DIRECTORS' REPORT Dear Shareholders, Your Directors here by present the Annual Report together with the Audited statements of Accounts for the financial year ended on 31st March 2015. OPERATIONS REVIEW: During the year under review due to financial crisis company has not carried out any business activities and faces huge set back. So company not in position to generate any revenue from the operation but due to some fixed cost company posted Net Loss of Rs. 87868/-. BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/STATE OF THE COMPANY'S AFFAIR: The Company does not have any significant business activity and not carried out any business during the year under review. DIVIDEND: Considering the loss incurred in the current financial year and accumulated losses, your Directors have not recommended any dividend for the financial year under review. TRANSFER TO RESERVES: The Company has not transferred any amount to Reserves for the period under review. SHARE CAPITAL: The issued, subscribed and paid up capital of the Company is Rs 43249000/- divided into 4324900 equity shares of Rs 10/- each. There has been no change in the share capital of the Company during the year. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES: The Company does not have any subsidiary, associate companies & joint ventures. FIXED DEPOSIT: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 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. 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. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY: No material changes and commitments affecting the financial position of the company have occurred between the end of financial year to which the financial statements relate and the date of the Directors' Report. SIGNIFICANT ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY'S OPERATIONS: To the best of our knowledge, the company has not received any such orders passed by the regulators, courts or tribunals during the year, which may impact the going concern status or company's operations in future. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Ms. DINABEN GANATRA (DIN: 07265796) appointed as additional director on 28.08.2015 and same resigned on 29.08.2015. Mr. KETANBHAI DINESHCNANDRA SORATHIYA resigned on 28.08.2015.Mr. KAMLESH THOTHAWALA was appointed as an additional director of the company with effect from August 29, 2015 and hereby appointed as director of the Company and whose office liable to retire by rotation. Since the Company does not have any significant business activities, hence the Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary. DECLARATION BY INDEPENDENT DIRECTORS: The Company has received necessary declaration from each Independent Director under Section 149 (7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013. MEETINGS: Minimum four pre-scheduled Board meetings are held annually. In case of business exigencies or urgency of matters, resolutions are passed by circulation. During the year Five Board meetings were held. The dates of the Board Meetings were 29.05.2014, 04.08.2014, 26.08.2014, 14.11.2014 and 07.02.2015. Attendance record of Directors attending the Board meetings and Annual General Meetings during the year: AUDIT COMMITTEE: The Audit Committee of the Company presently comprises of three Directors being MR. KAMLESH THOTHAWALA, MR. SHAILESH GUPTA and MR. ANIL MISTRY. The Board terms of reference of the Audit Committee are in consonance with the provisions of Section 177 of the Companies Act, 2013 and of the Listing Agreement. Role/ Functions of the Committee: o Reviewing with management the annual financial statements before submission to the Board. o Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services. o Review of policies relating to risk management - operational and financial. o Reviewing with the management, external auditors and the adequacy of the internal control system. Powers of the Committee: • To investigate any activity within its terms of reference. • To secure attendance of and seek any information from any employee including representative of the prime shareholders (subject to their internal approvals). • Compliance with accounting standards. • To obtain outside legal or other professional advice, if necessary. • To secure attendance of outsiders with relevant expertise, if it considers necessary. • Compliance with Stock Exchange and legal requirements concerning financial statements. Attendance at the Audit Committee Meetings: During the year the Audit Committee met 4 times on 29.05.2014, 04.08.2014, 14.11.2014, 07.02.2015 attendance of the members as under: NOMINATION AND REMUNERATION COMMITTEE: Nomination and Remuneration Committee has been constituted as per the provisions of Section 178(1) of the Companies Act, 2013 on 30.05.2015 to review and to recommend the remuneration payable to the Executive Directors and Senior Management of the Company based on their performance and defined assessment criteria. Nomination and Remuneration Committee of the Company presently comprises of three Directors being MR. KAMLESH THOTHAWALA, MR. SHAILESH GUPTA and MR. ANIL MISTRY. The following is the terms of reference of Nomination and Remuneration Committee: - Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the level and composition of remuneration of the directors, key managerial personnel and other employees; - Formulation of criteria for evaluation of independent directors and the Board; - Devising a policy on Board diversity; and -Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. Nomination and Remuneration Policy: The Committee is in process of formulating Nomination and Remuneration Policy which determines criteria inter-alia qualification, positive attributes and independence of Directors for their appointment on the Board of the Company and payment of remuneration to Directors, Key Managerial Personnel and other Employees. The Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director. - Qualification, expertise and experience of the Directors in their respective fields; - Personal, Professional or business standing; - Diversity of the Board In case of re-appointment of Non Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level. STAKEHOLDERS' RELATIONSHIP COMMITTEE: The Board of Directors of the Company has re-named Share Holders Grievance/ Share Transfer Committee as 'Stakeholders Relationship Committee' in order to align it with the provisions of Section 178 of the Companies Act, 2013. The Committee has been constituted to strengthen the investor relations and to inter-alia, look into issues relating to shareholders grievances pertaining to transfer of shares, non- receipt of declared dividends, non-receipt of Annual Report, issues concerning de-materialization etc. This committee presently consists of three directors namely, MR. KAMLESH THOTHAWALA, MR. SHAILESH GUPTA and MR. ANIL MISTRY. During the year two meetings were held on 29.05.2014 and 07.02.2015. BOARD EVALUATION: Pursuant to the provisions of the Schedule IV, clause VIII of the Companies Act, 2013 the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Appointment & Remuneration Committees. The performance evaluations of Independent Directors were also carried out and the same was noted. Independent Directors in their meeting decided to bring more transparency in their performance and bring more responsibility while taking any policy decisions for the benefit of the shareholders in general. REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES: No Directors/ Key Managerial Personnel are drawing any remuneration. Hence, the information required pursuant to Section 197 read with Rule 5 (1) (i) of The Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial year is not given. AUDITORS AND AUDITORS' REPORT: M/s. RISHI SEKHRI AND ASSOCIATES, CHARTERED ACCOUNTANTS, Mumbai (Firm Reg. No. 128216W), in respect of whom the company has received a Special Notice under section 140(4) of the Act, proposing their appointment in the place of retiring auditors M/s. Y. D. & Co., Chartered Accountants, Ludhiana, (FRN 018846N) and hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The observations made by the Auditors' in their Auditors' Report and the Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments. SECRETARIAL AUDIT AND SECRETARIAL AUDITORS' REPORT: Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Ms. SHUBHAM AGARAWAL, Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report in the prescribed Form No MR-3 is annexed herewith. QUALIFICATION IN SECRETARIAL AUDIT REPORT AND EXPLANATIONS BY THE BOARD: Sr. No. Qualifications made by Secretarial Auditor Explanations by the Board a) The Company has decided not to opt for compliance of Clause 49 for the time being The paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause so the Company has decided not to opt for compliance of Clause 49 for the time being. b) Acknowledgement for sending the notices of the Meeting of the Board and Committees are not maintained by the company. The notice and agenda for the Board and committee meeting are sent by the email or hand delivery. The company will ensure to maintain to the acknowledgements for sending the notice of the meeting of the board and the committee. c) Updating of website with regard to various policies is pending The company will take necessary steps to update website with regard to various policies which are pending. d) The company has not complied with certain clauses of Listing Agreement as regards publication of Notice of Board Meeting, Notice of AGM, quarterly results. The company will take necessary steps to comply with the same. e) As per the provisions of Section 149(1) of the Companies Act, 2013 and revised clause 49 of the listing agreement, the Company is required to have at least one Women Director on its Board. The Company has not appointed Women Director. As per section 203(1)(i),(ii) & (iii), the Company is required to appoint Company Secretary & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer. The Company is in process for appointing of Women Director and once suitable and if any willing candidate agrees to join the Company. f) Since the Company does not have any significant business activities, hence the Volume and Scope of work for the Company Secretary and Chief Financial Officer are less and it is not a full time work and the job of Company Secretary and Chief Financial Officer are not attractive commensurate with the scope of work and salary. g) As per section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor. The size of operation of the Company is very small, it is not viable to appoint Internal Auditor but the Company has established the internal control system. h) The company has not maintained the attendance register for Board and committee meeting Statutory Registrar as per companies Act 2013 is yet to be updated. i) The company will take necessary steps to maintain the attendance register for board and committee meetings. The company will take necessary steps to update Statutory Register as per companies Act 2013. Certain event based E Forms have not been filed by the company in time which were required to be filed with ROC during the audit period. The company will ensure to file all relevant documents in time with ROC and other authorities as when required. COST AUDITOR AND COST AUDIT REPORT: Cost Audit is not applicable to your Company. INTERNAL CONTROL SYSTEMS: As there is no significant business activities hence there was no systems set up for Internal Controls. EXTRACT OF ANNUAL RETURN: An extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in the prescribed Form No. MGT 9 forming part of this report is annexed herewith MANAGEMENT DISCUSSION AND ANALYSIS: Management Discussion and Analysis forms part of the Annual Report to the shareholders and it includes discussion on matters as required under the provisions of Clause 49 of the listing agreement forming part of this report is annexed herewith. CORPORATE GOVERNANCE REPORT: SEBI vide its circular no. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 had amended Clause 49 and made it applicable to all the listed Companies. Further, SEBI vide its circular no. CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 had made the Clause 49 on Corporate Governance non-mandatory to the following class of Companies: a. Companies having paid up equity share capital not exceeding Rs.10/- crores and Net worth not exceeding Rs.25/- crores, as on the last day of the previous financial year; Provided that where the provisions of Clause 49 becomes applicable to a company at a later date, such company shall comply with the requirements of Clause 49 within six months from the date on which the provisions became applicable to the company. b. Companies whose equity share capital is listed exclusively on the SME and SME-ITP Platforms. Accordingly the paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause. The Company has decided not to opt for compliance of Clause 49 for the time being. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES: The Company has not developed and implemented any Corporate Social Responsibility initiative under the provisions of Section 135 of the Companies Act, 2013, read with Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014, as the said provisions are not applicable. PARTICULARS OF EMPLOYEES: In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required to be given as there were no employees coming within the purview of this section. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The details of conservation of energy, technology absorption etc. as required to be given under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are not applicable to Company, as our Company has not carried out in the manufacturing activities. The foreign exchange earnings on account of the operation of the Company during the year was Rs. Nil. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation by way of notes to accounts relating to material departures; b) the Directors have 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 and of the profit or loss of the Company for that period; c) the Directors have 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; e) Directors have prepared the accounts on a "going concern basis". f) 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. INTERNAL CONTROL SYSTEMS: As there is no significant business activities hence there was no systems set up for Internal Controls. EXTRACT OF ANNUAL RETURN: An extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in the prescribed Form No. MGT 9 forming part of this report is annexed herewith MANAGEMENT DISCUSSION AND ANALYSIS: Management Discussion and Analysis forms part of the Annual Report to the shareholders and it includes discussion on matters as required under the provisions of Clause 49 of the listing agreement forming part of this report is annexed herewith. CORPORATE GOVERNANCE REPORT: SEBI vide its circular no. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 had amended Clause 49 and made it applicable to all the listed Companies. Further, SEBI vide its circular no. CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 had made the Clause 49 on Corporate Governance non-mandatory to the following class of Companies: a. Companies having paid up equity share capital not exceeding Rs.10/- crores and Net worth not exceeding Rs.25/- crores, as on the last day of the previous financial year; Provided that where the provisions of Clause 49 becomes applicable to a company at a later date, such company shall comply with the requirements of Clause 49 within six months from the date on which the provisions became applicable to the company. b. Companies whose equity share capital is listed exclusively on the SME and SME-ITP Platforms. Accordingly the paid up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause. The Company has decided not to opt for compliance of Clause 49 for the time being. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES: The Company has not developed and implemented any Corporate Social Responsibility initiative under the provisions of Section 135 of the Companies Act, 2013, read with Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014, as the said provisions are not applicable. PARTICULARS OF EMPLOYEES: In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not required to be given as there were no employees coming within the purview of this section. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The details of conservation of energy, technology absorption etc. as required to be given under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are not applicable to Company, as our Company has not carried out in the manufacturing activities. The foreign exchange earnings on account of the operation of the Company during the year was Rs. Nil. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation by way of notes to accounts relating to material departures; b) the Directors have 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 and of the profit or loss of the Company for that period; c) the Directors have 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; e) Directors have prepared the accounts on a "going concern basis". f) 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. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Since there are no women employees in the Company hence no comments DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014: Pursuant to Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment & Remuneration) Rules, 2014, every Listed Company mandates to disclose in the Board's Report the ratio of the remuneration of each director to the permanent employee's remuneration. However, since there is no permanent employee in the Company, no disclosure under the said provision has been furnished. BUSINESS RISK MANAGEMENT: Since the Company does not have any significant business activities, hence the Business Risk is at the Minimal Level. Hence, no major risk factors are envisaged except for: a. Government Policies b. Human Resource Risk VIGIL MECHANISM As the Company does not have any significant business activity, there was no need to have a Vigil Mechanism Policy. ACKNOWLEDGEMENT: Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, and Shareholders during the year. Your directors also wish to take on record their deep sense of appreciation for the committed services of the employees at all levels, which has made our Company successful in the business. For and on Behalf of the Board For, MFS INTERCORP LIMITED Sd/- (ANIL MISTRY) CHAIRMAN PLACE: DELHI DATE: 31.08.2015 |