartered Accountants, Statutory Auditors of the company, retires at the conclusion of the ensuring AGM are eligible of re-appointment. Certificate has been received from them to the effect that their re-appointment as Auditors of the Company, if made, would be within the limits prescribed under Section 139 and 141 of the Act. Members are requested to consider their re-appointment. Auditors Report: Observations made in the Auditors' Report are self-explanatory and therefore do not call for any further comments under Section 134(1) of the Companies Act, 2013. Related Party Transactions: All Related Party Transactions of the Company are at arm's length basis and were in the ordinary course of business. The particulars of contracts or arrangements with related parties in Form AOC - 2 are annexed herewith as Annexure A. Secretarial Audit: Pursuant to the requirements of Section 204(1) of the Act, and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. P.D. Pandya & Associates, Company Secretary in Practice to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report as received from M/s. P.D. Pandya & Associates is appended to this Report as Annexure B. Comments on Auditors' Report: There are no qualifications, reservations, adverse remarks or disclaimers made by M/s. Pravin Chandak & Associates., Statutory Auditors, in their Audit Report. The Company is regular in depositing dues with the appropriate authorities However the Company has not paid Profession Tax for the year, that was because Company doesn not registered with Profession Tax Authority and soon will take the the profession tax number and pay the profession tax with interest. Though the Company is doing business of Finance & Investments, Company had not accepted any deposits from public. The Company is doing business out of its own fund. However as per section 45IA of Reserve Bank of India Act, 1934, Company can not do Finance & Investments business without holding valid Certificate of Registration and which attracts the penalty of Rs. 5 Lacs u/s 58B (4-A) of the RBI Act, 1934. However to make good of the said default Company had decided to make application to RBI for obtaining COR from RBI, however RBI had stop considering any fresh application for granting COR to existing Company. With the view of that Company has diversified its business line and started new business of Trading in Textile and more than 50% of the total revenue is been generated from Textile Business, which bar the Company from being NBFC and dispence the requirment of obtaining COR from RBI and RBI will not impose any penalty and even if penalty imposed the same will be waived or reduces upon management re-presenataion. As far as making of Loan and Advances are concerned, management grants demand loan only either to the parties known to the Company or by reference therefore in some cases loan agreements were not executed. The Loan and Advances granted by the Company is cosidered as good and recoverable and do not required any provisions and same has been closely supervised and monitered on regular basis and proper internal control is on place. M/s. P.D. Pandya and Associates, Company Secretary in Practice, in his Secretarial Audit Report for financial year 2014-15 have drawn the attention of the management on some the non-compliances, which have been marked as qualification in his report. In connection with the same management herewith give the explanation for the same as follow: As pointed out by our Secretarial Auditors in their report, it was a matter of fact that Income Tax Authority had conducted Search on 9th June, 2015 and 10th June, 2015. During their search they had confiscated Minutes Books and certain other documents for their reference due to which the company could not produce physical copy of the minutes books to the secretarial auditor for their verification. However, the soft copy of the minutes was produced before the auditor and the same was verified by them. The size of the Company is very small as compared to its peer group companies, the Company has also established Risk Management Policy in place to mitigate unforeseeable risks and frauds. The management things that Company has adequate internal control system commensurate with the size of the Company and the Statutory Auditor also conduct test audit on quarterly basis and submit the limited review certificate and draws the attention of the management on concerned matters. However the Management also ensures to strengthen the Internal Control System of the Company. The Company has appointed M/s. A.M. Gohel & Co. as the Internal Auditor for conducting periodic internal audit in compliance of Section 138 of Companies Act, 2013. Mrs. Tanu Agarwal, Whole Time Director of the Company, was appointed as the Chief Financial Officer of M/s. Five X Finance & Investment Limited, a group company as both the companies are group company and operates from the same place, which allows to devote full time to both the companies by sitting at same place. However the same contravents the provision of section 203 of Companies Act, 2013. To ensure the Compliance with said section Company has suggested to Mrs. Tanu Agarwal to take resignation from the psot of CFO of M/s. Five X Finance & Investment Limited and confirmed with Mrs. Tanu Agarwal. Extract of Annual Return: Pursuant to the requirements under Section 92(3) and Section 134(3) of the Act read with Rule 12 of Companies (Management and Administration) Rules, 2014, an extract of Annual Return in prescribed Form MGT-9 is given in the Report as Annexure C. Particulars of Employees and Related Information: The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in the report as Annexure D. Reports on Corporate Governance: The reports on Corporate Governance for the year under review, as stipulated under Clause 49 of the Listing Agreement form part of the Annual Report. The certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is annexed to the Corporate Governance Report. Management Discussion and Analysis Report: Further, a separate Management Discussion and Analysis Report covering a wide range of issues relating to Industry Trends, Company Performance, SWOT analysis, Corporate Process, Business Outlook among others is annexed to this Report. Internal Financial Controls and their adequacy: The Company has put in place adequate internal financial controls with reference to the Financial Statements commensurate with the size of the Company. Vigil Mechanism / Whistle Blower Policy: The Company has established a vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the Management, the concerns about behavior of employees that raise concerns including fraud by using the mechanism provided in the Whistle Blower Policy. The details of the said Policy are included in the Report on Corporate Governance which forms part of the Annual Report. The detail of the Vigil Mechanism is posted on the website of the Company i.e. www.shreenathcommmercial.com . During the financial year 2014-15, no cases under this mechanism were reported in the Company and any of its subsidiaries/ associates. Significant and Material Orders Passed by the Regulators or Courts or Tribunals: During the year under report, there were no significant material orders passed by the Regulators/ Courts/ Tribunals impacting the going concern status and Company's operations in future. Policy for Prevention, Prohibition & Redressal of Sexual Harassment: The Company has framed policy in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year 2014-15, no cases in the nature of sexual harassment were reported at any workplace of the company. Particulars of Loans, Guarantees or Investments: Details of the Investments covered under the provisions of Section 186 of the Companies Act, 2013 (Act) will be produced for verification to the members at the registered office of the Company on their request. Postal Ballot: No postal ballot was held during the year 2014-2015. Conservation of Energy and Technology Absorption The particulars under the companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, on conservation of energy and Technology absorption is not applicable. Foreign exchange There is no inflow and outflow of Foreign Exchange. Listing of shares The Shares of the Company are listed on Bombay Stock Exchange (BSE) only and the Company has paid necessary Listing fees for the year 2015-2016. Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification The Chief Executive Officer and Chief Financial Officer Certification as required under Clause 49 of the Listing Agreements and Chief Executive Officer declaration about the Code of Conduct is Annexed to this Report. Green Initiative in Corporate Governance The Ministry of Corporate Affairs (vide circular nos.17/2011 and 18/2011 dated April 21 and April 29, 2011 respectively), has undertaken 'Green initiative in corporate Governance' and allowed companies to share documents with its shareholders through an electronic mode. Members are requested to support their green initiative by registering/updating their email addresses, in respect of shares held in dematerialized form with their respective depository participants and in respect of shares held in physical form with Companies RTA. Acknowledgement The Board of Directors wishes to express sincere thanks to Bankers, Shareholders, clients, Financial Institutions, customers, suppliers and employees of for extending support during the year. For and On behalf of the Board Sd/- Tanu Giriraj Agarwal (Whole Time Director) Sd/- Zubin Jasi Pardiwala (Director) Place: Mumbai Date: 11/08/2015 |