DIRECTORS' REPORT Dear Members, Your Director's have pleasure in presenting their Twentieth Annual Report and Audited Annual Accounts of the Company for the year ended on 31st March, 2015. REVIEW OF OPERATIONS AND FUTURE OUTLOOK The Company has recorded income from operations of Rs. 5517.08 lacs as compared to Rs. 8366.75 lacs achieved during the corresponding period in previous year representing a fall of 34.06 % over the previous year. After offsetting the expenses the Company has earned net loss (after tax) of Rs. 298.57 lacs during the year as against Profit after tax of Rs. 17.02 lacs earned in the previous year. The year under review has been a difficult one for the company, but the company is evolving various strategies to achieve higher growth in the future and with the new contracts and overall positive outlook in the country, the directors are confident that the company will be able to achieve higher sales and profitability in the times to come. DIVIDEND In order to conserve resources for future growth, your Directors do not recommend any dividend for the year. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure A". DIRECTORS Mr. Navin M. Mehta retires by rotation and being eligible offers himself for re-appointment. The directors recommend his re-appointment. Mrs. Kalpana kulkarni and Mrs. Shruti Sawant were re-designated as Independent Non-Executive Directors w.e.f 27th March, 2015, appointed for a period of 5 years and who shall not be liable to retire by rotation. The category of Mr. Mayur Tendulkar and Mr. Navin Mehta was changed to Professional Director w.e.f 27th March, 2015 respectively. Subsequent to the year end, Mr. Chirag Pramodkumar Sanghavi was appointed as a Independent Non -Executive Director w.e.f25.06.2015. 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. Board Evaluation Pursuant to the provisions of the Companies Act, 2013, 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, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Nomination & Remuneration Policy The Board has re-constituted the Nomination and Remuneration Committee and has framed policy for selection and appointment of Directors, Senior Management and there remuneration. The Nomination & remuneration Policy is stated in the Corporate Governance Report. Meetings During the year seven Board Meetings were convened and held i.e., 30.04.2014, 10.07.2014, 05.08.2014, 20.10.2014, 13.11.2014, 10.02.2015 and 27.03.2015. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. COMPANY SECRETARY Pursuant to the section 203 of the Companies Act, 2013, the Board appointed Mr. Ashwin Panditpautra as Company Secretary of the Company w.e.f 02.02.2015. However subsequent to year end, Mr. Ashwin Panditpautra has resigned w.e.f31.05.2015 DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to provisions of Section 134(5) of the Companies Act, 1956, the Directors would like to state that: 1. in preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. 2. they had selected such accounting standards, 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. 3. they had taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the relevant acts for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. 4. that the accounts are prepared on a going concern basis. 5. they had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. 6. they had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. CODE OF CONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. 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 EMPLOYEES During the year under review, there was no employee employed who was in receipt of remuneration in excess of the limits prescribed under section 197 read with Schedule V of the Companies Act, 2013. Since there are no employees during the year under review, the particulars required to be disclosed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. Your Company has not carried out any manufacturing activities during the year. Hence no separate details of the energy consumption and conservation is provided in the report. However the company has taken all possible steps for conservation of the energy in the company. The company has not adopted any foreign technology during the year. The details of the foreign exchange is provided in the notes to the accounts forming part of the Balance sheet. AUDITORS M/s. P. P. Jayaraman & Co., Chartered Accountants, statutory auditors of the Company hold office until the conclusion of this Annual General Meeting. The Directors recommend their re-appointment as auditors of the Company. AUDITOR'S REPORT The observations made by the auditors in their report are self explanatory when read with the notes to accounts and need no further elaboration. SECRETARIAL AUDIT Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. A.Sekar, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure B" OBSERVATIONS IN THE SECRETARIAL AUDIT REPORT The secretarial audit report obtained by the Company contains certain observations regarding exceptions to required compliances under the Companies Act, 2013 and the Listing agreement entered into with BSE. The explanations of the Directors to the said observations are given below: 1. The website of the Company is being updated to make it fully functional as mandated under Clause 54 of the listing agreement. 2. The Company will ensure that the requirements of Clause 41 with respect to a) intimation of results within 15 minutes of the conclusion of the Board meeting and b) publication of the notice conveying the Board Meeting for consideration of unaudited results will be fully complied in future. 3. The Audit Committee and other Statutory Committees constituted by the Board of Directors are in compliance of requirements of Companies Act, 2013 4. The Company has in the Financial Year 2015 - 2016 formulated the requisite Model Code of Conduct under the newly notified SEBI (Prohibition of Insider Trading) Regulations, 2015. 5. The Company had advertised through various sources for appointment of Whole Time Secretary. However, it did not succeed to finalise a suitable person till 2nd February, 2015. FIXED DEPOSITS The company has not accepted and/or renewed deposits from public during the year within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by the company are given in the notes to the financial statements. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size and the nature of its business with regard to purchase of inventory and fixed assets and the sale of goods and services. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee and of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on arm's length basis and were at prevailing market price. 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. Details of Related Party Transactions are annexed vide Form No. AOC 2 VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a vigil mechanism / Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. 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. RISK MANAGEMENT POLICY Pursuant to section 134(3)(n) of the Companies Act, 2013, the company has constituted a business risk committee. The details of the policy and its terms of reference are set out in the corporate governance report forming part of the Board's report. At present the company has not identified any element of risk which may threaten the existence of the company. CORPORATE COMPLIANCE POLICY Pursuant to section 134(5)(f) of the Companies Act, 2013, the Company has constituted Corporate Compliance Policy, to ensure compliance with the provisions of all applicable laws and to report that such systems were adequate and operating effectively. ANTI - SEXUAL HARRASMENT POLICY The Company has in place an Anti Sexual harassment Policy in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. However, the Company does not have more than 10 number of employees and as such, has not constituted Internal Complaints Committee. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required by Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report, which form an integral part of this Report, is set out as a separate Annexure. CORPORATE GOVERNANCE The requirement to report on clause 49 of the listing agreement is applicable to Companies having paid up capital of Rs. 10 crores. Since the paid up capital of the company is Rs. 5.01 crores, this clause is not applicable. However, Corporate Governance Report is attached as a separate annexure dealing with various governance aspects with emanating from Companies Act, 2013. APPRECIATION Your Directors take the opportunity to thank all staff members for their Co-operation and contribution to the Company's Operation during the year. Your Directors also wish to place on record their appreciation for the support and co-operation by the Banks, Business Associates and Financial Institutions during the period under review. BY ORDER OF THE BOARD FOR SHREE SURGOVIND TRADELINK LIMITED CHAIRMAN Place : Mumbai Dated :7th August, 2015 Registered Office: 103/1, 1st Floor, Angel Complex, Behind Bluestar Complex, Navjeevan, Ahmedabad - 380014 |