DIRECTORS' REPORT To the Shareholders, Your Directors have great pleasure in presenting the 21st Annual Report together with the Audited Statements of Accounts of your Company for the financial year ended on 31st March, 2015. OPERATIONS : The Company's total revenue from operations during the financial year ended 31st March 2015 were Rs.106906428/- as against Rs.36416459/- of the previous year representing decrease over the corresponding period of the previous year. Total expenses of the Company were Rs.103108741/- (previous year of Rs.34339467/-). The Company has made Net Profit of Rs.2677610/- as against net profit of Rs.1411867/- of the previous year after considering Depreciation and Provision for Tax. The EPS of the Company for the year 2014- 2015 is Rs.(0.26). The Company is looking forward to infuse additional working capital in the business of the Company in order to carry out the operation of the Company smoothly. DIVIDEND : No dividend has been recommended in respect of the financial year ended 31st March, 2015 and the entire surplus be ploughed back to the business to meet the needs for additional finance for capital expenditure. MANAGEMENT DISCUSSION AND ANALYSIS REPORT : As required under Clause 49 of the Listing Agreements with Stock Exchanges, the Management Discussion and Analysis Report is enclosed as a part of this report. CORPORATE GOVERNANCE REPORT : Your Company has taken adequate steps to adhere to all the stipulations laid down in Clause 49 of the Listing Agreement. A report on Corporate Governance is included as a part of this Annual Report. A certificate from the Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is included as a part of this report. LISTING WITH STOCK EXCHANGE : The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed. FIXED DEPOSIT : Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. SHARE CAPITAL : During the year under review there is no change on share capital of the Company. SUBSIDIARY COMPANY : The Company does not have any subsidiary. DIRECTORS : All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Pursuant to Section 152(6) of the Companies Act, 2013, Mrs. Lilaben K. Agaja retires by rotation at the forthcoming Annual General Meeting. Being eligible, she offers herself for reappointment. Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with the Articles of Association of the Company, Mrs. Lilaben K. Agaja is appointed as Additional Director and she shall hold office only up to the date of this Annual General Meeting. Your board has recommended appointment of Mrs. Lilaben K. Agaja as an independent Director not liable to retire by rotation for a period of 5 years. Mr. Satish R. Shah was resigned from the Board of Directors of the Company with effect form 27.03.2015. The Board placed on record its deep sense of appreciation for the invaluable contribution made by Mr. Satish R. Shah during his tenure NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW : During the year under review 6 (Six) Board Meetings were convened and held. The intervening gap between the two meetings was within the period prescribed under the Companies Act, 2013. The details of the meetings are furnished in the Corporate Governance Report which is attached as part of this Report. EXTRACT OF ANNUAL RETURN : The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-A, in Form MGT-9 and is attached to this Report. AUDITORS AND AUDITORS' REPORT : M/s. Marmik G. Shah & Associates, Chartered Accountants, Ahmedabad retires at the ensuing Annual General Meeting and being eligible, they offer themselves for re-appointment. Your Company has received letter from M/s. Marmik G. Shah & Associates, Chartered Accountants, Ahmedabad, to the effect that their appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 read with rules made thereunder and that they are not disqualified for such appointment. Your Directors recommend the re-appointment of M/s. Marmik G. Shah & Associates, Chartered Accountants, Ahmedabad, as Statutory Auditors of the Company to hold office from the conclusion of this AGM till the conclusion of 26th AGM of the Company to be held in the year 2020. The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations and comments, appearing in the Auditors' Report are self-explanatory. However, qualification, reservation or adverse remark or disclaimer in Auditors' Report and explanations or comments by the Board as under: 1. Auditors' Report regarding non availability of Financial Statement of the partnership firm in which Company had made investment. Board's Reply : The Company could not get the financial statement from the said partnership firm due to administrative problems. INTERNAL AUDITORS : M/s. Vineet Shah & Associates, Chartered Accountants of Ahmedabad performs the duties of internal auditors of the Company and their report is reviewed by the audit committee from time to time. SECRETARIAL AUDITORS : Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Mukesh H. Shah & Co., Company Secretaries, Ahmedabad to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as 'Annexure-B'. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS : There were no qualifications, reservations or adverse remarks made by the Auditors in their report. ADDITIONAL DISCLOSURES : In line with the requirements of the Listing Agreement with the Stock Exchanges and Accounting Standard of the Institute of Chartered Accountants of India, your Company has made additional disclosures in the notes on accounts for the year under review in respect of Related Party Transactions, Deferred Tax Liability, etc. RELATED PARTY TRANSACTIONS : There were no contracts or arrangements entered into by the company in accordance with provisions of section 188 of the Companies Act, 2013. However, there were material related party transactions in terms of clause 49 of the listing agreement. All material related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Suitable disclosures as required under AS-18 have been made in the Notes to the financial statements. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 : The details of Loans, Guarantees or Investments covered under the provisions of section 186 of the Companies Act, 2013 made during the year under review are disclosed in the financial statements. REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES : The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows: The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows: a) Employed throughout the year : Nil b) Employed for part of the year : Nil The number of permanent employees on the rolls of Company: 10 as on 31 March, 2015. The remuneration paid to all Key management Personnel was in accordance with remuneration policy adopted by the Company. BUSINESS RISK MANAGEMENT : The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. COMMITTEES OF BOARD : Details of various committees constituted by the Board of Directors as per the provision of Clause 49 of the Listing Agreement and Companies Act, 2013 are given in the Corporate Governance Report which forms part of this report. 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 thereunder. During the financial year 2014-15, the Company has not received any complaints on sexual harassment. Board Evaluation : Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. PREVENTION OF INSIDER TRADING : 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 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. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO : The details of conservation of energy, technology absorption etc. as required to be given under Section 134(3)(m) of the Companies Act, 2013 is not applicable to the Company, as the Company is not engaged in manufacturing activities. The Foreign Exchange Earnings and Outgo on account of the operation of the Company during the year was as under: Foreign Exchange Earnings during the year : Rs.1,80,150/- Foreign Exchange Outgo during the year : Rs. Nil INSURANCE : The Company has made necessary arrangements for adequate insuring of interests in various properties. DIRECTORS' RESPONSIBILITY STATEMENT : To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5)) of the Companies Act, 2013: a) that in the preparation of the annual financial statements 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) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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 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 proper internal financial controls were in place and that the 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 operating effectively. ACKNOWLEDGEMENTS : The 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, co-operation and assistance given by them to the Company and their con?dence reposed in the management. For and on Behalf of the Board For, SAWACA BUSINESS MACHINES LIMITED [SHETAL S. SHAH] DIN:02148909 CHAIRMAN & MANAGING DIRECTOR PLACE : AHMEDABAD DATE : 08.08.2015 |