DIRECTORS' REPORT TO THE MEMBERS OF ESSAR SECURITIES LIMITED, Your Directors have pleasure in presenting the Tenth Annual Report and Audited Accounts of the Company for the financial year ended March 31, 2015. PERFORMANCE: During the period under review your company has made a profit ofRs. 9.26 Lacs before making provision for Income tax amounting to Rs. 2.87 Lacs for the current year, thus a net credit balance of Rs. 6.39 Lacs has been transferred to Profit & Loss A/c for the current period and thus an amount of Rs. 3412.87 Lacs has been carried over. There were no changes in the nature of business of the Company during the year under review. RESERVES: No amount is transferred to reserves during the financial year under review. DIVIDEND: Since the company has not earned sufficient profits during the financial year ended March 31, 2015, hence no dividend was declared and paid by the company. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT: 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 on the date of this report. TRANSFER OF AMOUNT TO INVESTOR EDUCTION AND PROTECTION FUND: Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). DIRECTORS & KMPs: (a) Retirement by rotation: In accordance with the provisions of the Companies Act, 2013, Mr. Neeraj Gupta, Director retires by rotation and being eligible has offered himself for re-appointment. Mr. N. B. Vyas, Mr. S. V. Venkatesan and Mr. Sujay Sheth continues to be directors of your Company. (b) Appointment: The Board of Directors has co-opted Ms. Suparna Singh as an Additional Director of the Company on 31st March, 2015 and holds office upto the date of ensuing Annual General Meeting. The Company has received a notice alongwith requisite deposit from a member of the Company proposing her candidature for the office of Director of the Company. Your Board recommends for her appointment. (c) Cessation: Mr. Dhanpat Singh Nahata resigned from the directorship of the Company w.e.f. April 10, 2015. The Board wishes to place on record its sincere appreciation for the valuable services rendered by Mr. Nahata during his tenure as a Director of the Company. (d) Declaration from Independent Directors: The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement entered with the Stock Exchange. (e) Annual Performance and 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 Audit and Nomination & Remuneration Committees. The Board has devised questionnaire to evaluate the performances of each of the nonexecutive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the Directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas: i. Attendance of Board Meetings and Board Committee Meetings; ii. Quality of contribution to Board deliberations; iii. Strategic perspectives or inputs regarding future growth of Company and its performance; iv. Providing perspectives and feedback going beyond information provided by the management. The details of the programmes for familiarization of 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 and related matters are put up on the website of the Company at the link www.essar.com (f) Key Managerial Personnel: The key Managerial Personnel of the Company presently are Mr. Ashish Kumar Vyas, Company Secretary and Manager and Mr. Girish Vyas, Chief Financial Officer. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility statement:- (i) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, wherever applicable; (ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 31st March, 2015 and of the profit and loss of the Company for that period; (iii) the directors had taken proper and sufficient care 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; (iv) the directors had prepared the accounts for the financial year ended 31st March, 2015 on a going concern basis; (v) 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; and (vi) the directors has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. IMPLEMENTATION OF RISK POLICY: The Company has framed and adopted a Risk Management Policy. The policy framework enables the Company to identify and evaluate risks and opportunities. This framework seeks to create transparency, minimize adverse impact on business objective and enhance the Company's competitive advantage. The risk framework defines the risk management approach across the Company at various levels. CORPORATE SOCIAL RESPONSIBILITY: The relevant provisions are not applicable to the Company. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. PARTICULAR OF RELATED PARTY CONTRACTS AND OTHER ARRANGEMENTS UNDER SECTION 188 OF THE COMPANIES ACT, 2013: All contracts / arrangements / transactions entered by the Company during the financial year with related parties were on arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. Details of material related party transactions are given in the prescribed Form AOC - 2 and is appended to this report as Annexure A. The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the website of the Company. The web link of the same is as under www.essar.com EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: There was no qualifications, reservations or adverse remarks made by the Statutory Auditors. Pursuant to Section 203(1) of the Companies Act, 2013, Company had appointed CFO, CS and Manager. The Company Secretary of the Company is also acting as Managerof the Company. COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES: The Company has adopted a Policy on Remuneration & Criteria for evaluation of performance of Independent Directors. The Policy adopted by the Company covers the terms of appointment such as qualifications, positive attributes and independence of a director, remuneration for the directors, key managerial personnel and other employees as per the applicable provisions of the Companies Act, 2013, and the listing agreement. The Remuneration Policy is appended to this report as Annexure B. NOMINATION & REMUNERATION COMMITTEE: The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company. The information pertains to Nomination and Remuneration Committee is furnished in the Corporate Governance Report, which forms part of this report. DEPOSITS: The Company has neither invited nor accepted any deposits from the public during the year. There are no unclaimed deposit(s) lying with the Company as on March 31, 2015. AUDITORS: Nisar & Kumar, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The Company has received a letter from them to the effect that they are willing to continue as Statutory Auditors and if re-appointed, their re-appointment would be within limits prescribed under Section 139 of the Companies Act, 2013 and they are not disqualified from being appointed as Auditors. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the rules thereunder, it is proposed to appoint Nisar & Kumar, Chartered Accountants (Registration number 127820W) as Statutory Auditors of the Company from the conclusion of the 10th Annual General Meeting up to the conclusion of the Twelfth (12th) Annual General Meeting to be held in 2017 (subject to ratification of their appointment at the Annual General Meeting to be held in 2016) INTERAL AUDIT: The Company has appointed Mr. Amin Narsinh, Chartered Accountants (membership no. 111654), as its Internal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliances with operating systems, accounting procedures and policies at all locations of the Company and reports the same on quarterly basis to the Audit Committee. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Considering the nature of activities of your Company, the information required under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts), Rules 2014 relating to Energy Conservation, Technology Absorption is not applicable. The Company had no foreign exchange earnings or outgo during the period under review. MANAGERIAL REMUNERATION AND OTHER DETAILS: The information required under section 197(12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure C to this report. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically and used efficiently and adequately protected. HOLDING COMPANY: Essar Capital Limited continues to be holding company of your Company. Essar Capital Holdings (India) Limited continues to be the ultimate holding company. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES: The Company does not have any Subsidiary, Joint venture and Associate Company. MEETINGS OF THE BOARD: The Board met five times during the year, the details of which are given in the Corporate Governance Report. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013. AUDIT COMMITTEE: The Audit Committee consists of the following members:- A. Mr. S. V. Venkatesan B. Mr. N. B. Vyas C. Mr. Sujay Sheth D. Mr. Neeraj Gupta The above composition of the Audit Committee consists of independent Directors viz., Mr. S. V. Venkatesan, Mr. N. B. Vyas and Mr. Sujay Sheth, who form the majority. The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervise the Company's internal controls and financial reporting process. VIGIL MECHANISM: The Company has established a vigil mechanism to deal with instances of fraud and mismanagement, if any. The mechanism also provides adequate safeguards against victimization of employees and Directors who express their concerns and also provides direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees of the Company in the exceptional cases. We confirm that during the financial year 2014-15, no employee or director was denied access to the Audit Committee. EXTRACT OF ANNUAL RETURN: The extracts of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure D and is attached to this Report. SECRETARIAL AUDIT REPORT: In terms of Section 204 of the Companies Act, 2013 and Rule made there under, CS Manish Baldeva, (Membership No. FCS 6180) Prop. M/s. M Baldeva Associates, Company Secretaries, have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is attached as Annexure E to this report. The report is self-explanatory and do not call for any further comments. CORPORATE GOVERNANCE REPORT: The Company is committed to maintain the highest standard of Corporate Governance and comply to the Corporate Governance requirements as required under the Listing Agreement entered with the Stock Exchange. The disclosures as required in Clause 49 of the Listing Agreement have been furnished in the Annexure to the Directors' Report under the head "Report on Corporate Governance". The requisite Certificate from CS Manish Baldeva, (Membership No. FCS 6180) Prop. M/s. M Baldeva Associates, Company Secretaries, confirming the compliances with the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered with the Stock Exchange, is attached as Annexure F and forms part of this Annual Report. SHARE CAPITAL OF THE COMPANY: The paid up equity share capital of your Company is Rs. 14,28,77,540/- (Rupees Fourteen Crore Twenty Eight Lacs Seventy Seven Thousand Five Hundred Forty only) divided into 1,42,87,754 Equity shares of the face value of Rs. 10 (Rupee Ten) each. During the year under review, the Company has not bought back any of its securities or issued any Sweat Equity Shares or Bonus shares. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS: No Significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operations of the Company. EMPLOYEES STOCK OPTION PLAN: The Company has not provided any Stock Option Scheme to the employees. LISTING WITH STOCK EXCHANGE: The Company confirms that it has paid the Annual Listing Fees for the year 2015-16 to BSE where the Company's Shares are listed. ACKNOWLEDGEMENT: The Director expressed their appreciation for the contribution made by the employees in the progress of the Company. The Directors also thank the Company's customers, vendors, investors and bankers for their continued support during the year. For and on behalf of the Board Director Director Place : Mumbai Date : August 13, 2015 |