DIRECTORS REPORT Dear Shareholders, Your Directors have pleasure in presenting 31st Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015. DIVIDEND Your Directors have decided to plough back the profits to the operational fund requirement of the Company. Hence, no dividend has been recommended for the year under review. AMOUNT TRANSFERRED TO RESERVE During the year, the Company has not transferred any amount in General Reserve. OPERATIONS During the year under review, Sales and Other Income of the Company stood at Rs. 9,996.29 Lacs showing decreasing trend over the previous year but Profit before tax has increased and stood at Rs. 102.53 Lacs as compared to previous year Loss Rs. 1081.39 Lacs and Net Profit also increased and stood at Rs. 27.14 Lacs as compared to previous year net loss Rs. 1270.04 Lacs. Your Directors are hopeful for better performance in the coming years. DEPOSITS The Company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. SHARE CAPITAL During the year under review, the Company has not raised any paid up share capital. The Paid up Equity Share Capital as at 31st March 2015 stood at Rs. 6,96,88,500/-. The Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity shares. As on 31st March 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. INSURANCE All properties and insurable interests of the Company including Building and Plant & Machinery have been adequately insured. HUMAN RESOURCE & INDUSTRIAL RELATIONS Industrial relations were harmonious throughout the year. The Board wishes to place on record their sincere appreciation to the co-operation extended by all the employees in maintaining cordial relations. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, a Management Discussion and Analysis Report, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. DIRECTORS' RESPONSIBILITIES STATEMENT To the best of their knowledge and belief, your Directors make the following statements in terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013: i) That in the preparation of the annual accounts for financial year ended 31st March, 2015; the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii) That the Directors have 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 financial year and of the profit and loss of the Company for that period; iii) That the Directors have 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; iv) That the Directors have prepared the annual accounts on a going concern basis; v) That the Directors have laid down internal financial controls, which are adequate and are operating effectively; vi) That 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. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Sartajsing Chhabra, Director of the Company retires by rotation in accordance with the provisions of the Articles of Association of the Company and being eligible offer himself for re-appointment. Mr. Virendra Kumar Gupta has been ceased from the Directorship of the Company due to sad demise on 22.05.2014. The Board appreciates the services rendered by him during his association with your Company. Mrs. Deepika Arora was appointed as an Additional Director by the Board of the Company with effect from 16th March, 2015 and holds office upto the date of this Annual General Meeting. Your Company has received a notice in writing proposing her candidature for the office of Director of the Company liable to retire by rotation. During the year under review, the members approved the appointments of Mr. Udesh Dassani and Mr. Vijay Rathi, as Independent Directors who are not liable to retire by rotation and Mr. Yogender Mohan Sharma as a Whole-time Director of the Company. The Board designated Mr. Amit Jain, Company Secretary as Key Managerial Personnel of the Company and appointed Mr. Vijay Agrawal as Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. 01.07.2014 under Section 203 of the Companies Act, 2013 and rules made thereunder. Mr. Vijay Agrawal has resigned from the post of CFO w.e.f. 01.03.2015 due to his pre-occupations and Mr. Kailash Kumar Agarwal has been appointed by the Board as Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. 11.04.2015. During the year, declarations received from the Directors of the Company pursuant to Section 164 of the Companies Act, 2013. Board appraised the same and found that none of the directors is disqualified holding office as director. Details of the proposal for appointment/ re-appointment of Directors are mentioned in the Notice of the Annual General Meeting. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES The Company does not have any subsidiary or joint venture or associate Company during the year. NUMBER OF MEETINGS OF THE BOARD The Board met 10 times during the financial year. The details of which are given in the Corporate Governance Report that forms part of this annual report. The intervening gap between any two Meetings was within the period prescribed under the Companies Act, 2013. CODE OF CONDUCT The Company has laid down a code of conduct for all Board members and Senior Management and Independent Directors of the Company. All the Board members including Independent Directors and Senior Management Personnel have affirmed compliance with the code of conduct. Declaration on adherence to the code of conduct is forming part of the Corporate Governance Report. DECLARATION BY INDEPENDENT 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. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process. None of Independent Directors are due for re-appointment. FAMILIARIZATION PROGRAMME Details of the programmes for familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. are available on the website of the Company at the link: <http://www.sarthakindustries.com/images/Familiarisation%20Programme-SIL.pdf> INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements and during the year, no reportable material weaknesses in the design or operation were observed. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Your Company has not given any loans or guarantees or made investment beyond the limits mentioned under the provisions of Section 186 of the Companies Act, 2013. RELATED PARTY TRANSACTIONS 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 the business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.sarthakindustries.com/images/Related> Party Policy.pdf MATERIAL CHANGES AND COMMITMENT BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are given in the "Annexure A" forming part of this report. PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES None of the employee has received remuneration exceeding the limit as stated in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, are given in the "Annexure B" forming part of this report. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The policy 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 C" forming part of this report. AUDIT COMMITTEE The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. All the recommendations made by the Audit Committee were accepted by the Board. VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has a Vigil Mechanism which also incorporates a Whistle Blower Policy in line with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement to report genuine concerns or grievances. The Vigil Mechanism/ Whistle Blower Policy may be accessed on the Company's website i.e. www.sarthakindustries.com . RISK MANAGEMENT Pursuant to Section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the Listing Agreement, the Board of the Company has formed a Risk Management Committee to frame, implement and monitor the Risk Management Plan for the Company. The details of risk have been covered in the Management Discussion and Analysis Report forming part of the Boards report. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable to the Company. AUDITORS & AUDITORS REPORT The Auditors M/s. Ashok Khasgiwala & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and are eligible for re-appointment. The Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 and they are not disqualified for such appointment. The notes referred to by the Auditors in their Report are self explanatory and hence do not require any explanation. Further, there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-section (12) of Section 143 of Companies Act, 2013. COST AUDIT The Board has appointed M/s A. Goyal & Co., Cost Accountants, (Membership No. 13212) as Cost Auditors of the Company for conducting the audit of cost records maintained by the Company for the financial year 2014-15. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s Ajit Jain & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year 2014-15 is annexed herewith as "Annexure D" forming part of this report. There are no adverse comments, qualifications or reservations or adverse remarks in the Secretarial Audit Report. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulator or courts or tribunals impacting the going concern status of the Company and future operations. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure E" forming part of this report. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place an anti 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 the policy. There was no complaint received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal. ACKNOWLEDGEMENTS The Directors wish to convey their appreciation to all the employees of the Company for their enormous personal efforts as well as their collective contribution during the year. The Directors would also like to thank the shareholders, customers, suppliers, bankers, financial institutions and all other business associates for their continuous support given by them to the Company and their confidence in the management. For and on behalf of the Board of Directors YOGENDER MOHAN SHARMA Whole-time Director DIN: 03644480 SARTAJSING CHHABRA Director DIN: 05342507 Place: Indore Dated: 14th August, 2015 |