DIRECTOR'S REPORT To, The Shareholders, Your Directors have pleasure in presenting herewith the 21st Annual Report on the business of Your Company together with the Audited Accounts for the financial year ended 31st March, 2015. REVIEW OF OPERATIONS: During the year under review the gross sales registered a growth of more than 105%. With a view to get hold, stabilize, compete increase the Company's presence in the market initially the Company is not concentrating on margins. The move would certainly create good presence and name to the Company which would enable the Company in future to generate good income. DIVIDEND; In the absence of profits, the directors of your Company do not recommend any dividend for the Financial Year 2014-15. TRANSFER TO RESERVES: Your Company has not transferred any amount to the general reserve. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL Mrs.Phani Anupama Vankineni, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer herself for re-appointment. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. During the year under review Mrs. Jonnada Vaghira Kumari ceased to be the Company Secretary of the Company w.e.f 30th September, 2014. AUDITORS At the Annual General Meeting held on September 30, 2014, M/s. Ramasamy Koteswara Rao & co, Chartered Accountants,(Registration No. 010396S), Hyderabad, were appointed as statutory auditor of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. Ramasamy Koteswara Rao & co, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Secretarial Auditor: P.S.Rao & Associates, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there-under. The secretarial audit report for FY 2014-15 forms part of the Annual Report as Annexure-1 to the Board's report. The Board has appointed P.S.Rao & Associates, Practicing Company Secretaries, as secretarial auditors of the Company for the financial year 2015-16. DIRECTORS' RESPONSES ON THE QUALIFICATIONS MADE BY THE SECRETARIAL AUDITORS IN THEIR REPORT: With regard to the qualification raised in the Secretarial Audit Report with regard to non-appointment of CFO & Company Secretary, your Company has made all possible sincere and valid efforts to appoint Company Secretary, subsequent to Mrs. Jonnada Vaghira Kumari cessation on 30th September, 2014, but none were ready to work with your Company, as the registered office of the Company is situated at a small village near Eluru Town. Your Company is constantly trying to fill the post(s) of Key Managerial Personnel and is hoping that its efforts to comply with the statutory requirement would be fruitful in the days to come. FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS As required under the provisions of Schedule IV of the Companies Act, 2013 the performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Various Audit Systems in the Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the audit reports the units undertake corrective action in their respective areas and strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board periodically. The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy, policy to determine material subsidiaries and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding 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 information. NOMINATION AND REMUENRATION POLICY A committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of section 178, Schedule IV of the Companies Act and Clause 49 of the Listing Agreement and to recommend a policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time. Nomination and Remuneration Policy of the Company is enclosed herewith as Annexure -2 . RISK MANAGEMENT: The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors' confirm that: I) In preparation of annual accounts for the financial year ended 31st March, 2015 the applicable Accounting Standards have been followed along with proper explanation relating to material departures; ii) 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 true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2015 and of the profit and loss of the Company for the year; iii) The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) The Directors had prepared the annual accounts on a 'going concern' basis; v) 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 vi) 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. EXTRACT OFANNUAL RETURN: The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - 3. CORPORATE SOCIAL RESPONSIBILITY (CSR): As per the criteria laid down in the Companies Act, 2013, the provisions of Corporate Social Responsibility are not applicable to your Company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure - 4. OTHER DISCLOSURES: Board Meetings During the year under review Five Board Meetings were held during the year under review. For further details, please refer report on Corporate Governance Report enclosed herewith. Committees of Board Your company has the following committees namely: 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholders Relationship Committee The constitution of all the committees is as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges. The details of the Constitution are mentioned in Corporate Governance Report, which forms part of this Annual Report. Corporate Governance Report Your Company has complied with the requirements of Clause 49 of the Listing Agreement entered with the Stock Exchanges; Report on Corporate Governance including Auditor's Certificate on compliance with the code of Corporate Governance specified under the said Clause forms part of this report. Management Discussion and Analysis A brief note on the Management discussion and analysis for the year is annexed as part of this report Vigil Mechanism: In pursuant to the provisions of section 177(9) & (10) of the Companies Act , 2013 and Clause 49 of the Listing Agreement a Vigil Mechanism for directors and employees to report genuine concerns has been established. Protected disclosures can be made by a whistle blower through to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website Remuneration ratio of the directors/ Key Managerial Personnel/ Employees: Statement showing disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as Annexure - 5. PARTICULARS OF EMPLOYEES As required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, NO employee of your Company is in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5 lakh or more a month, during the financial year under review. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Details of the Loans, guarantees and investments if any covered under Section 186 of the Companies Act, 2013 are given in the notes to the financial statements pertaining to the year under review. DEPOSITS Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet. RELATED PARTY TRANSACTIONS: Related.party transactions entered during the financial year under review are disclosed in Note No. a of Notes to Fancial Statements of the Company for the financial year ended 31st March, 2015. These transactions entered were at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the note on the aforesaid related party transactions is enclosed herewith as Annexure - 6. The policy on materiality of Related Party Transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website. HUMAN RESOURCES: Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees. 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 there under. 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 review: I. Issue of equity shares with differential rights as to dividend, voting or otherwise. II. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. III. Neither the Managing Director nor the Whole-time Director of the Company receive any remuneration or commission from any of its subsidiaries. IV. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. V. No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial year and date of report. ACKNOWLEDGEMENTS: Your Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management. For and on behalf of the board Sd/- Chairman & Managing Director Place: Denduluru Date: 14.08.2015 |