DIRECTORS' REPORT To The Members, Your Directors have pleasure in presenting the Sixteenth Annual Report together with the audited accounts of the Company for the financial year ended 31st March, 2015 2. STATE OF COMPANY'S AFFAIRS: The performance of the Company during the year 2014-15 exhibits an upward trend with signs of growth and development. The total revenue from operations rose to Rs. 2504.74 lakhs thereby generating a net profit after tax of Rs. 118.79 lakhs as compared to revenue of Rs. 2036.10 lakhs and profit of Rs. 75.81 lakhs in the last year. According to the latest reports by GJEPC, the provisional gross export of Gold jewellery for the FY 2014 -15 shows growth of 17.77% as compared to 2013-14. The report said that "the growth stands testimony to the design and manufacturing excellence of the Indian G & J sector and a true reflection of PM Modi's 'Made in India' vision". The gem and jewellery industry ends the FY 2014-15 on an optimistic note also boosting your Company to take on expansion activities. In view of the same, the company has recently setup an independent manufacturing unit in line with the latest technology and designs, catering to the growing demand of its clients and business associates. The in-house manufacturing facility will reduce the job work and other related charges, and thus the process will be cost effective. With its exclusive cz and colored stone studded jewellery, the Company is confident to bring about an innovative and positive difference in its product line. It is hopeful to yield more profitable returns in near future. 3. DIVIDEND: In order to conserve resources for further expanding the Company's business, your Directors have opined to not recommend any dividend for the year 2014-15. 4. RESERVES Amount to be carried forward to the reserves- (Rs. 6,60,22,996/-) 5. SHARE CAPITAL (i) Re-issue of forfeited shares: During the year, Company has reissued and allotted 25, 00,000 equity shares of Rs. 10/- each at a premium of Rs. 15 per share out of 56, 62,900 equity shares forfeited earlier. (ii) Issue of shares with differential rights- NIL (iii) Issue of sweat equity shares - NIL 6. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mrs. Pritha Sanghi retires by rotation at the ensuing Annual General Meeting and being eligible offer herself for re-appointment. Her profile is given elsewhere in the report. Your Directors recommend her re-appointment. Pursuant to the provisions of Section 149 of the Companies Act 2013, Mr. Ramprasad Vempati, Mr. Siddharth Goel, and Mr. Vikram Goel were appointed as independent directors at the Annual General Meeting of the Company held on 29th September, 2014. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year During the year, Ms. Pragya Sarda, an associate member of the Institute of Company Secretaries of India, was appointed as the Company Secretary of the Company in terms of Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company is yet to appoint as Chief Financial Officer. 7. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT, IF ANY The declarations by all Independent Director(s) that he/they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 have been given as required. 8. NUMBER OF MEETINGS OF THE BOARD Nine meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. 9. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, Board committees and individual directors. The performance of the Board was evaluated after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and its functioning. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors The Board Evaluation Policy specifying the manner and process of formal evaluation of the performance of the Board is attached as Annexure I to this report. 10. MANAGERIAL REMUNERATION No remuneration is paid to the Managing Director or the Whole-time Directors of the Company. They are only paid sitting fee for attending the meetings of the Board of Directors held during the year. The Company's policy on Director's appointment and remuneration in accordance with Section 178 (3) of the Companies Act, 2013 is attached as Annexure II to this report. 11. PARTICULARS OF EMPLOYEES: There are no employees drawing remuneration equal or more than the limits specified in Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 12. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES There are no subsidiaries or joint ventures to the Company as on the date of this report. 13. STATUTORY AUDITORS: The Auditors, M/s Venugopal & Chenoy, Chartered Accountants, Hyderabad, (Firm Regn No.- 004671S) retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of four years from the conclusion of this Annual General Meeting [AGM] till the conclusion of AGM held in calendar year 2019 in accordance with the provisions of Section 139(2) of the Companies Act, 2013 read with the Companies (Audit and Auditor) Rules, 2014. 14. AUDITORS' REPORT The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. 15. SECRETARIAL AUDIT REPORT In terms of Section 204 of the Companies Act, 2013 and Rules made there under, Mr. Ajay S. Shrivastava, Practicing Company Secretary, Hyderabad (COP No- 3479) has been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors in the prescribed Form MR-3 is enclosed as Annexure III to this report. The report is self-explanatory and do not call for any further comments. 16. VIGIL MECHANISM In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been attached as Annexure IV to this report and the same has also been uploaded on the website of the Company - udayjewellery.com 17. INTERNAL AUDIT & CONTROLS The Company has appointed M/s Krishna and Suresh, Chartered Accountant, Hyderabad (Firm Regn No-001461S) as its Internal Auditors. Their scope of work 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. Their reports are laid before the audit committee periodically. 18. RISK MANAGEMENT POLICY The Management has put in place adequate and effective system and man power for the purposes of risk management. In the opinion of the Board, following are the risks involved in the industry: 1. Fluctuation in the rupee/dollar exchange rate as the sector is export-oriented. 2. Changing consumer preferences including regional preferences. 3. Fluctuating raw material i.e. Gold prices in India and across the world. 19. EXTRACT OF ANNUAL RETURN Pursuant to the provisions of section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 is attached as a part of this Annual Report as Annexure V 20. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. 21. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY There are no material changes between the date of balance sheet and the date of this report that would affect the financial position of the company. 22. DEPOSITS FROM PUBLIC The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet. 23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The Company has not given any loan or guarantee or security or made any investment during the financial year in terms of Section 186 of the Companies Act, 2013. 24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No AOC-2 as Annexure VI to this report. 25. CORPORATE GOVERNANCE CERTIFICATE The Compliance certificate from the practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement is annexed with the report. 26. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis for the year ended 31st March, 2015 are attached, which form part of this report. 27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The statement giving particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo, is attached to the report as Annexure VII. 28. CORPORATE SOCIAL RESPONSIBILITY (CSR) Since the Company's net worth does not exceed Rs. 500 crores or Company's turnover does not exceed Rs. 1000 crores or the Company's net profit does not exceed Rs. 5 crore for any financial year, the provisions of section 135 of the Companies Act, 2013 are not applicable. 29. DIRECTORS' RESPONSIBILITY STATEMENT: Your Directors would like to inform the members that the audited accounts for the year ended 31st March, 2015 are in full conformity with the requirement of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations. These financial statements are audited by the Statutory Auditors M/s Venugopal & Chenoy. Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, your Directors further confirm that: i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations 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 a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and Loss of the Company for the that period; iii) 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; iv) The Directors have prepared the annual accounts on a going concern basis. v) The directors in case of listed company have laid down internal financial controls to be followed by the company and such controls are adequate and are operating effectively. vi) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively. 30. LISTING: The shares of your company are listed on Calcutta Stock Exchange Limited. The Company has duly complied with all the applicable provisions of the Listing Agreement. The Company has made an application to BSE Ltd. under direct listing norms, for listing of its shares at the exchange. 31. ACKNOWLEDGMENT: The directors thank the Company's employees, customers, vendors and investors for their continuous support. The Directors also wish to place on record its appreciation of Banks, Stock Exchange & Other authorities for their able guidance and support. For and on behalf of Board of Directors Sd/- (Ritesh Kumar Sanghi) Managing Director DIN: 00628033 Address:8-2-686/DR/7, Road No. 12, Banjara Hills, Hyderabad - 500034 Sd/- (Sanjay Kumar Sanghi) Director DIN: 00629693 Address:8-2-686/DR/7, Road No. 12, Banjara Hills, Hyderabad - 500034 Date: 26.08.2015 Place: Plot No 5-9-60, Flat No 301, Moghuls Court, Basheerbagh, Hyderabad - 01 |