| Dear Members.
We are happy to present on behalf of the Board of Directors, the Twenty
Second Annual Report on the business and operation of the Company
together with the Audited Statements of Accounts for the year ended
31st March, 2015.
Financial Highlights:
Particulars For the year For the year
ended 31st ended 31st
March, 2015 March, 2014
Standalone Standalone
Rs. in Crores Rs. in Crores
Income from Operation 66.05 139.23
Other Income 0.32 1.56
Total Income 66.37 140.79
Operational Expenses 65.03 137.98
Exceptional Items - 29.85
Total Expenses 65.03 167.83
Profit before Tax and Depreciation 1.34 (27.04)
Less, Depreciation 0.69 1.06
Profit before Tax 065 (28.10)
Profit after Tax' 0.38 (28.04)
Profit after Tax available for 0.38 (28.04)
appropriation
Balance to the credit of Profit and loss 0.38 (28.04)
Particulars For the year For the year
ended 31st ended 31st
March, 2015 March, 2014
Consolidated Consolidated
Rs. in Crores Rs. in Crores
Income from Operation 81.64 156.54
Other Income 0.32 1.56
Total Income 81.96 158.10
Operational Expenses 78.71 149.74
Exceptional Items - 31.75
Total Expenses 78.71 181.49
Profit before Tax and Depreciation 3.25 (23.39)
Less, Depreciation 7.16 7.24
Profit before Tax (3.91) (30.63)
Profit after Tax' (4.22) (30.33)
Profit after Tax available for (4.22) (30.33)
appropriation
Balance to the credit of Profit and loss (4.22) (30.33)
account
State of Affairs
FY2014-15 was a challenging year for the company, wherein the income
from operations decreased by around 52.56% to reach Rs.66.05 crores as
compared to Rs.139.23 crores during the last financial year. Other
income for the year also decreased to reach Rs..0.32 crores, compared
to Rs.1.6 crores in the previous year. Operational expenses for the
year were Rs..65.03 crores as compared to Rs.137.98 crores in previous
year. Exceptional items were nil as against Rs.29.85 crores in previous
year. As a result, PBDT (Profit before Tax and Depreciation) was
Rs.1.34 crores as against (Rs.27.04) crores for the previous year.
Consequently, PAT (Profit after Tax) was reported at Rs..0.38 crores as
compared to (Rs.28.04) crores in last year. The main reason for
decrease in Income from Operation as compared to previous year because
earlier the company was executing capital intensive products with lower
margin but in current year focus was on projects having more profits
even if it does not have volume.
Transfer to Reserves
The Company has carried balance of Rs.0.38 Crores to the Reserve &
Surplus Account of the Balance Sheet as on 31st March 2015.
Dividends
The Board has decided not to recommend any dividend for the year ended
31st March, 2015. The outstanding balance in the unpaid dividend
account 2009 as on date is Rs.98.175.
Investments
The total investment as on date in 100% subsidiaries Rs.348.62 Crores
and investment in equity shares & mutual funds are Rs. 13.71 Crores.
Public Deposits
Your Company has not accepted any deposits from the public during the
year under review.
Subsidiary Companies
As per the provisions of Section 129 of the Companies Act, 2013 read
with Companies (Accounts) Rules, 2014, a separate statement containing
the salient features of the financial statements of the subsidiary
Companies/Associate Companies/Joint Ventures is prepared in Form AOC-1
and same is enclosed to this Report as Annexure I.
Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in MGT 9 is attached as a part of
this Annual Report as
Annexure-II.
Quality
The Company is certified by ISO 9001:2008 and OHSAS18001: 2007 and the
Company has also got environmental management system certification EMS:
14001:2004. Our target for quality is to maintain and to improve the
quality of products and service, in order to meet consistently customer
requirements and internal needs and to the customers preferred partner.
Our management is committed to the safety of the company's operations
and in particular to the health and safety of employees, customers and
the public in general. The Company is also conscious about the
environment impact out of the operations of the company and has got
itself audited and certified under EMS as well.
SEBI Regulation & Listing Fees
The shares of the company are listed at Bombay Stock Exchange (BSE) and
National Stock Exchange of India (NSE) and the GDRs are listed at
Luxembourg Stock Exchange. The annual listing fees for the year under
review have been paid to Bombay Stock Exchange Limited (BSE) and
National Stock Exchange of India Limited (NSE).
Corporate Governance
Your company believes Corporate Governance is at the core of
stakeholder's satisfaction. Adequate steps have taken to adhere to all
the stipulations laid down in Clause 49 of the Listing Agreement. A
report on Corporate Governance is attached elsewhere in this Annual
Report along with the Certificate of CS. Sukesh Saini, Practicing
Company Secretary on the compliance thereof.
Board of Directors
The Board of Directors comprises of 6 directors. Out of which one is
executive, two are non-executive rotational directors, two are
Independent Directors and one is Additional (Independent) Director. Out
of two executive Directors, Mrs. Sumati Sharma is retiring by rotation
and has expressed her willingness to be reappointed as director. The
Board has appointed Ms. Nitika as Additional Director on 15th May,
2015. Her appointment will come to an end at the commencement of
ensuing 22nd Annual General Meeting if it is not regularized by the
shareholders at their meeting. Ms. Nitika has declared that she is not
disqualified to be appointed as director of the company. The Board
recommends her regularization as Independent Director not liable to
retire by rotation.
Policy on Directors' Appointment & Remuneration
The policy of the Company for Appointment & Remuneration of Directors,
Key Managerial Personnel & Senior Employees including the criteria for
determining qualifications, positive attributes and independence of a
director and recommending to the Board relating to the remuneration for
the directors, key managerial personnel and other employees as provided
under Section 178(3) of the Companies Act, 2013, adopted by the Board
is enclosed as Annexure III to this Annual Report.
Declaration from Independent Directors on Annual Basis
The Company has received necessary declaration from each Independent
Director of the Company under Section 149(7) of the Companies Act, 2013
that the Independent Directors of the Company meet with the criteria of
their Independence laid down in Section 149(6).
Statement of particulars of appointment and remuneration of managerial
personnel:
The Statement of particulars of Appointment and Remuneration of
Managerial personnel as per Rule 5 of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is enclosed as
Annexure -IV to this Annual Report.
Particulars of Employees
As per Rule 5(2) of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the company had no employee who:-
(i) if employed throughout the financial year, was in receipt of
remuneration for that year which, in the aggregate, was not less than
sixty lakh rupees; (ii) if employed for a part of the financial year,
was in receipt of remuneration for any part of that year, at a rate
which, in the aggregate, was not less than five lakh rupees per month;
(iii) if employed throughout the financial year or part thereof, was in
receipt of remuneration in that year which, in the aggregate, or as the
case may be, at a rate which, in the aggregate, is in excess of that
drawn by the managing director or whole-time director or manager and
holds by himself or along with his spouse and dependent children, not
less than two percent of the equity shares of the company.
Board Meetings:
The Board of Directors met eight (8) times during this financial year,
the details of which are given on Corporate Governance Report that forms
the part of this Annual Report. The intervening gap between any two
meetings was within the prescribed time by the Companies Act, 2013.
Reappointment of Auditors
The Auditors of the Company M/s Sumanjeet Agarwal & Co., Chartered
Accountants are retiring at the ensuing Annual General Meeting. They
were appointed as Auditors of the Company at the Annual General Meeting
held on 29th September, 2014 for one year thereby completing their
first consecutive term of 5 years. As per the requirement of Section
139 reads with Rule 6 and all other applicable provisions of Companies
Act, 2013, M/s Sumanjeet Agarwal & Co., Chartered Accountants are
eligible to be appointed as Auditors of the Company for next 5 years.
The Auditors of the Company M/s Sumanjeet Agarwal & Co., Chartered
Accountants being eligible, have offered themselves for reappointment
for their second consecutive term of five years (subject to
ratification of their appointment at every AGM and fulfillment of all
other prescribed conditions). M/s Sumanjeet Agarwal & Co., Chartered
Accountants has also declared that they are not disqualified to be
appointed as Auditors of the Company for next term of five years. The
Board recommends re-appointment of M/s Sumanjeet Agarwal & Co.,
Chartered Accountants as Statutory Auditors of the Company.
Explanation to Auditor's qualification
The Auditors has observed while reporting under CARO that the company
has not deposited some statutory dues during the FY 2014-15. Since the
Company suffered huge losses during last Financial Year i.e FY 2013-14,
there was some liquidity issues, due to which some statutory dues have
not been paid. The Company has discharged full service tax liability
and substantial amount of other taxes including TDS have been paid. The
Directors are taking effective steps so that the rest of the
liabilities are paid at the earliest.
Secretarial Audit:
Secretarial Audit Report as provided by M/s Sukesh & Co., Practicing
Company Secretary is annexed to this Report as annexure V.
Particulars regarding conservation of energy, technology absorption,
and foreign exchange earnings and outgoings pursuant to provisions of
section 134(3)(m) of the companies act, 2013 read with The Companies
(Accounts) Rules, 2014.
(A) Conservation of energy:
(i) Steps taken or impact on conservation of energy: Not applicable
since the company is not engaged in the manufacturing activities.
Though the Company does not have energy intensive operations, it
continues to adopt energy conservation measures. Adequate measures have
been taken to conserve energy by using energy-efficient computers and
equipment with the latest technologies, which would help in
conservation of energy. As the cost of energy consumed by the Company
forms a very small portion of the total costs, the financial impact of
these measures is not material
(ii) Steps taken by the company for utilizing alternate sources of
energy including waste generated: N.A
(iii) Capital investment on energy conservation equipment: N.A
(B) Technology absorption:
1. Efforts, in brief, made towards technology absorption: NIL
2. Benefits derived as a result of the above efforts, e.g., product
improvement, cost reduction, product development, imports substitution,
etc: NIL
3. In case of imported technology (imported during the last 3 years
reckoned from the beginning of the financial year), following
information may be furnished:
(a) Details of technology imported: NIL
(b) Year of import: NIL
(c) Whether the technology been fully absorbed: NIL
(d) If not fully absorbed, areas where absorption has not taken place,
and the reasons therefore: NIL
4. Expenditure incurred on Research and Development: NIL
(C) Foreign exchange earnings and Outgo
There is Foreign exchange earnings of Rs.7.53 crores and the foreign
exchange expenditure of Rs.0.67 Crores during the year.
Composition of Audit Committee
The Audit Committee was constituted by our directors vide their Board
Meeting held on April 14, 2007 as per the requirements of Section 292A
of the Companies Act, 1956 and is re-constituted as per the
requirements under the Listing Agreement from time to time by our
Directors at their Board meeting. The Audit Committee consists of:
Mr. Rajiv Kumar Chairman (Independent Director)
Mr. Amar Sarin Member (Independent Director)
Mrs. Sumati Sharma Member (Non -Executive Director)
Two Third members of the audit committee are independent, whereas all
three members are non-executive directors and are "financially
literate". Rajiv Kumar is a qualified Chartered Accountant and can be
considered as having accounting or related financial management
expertise.
Composition of Stakeholder Relationship Committee
The Stakeholder Relationship Committee was re-constituted by our
Directors vide their Board Meeting held on 30th May, 2014. This
Committee is responsible for the smooth functioning of the share
transfer process as well as redressal of shareholder grievances. The
Stakeholder Relationship Committee consists of:
1 Mrs. Sumati Sharma Chairman (Non -Executive Director)
2 Mr. Inder Sharma Member (Managing Director)
Nomination & Remuneration Committee
The Nomination & Remuneration Committee of the Board was constituted on
30th May, 2014, as per the Companies Act, 2013 and Listing Agreement
thereby reconstituting Remuneration Committee as framed earlier.
The composition of Remuneration committee as on 31.03.2015 consists of:
1. Mr. Rajiv Kumar Chairman (Independent Director)
2. Mr. Amar Sarin Member (Independent Director)
3. Mrs. Sumati Sharma Member (Non- Executive Director)
Vigil Mechanism
The Board of Directors have adopted Whistle Blower Policy. The Whistle
Blower Policy aims for conducting the affairs in a fair and transparent
manner by adopting highest standards of professionalism, honesty,
integrity and ethical behavior. All permanent employees of the Company
are covered under the Whistle Blower Policy. A mechanism has been
established for employees to report concerns about unethical behavior,
actual or suspected fraud or violation of Code of Conduct and Ethics.
It also provides for adequate safeguards against the victimization of
employees who avail of the mechanism and allows direct access to the
Chairperson of the audit committee in exceptional cases.
Director's Responsibility Statement
The Directors Confirm as required under 134 (5) of the Companies Act,
2013:
* in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
* 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 had taken proper and sufficient care for 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; and
* the directors had laid down internal financial controls to be followed
by the company and that such internal financial controls are adequate
and were operating effectively.
* the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively
Formal annual evaluation of Board:
Evaluation of all Board members is done on an annual basis. The
evaluation is done by the Board, Nomination and Remuneration Committee
and Independent Directors with specific focus on the performance and
effective functioning of the Board and Individual Directors.
A) Criteria for evaluation of Board of Directors as a whole
i. The frequency of meetings;
ii. The length of meetings;
iii. The administration of meeting;
iv. The number of committees and their roles;
v. The flow of information to board members and between board members;
vi. The quality and quantity of information; and
vii. The Disclosure of Information to the stakeholders.
B) Criteria for evaluation of the Individual Directors
i. Ability to contribute and monitor corporate governance practices;
ii. Ability to contribute by introducing best practices to address top
management issues;
iii. Participation in long term strategic planning;
iv. Commitment to the fulfillment of director obligations and fiduciary
responsibilities;
v. Guiding strategy;
vi. Monitoring management performance and development;
vii. Statutory compliance & corporate governance;
viii. Attendance and contribution at Board /Committee meetings;
ix. Time spent by each of the member; and
x. Core competencies.
Particulars of loans, guarantees or investments:
The Company have duly complied with the provision of Section 186 of the
Companies Act, 2013 and it has taken
SECURED LOANS: NIL
UNSECURED LOANS: NIL
CURRENT/NON-CURRENT INVESTMENTS: NIL
GUARANTEES: NIL
SECURITIES EXTENDED: NIL
Risk Management Policy:
Risk Management Policy is framed based on Listing Agreement entered by
the Company with the Stock Exchange and under the provisions of the
Companies Act, 2013 and rules made there under. The objective of Risk
Management is to create and protect shareholder value by minimizing
threats or losses, and identifying and maximizing opportunities.
Corporate Social Responsibility Policy:
In pursuant to the provisions of section 135 and schedule VII of the
Companies Act, 2013, CSR Committee of the Board of Directors was formed
to recommend (a) the policy on Corporate Social Responsibility (CSR)
and (b) implementation of the CSR Projects or Programs to be undertaken
by the Company as per CSR Policy for consideration and approval by the
Board of Directors. The Corporate Social Responsibility (CSR) Committee
was constituted by our Directors vide their Board Meeting held on 30th
May, 2014 as per Section 135 of the Companies Act and rules made
there-under. The CSR Committee consists of:
1. Mr. Inder Sharma - Chairman
2. Mrs. Sumati Sharma - Member
3. Mr. Rajiv Kumar - Member
REASON FOR NOT SPENDING: The Company falls under the purview of CSR as
its net worth was exceeding Rs. 500 crore in the Financial Year
2012-13, but the Company's profits were not enough to carry out the CSR
activities. Since the last three financial years, the Financial Results
of the company has recorded continuous financial strain thereby making
negative profits. Moreover during the financial year 2013, the company
has suffered exceptional loss of Rs. 29.85 crores. This resulted into
negative profit. Due to this, the company has not carried any CSR
activities but it will make all possible efforts to work hard and make
it possible to contribute itself to social cause.
Related Party Transactions:
During the Financial Year 2014-15, there are no contracts/arrangements
entered into by the company with related parties referred to in
sub-section (1) of section 188 of the Companies Act, 2013.
Management's Discussion & Analysis Report
The Management's Discussion & Analysis on the performance, industry
trends and other material changes with respect to the Company and its
subsidiaries, wherever applicable are attached herewith as Annexure-VI.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank the customers, suppliers,
bankers, business partners/associates, financial institutions and
Central and State Governments for their consistent support and
encouragement to the company. We also appreciate all employees of the
company for their hard work and commitment. Their dedication and
competence has ensured that the company continues to grow and achieve
its objectives.
Place: New Delhi BY THE ORDER OF THE BOARD
Date: 28th August, 2015
Chairman & Managing Director
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