DIRECTORS' REPORT To, The Members of SYSTEMATIX CORPORATE SERVICES LIMITED Your Directors have pleasure in presenting the 30th Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015 2.TRANSFER TO RESERVES It is not proposed to transfer any amount to reserves during FY 2014-15. 3.DIVIDEND Since the Company incurred losses during the financial year, no dividend is recommended by the Board for the financial year ended 31st March, 2015. 4.BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR / STATE OF COMPANY'S AFFAIR As is evident from the above financial review, during the year, the company has earned Stand alone Income of Rs. 161.35 Lacs as compared to income of Rs. 313.60 Lacs of the Previous Year which registered a decline by 48.55 % as compared to last year Income, and Consolidated Income of Rs.3823.67 Lacs as compared to Consolidated Income of Rs. 3998.41 Lacs of the previous Year which also registered a decline by 4.37 % as compared to last year Consolidated Income. The Company has incurred Stand alone Loss after tax during the year of Rs. 3.81 Lacs as compared to the Profit after Tax of the previous year of Rs. 70.90 Lacs, and Consolidated Profit after tax during the year of Rs. 117.72 Lacs as compared to the Consolidated Profit after Tax of the Previous year of Rs. 196.50 Lacs which also registered a decline by 40.09 % as compared to last year Consolidated Profit after Tax. 5.5.1 DETAILS OF WHOLLY OWNED SUBSIDIARIES The Company as of March 31, 2015 had four Wholly Owned Subsidiaries viz: (i)M/s. Systematix Shares and Stocks (India) Limited (ii)M/s. Systematix Fincorp India Limited (iii)M/s. Systematix Finvest Private Limited (iv)M/s. Systematix Commodities Services Private Limited 5.2REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure I to the Board's Report. The statement also provides the details of performance, financial positions of each of the subsidiaries. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries will be available for inspection during business hours at the registered office of the Company. 5.3DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED AS SUBSIDIARY, ASSOCIATES AND JOINT VENTURES, DURING THE YEAR UNDER REVIEW, ARE AS UNDER: During the year, there is none of the Company becomes Subsidiary or Associates or Joint Ventures; however, M/s. Systematix Commodities Services Private Limited has become direct subsidiary instead of step down subsidiary. Further, M/s. Systematix Distributions Services Private Limited has ceased from fellow Subsidiary company as it ceased to be subsidiary company of M/s. Systematix Commodities Services Private Limited with effect from March 31, 2015. 6NATURE OF BUSINESS The Company is a SEBI registered 'Category I' Merchant Banker. There was no change in the nature of business of the Company for the year under review. 7MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT. No material changes have occurred between the end of the financial year and the date of the report. 8DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There are no significant material orders passed by the Regulators / Courts or Tribunals which would impact the going concern status of the Company and its future operations. 9DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS. The Company has adequate systems of internal control, to ensure that all assets are safeguarded and protected against loss from unauthorized use and procedures commensurate with the size and nature of business. The Company continuously upgrades its systems in line with the best availability practices.These systems are supported by periodical reviews by the management and standard policies and guidelines to ensure that financial and other records are prepared accurately. 10DEPOSITS During the year under review, your Company did not accept any deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014. As on April 1, 2014, no amounts were outstanding which were classified as 'Deposits' under the applicable provisions of Companies Act, 1956 and hence, the requirement forfurnishing of details ofdeposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable. 11PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The particulars of loans, guarantees and investments given/made during the financial year under review and governed by the provisions of Section 186 of the Companies Act, 2013 forms part of financial statements. 1212.1 PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: All the transactions/contracts/arrangements of the nature as specified in Section 188(1) of the Companies Act, 2013 entered by the Company during the year under review with related party (/ies) are in the ordinary course of business and on arms' length basis. Hence, Section 188(1) is not applicable and consequently no particulars in form AOC-2 have been furnished. Related Party transaction policy is posted on the website of the company and is available at www.systematixgroup.in 12.2 MATERIALLY SIGNIFICANT RELATED PARTY TRANSACTIONS DURING THE PERIOD UNDER REVIEW: The Company had not entered into any material transaction with any of its related parties. None of the transactions with any of related parties were in conflict with the Company's interest. All related party transactions are in the ordinary course of business and on arms' length basis. Transactions with related party are disclosed in Note. 28 in 'Notes forming a part of financial statement' annexed to the financial statements for the year. 13AUDITORS AND THEIR REPORTS The matters related to Auditors and their Reports are as under: 13.1OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015: The auditor's report does not contain any qualification, reservation or adverse remark or Disclaimer. 13.2SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED MARCH 31, 2015: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the report in respect of the Secretarial Audit carried out by Mr. Hitesh Kothari, Partner of M/s. Kothari H. & Associates, Company Secretaries in Form MR-3 for the FY 2014-15 is annexed herewith as 'Annexure II'. The said report does not contain any adverse observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. 13.3STATUTORY AUDITORS Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Maharaj N R Suresh & Co. Chartered Accountants, Chennai (Registration No. 001931S), the Statutory Auditors of the Company, hold office upto the conclusion of the Thirty First (31st) Annual General Meeting. However, their appointment as Statutory Auditors of the Company is subject to ratification by the Members at every Annual General Meeting. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members. 14SHARE CAPITAL The following changes occurred during the year under review in the share capital of the Company. a)The Authorized Share Capital of the Company has been increased from Rs. 25,00,00,000/- (Rupees Twenty Five Crore Only) divided into 2,50,00,000/- (Rupees Two Crore Fifty Lakhs) Equity shares of Rs.10/- (Rupees Ten) each to Rs. 50,00,00,000/- (Rupees Fifty Crores only) divided into 2,00,00,000 (Two crore) Equity Shares of Rs.10/- (Rupees Ten) each and 3,00,00,000 (Three Crore) Preference Shares of Rs. 10/- (Rupees Ten) each by introducing 2,50,00,000 (Two Crore Fifity Lacs) preference shares of Rs. 10/- (Rupees Ten) each and converting of 50,00,000 (Fifty Lacs) equity shares of Rs. 10/- (Rupees Ten) each into 50,00,000 (Fifty Lacs) preference shares of Rs. 10/- (Rupees Ten) b)Issue of 2,70,00,000 non-convertible Redeemable preference shares (NCRPS) of face value of Rs. 10/- each (the "Preference Shares") on preferential basis , for the consideration other than cash being conversion of unsecured loan from M/s Superstar Exports Private Limited in to share Capital. As on March 31, 2015 the authorized Capital of the Company is Rs. 500,000,000/- and paid up Share Capital is Rs. 400,514,080/- The Company has not issued any equity shares with differential rights / sweat equity shares/employee stock options or not made any provision of its own shares by employees or by trustees for the benefit of employees during the financial year 2014-2015. The Company has not made any purchase or provision of its own shares by employees or by trustees for the benefit of employees during the financial year 2014-2015. 15OTHER DISCLOSURES Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: 15.1 EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2015 made under the provisions of Section 92(3) of the Act is attached as 'Annexure III' which forms part of this Report. 15.2 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO; A)ENERGY CONSERVATION & TECHNOLOGY ABSORPTION 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. The Company has installed energy conservative equipment's like LED (Light Emitting Diode) lights instead of CFL (Compact Fluorescent Lamp). The Company has maintained a technology friendly environment for its employees to work in. Your Company uses latest technology and equipments. However since the Company is not engaged in any manufacturing, the information in connection with technology absorption is NIL. B)FOREIGN EXCHANGE EARNINGS AND OUTGO: The foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014, are provided as follows: a.Total foreign exchange earned: 4,69,153 b.Total foreign exchange outgo NIL 16 MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL; DIRECTORS: A)CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Sunil Sarda who is liable to retire by rotation and is eligible for reappointment, has offered himself for re- appointment. Pursuant to provision of section 203 of the Companies Act, 2013, the Articles of Association of the Company and other applicable provisions, the Company appointed Ms. Vrunda Dhanesha to hold the office of the Company Secretary and Compliance Officer of the Company w. e. f. 14th August, 2015 in place of Mr. Tushar Adhav who resigned from his office w. e. f. 22nd June, 2015. During the year under review, the existing appointment w. e. f. August 13, 2014 of Mr. Pradeep Gotecha a s Chief Financial Officer was formalised as the Key Managerial Personnel of the Company to comply with the provisions of Section 203 of the Companies Act, 2013. During the year under review Mr. Sanjay Khandelwal (DIN: 01592134) has been Appointed as NonExecutive Independent Director w. e. f September 30, 2014 for a tenure of Five (5) years and Mr. Ashish Kumar Vyas resigned as an Independent Director of the Company w. e. f. September 30, 2014. The Board has placed on record its appreciation for the services rendered by Mr. Ashish Kumar Vyas during his tenure as a Director. B)DECLARATION BY AN INDEPENDENT DIRECTOR(S)AND REAPPOINTMENT, IF ANY Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section 149(6) of the Companies Act, 2013. C)FORMAL ANNUAL EVALUATION OF DIRECTORS, COMMITTEES & BOARD Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. 17DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES; 17.1BOARD MEETINGS The Board of Directors met 5 times during the financial year ended March 31, 2015 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.Additionally, during the financial year ended March 31, 2015, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Clause 49(II)(B)(6) of the Listing Agreement. 17.2AUDIT COMMITTEE An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer section on Corporate Governance, under the head, 'Audit Committee' for matters relating to constitution, meetings, functions & Responsibilities of the Committee. 17.3DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES In compliance with the provisions of Section 177(9), the Board of Directors of the Company has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company. The Whistle Blower Policy is disclosed on the website of the Company at www.systematixgroup.in 17.4NOMINATION AND REMUNERATION COMMITTEE A Nomination and Remuneration Committee is in existence in accordance with the provisions of subsection (3) of Section 178. Kindly refer section on Corporate Governance, under the head, 'Nomination and Remuneration Committee' for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee. The Company's Policy on appointment and remuneration of Directors and Key Managerial Personnel under Section 178(3) of the Companies Act, 2013 and Clause 49(IV) of Listing Agreement is attached as Annexure IV to this report. 17.5PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE During the year, the Company has not received any complaint of sexual harassment. 17.6RISK MANAGEMENT Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in strategy, business and operational plans. Some of the risks which may pose challenges are set out in Management Discussions and Analysis Report which forms part of this report. 18MANAGERIAL REMUNERATION: The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not being sent along with this Report to the Members of the Company as per the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Corporate Office of the Company. The aforesaid information is also available for inspection by Members at the Corporate Office of the Company, 21 days before the 30th Annual General Meeting and upto the date of the Annual General Meeting during the business hours on working days. As per the provisions of section 197(14) of the Companies Act, 2013, the Managing Director is not in receipt of any commission from the Company or its subsidiaries. 19CORPORATE GOVERNANCE CERTIFICATE The Compliance certificate from M/s. Maharaj N. R. Suresh & Co., Chartered Accountants Chennai (Registration No. 001931S) regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is annexed with the report. 20DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed; a)That in the preparation of the annual financial statements for year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b)That 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 as at 31st March, 2015 and of the profit and loss of the company for the year ended on that date; c)That proper and sufficient care has been taken 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)That the annual financial statements have been prepared on a going concern basis; e)That the proper internal financial controls were in place and that such internal financial controls were adequate and were operating effectively. f)That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and were operating effectively. 21 ACKNOWLEDGMENTS Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company. For and on behalf of the Board of Directors Sd/- Chandra Prakash Khandelwal Chairman & Managing Director DIN:00016373 Sd/-Sunil Sarda Director DIN: 00030913 Date: 16/08/2015 Place: Mumbai |