BOARD'S REPORT To, The Members, Simran Farms Limited 1. Your Directors have pleasure in presenting the 28th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended on March 31, 2015. 2. OPERATIONAL AND STATE OF AFFAIRS OF THE COMPANY The company is engaged in the business of integrated poultry and poultry farming. The company is mainly focused on integration and consolidation of poultry activities and has arranged large manufacturing set-up for production of poultry feed for self consumption. Company is an integrated company with expertise across the poultry value chain and its management has three decades of experience in the industry. 3. CHANGE IN NATURE OF BUSINESS The company is engaged in the business of integrated poultry and poultry farming only and during the year there was no change in business activity of the company. 4. DIVIDEND Due to inadequate profit and with the view to conserve the resources of company, the directors have not recommended any dividend for the year under review. 5. AMOUNT TRANSFERRED TO RESERVES During the year under review, no amount was transferred to General Reserve. 6. FIXED DEPOSITS During the year under review, the Company has not accepted any deposits from the public within the meaning of section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time. 7. SHARE CAPITAL The paid up Equity Share Capital of the Company as at March 31, 2015 stood at Rs. 379.17 Lacs. During the year under review, the Company has not issued any shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company holds instruments convertible into equity shares of the Company. 8. EXTRACTS OF ANNUAL RETURN Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the details pertaining to extract of the Annual Return in Form MGT-9 is included in this Report as ANNEXURE I. 9. DETAILS OF SUBSIDIARY, JOINT VENTURE OR ASSOCIATE COMPANY The Company has only one subsidiary company in the name of "Puregene Biotech Limited" as on March 31, 2015. There is no associate company/Joint Venture within the meaning of section 2(6) of the Companies Act, 2015. There has been no material change in the nature of the business of the subsidiary company. 10. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Accounting Standard 21 issued by the Institute of Chartered Accountants of India and forms a part of this Annual Report. Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the Financial Statements of the Company's subsidiaries in Form AOC-1 (ANNEXURE II) is attached to the financial statements of the Company. Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company. 11. NUMBER OF BOARD MEETINGS AND COMMITTEE MEETINGS. A calendar of Meetings is prepared and circulated in advance to the Directors. During the year under review, 7 (seven) Board Meetings were convened and held. Further, 4 (four) meetings of the Audit Committee, 3 (three) meetings of Nomination and Remuneration Committee and 4 (four) meeting of Stakeholders' Relationship Committee were also held during the year. Detailed information on the meetings of the Board and its Committees is included in the Report on Corporate Governance, which forms part of this Annual Report. The intervening gap between the Board Meetings didn't exceed one hundred and twenty days as prescribed under the Companies Act, 2013. 12. PARTICULARS OF LOANS, INVESTMENTS OR GUARANTEE BY COMPANY UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Details of loans, investments or guarantee covered under the provisions of section 186 of the Companies Act, 2013 are given in notes to the financial statements. However, during the year under review, the Company has neither made any loans and investments in other body corporate or to any person, nor it has given any guarantee or provided any security in connection with a loan to any other body corporate or person within the meaning of Section 186 of Companies Act, 2013. 13. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES The transaction entered with related parties for the year under review were on arms length basis and in the ordinary course of business and the provision of section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further there are no material related party transactions during the year under review with the Promoters, Directors and Key Managerial Personnel. All related party transactions are placed before the Audit Committee and also to the Board of Directors for approval. Omnibus Approval was obtained on a quarterly basis for transactions which are of repetitive nature. The policy on related party transactions as approved by the Board of directors has been uploaded on the website of the company at the web link: <http://www.simranfarms.com/pdf/policy/related_party_transaction_policy.pdf>. 14. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of section 152 of the Companies Act, 2013 and the Company's Articles of Association, Shri Gurdeep Bhatia, Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board in its meeting held on 14th August, 2014 has appointed Smt. Jasmeet Kaur Bhatia as an Additional Director as well as independent women Director of the Company, not liable to retire by rotation Further Shri Surjit Singh Kohli resigned from the Directorship with effect from 29th May, 2014, due to his pre occupation. Your Board places on record its deep appreciation of the valuable contribution made by him during his tenure as Director of the Company. At the Annual General Meeting held on 25th September, 2014, Shri Harbhajan Singh Khanuja , Dr. Surendra Singh and Smt. Jasmeet Kaur Bhatia were appointed as Independent Directors of the Company pursuant to section 149 of the Companies Act, 2013 for a term of five consecutive years. None of the Independent Directors are due for re-appointment. Shri Harender Singh Bhatia, Managing Director and Shri Kawaljeet Singh Bhatia, Whole Time Director are designated as Key Managerial Personnel of the Company with effect from 29th May, 2014. During the year under review Mr. Mahesh Patidar and Mr. Mayank Lashkari were appointed as the Chief Financial Officer and Company Secretary (with effect from 14th August, 2014) of the Company respectively. They are the Key Managerial Personnel of the Company as per the provisions of the Companies Act, 2013. Further, Mr. Mayank Lashkari resigned from the post of Company Secretary of the Company with effect from 26th December, 2014 and Ms. Tanu Parmar has been appointed as the Company Secretary and compliance officer of the Company with effect from 2nd March, 2015. Disqualifications of Directors: During the year under review, declarations received from all the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. The Board appraised the same and found that none of the director is disqualified for holding office as director as per the provisions of the Companies Act, 2013. 15. DECLARATION BY INDEPENDENT DIRECTOR The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. The following Directors are independent in terms of Section 149(6) of the Act and Clause 49 of the Listing Agreement: (i) Dr. Surendra Singh (ii) Shri Harbhajan Singh Khanuja (iii) Smt. Jasmeet Kaur Bhatia 16. MEETING OF INDEPENDENT DIRECTORS The Independent Directors met once during the year under review. The Meeting was conducted on 14th February, 2015 in an informal manner without the presence of the Chairman, the Whole Time Director, the Non-Executive Non-Independent Directors and the Chief Financial Officer. 17. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS The details of familiarization programme for Independent Directors have been disclosed on the website of the Company at the link given here: <http://www.simranfarms.com/pdf/policy/familiarization_programme_for_independent_directors.pdf> 18. COMMITTEES OF THE BOARD OF DIRECTORS The Company has various committees which have been constituted and reconstituted as a part of the good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes. Your Company has an adequately qualified and experienced Audit Committee consisting of Shri Harbhajan Singh Khanuja as Chairman and Dr. Surendra Singh and Smt. Jasmeet Kaur Bhatia as Members. The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review. The other Committees of the Board are: (i) Nomination and Remuneration Committee (ii) Stakeholders' Relationship Committee (iii) Finance Committee (iv) Internal Complaint Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The details with respect to the composition, powers, roles, terms of reference, meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report. 19. STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS DIRECTORS, AND THAT OF ITS COMMITTEES Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, performance evaluation of the Board, its Committee and the Independent Directors was carried out time to time. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report. 20. DIRECTORS' RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to information and explanations obtained by them, your Directors make the following in terms of Section 134(3)(c) of the Companies Act, 2013, shall state that- a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; 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 that year ended on that date; c) 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; d) the annual accounts have been prepared on a going concern basis; e) that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under : (A) Conservation of Energy The steps taken or impact on conservation of energy: (i) The operations of the Company are not power intensive as the Company owns the facility and controls the breeding, hatching and/ or processing of broilers but it works on Contract Rearing basis i.e it contracts with the private poultry farmers for the raising of the chicks. Nevertheless, the Company continues its efforts to conserve energy wherever practicable, by economizing on the use of power at the farms, hatcheries and offices. The Company has installed state-of-the-art hatcheries and setters at its hatcheries. (ii) The capital investment on energy conservation equipments: Nil (B) Technology Absorption (i) The efforts made towards technology absorption: Not Applicable. (ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable. (iii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): The Company has neither purchased within India nor imported any technology. (iv) Company has not incurred any expenditure on Research and Development during the year under review. (C) Foreign Exchange Earnings and Outgo Foreign Exchange Earnings: Nil Foreign Exchange Outgo: Nil 22. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS The company has an effective internal control and risk mitigation system, which are constantly assessed and strengthened with new or revised standard operating procedures. The company's internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides bench-marking controls with best practices in the industry. The scope of internal audit includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The company has a robust management information system, which is an integral part of the control mechanism. The Audit Committee of the Board of Directors and statutory auditors are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of director. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. 23. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY Provisions of section 135 of the Companies Act, 2013 does not apply to the Company, therefore Company has not constituted Corporate Social responsibility (CSR) committee as required under the Act. 24. NOMINATION AND REMUNERATION POLICY/DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL Pursuant to section 178 of the Companies Act, 2013 read with the rules made thereunder and Clause 49 of the Listing Agreement, the Board has constituted the "Nomination and Remuneration Committee" Comprising Shri Harbhajan Singh Khanuja as Chairman and Dr. Surendra Singh & Smt. Jasmeet Kaur Bhatia as its members. The Nomination and Remuneration Committee framed a policy for selection and appointment, re-appointment, removal and appraisals of Directors and Senior Management and the same is stated in the Corporate Governance Report and the policy has been uploaded on the Company's website at the web link: <http://www.simranfarms.com/pdf/policy/nomination_renumeration.pdf>. Neither the Managing Director nor Whole Time Director of the company received any remuneration or commission from the subsidiary company. 25. PARTICULARS OF EMPLOYEES During the year under review, none of the employee of the company is drawing more than Rs. 60,00,000/- per annum or Rs. 5,00,000/- per month for the part of the year, therefore Particulars of the Employees as required under Section 197 of Companies Act, 2013 read with Rule 5 (2) & Rule 5 (3) of Companies (Appointment and Remuneration) Rules 2014 are not applicable, during the year under review. Ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial Year: Statement pursuant to Section 197(12) of the Companies Act 2013 and rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this report. (ANNEXURE III) 26. REPORT ON MANAGEMENT AND DISCUSSION ANALYSIS A detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report. 27. REPORT ON CORPORATE GOVERNANCE Your company make all possible endeavors to strive to maintain appropriate standards of good Corporate Governance as stipulated in Clause 49 of the Listing Agreement. A separate section titled "Corporate Governance" including a certificate from the Auditors of the Company confirming compliance of the conditions of the Corporate Governance as stipulated under clause 49 of the Listing Agreement is annexed hereto and forms part of the Annual Report. 28. DISCLOSURE OF ESTABLISHMENT OF VIGIL MECHANISM /WHISTLE BLOWER POLICY As per the requirement of section 177(9) & (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has established a Vigil Mechanism called the "Whistle Blower Policy" for directors and employees to report concerns of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The details of the "Whistle Blower Policy" have been uploaded on the Company's website at the web link: <http://www.simranfarms.com/pdf/policy/vigil_mechanism.pdf>. 29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company. 30. SECRETARIAL AUDIT REPORT In terms of Section 204 of the Companies Act and Rules made there under, the Company has appointed M/s. Ramesh Chandra Bagdi & Associates, Practicing Company Secretary, Indore (ACS: 11800, CP No. 2871) Secretarial Audit of the Company. The report of the Secretarial Auditors is enclosed as (ANNEXURE IV) and forms an integral part of this Report. The Company is in the process of filing Form CHG-1 with the ROC relating to the registration of charges against vehicle loans. Further, the report is self-explanatory and do not call for any further comments. 31. STATUTORY AUDITORS Pursuant to the provision of section 139 of the Act and the rules framed thereunder, M/s. Khandelwal Kakani & Co., Chartered Accountants, were appointed as the statutory auditors of the Company from the conclusion of the twenty seventh (27th) Annual General Meeting of the Company held on September 25, 2014 till the conclusion of the thirtieth (30th) Annual General Meeting to be held in the year 2017, subject to ratification of their appointment at every Annual General Meeting held thereafter. A resolution for appointment of M/s. Khandelwal Kakani & Co., Chartered Accountants, as auditors for the remaining period from the conclusion of the ensuing 28th AGM till the conclusion of the 30th AGM and for fixation of their remuneration for the year 2015-16 is being proposed in the notice of the ensuing AGM for the approval of the members. The Company has received from M/s. Khandelwal Kakani & Co, Chartered Accountant a written consent for ratification of their appointment from the conclusion of the 28th AGM till the conclusion of the 30th AGM and a certificate to the effect that their appointment shall be in accordance with the prescribed conditions and that the firm is not disqualified under the Companies Act, 2013. 32. EXPLANATION TO AUDITOR'S REMARKS The Auditors in their report have referred to the notes forming part of the Accounts which are self-explanatory and does not contain any qualification, reservation or adverse remark or disclaimer and do not call for any further explanation / clarification by the Board of Directors. Further there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-section (12) of section 143 of Companies Act, 2013. 33. COST AUDIT Your company does not falls within the provisions of Section 148 of Companies Act, 2013 read with the Companies (Cost records & Audit) Rules, 2014, therefore no such records required to be maintained. 34. REVISION OF ANNUAL FINANCIAL STATEMENT There was no such case of revision in financial statements during the year under review. 35. CODE OF CONDUCT The Company has laid down a code of conduct for all Board members and senior management and independent directors of the Company. All the Board members including independent directors and senior management personnel have affirmed compliance with the code of conduct. The policy on Code of Conduct has been uploaded on the Company's website at the web link <http://www.simranfarms.com/pdf/policy/code_of_conduct.pdf>. 36. STATEMENT INDICATING DEVELOPMENT & IMPLEMENTATION OF RISK MANAGEMENT The Board of Directors have adopted risk management policy for the Company which provides for identification, assessment and control of risks which in the opinion of the Board may threaten the existence of the Company. The Management identifies and controls risks through a properly defined framework in terms of the aforesaid policy. 37. MATERIAL CHANGES & COMMITMENTS, IF ANY AFFECTINGTHE FINANCIAL POSITION OF THE COMPANY No material changes and commitments affecting the financial position of the company have occurred between the end of the financial year to which the financial statements relate and the date of this Board's report. 38. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy required conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. 39. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 In order to prevent sexual harassment of women at work place a new act "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013" was notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Internal Complaint Committee for implementation of said policy and redressal of complaints received regarding sexual harassment. During the year under review, the company has not received any complaint of sexual harassment. The policy on Prevention of Sexual Harassment as approved by the Board of directors has been uploaded on the website of the company at the web link: <http://www.simranfarms.com/pdf/policy/sexual_harassment.pdf> 40. LISTING WITH STOCK EXCHANGES The Shares of the Company are listed on the Bombay Stock Exchange Limited (BSE), Mumbai, which provides the wider access to the investors nationwide. The Company has made all the compliances of Listing Agreement including payment of Annual Listing Fees up to March 31, 2016 to BSE. 41. BUSINESS RESPONSIBILITY REPORT Business responsibility reporting as required by clause 55 of the listing agreement with stock exchange is not applicable to your company for the financial year ending 31st March 2015. 42. DEPOSITORY SYSTEM Your Company's shares are tradable compulsorily in electronic form and your Company has connectivity with both the Depositaries i.e. National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL). In view of the numerous advantage offered by the Depository System, members are requested to avail of the facility of Dematerialization of the Company's shares on either of the Depositories mentioned as aforesaid. 43. PREVENTION OF INSIDER TRADING In view of the SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires Trading Plan, pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. 44. INDUSTRIAL RELATIONS Company's Industrial relations continued to be healthy, cordial and harmonious during the period under review. 45. ACKNOWLEDGEMENTS The Board of Directors wish to place on record its sincere appreciation for the support and co-operation received from all its stakeholders including customers, promoters, shareholders, bankers, suppliers, various departments/ agencies of State and Central Government and business associates of the Company. Your Board recognizes and appreciates the contribution made by all employees at all levels that ensures sustained performance in challenging environment. For and on behalf of the Board of Directors Harender Singh Bhatia Chairman & Managing Director (DIN: 00509426) Gurdeep Singh Bhatia Director (DIN: 00401929) Date: 14.08.2015 Place: Indore |