DIRECTOR'S REPORT Dear Shareholders, Your Directors present their Report together with the Audited Accounts for the year ended 31st March, 2015 DIVIDEND: Considering the accumulated losses, your Directors have not recommended any dividend on equity share capital of the company for the year ended 31st March 2015. TRANSFER OF PROFIT TO RESERVES The company has not proposed to transfer any of its profits to reserves in view of the Carried forward losses. MATERIAL CHANGE AND COMMITMENTS OF THE COMPANY There are no material changes and commitments 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; and there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. PARTICULARS INVESTMENTS OF LOANS, GUARANTEES OR There is no loan, guarantees and investment given or made by the Company under Section 186 of the Act during the financial year 2014 - 2015. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES The company doesn't have any subsidiaries, associates and joint venture companies. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information as required to be disclosed on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure I" to this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL In terms of Section 152 of the Companies Act 2013,Mr.N.K.S.Kolappan, Whole time Director, who retire by rotation at the forthcoming AGM and is eligible for reappointment. Mr.N.K.S.Kolappan offered himself for reappointment. Brief profile is mentioned in the Notice of forthcoming Annual General Meeting of the company. In terms of Sections 196, 197,203 and any other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 rules made there under (including any statutory modification(s) or re-enactment thereof), Mr.N.K.S.Kolappan, Whole time Director and Mr.S.Iyempandi ,Managing Director has been re-appointed. Brief profile is mentioned in the Notice of forthcoming Annual General Meeting of the company. INDEPENDENT DIRECTORS' DECLARATION All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 which has been relied on by the Company and placed at the Board Meeting of the Company. AUDITORS STATUTORY AUDITORS Pursuant to the provisions of section 139 of the Act and the rules framed there under, M/s. Ramadoss & Co, Chartered Accountants, (Firm Registration No. 002978S) were appointed auditors of the company from the conclusion of the 23rd Annual General Meeting (AGM) of the company held on 27th September2014till the conclusion of 26th AGM , subject to ratification of their appointment at every AGM. COMMENT ON STATUTORY AUDITOR REPORT With reference to point no.2 (d) of the Auditor Report, we would like to furnish our reply as under: 1) Non provision of gratuity and leave encashment: According to the management considering the number of employees, we are of the opinion, the leave encashment and gratuity will be accounted on cash basis. 2) Non provision of depreciation as per part C of Schedule II of the Companies Act 2013: Depreciation as per Part C of Schedule II of the Companies Act 2013 will be provided in the ensuring year onwards. SECRETARIAL AUDITOR Pursuant to the requirements of Section 204 (1) of the companies Act 2013 and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, M/s.Lakshmmi Subramanian& Associates, a firm of Company Secretaries in Practice to undertake Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit report as received from the secretarial auditor is annexed to this report as Annexure II. COMMENT ON SECRETARIAL AUDITOR REPORT With reference to the remarks made by the secretarial auditor, in the Secretarial Audit Report, the company has taken the corrective measures during the current financial year. EXTRACT OF ANNUAL RETURN The details forming part of extract of Annual Return in form MGT -9 as provided under Sub Section (3) of the Section 92 of the Companies Act,2013 (the "Act") is annexed herewith as Annexure -III to this report. PERSONNEL The information required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, forms part of this Report as Annexure IV. RELATED PARTY TRANSACTIONS During the year 2014 - 2015, the Company had entered into material transaction with related parties as per section 188of the companies Act, 2013 (Annexure V) MANAGEMENT DISCUSSION AND ANALYSIS REPORT Since your company's paid up Equity capital and Net worth is less than Rs.10 Crores and Rs.25 Crores respectively, hence not applicable to the company. 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 date of the balance sheet. CORPORATE GOVERNANCE REPORT Since your company's paid up Equity capital and Networth is less than Rs.10 Crores and Rs.25 Crores respectively, the provisions of revised Clause 49 relating to Corporate Governance, vide SEBI circular number CIR/CFD/POLICY CELL/7/2014 dated 15th September 2014. .Hence is not applicable to the company. NUMBER OF MEETINGS OF THE BOARD In total 4(four) Meetings of the Board of Directors of the Company were held during the year 2014-15,held on 30th May 2014, 31st July 2014, 31st October 2014 and 31st January 2015. The maximum time gap between any two consecutive meetings did not exceed 120 days. PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS Pursuant to the provisions of the Companies Act, 2013, 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 the Audit and Nomination & Remuneration Committees and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation. A structured questionnaire was prepared after taking into consideration of the inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman of the Board and the Executive Directors was carried out by the Independent Directors. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT The Board of Directors had adopted a Code of Conduct for the Board Members and employees of the company. This Code helps the Company to maintain the Standard of Business Ethics and ensure compliance with the legal requirements of the Company. The Code is aimed at preventing any wrongdoing and promoting ethical conduct at the Board and employees. The Compliance Officer is responsible to ensure adherence to the Code by all concerned. The Code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. The policy is available on the Company website www.iykot.com WHISTLE BLOWER POLICY/VIGIL MECHANISM The company has a whistle blower policy framed at present. Further, Directors and employees are having full access to the audit committee to report their genuine and serious concern if they observe any.The policy is available on the Company website www.iykot.com POLICY OF DIRECTORS' APPOINTMENT AND REMUNARATION Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178 of the Act are covered under the Board's policy formulated by the Company and is available on the Company website www.iykot.com BOARD COMPOSITION The Board is well constituted with composition of two executive and one non-executive and three independent directors in the meeting. Board Committees The Board has constituted the following committees viz. Audit Committee, Nomination and Remuneration Committee and Stakeholders' Relationship Committee. Audit Committee (A) Qualified and Independent Audit Committee The Company complies with Section 177 of the Companies Act, 2013 the Audit Committee. Its functioning is as under: (i) The Audit Committee presently consists of two whole time directors and three Independent Directors. (ii) All members of the Committee are financially literate and having the requisite financial management expertise; (iii) The Chairman of the Audit Committee is an Independent Director; B) Terms The terms of reference of the Audit Committee include: ? the recommendation for appointment, remuneration and terms of appointment of auditors of the company; ? review and monitor the auditor's independence and performance, and effectiveness of audit process; ? examination of the financial statement and the auditors' report thereon; ? approval or any subsequent modification of transactions of the company with related parties; ? scrutiny of inter-corporate loans and investments ? valuation of undertakings or assets of the company, wherever it is necessary; ? evaluation of internal financial controls and risk management systems; ? Monitoring the end use of funds raised through public offers and related matters. Powers of Audit Committee: The Audit committee shall have the authority - ? To call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board. ? To discuss any related issues with the internal and statutory auditors and the management of the company ? To investigate into any matter in relation to the items or referred to it by the Board ? To obtain professional advice from external sources ? To have full access to information contained in the records of the company. (C) Composition, names of Members and Chairperson, its meetings and attendance: The composition of the Committee consists of Dr.S.Rajapandian, Independent Director its Chairman, Mr.A.Paramasivam, Mr.N.K.S.Kolappan, and Mr.M.S.Krishnan are as members of the committee. During the year, 4 Audit Committee meetings were held on 30th May 2014, 31st July 2014, 31st October 2014 and 31st January 2015. The composition of the Audit Committee and number of meetings attended by the Members during the year are given below: Nomination and Remuneration Committee (A) Constitution The Company has set up a Remuneration Committee of Directors, consisting of Mr.A.Paramasivam, Chairman, Mr.M.S.Krishnan and Dr.S.Rajapandian are Members of the Nomination and Remuneration Committee. All increments/remuneration etc are decided at the Meetings collectively. (B) Terms of reference Terms of reference of the Nomination and Remuneration Committee include: ? The Committee shall formulate the criteria for determining the qualification, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees. ? The Committee shall identify persons who are qualified to become directors and who may be appointed in senior management positions in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every director's performance. ? The Committee shall ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets performance benchmarks, and involves a balance between fixed and incentive pay. ? Review the policy from time to time for selection and appointment of Directors and senior management employees and their remuneration; ? Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and Senior Management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and that the remuneration involves a balance between fixed and incentive pay reflecting short term and long term objectives of the Company. ? Filling up of vacancies in the Board that might occur from time to time and appointment of additional Non-Executive Directors. In making these recommendations, the Committee shall take into account the special professional skills required for efficient discharge of the Board's functions. ? Recommendation to the board with regard to retirement of Directors, liable to retire by rotation and appointment of Executive Directors. ? To determine and recommend to the Board from time to time (a) The amount of commission and fees payable to the Directors within the applicable provisions of the Companies Act, 2013. (b) The amount of remuneration, including performance or achievement bonus and perquisites payable to the Executive Directors (c) To frame guidelines for Reward Management and recommend suitable schemes for the Executive Directors and Senior Management. ? To determine the need for key man insurance for any of the company's personnel ? To carry out the evaluation of every director's performance ? To carry out any function as is mandated by the Board from time to time and /or enforced by any statutory notification, amendment or modifications as may be applicable. ? Stakeholders' Relationship Committee (C) Meetings and attendance during the year: There was no event occurred which mandates the meeting of Nomination and Remuneration Committee during the year 2014-15 , hence the requirement of holding the meeting does not arise . (D) Remuneration policy- The Board has, on the recommendation of the Nomination & Remuneration Committee approved a policy for selection and appointment of Directors, Senior Management and for determining their remuneration. Remuneration Policy of the Company is available in the company website www.iykot.com Stakeholders Relationship Committee The Stakeholders Relationship Committee specifically looks into issues such as redressing of shareholders' and investors' complaints such as transfer of shares, non-receipt of shares, non- receipt of declared dividends and ensuring expeditious share transfers and also redresses the grievances of deposit holders, debenture holders and other security holders. The Company has set up a Stakeholders Relationship Committee of Directors, consisting of Mr.S.Iyempandi and Mr.N.K.S.Kolappan are the members of the Committee. During the year, Stakeholder relationship Committee meetings were held on 30* May 2014, 20Mune 2014, 18th July 2014, 4thAugust 2014, 24th December 2014, 05th January 2015, and 25thMarch 2015. The Company received only 19 transfers for 16320 shares during April 2014 to March 2015 which has been approved and transferred. CORPORATE SOCIAL RESPONSIBILITY (CSR): Your company is not having Net profits of more than 5 Crore rupees, in the Year 2013-14 and therefore Constituting of a CSR committee in accordance with the provisions of section 135 of the Act does not arise. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 134(5) of the Act, the Directors hereby confirm: 1. That in the Preparation of Final Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; 2. That they 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 at the end of the Financial Year and of the Profit or Loss of the Company for that period; 3. That they had taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act, for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities; 4. That they had prepared the Annual Accounts on a Going Concern basis. 5. That they laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating properly; and 6. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT Your Directors wish to place on record their appreciation of the contributions made by employees at all levels, towards the continued growth and prosperity of your Company. .Directors take this opportunity to convey their thanks to all the valued shareholders and the valuable services rendered by the Officers and Staffs at all levels. By Order of the Board For Iykot Hitech Toolroom Ltd (S.IYEMPANDI) Managing Director DIN : 00891670 Place: Chennai Date : 31.07.2015 |