DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 22nd Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2015. Year in retrospect and overview (i) Financial Performance During the year under review, the total income of the Company was Rs. 375.64 Lac as against Rs. 355.24 Lac in previous year ended March 31, 2014. The Company suffered a loss of Rs. 186.20 Lac as against loss of Rs. 203.22 Lac in the previous year. Loss during the year is mainly due to lower income and excess depreciation of Rs. 274.40 Lac (Previous Year 251.85 Lac). The Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is given separately and forms part of this Report. Other Material Changes Save as aforesaid in this Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company i.e. March 31, 2015 and the date of this Report. Meetings of the Board 9 (Nine) meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance which forms part of this Annual Report. The intervening gap between two Board Meetings was within the period prescribed under Companies Act, 2013. Particulars of Loans, Guarantees or Investments Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. Particulars of Contracts or Arrangements made with Related Parties In line with the requirements of the Companies Act, 2013 and Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.ettgroup.in/investor section/codes & policies. The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have potential conflict with interest of the Company at large. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) in Form AOC-2 do not form part of the report. Dividend In view of losses, the Directors do not recommend any dividend for the year ended March 31, 2015. Deposits The Company has neither accepted nor renewed any deposits during the year under review. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The following information is given in accordance with the provisions of sub-section 3(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014: (a) Conservation of Energy & Technology Absorption: Since the Company is not engaged in any manufacturing activity, issues relating to conservation of energy and technology absorption are not quite relevant to its functioning. (b) Export Activities: There was no export activity in the Company during the year under review. (c) Foreign Exchange Earnings and Outgo: The foreign exchange earnings and expenditure of the Company during the year under review were Nil (Previous Year: Nil) and Rs. 19,101/- (Previous Year: Rs. 17,112/-) respectively on account of membership fees of US Green Building Council. Remuneration Policy The Nomination and Remuneration Committee of the Board has formulated 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. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. The disclosure pertaining to the managerial remuneration is mentioned in the Corporate Governance Report. Particulars of Employees The particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure 1 to the Board's report. During the year under review, no employee of the Company was in receipt of remuneration as specified under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence no particulars are required to be disclosed in this report. Annual Evaluation of Board Performance and Performance of its Committees and of Directors 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, performance of the Directors as well as the evaluation of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the performance evaluation process for the Board, its Committees and Directors. The detailed manner in which formal annual evaluation has been made by the Board has been mentioned in the Corporate Governance Report which is part of this report. Internal Financial Controls The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. Directors and Key Managerial Personnel The Board approved the appointment of Ms. Puniti Sharma, Company Secretary of the Company as Chief Financial Officer of the Company as well, with effect from January 1, 2015. During the year under review, the Board accorded its approval for re-appointment of Mr. Sandeep Sethi as Managing Director of the Company and Mr. Gurupreet Sangla as Joint Managing Director of the Company for a further term of five years with effect from February 21, 2015, with no variation in terms and conditions of appointment and remuneration. Your Directors recommend their re-appointment in the larger interest of the Company. Mrs. Roopal Sharma was appointed as an Additional Director in the capacity of Non-Executive Independent Director of the Company on March 30, 2015. The Company has received in writing along with the requisite deposit under section 160 of the Companies Act, 2013 proposing her candidature for the effective of director of the company in the ensuing AGM. Post closure of financial year under review, Mr. Rajvir Sharma resigned as an Independent Director from the Board of Directors with effect from May 30, 2015. The same was accepted by the Board in its meeting held on May 30, 2015. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Director of the Company. As per the Articles of Association of the Company and the relevant provisions of the Companies Act, 2013, Mr. Gurupreet Sangla will retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Keeping in view his expertise, experience and knowledge, the Board considers it desirable to continue to avail his services and recommends his re-appointment. Declaration by Independent Directors All the Independent Directors have given declarations that they meet all the requirements specified under Section 149(6) of the Companies Act, 2013 and Clause 49 of Listing Agreement with the Stock Exchanges, for holding the position of Independent Director. Familiarization program of Independent Directors The details of familiarization programme for Directors are available on Company's website at www.ettgroup.in/investor section/ Codes & Policies. Separate Independent Directors' Meeting During the financial year ended March 31, 2015, the Independent Directors met once on March 10, 2015 without the presence of Executive Directors or Management representatives and discussed the following: a) the performance of non-Independent Directors and the Board as a whole; b) the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Subsidiaries Your Company has the following subsidiaries as on March 31, 2015: 1. M/s Auxin Engineering Ltd. 2. M/s Valley Computech Ltd.* 3. M/s GST Hotel & Resorts Pvt. Ltd.** 4. M/s Ambience Buildtech Pvt. Ltd.** 5. M/s York Calltech Pvt. Ltd.** 6. M/s Uphill Farms Pvt. Ltd.# 7. M/s Opulent Farms Pvt. Ltd.@ * Subsidiary of M/s Auxin Engineering Ltd. ** Subsidiary of M/s Valley Computech Ltd. # M/s York Calltech Pvt. Ltd. acquired 100% equity shareholding in M/s Uphill Farms Pvt. Ltd. w.e.f. October 1, 2014. Accordingly, M/s Uphill Farms Pvt. Ltd. became step-down subsidiary of the Company during the current financial year. @ M/s Uphill Farms Pvt. Ltd. acquired 100% equity shareholding in M/s Opulent Farms Pvt. Ltd. w.e.f. March 31, 2015. Accordingly, M/s Opulent Farms Pvt. Ltd. became step-down subsidiary of the Company during the current financial year. During the year, the Board of Directors ('the Board') reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all of its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 2 to the Board's report. The statement also provides the details of performance, financial positions of each of the subsidiaries. In terms of the provisions of Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on our website www.ettgroup.in These documents will also be available for inspection during business hours at our registered office. Statutory Auditors M/s L.D. Saraogi & Co., Chartered Accountants (Firm Regn. No. 005524N), and M/s VSD & Associates, Chartered Accountants (Firm Regn. No. 008726N), joint Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above 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. The Board of Directors upon the recommendation of the Audit Committee, proposes the re-appointment of M/s L.D. Saraogi & Co., Chartered Accountants and M/s VSD & Associates, Chartered Accountants as joint statutory auditors of the Company until the conclusion of next Annual General Meeting. Your Directors recommend their re-appointment. Auditors' Report The observation of the Auditors along with comments of the Board of Directors thereon is as follows: 1. The Auditors have made an observation regarding delay in payment of statutory dues as referred to in point (vii)(b) of the Annexure to the Independent Auditors' Report. In the opinion of the Board, the comment of the Auditors read with the Note no. 34 of Notes to Financial Statements is self explanatory and do not warrant any specific clarification. Accounts along with notes and Independent Auditors' Report (except as aforesaid) are self explanatory and do not require further explanation and clarification. Secretarial Auditor M/s Naresh Verma & Associates, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for the financial year 2014-15 forms part of this report as Annexure 3. The Board has appointed M/s Naresh Verma & Associates, Practicing Company Secretaries, as secretarial auditor of the Company for the financial year 2015-16. Secretarial Auditor Report In connection with the auditors observation in the secretarial audit report, it is clarified that the delay occurred inadvertently in filing forms with the Registrar of Companies in respect of reappointment of Mr. Sandeep Sethi and Mr. Gurupreet Sangla as Managing Director and Joint Managing Director respectively. Corporate Governance Report The Corporate Governance Report, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of this Report. Your Company has in place all the statutory Committees required under the law. Details of Board Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report. During the year, your Company has adopted new policies such as Policy on Related Party Transactions, Policy on Material Subsidiaries and Vigil Mechanism in line with new governance requirements. These policies are available on the website of the Company at www.ettgroup.in/investor section/Codes & Policies. The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure 4 to this report. The requisite Compliance Certificate issued by M/s Naresh Verma & Associates, Company Secretaries, in line with Clause 49 of the Listing Agreement is annexed and forms part of the Corporate Governance Report. Corporate Social Responsibility Pursuant to Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has constituted the Corporate Social Responsibility (CSR) Committee under the Chairmanship of Mr. Harvinder Singh. The other Members of the CSR Committee are Mr. Aman Batra, Director and Mr. Sanjay Arora, Director. A detailed CSR Policy has been framed which is placed on the website of the Company. The CSR activity(ies) are in accordance with Schedule VII of the Companies Act, 2013 and the Company's CSR Policy. Your Company has not spend any amount on Corporate Social Responsibility activities in terms of Section 135 of the Companies Act, 2013 since the average net profits for last 3 years derived is negative. Report on CSR activities as required under Section 135 of the Companies Act, 2013 and the Rules framed thereunder is given as Annexure 5 of the Directors Report. Audit Committee Pursuant to the provisions of Section 177 of the Companies Act, 2013, your Company has an Audit Committee of the Board of Directors which comprises of the following members: 1. Mr. Harjit Singh Kalra, Director - Chairman 2. Mr. Ratinder Pal Singh Bhatia, Director - Member 3. Mr. Sandeep Sethi, Managing Director - Member 4. Mrs. Roopal Sharma, Director - Member *With effect from May 30, 2015, Mr. Rajvir Sharma has ceased to be a Director and Mrs. Roopal Sharma was appointed as a member in the Committee. During the year, the Audit Committee Meetings were conducted as per the provisions of listing agreement with the Stock Exchanges. The details about the functioning of the committee are being enumerated in the Corporate Governance Report Section which is part of the Annual Report for the year ending March 31, 2015. Directors' Responsibility Statement As required under clause (c) of sub-section (5) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby states and confirms that:- (a) in the preparation of the Annual Accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; (b) the Company 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 as at March 31, 2015 and of the loss of the Company for the year ended on that date; (c) the 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) the annual accounts are prepared on a going concern basis; (e) the internal financial controls are laid to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (f) the proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Vigil Mechanism/ Whistle Blower Policy The Company has adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the Directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct. The Company has provided dedicated e-mail id secretarial@ettgroup.in for reporting such concerns to Vigilance Officer or to the Chairman of the Audit Committee in exceptional cases. Alternatively, employees can also send written communications to the Company. The employees are encouraged to voice their concerns by way of whistle blowing and all the employees have been given access to the Audit Committee. The Whistle Blower Policy is available on the website of the Company at www.ettgroup.in/investor section/codes & policies. Listing The equity shares of your Company are listed on BSE Ltd., Delhi and Ahmedabad Stock Exchanges. The Annual Listing fees for the financial year 2015-16 have been paid to the above Stock Exchanges except Delhi Stock Exchange Ltd. Securities and Exchange Board of India vide its order dated November 19, 2014 has directed to withdraw the recognition granted to Delhi Stock Exchange Ltd. The Company has been informally advised by the said Exchange that the Listing Fees is not required to be paid. Whereas the Company has not received any information regarding the exit of the said Exchange and the Company has been continuing to send the listing compliances with the Exchange till further instruction regarding its exit. The Ludhiana Stock Exchange Ltd. (LSE) vide its letter dated January 23, 2015 has informed the Company that Securities and Exchange Board of India (SEBI) has passed the exit order in respect of LSE on December 30, 2014 under SEBI Circular no. CIR/MRD/DSA/14/2012 dated May 30, 2012. Hence LSE is no longer performing any Stock Exchange related activities post December 30, 2014. Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place the Policy on Prevention of Sexual Harassment at Workplace in line with the requirement of the Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaint(s) received from any employee during the financial year 2014-2015. Risk Management Policy In today's economic environment, Risk Management is very important part of the business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your Company recognizes risk management as an integral component of good corporate governance. The Company has developed and adopted a risk management policy. Risks are assessed encompasses, Operational risks, Internal Control risks, External risks, information technology risks etc. Significant and material orders passed by the Regulators or Courts or Tribunals During the year, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. Acknowledgement The Board acknowledges with gratitude the co-operation and assistance provided to your Company by its bankers and government as well as non-governmental agencies. The Board wishes to place on record its appreciation to the committed services and contributions made by employees of the Company. Your Directors also thank the tenants, vendors and other business associates for their continued support. Your Directors are thankful to the shareholders for their continued patronage and are confident that with their continued contributions and support, the Company will achieve its objectives and emerge stronger in the coming years. For and on behalf of Board of Directors Sd/- Sandeep Sethi Managing Director DIN: 00053915 Sd/- Gurupreet Sangla Jt. Managing Director DIN: 00036988 Place : New Delhi Date : August 28, 2015 |