BOARD'S REPORT To, The Members, Your Directors have pleasure in presenting the 21st Annual Report together with the Audited Statement of Accounts for the Financial Year ended March 31, 2015. DIVIDEND To maintain the liquidity of funds, the Board of Directors has decided not to declare any dividend for this financial year 2014-2015. The Board assures you to present a much strong financial statements in coming years. SHARE CAPITAL The Paid up Equity Share Capital as on March 31, 2015 was Rs. 249,615,000. During the year under review the company has issued 84,00,000 equity shares by way of preferential Allotment and has not issued any debentures or any other convertible instruments. a. BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. b. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. c. BONUS SHARES No Bonus Shares were issued during the year under review. d. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. e. ISSUE OF SHARES THROUGH PREFERENTIAL ALLOTMENT The Company has issued 84,00,000 equity shares by way of Preferential allotment. FIXED DEPOSIT The Company has not accepted any fixed deposit during the year under review falling within the purview of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. TRANSFER TO GENERAL RESERVES As the company has not declared any dividend, therefore, the Company has not proposes to carry any sum to the General Reserves of the Company for the period under consideration. CHANGE IN THE NATURE OF BUSINESS There were no changes in the nature of the Business during the Financial Year ended 31st March,2015. MATERIAL CHANGES AND COMMITMENTS There is no material change which may affect the financial position of the Company between the financial year and up to the date of this report. DETAILS OF SUBSIDIARY, JOINT VENTURE, ASSOCIATE COMPANIES DURING THE YEAR The Company has no subsidiaries, joint ventures or associated companies therefore disclosures in this regards are not provided in this report. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES The company has no subsidiaries, joint venture companies so there is no requirement of description of performance of Subsidiaries and Joint Venture companies. AUDITORS A. Statutory Auditors At the Annual General Meeting held on August 25, 2014, M/s V.N. Purohit & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold the office till the conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual general Meeting. Accordingly the appointment of M/s V.N. Purohit & 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. B. Auditor's Report All Observations made in the Independent Auditors' Report and Notes forming part of the Financial Statements are self explanatory and do not call for any further comments under section 197(12) of the Companies Act, 2013. C. Secretarial Auditor Ms. Rachna Bhasin, Practicing Company Secretary (Membership Number 23539) was appointed to conduct the secretarial audit of the Company for the F.Y 2014-2015, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial audit Report for FY 2014-2015 forms part of the Annual Report as Annexure I. D. Internal Auditor Mr. Gopal Bansal, Practising Chartered Accountant also performs the duties of internal auditors of the company for Financial Year 2014-2015 and his report is reviewed by the Audit Committee from time to time. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators and courts or tribunals impacting the going concern status and Company's operations in future. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of annual return in the prescribed format is appended as Annexure II. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use for disposition of its assets. All the transactions are probably authorised, recorded and reported to the Management. The Company is following all applicable accounting standards for properly maintaining the books of accounts and reporting financial statements. The internal Auditor of the company checks and verifies internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of business. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information required to be given pursuant to section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 and forming part of Board's Report for the year ended March 31, 2015 are given as below: A. Conservation of Energy The provision related conservation of energy does not apply to company, therefore the information as required under the Companies (Accounts) Rules, 2014 is not given. However the company is conscious about its responsibility to conserve energy, power, and other energy sources wherever possible. We emphasis towards a safe and clean environment and continue to adhere to all regulatory requirements and guidelines. B. Technology Absorption Your company has not imported any technology. However, we believe and use information technology extensively in all spheres of our activities to improve efficiency levels. RISK MANAGEMENT POLICY The Company has implemented Risk Management Policy (annexed as Annexure III) and the Board of Directors has prepared a comprehensive framework of risk management for assessment of risks and to determine the responses to these risks so as to minimize their adverse impact on the organization. The policy as approved by the Board of Directors is uploaded on Company's website. CORPORATE SOCIAL RESPONSIBILITY The provision of Companies Act, 2013 regarding Corporate Social Responsibility shall not be applicable to companies having net worth not exceeding Rs. 500 Cr or turnover not exceeding Rs. 1,000 Cr or net profit not exceeding Rs. 5 Cr or more during any financial year, as on the last date of previous financial year. In this connection, we wish to inform you that in respect of our company as on the last audited balance sheet as at March 31, 2015 neither the net worth exceeds Rs. 500 Cr nor turnover exceeds Rs. 1,000 Cr nor net profit exceeding Rs. 5 Cr. Hence, the provisions of Companies Act, 2013 regarding Corporate Social Responsibility would not be applicable. NUMBER OF MEETINGS OF THE BOARD The Boards of Directors duly met 12 times during the Financial Year 2014-15, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two board meetings was within the period prescribed by the Companies Act, 2013. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The current policy is to have an appropriate mix of Executive and Independent directors to maintain the independence of the board, separate its function of Governance and Management. As on March 31, 2015, the Board consists of 4 members, two of whom are executive or whole time directors, and other two are independent Directors. The Board periodically evaluates the need for change in its composition and its size. The policy of the company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the companies Act, 2013, adopted by the Board, is appended as Annexure IV to the Board's Report. We affirm that remuneration paid to the directors is as per the terms laid out in the remuneration policy of the company. DECLARATION BY INDEPENDENT DIRECTORS The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 52 of the SME Listing agreement. BOARD EVALUATION Clause 52 of the listing agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the board on its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that performance evaluation of independent directors shall be 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 frame work adopted by the Board. The evaluation process has been explained in this Annual report. The Board approved the evaluation results as collated by the nomination and remuneration committee. None of the independent directors are due for re-appointment. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS Every new independent directors of the board attends an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors/ senior managerial personnel make presentations to the inductees about the Company's strategy, operations, product and service offerings, markets, software delivery, organization structure, finance, human resources, technology, quality, facilities and risk management. Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as a director. The format of the letter of appointment is available on our website. INDUCTIONS On the recommendation of Nomination and Remuneration Committee, the Board appointed Mr. Amar Pal Singh as an Additional Director in the category of Independent Director under the Companies Act, 2013. Mr. Amar Pal Singh, Independent Director has given declaration that he meets the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Listing Agreement. The requisite Resolution for appointment of Mr. Amar Pal Singh as an Independent Director, is being proposed in the notice of the ensuing Annual General Meeting. We seek your support in confirming the appointment of Mr. Amar Pal Singh as a Director in the ensuing Annual general Meeting. DISCLOSURE OF RELATIONSHIPS BETWEEN DIRECTORS INTER-SE No Directors are directly related to each other. CHANGE IN DIRECTORS During the year, Mr. Narendra Kumar Gaur has resigned from the Directorship of the Company w.e.f March 30, 2015 and Mr. Amar Pal Singh appointed as Additional Director of the Company w.e.f March 30, 2015. DETAILS OF KEY MANAGERIAL PERSONNEL The following 2 persons were formally appointed/ designated as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013. 1. Mr. Ashish Bansal - Managing Director 2. Ms. Sushma Aggarwal- Chief Financial Officer COMMITTEES OF THE BOARD Currently, the Board has 3 Committees; the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior of the company has adopted a vigil mechanism policy. The aim of the policy is to provide adequate safeguards against victimization of whistle blower who avails of the mechanism and also provide direct access to the Chairman of audit Committee, in appropriate and exceptional cases. Accordingly, 'whistle Blower policy' has been formulated with a view to provide a mechanism for the Directors and employees of the Company to approach the Ethics Counselor or the Chairman of the audit Committee of the Company. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees willing to raise a concern about irregularities within the Company. This policy is also posted on the website of the company. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to members of the Board and all employees in the course of day to day business operations of the company. The Code has been placed on the Company's website www.stellarcapitalservices.com The Code lays down the standard procedure of business 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. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS UNDER SECTION 186 Particulars of Loans and Guarantees are provided in the financial statements (please refer the Notes to the financial Statements). RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on arm's length basis and also in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The details of Related Party Transactions are disclosed and forming part of the Annual Financial Statements and also stated in Form AOC-2 annexed as Annexure-VI. REPORT ON CORPORATE GOVERNANCE A report on corporate governance is annexed herewith. As required by Clause 52 of the Listing Agreement, the Certification on Corporate Governance is enclosed to the Board's Report. PRUDENTIAL NORMS AND DIRECTIONS OF RBI FOR NBFCS Your company has complied with all the prudential norms prescribed by the Reserve Bank of India and has filed the required returns. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company 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: a) Employed throughout the Year Nil b) Employed for part of the year Nil The remuneration paid to all key managerial personnel was in accordance with remuneration policy adopted by the company. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by members at the registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Chief Financial Officer in advance. SEXUAL HARASSMENT The Company has in place a Prevention of Sexual harassment policy in line with the requirements of the sexual harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Year 2014-2015, no complaints were received by the Company related to sexual harassment. BUSINESS RESPONSIBILITY REPORT Pursuant to relevant Clause of the SME listing Agreement is not applicable to our Company. Since no initiative with respect to environmental, social etc has been taken. DIRECTOR'S RESPONSIBILITY STATEMENT In terms of the provisions of Section 133 of the Companies Act, 2013 and read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards. The directors confirm that: • In preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed. • 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 at the end of the financial year and of the profit and loss of the company for that period. • The directors have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. • The directors had prepared the annual accounts on a going concern basis. • The directors have laid down internal financial controls, which are adequate and are operating effectively. • The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. STOCK EXCHANGE LISTING The Equity Shares of the Company are listed at the BSE Ltd (formerly Bombay Stock Exchange Ltd). The Company has already paid listing fees for the financial Year 2015-16 to the BSE. CAUTIONARY NOTE The statements forming part of the Board's Report may contain certain forward looking remarks within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements. ACKNOWLEDGEMENT The Board expresses its sincere gratitude to the shareholders, bankers and clients for their continued support. The Board also wholeheartedly acknowledges with thanks the dedicated efforts of all the staff and employees of the Company. For on behalf of the Board For Stellar Capital Services Limited Sd/- Ashish Bansal Managing Director DIN: 06607944 Sd/-Vikram Sharma Whole- Time Director DIN: 00243482 Place: New Delhi Date: 30.05.2015 |