DIRECTORS' REPORT To, The Members, Welspun Investments and Commercials Limited 1.Your directors have pleasure in presenting the 7th Annual Report of your Company along with the Audited Financial Statements for the financial year ended March 31, 2015. 2. Performance During the year, in view of subdued trading business opportunities, the Company's revenue from operations reduced by 22.75%. Secondly the trading margin was under pressure. These reasons, affected profitability from the Company's operations. However, profit before tax was positive compared to significant amount of loss in previous year which was caused by impairment in value of investment. The management is hopeful that the Company will be able to achieve the trading business with the expected growth in business opportunities. 3. Dividend In view of accumulated losses, your directors do not recommend any dividend for the financial year ended March 31, 2015. 4. Internal controls The Board had laid down internal financial controls to be followed by the Company which are commensurate with the size, scale and complexity of its business and such internal financial controls are adequate and were operating effectively within the meaning of the explanation of Section 134 (5) (e) of the Companies Act, 2013. 5. Deposits The Company has not accepted any deposit within the meaning of the Chapter V to Companies Act 2013. Further, no amount on account of principal or interest on deposit was outstanding as at the end of the year under report. 6. Associate Company There was no change in the associate company as at the beginning and end of the year under report. 7. Auditors i) Statutory Auditors M/s. Suresh Surana & Associates LLP, Chartered Accountants, the Auditors retire at the conclusion of the forthcoming Annual General Meeting and have expressed their unwillingness to be reappointed for a further term. Hence, the Board of Directors, based on recommendation of the Audit Committee, propose the appointment of M/s. S P C & Co., Chartered Accountants (Firm Registration No. 012388S) as the Statutory Auditors of the Company to hold office upto the conclusion of the 12th Annual General Meeting in place of retiring Auditors, M/s. Suresh Surana & Associates LLP, Chartered Accountants, to audit the accounts of the Company for the financial year 2015-16 to 2020-21 subject to ratification by the Members of the Company at every Annual General Meeting. ii) Secretarial Auditors The Board of Directors has re-appointed M/s. S. S. Risbud & Co., Company Secretaries, as the Secretarial Auditor of the Company for the year 2015-16. 8. Auditors' Report i) Statutory Auditors' Report The Auditors' observation read with Notes to Accounts are self-explanatory and therefore, do not call for any comment. ii) Secretarial Audit Report Secretarial Audit Report given by M/s. S. S. Risbud & Co., Company Secretaries is annexed with the report as Annexure 1. 9. Share Capital & Listing i) Issue of equity shares with differential rights The Company has not issued shares with differential rights and hence, disclosures as required in Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 are not required. ii) Listing with the stock exchanges The Company's equity shares are listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). Annual listing fees for the year 2014-15 have been paid to BSE and NSE 10. Extract of the annual return An extract of the annual return in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is attached to this report as Annexure 2. 11. Conservation of energy, technology absorption and foreign exchange earnings and outgo Your Company does not carry any activity which is covered under Section 134(3)(m) of the Companies Act, 2013 and applicable rules and accordingly no data needs to be provided in this regard. 12. Directors i) Changes in Directors and Key Managerial Personnel Since the last report, no change took place in the Board of Directors and the following Key Managerial Personnel were appointed: • Mr. Gajendra Nahar - appointed as Chief Financial Officer w.e.f. August 1, 2014 and as Chief Executive Officer w.e.f. November 6, 2014. • Ms. Priya Pakhare - appointed as Company Secretary w.e.f. August 1, 2014. Mr. L. T. Hotwani is retiring by rotation at the forthcoming Annual General Meeting and being eligible, has been recommended for re-appointment. Details about the directors being appointed / re-appointed are given in the Notice of the forthcoming Annual General Meeting being sent to the members along with the Annual Report. ii) Declaration by Independent Directors The independent directors on the Board of the Company met the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 at the time of their respective appointment and there is no change in the circumstances as on the date of this report which may affect their respective status as an independent director. iii) Formal Annual Evaluation The evaluation process was led by the Chairman of the Nomination and Remuneration Committee with specific focus on the performance vis-a-vis the plans, meeting challenging situations, performing leadership role within and effective functioning of the Board. The evaluation process invited, through IT enabled platform, graded responses to a structured questionnaire for each aspect of evaluation viz. time spent by each of the directors; accomplishment of specific responsibilities and expertise; conflict of interest; integrity of the Director; active participation and contribution during discussions. For the financial year 2014-15, the annual performance evaluation was carried out which included evaluation of the Board, independent directors, non-independent directors, Chairman appointed for the Board Meetings, Committees of the Board, quantity, quality and timeliness of information to the Board. The independent directors evaluated non-independent directors, the Board, the Committees, the Chairman appointed for the Board Meetings and the information to the Board. The Nomination and Remuneration Committee and Board evaluated performance of the independent directors, the Board itself, the Chairman appointed for the Board Meetings, the Committees of the Board, the information provided to the Board. All results were satisfactory. 13. Number of meetings of the Board of Directors The Company's Board consists of eminent persons with considerable professional expertise and experience thereby ensuring the best interest of stakeholders and the Company. The Board comprises of 4 Directors out of which 3 are Independent Directors. 4 meetings of the Board of Directors were held during the financial year 2014-15 on the following dates: May 20, 2014, August 1, 2014, November 6, 2014 and January 28, 2015. In addition to the above, a meeting of the Independent Directors was held on March 31, 2015 in compliance with the Section 149(8) read with Schedule V to the Companies Act, 2013. The said meeting was attended by Mr. Atul Desai and Mr. Rajkumar Jain. It is confirmed that there is no relationship between the directors inter-se. 14. Audit Committee The Committee comprises 3 non-executive independent directors having accounting and finance back-ground. The Company Secretary of the Company, Ms. Priya Pakhare acts as the Secretary of the Committee. 4 meetings of the Audit Committee of the Board of Directors were held during the financial year 2014-15 on following dates: May 20, 2014, August 1, 2014, November 6, 2014 and January 28, 2015. None of recommendations made by the Audit Committee were rejected by the Board. Terms of reference - The terms of reference stipulated by the Board of Directors to the Audit Committee are as contained under the Listing Agreement and Section 177 of the Companies Act, 2013. 15. Nomination and Remuneration Committee The Company had constituted the Nomination and Remuneration Committee consisting of non-executive independent directors. During the year under review, 4 meetings of the Committee were held on May 20, 2014, August 1, 2014, November 6, 2014 and January 28, 2015. Terms of reference - To recommend appointment of, and remuneration to, directors, Key Managerial Personnel and Senior Management Personnel and review thereof from time to time. Composition of the Committee - The Committee comprises of 3 non-executive independent directors as on date of this Report viz. Mr. Atul Desai, Mr. Rajkumar Jain and Ms. Mala Todarwal. Remuneration Policy - The Company follows a policy on remuneration of directors and senior management employees and the salient features thereof are as under: Appointment of Directors : • While identifying persons who may be appointed directors, the Committee shall consider business of the Company, strength, weakness, opportunity and threats to company's business, existing composition of the board of directors, diversity, skills, expertise of existing directors and, background, skills, expertise, reputation and qualification possessed by persons being considered, specific requirements under Companies Act, 2013, standard listing agreement and any other laws as to composition of the Board. • While identifying persons who may be appointed as independent directors, the Committee shall review their qualifications and suitability to ensure that such candidates will be able to function as directors 'Independently' and avoid any conflict of interest, obligations, pressure from other Board members, KMPs, senior management and other persons associated with the Company. Remuneration of directors, Key Managerial Personnel, Senior Management Personnel : • The remuneration to executive directors, Key Managerial Personnel and Senior Management Personnel at the time of appointment shall be mutually agreed. The Committee shall consider top industry indicators, requirements of role, qualification and experience of candidate, expected contribution of executive to the profitability challenges specific to the Company and such other matters as the Committee may deem fit. The remuneration must motivate individuals to achieve benchmarks which must be aligned to the vision of the Company. It may contain fixed pay. The management shall periodically find out the remuneration scale prevalent in the industry / peer group to the extent possible to find out if there is a need for revision in remuneration for retaining the talent. • The Non-Executive directors shall not be eligible for any remuneration / commission, unless specifically approved by the Board of Directors on recommendation of the NRC and by the shareholders. • The Non- Executive Directors including independent directors may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed Rs. 1,00,000 per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. • The Non-Executive Directors may be paid commission after complying with required provisions of the Companies Act, 2013. Besides, the Committee shall take into consideration performance, of the concerned executive as well as the Company, to the growth of business, profitability, company potentiality and critical role played / initiatives taken while considering pay hike / increment to the concerned executives. 16. Establishment of vigil mechanism for directors and employees The Company has a Whistle Blower Policy and Vigil Mechanism for its directors and employees and any director or employee may make protected disclosures to the Audit Committee and no personnel have been denied access to the Audit Committee. 17. Particulars of contracts or arrangements with related parties A related party transaction that was entered into during the year under report was on an arm's length basis and was in the ordinary course of business. There were 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. A related party transaction was entered into because of mutual need and to serve mutual interest. Except for this, directors' sitting fees, related party transaction listed in the financial statements, none of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The requirement of Form AOC-2 is not applicable to the Company. 18. Managerial Remuneration No remuneration or perquisite was paid to, and no service contract was entered into with, but the sitting fees were paid to, the following directors for attending meetings of Board / Committees of the Board: The above mentioned sitting fees paid to the Non-Executive Directors was within the limits prescribed under the Companies Act, 2013 for payment of sitting fees. None of the directors had any transaction with the Company. 19. Shareholding of the Directors of the Company as on March 31, 2015 As on March 31, 2015, none of the directors held any shares in the Company 20. Miscellaneous During the year under report, there was no change in the general nature of business of the Company. 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 No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. The Company has not made any provision of money for the purchase of, or subscription for, shares in your Company or its holding company, to be held by or for the benefit of the employees of your Company and hence the disclosure as required under Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is not required. 21. Directors' Responsibility Statement Pursuant to Section 134(3)(c) & 134(5) of the Companies Act, 2013, your directors hereby confirm that: a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. 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 of the Company for that period; c. 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; d. the directors had prepared the annual accounts on a going concern basis; e. being a listed company, 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; and 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. 22. Acknowledgements Your Directors wish to acknowledge the co-operation and support extended by the group companies, Central Government, State Governments, bankers, customers, and the shareholders. It will always be the Company's endeavor to build and nurture strong relationship for mutual benefit. For and on behalf of the Board of Directors L. T. Hotwani Director DIN - 00007125 Rajkumar Jain Director DIN - 00026544 Place: Mumbai Date: May 14, 2015 |