DIRECTORS' REPORT To, THE MEMBERS, Your Directors have the pleasure of presenting their 31st Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31, 2015. II. FINANCIAL PERFORMANCE:- The year 2014-15 has been a very challenging year for your Company. But considering the Company's future expansions plans/projects, your Directors look forward to improve the financial position of the Company. III. DIVIDEND: Since the Company has not earned sufficient profits in the Financial Year ended 31.03.2015.Hence no dividend is declared by the Company. IV. Draft Scheme of Capital Reconstruction: The Board of Directors of the Company proposed the draft scheme of Capital Reconstruction under Section 100 to 104 of the Companies Act, 1956 by proposing to reduce the paid up share capital from Rs. 3,47,68,000/-divided into 34,76,800 equity shares equity shares of Rs. 10/- each fully paid up to Rs.69,53,600/- divided into 34,76,800 equity shares of Rs.2/- each fully paid-up and that such reduction be effected by cancelling the capital which has lost or is unrepresented by available tangible assets, to the extent of Rs.8/- per share upon each of the 34,76,800 equity shares which have been issued by reducing the paid-up value of all the shares in the capital of the Company from Rs.10/- per share to Rs.2/- per share and thereafter consolidation of face value of Rs.2/- per share to Rs.10/- per share by issuing 1 equity share of Rs.10/- each fully paid-up against 5 equity shares of Rs.2/- per share. V. DEPOSITS The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the period under review. Hence, the requirement for furnishing the details of deposits which are not in compliance with Chapter V of the Act is not applicable. VI. 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 STATEMENTS 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. VII. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. VIII. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the period under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls IX. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. X. 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 during the financial period under review. The details of the investments made by company are given in the notes to the financial statements. XI. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions which were entered into during the financial year were on an arm's length basis and in the ordinary course of business. The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 are furnished in Annexure "A" and are attached to this report. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. XII. PARTICULARS OF EMPLOYEES The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not provided in the Report as no remuneration is paid to any of the directors of the company nor any employee of the Company was in receipt of the remuneration exceeding the limits prescribed in the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. XIII. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO: A. CONSUMPTION OF ENERGY & TECHNOLOGY ABSORPTION: The details as required under Section 134 (3) (m) of the Companies Act, 2013, in respect of Conservation of Energy, Technology Absorption are not applicable. B. FOREIGN EXCHANGE EARNING & OUTGO : Foreign Exchange Earning : NIL Foreign Exchange Outgo : NIL XIV. DIRECTORS i. Cessation During the year Mr. Tushar Shah (Din: 01748630) resigned from the Board of directors of the Company w.e.f. 28th October, 2014.The Board has noted his contribution as Director of the Company during his tenure on the Board of the Company. ii. Retirement by rotation: In accordance with the provisions of section 152[6] of the Act and in terms of Articles of Association of the Company, Mr. Vishal M. Shah (DIN:03279724) retires at this Annual General Meeting and being eligible offer themselves for re- appointment. The Board recommends his reappointment. iii. Independent Directors: Mr. Kunjan Vora (DIN: 03612667) and Mr. Viral Shah (DIN: 03603173) are the existing Independent Directors. The Company proposes to appoint them as Independent Directors under Section 149 of the Companies Act, 2013, for a period of five consecutive years from the date of this Annual General Meeting. In accordance with the provisions of the Act, none of the Independent Directors are liable to retire by rotation. The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. iv. Number of Board Meetings conducted during the year under review The Company had 5 Board meetings on 29/05/2014, 13/08/2014, 28/10/2014, 06/01/2015 and 11/02/ 2015 during the financial year under review. v. 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, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. XV. DIRECTOR'S RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, the Board hereby submits its responsibility Statement:— i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii. 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 or loss of the Company for the year under review. iii. 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. iv. The directors had prepared the annual accounts on a going concern basis. v. 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. vi. The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. XVI. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee of Company was reconstituted with effect from 28.10.2014 and reconstituted w.e.f. 14/ 08/2015 (due to resignation of Mrs. Archanaben Shinde, member of the committee) and as on the date of this Report, the Audit Committee comprises:- A. Mr. Kunjan Vora B. Mr. Bhavin Parikh C. Mr. Viral Shah The above composition of the Audit Committee consists of independent Directors viz., Mr. Kunjan Vora and Mr. Viral Shah who form the majority. The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. During the period under review, the Board of Directors of the Company had accepted all the recommendations of the Committee. XVII. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure "B" and is attached to this Report. XVIII. AUDITORS A. Statutory Auditors M/s Dharmesh Parikh & Co., Chartered Accountants, was appointed as Statutory Auditors for a period of 4 year(s) in the Annual General Meeting held on 26th September, 2014. 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 notes and remarks of Auditors' are self-explanatory and therefore do not require any further clarification. B. Cost Auditors The Company has not appointed the Cost Auditor as pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit is not applicable to the Company C. Secretarial Auditors Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report from Practicing Company Secretary. M/s Khandelwal Devesh & Associates, Company Secretaries had been appointed to issue Secretarial Audit Report for the period ended on 31st March 2015. Secretarial Audit Report issued by M/s Khandelwal Devesh & Associates, Company Secretaries in Form MR-3, attached and marked as Annexure "C", for the period under review forms part of this report. The said report contains observation or qualification relating to the appointment of Company Secretary and CFO. The Board of Directors of your Company would like to explain on the said observation that your Company took all reasonable steps to do such appointments, but as your Company is not doing well in its present line of business activity, it failed to attract right candidates for such post. The Board of your Company has appointed Mr. Viren G. Gurjar as its CFO w.e.f. 01/05/2015 and continues its efforts to search right candidate for the post of Company Secretary and will appoint the Company Secretary as soon as possible. XIX. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Company's Code of Conduct or Ethics Policy. Whistle Blower Policy is disclosed on the website of the Company at www.gujarattoolroom.com XX. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal. XXI. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable. XXII. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Corporate Governance Report forming part of the Annual Report. XXIII. CORPORATE GOVERNANCE: The Company has complied with the Corporate Governance requirements under the Act and as stipulated under clause 49 of the Listing Agreement. A separate section on detailed report on the Corporate Governance practices followed by the Company under the Listing Agreement along with a certificate from M/s. Dharmesh Parikh & Co., Auditor of the Company confirming the compliance, is part of the Annual Report. ACKNOWLEDGEMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. For and on behalf of the Board Suryakant H. Parikh Chairman cum Managing Director (DIN: 00038136) Date : 14/08/2015 Place : Ahmedabad |